Justia Contracts Opinion Summaries

In 2004, Robert and Cheri Knorr bought a lot and built a home on Lake Audubon. They owned the lake home debt free. When the national real estate market soured in the late 2000s, the Knorrs had to mortgage the lake property and other property to satisfy loan commitments. They were unable to make the mortgage loan payments on the property, so they turned to family members for assistance. According to the Knorrs, family members agreed to help them by purchasing their homes in Arizona and North Dakota and leasing them to the Knorrs with options to repurchase. The Knorrs' eldest daughter and her husband purchased the Arizona home and leased the property to the Knorrs with an option to repurchase. The Knorrs' daughter, Alonna, and her husband, Jon Norberg, allegedly agreed in late 2010 to also purchase the North Dakota lake home and lease it to the Knorrs with an option to repurchase. A lease agreement containing an option to purchase the lake home was executed by the Knorrs and sent to the Norbergs for their signatures. Alonna signed the agreement and claimed Jon did too, but that document was lost. Jon claimed the lake home was leased to the Knorrs but did not include a buy-back option. After transferring the lake home to the Norbergs, the Knorrs continued to live in the home, made monthly payments to Jon for an amount equal to the Norbergs' mortgage payments, paid all real estate taxes on the property, maintained the property, and paid all utilities and other expenses associated with the property. The Knorrs gave notice to the Norbergs, who were then experiencing marital difficulties, that they were exercising the option to purchase the lake property. Jon refused to recognize the option. Jon appealed the trial court's judgment allowing his in-laws to exercise the option. The Supreme Court concluded the district court erred in holding partial performance of an oral lease agreement with an alleged option to purchase removed the oral agreement from the statute of frauds. Accordingly, the Court reversed and remanded for the court to consider the Knorrs' alternative theories of recovery based on equitable principles of promissory estoppel and constructive trust. View "Knorr v. Norberg" on Justia Law

In 2010, Mary Gwyther was in a multi-vehicle accident while driving a pickup she co-owned with her mother, Peggy Gwyther, who died in the accident. The claimants allegedly suffered injuries and property damage as a result of the accident. The Gwyther vehicle was insured under a policy issued by Nodak Mutual Insurance Company, issued to Peggy as the named insured. Peggy lived in a home she co-owned with Mary in Bismarck. Although Mary was listed as a co-owner of the Bismarck property, she had never actually lived in the home, and had not lived with her parents since 1972. Mary had been living in Switzerland since 2000. She owned a business in Switzerland, owned and insured a vehicle there, and had a Swiss driver's license and residence permit. However, Mary voted by absentee ballot in North Dakota as a resident, declaring in applications and affidavits that she was a resident at her mother's Bismarck address. She also designated the Bismarck address as her permanent home address with the State Department. Nodak brought an interpleader action seeking a declaration it was only liable to pay the reduced step-down policy limits because Mary was not a resident of Peggy's household at the time of the accident and therefore was not a "family member" under the policy. The case was tried as a bench trial on stipulated facts. The district court found Mary was not a resident of Peggy's household, concluded the policy did not violate North Dakota law, and concluded Nodak was required to pay only the lower step-down policy limits. The claimants appealed that decision, but the Supreme Court affirmed, concluding the district court's finding was not clearly erroneous and the step-down endorsement to the insurance policy did not violate North Dakota law. View "Nodak Mutual Insurance Co. v. Bahr-Renner" on Justia Law

Balvitsch and Weisgram sued Tollefson for breach of contract, conversion, unjust enrichment, and other claims. Balvitsch and Weisgram moved to hold Tollefson in contempt, alleging Tollefson failed to obey a February 8, 2013 court order that instructed Tollefson not to make any further attacks on the parties and other non-party individuals during the course of the litigation. Balvitsch and Weisgram alleged the court ordered Tollefson at the scheduling conference to stop all attacks against a non-party individual and to stick to the facts of the case during the litigation. They alleged Tollefson ignored the court's order by threatening to launch websites defaming Weisgram and the non-party individual. The trial court entered an order to show cause noting the time and place for the contempt hearing and ordered that Tollefson appear and show why he should not have been held in contempt. The hearing took place, and the court found Tollefson in contempt and ordered sanctions. Tollefson appealed that order and sanction, arguing he did not receive proper notice of the hearing. Upon review, the Supreme Court reversed, concluding Tollefson did not have adequate notice of the contempt proceeding. View "Balvitsch v. Dakota Burger N Fries Corp." on Justia Law

