Henry Hill Oil Services LLC, Plaintiff and Appellee v. Abner C. Tufto, Eric Ted Tufto, Darla Tufto a/k/a Darla O‘Donnell, Kris Bradley Tufto, RWS Holdings, LLC, and Regional Water Service, LLC, Defendants and Lane A. Knudsen, Marcia K. Talley and David H. Talley, Trustees of the Marcia K. Talley Living Trust, and Ann E. Gochnour, Defendants and Appellants ---------- Regional Water Service LLC, Plaintiff v. Henry Hill Oil Services LLC, Defendant and Appellee
No. 20220212
IN THE SUPREME COURT STATE OF NORTH DAKOTA
MARCH 3, 2023
2023 ND 41
Opinion of the Court by Crothers, Justice.
Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Joshua B. Rustad, Judge. REVERSED AND REMANDED.
Mark W. Vyvyan (argued), Minneapolis, MN, and Lawrence Bender (appeared), Bismarck, ND, for for plaintiff and appellee.
Erich M. Grant, Minot, ND, for defendant and appellant Lane A. Knudsen.
Nicholas C. Grant (argued), and Marissa R. Cerkoney (on brief), Dickinson, ND, for defendants and appellants Marcia K. Talley and David H. Talley, Trustees of the Marcia K. Talley Living Trust, and Ann E. Gochnour.
Henry Hill Oil Services v. Tufto, et al.
No. 20220212
[¶1] Lane Knudsen, Ann Gochnour, and Marcia Talley and David Talley, Trustees of the Marcia K. Talley Living Trust (Landowners), appeal from a district court judgment foreclosing Henry Hill Oil Services LLC‘s construction liens against the
I
[¶2] Landowners own real property in Williams County. In 2017 and 2018, the Landowners executed water pipeline easements with RWS Holdings, LLC. The agreements granted RWS Holdings 75-foot-wide temporary easements for constructing a water pipeline and related facilities across and under the Landowners’ properties. The agreements granted RWS Holdings 30-foot-wide permanent pipeline easements on the properties. The temporary easements expired upon completion of the water pipelines.
[¶3] The Talley-Gochnour Defendants also granted RWS Holdings an easement for constructing a freshwater reservoir on their property. The easement term was 20 years or “until Grantee permanently removes” the reservoir from the property. Lane Knudsen and RWS Holdings executed a 10-year Water Agreement and Memorandum of Understanding. Knudsen granted RWS Holdings the right to access his property to install “equipment deemed necessary for the purposes of capturing, transporting and using water.”
[¶4] RWS Holdings hired Regional Water Service, LLC, which then hired Henry Hill Oil, to construct water reservoirs on the properties. Henry Hill Oil worked on the Landowners’ properties from June 2018 to October 2018. Henry Hill Oil recorded construction liens against the Landowners’ properties after it was not paid for its work. In May 2019, Henry Hill Oil sued Regional Water Service for breach of contract. In October 2019, Henry Hill Oil sued the Landowners to enforce the construction liens.
[¶5] All parties moved for summary judgment. Henry Hill Oil argued it held valid construction liens against the Landowners’ properties. The Landowners claimed they did not contract with Henry Hill Oil to perform work on their properties, and the liens are only effective against RWS Holdings’ easement interests.
[¶6] After a hearing, the district court granted Henry Hill Oil‘s motions for summary judgment. The court concluded that under the construction lien statutes,
[¶7] The district court entered a judgment foreclosing the construction liens and awarding Henry Hill Oil $89,709.79 in costs and attorney‘s fees. The court also awarded Henry Hill Oil $660,228.40 in damages against Regional Water Service. The judgment against Regional Water Service is not subject to this appeal.
II
[¶8] This Court‘s standard of review for summary judgments is well established:
“Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary
judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.”
Pennington v. Cont‘l Res., Inc., 2019 ND 228, ¶ 6, 932 N.W.2d 897 (quoting Horob v. Zavanna, LLC, 2016 ND 168, ¶ 8, 883 N.W.2d 855).
