971 N.W.2d 822
N.D.2022Background
- In Feb 2012 the County executed four oil-and-gas leases and received $1,314,506.80 in bonus payments from Twin City Technical, Three Horns Energy, Prairie of the South, and Irish Oil & Gas ("Companies").
- Companies later discovered potential title defects and sued for rescission, declaratory relief, and unjust enrichment; they amended to allege the leases were void for failing to comply with N.D.C.C. § 38-09-16 (public advertising/bidding).
- The district court granted summary judgment for the Companies: leases void for statutory advertising violations, County unjustly enriched, and laches failed; the County appealed.
- This Court (2019 ND 128) affirmed invalidity of leases, reversed/remanded solely on the laches issue; on remand the district court held a bench trial, compelled discovery, denied waiver/unclean-hands defenses, awarded prejudgment interest (from Sept 30, 2015), and granted fees/costs for a discovery motion.
- On this appeal the Supreme Court: held the County is barred by the law-of-the-case/mandate rule from relitigating unjust enrichment or asserting waiver/unclean hands; affirmed that laches did not bar relief; affirmed bench trial and discovery orders; modified the fees award to subtract $420 charged separately for Westlaw research.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Law of the case / relitigation of unjust enrichment and raising new equitable defenses | Companies: prior appeal resolved unjust enrichment; remand limited to laches so County cannot raise new defenses | County: remand allowed consideration of equitable defenses (waiver, unclean hands) | Court: barred County from relitigating unjust enrichment and from raising waiver and unclean hands; mandate limited to laches |
| Laches (whether Companies’ delay bars recovery) | Delay was not prejudicial; County had notice in April 2015; any prejudice was due to County's inaction | Delay (from 2013/2012 knowledge to suit) prejudiced County: key witness died and funds were spent on a building | Court: district court findings not clearly erroneous; laches does not bar claim |
| Prejudgment interest start date | Interest should run from when County had notice (Sept 30, 2015) | Interest should start from filing of amended complaint (Nov 8, 2016) | Court: interest properly started Sept 30, 2015 (County had notice earlier) |
| Right to jury / bench trial on laches | Companies: equitable defense; bench trial appropriate | County: entitled to jury trial | Court: no absolute jury right in equity; bench trial not an abuse of discretion |
| Motion to compel / good-faith conferral and contention interrogatories | Companies: made good-faith conferral; interrogatories were proper contention interrogatories | County: Companies failed to confer in good faith; interrogatories sought work product/opinion work | Court: Companies’ conferral satisfied Rule 37; interrogatories not protected work product; motion to compel properly granted |
| Award of expenses and attorney’s fees for motion to compel | Companies: fees reasonable; research costs part of attorney fees | County: rates excessive, duplicative, and research cost improperly taxed separately | Court: fees and hours reasonable; but Westlaw research ($420) cannot be separately taxed and was subtracted from award |
Key Cases Cited
- Twin City Tech. LLC v. Williams Cty., 927 N.W.2d 467 (prior appeal addressing invalid leases and remanding on laches)
- Pennington v. Continental Res., Inc., 961 N.W.2d 264 (law-of-the-case and mandate rule)
- Bakken v. Duchscher, 827 N.W.2d 17 (standard for clear-error review of factual findings)
- Gonzalez v. Tounjian, 665 N.W.2d 705 (court discretion to award prejudgment interest)
- PHI Fin. Servs., Inc. v. Johnston Law Office, P.C., 881 N.W.2d 216 (good-faith conferral under discovery rules)
- Heng v. Rotech Med. Corp., 720 N.W.2d 54 (electronic legal research fees are part of attorney fees, not separate costs)
- Riemers v. State, 750 N.W.2d 407 (district court expertise and discretion in awarding attorney fees)
- N.D. Dep’t of Transp. v. Schmitz, 910 N.W.2d 874 (factors for attorney-fee reasonableness)
- Barker v. Ness, 587 N.W.2d 183 (no absolute right to jury in equitable proceedings)
- Stenehjem ex rel. State v. Nat’l Audubon Soc’y, Inc., 844 N.W.2d 892 (laches is equitable defense)