Riverwood Comm Park v. Standard Oil Co., 20060122.

• Citation: 2007 ND 36,729 N.W.2d 101
• Decision Date: 05 March 2007
• Docket Number: No. 20060122.,20060122.
• Parties: RIVERWOOD COMMERCIAL PARK, L.L.C., and Tom S. Freidt, Plaintiffs and Appellants, v. STANDARD OIL COMPANY, INC., a/k/a BP, and Tesoro Refining and Marketing Company, Defendants and Appellees.
• Court: United States State Supreme Court of North Dakota

729 N.W.2d 101

2007 ND 36

RIVERWOOD COMMERCIAL PARK, L.L.C., and Tom S. Freidt, Plaintiffs and Appellants, v. STANDARD OIL COMPANY, INC., a/k/a BP, and Tesoro Refining and Marketing Company, Defendants and Appellees.

No. 20060122.

Supreme Court of North Dakota.

March 5, 2007.

Chad C. Nodland (argued), Chad C. Nodland, P.C., Bismarck, N.D., for plaintiffs and appellants.

John C. Kapsner (argued) and Kari R. Reichert (appeared), Vogel Law Firm, Bismarck, N.D., for defendant and appellee Standard Oil Company, Inc.

Michael J. Geiermann (argued), Schulz Geiermann & Bergeson Law Offices, P.C., Bismarck, N.D., for defendant and appellee Tesoro Refining and Marketing Company.

MARING, Justice.

[¶ 1] Riverwood Commercial Park, LLC, and Tom Freidt (collectively "Riverwood") have appealed from a judgment dismissing their action against Standard Oil Company ("Standard") and Tesoro Refining and Marketing Company ("Tesoro") for trespass, breach of contract, slander of title, right to quiet title, interference with prospective advantage, fraud, and nuisance. We reverse, concluding (1) the district court erred in holding Riverwood's claims for slander of title, right to quiet title, interference with prospective advantage, fraud, and nuisance were barred by res judicata, collateral estoppel, and law of the case, and (2) the district court erred in dismissing with prejudice Riverwood's claims for trespass and breach of contract for failure to join indispensable parties.

I

[¶ 2] We outlined the historical background of the parties' disputes in Riverwood Commercial Park, LLC v. Standard Oil Co., Inc., 2005 ND 118, ¶¶ 2-3, 698 N.W.2d 478:

In 1953, Standard owned an oil refinery in Mandan, and the Northern Pacific Railway Company ("NP") owned land between the refinery and the Heart River. On March 23, 1953, NP executed a written permit granting Standard permission to "construct, operate, and maintain" a sewer pipeline along NP's right-of-way from the refinery to the Heart River. The permit provided that Standard could not transfer or assign the permit without NP's written consent. A twenty-two inch underground sewer pipeline, including a large manhole, was constructed across NP's property from the refinery several miles south to the Heart River.

In 1998, NP sold a portion of its property containing the sewer pipeline to Marmot Properties. Since 1953, Standard has gone through a series of name changes and eventually became British Petroleum ("BP"). In 2001, BP sold the Mandan refinery to Tesoro. On May 17, 2004, Tesoro filed a "Notice of Permit," with a copy of the 1953 permit attached, with the Morton County Recorder's Office. On June 15, 2004, Marmot Properties sold the property involved in this case, with the sewer pipeline running beneath it, to Riverwood.

[¶ 3] In August 2004, Riverwood brought a summary eviction action under N.D.C.C. ch. 33-06 against Standard and Tesoro, contending that the existence of the pipeline on its property constituted a trespass.¹ Riverwood sought immediate removal of the pipeline, claiming its presence interfered with Riverwood's ability to develop and market its property. On Tesoro's motion for judgment on the pleadings under N.D.R.Civ.P. 12(b)(vi) for failure to state a claim upon which relief could be granted, the district court concluded that the 1953 permit did not create a lease and Standard and Tesoro did not have a possessory interest in the property, and eviction via the summary procedure under N.D.C.C. ch. 33-06 was therefore not available. Riverwood appealed from the judgment dismissing the eviction action and this Court affirmed, concluding the 1953 permit "at best" created a license or an easement, not a lease, and subsections (4), (7), and (8) of N.D.C.C. § 33-06-01, which specifically apply only to lessees, were inapplicable. Riverwood, 2005 ND 118, ¶¶ 10-11, 698 N.W.2d 478.

