Justia Business Law Opinion Summaries

Ronald Smithberg appealed a judgment ordering Smithberg Brothers, Inc., to purchase his interest in the family farm corporation for $169,985 and dismissing on summary judgment his other claims against the corporation and its remaining shareholders, Gary and James Smithberg. After review, the North Dakota Supreme Court concluded Ronald Smithberg raised genuine issues of material fact regarding his claims against the corporation and Gary and James Smithberg, and the district court erred in granting summary judgment dismissing those claims. The court’s valuation of Ronald Smithberg’s interest in the corporation was reversed because his interest could not be valuated until his derivative claims on behalf of the corporation were resolved. View "Smithberg v. Smithberg, et al." on Justia Law

Brian Welken appealed a district court judgment piercing Lakeview Excavating, Inc.’s corporate veil and holding him personally responsible for money damages awarded to Eugene Taszarek, Marlys Taszarek, Trina Schilling, Steven Taszarek, and Michael Taszarek. In the spring of 2012, German Township in Dickey County, North Dakota selected Lakeview Excavating as a contractor for FEMA-funded road projects. Welken was Lakeview Excavating’s president and sole shareholder. A farmer who owned land adjacent to land owned by the Taszareks permitted Lakeview Excavating to enter his property to harvest field rock used for the road projects. However, Lakeview Excavating also took rock from the Taszareks’ property that was used in the road projects. The Taszareks sued Lakeview Excavating and Welken for intentional trespass, conversion of property, and unjust enrichment. The trespass and conversion claims 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, concluding that while Welken had consented to the jury deciding the alter ego issue, the district court did not adequately instruct the jury on the alter ego doctrine. On remand the district court ordered a March 2018 bench trial on the issue of whether Lakeview Excavating was the alter ego of Welken, concluding Lakeview Excavating was the alter ego of Welken and ruled the Taszareks could recover damages from either Welken or Lakeview Excavating. Welken argued on appeal the district court erred in piercing Lakeview Excavating’s corporate veil and holding him personally liable for the Taszareks’ damages. The Supreme Court again reversed, concluding the district court did not make adequate findings of fact under N.D.R.Civ.P. 52(a), and its findings relating to piercing Lakeview Excavating’s corporate veil were inadequate to permit appellate review. View "Taszarek, et al. v. Lakeview Excavating, Inc., et al." on Justia Law

Interiors by France (“IBF) appealed a district court judgment limiting IBF to a recovery of damages from Mitzel Contractors, Inc. (“MCI”) without an award of attorney fees. IBF initiated a small claims court proceeding in 2016 naming Mitzel Builders, Inc. (“MBI”) and Leeroy Mitzel as the defendants. IBF alleged it had not been paid for flooring materials and installation of the materials. MBI and Mitzel filed an answer, and Mitzel elected to remove the action from small claims court to district court. IBF argued it was entitled to a recovery of attorney fees under N.D.C.C. 27-08.1-04, which provided for the mandatory recovery of attorney fees to a prevailing plaintiff following the defendant’s removal of a small claims court case to the district court. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Interiors by France v. Mitzel Contractors, Inc., et al." on Justia Law

Elyse Puklich appealed, and Blayne Puklich cross-appealed, a district court judgment awarding Blayne $6,012,230. Elyse and Blayne Puklich were siblings who held ownership interests in a closely-held corporation, Puklich Chevrolet, Inc. (“PCI”, a limited partnership), B&E Holdings, LLP (“B&E”), and a closely-held corporation, B&E Bismarck Limited (“Limited”). In 2013, Elyse initiated this action to dissolve B&E. Blayne responded and asserted his own claims, including a request that the district court compel Elyse to buy his interest in PCI and seeking an award of damages for breach of fiduciary duties. In 2018, the district court issued findings of fact, conclusions of law, and ordered the entry of a judgment: dissolving B&E, compelling Elyse to purchase Blayne’s interest in B&E for $2,940,660, and compelling Elyse to purchase Blayne’s 19 percent ownership interest in PCI for $2,622,000. The judgment also awarded Blayne $300,000 for Elyse’s breach of a fiduciary duty owed to Blayne with respect to B&E. Finally, the judgment provided an award of $149,570 to Blayne for Elyse’s breach of her duty of loyalty and fair dealing in winding up Limited. Upon reviewing the record, the North Dakota Supreme Court was not satisfied sufficient evidence was presented to support the court’s damage award to Blayne for Elyse’s breach of a fiduciary duty with respect to B&E, and therefore reversed that award. The Court affirmed in all other respects. View "Puklich v. Puklich, et al." on Justia Law

