Erickson v. Brown

• Decision Date: 27 February 2012
• Docket Number: No. 20110144.,20110144.
• Citation: 813 N.W.2d 531,2012 ND 43
• Parties: John D. ERICKSON, Richard B. Dregseth, and Jon A. Ramsey, Plaintiffs Richard B. Dregseth, Appellant v. Randy BROWN, Defendant and Appellee and Capital Harvest, Inc., Defendant.
• Court: North Dakota Supreme Court

813 N.W.2d 531

2012 ND 43

John D. ERICKSON, Richard B. Dregseth, and Jon A. Ramsey, PlaintiffsRichard B. Dregseth, Appellant

v. Randy BROWN, Defendant and AppelleeandCapital Harvest, Inc., Defendant.

No. 20110144.

Supreme Court of North Dakota.

Feb. 27, 2012.

Ronald H. McLean (argued) and Kasey Duane McNary (appeared), Fargo, ND, for appellant.

W. Todd Haggart (argued), Fargo, ND, for defendant and appellee.

CROTHERS, Justice.

[¶ 1] Richard Dregseth appeals the district court's judgment dismissing his equitable claims against Randy Brown. Dregseth argues the district court erred by (1) failing to make findings of fact in compliance with N.D.R.Civ.P. 52(a)(1), (2) failing to reject Brown's testimony and (3) dismissing Dregseth's promissory estoppel, equitable estoppel and unjust enrichment claims. We affirm.

I

[¶ 2] Our prior decision in this case contains the relevant facts, and we will not repeat them except as necessary to resolve the issues raised in this appeal. See Erickson v. Brown (“Erickson I”), 2008 ND 57, ¶¶ 3–11, 747 N.W.2d 34. In 1999, Dregseth left his job at Bremer Bank to work for Brown at Capital Harvest, Inc., a captive finance company for AGSCO, Inc., a corporation owned Brown. Dregseth worked for Brown until 2003, first at Capital Harvest then at AGSCO. In 2005, Dregseth and two former Capital Harvest employees, John D. Erickson and Jon A. Ramsey, sued Brown and Capital Harvest for breach of contract, fraud, deceit, promissory estoppel, equitable estoppel, unjust enrichment and breach of fiduciary duty. Dregseth claimed he was entitled to be paid the value of an ownership interest in Capital Harvest that Brown promised to provide as part of Dregseth's compensation.

[¶ 3] Prior to the last appeal, the district court dismissed all of Dregseth's claims before trial except those against Brown for breach of contract and for what a majority of this Court called fraud. The jury found Brown did not enter into a contract with Dregseth, and the district court entered a final judgment dismissing all of Dregseth's claims against Capital Harvest and Brown. Dregseth appealed.

[¶ 4] In Erickson I, we affirmed in part, reversed in part and remanded for further proceedings on Dregseth's deceit and equitable claims. Those claims were based on allegations that Brown initially agreed to “give” Dregseth an ownership interest but subsequently and unilaterally decided to allow Dregseth to “earn” an ownership interest if Capital Harvest was profitable. Dregseth claimed Brown first offered Dregseth a 5 percent ownership interest in Capital Harvest. Dregseth claimed he countered by requesting an 8 percent ownership interest. Dregseth claimed Erickson, acting on Brown's behalf, accepted Dregseth's proposal, giving rise to Brown's first alleged promise to give Dregseth an 8 percent ownership interest. Dregseth claimed Brown then unilaterallychanged the agreement requiring Dregseth to earn the ownership interest under Erickson's written transfer schedule. We affirmed dismissal of the claims based on the alleged promise to earn an interest but remanded for further proceedings on Brown's alleged promise to give Dregseth an interest.

[¶ 5] Before trial, the parties stipulated to dismissal of Dregseth's deceit claim against Brown and all of his claims against Capital Harvest. On June 8–10, 2010, the district court conducted a bench trial on Dregseth's promissory estoppel, equitable estoppel and unjust enrichment claims against Brown. Dregseth, Brown, Erickson and two economists testified at trial. On January 26, 2011, the district court issued an order dismissing Dregseth's remaining claims. Judgment was entered on March 11, 2011, and amended judgment was entered on July 1, 2011. Dregseth took a timely appeal from the judgment.

II

[¶ 6] Dregseth argues the district court failed to comply with N.D.R.Civ.P. 52(a)(1) because its written decision is unclear whether the “Facts” section constitutes the court's specific findings. Dregseth requests remand for new findings of fact and conclusions of law. Brown responds that no remand is necessary because the district court's findings are sufficient to enable this Court to understand the district court's reasoning.

