Court Opinion

ID: 4880922
Source: CourtListenerOpinion
Date Created: 2021-09-02 14:07:24.513842+00
Date Added: 2024-06-11T08:03:08.586535
License: Public Domain

FILED
                                                                      IN THE OFFICE OF THE
                                                                   CLERK OF SUPREME COURT
                                                                        SEPTEMBER 2, 2021
                                                                    STATE OF NORTH DAKOTA

                   IN THE SUPREME COURT
                   STATE OF NORTH DAKOTA

                                2021 ND 162

Richard Manning,                                       Plaintiff and Appellee
  v.
Alvin A. Jaeger,                                     Defendant and Appellee
  and
Continental Resources, Inc.,                  Interested Party and Appellant

                               No. 20200332

Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Pamela A. Nesvig, Judge.

AFFIRMED.

Opinion of the Court by McEvers, Justice.

John E. Ward, Bismarck, ND, for plaintiff and appellee; submitted on brief.

Matthew A. Sagsveen, Bismarck, ND, for defendant and appellee; submitted
on brief.

Lawrence Bender, Bismarck, ND, and Andrew D. Sims, Fort Worth, TX, for
interested party and appellant; submitted on brief.
                             Manning v. Jaeger
                               No. 20200332

McEvers, Justice.

[¶1] Continental Resources, Inc. (“Continental”) appeals from a district court
amended order denying its motion to intervene in this proceeding. We conclude
the district court did not err in denying Continental’s amended motion to
intervene. We decline Continental’s request for this Court to exercise its
supervisory authority to direct the district court to vacate its prior order for
reinstatement. We affirm.

                                       I

[¶2] P&P Industries, LLC I (“P&P”), a foreign limited liability company,
initially obtained a certificate of authority to transact business in North
Dakota as a foreign limited liability company in December 2012. Richard
Manning is the managing member of the LLC. On May 22, 2015, Secretary of
State Alvin Jaeger revoked the certificate of authority of P&P in North Dakota
as a result of P&P’s failure to file its annual report.

[¶3] On April 14, 2020, Manning, represented by counsel, filed a petition and
supporting exhibits on behalf of P&P in the district court appealing for
reinstatement under N.D.C.C. § 10-32.1-91, seeking to reinstate P&P’s
authority to transact business in this state as a foreign limited liability
company. The Secretary of State admitted service of the petition, waived the
right to any further notice, and consented to the immediate reinstatement of
P&P. After reviewing the petition and exhibits, the court entered an order for
reinstatement on April 16, 2020. No party has appealed from the April 2020
reinstatement order.

[¶4] In May 2020, Continental moved the district court to intervene in this
matter and to vacate the reinstatement order. Continental sought to intervene
as a matter of right and asserted the district court’s reinstatement order was
void. Continental asserted Manning filed the petition to defeat its motion to
dismiss P&P’s counterclaims in a pending matter on remand in Williams
County district court. See Continental Res., Inc. v. P&P Indus., LLC I, 2018

                                       1
ND 11, 906 N.W.2d 105. Continental also asserted that Manning lacked
statutory standing to seek reinstatement because the statute requires the
entity to file the petition for reinstatement and that P&P did not meet the
requirements for obtaining a foreign LLC certificate of authority because it did
not exist as an entity in Delaware, the state of its formation, at the time of the
petition and the reinstatement order.

[¶5] Manning filed a response in opposition to Continental’s motion, which
included a “statement of correction” executed by Manning, correcting the
record to show P&P had been revived as an LLC in Delaware on May 4, 2020,
and attaching a certificate of revival in the state of Delaware. On August 12,
2020, the district court entered an order that denied Continental’s motion to
intervene because it failed to file with its motion a pleading asserting a claim
or defense as required under the rules. Continental subsequently filed an
amended motion and brief in support of its amended motion with a proposed
pleading.