Pinky’s Aggregates, Inc., and its president, Dale Honsey, appealed the grant of summary judgment awarding Frontier Fiscal Services, LLC, $526,253.12 in its action for breach of contract and to collect on a personal guaranty. Because Pinky’s and Honsey failed to raise a genuine issue of material fact to preclude summary judgment, the North Dakota Supreme Court affirmed summary judgment. View "Frontier Fiscal Services LLC v. Pinky's Aggregates, Inc., et al." on Justia Law

Eight Ball Trucking, Inc., and David and Laurie Horrocks (collectively “defendants”) appealed from an order entered after the district court denied their motion under N.D.R.Civ.P. 60(b) for relief from a summary judgment. The Horrocks are officers of Eight Ball, a Utah trucking company doing business in North Dakota during the relevant time period. A dispute arose over Eight Ball’s allocation of employees between North Dakota and Utah and Eight Ball’s obligation to procure North Dakota workers compensation insurance for its North Dakota employees. In late March and early April 2016, Workforce Safety & Insurance (“WSI”) commenced an action against the defendants by serving them with a summons and complaint to enjoin them from employing individuals in North Dakota and to collect $802,689.84 in unpaid workers compensation insurance premiums, penalties, and interest. The complaint alleged that WSI had issued an August 28, 2015 notice of an administrative decision finding the Horrocks personally liable for unpaid premiums and penalties owed by Eight Ball, that the Horrocks did not request reconsideration nor appeal from that decision, and that the administrative decision was res judicata. WSI filed the pending lawsuit in district court and moved for summary judgment. According to the Horrocks, they did not respond to the summary judgment motion because they thought they had submitted necessary documentation to WSI to resolve the issue. The district court ultimately granted WSI’s motion for summary judgment, awarding WSI $812,702.79 in premiums, penalties, and costs and disbursements and enjoining Eight Ball from engaging in employment in North Dakota. On December 19, 2016, WSI sent the Horrocks a letter, informing them the judgment had been entered against them on December 15, 2016, and requesting payment. The defendants did not appeal the summary judgment. Defendants moved to set aside the summary judgment on grounds of mistake, inadvertence, surprise or excusable neglect. The district court denied the motion, determining the defendants’ disregard and neglect of the legal process was not excusable neglect and failed to establish extraordinary circumstances necessary to set aside the judgment under N.D.R.Civ.P. 60(b). After review of the district court record, the North Dakota Supreme Court concurred and affirmed judgment. View "WSI v. Eight Ball Trucking, Inc., et al." on Justia Law

JRC Construction, LLC, appealed a judgment entered after a jury awarded Larry Pavlicek $217,244.55 in damages against JRC. The jury found JRC breached a contract with Pavlicek relating to construction work performed by JRC. JRC argued the district court erred in denying its motion and renewed motion for judgment as a matter of law because Pavlicek failed to prove he had a contract with JRC. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law