[¶ 7] “In an action tried on the facts without a jury[,] ... the court must find the facts specially and state its conclusions of law separately.” N.D.R.Civ.P. 52(a)(1). The rule expressly permits making findings of fact and conclusions of law “in an opinion or memorandum of decision filed by the court.” Id. “Findings of fact are adequate under N.D.R.Civ.P. 52(a) if they provide this Court with an understanding of the district court's factual basis used in reaching its decision.” City of Fargo v. Salsman, 2009 ND 15, ¶ 9, 760 N.W.2d 123.

[¶ 8] Here, the district court issued a 17–page Memorandum Decision and Order for Judgment stating its factual findings and the rationale for its decision. The district court's decision listed the facts of the case and identified the issues in dispute. The decision contains the district court's analysis of the identified issues under the law and the facts of the case. The order is adequate under N.D.R.Civ.P. 52(a)(1) because it provides us with an understanding of the factual basis for the district court's decision.

III

[¶ 9] Dregseth claims the district court was required to reject the truth of all of Brown's testimony because Brown committed perjury in a deposition prior to the first trial regarding the possible sale of AGSCO. He argues North Dakota Pattern Jury Instruction, NDJI–Civil 80.02, required the district court to reject Brown's testimony unless corroborated by other credible evidence. Brown counters that his testimony about matters other than the sale of AGSCO could be, and properly was, accepted by the district court because the factual basis for the testimony was corroborated by other witnesses and documents.

[¶ 10] We have cautioned against citing pattern jury instructions to courts as representative statements of substantive law:

“The North Dakota Pattern Jury Instructions are published as a guide by the State Bar Association, in conjunction with the North Dakota Pattern Jury Instruction Commission. The pattern jury instructions are not controlling law, and are published with the caution that they are ‘neither a restatement nor an encyclopedia of the prevailing law.’ ”

State v. Bauer, 2010 ND 109, ¶ 14, 783 N.W.2d 21 (quotation and citations omitted).

[¶ 11] Our prevailing law on how a court should treat intentionally false testimony is found in Urlaub v. Urlaub, 325 N.W.2d 234 (N.D.1982). In Urlaub, the district court determined a witness intentionally gave false testimony on a material issue but relied on the witness' testimony regarding other issues. Id. at 235. The appellant argued the court erred by failing to reject all of the witness' testimony. Id. Reasoning that the district court was the best judge of credibility, this Court stated:

“The trial judge was the trier of fact, and, as a corollary, the judge of the credibility of the witnesses. The trial judge is uniquely qualified to determine the credibility of a witness with regard to the truthfulness of the various facts to which the witness testified. The trial judge, like a jury, has the opportunity to observe the demeanor of the witness and all of the other matters which are taken into consideration in determining the credibility of a witness. Unlike most jurors, the trial judge is learned in the law and is aware of the various factors which need to be taken into consideration. We need only determine whether or not the findings of the trial court are clearly erroneous under the standard set forth in Rule 52(a), N.D.R.Civ.P. We see no reason to encumber the trial judge with various rules announced by this [C]ourt concerning the credibility of a witness.”

Urlaub, at 236.

[¶ 12] Here, Brown admitted at trial to giving false testimony during a 2006 deposition about the possible sale of AGSCO. Despite Brown's admission, the district court relied on evidence from Brown, other witnesses and documents to support its findings on the remaining equitable issues. As we more fully discuss below, the district court's partial reliance on Brown's testimony in support of its rulings is not grounds for reversal of the promissory estoppel, equitable estoppel or unjust enrichment decisions because other evidence corroborated Brown's testimony or supported the district court's findings without reliance on Brown's testimony.

IV

A

[¶ 13] Dregseth contends the district court erred by dismissing his equitable claims. He claims the district court clearly erred by failing under the promissory estoppel theory to award him judgment against Brown for the value of his 8 percent interest in Capital Harvest. Dregseth further claims the district court erred finding Dregseth failed to show that Brown's promise of an ownership interest in the corporation included all the essential terms of a grant and that injustice can be avoided only by enforcing Brown's promise. Brown argues the district court's findings that the promise was based on preliminary negotiations and that no injustice existed were not clearly erroneous.

[¶ 14] The elements of promissory estoppel are “(1) a promise which the promisor should reasonably expect will cause a change of position by the promisee; (2) a substantial change in the promisee's position through action or forbearance; (3) justifiable reliance on the promise; and (4) injustice which can only be avoided by enforcing the promise.” Dalan v. Paracelsus Healthcare Corp., 2002 ND 46, ¶ 16, 640 N.W.2d 726 (quoting Peterson Mechanical, Inc. v. Nereson, 466 N.W.2d 568, 571 (N.D.1991)).

[¶ 15] “Estoppel is generally a question of fact.” Peterson Mechanical, 466 N.W.2d at 571. We review a district court's findings of fact under the “clearly erroneous” standard of review. N.D.R.Civ.P. 52(a)(6). “A finding of fact is clearly erroneous only if it is induced by an...