Filed 10/21/20 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 205
Robert M. Hall, Plaintiff and Appellant
v.
Estate of John F. Hall and all unknown heirs,
devisees, sucessors, and creditors of Myles
Franklin Hall, Myles F. Hall, a/k/a Myles Hall,
deceased, and all other persons unknown claiming
any estate or interest in, or lien or encumbrance
upon, the property described in the Complaint, Defendants
and
Deborah E. Hall, Leslie Hall,
a/k/a Leslie Hall Butzer, Defendants and Appellees
No. 20190169
Appeal from the District Court of Williams County, Northwest Judicial
District, the Honorable Benjamen J. Johnson, Judge.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Opinion of the Court by McEvers, Justice.
Zachary E. Pelham (argued), and Benjamin W. Keup (appeared), Bismarck,
ND, for plaintiff and appellant.
William C. Black, Bismarck, ND, for defendants and appellees.
Hall v. Hall
No. 20190169
McEvers, Justice.
[¶1] Robert Hall appeals from a judgment entered in favor of the defendants
Estate of John Hall; Deborah Hall; and Leslie Hall, aka Leslie Hall Butzer;
(Hall defendants) in this action to quiet title to a non-participating royalty
interest (NPRI) in certain real property. We conclude the district court did not
abuse its discretion in vacating a default judgment against John Hall.
However, because res judicata does not bar Robert Hall’s claims, we conclude
the court erred in granting summary judgment to the Hall defendants. We
affirm in part, reverse in part, and remand for further proceedings.
I
[¶2] In 2018, Robert Hall commenced this quiet title action against the Hall
defendants, seeking to quiet title to a 1.04% NPRI in certain real property. He
alleges the Hall defendants claim an ownership interest in the property that is
adverse to him. Robert Hall and the Hall defendants are the heirs of Myles
Hall. Robert Hall alleges he purchased the NPRI at issue from his father,
Myles Hall, in 1988.
[¶3] Myles Hall was the assignee in a 1953 assignment of oil and gas royalty,
which conveyed the NPRI at issue in this case. Robert Hall asserts that he
purchased the NPRI from his father for $100 in cash in 1988, and that a
notation and signature with a date at the bottom of the 1953 assignment of
royalty was written by his father on the original assignment of royalty
document. Myles Hall died in February 1992 in Minnesota. Probate
proceedings were commenced in Minnesota, and Robert Hall was co-personal
representative of the Estate. No probate proceedings were commenced in
North Dakota.
[¶4] Although Myles Hall died in 1992, record title to the NPRI apparently
remained in Myles Hall’s name. Robert Hall, as the personal representative
in a Minnesota probate of his father’s estate, successfully defended a 2011
quiet title action against the Estate of Myles Hall that the surface owners of
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the real property brought under North Dakota’s abandoned mineral statutes,
N.D.C.C. ch. 38-18.1 (sometimes referred to as termination of mineral interest
act or as dormant mineral act). The surface owners sought to claim their
ownership of the purported abandoned mineral interests under the statutes.
Robert Hall did not personally intervene or raise any issue in the 2011 quiet
title action about his alleged 1988 purchase of the NPRI from Myles Hall.
Robert Hall asserts the 2011 quiet title action resulted in the NPRI being
“restored” in his father’s name, as it had been previously held.
[¶5] The district court’s 2015 judgment in the 2011 quiet title action
addressing the Estate of Myles Hall’s interest states, in relevant part:
Pursuant to said Order [granting the Estate of Myles Hall’s motion
for summary judgment], which is incorporated herein by reference,
it is hereby . . . ORDERED, ADJUDGED, AND DECREED that
Defendant Estate of Myles Hall is the owner of a 1.04% non-
participating royalty interest in [the subject real property].
[¶6] In 2018, Robert Hall brought this quiet title action against the Hall
defendants seeking the 1.04% NPRI be quieted in his name. In May 2018,
defendant Leslie Hall, aka Leslie Hall Butzer, filed an answer and
counterclaim. Robert Hall moved for a partial default judgment against
defendants Deborah Hall and John Hall. In July 2018, Deborah Hall filed an
answer and counterclaim, and the district court subsequently denied the
motion for default judgment as to her. In August 2018, the court granted the
motion for default judgment against John Hall, and a judgment was entered
against him.
