Justia Contracts Opinion SummariesArticles Posted in North Dakota Supreme Court
Ordahl v. Lykken, et al.
Ordahl LLC (“Ordahl”) appeals from a district court order granting Arlene Lykken, Bruce Lykken, Paul Lykken, and Sandra Teske’s (“the Lykkens”) motion for summary judgment and denying Ordahl’s motion for summary judgment. Ordahl and the Lykkens executed a purchase agreement for the sale of 12 acres of land and an easement on adjacent property to the north of the parcel. Under the terms of the purchase agreement, Ordahl was required to provide a $10,000 earnest money payment. After the purchase agreement was signed, the Lykkens anticipatorily breached the agreement. Ordahl brought suit seeking a declaratory judgment declaring that Ordahl’s relief was not limited to the return of its earnest money. Ordahl claimed it was not required to terminate the parties’ agreement and was entitled to enforce the terms of the agreement through the equitable doctrine of specific performance. The Lykkens counterclaimed seeking reformation of the purchase agreement. The North Dakota Supreme Court concluded the trial court erred in determining the purchase agreement required Ordahl to terminate the agreement and limited Ordahl to a recovery of its earnest money. The Supreme Court reversed and remanded this case for consideration of whether Ordahl should have prevailed on its equitable claim to enforce the terms of the parties’ agreement through specific performance and, if necessary, consider the Lykkens’s request for reformation of the agreement. View "Ordahl v. Lykken, et al." on Justia Law
Posted in: Contracts, North Dakota Supreme Court
Troubadour Oil & Gas v. Rustad, et al.
Troubadour Oil and Gas, LLC, petitioned the North Dakota Supreme Court for a supervisory writ after the district court issued a discovery order requiring Troubadour to disclose all communications between Troubadour’s counsel and Troubadour’s owner who also was identified as an expert witness. Troubadour argued the court erroneously required the disclosure of confidential communications protected by the attorney-client privilege and the work product doctrine. After review, the Supreme Court granted the petition and directed the district court to vacate the portion of its March 10, 2022 discovery order requiring disclosure of all communications between Troubadour’s counsel and Troubadour’s owner because the court abused its discretion and misapplied the law by relying on federal rules and case law not applicable in this state court proceeding. The Supreme Court also vacated the court’s award of attorney’s fees and remanded for reconsideration. View "Troubadour Oil & Gas v. Rustad, et al." on Justia Law
Newfield Exploration Company, et al. v. North Dakota, et al.
The State of North Dakota, ex rel. the North Dakota Board of University and School Lands, and the Office of the Commissioner of University and School Lands, a/k/a the North Dakota Department of Trust Lands appealed a judgment dismissing its claim against Newfield Exploration Company relating to the underpayment of gas royalties. The North Dakota Supreme Court found that the district court concluded the State did not establish a legal obligation owed by Newfield. However, the State pled N.D.C.C. § 47-16-39.1 in its counterclaim, which the court recognized at trial. Because the State satisfied both the pleading and the proof requirements of N.D.C.C. § 47-16-39.1, the Supreme Court held the district court erred in concluding the State did not prove Newfield owed it a legal obligation to pay additional royalties. Rather, as the well operator, Newfield owed the State an obligation under N.D.C.C. § 47-16-39.1 to pay royalties according to the State’s leases. The court failed to recognize Newfield’s legal obligations as a well operator under N.D.C.C. § 47-16-39.1. The Supreme Court concluded the district court erred in dismissing the State's counterclaim; therefore, judgment was reversed and the matter remanded for findings related to the State's damages and Newfield's affirmative defenses. View "Newfield Exploration Company, et al. v. North Dakota, et al." on Justia Law
Pavlicek v. American Steel Systems, Inc., et al.
Grinnell Mutual Reinsurance Company appealed a district court judgment ordering it to pay Larry Pavlicek $214,045.55 under a commercial general liability insurance (CGL) policy Grinnell had with JRC Construction. Grinnell argued the district court misinterpreted the insurance policy, and that it was not required to indemnify JRC Construction because its work product was defective. In 2013, Pavlicek hired a contractor to construct a steel building on his property. JRC Construction installed the concrete floor and floor drain for the project. Another subcontractor installed the in-floor heating system for the concrete floor. After JRC completed the floor drain, it failed to properly install the concrete floor, and its attempts to repair the concrete damaged the drain. Pavlicek sued JRC for breach of contract relating to the defective work. In February 2020, Pavlicek filed a supplemental complaint against Grinnell, alleging it was required to satisfy the judgment as JRC’s insurer. Grinnell claimed it had no obligation to indemnify JRC under the CGL policy. The district court concluded JRC’s defective work on the concrete floor was not covered under the CGL policy, but damage to the floor drain was covered. Because removal and replacement of the floor and in-floor heat were necessary to repair the drain the court concluded the CGL policy covered all of those costs. The North Dakota Supreme Court found that although the CGL policy provided coverage to repair the floor drain, it did not cover the cost of replacing the concrete floor because that damage was the result of JRC’s defective work. The district court erred in finding the CGL policy covered the entire concrete floor replacement because replacement of the floor was the only way to repair the floor drain. Further, the Supreme Court found the district court erred in concluding the CGL policy provided coverage for replacement or repair of the in-floor heating system beyond that which may be necessary to repair the drain. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law
Posted in: Construction Law, Contracts, Insurance Law, North Dakota Supreme Court
Fischer v. Hoyt