[¶6] After an October 2020 hearing, the district court entered an order
denying Continental’s amended motion to intervene and refusing to consider
its request to vacate the order for reinstatement. In its order denying
intervention, the court held Continental’s claimed interest in this proceeding
derives from the motion to dismiss it filed in the separate pending lawsuit. The
court rejected Continental’s argument that it has a right to intervene in this
proceeding merely because the court’s prior reinstatement order affects an
argument Continental is asserting in the separate action. The court concluded
this was not a legally protectable interest in the appeal for reinstatement.

[¶7] The district court held reinstatement under N.D.C.C. § 10-32.1-91
involves only the company seeking reinstatement and the Secretary of State.
The court found the Secretary had clearly consented to the immediate
reinstatement of P&P; no other parties are involved; and Continental had no
interest in P&P’s reinstatement. The court therefore denied Continental’s
amended motion to intervene.

                                        2
                                       II

[¶8] Continental’s amended motion relied on N.D.R.Civ.P. 24 and 60, and
sought an order from the district court permitting it to intervene as a matter
of right and vacating the court’s April 2020 order for reinstatement.
Continental has appealed from the order denying its amended motion to
intervene. See Wyatt v. R.D. Werner Co., Inc., 524 N.W.2d 579, 580 (N.D. 1994)
(holding an order denying a motion to intervene is a final appealable order).
While Continental raises a number of issues, the dispositive issue raised on
appeal is whether the district court erred in denying Continental’s motion to
intervene under N.D.R.Civ.P. 24(a)(2).

[¶9] Rule 24(a), N.D.R.Civ.P., allows for intervention as a matter of right and
provides that, on timely motion, the court must permit anyone to intervene
who:

      (1) is given an unconditional right to intervene by a statute; or
      (2) claims an interest relating to the property or transaction that
      is the subject of the action, and is so situated that disposing of the
      action may as a practical matter impair or impede the movant’s
      ability to protect its interest, unless existing parties adequately
      represent that interest.

(Emphasis added.) We have construed N.D.R.Civ.P. 24 liberally, and
intervention has historically been liberally granted in North Dakota. Pub.
Serv. Comm’n v. Grand Forks Bean Co., Inc., 2017 ND 201, ¶ 13, 900 N.W.2d
255; White v. T.P. Motel, LLC, 2015 ND 118, ¶ 22, 863 N.W.2d 915; see also
Eichhorn v. Waldo Twp. Bd. of Supervisors, 2006 ND 214, ¶ 16, 723 N.W.2d
112 (holding water resource district had the right to intervene in landowner’s
petition for writ of mandamus against township). We have also said, however,
that “[e]ven though liberally granted, post-judgment intervention is unusual
and not often granted.” Minn-Kota Ag Prods., Inc. v. N.D. Pub. Serv. Comm’n,
2020 ND 12, ¶ 41, 938 N.W.2d 118 (quotation marks omitted).

[¶10] Whether a party may intervene as a matter of right under N.D.R.Civ.P.
24(a) presents a question of law and is fully reviewable on appeal. Grand Forks
Bean, 2017 ND 201, ¶ 15; Fisher v. Fisher, 546 N.W.2d 354, 355 (N.D. 1996).

                                        3
In considering a motion to intervene under N.D.R.Civ.P. 24(a), we review the
district court’s findings of fact under the clearly erroneous standard of review
in N.D.R.Civ.P. 52(a). Grand Forks Bean, at ¶ 15.