[¶7] In November 2018, defendants Leslie Hall and Deborah Hall moved for
summary judgment, arguing that collateral estoppel and res judicata barred
Robert Hall’s claims. Robert Hall opposed the motion and moved for summary
judgment on defendants’ outstanding counterclaims. The district court
granted Leslie Hall and Deborah Hall’s summary judgment motion, denied
Robert Hall’s subsequent motion for reconsideration, and granted Robert
Hall’s summary judgment motion to dismiss the defendants’ counterclaims
seeking attorney fees. In May 2019, Robert Hall appealed.
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[¶8] John Hall died in July 2019, while this appeal was pending. The
personal representative of the Estate of John Hall moved the district court to
vacate the August 2018 default judgment against John Hall and also moved
this Court for a temporary remand to decide the motion. In October 2019, the
court on remand granted the motion to vacate. In November 2019, the court
also entered an order adopting the parties’ stipulation for substitution of
parties, substituting the Estate of John F. Hall for John F. Hall as a defendant.
After the parties stipulated to a final judgment to include all of the Hall
defendants, Robert Hall filed an amended notice of appeal to include the order
to vacate.
II
[¶9] Robert Hall contends the district court abused its discretion in vacating
the default judgment against John Hall.
[¶10] In Bickler v. Happy House Movers, L.L.P., 2018 ND 177, ¶ 12, 915
N.W.2d 690 (quoting Key Energy Servs., LLC v. Ewing Constr. Co., Inc., 2018
ND 121, ¶ 13, 911 N.W.2d 319), we explained:
On appeal, to establish a basis for relief under N.D.R.Civ.P.
60(b) from a district court’s denial of a motion for relief from a
default judgment, a party must show the district court abused its
discretion. . . . An abuse of discretion by the [district] court is never
assumed and must be affirmatively established, and this Court
will not overturn a court’s decision merely because it is not the one
it would have made had it been deciding the motion.
[¶11] “[T]here should generally be greater liberty in granting motions under
N.D.R.Civ.P. 60(b) when the matter involves a default judgment rather than a
judgment following a full trial on the merits.” Bickler, at ¶ 12 (quoting Key
Energy Servs., at ¶ 13); see also Overboe v. Brodshaug, 2008 ND 112, ¶ 8, 751
N.W.2d 177; Gepner v. Fujicolor Processing, Inc., 2001 ND 207, ¶ 14, 637
N.W.2d 681. In Gepner, at ¶ 14 (internal citations and quotations omitted),
this Court discussed relevant considerations to guide the district court’s
discretion:
3
This court has long encouraged trial courts to be more
lenient when entertaining Rule 60(b) motions to vacate default
judgments as distinguished from “litigated” judgments, that is,
judgments entered after trial on the merits. While a trial court
certainly has discretion to grant or deny a Rule 60(b) motion to
vacate a default judgment, the range of that discretion is limited
by three important considerations. First, Rule 60(b) is remedial in
nature and should be liberally construed and applied. Second,
decisions on the merits are preferable to those by default. Third,
as a consequence of the first two considerations, where timely
relief is sought from a default judgment and the movant has a
meritorious defense, doubt, if any, should be resolved in favor of
the motion to set aside the judgment so that cases may be decided
on their merits.
A district court abuses its discretion when it acts arbitrarily, unreasonably, or
unconscionably, or when it misinterprets or misapplies the law. Warnke v.
Warnke, 2011 ND 212, ¶ 4, 806 N.W.2d 606.
[¶12] Robert Hall argues that the Estate of John Hall’s motion to vacate and
accompanying brief and affidavits provided no evidence the district court could
rely on to reach a reasoned and reasonable decision. He contends the Estate
failed to overcome the rebuttable presumption that service was proper, as
evidenced by the affidavit of non-service. He also asserts that as an in rem
action, personal service was not absolutely necessary and service by
publication was sufficient. He further contends this was not an exceptional
circumstance warranting the decision to vacate and the court’s decision is
contrary to law.
[¶13] The Estate of John Hall responds, however, that the district court did
not abuse its discretion by finding the motion to vacate was timely filed and in
determining justice requires a decision on the merits. The Estate asserts the
motion was made within one year of the default judgment and the court had
already established the codefendants had meritorious defenses, as they had
been granted summary judgment. The Estate further contends Robert Hall is
not prejudiced by having the default judgment vacated.
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[¶14] Here, the district court granted the motion to vacate the default
judgment against John Hall. In so doing, the court stated: “The motion to
vacate was timely filed and justice requires a decision based upon the merits.”
