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Flaten v. Couture

Supreme Court of North Dakota

June 5, 2018

Lynn Flaten, Plaintiff and Appellee
v.
Edward Couture, individually and as Manager of A&M Structuring; and A&M Structuring, LLC, Defendants and Appellants

          Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Joshua B. Rustad, Judge.

          Thaddeus E. Swanson, Fargo, ND, for plaintiff and appellee.

          Ross A. Nilson (argued) and William J. Brudvik (appeared), West Fargo, ND, for defendants and appellants.

          OPINION

          VANDEWALLE, CHIEF JUSTICE.

         [¶ 1] A&M Structuring, LLC, and Edward Couture, individually and as manager of A&M Structuring, (collectively "defendants"), appealed from a judgment entered in favor of Lynn Flaten and from a post-judgment order denying their motions to amend the judgments and "regarding ownership or interest in levied property." We conclude the district court did not err in granting partial summary judgment or abuse its discretion in denying the post-judgment motions. We affirm.

         I

         [¶ 2] In September 2012, Flaten sued A&M Structuring, LLC, and Couture, individually and as manager of A&M Structuring, for claims of breach of contract, unjust enrichment, and fraud. Flaten alleged he agreed to sell certain real property located in Williams County ("Williston property") to the defendants for $275, 000 in February 2012, the defendants paid $50, 000 as a down payment, but failed to pay the remaining amounts due for the property. Flaten also alleged the defendants agreed to sell him certain real property located in McKenzie County ("Dore property"), the Dore property consisted of three individual lots, and the defendants never delivered the property.

         [¶ 3] The defendants answered, alleging various affirmative defenses. The defendants also counterclaimed, alleging Flaten owes them for bills they incurred and services they performed on his behalf related to the properties.

         [¶ 4] In November 2014, the defendants moved for summary judgment. They argued there were no disputed issues of material fact, Flaten agreed to purchase the Dore property at a discounted price of $75, 000 for each lot, but Flaten never closed on the sale of the Dore property. The defendants also alleged the discounted price on the Dore property was negotiated to offset the discounted price they paid for the Williston property. Couture filed an affidavit in support of the defendants' motion, claiming the Dore property was worth $450, 000 to $600, 000 for all three lots. He also claimed the parties agreed to modify the terms of the sale of the Williston property, the defendants would pay $50, 000 cash for the Williston property, the Dore property would be discounted to $75, 000 for each lot, and the amount discounted on the Dore property along with the $50, 000 cash were equal to the $275, 000 price for the Williston property. He alleged Flaten received full consideration and value for the Williston property in the form of the cash and discounts.

         [¶ 5] Flaten opposed the motion and also moved for summary judgment. He argued the written terms of the purchase agreements for the Williston and Dore properties govern, the purchase agreement for the Williston property states it was to be a "cash sale" of $275, 000 and is silent about any "discounted price, " and Couture breached the purchase agreement for the Dore property by failing to deliver the property. Flaten requested the court grant summary judgment in his favor.

         [¶ 6] In October 2015, the district court denied the defendants' motion for summary judgment and partially granted Flaten's motion for summary judgment. Although the purchase agreements for the Williston and Dore properties were executed on the same day and are essentially the same except for the switched purchaser and seller, the property descriptions, and the purchase price, the court concluded the Dore property purchase agreement was ambiguous but the Williston property purchase agreement was not ambiguous. In ruling the purchase agreement for the Williston property was not ambiguous, the court noted that Flaten agreed to sell the property to the defendants for $275, 000, the purchase agreement did not reference any other transaction or state the sale was dependent on the Dore property and the defendants paid $50, 000. The court held the defendants breached the contract and owe Flaten $225, 000. The court concluded there was ambiguity in the Dore purchase agreement regarding the terms for closing on the sale of the Dore property and extrinsic evidence was necessary to determine the closing terms, what was a reasonable time to close, and whether Flaten had the ability and means to close on the property. Any similar ambiguity in the purchase agreement for the Williston property was not at issue because the parties had closed on the sale of that property and a warranty deed had been issued. The court determined there were genuine issues of material fact on the claims related to the Dore property and summary judgment was not appropriate on those claims.

         [¶ 7] In April 2017, the defendants moved to dismiss the action under N.D.R.Civ.P. 12 and for the court to grant them relief from the order for partial summary judgment under N.D.R.Civ.P. 60(b)(6). They argued the court did not have subject matter jurisdiction because Flaten was the only named plaintiff, he was not named in the purchase agreements as the purchaser or seller of the properties, and there were genuine issues of material fact about who entered into the purchase agreement for the Williston property and whether the agreement was enforceable. The district court denied the motion.