The Johnston Law Office appeals from a judgment dismissing its claims against Jon Brakke and Vogel Law Firm (collectively "Vogel"). Johnston argued the district court erred in granting summary judgment and dismissing its claims. Vogel represented PHI Financial Services, Inc. in an action against Johnston to recover damages for a fraudulent transfer. The district court entered judgment against Johnston in that action. In April 2016 Johnston sued Vogel for tortious interference with a business relationship, tortious interference with attorney-client business relationships, and abuse of process. Johnston alleged Vogel violated state law while attempting to execute on the judgment entered against Johnston. Johnston claimed Vogel improperly attempted to garnish funds from Johnston's lawyer trust account, operating account and fees owed by Johnston's clients, and Vogel's unlawful actions interfered with Johnston's business relationships with its lending bank and clients. In July 2017 Vogel moved for summary judgment, arguing Johnston was unable to prove the required elements of its claims and Vogel was entitled to dismissal of the claims. Vogel also moved to quash a subpoena duces tecum Johnston served on PHI Financial seeking billing information between Vogel and PHI Financial. The district court granted Vogel's motion as to all claims. Finding no reversible error, the North Dakota Supreme Court affirmed dismissal. View "Johnston Law Office, P.C. v. Brakke" on Justia Law

Shane Dockter appealed the denial of his N.D.R.Civ.P. 60(b) motion to vacate a default judgment, arguing the judgment was either void or should have been vacated for excusable neglect. Brandon and Shane Dockter were brothers. In 2007, the brothers formed a partnership to facilitate a joint farming operation. In conjunction with the formation of the partnership, the brothers also created a trust, the Dockter Brothers Irrevocable Trust, to hold farmland. The brothers were co-trustees of the trust. Shane had mental health and chemical dependency problems. By 2012, Shane's mental health and chemical dependency had escalated and caused him to be absent from the farm. In 2015, Shane was detained by law enforcement after he was found walking down a public road carrying a Bible while wearing a church robe and claiming to be Jesus. The incident resulted in Shane's admission to the North Dakota State Hospital for about a month. Around the same time, Shane developed an addiction to opioids and methamphetamine. He was readmitted to the State Hospital in late 2016 after threatening his mother. In February 2017, Shane was arrested for various offenses and was readmitted to the State Hospital. Brandon commenced a lawsuit against Shane seeking "dissolution" of the partnership and "dissolution" of the trust. Brandon alleged that "Shane's mental health and chemical dependency problems" made him unable to participate in partnership activities and made it impossible to achieve the purpose of the trust. Shane was served while in custody at the sheriff's office. Shane did not answer the complaint, and he was readmitted to the State Hospital for another month. While Shane was at the Hospital, Brandon moved for default judgment. Shane was served with the motion for default judgment at the State Hospital, but did not respond. The district court ultimately granted the default judgment "expell[ing]" Shane from the partnership and removing him as co-trustee of the trust. On appeal, Shane argued: (1) the default judgment was void and should have been vacated under N.D.R.Civ.P. 60(b)(4); and (2) the court abused its discretion by denying relief as provided in N.D.R.Civ.P. 60(b)(1), which allowed relief from a final judgment for mistake, inadvertence, surprise, or excusable neglect. Applying the limited standard for reviewing denial of motions to vacate default judgments, the North Dakota Supreme Court concluded the district court did not abuse its discretion and affirmed the orders denying the motion. View "Dockter v. Dockter" on Justia Law

Borsheim Builders Supply, Inc., doing business as Borsheim Crane Service, ("Borsheim") appealed a declaratory judgment granting summary judgment to Mid-Continent Casualty Company and dismissing Borsheim's claims for coverage. After review of the facts presented, the North Dakota Supreme Court concluded the district court erred in concluding Construction Services, Inc. ("CSI"), and Whiting Oil and Gas Corporation were not insureds entitled to defense and indemnity under the "additional insured" endorsement in the commercial general liability ("CGL") policy Mid-Continent issued to Borsheim. Furthermore, the Court concluded the court erred in holding Mid-Continent had no duty to defend or indemnify Borsheim, CSI, and Whiting under the CGL policy for the underlying bodily injury lawsuit. View "Borsheim Builders Supply, Inc. v. Manger Insurance, Inc." on Justia Law