Justia Real Estate & Property Law Opinion Summaries

Artec Homes, LLC ("Artec") appealed an amended judgment granting foreclosure in favor of Andrew Martin ("Martin"), and dismissing Artec's claims against Martin and Greyson Financial Services, Inc. ("Greyson"). This case was the fourth lawsuit relating to an unfinished real estate development referred to as Magic Meadows in Minot, North Dakota. Highpoint Properties, LLC ("Highpoint") originally owned 127 residential lots in the Magic Meadows development. In September 2011, Artec purchased an interest in twenty of the lots from Highpoint for $400,000. Highpoint continued to own the remaining 107 lots after the sale of the twenty lots to Artec. In April 2013, while the first lawsuit between Artec and Highpoint was pending, Highpoint conveyed its interest in the remaining 107 lots to Marquee Pacific, LLC ("Marquee"). In June 2013, Greyson loaned $400,000 to Marquee in exchange for a mortgage against the remaining 107 lots. Greyson subsequently assigned the mortgage to Martin in November 2014. In December 2013, Artec began the third lawsuit against Highpoint and Marquee after it discovered Highpoint transferred the remaining 107 lots to Marquee. Artec alleged that Highpoint's conveyance of the remaining 107 lots to Marquee was fraudulent. Highpoint and Marquee did not defend the lawsuit, and Highpoint's conveyance to Marquee was set aside. Greyson and Martin were not parties to the third lawsuit. Following that lawsuit, Artec owned all 127 lots subject to the mortgage on 107 lots originally held by Greyson and assigned to Martin. The latest lawsuit was initiated by Martin against Marquee and Artec seeking to foreclose the mortgage on the 107 lots. Artec counterclaimed against Martin and subsequently brought a third-party complaint against Greyson, alleging they did not receive the mortgage from Marquee in good faith and for reasonably equivalent value, rendering the mortgage unenforceable. Martin and Greyson moved to dismiss Artec's counterclaim and third-party complaint, and Martin moved for summary judgment on the foreclosure claim. The district court concluded that because Greyson obtained its mortgage from Marquee before Artec sued to set aside the conveyance from Highpoint to Marquee in the third lawsuit, Greyson should have been made a party to that action. The court held Artec improperly split its cause of action because it did not join Martin and Greyson in the fraudulent transfer action. The court granted Martin's motion for summary judgment on the foreclosure claim after determining that dismissal of Artec's claims against Martin and Greyson eliminated Artec's only defense to the foreclosure claim. The North Dakota Supreme Court reversed and remanded:because Greyson and Martin were not parties to the fraudulent transfer action nor in privity with Highpoint or Marquee, the res judicata prohibition against splitting a cause of action did not apply, and the district court erred in dismissing Artec's claims. View "Martin v. Marquee Pacific, LLC" on Justia Law

Craig Benson ("Benson") appealed a district court's judgment defining the boundaries of Outlot 11 and awarding Feland Brothers Properties ("the Felands") the northern portion of Outlot 53 through adverse possession. In 1951, Ruby Benson, Benson's grandmother, acquired a 600 by 450 foot tract to the west of Whiskey Bay on Lake Metigoshe. This tract of land was subdivided into several lots. The Felands owned Outlot 10, Craig and Brenda Benson ("the Bensons") owned Outlot 53, and Danny and Gwen Aftem ("the Aftems") owned Outlot 11. Outlot 53 was the result of a survey completed in 2010. The northern portion of Outlot 53 was largely ignored by the record owners, Richard Benson and then Craig Benson. Chris Romfo, a neighbor, testified that he rented Outlot 53 from Richard Benson for about nine years and understood that it was only for the southern part of Outlot 53. Romfo testified that Richard Benson never mentioned owning the northern part of Outlot 53. Although Craig Benson testified that he and his family regularly stayed at the lake for many years, he was vague as to the use of the northern part. He testified that he didn't build anything on the northern lot, except for a small bridge across the creek, apparently connecting the north and south portions of the lot. This bridge was later removed. After the 2010 survey was completed, he placed "no trespass" signs on the northern lot and cut trees down. He also began warning others not to use the property. The previous owners of Outlot 10 made a number of improvements to the northern portion of Outlot 53. The Bensons sued the Felands and Aftems to quiet title in all of Outlot 53. The Felands and Aftems counterclaimed, arguing that they own the northern portion of Outlot 53 and title should be quieted in their favor. Alternatively, the Felands and Aftems argued that they acquired the northern portion of Outlot 53 through adverse possession. After a bench trial, the district court defined the southeastern boundary of Outlot 11 as the corner of L-8 and L-9 on Outlot 53's plat, awarded the Felands the northern portion of Outlot 53 on the basis of adverse possession, and quieted title to the southern portion of Outlot 53 in favor of the Bensons. The North Dakota Supreme Court affirmed, concluding the district court did not clearly err in defining the boundaries of Outlot 11 or in concluding the Felands adversely possessed the northern portion of Outlot 53. View "Benson v. Feland Brothers Properties" on Justia Law

