Court Opinion

ID: 9409721
Source: CourtListenerOpinion
Date Created: 2023-07-19 13:06:13.037576+00
Date Added: 2024-06-11T17:20:52.931495
License: Public Domain

FILED
                                                                     IN THE OFFICE OF THE
                                                                  CLERK OF SUPREME COURT
                                                                          JULY 19, 2023
                                                                   STATE OF NORTH DAKOTA

                 IN THE SUPREME COURT
                 STATE OF NORTH DAKOTA

                                2023 ND 132

Lance Hagen,                                        Petitioner and Appellant
     v.
North Dakota Insurance Reserve Fund,                Respondent and Appellee

                               No. 20230025

Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Bonnie L. Storbakken, Judge.

REVERSED.

Opinion of the Court by Jensen, Chief Justice, in which Justice Tufte joined.
Justice Bahr filed a concurring opinion. Justice Crothers filed an opinion
dissenting, in which Justice McEvers joined.

William J. Behrmann, Bismarck, ND, for petitioner and appellant; submitted
on brief.

Zachary E. Pelham and Kirsten Tuntland, Bismarck, ND, for respondent and
appellee; submitted on brief.
                  Hagen v. N.D. Insurance Reserve Fund
                              No. 20230025

Jensen, Chief Justice.

[¶1] Lance Hagen appeals from a district court’s judgment concluding certain
documents belonging to North Dakota Insurance Reserve Fund (“NDIRF”)
were exempt from release under the potential liability exception outlined in
N.D.C.C. § 44-04-19.1(8). Hagen argues the court abused its discretion by
finding NDIRF itself faced potential liability because its members could face
potential liability, and because the court discussed the fiscal effect of a
disclosure on NDIRF, which Hagen argues exceeded the scope of this Court’s
remand order in Hagen v. North Dakota Insurance Reserve Fund, 2022 ND 53,
971 N.W.2d 833. Because we conclude the potential liability exception under
N.D.C.C. § 44-04-19.1(8) does not apply to any of the documents determined by
the district court to be exempt, we reverse.

                                        I

[¶2] Hagen filed a public records request related to a condemnation case he
was a party to involving the City of Lincoln and NDIRF. Hagen sought to
determine how the City of Lincoln and NDIRF spent approximately $1.1
million dollars on litigation costs defending the action. NDIRF did not produce
all requested records, and the parties sought relief from the district court. That
case was finalized and all appeals exhausted in Lincoln Land Development,
LLP v. City of Lincoln, 2019 ND 81, 924 N.W.2d 426.

[¶3] The district court granted a portion of Hagen’s petition and ordered
NDIRF to disclose certain documents, but found others were protected. The
judgment was appealed, and this Court remanded because it could not discern
whether the district court applied the potential liability exception under the
second prong of N.D.C.C. § 44-04-19.1(8), which protects public entities from
disclosing attorney work product regarding potential liability, or applied a
more general opinion work product theory. Hagen, 2022 ND 53, ¶ 26. This
Court ordered the district court to decide whether certain documents belonging
to NDIRF reflected the mental impressions, opinions, conclusions, or legal

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theories that would subject NDIRF to potential liability under the second
prong of N.D.C.C. § 44-04-19.1(8). Hagen, at ¶ 27.

[¶4] While on remand, the district court issued an order concluding NDIRF
was required to produce 35 out of 76 requested documents. Approximately 41
documents were found exempt from disclosure by the court under the potential
liability exception within N.D.C.C. § 44-04-19.1(8).

                                        II

[¶5] Hagen argues the district court’s findings lack specificity and “simply
parrot the language of N.D.C.C. § 44-04-19.1(8) with no substantive analysis.”
Hagen further contends the attorney work product connected to City of
Lincoln, 2019 ND 81, would never relate to potential liability for NDIRF itself
because NDIRF’s role is only to represent the legal needs of its member
agencies.

[¶6] This Court reviews a district court’s review of in-camera documents for
an abuse of discretion. Schmitz v. N.D. State Bd. of Chiropractic Exam’rs, 2022
ND 52, ¶ 14, 971 N.W.2d 892. “We adopt and apply the abuse of discretion
standard for the in-camera review by a district court for the determination of
whether documents are exempt from disclosure following an open records
request.” Id. A district court abuses its discretion when it misapplies or
misinterprets the law. Id. Additionally, a district court’s findings of fact should
be specific enough to allow an appellate court to understand the basis for its
decision. Datz v. Dosch, 2013 ND 148, ¶ 9, 836 N.W.2d 598.

[¶7] Both constitutional and statutory law protect the people’s right to access
and inspect public records:

      Unless otherwise provided by law, all records of public or
      governmental bodies, boards, bureaus, commissions, or agencies of
      the state or any political subdivision of the state, or organizations
      or agencies supported in whole or in part by public funds, or
      expending public funds, shall be public records, open and
      accessible for inspection during reasonable office hours.

