Summary
The North Dakota Supreme Court affirmed summary judgment for Leland Swanson and Open Road Trucking, LLC, holding that an alleged oral settlement agreement was invalid under the statute of frauds. The court concluded that the agreement involved the transfer of oil interests, which are interests in real property, and that no signed writing authorized counsel to execute the agreement. The court also rejected arguments based on partial performance and injustice.
Topics
Practice areas
Questions Presented
- Whether the alleged settlement agreement involved the sale or transfer of an interest in real property and therefore fell within N.D.C.C. § 9-06-04(3).
- Whether the exchanged writings and an attorney's email signature satisfied the statute of frauds and its requirement that an agent's authority be in writing.
- Whether Lund's conduct in asking the district court to remove a trial from the calendar constituted sufficient part performance to remove the agreement from the statute of frauds.
- Whether applying the statute of frauds would promote an injustice or perpetrate a fraud.
Holdings
- An agreement to transfer oil interests for valuable consideration is an agreement for the sale of real property, or an interest in real property, under N.D.C.C. § 9-06-04(3). The alleged settlement agreement therefore fell within the statute of frauds.
- The statute of frauds was not satisfied because Lund identified no signed writing authorizing the defendants' attorney to execute the settlement agreement on their behalf.
- Lund's request that the district court remove the pending trial from the calendar did not constitute sufficient part performance to make the alleged oral agreement enforceable.
- The statute of frauds defense was not barred by equitable considerations because Lund showed neither detrimental reliance nor unjust enrichment; merely losing the benefit of the alleged bargain was insufficient.
Key quotations
“We hold that an agreement to transfer oil interests for valuable consideration is an agreement for the sale of real property, or of an interest therein, under N.D.C.C. § 9-06-04(3).” (¶ 18)
“To take a contract out of the statute of frauds, the party seeking to enforce the oral contract must establish part performance that is not only consistent with, but that is consistent only with, the existence of the alleged oral contract.” (¶ 22)
“Such an argument, if accepted, would render the statute of frauds meaningless.” (¶ 26)
Factual background
Lund and Swanson co-owned several business entities, including entities holding real estate and oil interests. On the eve of trial in related litigation, Lund, Swanson, Open Road, and their attorneys discussed settlement terms involving transfers of LLC interests, real property and oil interests, dismissal of lawsuits, and a global release. Attorneys exchanged proposed settlement documents, but no party signed a written settlement agreement. Lund later sought to enforce the alleged settlement, asserting that emails, partial performance, and equitable considerations removed it from the statute of frauds.
Procedural history
The parties negotiated settlement terms but never signed a written settlement agreement. Lund subsequently sued to enforce the alleged settlement agreement. The District Court of Cass County granted summary judgment to Swanson and Open Road, concluding the statute of frauds barred enforcement, and Lund appealed.