         [¶ 8] A jury trial was held on the remaining issues in April 2017. A special verdict form was used. The jury found the parties had agreed upon terms for the sale of the Dore property that were different from the purchase agreement and the defendants breached the agreed upon terms for the sale of the property. The jury awarded Flaten $10, 000 plus interest for the defendants' breach of the Dore property purchase agreement and $4, 500 plus interest for work Flaten performed on the Dore property. Neither party has challenged the special verdict form on appeal and, as a result, we do not consider whether or not the questions contained therein were proper for the jury to answer. In May 2017, judgments were entered in favor of Flaten for $289, 208.22 for the claims related to the Williston property and $17, 303.88 for the claims related to the Dore property.

         [¶ 9] In July 2017, the defendants moved for relief from the judgments under N.D.R.Civ.P. 59(j) and 60 (b)(1) and (6). The defendants argued Couture should be removed from the judgments and should not be held personally liable because Flaten failed to pierce the corporate veil. Flaten opposed the motion.

         [¶ 10] In August 2017, the defendants filed a "Motion Regarding Ownership or Interest in Levied Property, " requesting funds be returned that they alleged were removed from bank accounts for business entities who were not parties to the case. They claimed the purchase agreements only listed A&M Structuring 7, LLC as the buyer or seller, A&M Structuring 7 is part of a Nevada series limited liability company, there are 13 total A&M Structuring series limited liability companies, the other A&M Structuring series limited liability companies were not parties to the action, and any funds from their accounts should be returned. Flaten opposed the motion.

         [¶ 11] After a hearing, the district court denied both motions.

         II

         [¶ 12] The defendants argue the district court erred in granting summary judgment on Flaten's breach of contract claim related to the Williston property. They claim they raised a genuine issue of material fact about the terms of the purchase agreement and the court erred in concluding the purchase agreement was unambiguous.

         [¶ 13] In reviewing a district court's decision on a motion for summary judgment, this Court views the evidence in the light most favorable to the party opposing the motion. Snider v. Dickinson Elks Bldg., LLC, 2018 ND 55, ¶ 9, 907 N.W.2d 397. "[T]his 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." Id. Whether the court properly granted summary judgment is a question of law, which is reviewed de novo on the entire record. Id.

         [¶ 14] We have explained the well-established rules for interpreting written contracts:

The construction of a written contract to determine its legal effect is a question of law. A contract is to be interpreted to give effect to the mutual intention of the parties at the time of contracting. Under [N.D.C.C. § 9-07-04], the intention of the parties to a written contract is to be ascertained from the writing alone, if possible. If executed documents are unambiguous, parol evidence is not admissible to contradict the terms of the written agreement. If a written contract is ambiguous, extrinsic evidence can be considered to clarify the parties' intent. [W]here the contract is clear and unambiguous there is no reason to go further. Whether or not a contract is ambiguous is a question of law. An ambiguity exists when rational arguments can be made in support of contrary positions as to the meaning of the term, phrase, or clause in question. If the parties' intentions can be ascertained from the writing alone, then the interpretation of the contract is entirely a question of law, and we will independently examine and construe the contract to determine if the district court erred in its interpretation of it. A contract may be explained by reference to the circumstances under which it was made and the matter to which it relates. However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract.

In re Estate of Dionne, 2009 ND 172, ¶ 16, 772 N.W.2d 891 (quoting Pamida, Inc. v. Meide, 526 N.W.2d 487, 490 (N.D. 1995) (internal quotations omitted)).

         [¶ 15] A contract for the sale of real property is invalid unless it is in writing. N.D.C.C. § 9-06-04. "The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument." N.D.C.C. § 9-06-07. "When the language of a contract is plain and unambiguous and the parties' intentions can be ascertained from the writing alone, extrinsic evidence is inadmissible to alter, vary, explain, or change the document." Burk v. State, 2017 ND 25, ¶ 9, 890 N.W.2d 535; see also N.D.C.C. § 9-07-04. "If the language of [a] contract is clear and unambiguous and the intent is apparent from its face, there is no room for further interpretation, and extrinsic evidence may not be used to vary or contradict the terms of the agreement or to create an ambiguity." Limberg v. Sanford Med. Ctr. Fargo, 2016 ND 140, ¶ 17, 881 N.W.2d 658.

         [¶ 16] The purchase agreement for the Williston property states:

         PURCHASE AGREEMENT

A&M Structuring 7, LLC, 4590 E. Cincinatti [sic], Las Vegas NV 89104 herinafter [sic] referred to as the purchaser, do herby [sic] agree to purchase, and Flaten Trucking, LLC, PO Box 4311, Williston ND 58801, hereinafter referred to as the seller, do hereby agree to sell the ...

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