958 N.W.2d 128
N.D.2021Background:
- In 1968 Great Plains’ creditors initiated bankruptcy; trustee published a notice of sale listing certain oil and gas interests and Earl Schwartz was the high bidder; the bankruptcy court confirmed the sale and approved transfers to Earl Schwartz and SunBehm for interests described in the notice.
- There is no record of valid deeds or other conveyances from the bankruptcy trustee transferring the disputed interests; some Great Plains interests were not listed in the notice of sale.
- The bankruptcy case closed in 1974, was reopened in 2013 (creditors paid in full), and adversary proceedings followed to determine ownership of various oil and gas interests.
- Great Plains sued in 2016 for quiet title, slander of title, and conversion; the district court originally found the trustee intended to sell 100% of Great Plains’ interests, but this court reversed in Great Plains I, holding the trustee did not intend to sell assets not listed in the notice and remanding for further proceedings.
- On remand ESCO and SunBehm claimed equitable title to the "Disputed Interests" identified in the notice of sale, the district court quieted title in Great Plains based on absence of conveyance instruments and denied Great Plains’ damage claims; both sides appealed.
Issues:
| Issue | Plaintiff's Argument (Great Plains) | Defendant's Argument (ESCO / SunBehm) | Held |
|---|---|---|---|
| Effect of bankruptcy sale/confirmation on title to Disputed Interests | Sale did not transfer interests beyond what was listed; absence of trustee conveyance means title remained with Great Plains | Confirmation of sale vested equitable title in purchaser for interests identified in the notice; title passes upon confirmation despite no deed | Court vacated district court's title determination and remanded for the trial court to decide if title to interests listed in the notice passed by the sale/confirmation; reversed collateral estoppel ruling |
| Application of collateral estoppel based on bankruptcy proceedings | Prior bankruptcy findings bind ESCO and preclude relitigation that trustee intended to sell assets | Bankruptcy decision did not determine which specific interests were sold; collateral estoppel therefore not applicable | District court misapplied collateral estoppel; reversed (bankruptcy holding limited to trustee’s intent, not identification of specific assets) |
| Standing / judicial estoppel for failure to list assets in bankruptcy | (Implicit) Great Plains’ claims are properly before the court | Defendants argued Great Plains lacks standing or is judicially estopped for not disclosing assets in bankruptcy | Court refused to address these arguments raised first on appeal because they are not jurisdictional and were not raised below |
| Slander of title and conversion claims (damages) | ESCO recorded instruments maliciously and wrongfully retained royalty proceeds, meriting damages | No evidence of malice; no proof ESCO/SunBehm were lessees/operators or unlawfully retained royalties | Affirmed denial of slander damages (no malice). Denial of conversion vacated and remanded for reconsideration in light of title findings; unjust enrichment theory forfeited |
Key Cases Cited
- Great Plains Royalty Corp. v. Earl Schwartz Co., 927 N.W.2d 880 (N.D. 2019) (prior appellate opinion reversing district court on trustee intent and remanding)
- McCarvel v. Perhus, 952 N.W.2d 86 (N.D. 2020) (standard of review for bench trial findings and conclusions)
- Riverwood Commercial Park, L.L.C. v. Standard Oil Co., Inc., 729 N.W.2d 101 (N.D. 2007) (law of the case doctrine explained)
- Ungar v. N.D. State Univ., 721 N.W.2d 16 (N.D. 2006) (collateral estoppel / issue preclusion principles)
- Blaustein v. Aiello, 182 A.2d 353 (Md. 1962) (authority cited for proposition that confirmation of trustee sale passes title)
- Coulter v. Blieden, 104 F.2d 29 (8th Cir. 1939) (confirmation of sale completes sale and passes title)
- Briggs v. Coykendall, 224 N.W. 202 (N.D. 1929) (malice must be proved as a substantive fact for slander of title)
- Maragos v. Union Oil Co. of California, 584 N.W.2d 850 (N.D. 1998) (slander of title requires intent to injure, vex, or annoy)