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N.D. Const. art. XI, § 6. This provision is codified into statutory code under
N.D.C.C. § 44-04-18. While attorney work product is generally exempt from
public disclosure, it may be accessed once litigation ends unless certain
exceptions apply. See N.D.C.C. § 44-04-19.1(1) and (6). North Dakota statute
defines these exceptions as follows:

      Following the final completion of the civil or criminal litigation or
      the adversarial administrative proceeding, including the
      exhaustion of all appellate remedies, attorney work product must
      be made available for public disclosure by the public entity, unless
      another exception to section 44-04-18 applies or if disclosure would
      have an adverse fiscal effect on the conduct or settlement of other
      pending or reasonably predictable civil or criminal litigation or
      adversarial administrative proceedings, or the attorney work
      product reflects mental impressions, opinions, conclusions, or legal
      theories regarding potential liability of a public entity.

N.D.C.C. § 44-04-19.1(8) (emphasis added). The latter exception is referred to
as the “potential liability exception” and differs from “opinion work product” in
that the exception can only apply to potential liability of a public entity. Hagen,
2022 ND 53, ¶ 26. A district court’s conclusion that attorney work product
meets the “potential liability exception” must include a finding that “the
records relate to circumstances for which there remains a genuine potential for
liability[.]” Id. at ¶ 27. We also clarified that “past liability cannot form the
basis for the potential liability exception.” Id. “If the potential for liability is
entirely in the past, the record is no longer exempt.” Id.

[¶8] During the remand proceeding, NDIRF asserted it was currently
defending 8 condemnation cases, has a history of defending approximately 80
similar cases since 2005, and the release of certain attorney work product
documents would reflect “mental impressions, opinions, conclusions” and “legal
theories regarding potential liability” of those future cases. N.D.C.C. § 44-04-
19.1(8). The district court found, “[D]ocuments which discuss possible
settlement could be used against [NDIRF’s] interests in future condemnation
proceedings.” The court further explained, “[T]he requirement to produce the
documents in this case would have an adverse impact on NDIRF by opening
up settlement offer ranges and thresholds, and litigation and negotiation

                                         3
strategies to opposing parties in current and future matters similarly
situated.”

[¶9] We conclude the documents—including documents that discuss
settlement ranges for litigation that is completely resolved—do not create a
potential for liability toward NDIRF. While NDIRF has a legal duty to defend
condemnation cases, regularly does so on behalf of member agencies, and will
likely defend condemnation cases in the future, the documents here do not
relate to circumstances for which there remains a genuine potential for liability
toward NDIRF or its members. The potential for liability regarding these
documents lies entirely in the past. The district court misconstrues the
standard set forth in the potential liability exception by finding that because
NDIRF may experience an “adverse impact” through the release of “litigation
and negotiation strategies” that this creates a potential for liability. The
“litigation and negotiation strategies” contained in the disputed documents
were case-specific to litigation that has already occurred and do not create a
genuine potential for liability. To the extent the court used this justification as
its reason for non-disclosure, the court misapplied the exception and abused
its discretion. We reverse the court’s judgment and order the 41 previously
exempted documents be released pursuant to N.D.C.C. § 44-04-19.1(8).

                                       III

[¶10] It is unnecessary to decide whether the district court abused its
discretion by exceeding the scope of this Court’s remand in Hagen as that issue
is not relevant to our decision today. The district court abused its discretion
when it found 41 records were exempt from disclosure. The judgment is
reversed.

[¶11] Jon J. Jensen, C.J.
      Jerod E. Tufte

Bahr, Justice, concurring.

[¶12] I join the majority opinion because the district court erred in concluding
the potential liability exception in N.D.C.C. § 44-04-19.1(8) applies to the 41

                                        4
documents the court held exempt from disclosure, and because Hagen v. North
Dakota Insurance Reserve Fund, 2022 ND 53, 971 N.W.2d 833, is the law of the
case. See Matter of Rose Henderson Peterson Min. Tr. dated Mar. 26, 1987, 2022
ND 92, ¶¶ 11-13, 974 N.W.2d 372 (discussing the law of the case doctrine). I
was not a member of the Court when Hagen was decided and take no position
regarding whether Hagen was correctly decided.

[¶13] Douglas A. Bahr

Crothers, Justice, dissenting.

[¶14] I respectfully dissent for the reasons stated in my dissent in Hagen v.
North Dakota Insurance Reserve Fund, 2022 ND 53, ¶¶ 32-43, 971 N.W.2d 833.

[¶15] Daniel J. Crothers
      Lisa Fair McEvers

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