Title: Sorenson v. Bakken Investments, LLC

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

IN THE SUPREME COURT STATE OF NORTH
DAKOTA 2017 ND 127Craig and
Barbara Sorenson, Plaintiffs and Appelleesv. Bakken Investments
LLC, Creeping Cedar Oil, LLC, XTO Energy, Inc., Black Stone Minerals Co., LP, Pierce
Exploration and Production Corp., Emile-Jean, Baesch-Muller, Ann-Marie Kienz Baesch, Milton
S. Olson, Palmer and Doris Norby, Donald Karst, Wendell and Carole Tasker, Neal "Tuke" P.
Burgess as Personal Representative for the Estate of Alan D. Burgess, Neal Burgess, Claire and
Lois Bjorgen, William R. Anderson, LEAF Minerals, LLC, Ryan Masset, Peter Masset, Tricia
Steffan, Kristi Anseth, Jay Anseth, Siri Njos, Avalon North, LLC, Red Rhino Resources, LLC,
Dakota West Energy, Stallings Properties Ltd., Joe Gieb III, Sara Gieb, Peggy Helphrey, Wayne
Sorenson, Richard Cernosek, Sacred Heart Church, Cyrill Kallus, Elizabeth Kallus, Marilyn
Kallus Kothmann, Mike Kulhanek, Harry Mazurkiewicz, Joseph Hild, Gus Lindemann, David
Machala, Kenneth Stevenson, William Everett, Danny Gumm, Randy Gumm, Bryan Gumm,
Bakken Oil, LLC, Sundance Oil and Gas, LLC, Albert Frisch, Stallings Properties, LTD,
Madeline Frisch, Miriam Philippe-Reuter, Marie Louise Frisch, Continental Resources, Inc.,
Newfield Production Co., Ashley Resources, Inc., Kodiak Oil and Gas, North Plains Energy,
LLC, Maitre Fabienne Mondot, Theresa Pryor, and persons unknown claiming any estate or
interest in, or lien or encumbrance upon, the mineral acres described in the complaint,
Defendants andWilliam Everett, Sara A. Gieb, Marilyn Kallus Kothmann, Elizabeth A.
Kallus, Richard Cernosek, Bryan Gumm, Randy Gumm, Gus F. Lindemann, David F. Machala,
Joe Gieb III, Stallings Properties Ltd., Joseph C. Hild, Mike Kulhanek, Kenneth Stevenson, and
Harry Mazurkiewicz, Defendants and AppellantsNo.
20160319Appeal from the District Court of McKenzie County, Northwest Judicial District,
the Honorable David W. Nelson,
Judge.AFFIRMED.Opinion of the Court by Tufte, Justice.Joshua A. Swanson, Fargo, N.D., for plaintiffs and
appellees.Shea A. Thomas (argued) and Nathan M. Bouray (appeared), Dickinson, N.D., for
defendants and appellants.Sorenson v. Bakken Investments,
LLCNo. 20160319Tufte,
Justice.[¶1] William Everett and 14 others (collectively
"Everett defendants") appeal from a judgment quieting title to certain McKenzie County mineral
interests in Craig and Barbara Sorenson against the Everett defendants. We affirm because
collateral estoppel bars the Everett defendants' arguments in this case.I[¶2] In 2010 the Sorensons sued the Everett
defendants and others to quiet title to certain mineral interests, claiming they had succeeded to
ownership of those interests because the interests were abandoned under the Termination of
Mineral Interest Act, N.D.C.C. ch.
38-18.1.  The Everett defendants each filed stipulations to dismiss the quiet title
action against them with prejudice because "they have no financial or ownership interest"
in the minerals at issue. Judgments against the Everett defendants were subsequently entered
stating they are "hereby adjudicated to have no claim in the property at issue in Plaintiffs'
Complaint pursuant to the parties['] Stipulations," and dismissing them from the quiet title action
with prejudice. The district court then granted the remaining defendants summary judgment
dismissal of the quiet title action because the Sorensons had not complied with the notice
provisions of N.D.C.C. ch.
38-18.1 and the minerals had been "used" within the relevant time period.[¶3] In 2012 the Sorensons commenced another quiet title action against the same
defendants claiming entitlement to the same minerals because those interests were abandoned
under N.D.C.C. ch. 38-18.1. In
July 2015 a partial judgment was entered based on a stipulation between the Sorensons and the
defendants other than the Everett defendants resolving various issues about mineral ownership.
