Justia Real Estate & Property Law Opinion Summaries

26th Street Hospitality, LLP appealed a district court's order granting a motion to compel arbitration; order lifting a stay in the proceedings, confirming the arbitration award, and awarding post-judgment interest; and final judgment. The Partnership argued the district court erred in ordering arbitration because the court was required to determine the validity of the contract before arbitration could be ordered and not all of the claims and parties were subject to arbitration. Finding no reversible error in the district court's judgment, the Supreme Court affirmed. View "26th Street Hospitality v. Real Builders" on Justia Law

The Next Step, an unincorporated association, and Jamie Redmon, an individual, both claimed title to residential real property in Minot. Both parties claimed ownership through different quitclaim deeds they alleged were executed by the prior owner of the property. Redmon alleged the quitclaim deed to The Next Step was forged. Holly Gates, a co-founder of The Next Step, asserted it was not. The Next Step moved for summary judgment, and Redmon filed a response. The district court did not immediately rule on the motion; it instructed the parties to provide supplemental briefing on the issue of whether unincorporated associations were capable of holding title to real property in North Dakota. After the parties provided their supplemental briefs, the court entered an order dismissing the case. The court held unincorporated associations are incapable of holding title to real property in North Dakota. The Next Step appealed. The Supreme Court affirmed dismissal, finding that indeed, unincorporated associations were incapable of holding title to real property. View "The Next Step v. Redmon" on Justia Law

In 2007, Leroy and Norma Seaton entered into an oil and gas lease with Gadeco, LLC covering Sections 5, 6, 7, 8, and 18 in Township 154 North, Range 98 West, Williams County, North Dakota. The lease had a primary term of five years. The lease contained a "continuing operations clause," which enabled Gadeco to extend the primary term of the lease if "not more than ninety . . . days . . . elapse between the completion or abandonment of one well and the beginning of operations for the drilling of a subsequent well." The lease also contained a Pugh clause (the terms of which were not at issue here). In 2012, the Seatons entered into an oil and gas top lease with Valentina Exploration, LLC, covering Sections 5, 6, 7, and 8 in Township 154 North, Range 98 West, Williams County, North Dakota, sections already under contract by Gadeco's lease. A Gadeco land manager mailed a letter to the Seatons, tendering a shut-in royalty payment. The Seatons did not immediately contact Gadeco in response to the land manager's letter, but later had their attorney mail a certified letter to Gadeco demanding that it "sign and file a formal Release of Oil and Gas lease as to the Seaton lease acres in Sections 6 and 7, . . . pursuant to [N.D.C.C. § 47-16-36]." The letter alleged the lease had expired as to Sections 6 and 7 based on the terms of the lease, stating: "[d]ue to the "unless" lease term provisions contained in the 2007 Gadeco, L.L.C. lease and the letter of March 5, 2012, the lease rights held by Gadeco, L.L.C. under the May 4, 2007 Seaton lease have expired as to the acreage in Section 6 and 7 terminated as of May 4, 2012." 2013, Valentina Exploration recorded and assigned its top lease to Valentina Williston, its wholly-owned subsidiary, to litigate the dispute. The Seatons entered into a litigation agreement with Valentina Williston in which the Seatons agreed to Valentina Williston acting "as the agent and Lessee of Seaton," in the impending litigation. Valentina Williston sued for declaratory judgment and to quiet title. Valentina Williston moved for partial summary judgment arguing the lease had terminated, as a matter of law, due to the effect of the land manager's letter. Gadeco filed a cross-motion for summary judgment asking the district court to dismiss Valentina Williston's claims and conclude the lease continued in full force and effect beyond the primary term due to continuing drilling operations. The district court granted Gadeco's motion for summary judgment and dismissed Valentina Williston's claims with prejudice. Valentina Williston appealed. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Valentina Williston, LLC v. Gadeco, LLC" on Justia Law

