Justia Business Law Opinion SummariesArticles Posted in North Dakota Supreme Court
Taszarek, et al. v. Lakeview Excavating, et al.
Eugene Taszarek, Marlys Taszarek, Trina Schilling, Steven Taszarek, and Michael Taszarek (“Taszareks”) appealed a judgment finding Lakeview Excavating, Inc., was not the alter ego of Brian Welken. Welken was Lakeview Excavating’s president and sole shareholder. While working on certain county projects, Lakeview Excavating’s employees took fieldstones from a nearby property owned by the Taszareks to use for the roads. The Taszareks sued Lakeview Excavating and Welken for intentional trespass, conversion of property, and unjust enrichment. The claims of trespass and conversion were tried to a jury. The jury returned a verdict in the Taszareks’ favor, finding Lakeview Excavating was the alter ego of Welken and holding both parties liable for damages. The North Dakota Supreme Court reversed and remanded for a new trial, concluding the district court inadequately instructed the jury on the alter ego doctrine. After a bench trial, the district court found Lakeview Excavating was the alter ego of Welken and ordered the Taszareks could recover damages from either Welken or Lakeview Excavating. The Supreme Court reversed again, concluding the court’s findings relating to piercing Lakeview Excavating’s corporate veil were inadequate to permit appellate review. On remand, the court held an evidentiary hearing and found Lakeview Excavating was not the alter ego of Welken. The Taszareks argue the district court exceeded the scope of remand by holding an evidentiary hearing instead of specifying findings of fact based on evidence already in the record. Finding no reversible error in last of the district court's alter ego findings, the Supreme Court affirmed. View "Taszarek, et al. v. Lakeview Excavating, et al." on Justia Law
RTS Shearing v. BNI Coal
RTS Shearing, LLC (“RTS”) appealed the dismissal of its action with prejudice after the district court granted summary judgment in favor of the defendant BNI Coal, Ltd. (“BNI”). RTS provided rock crushing services for use on various construction projects. BNI operated a coal mine near Center, North Dakota. In February 2019, RTS filed suit against BNI, claiming breach of contract after BNI canceled purchase orders for RTS to provide rock-crushing services to BNI. BNI asserted it exercised its right to cancel the balance of the purchase orders under the Terms and Conditions that were incorporated by reference in the purchase orders. In January 2020, BNI moved for summary judgment, arguing RTS’s breach-of-contract claim failed and the action should have been dismissed because the two purchase orders at issue had also incorporated BNI’s standard “Terms and Conditions,” which allowed for the cancellation. In August 2020, the district court held a hearing on BNI’s motion. The court granted summary judgment in favor of BNI and dismissed RTS’s action with prejudice. Before the North Dakota Supreme Court, RTS argued the district court erred by entering summary judgment dismissing its complaint for breach of contract. The dispositive issue was whether BNI’s separate “Terms and Conditions” were incorporated by reference into the March 2015 and July 2015 purchase orders. On this record, the Supreme Court concluded as a matter of law the undisputed facts established that both RTS and BNI had knowledge of and assented to the incorporated terms referenced in the purchase orders and that RTS was not excused from the Terms and Conditions merely on the basis of its failure to request and review a copy from BNI before performing under the purchase orders. The district court, therefore, did not err in granting BNI’s summary judgment motion. View "RTS Shearing v. BNI Coal" on Justia Law
McDougall, et al. v. AgCountry Farm Credit Services, et al.
