Justia Contracts Opinion Summaries

Articles Posted in North Dakota Supreme Court
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Defendants GADECO, LLC, and Continental Resources, Inc. appealed a judgment quieting title in oil and gas leasehold interests in Zavanna, LLC. Zavanna and the Defendants made competing claims to oil and gas leasehold interests covering 1,280 gross acres in Williams County, North Dakota. These interests were located in the Golden Unit; the Golden Well was the only well producing oil and gas from the subject leasehold within the Golden Unit. GADECO operated the Golden Well. Zavanna was the lessee by assignment of the “Top Leases” and GADECO and Continental were the lessees of the “Bottom Leases.” The Top Leases and Bottom Leases covered the same lands and leasehold interests. The Bottom Leases automatically terminated upon cessation of production unless certain express conditions were met. The Bottom Leases stated that a cessation of production after the lease’s primary term would not terminate the lease if the lessee restores production or commences additional drilling or reworking operations within 90 days (or 120 days in the case of the Parke Energy Leases) from the date of cessation of production. After a bench trial, the district court quieted title in Zavanna, concluding the Bottom Leases terminated by their own terms when production ceased and GADECO failed to timely commence drilling or reworking operations. The court found three periods of production cessation. The court concluded Defendants bore the burden to prove that production did not cease or reworking operations were timely commenced. The North Dakota Supreme Court affirmed, concluding the district court did not err in concluding Defendants’ leases terminated under their terms when production ceased and Defendants failed to timely commence reworking operations, and in concluding Defendants failed to show a force majeure condition saved the leases from termination. View "Zavanna v. Gadeco, et al." on Justia Law

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Plaintiffs William Kainz and GeoChemicals, LLC appealed a district court’s order granting Jacam Chemical Co. 2013, LLC’s motion to abate and an order and judgment awarding attorney’s fees to Jacam. Plaintiffs argued the district court erred by abating the action and by awarding attorney’s fees. The North Dakota Supreme Court concluded the district court misapplied the law in granting the motion to abate and abused its discretion by awarding attorney’s fees. Accordingly, judgment was reversed and the case remanded for further proceedings. View "Kainz, et al. v. Jacam Chemical Co. 2013" on Justia Law

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Lane Knudsen, Ann Gochnour, and Marcia Talley and David Talley, Trustees of the Marcia K. Talley Living Trust (Landowners), appeal from a district court judgment foreclosing Henry Hill Oil Services LLC’s construction liens against the Landowners’ properties and awarding Henry Hill Oil its costs and attorney’s fees. Landowners owned real property in Williams County, North Dakota. In 2017 and 2018, the Landowners executed water pipeline easements with RWS Holdings, LLC. The agreements granted RWS Holdings 75-foot-wide temporary easements for constructing a water pipeline and related facilities across and under the Landowners’ properties. The agreements granted RWS Holdings 30-foot-wide permanent pipeline easements on the properties. The temporary easements expired upon completion of the water pipelines. The Talley-Gochnour Defendants also granted RWS Holdings an easement for constructing a freshwater reservoir on their property. The easement term was 20 years or “until Grantee permanently removes” the reservoir from the property. RWS Holdings hired Regional Water Service, LLC, which then hired Henry Hill Oil, to construct water reservoirs on the properties. Henry Hill Oil worked on the Landowners’ properties from June 2018 to October 2018. Henry Hill Oil recorded construction liens against the Landowners’ properties after it was not paid for its work. In May 2019, Henry Hill Oil sued Regional Water Service for breach of contract. In October 2019, Henry Hill Oil sued the Landowners to enforce the construction liens. The North Dakota Supreme Court concluded the trial court erred in determining the Landowners’ properties were subject to Henry Hill Oil’s construction liens. The Court reversed the judgment and remanded for a determination of the Landowners’ costs and attorney’s fees. View "Henry Hill Oil Services v. Tufto, et al." on Justia Law

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Nodak Insurance Company (“Nodak”) appealed, and John D. Miller, Jr. d/b/a John Miller Farms, Inc. and JD Miller, Inc. (collectively, “Miller”) cross-appealed a judgment determining Miller’s insurance policy with Nodak provided coverage and awarding Miller damages. The dispute arose from Miller’s sale of seed potatoes to Johnson Farming Association, Inc. (“Johnson”). Miller operated a farm in Minto, North Dakota. During the 2015 planting season, Miller planted seed potatoes. Miller claimed a North Dakota State Seed Department representative inspected the field where the seed was being grown on July 13, July 26, and September 3, 2015, which indicated no problems with the seed crop. On or about September 3, 2015, Miller “killed the vines” in anticipation of and as required to harvest the seed crop. Miller harvested the seed crop between September 18 and September 25, 2015, and the harvested seed crop was immediately taken from the field to Miller’s storage facility south of Minto. n December 31, 2015, Miller and Johnson entered into a contract for the sale of seed potatoes. The contract for sale disclaimed any express or implied warranty of merchantability or fitness for a particular purpose and contained a limitation of consequential damages and remedies. In June or July 2016, Johnson informed Miller of problems with some of the seed potatoes he had purchased. Johnson stated an analysis definitively showed very high levels of the herbicide glyphosate, which caused the problems with the seed potatoes. The seed potatoes did not grow properly, and Johnson alleged damages as a result. It was undisputed the seed potatoes were damaged because an employee of Miller inadvertently contaminated the seed potatoes with glyphosate while they were growing on Miller’s Farm. In July 2016, Miller sought coverage for the loss from Nodak. Because the North Dakota Supreme Court concluded a policy exclusion applied and precluded coverage, the North Dakota Supreme Court reversed the district court's judgment. View "Miller, et al. v. Nodak Ins. Co." on Justia Law