The Zavadils alleged they loaned Jon and Hollie Rud $32,000 under an April 2008 verbal agreement. The loan was to be repaid when the Ruds sold their home or within six months. When the Ruds failed to repay the loan, the Zavadils agreed to renew and extend the original verbal loan agreement. In 2009, the Ruds executed a third mortgage on their property in favor of the Zavadils, and on a few months later, the Ruds executed a promissory note for $32,000 plus interest due and payable to the Zavadils a year later. The Ruds divorced in June 2009, between executions of the third mortgage and the promissory note. The Zavadils sued the Ruds to foreclose the third mortgage after the Ruds failed to make all payments required under the promissory note. Wells Fargo Bank subsequently brought an action against the Ruds, the Zavadils and others to foreclose its first position mortgage on the property. The Zavadils admitted their third mortgage was subordinate to the bank's mortgage on the property and stipulated to dismissal of their foreclosure action against the Ruds. Jon Rud appealed the grant of summary judgment that awarded Zavadils $33,490.19 in their action to recover on the promissory note. Upon review of the matter, the Supreme Court affirmed, concluding the district court did not err in ruling no genuine issues of material fact existed and the Zavadils were entitled to judgment as a matter of law. View "Zavadil v. Rud" on Justia Law

Roger Sundsbak, George Bitz and Northern Livestock Auction appealed a district court judgment granting Craig Anderson's motion for summary judgment and denying Northern Livestock's motion to amend their counterclaim. Anderson was First Western Bank & Trust's assignee. Northern Livestock argued the district court erred as a matter of law by entering summary judgment in favor of Anderson, by failing to enter summary judgment in favor of Northern Livestock's counterclaim for specific performance and by failing to provide sufficient findings of fact and conclusions of law to allow judicial review of its decision denying Northern Livestock's cross-motion for summary judgment. Finding no reversible error, the Supreme Court affirmed. View "Anderson v. Zimbelman" on Justia Law

From 1998 through 2009, Keith Jensen owned a cattle feedlot in South Dakota. Jensen did not personally operate the feedlot but used it for his cattle-brokering business. Jensen leased the feedlot to Arden Sieh under a five-year written lease agreement. The written lease expired in 2003, but Sieh continued to operate the feedlot under an oral lease agreement with Jensen. While operating the feedlot, Sieh purchased cattle feed from Forbes Equity Exchange, Inc. ("FEE"), a North Dakota cooperative grain elevator. In 2010, FEE filed a complaint against Sieh and Jensen for $166,015.18 worth of corn purchased by Sieh on an open account that was allegedly never paid. FEE alleged Jensen's cattle consumed the feed. In March 2011, FEE withdrew its claim against Sieh for the unpaid feed. In exchange, Sieh assigned to FEE all potential claims he had against Jensen for cattle feed and care services that exceeded Sieh's rent payments. FEE amended its complaint, and raised Sieh's claims for cattle-care costs in addition to its original suit against Jensen for unpaid cattle feed. Jensen filed a third-party complaint against Sieh for the collection of past debts, including bounced checks, missed rent payments, unpaid loans and interest, missing cattle, damaged feedlot property, and other financial obligations arising from Sieh's operation of Jensen's feedlot. Jensen ultimately lost on his contract claims, and he appealed. The Supreme Court affirmed, concluding the district court did not err in denying Jensen's claim for an offset or in admitting evidence. The Court also concluded that the court did not err in finding in favor of Forbes Equity Exchange on its assigned claim against Jensen. View "Forbes Equity Exchange, Inc. v. Jensen" on Justia Law