Michele Brandt, as Trustee of the Michele L. Brandt Revocable Trust, appealed an order dismissing her appeal of the City of Fargo's resolution of necessity. Karen Wieland appealed a judgment dismissing her appeal to the district court from the City's resolution of necessity. In December 2016, the Fargo City Commission passed a resolution of necessity for property owned by Brandt related to construction of a flood protection project. Days later in a separate proceeding, the City passed a similar resolution of necessity for property owned by Wieland. Each resolution authorized the City to proceed with all legal means to obtain the property, including eminent domain. In each case the City filed a record on appeal in the district court and moved the court to dismiss the appeal. In Brandt's appeal, the City moved alternatively to consolidate Brandt's appeal with an eminent domain proceeding that the City also commenced in December 2016. In both appeals, Brandt and Wieland moved the district court to strike all materials from the record that had not specifically been placed in front of the city commission during the respective December 2016 meetings. After a February 22, 2017 hearing in Brandt's appeal, the district court entered an order granting the City's motion to dismiss and holding a resolution of necessity as a predicate to eminent domain is not subject to appellate review by the court. The court also held the City had not acted in bad faith, with a gross abuse of discretion, or fraudulently in passing the resolution of necessity. The order denied Brandt's motion to strike, concluding further consideration of the motion was moot. After a March 21, 2017 hearing in Wieland's appeal before a different judge, the district court entered an order and judgment dismissing Wieland's appeal. The court explained that the decision to go forward with an eminent domain proceeding is the City's political or legislative decision which the court could not review by appeal from issuance of the resolution. The City commenced an eminent domain proceeding for the Wieland property in April 2017. Because of similar dispositions, the North Dakota Supreme Court addressed both appeals in this decision and affirmed, concluding the court in each case did not err in dismissing the appeals because no statutory basis authorized an appeal to the district court from the City's resolutions of necessity. View "Brandt v. City of Fargo" on Justia Law

Robert and Teryl Gannaway filed a complaint in 2015 against Nadir Torres, Terra Nova Developments, LLC ("Terra Nova"), William and Karen Schneider, and any other encumbrancers of their property. The Gannaways sought to quiet title to the property after it was fraudulently conveyed, and the Schneiders secured a mortgage on the property. The North Dakota Supreme Court affirmed the district court's judgment quieting title in the Gannaways and determining the Schneiders were not good-faith purchasers for value without notice. View "Gannaway v. Torres" on Justia Law

David and Virginia Ceynar appealed summary judgment that dismissed their breach of contract/covenant and nuisance action against Lonnie Barth and The Ridge at Hawktree Homeowners' Association. The Ceynars and Barth were neighbors at The Ridge at Hawktree, a Bismarck subdivision near a golf course, and were members of the Association. Before the Ceynars purchased their home, Barth approached the Association with plans to build what the parties referred to as a "pool house" on his property. Based on the Association's restrictive covenants, the Association's Architectural Committee informed Barth that detached buildings were not permitted. Barth then proposed construction of a breezeway connecting the pool house to Barth's home. The Committee approved the final plans in January 2014. The plans for the addition were then submitted to the City of Bismarck, which approved the plans and issued a building permit. The Ceynars bought the house next door to Barth's property from their daughter in June 2014. Actual construction of the pool house began in February 2015, and the Ceynars complained to the Association. They claimed the pool house would block their view to the north and west toward the Hawktree Golf Club. Members of the Association came to the Ceynars' home to observe how the pool house affected their property, but the Association took no action to stop construction. In July 2015, the Ceynars brought this action against Barth and the Association alleging breach of contract/covenant and nuisance, claiming the pool house violated restrictive covenants and unreasonably interfered with the enjoyment of their property and diminished its value. After Barth remedied a setback violation, he and the Association moved for summary judgment dismissing the action. In October 2016, the district court denied the motion, concluding there were "a number of genuine issues of material fact" precluding summary judgment. Because the district court did not err in ruling that the Association's restrictive covenants were not violated, and because Barth's actions as a matter of law did not unreasonably interfere with the Ceynars' use and enjoyment of their property, the North Dakota Supreme Court affirmed. View "Ceynar v. Barth" on Justia Law

Traill Rural Water District ("TRWD") appealed a judgment that granted damages for overdue rent to Daniel and Marlene Motter ("the Motters"). In 2006 Melba Motter, through her estate's conservator Alerus Financial, leased approximately forty acres of land in rural Steele County to TRWD at $250 per acre for ninety-nine years. Attorneys for both Melba's estate and TRWD negotiated the leases. In January 2011 Daniel Motter, grandson of Melba, and Daniel's wife Marlene acquired title to the land, including the leases. Daniel received offers from TRWD to renegotiate the leases during the period from 2006 to 2011, when he farmed the land but did not own it. Daniel reviewed the TRWD leases in 2014 and claimed back rent of $10,000 per year for the full forty acres from 2011 through 2014. TRWD offered $4,500 compared to Motter's initial calculation of $31,300. The district court acknowledged the mathematical error and adjusted to $51,500 for the five years from 2011 to 2015. The parties' different interpretations led to this lawsuit. The North Dakota Supreme Court concluded the district court did not err in denying reformation of two leases on the Motters' land and did not abuse its discretion in granting a new trial. View "Motter v. Traill Rural Water District" on Justia Law

