Court Opinion

ID: 9514063
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:43:59.325707+00
Date Added: 2024-06-11T09:06:11.023560
License: Public Domain

KAPSNER, Justice,
dissenting.
[¶ 27] I respectfully dissent.
[¶ 28] I agree with the majority’s holding that proceedings include settlement for purposes of determining the effect of the lis pendens. However, I am concerned that the effect of the majority opinion is to ignore the status of the underlying litigation and the terms of its settlement and to elevate the legal effect of the quitclaim executed as a result of the settlement. A lis pendens purchaser is not bound by a result not suggested by the record of the proceedings, including the settlement.
[¶ 29] The purpose of the underlying litigation, regarding which the lis pendens *490was filed, was to determine the priority between Bragg and Gleason, as plaintiffs, and Continental Resources, as defendant, to the lease at issue in this case which the majority describes as the White lease. A partial summary judgment was entered in that litigation holding as a matter of law, that “the Diamond lease assigned to Continental is valid and superior to the subsequent leases covering the same land given by White to Bragg, and title is quieted to the leasehold interest created by the Diamond lease and assigned to Continental as to any and all adverse claims of the plaintiffs, their successors, or assigns.” This partial summary judgment was entered September 11, 2003. At the time this partial summary judgment was entered, Continental had already assigned its interest in the lease to Burlington.
[¶ 30] It was in the context of this ruling, adverse to the interests of Bragg and Gleason, that the parties decided to enter into the settlement. As noted in paragraph 2 of the majority opinion, that settlement included assignments of all leases at issue, except the White lease, to Continental, a quitclaim from Continental to Bragg and Gleason of the White lease, and a check from Continental to Gleason in the amount of $325,000. As a result of this settlement, a judgment dismissing the action “on the merits, with prejudice,” was entered. A judgment of dismissal with prejudice, based upon the parties’ stipulation, operates as an adjudication of the merits, prohibiting the subsequent reopening of the partial summary judgment. Rugby Milling Co. v. Logosz, 261 N.W.2d 662, 664-65 (N.D.1977).
[¶ 31] A quitclaim conveys no more than the interest held by the grantor at the time of its delivery. Bilby v. Wire, 77 N.W.2d 882, 888 (N.D.1956) (citation omitted) (“A quitclaim deed is one which purports to convey, and is understood to convey, nothing more than the interest or estate in the property described of which the grantor is seized or possessed, if any, at the time, rather than the property itself.”). Yet, the trial court reasoned:
Under any reasonable interpretation of the settlement agreement it is clear that Continental was giving up its claim to the White lease. It defies logic and seems inconceivable that Bragg and Gleason would accept a quit claim deed from Continental as part of a settlement agreement and know they were receiving nothing. When reasonable minds can reach only one conclusion from the evidence as to the terms of settlement it becomes a question of law and summary judgment is appropriate.
[¶ 32] Aside from the fact that the comment ignores the receipt of $325,000 as part of the settlement in the context of an existing adverse ruling and aside from the fact that courts do not usually look at the adequacy of consideration in a contract (Harrington v. Harrington, 365 N.W.2d 552, 555 (N.D.1985)), the court’s reasoning ignores the state of the record that it was using to decide the issue as a matter of law. The court relies on an affidavit of counsel to establish the basis of the settlement. That affidavit includes the deposition testimony of James Bragg in which he testifies that he knew of the prior assignment from Continental to Burlington and he understood the effect of a quitclaim.
[¶ 33] On the issue of the prior assignment by Continental, Bragg testified:
Q. Did you talk about what terms you would be willing to settle on with Mr. Gleason before he met with Mr. Hamm? ...
A. I don’t recall that we discussed specific amounts. We were trying to get this thing settled. We were trying to get paid. But I did mention that I would — since I felt that I *491owned the lease in Burlington’s unit and Burlington thought that I owned the lease in Burlington’s unit, that I wanted — did not want to — I wanted to emerge from this settlement as still owning the White lease.
Q. And you knew that Continental didn’t own the White lease at that point; right?
A. As far as I was concerned, they didn’t own it.
Q. And, in fact, they didn’t even own what title there was in their 1995 lease; is that right?
A. I didn’t think they did.
Q. And you knew that that interest had been assigned to Burlington?
A. Yes.
Q. Did you discuss with Mr. Gleason whether you should attempt to get Burlington to participate in the settlement?
A. No.
[¶ 34] On the subject of the quitclaim deed, Bragg testified:
Q. Was there any discussion that you were involved in relating to the form of the quit claim of Continental’s interest in the White lease?
A. No. There was no discussion on the quit claim deed, except that they would convey everything to us. That was it.
Q. And you knew they had already conveyed that interest to Burlington; right?
A. Yes.
Q. And as a landman, you know that a quit claim does nothing more than indicate that the party no longer claims an interest in certain property?
A. That’s correct.
Q. So you knew that the quit claim really had no legal effect?
A. I wouldn’t say that.
Q. What legal effect—
A. It’s got to have some effect.
Q. What effect do you believe it had?
A. I believe it says that they no longer have any claim to it.
Q. That Continental no longer has any claim to it?
A. Mm-hmm. They convey whatever interest they own to the grantee.
[¶ 35] It appears from the testimony of Bragg that the settlement was entered without any misunderstanding about the status of Continental’s interest or the legal effect of the intended document when they entered into the settlement. Yet, the trial court gives greater effect to the quitclaim than given by our jurisprudence because, as a matter of law, it “defies logic” to do otherwise.
[¶ 36] Even though Burlington, as a lis pendens purchaser, is bound by the litigation, there is nothing in the status of that litigation, including the partial summary judgment, the judgment of dismissal with prejudice, or the terms of the settlement, that mandates the result of the majority opinion. Therefore, I dissent and would reverse the decision of the trial court.
[¶ 37] CAROL RONNING KAPS-NER, DALE V. SANDSTROM.