III
[¶9] The Landowners argue the district court erred in granting Henry Hill Oil‘s motions for summary judgment. They claim the court erred in concluding they were “owners” under
[¶10] Our primary goal in statutory interpretation is to determine the intent of the legislature, and we first look to the plain language of the statute and give each word of the statute its ordinary meaning. Laufer v. Doe, 2020 ND 159, ¶ 11, 946 N.W.2d 707;
[¶11] Construction liens are authorized by
“Any person that improves real estate, whether under contract with the owner of such real estate or under contract with any agent, trustee, contractor, or subcontractor of the owner, has a lien upon the improvement and upon the land on which the improvement is situated or to which the improvement may be removed for the price or value of such contribution.”
An “‘[o]wner’ means the legal or equitable owner and also every person for whose immediate use and benefit any building, erection, or improvement is made, having the capacity to contract, including guardians of minors or other persons, and including any agent, trustee, contractor, or subcontractor of such owner.”
[¶12] The district court concluded Henry Hill Oil‘s construction of water reservoirs improved the Landowners’ properties. See
[¶13] The district court concluded the Landowners were “owners” as defined in
[¶14] The district court also concluded that through the agreements with RWS Holdings, the Landowners authorized Henry Hill Oil to work on the properties.
“[The Landowners] do not dispute that RWS Holdings hired Regional Water Service to commence the construction of certain water pipelines and reservoirs on [their properties], nor do they dispute that Regional Water Service in turn made Henry Hill its subcontractor. See
N.D.C.C. § 35-27-01(7) (defining subcontractor as ‘all persons contributing any skill, labor, or materials to the improvement except such as have contracts therefor directly with the owner‘). Accordingly, [the Landowners] authorized Henry Hill to work on [their properties].”
[¶15] Under
[¶16] Henry Hill Oil made the improvements for the immediate use and benefit of RWS Holdings but not to the Landowners’ properties generally. As the easement owner, RWS Holdings had the capacity to contract for the improvements relating to the easements. RWS Holdings contracted with Regional Water Service, and Regional Water Service contracted with Henry Hill Oil. Under
[¶17] Here, the district court erred in concluding the Landowners are “owners” under
[¶18] A construction lien covers “[t]he entire land upon which any . . . improvement is situated . . . to the extent of all the right, title, and interest of the owner for whose immediate use or benefit the labor was done or materials furnished.”
[¶19] Henry Hill Oil does not have valid construction liens against the Landowners’ properties. We reverse the portion of the district court‘s judgment foreclosing Henry Hill Oil‘s construction liens against the Landowners’ properties, and remand for entry of judgment in favor of the Landowners.
IV
[¶20] The Landowners claim the district court erred by awarding Henry Hill Oil its attorney‘s fees. They contend the court misapplied
[¶21] Under
[¶22] The district court concluded
“First, in reviewing the plain language used in
N.D.C.C. § 35-27-24.1 , the Court finds that this statute is broad by nature, including phrases such as ‘any owner,’ and ‘any action.’ Second, the Court finds that in an action to foreclose on a construction lien, as in this present matter, the contractor must defend the validity or accuracy of its construction lien, andN.D.C.C. § 35-27-24.1 is meant to apply in ‘any actions’ to do the same.”
The court also acknowledged the remedial nature of
[¶23] The district court misconstrued
[¶24] The Landowners successfully contested the validity of Henry Hill Oil‘s construction liens. The district court erred in awarding Henry Hill Oil its costs and attorney‘s fees. We reverse that part of the judgment awarding Henry Hill Oil its costs and attorney‘s fees, and remand for a determination of the Landowners’ costs and attorney‘s fees for successfully contesting
V
[¶25] The parties’ remaining arguments have been considered and are either without merit or not necessary to our decision. The judgment is reversed and the case is remanded.
[¶26] Jon J. Jensen, C.J.
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
Douglas A. Bahr