Swenson v. Mahlum

• Court: North Dakota Supreme Court
• Writing for the Court: Crothers, Justice.
• Citation: Swenson v. Mahlum, 927 N.W.2d 850 (N.D. 2019)
• Decision Date: 16 May 2019
• Docket Number: No. 20180345,20180345
• Parties: Willis G. SWENSON, and Dayna L. Johnson, Plaintiffs, Appellants, and Cross-Appellees v. Kyle MAHLUM, Defendant, Third-Party Plaintiff, Appellee, and Cross-Appellant v. Carol Hodgerson, Gerard Swenson, Lee Alan Swenson, and Mary Ann Vig, in their individual capacities and as heirs to the estate of Junietta Swenson, Third-Party Defendants and Appellees

927 N.W.2d 850

Willis G. SWENSON, and Dayna L. Johnson, Plaintiffs, Appellants, and Cross-Appellees

v.Kyle MAHLUM, Defendant, Third-Party Plaintiff, Appellee, and Cross-Appellant

v.Carol Hodgerson, Gerard Swenson, Lee Alan Swenson, and Mary Ann Vig, in their individual capacities and as heirs to the estate of Junietta Swenson, Third-Party Defendants and Appellees

No. 20180345

Supreme Court of North Dakota.

Filed May 16, 2019

Rehearing Denied June 27, 2019

Taylor D. Olson (argued) and Peter H. Furuseth (on brief), Williston, ND, for plaintiffs, appellants, and cross-appellees Willis G. Swenson and Dayna L. Johnson.

Ryan G. Quarne, Minot, ND, for defendant, third-party plaintiff, appellee, and cross-appellant Kyle Mahlum.

Elizabeth L. Pendlay, Crosby, ND, for third-party defendants and appellees Carol Hodgerson, Gerard Swenson, Lee Alan Swenson and Mary Ann Vig.

Crothers, Justice.

[¶1] Willis Swenson appeals and Kyle Mahlum cross-appeals from an order dismissing Willis Swenson’s claims against Mahlum and Mahlum’s claims against Carol Hodgerson, Gerard Swenson, Lee Alan Swenson, and Mary Ann Vig ("third-party defendants"). Willis Swenson argues the district court erred in dismissing his breach of contract claim against Mahlum. We reverse the order and judgment and remand.

I

[¶2] Robert and Junietta Swenson owned real property in Burke County, North Dakota described as:

Township 163 North, Range 89 West Section 28: NW1/4

Township 163 North, Range 88 West Section 19: NE1/4Section 29: NE1/4Section 31: E1/2NE1/4Section 32: SE1/4

Willis Swenson and the third-party defendants are the children of Robert and Junietta Swenson. In 2004, Robert and Junietta Swenson conveyed the property to their children as joint tenants, reserving a life estate for themselves. In 2005, Robert Swenson died and Junietta Swenson became the sole life tenant.

[¶3] In 2008, Junietta Swenson leased the property to Willis Swenson. Willis Swenson agreed to rental payments of $ 20,016 per year, due in installments of $ 10,008 on March 15 and October 15.

[¶4] In December 2009, Willis Swenson leased the property to Mahlum for $ 31,022.50 per year, due on March 1. The Swenson-Mahlum lease became effective in March 2010 and stated it would expire in October 2019. The lease also stated, "In the event of Junietta W. Swensons death, payments shall be made as follows. Semi annual payments of $ 10,008 (ten thousand, eight and 00/100) on March 15 and October 15 to Swenson farm land trust. A single payment to Willis G Swenson of $ 11006.50 (Eleven thousand, six and 50/100) on March 1st of each year."

[¶5] In November 2011, Willis Swenson signed a new lease with Junietta Swenson. The lease required Willis Swenson to pay $ 10,008 on March 15 and October 15 of each year. The lease began in 2012 and stated it would expire in 2022. The lease permitted Willis Swenson to assign or sublet the property to any person.

[¶6] In July 2012, Lee Alan Swenson was appointed guardian and conservator for Junietta Swenson. In January 2013, Lee Alan Swenson, as guardian and conservator, leased the same property to Mahlum that Willis Swenson already was leasing to Mahlum in the December 2009 lease. The new lease required Mahlum to pay Junietta Swenson $ 31,122.50 each year on March 1. Junietta Swenson died on November 20, 2013. Mary Vig, as personal representative of Junietta Swenson’s estate, informed Mahlum that future rental payments should be split and made to each of Junietta Swenson’s children in equal amounts.

[¶7] In January 2017, Willis Swenson and his daughter, Dayna Johnson, sued Mahlum for unpaid rent. Willis Swenson alleged Mahlum was required to pay him $ 31,022.50 each year under the 2009 lease, and Mahlum failed to pay any rent in 2013, 2014, 2015, and 2016. Willis Swenson requested $ 124,090 in damages.

[¶8] Mahlum answered and filed a third-party complaint, suing the third-party defendants, in their individual capacities and as heirs to the Estate of Junietta Swenson, for unjust enrichment. He alleged in 2013 he paid $ 31,122.50 to Junietta Swenson under the terms of the 2013 lease. He also alleged in 2014, 2015, and 2016 he paid $ 31,122.50 in rent to each of Junietta Swenson’s five children. He claimed that the third-party defendants have been unjustly enriched, and that the third-party defendants be ordered to pay Mahlum any amounts the court finds he owes Willis Swenson if Willis Swenson obtains a judgment against him.