[¶11] In White, 2015 ND 118, ¶ 20, this Court said N.D.R.Civ.P. 24 “is derived
from and substantially similar to Fed.R.Civ.P. 24,” and “[w]hen a state rule is
derived from a corresponding federal rule, the federal courts’ interpretation of
the federal rule may be persuasive authority when interpreting our rule.” See
also Fisher, 546 N.W.2d at 355. We further explained that “[u]nder
Fed.R.Civ.P. 24(a)(2), upon a timely motion, a person is entitled to intervene
as of right if: (1) the person has a cognizable interest in the subject matter of the
litigation; (2) the interest may be impaired as a result of the litigation; and (3)
the interest is not adequately represented by an existing party to the
litigation.” White, at ¶ 21 (citing Chiglo v. City of Preston, 104 F.3d 185, 187
(8th Cir. 1997); Kansas Pub. Emp. Ret. Sys. v. Reimer & Koger Assoc., Inc., 60
F.3d 1304, 1307 (8th Cir. 1995)) (emphasis added); see also Grand Forks Bean,
2017 ND 201, ¶ 14. Each of these requirements must be met to intervene as a
matter of right under N.D.R.Civ.P. 24(a)(2). See White, at ¶ 21 (citing Chiglo,
at 187).

[¶12] In Fisher, 546 N.W.2d at 356, this Court discussed federal precedent and
the interest required to support intervention as a matter of right:

             In United States v. Union Elec. Co., 64 F.3d 1152, 1161 (8th
      Cir. 1995), the court explained the interest required to support
      intervention of right under Rule 24(a), F.R.Civ.P.:
             “The applicant for intervention must have an interest in the
             subject matter of the litigation, i.e., an interest that is
             ‘direct,’ as opposed to tangential or collateral. Furthermore,
             that interest must be ‘recognized,’ i.e., both ‘substantial’ and
             ‘legally protectable.’”
      A “direct” interest is one that is not “remote” or “contingent.” A
      “legally protectable” interest is one that “the substantive law
      recognizes as belonging to or being owned by the applicant.” A
      party who qualifies as a “real party in interest” under Rule 17(a),
      F.R.Civ.P., is a party with a “legally protectable” interest.

(Internal citations omitted.)

                                         4
[¶13] In Medical Liability Mutual Insurance Company v. Alan Curtis LLC, 485
F.3d 1006, 1008 (8th Cir. 2007), the court explained that the interest must be
“direct, substantial, and legally protectable” for an interest to be “cognizable”
under Rule 24(a)(2):

            An interest is cognizable under Rule 24(a)(2) only where it is
      “direct, substantial, and legally protectable.” United States v.
      Union Elec. Co., 64 F.3d 1152, 1161 (8th Cir. 1995). An economic
      interest in the outcome of the litigation is not itself sufficient to
      warrant mandatory intervention. Curry v. Regents of the Univ.,
      167 F.3d 420, 422–23 (8th Cir. 1999). An interest that is
      “contingent upon the occurrence of a sequence of events before it
      becomes colorable” is also not sufficient to satisfy Rule 24(a)(2).
      Standard Heating & Air Conditioning Co. v. City of Minneapolis,
      137 F.3d 567, 571 (8th Cir. 1998), quoting Washington Elec. v.
      Mass. Mun. Wholesale Elec., 922 F.2d 92, 97 (2d Cir. 1990).

[¶14] In Liberty Mutual Insurance Company v. Treesdale, Inc., 419 F.3d 216,
221 (3d Cir. 2005), the court further discussed the requisite “cognizable
interest”:

      While the precise nature of the interest required to intervene as of
      right has eluded precise and authoritative definition, some general
      guidelines have emerged. . . . [A]n intervenor’s interest must be
      one that is significantly protectable. [This means that] the interest
      must be a legal interest as distinguished from interests of a
      general and indefinite character. The applicant must demonstrate
      that there is a tangible threat to a legally cognizable interest to
      have the right to intervene. This interest is recognized as one
      belonging to or one being owned by the proposed intervenors. . . .
      In general, a mere economic interest in the outcome of litigation is
      insufficient to support a motion to intervene. Thus, the mere fact
      that a lawsuit may impede a third party’s ability to recover in a
      separate suit ordinarily does not give the third party a right to
      intervene.

Treesdale, at 220-21 (quoting Mountain Top Condo. Ass’n v. Dave Stabbert
Master Builder, Inc., 72 F.3d 361, 366 (3d Cir. 1995) (citations omitted)).

                                       5
[¶15] With this standard in mind, we examine whether Continental has shown
a cognizable interest in these proceedings.

