Justia Real Estate & Property Law Opinion Summaries

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

Darwin Glasoe was the record title holder to a home in Williston when he died in 2003. His widow was appointed the personal representative of the estate, but she died shortly thereafter. No action was taken to further estate administration until a successor personal representative was appointed in December 2013. LeAnne Glasoe and Kris Glasoe were Darwin Glasoe's surviving children, and LeAnne Glasoe lived in the home during all pertinent times. The Williams County Auditor continued to mail its annual tax statements to the record title holder, Darwin Glasoe, after his death. Although real estate taxes were paid on the property through 2009, no taxes were paid on the property from 2010 through 2013. The County placed a tax lien on the property for delinquent taxes in May 2013. A tax deed issued to the County dated October 2, 2013, was filed on October 7, 2013. The County sold the property at public auction to Bradley and Brenda Parker a month later. On November 21, 2013, LeAnne Glasoe attempted to repurchase the property, but the County would not allow her to do so. The County issued the Parkers a deed to the property, which was filed on December 4, 2013. The Estate of Darwin Glasoe, LeAnne Glasoe, and Kris Glasoe appealed a judgment dismissing their action to recover and quiet title to property. Because the Glasoes failed to establish any jurisdictional defects in the tax lien foreclosure proceedings and LeAnne Glasoe's attempt to repurchase the property was too late, the Supreme Court affirmed. View "Estate of Glasoe v. Williams County" on Justia Law

Connie Welker and Vicki Ostrem appealed the grant of summary judgment quieting title to certain Mountrail County mineral interests. Ross Markgraf and Shanahan alleged W.J. Hannah owned 100% of the surface and minerals when he conveyed the property to "Arnold Hannah, Trustee" by grant deed in 1965, intending to create a family trust and appointing his son, Arnold Hannah, as trustee. Markgraf and Shanahan were descendants of Kathryn Nelson, W.J. Hannah's daughter and Arnold Hannah's sister. They claimed W.J. Hannah intended Arnold Hannah would hold the legal title to the property in trust for the benefit of himself; his siblings, Kathryn Nelson and Robert L. Hannah; and Margaret Rehmer, the only child of his deceased brother, Wilbert Hannah. They claimed Arnold Hannah held himself out as trustee in dealings related to the property, kept an accounting of the income and expenses related to the property, and made disbursements to the beneficiaries from the proceeds of the trust. They argued a resulting or constructive trust was created and Welker and Ostrem, as Arnold Hannah's heirs, did not have exclusive rights to the property. Welker and Ostrem answered and requested the complaint be dismissed. Welker and Ostrem then moved for summary judgment, arguing the 1965 grant deed transferring the property to "Arnold Hannah, Trustee" conveyed the title to Arnold Hannah in his individual capacity, the word "Trustee" was surplusage under N.D.C.C. 47-09-12, and Markgraf and Shanahan's claims for a resulting or constructive trust failed. Welker and Ostrem argued on appeal to the Supreme Court that the district court erred in granting Markgraf and Shanahan's motion for summary judgment because Markgraf and Shanahan's claims were barred by the statute of limitations, the court relied on inadmissible evidence, and Markgraf and Shanahan did not prove the existence of an implied trust by clear and convincing evidence. After review, the Supreme Court reversed and remanded, concluding summary judgment was not appropriate. View "Markgraf v. Welker" on Justia Law

