Puklich v. Puklich, 978 N.W.2d 668

Blayne and Elyse Puklich are siblings with ownership interests in entities tied to their late father's auto dealership: Puklich Chevrolet, Inc. (PCI) and B&E Holdings (real estate holding partnership).
Elyse managed the businesses and formed PKI to buy a Valley City dealership and later transferred the Valley City real estate to END, L.L.L.P.; Blayne alleged she usurped the opportunity.
In 2014 Elyse sued to dissolve B&E; Blayne counterclaimed alleging fiduciary usurpation related to the Valley City deal; the district court found Elyse and PKI/END entitled to the Valley City property "free and clear" of any claim by PCI or Blayne.
Blayne filed subsequent suits raising the same Valley City claim; one was dismissed without prejudice while an earlier appeal was pending, and the Supreme Court in a 2019 opinion did not address the unpled Valley City claim.
In June 2021 Blayne sued again (individually and derivatively for B&E), alleging breach of fiduciary duty for usurping the Valley City opportunity; the district court dismissed under N.D.R.Civ.P. 12(b)(6) as precluded and denied Elyse’s Rule 11 sanctions motion.
The Supreme Court affirmed: (1) issue preclusion bars Blayne’s individual claim; (2) Blayne lacked derivative standing because he was not a partner when suit was filed; (3) denial of Rule 11 sanctions was not an abuse of discretion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Blayne’s individual claim that Elyse usurped the Valley City opportunity is precluded	The Valley City deal occurred after Blayne moved to amend pleadings and he was unaware, so the claim could not have been raised earlier	Prior litigation addressed the substance; district court considered evidence and decided rights to the Valley City property	Issue preclusion applies; individual claim barred (Blayne had no personal right to the opportunity)
Whether Blayne may pursue a derivative action on behalf of B&E Holdings	He styled the suit derivative and alleged demand futility	Blayne was not a partner when the suit was filed; the partnership was dissolved and he had been paid	Dismissed for lack of derivative standing because plaintiff was not a partner at commencement
Whether the district court erred by denying Rule 11 sanctions for a frivolous claim	Blayne contends his claims were supported by some legal authority and not frivolous	Elyse argues the suit was frivolous and sanctions were warranted	Denial affirmed: district court reasonably found some legal support and did not abuse its discretion

Puklich v. Puklich, 2019 ND 154, 930 N.W.2d 593 (N.D. 2019) (prior appeal addressing dissolution and noting Valley City claim was unpled)
Great Plains Royalty Corp. v. Earl Schwartz Co., 2021 ND 62, 958 N.W.2d 128 (N.D. 2021) (defines issue preclusion scope)
Riverwood Commercial Park, L.L.C. v. Standard Oil Co., Inc., 2007 ND 36, 729 N.W.2d 101 (N.D. 2007) (preclusion principles and finality considerations)
Atkins v. State, 2021 ND 83, 959 N.W.2d 588 (N.D. 2021) (standard of review for Rule 12(b)(6) dismissals)
Estate of Nelson, 2015 ND 122, 863 N.W.2d 521 (N.D. 2015) (pleading sufficiency under Rule 12(b)(6))
McCarvel v. Perhus, 2020 ND 267, 952 N.W.2d 86 (N.D. 2020) (definition of frivolous claim)
Empower the Taxpayer v. Fong, 2013 ND 187, 838 N.W.2d 452 (N.D. 2013) (standard of review for Rule 11 sanctions discretionary decisions)
In re Pederson Trust, 2008 ND 210, 757 N.W.2d 740 (N.D. 2008) (Rule 11 sanctions authority and framework)