John Finstad v. Beresford Bancorporation, Inc., 831 F.3d 1009

John and Lorie Finstad conveyed a quitclaim deed to Beresford Bancorporation in a 2005 settlement during their Chapter 12 bankruptcy; they retained tenancy and an annually renewable option to repurchase (through March 15, 2010) at the loan balance plus interest minus lease payments.
The Finstads made large payments to Beresford (including a $345,000 payment financed by the Gords, who took a second mortgage) but later received notices of default; Beresford sold its interest to James and Wendy Gord in December 2008.
The Gords evicted the Finstads in 2012 after initiating eviction proceedings.
The Finstads sued in state court (2012) alleging the quitclaim was an equitable mortgage (seeking quiet title and declaratory relief). The state district court dismissed claims against Beresford (finding the bank relinquished any interest) and granted summary judgment for the Gords (finding the deed unambiguous and that the Finstads lacked statutory standing); the North Dakota Supreme Court affirmed on appeal.
The Finstads then filed in federal court alleging breach of contract and conversion against Beresford and intentional interference with contract against the Gords; defendants moved for summary judgment based on preclusion from the state-court judgment.
The federal district court granted summary judgment for both defendants; the Eighth Circuit affirmed, holding the state-court judgment precluded the federal claims (claim preclusion as to Beresford; issue preclusion as to the Gords).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claim preclusion bars Finstad's claims against Beresford	Finstad: state dismissal was for lack of standing, not a merits decision, so res judicata doesn't bar new contract/conversion claims	Beresford: prior litigation produced a final merits judgment as to Beresford's interest; claims here were or could have been raised previously	Held: Claim preclusion applies — state court decided claims against Beresford on the merits and Finstads could have raised contract/conversion in that action
Whether issue preclusion bars Finstad's interference claim against the Gords	Finstad: state dismissal for lack of statutory standing is not a merits ruling; issue preclusion thus does not apply	Gords: state court necessarily decided that Finstads had no contractual interest/option, so relitigation is barred	Held: Issue preclusion applies — state court necessarily decided Finstads lacked a contract/interest, foreclosing interference claim
Whether Beresford is judicially estopped from asserting preclusion	Finstad: Beresford previously suggested the deed was a financing device, so it should be estopped from asserting preclusion now	Beresford: no inconsistent positions were taken between actions; judicial estoppel inapplicable	Held: Judicial estoppel rejected — no inconsistency that would bar Beresford's preclusion defense

Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75 (Full Faith and Credit requires federal courts to give state judgments same preclusive effect as state law)
In re Athens/Alpha Gas Corp., 715 F.3d 230 (8th Cir.) (articulating North Dakota four-part claim preclusion test)
Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380 (N.D. 1992) (definition of claim preclusion under North Dakota law)
Ungar v. N.D. State Univ., 721 N.W.2d 16 (N.D. 2006) (prior judgment precludes claims that were or could have been raised)
Lucas v. Porter, 755 N.W.2d 88 (N.D. 2008) (plaintiff barred from pursuing claims not raised in earlier action)
Pohlmann v. Bil-Jax, Inc., 176 F.3d 1110 (8th Cir.) (issues decided in non-merits dismissal can have preclusive effect)
United States v. One Lincoln Navigator 1998, 328 F.3d 1011 (8th Cir.) (dismissal for statutory standing can be a ruling on the merits)
Thimjon Farms P’ship v. First Int’l Bank & Trust, 837 N.W.2d 327 (N.D. 2013) (element required to prove intentional interference with contract)
BTA Oil Producers v. MDU Res. Grp., Inc., 642 N.W.2d 873 (N.D. 2002) (judicial estoppel prohibits inconsistent positions during litigation)