While somewhat conclusory, the court explained its decision, which does not
appear arbitrary or capricious when considering the prior summary judgment
proceedings. We have said that a court should be more lenient in considering
Rule 60(b) motions to vacate default judgments as distinguished from
“litigated” judgments and that we prefer decisions on the merits. Moreover, in
this case the court had already determined the other similarly situated
codefendants, as heirs of Myles Hall, had established meritorious defenses.
[¶15] On the basis of our review, we cannot say the district court abused its
discretion in vacating the default judgment against John Hall.
III
[¶16] Robert Hall argues the district court erred in granting the defendants’
summary judgment motion because his claims are not barred by res judicata.
Our standard of review for summary judgment is well established:
Summary judgment is a procedural device under
N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the
merits without a trial if there are no genuine issues of material
fact or inferences that can reasonably be drawn from undisputed
facts, or if the only issues to be resolved are questions of law. The
party seeking summary judgment must demonstrate there are no
genuine issues of material fact and the case is appropriate for
judgment as a matter of law. In deciding whether the district court
appropriately granted summary judgment, we view the evidence
in the light most favorable to the opposing party, giving that party
the benefit of all favorable inferences which can reasonably be
drawn from the record. A party opposing a motion for summary
judgment cannot simply rely on the pleadings or on unsupported
conclusory allegations. Rather, a party opposing a summary
judgment motion must present competent admissible evidence by
affidavit or other comparable means that raises an issue of
material fact and must, if appropriate, draw the court’s attention
to relevant evidence in the record raising an issue of material fact.
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City of Fargo v. Wieland, 2019 ND 286, ¶ 6, 936 N.W.2d 55 (quoting Brock v.
Price, 2019 ND 240, ¶ 10, 934 N.W.2d 5). The district court’s decision on
summary judgment is a question of law, which is reviewed de novo on the
record. Id.
A
[¶17] “Res judicata, or claim preclusion, prevents relitigation of claims that
were raised, or could have been raised, in prior actions between the same
parties or their privies.” Sundance Oil & Gas, LLC v. Hess Corp., 2017 ND
269, ¶ 6, 903 N.W.2d 712 (quoting Kulczyk v. Tioga Ready Mix Co., 2017 ND
218, ¶ 10, 902 N.W.2d 485); see also Missouri Breaks, LLC v. Burns, 2010 ND
221, ¶ 10, 791 N.W.2d 33. “Fundamental fairness underlies determinations of
privity and res judicata.” Kulczyk, at ¶ 11. In Missouri Breaks, at ¶ 12, this
Court applied the following elements to decide whether res judicata barred
claims:
1. A final decision on the merits in the first action by a court of
competent jurisdiction;
2. The second action involves the same parties, or their privies, as
the first;
3. The second action raises an issue actually litigated or which
should have been litigated in the first action;
4. An identity of the causes of action[.]
[¶18] Privity exists when one is so identified in interest with another that the
person represents the same legal right. Ungar v. N.D. State Univ., 2006 ND
185, ¶ 12, 721 N.W.2d 16. Privity includes:
a person who is not technically a party to a judgment, or in privity
with him, but who is, nevertheless, connected with it by his
interest in the prior litigation and by his right to participate
therein, at least where such right is actively exercised by
prosecution of the action, employment of counsel, control of the
defense, filing of an answer, payment of expenses or costs of the
action, the taking of an appeal, or the doing of such other acts as
are generally done by parties.
6
Id. (quoting Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380, 384
(N.D. 1992)). “The doctrine of res judicata does not apply to matters which are
incidental or collateral to the determination of the main controversy.” Martin
v. Rath, 1999 ND 31, ¶ 9, 589 N.W.2d 896 (emphasis added). The applicability
of res judicata presents a question of law and is fully reviewable on appeal.
Sundance Oil & Gas, 2017 ND 269, ¶ 6.
[¶19] Here, the district court applied the four elements provided in Missouri
Breaks, concluded all the elements were met, and held res judicata barred the
current action. The court held that the 2011 quiet title action resulted in a
final decision on the merits relating to the Estate of Myles Hall’s ownership of
the NPRI and that Robert Hall and the Hall defendants are heirs—successors
in interest—and have privity with the Estate. While Robert Hall’s ownership
claim through the alleged 1988 purchase was not litigated, the court held his
ownership claim could have and should have been addressed in the 2011
action. The court further concluded the fourth element—an identity of the
causes of action—applied because if Robert Hall had litigated his ownership of
the NPRI in the 2011 action, a final judgment would have barred this action
and the same evidence would be used in both of the actions.
