Justia Contracts Opinion Summaries

The case concerns a dispute between a homeowner and the builder of his residence. The homeowner entered into a purchase agreement in 2014 for a newly constructed home, which included a one-year residential warranty. Shortly after moving in, he noticed significant cold drafts, frost buildup, and temperature differences in the northwest corner of the home. He raised these concerns with the builder and a local home builders association within the first year, and specifically requested an insulation check before the warranty expired. The builder coordinated multiple inspections and minor repairs with a subcontractor and later, after a period of inactivity, continued to address the issues through additional inspections and proposed repairs. Nevertheless, the homeowner did not commence legal action until July 2022, after an independent inspection revealed ongoing insulation defects.The District Court of Cass County, East Central Judicial District, dismissed the homeowner’s claims for breach of warranty, breach of contract, and negligence on summary judgment. The court found the claims were time-barred under North Dakota’s six-year statute of limitations, ruling that the homeowner was on inquiry notice of potential claims as early as December 28, 2015, when he specifically identified insulation concerns. The court also rejected arguments that the builder had waived or forfeited the statute of limitations defense due to litigation conduct, or that equitable estoppel should apply based on ongoing repair efforts.The Supreme Court of North Dakota affirmed the district court’s decision. It held that the homeowner was on inquiry notice of his claims by December 28, 2015, making his 2022 action untimely under N.D.C.C. § 28-01-16(1). The Court further held that the builder neither waived nor forfeited its limitations defense, that ongoing repair and settlement discussions did not equitably estop the builder from asserting the defense, and that no duty-to-disclose exception applied. The summary judgment dismissal was affirmed. View "Hanson v. Dabbert Custom Homes" on Justia Law

The dispute centers on two business partners, Hofer and Paulson, who jointly owned multiple entities, including Imaging Solutions, Inc. (ISI). After several ventures failed, both partners assumed significant individual debts to ISI. In 2016, as Paulson sought to separate his interests, the parties negotiated a "Takeout" through their chief financial officer, Heier. Hofer agreed to assume Paulson’s $1.9 million debt to ISI. Multiple agreements were executed, including an oral assumption agreement, a Master Redemption Agreement, and an ISI Redemption Agreement. Hofer later claimed he was unaware of assuming the debt, citing written assumption agreements with stamped signatures that he alleged were unauthorized.The District Court of Cass County held a bench trial in November 2024. It found the oral assumption agreement valid and enforceable, concluding Hofer had indeed assumed Paulson’s debt as part of the Takeout. The court declared the written assumption agreements invalid, dismissed Hofer’s claims for fraud, breach of fiduciary duty, civil conspiracy, rescission, and other causes of action, and awarded statutory costs to Paulson and Heier. Paulson’s counterclaims, other than the request for declaratory judgment, were also dismissed.The Supreme Court of North Dakota reviewed the appeal and applied a clearly erroneous standard to factual findings. It held the oral assumption agreement was not subject to the statute of frauds under N.D.C.C. § 9-06-04(2) or (5), because the agreement constituted an assumption rather than a guaranty and did not alter terms of repayment. The court found sufficient evidence of mutual consent and affirmed the district court’s judgment, upholding the validity and enforceability of the oral assumption agreement. View "Hofer v. Paulson" on Justia Law

Richard Marschner and Roxane Marschner divorced in 2016 after reaching a settlement agreement dividing their marital property. Richard received a lump sum from Roxane’s retirement account, and Roxane was to receive a portion of Richard’s Army National Guard pension and Federal Employees’ Retirement System benefits upon his retirement. The divorce judgment included provisions that if Richard took action to prevent or reduce Roxane’s share of his military retirement pay—including by waiving retirement pay in favor of disability pay—he would be required to indemnify Roxane. Both parties waived spousal support in the original settlement.After Richard was separated from the National Guard for medical reasons, he began receiving military disability retired pay and waived all his retirement pay. When Roxane attempted to collect her share, the Defense Finance and Accounting Service denied her request, stating that disability pay was not divisible under the Uniformed Services Former Spouses’ Protection Act. Roxane then sought an amended judgment or redistribution of the marital estate from the District Court of Burleigh County, South Central Judicial District. The district court awarded Roxane spousal support equivalent to her lost share of Richard’s retirement pay, relying on the indemnification provision and reasoning that federal law did not prevent enforcement of the parties’ agreement.The Supreme Court of North Dakota reviewed the case de novo, focusing on whether federal law preempts enforcement of the indemnification provision. The court held that federal law, as interpreted in Howell v. Howell, prohibits state courts from dividing military disability retired pay or enforcing indemnification provisions, even if contractually agreed upon. The district court’s award of spousal support was deemed an impermissible division of disability pay. The Supreme Court of North Dakota reversed the amended judgment. View "Marschner v. Marschner" on Justia Law