On November 20, 2015, the Everett defendants moved for summary judgment dismissal of the
Sorensons' 2012 quiet title action. The Everett defendants argued they were not represented by
counsel during the 2010 quiet title proceedings, they "mistakenly stipulat[ed] to entry of a
judgment entered against them that disclaimed ownership of the mineral interests," and the
"incorrect Stipulations" did not make the Sorensons "the owners of these
minerals."[¶4] On January 26, 2016, the Everett defendants filed a
N.D.R.Civ.P. 60(b) motion in the 2010 case to
vacate the stipulated judgments because the judgments were based on the "mistaken belief" that
they "did not own a portion of the mineral interests at issue." On January 29, 2016, the district
court in the 2012 litigation granted the Sorensons' cross-motion for summary judgment and
quieted title in favor of them against the Everett defendants. The court ruled the Everett
defendants' lack of counsel when they entered into the stipulations disclaiming any interests they
may have had in the minerals was "not grounds for invalidating the valid and binding
Judgments." On February 24, 2016, the court entered an order in the 2010 case denying the
Everett defendants' N.D.R.Civ.P. 60(b) motion to
vacate the stipulated judgments because the motion was untimely and the Everett defendants'
"mistaken belief they had no interest in the minerals at issue is not a sufficient reason for
disturbing final judgment." The court denied the Everett defendants' motion for reconsideration
of the judgment in the 2012 litigation, and the Everett defendants appeal only from that
judgment.II[¶5] The Everett defendants argue
the district court erred in granting summary judgment quieting title in the Sorensons because the
judgments in the 2010 litigation did not convey the minerals to the Sorensons and the Sorensons
failed to provide sufficient evidence that they complied with the lapsed mineral procedures in N.D.C.C. ch. 38-18.1.[¶6] Our standard for reviewing summary judgments is
well-established:Summary judgment is a procedural device for the
prompt resolution of 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. A party moving for summary judgment has the burden
of showing there are no genuine issues of material fact and the moving party is entitled to
judgment as a matter of law. In determining whether summary judgment was appropriately
granted, we must view the evidence in the light most favorable to the party opposing the motion,
and that party will be given the benefit of all favorable inferences which can reasonably be drawn
from the record. On appeal, this Court decides whether the information available to the district
court precluded the existence of a genuine issue of material fact and entitled the moving party to
judgment as a matter of law. Whether the district court properly granted summary judgment is a
question of law which we review de novo on the entire record. Hamilton, v. Woll, 2012 ND 238, ¶ 9, 823 N.W.2d 754 (citation
omitted).[¶7] The Sorensons argue that the issues raised by the
Everett defendants on appeal were not raised in the district court and should not be considered
here because "[i]t is well-settled that issues not raised in the district court may not be raised for
the first time on appeal." Paulson v.
Paulson, 2011 ND 159, ¶ 9, 801 N.W.2d 746. The only
argument addressed by the district court was whether the Everett defendants could be relieved
from the stipulated 2010 judgments because they were not represented by counsel and did not
fully understand the consequences of their stipulations. The court correctly rejected this
argument. "When a settlement agreement is merged into a judgment, the agreement is interpreted
and enforced as a final judgment and not as a separate contract between the parties." Silbernagel v. Silbernagel, 2011 ND 140,
¶ 11, 800 N.W.2d 320. "A party
may not collaterally attack a final decision, that was not appealed, in subsequent proceedings." Interest of T.H., 2012 ND 38, ¶ 20, 812 N.W.2d 373; see
also State ex rel. Rayl v. Hettinger
County, 467 N.W.2d 98, 100 (N.D.
1991). The Everett defendants' remedy was to move for relief from the stipulated 2010 judgments
under N.D.R.Civ.P. 60(b). See Silbernagel v. Silbernagel, 2006 ND 235,
¶ 2, 725 N.W.2d 588. Their
request for Rule 60(b) relief was denied, and they
did not appeal that decision. Consequently, they are bound by the judgments entered in the 2010
litigation.[¶8] The Everett defendants also argued to the district
court that their "incorrect Stipulations" did not make the Sorensons "the owners of these
minerals," making the quiet title determination inappropriate for summary judgment. However,
this is a quiet title action and N.D.C.C.
§ 32-17-01 provides in part:An action may be
maintained by any person having an estate or an interest in, or lien or encumbrance upon, real
property, . . . against any person claiming an estate or interest in, or lien or
encumbrance upon, the same, for the purpose of determining such adverse estate, interest, lien, or
encumbrance. The statute "authorizes a person with an interest in real
property to bring a quiet title action against any other person claiming an interest in the property
to determine adverse claims." Dennison v. North
Dakota Department of Human Services, 2002 ND 39, ¶ 15, 640 N.W.2d 447; see
also Sabot v. Fox, 272 N.W.2d 280,
283 (N.D. 1978). Only a person having an
interest in, or claiming an interest in, real property may challenge a court's rulings in a quiet title
action. See Nelson v. McAlester
Fuel Co., 2017 ND 49, ¶ 25, 891 N.W.2d 126; Finstad v. Gord, 2014 ND 72, ¶ 24, 844 N.W.2d 913; Gajewski v. Bratcher, 221 N.W.2d 614, 638 (N.D. 1974); see also Finstad
v. Beresford Bancorporation, Inc., 831 F.3d 1009, 1013-14 (8th Cir. 2016) (applying North
Dakota law). The Everett defendants do not have an interest, nor can they claim an
interest, in the subject minerals because they expressly disclaimed any interests in the property in
their stipulations, and the resulting judgments stated they "have no claim in the property at issue."
The Everett defendants are bound by the final judgments in the 2010 litigation, see
generally Hofsommer v. Hofsommer
Excavating, Inc., 488 N.W.2d 380, 384 (N.D. 1992), and therefore possess no
interest a court could protect in this proceeding. See Gajewski, at 638. The Everett defendants cannot collaterally
attack the prior judgments to claim an interest in the property and challenge the court's rulings in
the 2012 quiet title litigation.[¶9] Whether collateral estoppel
applies is a question of law. See Holkesvig v. Grove, 2014 ND 57, ¶ 11, 844 N.W.2d 557. We
conclude the district court did not err in granting summary judgment as a matter of law quieting
title to the mineral interests in the Sorensons against the Everett defendants.III[¶10] It is unnecessary to address other issues
raised. The judgment is affirmed.[¶11] Jerod E. TufteDaniel J. CrothersWilliam A.
Neumann, S.J.Benny A. Graff, S.J.Lisa Fair McEvers, Acting C.J.
[¶12] The Honorable William A. Neumann, S.J., and the Honorable Benny A. Graff, S.J., sitting in place of Kapsner, J., and VandeWalle, C.J., disqualified.