David Gray appealed from an order denying his demand for a change of judge and from a judgment dismissing his claims and awarding costs and attorney's fees to Terry Berg. Gray and Berg are adjacent property owners. Berg wounded a deer on his property. The deer ran onto Gray's property. Berg followed the deer onto Gray's property, but he did not find the deer. Berg, along with his son and an acquaintance, reentered the property the following day, but they again did not find the deer. In a subsequent conversation with Gray, Gray informed Berg he was not welcome on the property. About a month later, Gray posted his property. Gray refused Berg's subsequent requests to access the property for purposes of finding the deer. Berg contacted the North Dakota Department of Game and Fish for assistance in entering Gray's property to locate the deer. On December 23, 2013, a game warden accompanied Berg to Gray's property. At trial, the game warden testified that prior to going to the property, she contacted Gray, who agreed Berg and the game warden could come onto his property. However, once at the property, Gray informed a sheriff's deputy, who had been called to the property, he wanted Berg and the game warden removed for trespassing. The district court found, as a matter of fact, Gray consented to their search for the deer after the sheriff's deputy informed Gray that Berg and the game warden wanted to search his property to recover the deer. Berg and the game warden again did not locate the deer. Gray sued Berg for Berg's December 23, 2013 entry to his property. After a bench trial, the district court concluded Berg lawfully entered Gray's property to recover the deer, which was legally shot on his own land. The court concluded Berg acted reasonably and caused no damage while on the property. The court also concluded Gray's claims were frivolous because, in the court's opinion, the law was clear Berg had the right to go onto Gray's property to recover the deer and there was no good faith basis on which Gray could have expected to prevail. Accordingly, the court entered a judgment dismissing Gray's action and ordering Gray to pay Berg's costs and attorney's fees. Gray appealed. The Supreme Court affirmed the order and the judgment. Berg's request for attorney's fees for defending against this appeal was denied. View "Gray v. Berg" on Justia Law

Jerry and Linda Lumley appealed a judgment dismissing their action against Elaine Kapusta for specific performance of an oral contract to convey real property located in Mountrail County. The Lumleys were long-time tenant farmers of Kapusta's property in Mountrail County. Kapusta resided in Virginia and wanted to sell her North Dakota property. Linda Lumley and Kapusta had telephone conversations in 2012 about the Lumleys purchasing some of the property. Linda Lumley told Kapusta she would obtain an appraisal of the property. Dacotah Bank conducted an "Agricultural Real Estate In-House Evaluation," which specifically warned "[t]his evaluation is not an appraisal," and valued the property at $525,827. Butch Haugland, who is not a licensed appraiser, also conducted an evaluation and valued the property $60,000 higher than the bank's valuation. Based on the bank's valuation, the Lumleys sent Kapusta a cashier's check for $525,827, deeds to be executed by Kapusta, and a note instructing her that "[t]he purchase of all the property is contingent upon all documents being signed, notarized, and returned the same day as signed." Kapusta endorsed and deposited the check in a bank and signed the deeds, but did not return the executed deeds to the Lumleys. According to Kapusta and her daughter, they telephoned Linda Lumley and told her they did not understand why there had been no appraisal of the property and they wanted one performed. Shortly afterward, Kapusta returned the money to the Lumleys. The Lumleys thereafter sued Kapusta for specific performance of their alleged oral contract to convey the property. Because the district court's finding that there was no enforceable oral contract between the parties was not clearly erroneous, the Supreme Court affirmed the judgment. View "Lumley v. Kapusta" on Justia Law

APM, a property management company, sought a builders risk insurance policy from TCI Insurance Agency, Inc. to cover an apartment building under construction in Fargo. Jay Alsop, APM's president, discussed insurance policies with TCI's agent Devin Gaard. One policy in particular, from Philadelphia Insurance Company, covered lost rent and other "soft costs," such as interest. Alsop also received a quote from a different insurance agency for another policy from Travelers Insurance Company, which was cheaper than the Philadelphia policy. The Travelers policy did not have coverage for lost rent and soft costs. Alsop informed Gaard about the Travelers policy and requested Gaard to procure the policy as it was quoted by the other agency, without change. A fire at the construction site delayed the opening of the apartment building for five months. APM filed a claim under the insurance policy for damages caused by the fire, including lost rent and interest charges. Travelers paid part of the claim, but denied the claim for lost rent and interest because the policy did not provide coverage for those costs. APM sued TCI, alleging TCI and Gaard were negligent for failing to offer APM a policy endorsement that provided additional coverage for lost rent and soft costs. TCI denied liability and moved for summary judgment, claiming that APM did not request the additional coverage for lost rent and soft costs and that TCI and Gaard were not required to offer the additional coverage to APM. The district court granted TCI's motion, concluding APM failed to raise a genuine issue of material fact as to whether Gaard breached his duty to APM. The court also concluded Gaard's duty was not enhanced because APM failed to establish a genuine issue of material fact indicating a special relationship existed between APM and TCI. On appeal, APM argued the district court erred in deciding there were no genuine issues of material fact as to whether: (1) Gaard breached his duty to APM; and (2) a special relationship existed between APM and TCI. Finding no reversible error, the Supreme Court affirmed the grant of summary judgment to TCI. View "APM, LLP v. TCI Insurance Agency, Inc." on Justia Law