                                        A

[¶16] This case involves an appeal to the district court under N.D.C.C. § 10-
32.1-91, seeking P&P’s reinstatement. Under N.D.C.C. § 10-32.1-91(1)(b)(1), a
foreign limited liability company may appeal to the district court in Burleigh
County for reinstatement after the Secretary of State has revoked a certificate
of authority to transact business in the State. This statute provides, in relevant
part:

      1. With respect to reinstatement following involuntary
      termination or revocation of authority:
           ....
           b. With respect to a reinstatement which is more than one
           year after involuntary termination or revocation:
                 (1) If the secretary of state terminates a limited
                 liability company or revokes the certificate of
                 authority to transact business in this state of any
                 foreign limited liability company, pursuant to the
                 provisions of section 10-32.1-90, then the limited
                 liability company or foreign limited liability company
                 may appeal to district court in the judicial district
                 serving Burleigh County for reinstatement by filing
                 with the clerk of such court a petition, including:
                         (a) A copy of the articles of organization of the
                         limited liability company and a copy of the notice
                         of termination given by the secretary of state; or
                         (b) A copy of the certificate of authority of the
                         foreign limited liability company to transact
                         business in this state and a copy of the notice of
                         revocation given by the secretary of state. The
                         matter must be tried de novo by the court. The
                         court shall either sustain the action of the
                         secretary of state or direct the secretary of state
                         to take such action as the court may deem
                         proper.
                 (2) If the court order sought is one for reinstatement of
                 a limited liability company that has been terminated

                                        6
                  as provided in subsection 1 of section 10-32.1-90, or for
                  reinstatement of the certificate of authority of a
                  foreign limited liability company that has been
                  revoked as provided in subsection 2 of section 10-32.1-
                  90, then, together with any other actions the court
                  deems proper, any order which reverses the decision of
                  the secretary of state shall require the limited liability
                  company or foreign limited liability company to:
                         (a) File the most recent past-due annual report;
                         (b) Pay the fees to the secretary of state for all
                         past-due annual reports as provided in
                         subsection [25] of section 10-32.1-92; and
                         (c) Pay the reinstatement fee to the secretary of
                         state as provided in subsection [25] of section 10-
                         32.1-92.
                  (3) Appeals from all final orders and judgments
                  entered by the district court under this section in
                  review of any ruling or decision of the secretary of
                  state may be taken as in other civil actions.
                  ....
            e. Appeals from all final orders and judgments by the district
            court under this subsection may be taken as in other civil
            actions.

N.D.C.C. § 10-32.1-91(1).

[¶17] Continental argues the district court erred in denying its amended
motion and it had met the requirements of N.D.R.Civ.P. 24(a)(2) to intervene
as a matter of right because it has an interest relating to the subject matter of
P&P’s reinstatement. Continental contends it has a “statutory right” to
prevent P&P from asserting its breach of contract claim in the Williams County
case because P&P’s certificate of authority in North Dakota was terminated in
2015. See N.D.C.C. § 10-32.1-84(1) (“A foreign limited liability company
transacting business in this state may not maintain an action or proceeding in
this state unless it has a certificate of authority to transact business in this
state.”).

[¶18] Continental argues that its interest goes beyond merely an argument
asserted in the Williams County case, because it has a right to enforce N.D.C.C.

                                        7
§ 10-32.1-84(1) against a foreign limited liability company attempting to use
North Dakota courts to assert a “prohibited” cause of action in defending
against P&P’s counterclaim. Continental asserts the subject matter of the
reinstatement proceeding is whether P&P’s certificate of authority should be
reinstated under N.D.C.C. § 10-32.1-91(1)(b) and P&P’s ability to satisfy the
statute and assert its counterclaim against Continental in the Williams
County case wholly depends on P&P obtaining the valid reinstatement order.

