Justia Business Law Opinion Summaries

Articles Posted in North Dakota Supreme Court
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The case involves Timothy Morales, who was injured when he was hit by a vehicle driven by Ruby Junewal within the Weatherford Distribution Facility in Williston. Morales filed a lawsuit alleging negligence against Weatherford U.S., L.P., Junewal, and Junewal's employer, Wilhoit Properties, Inc. He also claimed that Weatherford was negligent for failing to install proper lighting, road signs, or sidewalks near the road.The District Court of Williams County dismissed Morales's claims against Wilhoit with prejudice after the parties did not oppose Wilhoit’s motion for summary judgment. Later, Weatherford moved for summary judgment, arguing that it owed no duty to Morales because he was aware of the obvious danger posed by vehicles on the roadway. The district court granted Weatherford’s motion, and Morales appealed.Meanwhile, Junewal notified the court that she and Morales had reached a settlement. However, no concluding documents were filed. The district court then entered an order for judgment under its order granting Weatherford summary judgment. Morales appealed again, but the Supreme Court of North Dakota dismissed his appeal because claims against Junewal remained pending in the district court.In the Supreme Court of North Dakota, the court concluded that the district court misapplied the law when it treated Morales’s request as a Rule 60(b) motion and held it “no longer has jurisdiction.” The Supreme Court reversed the district court's order denying Morales's request and remanded the case with instructions for the district court to enter a single final judgment adjudicating all the claims and all the parties’ rights and liabilities within twenty days from the filing of the Supreme Court's opinion. View "Morales v. Weatherford U.S., L.P." on Justia Law

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The case involves a dispute between Keisha Kemmet and Lindell Kemmet, who were married in September 2016 and separated in June 2021. The main issues in the case revolve around the distribution of marital property following their divorce. Keisha Kemmet argues that the district court's distribution of marital property was not equitable, the court's valuation of land was clearly erroneous, and the court's computations contain errors. Lindell Kemmet cross-appeals, arguing that the court's valuations of his remainder interest in his family's homestead, personal property items, and his dental practice were clearly erroneous. He also argues that the distribution of marital property is not equitable, the provision regarding health insurance is ambiguous, and the court abused its discretion by failing to allow for cross-examination of Keisha Kemmet’s expert witness.The district court had valued the parties' property and debts and made an equitable distribution. Both parties presented testimony regarding the valuation of the land and the dental practice. The district court issued its findings of fact, conclusions of law, and order for judgment and judgment. Both parties appealed.The Supreme Court of North Dakota found that the district court's valuation of the Kidder County property and the dental practice was not clearly erroneous. The court's valuations of these items were within the range of the evidence presented. However, the court's execution of the distribution created confusion and required clarification. The Supreme Court remanded the issue for proper accounting of the distribution of the marital estate. The court also found that the district court's finding of an equitable distribution of 40% to Keisha Kemmet in a short-term marriage was not clearly erroneous. The court's findings and distributions were supported by the record. The Supreme Court affirmed the judgment in all other respects, except for the court's findings regarding the valuation and distribution of the Kidder County property, which must be clarified and its distributions reconsidered. View "Kemmet v. Kemmet" on Justia Law

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The Supreme Court of North Dakota reviewed a case involving Donovan Meuchel, a member of Red Trail Energy, LLC, who requested information from the company after it solicited bids for a project and his company's bid was unsuccessful. Meuchel claimed a right to the information under state law, but Red Trail argued that he was not entitled to the information as it was not material to his rights and duties as a member of the company. The District Court sided with Red Trail, and Meuchel appealed.The Supreme Court affirmed the lower court's decision, concluding that the court had not erred in denying Meuchel's request for information or in awarding attorney’s fees to Red Trail. The court explained that under North Dakota's Uniform Limited Liability Company Act, a member of an LLC has a right to any record or information that is material to the member's rights and duties or any other information, unless the demand is unreasonable or improper. In this context, information is considered "material" if there is a substantial likelihood that a reasonable decision maker would consider it important.The court found that Meuchel had not shown that the information he sought was material to his rights and duties as a Red Trail member. Furthermore, the court determined that Red Trail's refusal to provide information on the bidding process was not unreasonable, given that disclosure could have negatively impacted the company's financial status and reputation. The court also found that Meuchel had failed to make a good faith effort to resolve the discovery dispute outside of court, which justified the award of attorney’s fees to Red Trail. View "Meuchel v. Red Trail Energy" on Justia Law