Laura Jean Entzel appealed a district court opinion that awarded her a partial refund of her prepaid rental fee, and an order denying her request for attorney fees. Entzel entered into a Boat Space Rental Agreement with Moritz Sport & Marine. Entzel pre-paid Moritz for use of a marina boat slip from May 2011 until October 2011. Entzel chose not to use the slip at the start of the agreement period. Due to the threat of an impending flood along the Missouri River shoreline, the city of Mandan contacted Moritz at the end of May, and informed Moritz that the City wanted Moritz to take precautionary action. Moritz notified Entzel that, because of potential flooding, all boats needed to be removed from the marina. Moritz never informed Entzel that her boat could be returned to the marina once the threat was gone, and as a result, Entzel did not use the slip during the contract period. However, other customers of Moritz began to use their slips in the marina beginning mid-June 2011 until freeze in. Entzel sued Moritz in small claims court alleging breach of contract and seeking to recover the slip rental fee. Moritz removed the action to district court, arguing a force majeure clause in the contract relieved Moritz from liability, and Entzel moved for attorney fees. Upon review, the Supreme Court reversed the district court judgment's award of a refund to Entzel, because it held the force majeure clause of the parties' contract relieved Moritz of liability for nonperformance and allocated the risk of loss to Entzel. The Court affirmed the district court judgment's denial of Entzel's request for attorney fees. View "Entzel v. Moritz Sport & Marine" on Justia Law

Jeff Trosen appealed a district court judgment that dismissed his legal and equitable claims against Shirley Trosen and Brent Trosen. Upon review, the Supreme Court affirmed the judgment, concluding the district court did not err by granting the Trosen's motion for judgment as a matter of law and dismissing Jeff Trosen's legal claims. Further, the Supreme Court concluded the district court reached the right result with respect to Jeff Trosen's equitable claims, but for the wrong reason. View "Trosen v. Trosen" on Justia Law

Eugene and Charlene Guthmiller appealed a district court judgment finding an option agreement should have been honored, allowing Guthmiller Farms, LLP and Jeremy Guthmiller to each purchase by contract for deed an undivided one-half interest in specified lands. The Guthmillers argued on appeal: (1) that Guthmiller Farms did not have standing to pursue the action; (2) that consideration was invalid for the option contract; (3) that exercise of the option constituted a counteroffer; and (4) that the district court erred in considering evidence not disclosed prior to the hearing. Finding no error, the Supreme Court affirmed. View "Guthmiller Farms v. Guthmiller" on Justia Law

James Leach, IDA Marketing Corporation, and IDA of Moorhead Corporation appealed a judgment holding them jointly and severally liable to Reed Danuser for claims involving Danuser's termination as president and chief executive officer of the corporations and Leach's breach of a fiduciary duty to Danuser and requiring IDA Moorhead to pay Danuser for loans he made to IDA Moorhead. Upon careful analysis of the inter-company agreements and facts presented at the district court, the Supreme Court affirmed, finding: (1) James Leach was responsible for freezing out Danuser's interests in the corporations, which, as found by the court, involved more than just the wrongful termination of Danuser's employment; (2) Leach was not a party to a stock buy-sell agreement, and under the circumstances of this case as found by the district court involving the freeze out of Danuser's interests in the intertwined corporations, the court's determination of damages was not a misapplication of the law and was not arbitrary, unreasonable, or unconscionable; (3) both James Leach and IDA Moorhead gained from James Leach's actions, which were attributable to the corporation. The district court decided James Leach had control of the corporations when he breached his fiduciary duties to Danuser. Therefore, the district court did not misapply the law in deciding James Leach and the corporations were jointly and severally liable for Danuser's damages and the court's decision was not arbitrary, unreasonable, or unconscionable. View "Danuser v. IDA Marketing Corp." on Justia Law