Court Opinion

ID: 9513990
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:43:00.109341+00
Date Added: 2024-06-11T09:06:07.373135
License: Public Domain

CROTHERS, Justice,
concurring in part and dissenting in part.
[¶ 24] I concur with Part II of the Majority Opinion affirming the district court’s findings and conclusion that the parties were not partners. I respectfully dissent from Parts III and IV where the Majority overlooks the district court’s findings of fact and, therefore, overtakes the district court’s fact-finding role.
[¶ 25] The hallmark of a joint venture is that parties pool financial resources and share control to accomplish a for-profit, limited-time event. See SPW Associates, LLP v. Anderson, 2006 ND 159, ¶ 10, 718 N.W.2d 580. This Court has recognized, *525“There is, however, no definite formula for identifying the joint venture relationship in all cases, and each case will depend upon its own unique facts.” Id.
[¶ 26] Overlooking this “no one size fits all” admonition, the Majority concludes a joint venture arose out of the Horn lease purchase based on facts the Majority found more persuasive. Majority Opinion at ¶ 13. In the process, the Majority lists, and then casts aside as apparently less persuasive, the district court’s findings which the Majority agreed supported the district court’s conclusion that no joint venture existed. Id. at ¶ 12. I submit the Majority’s actions ignore our “clearly erroneous” standard of review and usurp the district court’s fact-finding role. See Klein v. Larson, 2006 ND 236, ¶ 35, 724 N.W.2d 565 (Crothers, J., concurring in part and dissenting in part) (“[W]e will not retry the case or substitute our judgment for the district court’s if its determination is supported by evidence in the record.”).
[¶ 27] Even accepting that the present facts require the conclusion that a joint venture was created, the Majority’s ultimate decision that liability attaches to the “top leasing” activity is unpersuasive. Rather, North Dakota law allows partners (and therefore joint venturers) to limit the scope of their duty of loyalty to the remaining partners. N.D.C.C. § 45-13-03(2). This public policy is consistent with other jurisdictions examining the question in the context of mineral development. See Christopher Lane and Catherine J. Boggs, Duties of Operator or Manager to Its Joint Venturers, 29 Rocky Mountain Mineral Law Institute 199, 228-29 (1984). This also means that, under North Dakota law, the parties could have limited then-duty of loyalty. Nevertheless, the Majority presumes without question that the full duty of loyalty existed, and that it formed a basis for liability in this case. See Majority Opinion at ¶¶ 15-16.
[¶ 28] There was no written contract in this case. The parameters of the transaction were unclear. A full trial occurred, with many witnesses testifying about their understanding of the business arrangement. From this, the district court made specific findings regarding the nature of the parties’ enterprise, and the scope of their duties to each other:
“7. Bragg never talked to Haughton about the investment in the Horn Leases and had no agreement with Haughton concerning the purchase of additional leases, the purchase of Horn minerals, or the purchase of leases on minerals adjacent to the Horn property. Sand-vick had no written or oral agreement with either Haughton or LaCrosse concerning the acquisition of a new lease following the expiration of the Horn Leases.
“8. At the time of the acquisition of the Horn Leases, Bragg had no agreement with LaCrosse concerning the development of those leases. LaCrosse never agreed to make Sandvick and Bragg a part of any subsequent lease of the Horn minerals. If Bragg had any expectations concerning the development of the Horn Leases, they were not communicated to Haughton.
“9. The parties were all involved in other oil and gas related undertakings with various other parties, including, in some instances, the parties that are involved in these proceedings. These undertakings were separate and apart from the Horn Leases.
“10. No agreement was entered into, express or implied, limiting the parties’ abilities to continue activity which did not include the other parties to these proceedings.
*526“11. None of the parties intended to be exclusively involved in this undertaking, and they knew that the other parties would continue to do business which would not include them.
“12. Haughton was interested in the area surrounding the Horn Leases and had various leasehold and mineral interests in the area dating from 1991. Sandvick, Bragg, and LaCrosse were aware of these facts and had reason to believe that he would continue to invest in the area.
“13. Under the circumstances, the parties had no expectations that the other parties would refrain from investing in the area without offering to the other
parties an opportunity to join in the investment.”
Rather than ignoring the district court’s findings, our standard of review requires that we respect the trier of fact’s ability to see the witnesses, hear the testimony, and determine the scope of the obligations at issue in this case. I therefore would affirm the district court’s judgment.
[¶ 29] DANIEL J. CROTHERS, J.