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This case involves a dispute that arose after a divorce between Greg Grengs and Lisa Genareo (formerly Lisa Grengs). As part of the divorce settlement, the Supreme Court of North Dakota ordered that property owned by GLG Farms, LLC, a company established by Grengs to hold ownership of his farm property and equipment, be mortgaged to provide Genareo with security for a property settlement payment valued at $1,300,000. Following the court order, two new members were added to GLG Farms, LLC, and the company filed for bankruptcy protection. Grengs and GLG Farms, LLC, then entered into a stipulation agreement in bankruptcy court, agreeing to mortgage terms and payment terms. However, GLG Farms, LLC, later argued that the two new members of the company were not required to execute the mortgage and that the agreement in bankruptcy court had little impact on the court's decision.The Supreme Court of North Dakota affirmed the district court's order, holding that Grengs acted as an ostensible agent of GLG Farms, LLC, with apparent authority. The court found that Genareo was right to believe that GLG Farms, LLC, consented to Grengs acting as its agent, thus binding the company to the stipulation agreement. The court concluded that GLG Farms, LLC, ratified Grengs' actions by embracing their advantages and using them in judicial proceedings and did not timely disavow Grengs' actions.The court also rejected GLG Farms, LLC's argument that the district court failed to adequately describe the terms of the required mortgage, pointing out that a statutory mortgage form exists and that the amounts due by Grengs were plainly provided in the stipulation. The court further found GLG Farms, LLC's argument that North Dakota law does not provide a standard mortgage to be frivolous, awarding Genareo $1,000 as a sanction. View "Grengs v. Grengs" on Justia Law

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Rocket Dogs K-9 Aquatics & Wellness Center, LLC (“Rocket Dogs”) appealed the dismissal of its action against Derheim, Inc., dba My Aquatic Services, and Troy Derheim (“Derheim”), with prejudice. The North Dakota Supreme Court concluded the district court did not err in granting Derheim’s motion to enforce settlement and in deciding questions of fact, rather than submitting the issue to a jury, on whether Rocket Dogs authorized its previous counsel to settle its claims. The court’s findings the parties entered into a binding and enforceable settlement agreement were not clearly erroneous, and the court did not abuse its discretion in enforcing the agreement. View "Rocket Dogs K-9 Aquatics & Wellness Center v. Derheim, et al." on Justia Law

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Defendants appealed a judgment and order denying their motion for a new trial after a jury found in favor of plaintiffs on their claims of breach of contract, conversion, deceit, defamation, and unlawful interference with business. The district court quieted title in plaintiff Seven Star Holdings. Defendants argued: (1) the court erred by failing to decide whether a joint venture existed and in quieting title; (2) there was insufficient evidence supporting the jury verdict on the claims of breach of contract, conversion, defamation, and unlawful interference with business; and (3) the verdict violated the law of comparative fault. After review, the North Dakota Supreme Court affirmed, concluding defendants waived their arguments on joint venture, quiet title, breach of contract, and comparative fault; and the court did not abuse its discretion in determining the verdict was not manifestly against the weight of the evidence and rejecting the defendants’ new trial motion. View "Kluver, et al. v. SGJ Holdings, et al." on Justia Law

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4201 2nd Ave. W., LLC, d.b.a. Safari Fuels 105 (“4201”) appealed a district court’s judgment finding First State Bank & Trust, formerly First National Bank & Trust Company (“the bank”), held a valid and enforceable security interest in a liquor license and other collateral. In 2015, the bank loaned approximately $4.34 million to Racers Store 102, LLC (“Racers”) under a promissory note for its operation of a convenience store. As security for the loan, Racers signed the bank a leasehold mortgage, security agreement, and fixture filing against real and personal property including a liquor license, coffee kiosk, walk-in freezer, and Kohler generator, among other collateral. In 2016, Racers defaulted on its loan, and the bank commenced a foreclosure action. During foreclosure proceedings, the bank took control of the convenience store and contracted with 4201 to operate the store while the foreclosure action was pending. Racers transferred its rights, titles, and interests in the ground lease and assets of the store to 4201; 4201 entered into a forbearance agreement with the bank. The parties subsequently discovered the liquor license could not be transferred until delinquent property taxes were paid. The bank and 4201 executed an addendum to the forbearance agreement agreeing to pay equal shares of the property taxes whereby the liquor license would become an asset of 4201 subject to the existing lien held by the bank. The parties also entered into a personal property pledge in which 4201 pledged to give the bank a continuing first-priority interest in the liquor license, 4201 agreed not to sell, assign, or transfer the license, and 4201 agreed to reimburse the bank for costs associated with defending its interest in the license. In 2021, the bank decided to cease operations of the store and offered to sell the liquor license to 4201. 4201 commenced legal action seeking a declaratory judgment that the bank no longer held a valid and enforceable lien on the liquor license, coffee kiosk, walk-in freezer, and Kohler generator. Following a bench trial, the district court determined the bank held a valid and enforceable security interest in the liquor license and other collateral. The court dismissed the bank’s counterclaim. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed. View "4201 2nd Ave W v. First State Bank & Trust, et al." on Justia Law

