from the District Court of Burleigh County, South Central
Judicial District, the Honorable James S. Hill, Judge.
C. Nodland, Bismarck, ND, for plaintiff and appellant.
R. Asmus (argued) and Charles B. Rogers (on brief),
Minneapolis, MN, for defendants and appellees.
VandeWalle, Chief Justice.
Wayne Munson appealed from a district court judgment granting
Indigo Acquisition Holdings' (IAH) motion for judgment on
the pleadings. We conclude that the transaction at issue is
exempt under the North Dakota Securities Act. We affirm.
In 2009, Munson and other employees of Indigo Signworks
entered into an agreement to participate in a Stock
Appreciation Rights (SAR) program rather than receive
bonuses. Under the program, Munson would be paid for his SARs
if Indigo Signworks was sold. In 2016, IAH, a Delaware
corporation, purchased Indigo Signworks. Munson and other
employees participating in the SAR program were paid for
their SARs and had the opportunity to reinvest in IAH's
membership units. On October 28, 2016, Munson purchased 12,
500 Class A Units of IAH. In July 2018, Munson left his
employment at Indigo Signworks to begin a competing sign
company. IAH alleged this new business violated Munson's
obligations under IAH's Amended LLC Agreement and filed
suit in Delaware.
In September 2018, Munson served IAH with a complaint seeking
to void his purchase of the IAH Units. Munson argued the IAH
Units he purchased are unexempt, unregistered securities
under the North Dakota Securities Act. On October 1, IAH
served their answer on Munson via U.S. Mail. At the time of
IAH's answer, Munson had not yet filed the pleadings.
After Munson filed the pleadings, IAH again served Munson via
U.S. Mail on November 9. The district court found this paper
service appropriate because Munson's counsel was not
enrolled as a service contact for Munson under Odyssey, North
Dakota's electronic service system.
Accompanying IAH's November answer was a motion for
judgment on pleadings pursuant to N.D.R.Civ.P. 12(c). In
January 2019, the district court entered judgment dismissing
the case. In its memorandum and decision, the court found the
only issue raised in Munson's complaint was whether the
purchase of IAH Units was an exempt transaction under the
North Dakota Securities Act. After finding the transaction
exempt under N.D.C.C. ch. 10-04 as a matter of law, the court
dismissed the case under N.D.R.Civ.P. 12(c), or
alternatively, under N.D.R.Civ.P. 56.
On appeal, Munson argues his purchase of IAH Units is not
exempt under the North Dakota Securities Act; that IAH did
not provide proper service under N.D.R.Civ.P. 5(b) and
N.D.R.Ct. 3.2 and 3.5; and that the district court abused its
discretion in denying his amended complaint. IAH argues this
Court does not have subject matter jurisdiction to determine
the enforceability of the LLC Member Agreement because Munson
did not raise it in his complaint and the issue is currently
being litigated in Delaware.
A party may move for judgment on the pleadings under Rule
12(c), N.D.R.Civ.P. However, a court should not dismiss
a pleading under N.D.R.Civ.P. 12(c) unless it appears beyond
doubt that no set of facts support a party's claim which
would entitle him to relief. Kuntz v. State, 2019 ND
46, ¶ 25, 923 N.W.2d 513. We view pleadings in the light
most favorable to the pleading party and the allegations are
taken as true. Id. If matters outside the pleadings
are presented to and not excluded by the court, the motion
must be treated as one for summary judgment under Rule 56.
White v. T.P. Motel, L.L.C., 2015 ND 118, ¶ 15,
863 N.W.2d 915; N.D.R.Civ.P. 12(d).
Summary judgment under N.D.R.Civ.P. 56 "is a procedural
device for promptly resolving a controversy on the merits
without a trial if there are no disputed issues of material
fact and inferences that can reasonably be drawn from
undisputed facts, or if the only issues to be resolved are
questions of law." Davidson v. State ex rel. N.D.
State Bd. of Higher Ed., 2010 ND 68, ¶ 11, 781
N.W.2d 72. All parties must be given a reasonable opportunity
to present to the court all the material that is pertinent to
the motion. White, 2015 ND 118, ¶ 15, 863
N.W.2d 915. A district court's decision on a motion for
summary judgment is a question of law reviewed de novo on the
record. Baker v. Sabinash, 2015 ND 153, ¶ 5,
864 N.W.2d 436.
In this case, materials outside of the pleadings, including
IAH's answer and attached exhibits, were presented to and
not excluded by the district court. Because the court
considered materials outside of the pleadings, the motion
must be treated as one for summary judgment under
N.D.R.Civ.P. 56. The court found there were no disputed
issues of material fact and that the only legal issue raised