AgCountry Farm Credit Services, PCA appealed a district court judgment granting Michael and Bonita McDougall’s unjust enrichment claim and ordering AgCountry to pay $170,397.76. Kent and Erica McDougall were farmers and ranchers who began raising cattle in 2007. Michael and Bonita (collectively, “the McDougalls”) were Kent’s parents. In 2013, Kent and Erica began financing their operations through AgCountry.On various dates Kent and Erica obtained eight loans from AgCountry and signed promissory notes secured by real estate mortgages and security agreements. From fall of 2015 through March 2016, Kent and Erica repeatedly requested AgCountry restructure their loans and assist them in obtaining operating funds. Although Kent and Erica were in default on their loans with AgCountry, they signed a mortgage on the home quarter to AgCountry. When Kent and Erica were informed their request for restructuring was denied, they filed for bankruptcy. As part of the bankruptcy proceedings, Kent and Erica initiated an adversary action against AgCountry and the McDougalls. The complaint in the adversary action asserted a count for avoidance of transfer, for avoidance of the mortgage on the basis of fraud, and to determine the transfer of the home quarter back to the McDougalls from Kent and Erica was appropriate and nonavoidable. Then in 2018, the McDougalls sued AgCountry seeking a declaration that the mortgage on the home quarter was void and asserting claims of deceit, conversion, estoppel and unjust enrichment. AgCountry moved for summary judgment, arguing the McDougalls’ claims failed as a matter of law based on undisputed facts. AgCountry also argued the claims were barred by the prior judgment in Kent and Erica’s bankruptcy proceedings. Summary judgment was granted in favor of AgCountry dismissing the McDougalls’ claims of conversion, promissory estoppel, unjust enrichment and deceit and granting a declaration of superiority in AgCountry’s mortgage on the home quarter. The McDougalls appealed, and a trial ordered on their claims of deceit and unjust enrichment. The jury found in favor of AgCountry on the deceit claim, but in favor of the McDougalls on unjust enrichment. After review, the North Dakota Supreme Court directed the district court to modify the cost judgment, and affirmed as modified. View "McDougall, et al. v. AgCountry Farm Credit Services, et al." on Justia Law
Kruger, et al. v. Goossen
Sally Goossen appealed a trial court judgment determining Thomas Kruger’s and Goossen’s ownership interests in North Dakota Safety Professionals, LLC (“NDSP”). Goossen argued the district court erred in finding that she owned 45 percent of NDSP, and that certain expenses were business expenses for NDSP and were not draws Kruger made from NDSP’s account for his personal benefit. Concluding the district court’s findings were not clearly erroneous, the North Dakota Supreme Court affirmed. View "Kruger, et al. v. Goossen" on Justia Law
Command Center v. Renewable Resources, et al.
Shawn Kluver and Little Knife Disposal, LLC (“Little Knife”), appealed an amended judgment entered after a bench trial that awarded Command Center, Inc., monetary damages, interest, attorney’s fees and costs against Renewable Resources, LLC, and Kluver, jointly and severally. The amended judgment also awarded Renewable Resources damages and interest against Kluver and Little Knife, jointly and severally, and ordered them to indemnify Renewable Resources for all damages, interest, attorney’s fees, and costs awarded to Command Center. Command Center provided temporary labor services. Command Center sued Renewable Resources in small claims court, claiming unpaid amounts totaling $14,631.20, relating to temporary labor services that Command Center provided under agreements with Renewable Resources. Renewable Resources removed the case to district court. Command Center obtained leave of court to file an amended complaint, naming Kluver and Little Knife as additional defendants. Kluver had been the manager of Renewable Resources. Although Renewable Resources was billed and had paid Command Center $20,000 for the temporary labor services, Renewable Resources alleged that the temporary labor services were provided for the benefit of Little Knife, and that Kluver did not have authority to contract on behalf of Renewable Resources for the temporary labor services that benefited Little Knife. On review, the North Dakota Supreme Court concluded that evidence presented at trial supported the district court’s findings of fact and, further, that Kluver and Little Knife were rearguing the evidence and challenging the district court’s weight and credibility determinations. "We will not second-guess the district court’s clear findings on appeal. On this record, we conclude the district court’s findings are not clearly erroneous." View "Command Center v. Renewable Resources, et al." on Justia Law
Lund v. Swanson, et al.
