956 N.W.2d 354
N.D.2021Background
- Lund and Swanson co-owned multiple LLCs (Fargo Cargo/Fargo Logistics, CAM, SBC, Wedak); Open Road Trucking is an LLC associated with Swanson.
- Multiple lawsuits existed between Lund, Swanson, Open Road; a trial was set for December 3, 2019.
- On December 2, 2019 the parties and counsel met and discussed settlement; Lund’s counsel emailed settlement notes summarizing terms (including transfers of CAM oil interests and one-half of net proceeds from a Moorhead residence, transfer of membership interest in Wedak, dissolution of other LLCs, dismissal of suits, and a global release).
- Defendants’ counsel sent a proposed written settlement on December 10; Lund’s counsel emailed a revised draft on December 12; no signed written settlement was ever executed by the parties.
- Lund sued in January 2020 to enforce the alleged settlement; district court granted summary judgment for Swanson and Open Road, holding the statute of frauds barred enforcement; Lund appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the statute of frauds applies | Lund: settlement was not a "sale" of real property and thus not within statute | Swanson: agreement included transfer of real property/mineral interests so statute applies | Court: statute applies because transfer of oil/mineral interests is a real property interest and falls within § 9-06-04(3) |
| Whether a signed writing satisfied the statute | Lund: December 10 email (with attached draft and opposing counsel’s signature block) satisfied writing/signature and showed agent authority | Swanson: no writing signed by the parties granting agent authority; counsel’s email not a signed authorization | Court: no signed writing showing defendants authorized their attorney to bind them; statute not satisfied |
| Whether partial performance removes the agreement from the statute | Lund: counsel’s email to the court asking to remove trial from calendar and requesting time to submit closing documents constituted part performance | Swanson: those acts are not the recognized acts of part performance for real property transfers | Court: part performance exception does not apply—plaintiff did not show acts (payment, possession, improvements) consistent only with an oral sale |
| Whether applying the statute would produce injustice | Lund: defendants reneged after favorable appellate ruling and he lost the benefit of the bargain | Swanson: statute protects against unenforceable oral transfers; no fraud shown | Court: no fraud or unjust enrichment shown; statute may be invoked; relieving defendants would not be unjust under these facts |
Key Cases Cited
- McDougall v. AgCountry Farm Credit Services, PCA, 937 N.W.2d 546 (summary judgment standard)
- Rasnic v. ConocoPhillips Co., 854 N.W.2d 659 (mineral interests are real property)
- Jones v. Barnett, 619 N.W.2d 490 (broad application of statute of frauds to oral land transactions)
- Mertz v. Arendt, 564 N.W.2d 294 (partial performance exception discussed)
- Kohanowski v. Burkhardt, 821 N.W.2d 740 (part performance must be consistent only with oral contract)
- Johnson Farms v. McEnroe, 568 N.W.2d 920 (categories of acts constituting part performance)
- Nelson v. TMH, Inc., 292 N.W.2d 580 (statute of frauds cannot be invoked to perpetrate fraud)