Hess Corporation ("Hess") appealed the grant of summary judgment which held Sundance Oil and Gas, LLC ("Sundance") held the superior leasehold mineral interest in a property located in Mountrail County. Sundance and Hess both moved for summary judgment, each arguing they had a superior claim to the mineral interests. The district court determined the trust action was res judicata and granted partial summary judgment in favor of Sundance, quieting title to the leasehold interest. Although the district court entered an order for partial summary judgment, the parties stipulated to the remaining issues related to revenues and expenses, and the district court later entered a final judgment. On appeal, Hess argued: (1) the district court erred in applying res judicata to determine Sundance was a good-faith purchaser for value; (2) the district court erred in granting summary judgment in Sundance's favor because genuine disputes of material fact existed; and (3) the district court erred by concluding Sundance could obtain a superior lease for the same property without providing Hess actual notice of the trust action proceedings. After review, the North Dakota Supreme Court determined the district court improperly applied res judicata and failed to consider the factual issues raised by Hess: a district court may not use the findings in an unlocatable mineral owner trust action as res judicata in a subsequent quiet title action to resolve all factual disputes regarding whether a later purchaser was a good-faith purchaser for value. The judgment was reversed and the matter remanded for further proceedings. View "Sundance Oil and Gas, LLC v. Hess Corporation" on Justia Law

United Fire & Casualty Company appealed a district court judgment awarding Carol Forsman $249,554.30 in her garnishment action against United Fire, commenced after she settled claims in the underlying suit against Blues, Brews and Bar-B-Ques, Inc., d.b.a. Muddy Rivers. Muddy Rivers was a bar in Grand Forks that was insured by United Fire under a commercial general liability ("CGL") policy. In 2010, Forsman sued Muddy Rivers and Amanda Espinoza seeking damages for injuries to her leg allegedly sustained while a guest at a February 2010 private party at Muddy Rivers. Muddy Rivers notified United Fire of the suit and requested coverage. United Fire denied defense and indemnification based on the policy's exclusions for assault and battery and liquor liability. However, after appeals and reconsideration, the court ruled in Forsman's favor, finding the settlement amount was reasonable. The North Dakota Supreme Court concluded the court erred in granting summary judgment because material fact issues existed on whether exclusions for "assault and battery" and "liquor liability" in the CGL policy excluded coverage of Forsman's negligence claim against Muddy Rivers. Furthermore, the Court concluded further conclude the court properly granted summary judgment to Forsman holding United Fire had a duty to defend Muddy Rivers under the CGL policy in the underlying suit. Therefore, the Court affirmed in part, reversed in part, and remanded for further proceedings. View "Forsman v. Blues, Brews & Bar-B-Ques Inc." on Justia Law

Keith Candee appealed the grant of summary judgment to his parents, Lyla and Douglas Candee, awarding them an $884,508.83 deficiency judgment following foreclosure of properties in California and North Dakota. Keith and his parents executed a settlement agreement and mutual release of claims in 2013 relating to earlier disputes between the parties about the management of their family assets. Under the settlement agreement, Keith agreed to pay $2.2 million to Lyla and Douglas. The $2.2 million settlement amount was secured by real property in California and North Dakota. A deed of trust in favor of Lyla and Douglas secured the California property, and a mortgage secured the property in North Dakota. The deed of trust securing the California property included a power of sale provision allowing Lyla and Douglas to foreclose the property in a nonjudicial manner via a trustee's sale. After Keith failed to make payments under the settlement agreement, Lyla and Douglas foreclosed the California property. They proceeded with a nonjudicial foreclosure and in January 2014 purchased the property at a trustee's sale for a credit bid of $200,000. Lyla and Douglas foreclosed the North Dakota property and purchased the property for $975,000 at a July 2015 sheriff's sale. In September 2015, Lyla and Douglas sued Keith in North Dakota for a deficiency judgment for the difference between the amount Keith owed under the settlement agreement and the amount Lyla and Douglas obtained through foreclosure of the properties. Keith argued a deficiency judgment was not available under the agreement because California law applied and a deficiency judgment was prohibited under California law. The district court concluded California law applied only to the California property and granted summary judgment to Lyla and Douglas. The court entered an $884,508.83 deficiency judgment against Keith. On appeal, Keith maintained the California anti-deficiency statutes applied to the settlement agreement, and those statutes barred a deficiency judgment in this case. The North Dakota Supreme Court reversed and remanded, concluding California law barred a deficiency judgment in this case as a matter of law. View "Candee v. Candee" on Justia Law

Shannon Evans appealed an order granting Gerald Feldmann ownership of certain property from Leonhard Feldmann's estate. The North Dakota Supreme Court affirmed, concluding the district court did not err in finding an inter vivos gift and did not err in finding the proceeds of the standing crop passed with the devise of real property. “The appellate court does not reweigh evidence, reassess witness credibility, or substitute its judgment for the trial court's decision merely because it would have reached a different result. Standing crops at the time of death pass with the real estate to which they are attached unless otherwise specified in a will.” View "Estate of Feldmann" on Justia Law