James Lund appealed the grant of summary judgment entered in favor of Leland Swanson and Open Road Trucking, LLC. Lund had been an adverse party to Swanson and Open Road in a series of lawsuits, dating back to 2018. Trial in one of the lawsuits was scheduled to begin December 3, 2019. On the day before trial, Lund, Swanson, Open Road, and their respective counsel met to discuss settling the lawsuits between them. Swanson and Open Road were represented by the same attorneys. After the meeting, Lund’s attorney, Sean Foss, contacted the district court to inform it that the parties had resolved the matter scheduled for trial the following day, and asked the court to “take the trial off the calendar.” Attorney Foss then sent an email to counsel for Swanson and Open Road, with the subject line “settlement,” containing his notes regarding the settlement terms. On December 10, 2019, Swanson and Open Road’s attorney, Randolph Stefanson, emailed Foss a proposed settlement agreement, which included the same terms as Foss’s email. Two days later, Foss emailed Swanson and Open Road’s attorneys a revised version of the proposed settlement agreement. That same day, the North Dakota Supreme Court issued an opinion on one of the parties' pending cases which was on appeal at the time. In that case, the Supreme Court concluded a “judgment was not satisfied as between Swanson and Lund, and Open Road was entitled to take an assignment of the judgment from Swanson to enforce Swanson’s right of contribution from Lund for one-half of the judgment amount.” The Court reversed the district court’s order directing entry of satisfaction of the judgment, and remanded for entry of a charging order against Lund's transferrable interests in specified limited liability companies. Ultimately, no written settlement agreement was signed by the parties. In January 2020, Lund initiated this action against Swanson and Open Road to enforce the alleged settlement agreement. The parties filed cross-motions for summary judgment. After a hearing, the district court denied Lund’s motion and granted summary judgment in favor of Swanson and Open Road, concluding the statute of frauds barred enforcement of the settlement agreement. Lund appealed. Finding no reversible error, the North Dakota Supreme Court affirmed the district court's judgment. View "Lund v. Swanson, et al." on Justia Law
R & F Financial Services v. North American Building Solutions, et al.
R & F Financial Services, LLC, appealed a district court order dismissing its claims against Cudd Pressure Control, Inc., and RPC, Inc., and granting Cudd’s and RPC’s counterclaims and cross claims. North American Building Solutions, LLC (“NABS”) and Cudd Pressure Control, Inc. (“Cudd”) entered into an agreement where Cudd would lease from NABS 60 temporary housing modules for employee housing. The terms of the Lease required Cudd, at its sole expense, to obtain any conditional use permits, variances or zoning approvals “required by any local, city, township, county or state authorities, which are necessary for the installation and construction of the modules upon the Real Property.” The Lease was set to commence following substantial completion of the installation of all the modules and was to expire 60 months following the commencement date. NABS assigned its interest in 28 modules under lease to R & F; NABS sold the modules to R & F by bill of sale. Cudd accepted the final 32 modules from NABS, to which R & F was not a party. RPC, as the parent company of Cudd, guaranteed Cudd’s performance of payment obligations to R & F under the Lease. The Lease was for a set term and did not contain an option for Cudd to purchase the modules at the expiration of that set term. At the time R & F purchased NABS’s interest in the Lease, it understood the purpose of the Lease was to fulfill Cudd’s need for employee housing. The County required a conditional use permit for workforce housing, and Cudd had been issued a permit allowing for the use of the modules as workforce housing. The City of Williston annexed the Property within its corporate limits. Thereafter, the City adopted a resolution that declared all workforce housing was temporary and extension of permits was subject to review. The City modified the expiration date policy and extended all approvals for workforce housing facilities to December 31, 2015, such that all permits would expire the same day. In December 2015, Cudd successfully extended its permit for the maximum time permitted to July 1, 2016. Cudd sent a letter to NABS stating that it viewed the Lease as being terminated by operation of law as of July 1, 2016. R & F argued the trial court erred in finding the Lease was not a finance lease and, in the alternative, that the court erred in finding the doctrines of impossibility of performance and frustration of purpose to be inapplicable. Finding no reversible error, the North Dakota Supreme Court affirmed. View "R & F Financial Services v. North American Building Solutions, et al." on Justia Law
Three Aces Properties v. United Rentals