[¶19] Continental also argues that its interest may be impaired as a result of
the reinstatement and that its interest was not adequately protected by an
existing party to the reinstatement proceeding, i.e., the Secretary of State.
Continental asserts that, contrary to the statute’s requirements, the Secretary
has consented to the reinstatement of P&P, has taken no position on its
amended motion to intervene, and has failed to take any action to “correct” the
reinstatement order despite there being no dispute that P&P did not exist
when the reinstatement order was signed.

[¶20] Continental argues intervention was not precluded because Continental
timely sought to intervene within the time for appeal and within the time for
vacating a void order under N.D.R.Civ.P. 60(b), or alternatively under
N.D.R.Civ.P. 60(b)(1), (3), and (6). Continental asserts it met all of the elements
for intervention as a matter of right and requests this Court to reverse the
intervention order and remand for the district court to consider its request
under N.D.R.Civ.P. 60(b) to vacate the void reinstatement order.

[¶21] Here, in denying Continental’s amended motion to intervene, the district
court explained:

            In this case, Continental’s claimed “interest” in this
     reinstatement action derives from a motion filed in a completely
     separate lawsuit. Continental essentially argues that it has a right
     to intervene in this matter because this Court’s Order granting
     P&P’s reinstatement affects an argument Continental is trying to
     make in a motion in another lawsuit. This Court concludes this is
     not a legally protectable interest in this reinstatement action.
     The fact that this Court’s reinstatement may impact Continental’s
arguments in the Williams County case does not mean the arguments in

                                        8
the Williams County case should impact this Court’s decision on P&P’s
reinstatement. Actions for reinstatement involve only the company
seeking reinstatement, and the Secretary of State’s Office. Section 10-
32.1-91, N.D.C.C., is clear regarding the process a company must
undergo when seeking that reinstatement. That the reinstatement may
impact other legal matters is not one of the factors the district court
considers in reviewing the filings to ensure they are in compliance with
the statute. Here, the Secretary of State clearly consented to the
immediate reinstatement of P&P. There are no other parties involved in
a reinstatement action.
            The Court concludes Continental has no interest in P&P’s
      reinstatement. Having to defend from a claim in a completely
      separate action unrelated to the reinstatement is not a direct,
      substantial, and legally protectable interest. P&P’s reinstatement
      has no effect on Continental’s ability to defend itself in the
      Williams County Action. Therefore, Continental does not have a
      right to intervene in this matter, and the Court will not permit
      intervention.

The district court declined to consider Continental’s request under
N.D.R.Civ.P. 60 to vacate its prior reinstatement order because Continental is
not a party and intervention was not allowed.

[¶22] We agree with the conclusion that Continental’s interest in the statutory
appeal to the district court is tangential and that Continental has no direct,
substantial, and legally protectable interest in P&P’s reinstatement. See
Fisher, 546 N.W.2d at 356 (“[A]pplicant for intervention must have an interest
in the subject matter of the litigation, i.e., an interest that is ‘direct,’ as opposed
to tangential or collateral.” (citation omitted)). The question here is whether
Continental’s interest in these proceedings is a direct, substantial, and legally
protectable interest. See Treesdale. Co., 419 F.3d at 221 (“[A] mere economic
interest in the outcome of litigation is insufficient to support a motion to
intervene. . . . [T]he mere fact that a lawsuit may impede a third party’s ability
to recover in a separate suit ordinarily does not give the third party a right to
intervene.” (citation omitted)).

[¶23] Continental’s asserted interest is its ability to “enforce” N.D.C.C. § 10-
32.1-84(1), precluding a foreign LLC from maintaining an action unless it has

                                          9
a certificate of authority, by way of its motion to dismiss P&P’s counterclaim
in the pending Williams County action. While Continental plainly has a direct
interest in the Williams County action, that interest is not sufficiently direct
for Continental to intervene as of right in the statutory appeal provided under
N.D.C.C. § 10-32.1-91. Continental does not purport to have an ownership
interest in or to be a member of P&P. The fact that the appeal proceedings may
impede Continental’s motion to dismiss in a separate lawsuit does not give it
a right to intervene. We conclude that Continental’s interest in the appeal
under N.D.C.C. § 10-32.1-91 is more appropriately categorized as tangential
and collateral, and under these facts and circumstances the district court did
not err in denying Continental’s amended motion to intervene as a matter of
right.

