Lund v. Swanson
| Decision Date | 03 March 2021 |
| Docket Number | No. 20200147,20200147 |
| Citation | 956 N.W.2d 354 |
| Parties | James B. LUND, Plaintiff and Appellant v. Leland A. SWANSON and Open Road Trucking, LLC, Defendants and Appellees |
| Court | North Dakota Supreme Court |
Sean T. Foss (argued) and Sarah A. Aaberg (on brief), Fargo, ND, for plaintiff and appellant.
Bruce A. Schoenwald (argued) and Randolph E. Stefanson (on brief), Moorhead, MN, for defendants and appellees.
[¶1] James Lund appealed from a judgment entered after the district court granted summary judgment in favor of Leland Swanson and Open Road Trucking, LLC ("Open Road"). Lund argues the district court erred in concluding the statute of frauds barred enforcement of the parties’ settlement agreement. We affirm, concluding the alleged settlement agreement is invalid under the statute of frauds.
[¶2] Lund and Swanson co-own multiple business entities, including:
Open Road is a limited liability company with its principal address in Fargo, North Dakota.
[¶3] Lund has been an adverse party to Swanson and Open Road in a series of lawsuits, dating back to 2018. Trial in one of the lawsuits was scheduled to begin December 3, 2019. On the day before trial, December 2, 2019, Lund, Swanson, Open Road, and their respective counsel met to discuss settling the lawsuits between them. Swanson and Open Road are represented by the same attorneys.
[¶4] After the meeting, Lund's attorney, Sean Foss, contacted the district court to inform it that the parties had resolved the matter scheduled for trial the following day, and asked the court to "take the trial off the calendar." Attorney Foss then sent an email to counsel for Swanson and Open Road, with the subject line "settlement," containing his notes regarding the settlement terms, which included:
On December 10, 2019, Swanson and Open Road's attorney, Randolph Stefanson, emailed Foss a proposed settlement agreement, which included the same terms as Foss's email. Two days later, Foss emailed Swanson and Open Road's attorneys a revised version of the proposed settlement agreement.
[¶5] On that same day, December 12, 2019, this Court issued an opinion in one of the parties’ pending cases, which was on appeal at the time. See Open Road Trucking, LLC v. Swanson , 2019 ND 295, 936 N.W.2d 72. In that case, we concluded a "judgment was not satisfied as between Swanson and Lund, and Open Road was entitled to take an assignment of the judgment from Swanson to enforce Swanson's right of contribution from Lund for one-half of the judgment amount." Id. at ¶ 26. We reversed the district court's order directing entry of satisfaction of the judgment, and remanded for entry of a charging order against Lund's transferrable interests in specified limited liability companies. Id. at ¶ 27.
[¶6] Ultimately, no written settlement agreement was signed by the parties. In January 2020, Lund initiated this action against Swanson and Open Road to enforce the alleged settlement agreement. The parties filed cross-motions for summary judgment. After a hearing, the district court denied Lund's motion and granted summary judgment in favor of Swanson and Open Road, concluding the statute of frauds barred enforcement of the settlement agreement. Lund appealed.
[¶7] Our standard of review for summary judgments is well established:
Summary judgment is a procedural device under N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. The party seeking summary judgment must demonstrate there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. In deciding whether the district court appropriately granted summary judgment, we view the evidence in the light most favorable to the opposing party, giving that party the benefit of all favorable inferences which can reasonably be drawn from the record. A party opposing a motion for summary judgment cannot simply rely on the pleadings or on unsupported conclusory allegations. Rather, a party opposing a summary judgment motion must present competent admissible evidence by affidavit or other comparable means that raises an issue of material fact and must, if appropriate, draw the court's attention to relevant evidence in the record raising an issue of material fact. When reasonable persons can reach only one conclusion from the evidence, a question of fact may become a matter of law for the court to decide. A district court's decision on summary judgment is a question of law that we review de novo on the record.
McDougall v. AgCountry Farm Credit Services, PCA , 2020 ND 6, ¶ 10, 937 N.W.2d 546.
[¶8] Lund argues: (i) the statute of frauds does not apply to the parties’ settlement agreement; (ii) even if the statute of frauds applies, the parties’ writings satisfied the statute; (iii) the parties’ partial performance of the settlement agreement removed the agreement from the statute of frauds; and (iv) application of the statute of frauds would promote an injustice.
[¶9] A settlement agreement is a contract between parties, and thus contract law applies. See Kuperus v. Willson , 2006 ND 12, ¶ 11, 709 N.W.2d 726. Subsection 9-06-04(3), N.D.C.C., provides in relevant part:
[¶10] The district court determined the statute of frauds applied to the parties’ alleged settlement agreement because the terms being negotiated included "interests in real property."1 The court concluded that at the December 2, 2019, settlement meeting the parties "verbally agreed to reach settlement along the following terms: ... CAM would transfer all of its real estate properties to Defendant Swanson except Plaintiff Lund would receive CAM's oil and gas interests and one-half of the net sale proceeds from the pending sale of a residence in Moorhead." After the meeting, Lund's attorney emailed Swanson and Open Road's attorneys his notes, providing: "All CAM properties transferred to [Swanson] except [Lund] gets CAM oil interests and one-half of Moorhead net sales proceeds." The subsequent proposed settlement agreement provides: "All of Lund's member interest in CAM shall be transferred to Swanson with the exception of CAM's oil interests and one-half of the net proceeds in a Moorhead, MN residence currently under contract of sale which shall be conveyed to Lund." Because of the inclusion of oil interests, the alleged settlement agreement included real property interests under N.D.C.C. § 9-06-04(3). See Rasnic v. ConocoPhillips Co. , 2014 ND 181, ¶ 10, 854 N.W.2d 659 ().
[¶11] Lund argues in his reply brief that N.D.C.C. § 9-06-04(3) applies only to the sale of real property, not the transfer of real property. He contends the settlement agreement "did not contemplate the formal ‘sale’ of real property and instead negotiated the transfer of real property as part of the settlement." Lund does not provide the meaning of "sale" as it appears in subsection 3, nor does he cite any authority supporting such a narrow interpretation of the statute of frauds.
[¶12] "The general rule is that contracts for the sale of real property and transfers of real property interests must be made by an instrument in writing." Williston Co-op. Credit Union v. Fossum , 459 N.W.2d 548, 551 (N.D. 1990) (emphasis added) (citing N.D.C.C. §§ 9-06-04, 47-10-01 ). Section 47-10-01, N.D.C.C., provides in relevant part, "An estate in real property ... can be transferred only by operation of law or by an instrument in writing, subscribed by the party disposing of the same or by the party's agent thereunto authorized by writing." (Emphasis added.) Thus, section 47-10-01 would seem to defeat Lund's argument. However, it is unclear whether Lund is arguing the settlement agreement actually transferred the real property or if it was an agreement to transfer the property, contemplating the execution of a deed. To the extent Lund argues the settlement agreement is not the instrument of transfer but merely an agreement to transfer the real property in the future through a deed, which would presumably satisfy N.D.C.C. § 47-10-01, we must review whether the agreement was for the sale of real property under N.D.C.C. § 9-06-04(3).
[¶13] Issues regarding interpretation and application of statutes are questions of law and are fully reviewable on appeal. Johnston...
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