The successors to the interest of the Grynberg Petroleum Company appealed a trial court's conclusion that Grynberg wrongfully deducted certain costs from gas royalties paid to Tyronne Kittleson, as trustee of the Tyronne B. Kittleson Real Estate and Oil Trust ("Kittleson"), under a lease between the parties. The royalty clause of the lease at issue here contained a "no deductions" clause. The gas produced from the well on the leased premises was a sour gas with little to no market value. Grynberg does not operate the gas-producing well. The well is operated by Missouri River Royalty Corporation under a joint operating agreement with Grynberg. Missouri River entered into agreements for third parties to gather and process the gas. After the gas and liquids were processed and sold, Grynberg calculated Kittleson's royalty using the work-back method. Under the work-back method, market value of the gas at the well is calculated by deducting post-production costs incurred in making the sour gas a marketable product from the plant tailgate proceeds. Grynberg paid Kittleson by subtracting post-production costs from the sales price Grynberg received for the processed gas. In 2005, Kittleson sued Grynberg, claiming that under the "no deductions" language in the royalty clause of the lease, Grynberg was prohibited from deducting the costs of processing the sour gas from Kittleson's royalty. Kittleson alleged Grynberg began wrongfully deducting post-production costs from Kittleson's royalties in 1997. Grynberg denied liability, claiming the royalties paid to Kittleson did not violate the terms of the lease. Grynberg argues the district court erred in its interpretation of the lease. Grynberg argues the lease allows it to subtract post-production costs from Kittleson's royalty. After review, the North Dakota Supreme Court affirmed, concluding the district court correctly interpreted the lease, the amount of damages was not clearly erroneous, and the correct statute of limitations was applied. View "Kittleson v. Grynberg Petroleum Company" on Justia Law

John Benson appealed the grant of summary judgment quieting title in disputed mineral interests in Desert Partners IV, L.P. Benson argued the district court erred in concluding Desert Partners and Family Tree Corporation, Inc., were entitled to summary judgment as good-faith purchasers for value of the disputed mineral interests. After review of the trial court record, the Supreme Court concluded there were disputed issues of material fact involving whether the plaintiffs were good-faith purchasers. The Court reversed summary judgment in this case and remanded for further proceedings. View "Desert Partners IV, L.P. v. Benson" on Justia Law

In June 2015, the State began this civil action against Patricia Goodale, contending that her home was a public nuisance. The Walsh County sheriff's office personally served Goodale with the summons and complaint. On August 5, 2015, after several weeks without receiving an answer from Goodale, the State filed with the district court an affidavit of default and proof for judgment; proposed findings of fact, conclusions of law, and order for abatement; and a proposed judgment. On August 7, 2015, the district court signed the findings and order, and a default judgment for abatement of nuisance was entered. Goodale was served notice of the judgment. Goodale did not seek relief from the default judgment in the district court under N.D.R.Civ.P. 60(b), but instead appealed directly to the North Dakota Supreme Court. Finding no reversible error, the Supreme Court affirmed. View "North Dakota v. Goodale" on Justia Law

Dwight Johnson and Darin Vangsness appealed from a judgment affirming the State Board of Public School Education's decision to deny their petition for annexation of property from one school district to another. Johnson and Vangsness owned land that was transferred to the Lewis and Clark district, and they sought annexation of property to the Garrison district. The McLean and Ward county committees approved the petition. The petition was then submitted to the State Board of Public School Education for approval. Proponents and opponents of the petition testified and presented other evidence. Johnson, Vangsness and others, including the superintendent of Garrison, testified in favor of the annexation petition. The superintendent of Lewis and Clark and the president of its school board testified in opposition to the petition. Because the Board acted in accordance with the law, did not violate Johnson and Vangsness' constitutional rights or their rights to a fair hearing, and its decision was supported by a preponderance of the evidence, the Supreme Court affirmed the judgment. View "Annexation of a Part of Lewis & Clark Public Sch. Dist." on Justia Law