Three Aces Properties LLC appealed, and United Rentals (North America), Inc., cross-appealed a judgment and orders denying their motions to amend the judgment. In 2017, Three Aces sued United Rentals for breach of contract and waste. Three Aces claimed United Rentals breached the lease by failing to pay rent after it vacated the property, failing to maintain and repair the parking area, and failing to maintain and repair the premises. Three Aces alleged United Rentals’ use of the premises resulted in destruction of the asphalt parking area and damages to the building and other areas of the property. Three Aces claimed United Rentals attempted to repair the parking area by replacing the asphalt paving with scoria, the City of Williston notified the parties that replacement of the asphalt with scoria violated zoning ordinances, and the parties disagreed about which party had an obligation to repair the parking area. Three Aces argued the district court erred by failing to award it damages for its breach of contract claims. United Rentals argued the court erred in dismissing its breach of contract and constructive eviction claim. Finding no reversible error, the North Dakota Supreme Court affirmed the district court. View "Three Aces Properties v. United Rentals" on Justia Law
Estate of Moore
Donald Moore, Scott Moore, and the Glenn W. Moore & Sons partnership appealed an amended judgment ordering the partnership to pay $140,206 to Delbert Moore’s step-children, Charles Minard, Candice Eberhart, and Terry Minard. Before his death, Delbert Moore was a partner with his brother Donald Moore and nephew Scott Moore in the Glenn W. Moore & Sons partnership, a ranching business. Delbert Moore’s will directed that a majority of his real property be sold within six months of his death and the proceeds be distributed to his three step-children, Charles Minard, Candice Eberhart, Terry Minard, and his nephew Scott Moore. His will also devised his one-third interest in the partnership to his three step- children. Delbert Moore’s real property sold in May 2015. The partnership and Delbert Moore’s estate each hired an accountant to prepare an accounting of the partnership’s profits and losses; the Estate’s one-third share of the partnership’s profits was $140,206. The partnership argues the district court erred in adopting the Estate’s accounting of the partnership’s profits and losses. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed. View "Estate of Moore" on Justia Law
Titan Machinery v. Kluver
Shawn Kluver and Little Knife Disposal, LLC, appeal from a district court judgment ordering them to pay $140,042.83 to Titan Machinery, Inc., and $100,731.62 to Renewable Resources, LLC. In 2016, Kluver was the general manager of Renewable Resources, which was in the business of oilfield waste disposal. “At Kluver’s request and direction,” Renewable Resources leased a Case excavator and other equipment from Titan. The rental agreement for the Case excavator showed an estimated return date of June 28, 2016. Kluver also executed a credit application and personal guaranty with Titan to ensure Renewable Resources’ payment obligations under the rental agreement. Renewable Resources made all payments under the rental agreement from June 21, 2016, to December 6, 2016. No additional rental payments were made. In February 2017, while still employed by Renewable Resources, Kluver executed the operating agreement of Little Knife Disposal, LLC, as its sole member. Little Knife was also in the business of oilfield waste disposal. After Renewable Resources failed to make rental payments, Titan retrieved the Case excavator in October 2017. The excavator was damaged during the lease, and the excavator’s bucket was missing. In November 2017, Titan sued Renewable Resources for damaging the equipment and failing to pay the balance due under the rental agreement. In January 2018, Renewable Resources filed a third-party complaint against Kluver and Little Knife, claiming they wrongfully used the equipment leased from Titan and did not reimburse Renewable Resources. Renewable Resources requested that Kluver and Little Knife indemnify Renewable Resources for their use of the equipment. In October 2018, Titan obtained a $140,042.83 money judgment against Renewable Resources. In January 2019, Titan sued Kluver, claiming that under the personal guaranty he was liable for Renewable Resources’ debt to Titan. Kluver denied Titan’s allegations and brought a third-party complaint against Renewable Resources, asserting Renewable Resources should indemnify him for any amounts he was required to pay to Titan. Kluver and Little Knife argued the district court erred in finding they benefited from the equipment leased by Renewable Resources. They claimed there was no evidence they received a benefit from the Case excavator leased by Renewable Resources and the court erred in ordering them to indemnify Renewable Resources. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed the order in favor of Titan Machinery and Renewable Resources. View "Titan Machinery v. Kluver" on Justia Law