The case concerns a failed sale of a bar and restaurant in Bismarck, North Dakota. Neil Galpin, as assignee of Galpin Entertainment, sought to recover a $100,000 earnest money deposit after Cantina Holdings, LLC and Clay Butte Holdings, LLC (the buyers) did not complete the purchase. The parties had executed a confidential offer letter, which required the deposit and stated it would become non-refundable after the buyer’s due diligence period expired, unless the buyer notified the seller of its intent not to proceed before that date. Later, the parties signed a standard form purchase agreement that both incorporated the confidential letter and included a conflicting, pre-printed provision stating that if financing failed after a certain date, the earnest money would be returned to the buyer. The transaction never closed, and Galpin Entertainment ultimately sold the property to someone else.The District Court of Burleigh County, South Central Judicial District, heard the case in a bench trial. The court concluded that the specially drafted provision in the confidential letter, rather than the standard form language in the purchase agreement, controlled the disposition of the earnest money. It found that the buyers did not properly exercise their right to terminate before the due diligence deadline and that Galpin did not breach the contract by failing to negotiate the contract for deed in good faith. Judgment was entered in favor of Neil Galpin for the earnest money, and the buyers’ counterclaims were denied.On appeal, the Supreme Court of the State of North Dakota affirmed the district court’s judgment. The Supreme Court held that, when conflicting contract provisions exist, specially drafted terms control over standard form language, especially where the parties who caused the uncertainty seek to benefit from it. The court also found no clear error in the district court’s finding that Galpin negotiated in good faith. View "Galpin v. Cantina Holdings" on Justia Law

Alan Juliuson rented three tracts of farmland from various owners, collectively referred to as Johnson, for over 40 years. In 2018, he contracted to farm the property until December 2021, with an option to renew and a right of first refusal to purchase the property. Towards the end of the lease, Johnson proposed new lease terms that increased the rent, removed the right of first refusal, and included a termination clause if the property was sold. Juliuson did not respond to these terms and later offered to purchase the property, which Johnson rejected, selling it instead to Bjerke Holdings, LLLP.Juliuson sued Johnson, Bjerke, and Farmers National Company (FNC) for various claims, including breach of contract, specific performance, and deceit. The district court dismissed several claims through summary judgment and ruled against Juliuson on others after a jury trial. The jury found no breach of the right of first refusal or the option to renew. Juliuson’s post-trial motions for judgment as a matter of law were denied.The North Dakota Supreme Court reviewed the case and affirmed the district court’s decisions. The court held that sufficient evidence supported the jury’s verdict that Johnson did not breach the lease renewal option or the right of first refusal. The court also upheld the dismissal of Juliuson’s claims for specific performance, finding no breach of contract to warrant such a remedy. Additionally, the court affirmed the dismissal of the claims for breach of the implied covenant of good faith and fair dealing and deceit, as these claims were not supported by independent tortious conduct separate from the alleged breach of contract. The district court’s judgment dismissing Juliuson’s claims with prejudice was affirmed. View "Juliuson v. Johnson" on Justia Law

In this case, Donald Neuens entered into a contract for deed with Dorothy Czajkowski for the sale of property in Golden Valley County, North Dakota. Czajkowski agreed to pay $60,000 for the property, with a down payment and the remaining balance to be paid in monthly installments at an interest rate of 6%, along with property taxes. After Neuens passed away, the Axvigs purchased his interest from his estate. The Axvigs then initiated a quiet title action against Czajkowski to cancel the contract for deed, alleging that Czajkowski had abandoned the property, failed to make the required payments, and failed to pay the property taxes.The District Court of Golden Valley County awarded summary judgment in favor of the Axvigs, concluding that the contract for deed was canceled and awarding the property to the Axvigs. The court found that the contract allowed the Axvigs to proceed with a court action without providing notice and an opportunity to cure the default. Czajkowski appealed, arguing that the court erred in its interpretation of the contract and failed to allow a redemption period.The North Dakota Supreme Court reviewed the case and reversed the amended judgment. The court held that the contract for deed was unambiguous and required the seller to provide notice of default and an opportunity to cure before seeking cancellation. The court found that the district court misinterpreted the contract by allowing the Axvigs to proceed with the cancellation action without first providing the required notice and time to cure the default. The Supreme Court concluded that the Axvigs breached the contract by not providing the necessary notice of default before initiating the cancellation action. View "Axvig v. Czajkowski" on Justia Law

ICON HD, LLC filed a lawsuit against National Sports Opportunity Partners, LLC (NSOP) and Michael Kuntz. Kuntz, the sole owner of NSOP, was previously a founding member of ICON HD. Kuntz had earlier sued ICON HD and its members, leading to a settlement agreement that included a release of claims. ICON HD later alleged that Kuntz, through NSOP, engaged in actions that harmed ICON HD, including failing to pay for contractor services provided by ICON HD.The District Court of Grand Forks County granted summary judgment in favor of Kuntz and NSOP, concluding that ICON HD’s claims were barred by the settlement agreement and by res judicata. The court found that the settlement agreement’s release terms covered the claims against Kuntz and NSOP, and that the claims were essentially variations of those resolved in the prior litigation.The North Dakota Supreme Court reviewed the case. It determined that the district court erred in applying res judicata because NSOP and Kuntz did not raise it as an affirmative defense in their answer. The Supreme Court also found that the settlement agreement unambiguously released Kuntz from the claims but was ambiguous regarding the release of claims against NSOP. The ambiguity arose from whether NSOP was considered an "unnamed third party" under the settlement agreement’s exception clause.The North Dakota Supreme Court affirmed the summary judgment dismissing the claims against Kuntz, as the settlement agreement clearly released him from such claims. However, it reversed the summary judgment dismissing the claims against NSOP, finding that the ambiguity in the settlement agreement regarding NSOP’s status as an "unnamed third party" required further factual determination. View "ICON HD v. National Sports Opportunity Partners" on Justia Law