B
[¶20] Robert Hall argues this quiet title action is “incidental” to the earlier
2011 action and title to the NPRI was not determined on the merits between
the parties to this action. He contends he seeks simply to confirm the
conveyance from his father; an opportunity never given to him during the
earlier case because that action was one of mere interpretation of North
Dakota’s dormant mineral act. He asserts the present action addresses
ownership of the NPRI after Myles Hall’s conveyance to Robert Hall.
[¶21] Robert Hall argues the 2015 judgment in the 2011 action only
determined the applicability of the North Dakota abandoned mineral act. He
asserts there was no claim in the prior action that Myles Hall or the Estate did
not own the NPRI; rather, the issue was whether the act had stripped the
interest from him or the Estate. He contends the only question in the 2011
action was whether the surface owner had succeeded to the ownership of the
7
royalty interests. He contends he and the Hall defendants were not in privity
with the Estate of Myles Hall in the prior action, the issues litigated in these
two actions are distinct, and the issue of title between the parties to this action
was not litigated in the 2011 action.
[¶22] Generally, this Court has held that “the privity doctrine cannot be
applied if the rights to property were acquired by the person sought to be bound
before the adjudication.” Gerrity Bakken, LLC v. Oasis Petroleum N. Am., LLC,
2018 ND 180, ¶ 17, 915 N.W.2d 677 (citing Hull v. Rolfsrud, 65 N.W.2d 94, 98
(N.D. 1954)); see also Great Plains Royalty Corp. v. Earl Schwartz Co., 2019
ND 124, ¶ 28, 927 N.W.2d 880; Bismarck Pub. Sch. Dist. v. Hirsch, 136 N.W.2d
449, 454 (N.D. 1965); 50 C.J.S. Judgments § 1163 (June 2020 Update) (“A
judgment with respect to real property against a vendor or grantor is binding
on the purchaser or grantee where the latter acquired his or her interest after
the commencement of the suit, but not where he or she acquired it prior to that
time and is not a party to the action at the time of rendition of judgment.”). In
Gerrity Bakken, at ¶ 17, we explained:
A quiet title or declaratory judgment is not binding on any persons
having interests in leases and wells who were not made parties to
the action. See Golden v. SM Energy Co., 2013 ND 17, ¶ 21, 826
N.W.2d 610; see also Nord v. Herrman, 2001 ND 11, ¶ 14, 621
N.W.2d 332 (“The judgment is not binding on other property
owners in the area who were not made parties to this action and
who might have a claim to the subject property.”). Gerrity Bakken
and its predecessors, “persons appearing of record” to have an
interest in the property, were not made parties to the 2013 quiet
title action. N.D.C.C. § 32-17-05. “[U]nless one is a party to a
proceeding or in privity with those who are parties to an action, he
cannot be bound by the judgment in that action.” Sturdevant v.
SAE Warehouse, Inc., 270 N.W.2d 794, 799 (N.D. 1978) (footnote
omitted). However, the privity doctrine cannot be applied if the
rights to property were acquired by the person sought to be bound
before the adjudication. See Hull v. Rolfsrud, 65 N.W.2d 94, 98
(N.D. 1954).
In Sprynczynatyk v. Celley, 486 N.W.2d 230, 231 (N.D. 1992) (quoting Hull, 65
N.W.2d at 96-97 Syll. ¶ 1), this Court said:
8
Privity is the mutual or successive relationship to the same rights
of property. If it is sought to bind one as privy by an adjudication
against another it must appear that at the time he acquired the
rights or succeeded to the title it was then affected by the
adjudication. If the right was acquired by him before the
adjudication, then the doctrine cannot apply.
[¶23] The present case involves whether the 2011 quiet title proceeding,
resulting in the 2015 judgment and quieting title to the NPRI in the Estate of
Myles Hall, also binds Robert Hall individually and forecloses his present
action to establish sole ownership of the NPRI. In the 2011 action, Robert Hall
was acting as personal representative for the Estate of Myles Hall.