Arrow Midstream Holdings, LLC and Arrow Pipeline, LLC (collectively "Arrow") appealed, and Tesla Enterprises, LLC ("Tesla") cross-appealed, a judgment dismissing without prejudice for lack of jurisdiction its action against 3 Bears Construction, LLC and Tesla for breach of contract and a declaration that Tesla's pipeline construction lien was invalid. In 2013, Arrow hired 3 Bears to be the general contractor for the construction of a pipeline located on a right-of-way easement acquired by Arrow from the Bureau of Indian Affairs over Indian trust land on the Fort Berthold Indian Reservation. 3 Bears entered into a subcontract with Tesla to supply materials and labor for the construction. 3 Bears was owned by two members of the Three Affiliated Tribes ("Tribe") and was certified under the Tribal Employment Rights Ordinance ("TERO"). 3 Bears claimed Arrow was a covered employer who was required to comply with TERO rules. After the pipeline was completed, a dispute arose between 3 Bears and Tesla concerning amounts Tesla claimed it was owed by 3 Bears for work Tesla performed. In mid-2014, Tesla sent Arrow a notice of right to file a pipeline lien under N.D.C.C. ch. 35-24. Tesla recorded the pipeline lien against Arrow in the Dunn County recorder's office in June 2014. In July 2014, Arrow commenced this action in state district court challenging the validity of the pipeline lien, seeking indemnification, and claiming 3 Bears breached the parties' contract. In August 2014, 3 Bears moved to dismiss for lack of subject matter jurisdiction. In November 2014, 3 Bears filed a complaint against Tesla and Arrow in Fort Berthold Tribal Court. 3 Bears sought a declaration that the pipeline lien was invalid, alleged Arrow had breached the master service contract, and requested an award of damages. In December 2014, the state district court agreed with 3 Bears' argument that it lacked subject matter jurisdiction over the lawsuit. The court concluded "exercising jurisdiction over this action under the circumstances presented here would infringe upon Tribal sovereignty." The court further concluded, "at the very least, Arrow and Tesla, as a matter of comity, should be required to exhaust their tribal court remedies before this Court exercises jurisdiction." The court dismissed the action "without prejudice to allow any of the parties to re-open the case without payment of another filing fee should it become necessary for purposes of enforcing the Tribal Court action or for any other reason." After review of the matter, the North Dakota Supreme Court reversed and remanded, concluding the district court had jurisdiction over this lawsuit. View "Arrow Midstream Holdings, LLC v. 3 Bears Construction, LLC" on Justia Law

Nathaniel Fleck and Alma Bergmann as trustees of the George J. Fleck Trust ("Fleck") appealed the grant of summary judgment quieting title to an oil and gas lease in favor of Missouri River Royalty Corp., Exxon Mobil Corp. and Mountain Pacific General, Inc. (collectively "defendants"). Fleck owns mineral interests in McKenzie County described as the south half of section 10 in range 100 west of township 150 north. In 1972, Fleck's predecessors in interest executed an oil and gas lease in favor of the defendants' predecessor in interest. The lease term was ten years and as long thereafter as oil or gas was produced. The lease also provided it would not expire if production ceased after expiration of the primary term if the lessee resumed operations to drill a well or to restore production within ninety days. In 1982, the Fleck 1 well was completed and the lease extended. In 2012, Fleck served the defendants with a notice of forfeiture and a demand for release of the lease. Fleck sued the defendants to quiet title, alleging the oil and gas lease expired due to a failure to produce oil or gas in paying quantities. The defendants answered, counterclaimed and requested the court declare the lease remained valid and in effect by the continued production of oil and gas from the Fleck 1 well and by the commencement of operations to restore production. Fleck moved for summary judgment, arguing they were entitled to a declaration quieting title to the mineral interests because the lease terminated when the Fleck 1 well stopped producing in paying quantities in 2010 and the defendants failed to engage in new drilling or reworking operations within ninety days. Pacific Mountain General and Missouri River Royalty separately moved for summary judgment, arguing the lease extended into its secondary term and remains valid and in effect based on the continued production of oil and gas by the Fleck 1 well. Exxon Mobil joined Missouri River Royalty's motion. The district court interpreted the lease and found production in paying quantities was not required to extend the lease, the well consistently produced an average of a few barrels per day, production was continuous at all relevant times and any cessation of production was temporary. The Supreme Court reversed, finding that the district court misapplied the law in interpreting the lease and that summary judgment was not appropriate. View "Fleck v. Missouri River Royalty Corp." on Justia Law