In March 2020, Valence Natural Gas Solutions issued a request for proposal for the rental of natural gas generators. Gravity Oilfield Services submitted a price quotation in April 2020. After a pause in communication, discussions resumed in January 2021, and Gravity delivered the equipment to Valence in March 2021. From April 2021 to April 2022, Gravity sent monthly sales orders and invoices to Valence, which from September 2021 included a reference to terms and conditions on Gravity’s website. In April 2022, the equipment was damaged in a fire, and Gravity invoiced Valence for the replacement cost, which Valence did not pay.The District Court of McKenzie County initially denied Gravity’s first motion for summary judgment due to disputed material facts regarding contract formation and terms. However, upon Gravity’s renewed motion for summary judgment in March 2024, the district court granted the motion. The court concluded that the contract was formed in April 2022 and included Gravity’s terms and conditions by reference, making Valence liable for the damaged equipment and awarding attorney’s fees to Gravity.The Supreme Court of North Dakota reviewed the case and reversed the district court’s judgment. The Supreme Court found that genuine issues of material fact existed regarding when the contract was formed and whether Gravity’s terms and conditions were incorporated into the agreement. The court noted that the terms and conditions referenced in the April 2022 sales order and invoice were sent after the equipment was damaged, and there was a dispute over whether these terms were part of the original agreement. Consequently, the Supreme Court concluded that summary judgment was inappropriate and also reversed the award of attorney’s fees. View "Gravity Oilfield Services v. Valence Natural Gas Solutions" on Justia Law

Jared Peterka, a neighbor and tenant of John and Irene Janda, assumed the lease of their farmland in 2012. The lease was renewed every three years, and in 2019, a right of first refusal for Peterka to purchase the land was added. In October 2018, the Jandas established a living trust and conveyed the property into it, with their daughters as residuary beneficiaries. In June 2021, the Jandas and Peterka executed an option to purchase the property. Shortly after, guardianship proceedings were initiated, and the Jandas were found incapacitated. The guardians rescinded the option to purchase.Peterka filed a complaint for declaratory judgment to validate the option to purchase. The Defendants counterclaimed, arguing the option was the result of undue influence and that the Jandas lacked capacity. After a four-day bench trial, the District Court of Traill County found the option to purchase was facially valid and not a product of undue influence. However, it ruled the option was voidable under N.D.C.C. § 14-01-02 due to the Jandas' lack of capacity and dismissed Peterka’s complaint.The North Dakota Supreme Court reviewed the case. Peterka argued the district court erred in its findings on capacity. The Supreme Court clarified that the capacity to enter into a contract and the capacity under N.D.C.C. § 14-01-02 are distinct. The court found the district court did not misstate the law and its findings were supported by evidence. The Supreme Court affirmed the district court’s judgment, holding that the option to purchase was voidable under N.D.C.C. § 14-01-02 due to the Jandas being of unsound mind but not entirely without understanding. View "Peterka v. Janda" on Justia Law

Northstar Center, LLC entered into a real estate contract with Lukenbill Family Partnership, LLLP to purchase a 120-acre parcel of land. The contract was later assigned to Northstar by Templeton Enterprises, LLC. The agreement included an option to purchase an additional 105-acre parcel, which was amended to a commitment to purchase. Northstar provided a promissory note for a tax increase payment due by January 1, 2014, but paid it late. Lukenbill sold the disputed property to Tundra Properties, LLC, leading Northstar to sue for breach of contract and intentional interference with contract.The District Court of Williams County granted summary judgment in favor of Northstar on its breach of contract claim against Lukenbill and its intentional interference with contract claim against Tundra. The court also granted summary judgment in favor of Lukenbill on its indemnification claim against Tundra and dismissed Tundra’s breach of warranty claim against Lukenbill. The court held a bench trial on Northstar’s damages due to Lukenbill’s breach.The North Dakota Supreme Court reviewed the case and found that the district court erred in granting summary judgment for Northstar on its breach of contract and intentional interference claims. The Supreme Court determined that genuine issues of material fact existed regarding whether Northstar breached the contract by failing to make the tax increase payment on time and whether Tundra had knowledge of the contract amendments. The court also found that the district court improperly resolved factual disputes regarding Tundra’s knowledge and intent, and whether Tundra acted without justification.The Supreme Court affirmed the dismissal of Tundra’s breach of warranty claim but reversed the summary judgments on Northstar’s breach of contract and intentional interference claims, as well as Lukenbill’s indemnification claim. The case was remanded for further proceedings consistent with the Supreme Court’s opinion. View "Northstar Center v. Lukenbill Family Partnership" on Justia Law