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Travis Iversen appealed a judgment entered in favor of appellee, Larson Latham Huettl, LLP (hereafter “LLH”), and an order denying relief from judgment under N.D.R.Civ.P. 59(j). Iversen was an attorney employed by LLH from February 2019 until July 2021. Iversen asserts that Tyrone Turner, an LLH partner, told Iversen that “you can only do the work that we give you.” After Iversen terminated his employment with LLH, LLH requested that Iversen refund it $35,772.63 for overpayment. LLH argues that Iversen owes this debt to LLH because he had not been credited with sufficient billable hours to justify the compensation he received under the employment agreement. Iversen refused to pay the deficiency, and LLH then sued Iversen. The district court issued a memorandum opinion granting LLH’s motion for summary judgment. Before judgment was entered, Iversen filed a “motion for reconsideration” citing N.D.R.Civ.P. 59(j). The district court denied Iversen’s motion. Iverson argued that several genuine issues of material fact remained, precluding summary judgment. He also argued the district court abused its discretion in denying his motion under Rule 59(j). Finding no reversible error, the North Dakota Supreme Court affirmed the judgment and the order denying Iversen’s Rule 59(j) motion. View "Larson Latham Huettl, LLP v. Iversen" on Justia Law

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L&C Expedition, LLC (“L&C”) appealed the grant of summary judgment in favor of International Fidelity Insurance Company (“IFIC”) and denying summary judgment to L&C. L&C contracted with Unlimited Excavating (“Unlimited”) to perform work on a residential development project. Unlimited completed its work in November 2016 and received final payment in July 2017. In 2019, L&C learned of major problems in the construction and notified Unlimited it needed to make repairs. Unlimited did not make the repairs and L&C demanded IFIC arrange for performance of Unlimited’s work per the terms of the performance bond. IFIC refused to arrange for performance. L&C subsequently initiated suit against IFIC in May 2020 arguing L&C is entitled to recover $393,000 under the terms of the performance bond. The performance bond provided the following: “[a]ny suit under this bond must be[] [i]nstituted before the expiration of two years from the date on which final payment under the subcontract falls due.” The parties do not dispute the district court’s finding L&C initiated its action outside the limitation period provided within the terms of the bond. L&C argued the district court erred in finding a contractual limitation on the period to assert a claim was enforceable, erred in failing to apply N.D.C.C. § 9-08-05 to preclude modification of the applicable statute of limitations, and erred in interpreting N.D.C.C. § 22-03-03 as providing an exception to the prohibition against modifying the applicable statute of limitations. Finding no reversible error, the North Dakota Supreme Court affirmed. View "L&C Expedition, et al. v. Swenson, Hagen and Co., et al." on Justia Law

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Defendants Eagle Crest Apartments, LLC, et al. appealed a judgment awarding UMB Bank N.A. more than $21 million in an action for breach of contract, foreclosure, fraudulent transfers, and deceit. The Defendants raised a number of issues on appeal. The North Dakota limited review to the issues raised in defendants' motion for a new trial, and concluded the district court did not err when it entered a deficiency judgment and pierced the Defendants’ corporate veils. View "UMB Bank N.A. v. Eagle Crest Apartments, et al." on Justia Law

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Justin Shafer appealed a district court judgment confirming an arbitration award against Diamond Development & Custom Homes, L.L.C. Shafer argued the district court erred by failing to increase the amount of damages he was awarded. He also argued the North Dakota Supreme Court should narrowly expand the standard for reviewing an arbitration award. The Court declined Shafer’s request to expand the standard of review, and concluded the district court did not err in confirming the arbitration award. View "Shafer v. Scarborough, et al." on Justia Law

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Thomas Burckhard appealed a judgment entered following consideration of Larson Latham Huettl LLP’s motion for summary judgment. Burckhard began employment with Larson Latham Huettl LLP (hereinafter LLH) in January 2019. In May 2019 Burckhard signed an employment contract, under which Burckhard agreed he would receive compensation based upon projected hours billed. Any overpayment resulting from a deficiency between the projected hours he would bill and the actual hours he billed would be considered a debt owed by Burckhard to LLH. Burckhard’s employment with LLH ended on August 15, 2020. At that time, Burckhard was paid for 697.88 projected billable hours more than his actual billable hours resulting in an overpayment of compensation in the amount of $29,885.38. LLH filed suit alleging breach of contract seeking to recover the excess compensation plus pre-judgment interest. The district court granted LLH’s motion finding there were no issues of material fact and LLH was entitled to judgment as a matter of law. Burckhard appealed, arguing summary judgment was improper because the contract’s purpose was frustrated, the contract is unconscionable, the contract fails for lack of consideration, LLH waived its right to obtain payment, there is a genuine dispute as to the amount of the damages, and the district court abused its discretion in denying Burckhard additional time for discovery. The North Dakota Supreme Court determined Burckhard failed to prove there was a genuine dispute as to any material fact. The district court properly granted summary judgment in favor of LLH and properly dismissed all of Burckhard’s affirmative defenses. View "Larson Latham Huettl, LLP v. Burckhard" on Justia Law

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Scotty Fain, Sr., Scotty Fain, Jr., and Kris Durham appealed a district court judgment entered following findings that there was no contract between the parties, no transfer of ownership interest in Integrity Environmental, LLC, and no violation of fiduciary duties as alleged in the complaint against Integrity Environmental, LLC, Andrea Vigen, Lewis Vigen, and Kelly Harrelson. They also challenged the court’s findings that a substitute arrangement agreed upon by all parties led to an accord and satisfaction, novation, and waiver of contractual rights. Finding no reversible error in that judgment, the North Dakota Supreme Court affirmed. View "Fain, et al. v. Integrity Environmental, et al." on Justia Law