[¶24] Additionally, to the extent Continental seeks to vacate the April 2020
reinstatement order under N.D.R.Civ.P. 60(b), that relief is available only to
“a party or its legal representative from a final judgment, order, or proceeding.”
Because the district court did not err in denying intervention, we conclude the
court did not err by refusing to consider Continental’s request to vacate its
prior reinstatement order.

                                      III

[¶25] Continental requests, alternatively, this Court to exercise its supervisory
authority and direct the district court to vacate the April 2020 reinstatement
order.

[¶26] While the parties to this proceeding have not appealed the district court’s
April 2020 reinstatement order, this Court may exercise supervisory
jurisdiction to review the order.

            Under N.D. Const. art. VI, § 2, and N.D.C.C. § 27-02-04, this
      Court may examine a district court decision by invoking our
      supervisory authority. We exercise our authority to issue
      supervisory writs rarely and cautiously, and only to rectify errors
      and prevent injustice in extraordinary cases when no adequate
      alternative remedy exists. Our authority to issue a supervisory
      writ is “purely discretionary,” and we determine whether to

                                       10
      exercise supervisory jurisdiction on a case-by-case basis,
      considering the unique circumstances of each case. Exercise of
      supervisory jurisdiction may be warranted when issues of vital
      concern regarding matters of important public interest are
      presented.

Wilkinson v. Bd. of Univ. & Sch. Lands, 2020 ND 179, ¶ 17, 947 N.W.2d 910
(quoting Nygaard v. Taylor, 2017 ND 206, ¶ 11, 900 N.W.2d 833) (quotation
marks omitted). This Court generally will not exercise its supervisory
jurisdiction when the proper remedy is an appeal. City of West Fargo v. Olson,
2020 ND 188, ¶ 3, 948 N.W.2d 15; State ex rel. Madden v. Rustad, 2012 ND
242, ¶ 5, 823 N.W.2d 767.

[¶27] Continental argues this Court should exercise its supervisory authority
and direct the district court to vacate the “void” reinstatement order.
Continental contends that the district court lacked subject matter jurisdiction
when it signed the reinstatement order because: Manning lacked standing to
seek reinstatement on behalf of P&P since the statute requires the entity to
file the petition for reinstatement under N.D.C.C. § 10-32.1-91(1)(b)(1); and
P&P lacked standing to obtain reinstatement since P&P did not exist in
Delaware, the state of the LLC’s formation, at the time the petition was filed
and the reinstatement order was signed. Continental argues the “void”
reinstatement order could not be made valid by subsequent events.

[¶28] We conclude that the fact Continental may be unable to appeal the
district court’s order on P&P’s reinstatement does not alone create
“extraordinary circumstances” justifying our supervisory jurisdiction.
Moreover, we conclude that issues of vital concern regarding matters of
important public interest are not present in this case. Continental’s motion to
intervene is primarily based upon an alleged defense to P&P’s counterclaim in
the separate action. Under these facts and circumstances, we decline to
exercise our supervisory jurisdiction.

                                     IV

[¶29] Because of our disposition of Continental’s appeal, we do not address
Manning’s motions to strike and to dismiss the appeal in part. We have

                                      11
considered Continental’s remaining arguments and conclude the remaining
arguments are unnecessary to our decision. The district court’s order denying
Continental’s amended motion to intervene is affirmed.

[¶30] Jon J. Jensen, C.J.
      Daniel J. Crothers
      Lisa Fair McEvers
      Jerod E. Tufte
      Jay A. Schmitz, D.J.

[¶31] The Honorable Jay A. Schmitz, D.J., sitting in place of VandeWalle, J.,
disqualified.

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