Ralph Fischer appealed from an order denying his request for attorney’s fees under N.D.C.C. 27-08.1-04. In February 2018, Fischer and Darin Hoyt executed a Cattle Share Lease. Under the terms of the lease, Fischer rented pasture land to Hoyt. In July 2019, Fischer sued Hoyt in small claims court arguing he was entitled to $15,000 for Hoyt’s failure to pay pasture rent in 2018. Hoyt removed the case to district court and filed an answer and counterclaim, asserting Fischer breached terms of the agreement. Fischer answered the counterclaim and requested attorney’s fees under N.D.C.C. 27-08.1-04. In February 2020, Fischer received leave of court to amend his complaint and increased his alleged damages to $25,000. After a bench trial, the district court found both parties breached the lease in different respects. Pertinent here, the district court found Hoyt breached the lease by failing to pay rent in 2018. The district court denied Fischer’s request for attorney’s fees, finding "the claims and counterclaims in this matter were far too complex for small claims court and would have been dismissed without prejudice to refile in district court." To the North Dakota Supreme Court, Fischer argues the district court erred in denying his request because he is the prevailing plaintiff after removal from small claims court. Fischer also argued he was entitled to attorney’s fees incurred in this appeal. The Supreme Court agreed, and reversed and remanded for an award of Fischer’s attorney’s fees in the district court action and on appeal. View "Fischer v. Hoyt" on Justia Law
Posted in: Civil Procedure, Contracts, Landlord - Tenant, North Dakota Supreme Court
Tergesen, et al. v. Nelson Homes
Jeanne and Nevin Tergesen appealed a judgment dismissing their complaint and awarding Nelson Homes, Inc. damages for its breach of contract counterclaim. The Tergesens argued the district court erred in dismissing their rescission and breach of contract claims, and the court erroneously found the Tergesens breached the contract. After review, the North Dakota Supreme Court concluded the district court did not err in dismissing the Tergesens’ claims or finding the Tergesens breached the contract, but the court did err in calculating the amount of prejudgment interest on Nelson Homes’ damages. View "Tergesen, et al. v. Nelson Homes" on Justia Law
Swanson v. Larson
Leland Swanson appealed a judgment dismissing his breach of contract and professional negligence claims against Mark Larson and Mark Larson, CPA, PLLC. In 2017, Swanson hired Larson to provide a forensic accounting of various entities owned by Swanson. Larson provided the accounting services in anticipation of litigation against Swanson’s former business partner. During discovery in subsequent litigation against the former business partner, Larson was identified as an expert witness in a July 2018 response to interrogatories. Larson ended his engagement in January 2019 by providing written notice to Swanson’s attorney. After Larson’s termination, Swanson retained another expert to testify in the pending litigation. In January 2020, Swanson sued Larson for breach of contract and professional negligence, alleging Larson breached their agreement and committed professional negligence by terminating his services and refusing to testify as an expert witness in the litigation against the former business partner. Larson moved for summary judgment, arguing the agreement did not require him to testify at trial. He also argued the agreement was terminable at will by either party, and he did not breach the agreement by terminating his services. On appeal to the North Dakota Supreme Court, Swanson argued the district court prematurely and improperly granted summary judgment in Larson’s favor. Finding no reversible error, the Supreme Court affirmed the trial court's judgment. View "Swanson v. Larson" on Justia Law
Posted in: Civil Procedure, Contracts, North Dakota Supreme Court
Wades Welding v. Tioga Properties
Tioga Properties, LLC, appealed a district court judgment awarding Wades Welding, LLC $27,669.90 relating to Wades Welding’s lawsuit for enforcement of construction liens and unjust enrichment. Janice Ellsworth owned Tioga Properties. Tioga Properties owned a restaurant and home (referred to by the parties as a “mobile home”) adjacent to each other in Tioga, North Dakota. Susan Gordon leased the restaurant from Tioga Properties. Gordon delivered rent payments to John Ellsworth Jr., Janice Ellsworth’s son. Gordon resided in the home but had no written lease for that property. In late 2016 and early 2017, Gordon hired Wades Welding to repair the home and restaurant. Wades Welding performed $19,840 of work on the home and $2,500 of work on the restaurant. Wades Welding delivered the invoices for its work to Ellsworth Jr. A day after Wades Welding completed its work at the home, Ellsworth evicted Gordon from the restaurant and home. Ellsworth Jr. supervised the eviction and Gordon left both properties within 48 hours. In December 2017, Wades Welding recorded construction liens against the properties after Tioga Properties failed to pay for the repairs. Tioga Properties sold the restaurant in July 2019. In September 2019, Tioga Properties served on Wades Welding a demand to enforce the home lien. In October 2019, Wades Welding sued Tioga Properties for breach of contract, foreclosure of the construction liens and unjust enrichment. Tioga Properties denied the allegations, claiming it did not authorize Wades Welding's work on the properties. The district court found Wades Welding's construction liens on both properties were valid, and ordered foreclosure of the home lien. The court found the lien on the restaurant was unenforceable due to a service error, but nonetheless awarded Wades Welding the amount of the repaired under the doctrine of unjust enrichment. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed judgment in favor of Wades Welding. View "Wades Welding v. Tioga Properties" 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
Posted in: Business Law, Contracts, North Dakota Supreme Court
Schulz v. Helmers
Edwin Schulz appealed a judgment following a bench trial on the damages to his barn, pole barn and shed. Schulz sued Adam Helmers for negligence and breach of contract following a fire that destroyed the barn, pole barn and shed. At the time of the fire, Schulz was leasing the farmstead to Helmers, including the three buildings. He argued the district court applied the wrong measure of damages in his breach of contract claim against Helmers. The district court concluded N.D.C.C. 32-03-09.1 applied to the breach of contract claim, which provided the measure of damages for an injury to property not arising from contract was the diminution of value. The North Dakota Supreme Court concurred with the district court's finding and affirmed the judgment. View "Schulz v. Helmers" on Justia Law