[¶ 4] While the appeal in Riverwood I was pending, Riverwood brought this action against Standard and Tesoro, alleging trespass, breach of contract, slander of title, right to quiet title, interference with prospective advantage, fraud, and nuisance. Standard and Tesoro moved to dismiss the complaint under N.D.R.Civ.P. 12(b)(vi) and (vii) for failure to state a claim upon which relief could be granted and failure to join indispensable parties under N.D.R.Civ.P. 19. Riverwood responded to the motions to dismiss and moved to amend the complaint to add a claim for exemplary damages. The district court dismissed the slander of title, right to quiet title, interference with prospective advantage, fraud, and nuisance claims, finding they were barred by res judicata, collateral estoppel, and law of the case. The court initially did not dismiss Riverwood's claims for trespass or breach of contract, expressly concluding they were not barred by res judicata, collateral estoppel, or law of the case, but ordered that Burlington Northern Santa Fe Railroad (NP's successor) and Marmot Properties were indispensable parties and granted Riverwood fifteen days to join them as defendants. When Riverwood failed to join the additional parties, the district court ordered dismissal with prejudice of the trespass and breach of contract claims, and judgment was entered dismissing Riverwood's complaint in its entirety.

[¶ 5] Riverwood has appealed, arguing its claims in this case were not barred by the result in Riverwood I, it was not required to join additional parties, and the district court erred in failing to grant Riverwood's motion to amend the complaint to include a claim for exemplary damages.

II

[¶ 6] Our review of the judgment dismissing the complaint is complicated by the uncertain procedural posture of this case. Standard and Tesoro moved for judgment on the pleadings under N.D.R.Civ.P. 12(b)(vi) and (vii) for failure to state a claim upon which relief could be granted and failure to join indispensable parties. The parties thereafter presented to the district court evidentiary matters, including affidavits and documentary evidence, in support of their respective arguments. Rule 12(c), N.D.R.Civ.P., applies when matters outside the pleadings are presented to the court:

After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings. If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in N.D.R.Civ.P. 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by N.D.R.Civ.P. 56.

[¶ 7] In this case, it is unclear whether the district court disposed of the motions under Rule 12 or Rule 56. Although the court did not expressly exclude the additional matters presented by the parties, the court did not reference any of those additional materials in its order granting the motion to dismiss. Nor did the court explain whether it was applying the standards governing judgment on the pleadings or the summary judgment standards in resolving the motions. The determination of which procedure the district court employed affects the applicable standards and the scope of our review on appeal.

[¶ 8] In Kouba v. State, 2004 ND 186, ¶¶ 4-6, 687 N.W.2d 466, we outlined the standards governing judgment on the pleadings under N.D.R.Civ.P. 12:

"A trial court's decision for granting judgment on the pleadings under Rule 12(c), N.D.R.Civ.P., is reviewed de novo." Tibert v. Minto Grain, 2004 ND 133, ¶ 6, 682 N.W.2d 294. . . .

When our Court reviews the dismissal of a complaint after a judgment on the pleadings under Rule 12(c), N.D.R.Civ. P.,

we recognize that a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. The court's inquiry is directed to whether or not the allegations constitute a statement of a claim under Rule 8(a), N.D.R.Civ.P., which sets forth the requirements for pleading a claim and calls for a short and plain statement of the claim showing that the pleader is entitled to relief. The complaint is to be construed in the light most favorable to the plaintiff, and the allegations of the complaint are taken as true. The motion for dismissal of the complaint should be granted only if it is disclosed with certainty the impossibility of proving a claim upon which relief can be granted.

Tibert, 2004 ND 133, ¶ 7, 682 N.W.2d 294 (citation omitted).

A trial court's decision granting judgment of dismissal for failure to state a claim upon which relief can be granted under Rule 12(b)(vi), N.D.R.Civ.P., will be affirmed by our Court if we cannot "discern a potential for proof to support it." Vandall v. Trinity Hospitals, 2004 ND 47, ¶ 5, 676 N.W.2d 88 (quoting Towne v. Dinius, 1997 ND 125, ¶ 7, 565 N.W.2d 762).

[¶ 9] The standards governing summary judgment under N.D.R.Civ.P. 56, while similar to those for judgment on the pleadings, allow a somewhat broader procedure and review:

Summary judgment is a procedural device for promptly resolving a controversy on the merits without a trial if either party is entitled to judgment as a matter of law, and if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result. The party moving for summary judgment must show there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. A party resisting a motion for summary judgment cannot merely rely on the pleadings or other unsupported conclusory allegations. A resisting party must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact. A district court's decision on a motion for summary judgment is a question of law that we review de novo on the...