United States District Court, D. North Dakota
ORDER CANCELLING LIS PENDENS
L. Hovland, United States District Court Chief Judge
Before the Court is the Defendant's “Motion to
Cancel Lis Pendens” filed on September 2, 2016.
See Docket No. 24. The Plaintiff filed a response in
opposition to the motion on September 16, 2016. See
Docket No. 26. The Defendants filed a reply brief on
September 23, 2016. See Docket No. 27. For the
reasons set forth below, the Defendant's motion is
April 25, 2016, El Petron Enterprises, LLC (“El
Petron”) filed the current lawsuit against Whiting
Resources Corporation (“Whiting”). El Petron
claims that Whiting has improperly deducted post-production
costs from payments on an overriding royalty interest that El
Petron reserved from certain oil and gas leases that it
assigned to Sonic Oil & Gas, L.P. Whiting is the current
owner of the oil and gas leases. The complaint sets forth
five claims including: (1) a claim for a declaratory judgment
with respect to the rights and obligations of the parties
with respect to the overriding royalty interest; (2) a claim
for breach of covenants; (3) a claim demanding an accounting
of all costs deducted under the overriding royalty interest;
(4) a claim for nonpayment of royalties; and (5) a claim for
unjust enrichment. In its answer, Whiting admits that El
Petron is the record owner of the overriding royalty interest
but denies that Whiting has improperly deducted
post-production costs in calculating the payments owed to El
conjunction with the commencement of this federal action, El
Petron filed a notice of lis pendens, pursuant to Section
28-05-07 of the North Dakota Century Code. In its notice of
lis pendens, El Petron asserts an interest in and to certain
mineral property located in McKenzie County, North Dakota.
The notice of lis pendens has been recorded in the McKenzie
County Recorder's Office as Document No. 492461. Whiting
seeks cancellation of the notice of lis pendens pursuant to
Section 28-05-08 of the North Dakota Century Code.
Section 28-05-07, a notice of lis pendens may be filed
“[i]n a civil or criminal action in a court affecting
the title to real property.” “[T]he purpose of a
notice of lis pendens is to ‘let the world know that
there is an action pending, and everybody interested can go
to the clerk's office, and there learn the particulars
from the complaint.'” Bragg v. Burlington Res.
Oil & Gas Co., 763 N.W.2d 481, 485 (N.D. 2009)
(quoting Plott v. Kittelson, 228 N.W. 217, 220 (N.D.
1929)). “The filing of a lis pendens binds a purchaser
of property described in the lis pendens to ‘all that
in like manner affects his granter.'” Id.
(internal citations omitted). The relevant portion of Section
28-05-07 provides as follows:
In a civil . . . action in a court affecting the title to
real property, the plaintiff, at the time of filing the
complaint . . . or at any time afterwards, . . . may file for
record with the recorder of each county in which the real
property is situated a notice of the pendency of the action,
containing the names of the parties, the object of the
action, and a description of the real property affected. From
the time of filing only shall the pendency of the action be
constructive notice to a purchaser or encumbrancer of the
property affected thereby, and every person whose conveyance
or encumbrance is subsequently executed or subsequently
recorded is deemed a subsequent purchaser or encumbrancer
with notice and is bound by all proceedings taken after the
filing of such notice to the same extent as if that person
were a party to the action.
N.D.C.C.§ 28-05-07. The use of lis pendens is restricted
in order to avoid abuse. Investors Title Ins. Co. v.
Herzig, 788 N.W.2d 312, 324 (N.D. 2010). Upon a showing
of good cause, an aggrieved person may move the court in
which the action is pending to cancel a lis pendens. N.D.C.C.
notice of lis pendens may not be predicated on an action or
suit seeking merely to recover a money judgment, even if real
property is the subject of the dispute. See N.D.C.C.
§§ 28-05-07 and 28-05-08; see also Herzig,
788 N.W.2d at 324-25. Thus, in order for a notice of lis
pendens to be appropriately filed, there must be a civil
action “affecting the title to real
property.” N.D.C.C. § 28-05-07 (emphasis added).
If only collateral issues are involved that may affect the
parties' interest in property, the doctrine of lis
pendens does not apply.
case, Whiting contends the action brought by El Petron is one
for money damages and is not one affecting title to real
property and therefore the lis pendens filed by El Petron is
improper and should be cancelled. The Court agrees.
purpose of a lis pendens is to put prospective purchasers on
notice that there is litigation pending which may affect
title to a particular piece of real property. The outcome of
this litigation will certainly affect El Petron's
overriding royalty interest and the leases owned by Whiting.
However, the ownership of the overriding royalty interests at
issue are not in dispute. The Court concludes the notice of
lis pendens recorded by El Petron in the McKenzie County
Recorder's Office as document 492461 shall be cancelled.
and for the reasons explained above, the Defendant's
Motion to Cancel Lis ...