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City of Moorhead v. Bridge Co.

Supreme Court of North Dakota

July 30, 2015

The City of Moorhead, a political subdivision of the State of Minnesota, Plaintiff and Appellee
v.
Bridge Company, Defendant and Appellant and the City of Fargo, a political subdivision of the State of North Dakota, Defendant and Appellee

Page 340

Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Frank L. Racek, Judge.

Andrew D. Cook (argued) and Michael D. Nelson (on brief), West Fargo, N.D., for plaintiff and appellee.

Bruce A. Schoenwald (argued), Randolph E. Stefanson (on brief), and Steven K. Aakre (on brief), Moorhead, Minn., for defendant and appellant.

Ronald H. McLean (argued) and Peter W. Zuger (on brief), Fargo, N.D., for defendant and appellee.

Dale V. Sandstrom, Daniel J. Crothers, Lisa Fair McEvers, Carol Ronning Kapsner, Gerald W. VandeWalle, C.J. Opinion of the Court by Sandstrom, Justice.

OPINION

Page 341

Dale V. Sandstrom, Justice.

[¶1] Bridge Company appeals from a judgment ordering it to donate a toll bridge to the cities of Fargo, North Dakota, and Moorhead, Minnesota, free and clear of all liens. Because the district court did not err in interpreting the parties' agreement and the court's findings of fact are not clearly erroneous, we affirm.

I

[¶2] In May 1986, the cities and the Company entered into an agreement for the purpose of construction and operation of a private toll bridge over the Red River connecting 12th Avenue North in Fargo with 15th Avenue North in Moorhead. Section 2.3 of the agreement provided " [a]ny and all financing necessary for the construction, operation, and maintenance of the bridge is the responsibility of the Company." Section 4.2 of the agreement provided " [t]he bridge shall be owned and operated by the Company and costs of constructing the bridge shall be paid by the Company." Section 5.3 of the agreement provided " [t]he bridge shall be maintained and repaired at the sole cost and expense of the Company in a state of good repair in accordance with the generally accepted standards by the Highway Departments for the States of North Dakota and Minnesota for similar structures." The agreement allowed the Company to charge a toll for vehicular traffic on the bridge.

[¶3] The agreement further provided:

6.1. Term. The term of this Agreement shall be for a period of [25] years commencing with the day the Bridge commences operations. At the expiration of 25 years from the day the Bridge commences operations one of the following shall occur:
a) In the event the original debt incurred for the construction of the Bridge, including any refinancing or renegotiation of such debt, and any debt incurred for major maintenance and repairs to the Bridge, have been fully paid, the Company shall donate the Bridge to the Cities free and clear from any liens, and the Cities shall accept the Bridge for public use to be operated by the Cities as they may determine. It is expressly understood and agreed by and between the parties that any refinancing or additional financing which constitutes a lien or encumbrance on the Bridge which may be obtained more than five years after the original financing for the construction of the Bridge, shall be subject to the approval of the Cities. The amortization of any refinancing may not extend beyond 25 years from the commencement of the operation of the Bridge and the Company agrees it will not default on any loan secured by the Bridge. It is further agreed the Company will not permit or cause to be filed any lien or encumbrance on the Bridge other than a first lien for permanent financing and such liens or encumbrances as are necessary to secure interim construction financing.
b) In the event any portion of the original debt incurred for the construction of the Bridge, including any refinancing or renegotiation of such debt approved in advance by the Cities, or any portion of any debt incurred for major maintenance and repairs of the Bridge remains unpaid, the Cities shall have the option to either:
1. To pay or assume such outstanding indebtedness ...

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