Van Sickle v. Hallmark & Associates, Inc.
2013 ND 218
| N.D. | 2013Background
- Van Sickle royalties total 0.0013125% in Missouri Breaks Unit No. 1 (McKenzie County) governed by four leases; Comanche originally lessee.
- Alpha Gas Corporation owned/operated interests; Alpha's working interest later transferred to Missouri Breaks via a 2005 reorganization plan.
- Van Sickles did not file a claim in Alpha’s bankruptcy and had no notice of proceedings; Plan did not list their claims.
- Post-confirmation royalties were paid to Van Sickles; Van Sickles sued in 2006 for pre-confirmation royalties and other claims.
- District court initially granted summary judgement dismissing some claims; on remand, Missouri Breaks was found liable as Alpha’s successor for pre-confirmation royalties.
- Amended judgment awarded Van Sickles $10,086.67 each for unpaid royalties plus interest and $3,000 in attorney’s fees; total roughly $23,173.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Missouri Breaks liable as successor for pre-confirmation royalties? | Van Sickle | Missouri Breaks | Yes; Missouri Breaks liable under state successor-liability law |
| Are Interest Holders liable as operators under N.D.C.C. § 47-16-39.1? | Van Sickle | Interest Holders | No; not individually liable as operators |
| Did Alpha’s bankruptcy bar pre-confirmation royalties from Van Sickles under 11 U.S.C. §§ 365/1141 given lack of notice? | Van Sickle | Missouri Breaks/Interest Holders | Not binding; debts not discharged due to lack of notice |
| What is the correct attorney’s-fees and interest award under N.D.C.C. § 47-16-39.1? | Van Sickle | Missouri Breaks | District court did not err; awarded $3,000 in attorney’s fees and simple interest |
| Should the district court have awarded compound interest under the statute? | Van Sickle | Missouri Breaks | No; 18% simple interest awarded as plain-language statute does not require compounding |
Key Cases Cited
- Downtowner, Inc. v. Acrometal Prods., Inc., 347 N.W.2d 118 (N.D. 1984) (recognizes four exceptions to corporate nonliability and related successor liability analysis)
- Benson v. SRT Commc’ns, Inc., 2012 ND 58 (N.D. 2012) (articulates exceptions to the general rule of nonliability)
- Golden v. SM Energy Co., 2013 ND 17 (N.D. 2013) (standard for summary judgment; view most favorable to nonmovant)
- In re N.C.C., 2000 ND 129 (N.D. 2000) (interpretation of post-judgment motions and pleadings for reconsideration)