[¶9] After a bench trial, the district court dismissed Willis Swenson and Dayna Johnson’s claims against Mahlum with prejudice and dismissed Mahlum’s claims against the third-party defendants without prejudice. The court dismissed Johnson’s claims, finding she had no interest in the property, no interest in the lease, she could not assert Willis Swenson’s rights, and therefore she had no standing. The court found Willis Swenson’s alleged damages were limited because he was required to pay Junietta Swenson $ 20,016 per year for rent on the property and therefore the most he would ever receive from Mahlum under the lease was $ 11,006.50, and the maximum amount of his recovery was $ 44,026 if he recovered any damages.

[¶10] The court dismissed Willis Swenson’s claims to any rent for 2014 through 2016, finding Junietta Swenson’s 2011 lease to Willis Swenson terminated upon her death, Willis Swenson no longer had a right to sublease the property, and therefore the lease between Willis Swenson and Mahlum also terminated upon Junietta Swenson’s death in November 2013. The court also dismissed Willis Swenson’s claims for payment of the 2013 rent. The court found Lee Alan Swenson advised Mahlum in 2013 that all future rental payments should be made directly to Junietta Swenson, Mahlum paid the 2013 rent to Junietta Swenson, and Mahlum is protected from any claim by N.D.C.C. § 30.1-29-23 because he acted in good faith with Lee Alan Swenson, as guardian and conservator.

II

[¶11] The third-party defendants argue the appeal should be dismissed because Mahlum’s claims were dismissed without prejudice, the district court did not certify the judgment as final under N.D.R.Civ.P. 54(b), and the judgment is not final and appealable.

[¶12] The right to appeal is governed by statute, and the appeal must be dismissed if there is no statutory basis to hear the appeal. James Vault & Precast Co. v. B&B Hot Oil Serv., Inc. , 2018 ND 63, ¶ 8, 908 N.W.2d 108. A party may appeal from a judgment or order in a civil action under N.D.C.C. § 28-27-01. Only judgments and decrees which constitute a final judgment and orders specified by statute are appealable. James Vault & Precast , at ¶ 8.

[¶13] A dismissal without prejudice generally is not appealable. Conrad v. Wilkinson , 2017 ND 212, ¶ 5, 901 N.W.2d 348. "This Court has noted that, because either side may commence another action after a civil complaint is dismissed without prejudice, the order dismissing the action neither ‘determines the action’ nor ‘prevents a judgment from which an appeal might be taken.’ " Bell v. Pro Tune Plus , 2013 ND 147, ¶ 4, 835 N.W.2d 858 (quoting Triple Quest, Inc. v. Cleveland Gear Co., Inc. , 2001 ND 101, ¶ 7, 627 N.W.2d 379 ). "However, a dismissal without prejudice may be final and appealable if the plaintiff cannot cure the defect that led to dismissal, or if the dismissal has the practical effect of terminating the litigation in the plaintiff’s chosen forum." Conrad , at ¶ 5 (quoting Rodenburg v. Fargo-Moorhead Young Men’s Christian Ass’n , 2001 ND 139, ¶ 12, 632 N.W.2d 407 ).

[¶14] In James Vault & Precast , 2018 ND 63, ¶ 1, 908 N.W.2d 108, the question was whether the judgment was final for purposes of appeal when some claims were dismissed without prejudice. There, the district court granted summary judgment dismissing several of the defendants’ cross-claims. Other claims remained and were scheduled for trial. To make the case appealable, the parties stipulated to dismissal of the remaining claims without prejudice, and the court entered judgment conforming to the stipulation. Id. at ¶¶ 4-5. On appeal we considered the extent of our jurisdiction where parties voluntarily dismissed claims without prejudice to create a final judgment for purposes of appeal. Id. at ¶ 11. In reviewing the approaches federal appellate courts have adopted, we said, "We adopt the bright-line approach to review appeals where remaining claims are dismissed without prejudice. Under this approach, if there is a dismissal without prejudice of remaining non-adjudicated claims to create a final disposition of all claims in a lawsuit, there is not a final judgment of the rights of the parties." Id. at ¶ 14.

[¶15] This case is different than James Vault & Precast . Here, after a bench trial, the district court dismissed Willis Swenson’s claims against Mahlum with prejudice and dismissed Mahlum’s claims against the third-party defendants without prejudice. Willis Swenson’s claims against Mahlum were for failure to pay rent due under the farm lease. Mahlum’s unjust enrichment claims against the third-party defendants were dependent on the court entering judgment against Mahlum on Willis Swenson’s claims. Because the court found in favor of Mahlum on Willis Swenson’s claims, it dismissed Mahlum’s claims without deciding the merits of his claims. None of the parties requested Mahlum’s third-party claims be dismissed without prejudice to "create" or "manufacture" a final judgment for purposes of appellate jurisdiction. None of the claims were dismissed without prejudice "to create a final disposition of all claims." Because Mahlum’s third-party claims were dependent on Willis Swenson’s claims which were dismissed without prejudice, the court’s decision has the practical effect of terminating the litigation. Therefore, the order and judgment dismissing Willis Swenson’s claims with prejudice and Mahlum’s claims without prejudice is appealable.

III

[¶16] Willis Swenson argues the district court erred in dismissing his breach of contract claim...