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Plaintiffs William Kainz and GeoChemicals, LLC appealed a district court’s order granting Jacam Chemical Co. 2013, LLC’s motion to abate and an order and judgment awarding attorney’s fees to Jacam. Plaintiffs argued the district court erred by abating the action and by awarding attorney’s fees. The North Dakota Supreme Court concluded the district court misapplied the law in granting the motion to abate and abused its discretion by awarding attorney’s fees. Accordingly, judgment was reversed and the case remanded for further proceedings. View "Kainz, et al. v. Jacam Chemical Co. 2013" on Justia Law

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Nodak Insurance Company (“Nodak”) appealed, and John D. Miller, Jr. d/b/a John Miller Farms, Inc. and JD Miller, Inc. (collectively, “Miller”) cross-appealed a judgment determining Miller’s insurance policy with Nodak provided coverage and awarding Miller damages. The dispute arose from Miller’s sale of seed potatoes to Johnson Farming Association, Inc. (“Johnson”). Miller operated a farm in Minto, North Dakota. During the 2015 planting season, Miller planted seed potatoes. Miller claimed a North Dakota State Seed Department representative inspected the field where the seed was being grown on July 13, July 26, and September 3, 2015, which indicated no problems with the seed crop. On or about September 3, 2015, Miller “killed the vines” in anticipation of and as required to harvest the seed crop. Miller harvested the seed crop between September 18 and September 25, 2015, and the harvested seed crop was immediately taken from the field to Miller’s storage facility south of Minto. n December 31, 2015, Miller and Johnson entered into a contract for the sale of seed potatoes. The contract for sale disclaimed any express or implied warranty of merchantability or fitness for a particular purpose and contained a limitation of consequential damages and remedies. In June or July 2016, Johnson informed Miller of problems with some of the seed potatoes he had purchased. Johnson stated an analysis definitively showed very high levels of the herbicide glyphosate, which caused the problems with the seed potatoes. The seed potatoes did not grow properly, and Johnson alleged damages as a result. It was undisputed the seed potatoes were damaged because an employee of Miller inadvertently contaminated the seed potatoes with glyphosate while they were growing on Miller’s Farm. In July 2016, Miller sought coverage for the loss from Nodak. Because the North Dakota Supreme Court concluded a policy exclusion applied and precluded coverage, the North Dakota Supreme Court reversed the district court's judgment. View "Miller, et al. v. Nodak Ins. Co." on Justia Law

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Brian and April Szostak appealed a district court’s order granting a second motion for sanctions, and the court’s finding of facts, conclusions of law, and order for judgment and judgment. Panther Pressure Testers Inc., and Kirk Wold sued the Szostaks alleging the Szostaks and Wold formed a company named Szostak Services, LLC. Panther and Wold alleged Wold was a member of Szostak Services and the company breached their contract by failing to recognize him as a member. Panther and Wold claim the Szostaks were unjustly enriched after Panther and Wold erroneoysly deposited funds into a Szostak Services bank account and the Szostaks refused to return the funds. The Szostaks answered and counterclaimed. The Szostaks served discovery responses, but did not provide requested documents. Panther and Wold moved for sanctions due to Szostaks’ non-compliance with the district court’s order compelling discovery. At a deposition, for which a subpoena duces tecum was issued, April Szostak revealed she and her husband had 12 boxes of documents pertaining to Szostak Services, but Szostak Services did not bring any documents to the deposition. Panther and Wold moved again for sanctions, requesting the district court enter a default judgment against the Szostaks and dismiss their counterclaims. The Szostaks argued the court abused its discretion by granting Panther and Wold’s second motion for sanctions and entering default judgment. The Szostaks also argued the court erred in its determination of damages. Finding no reversible error, the North Dakota Supreme Court affirmed the default judgment. View "Panther Pressure Testers, et al. v. Szostak, et al." on Justia Law