[¶24] This Court has looked to the Restatement of Judgments (Second) (1982)
for guidance. See, e.g., Gerrity Bakken, 2018 ND 180, ¶ 19; Northstar Founders,
LLC v. Hayden Capital USA, LLC, 2014 ND 200, ¶ 63, 855 N.W.2d 614; Lucas
v. Porter, 2008 ND 160, ¶ 18, 755 N.W.2d 88; Baier v. N.D. Workers Comp.
Bureau, 2000 ND 78, ¶ 18, 609 N.W.2d 722; Westman v. Dessellier, 459 N.W.2d
545, 547 (N.D. 1990); Klem v. Greenwood, 450 N.W.2d 738, 742-43 (N.D. 1990).
In Sprynczynatyk, 486 N.W.2d at 232, this Court cited with approval the
Restatement (Second) of Judgments § 36 (1982). This section addresses when
a party appears in a different capacity:
(1) A party appears in his individual capacity unless, in his
designation as a party or by other manifestation, it is made evident
that he appears in some other capacity.
(2) A party appearing in an action in one capacity, individual or
representative, is not thereby bound by or entitled to the benefits
of the rules of res judicata in a subsequent action in which he
appears in another capacity.
[¶25] Additionally, we note the Restatement (Second) of Judgments § 43
(1982), provides:
A judgment in an action that determines interests in real or
personal property:
(1) With respect to the property involved in the action:
(a) Conclusively determines the claims of the parties to
the action regarding their interests; and
9
(b) Has preclusive effects upon a person who succeeds
to the interest of a party to the same extent as upon
the party himself.
(2) With respect to other property held by a party to the
action, does not preclude a person who is a successor in
interest thereof from subsequently litigating issues
determined in the action.
(Emphasis added.) See also 50 C.J.S. Judgments § 1089 (June 2020 Update)
(“A judgment on a question of title or right to property is conclusive in a
subsequent litigation involving the same property where the question was in
issue and was expressly or by necessary implication determined; but the
judgment ordinarily is not conclusive of title or rights to other property.”); 50
C.J.S. Judgments § 1189 (June 2020 Update) (“A judgment in an action to quiet
title bars subsequent litigation on the same cause of action between the same
parties or their privies, and is final and conclusive not only as to all issues
actually involved and determined, but also as to such matters as should have
been litigated and determined in the former action.”); see also Raleigh v.
Raleigh, 91 N.E.2d 241, 247 (Ohio 1950) (“There is no such privity between a
personal representative and the heirs of a person as will cause a judgment
against the representatives to foreclose the heirs, who are not parties thereto,
where real estate is involved.”); 50 C.J.S. Judgments § 1172 (June 2020
Update) (“A judgment against an executor or administrator ordinarily is not
conclusive on the heirs and devisees with respect to lands descended or devised
to them.”).
[¶26] Robert Hall contends the 2011 action only resulted in defeating the
surface owners’ claim to the NPRI at issue in this case. We agree. The 2015
judgment in the 2011 case only concluded the Estate of Myles Hall is the owner
of the 1.04% non-participating royalty interest. The judgment does not address
the respective interests of the heirs of Myles Hall, and their individual
interests were not litigated in the 2011 action.
[¶27] In the 2011 action, the surface owners claimed title to the alleged
abandoned mineral interests under N.D.C.C. ch. 38-18.1. The Estate of Myles
Hall answered, raised defenses in response to the complaint, and
10
counterclaimed against the surface owners, seeking a decree that title to the
NPRI be quieted in the Estate. In moving for summary judgment, the Estate
of Myles Hall also requested the district court to grant the relief sought in its
answer and counterclaim and to order an accounting and payment of any
royalties attributable to Hall’s interest. In granting summary judgment, the
court’s 2015 judgment only determined: “Defendant Estate of Myles Hall is
the owner of a 1.04% non-participating royalty interest” in the property. The
heirs’ respective ownership of the NPRI at issue was plainly not at issue.
[¶28] Robert Hall’s claimed sole ownership of the NPRI was acquired before
the 2011 quiet title action and before Myles Hall died. From the record, Robert
Hall participated in the 2011 quiet title action only as a personal
representative of the Estate of Myles Hall, rather than in his individual
capacity. See N.D.R.Civ.P. 17(a)(1)(A) (“An action must be prosecuted in the
name of the real party in interest. The following may sue in their own names
without joining the person for whose benefit the action is brought: (A) a
personal representative[.]”). Robert Hall was not named as a party in his
individual capacity, and his interests in the NPRI were not litigated in the
2011 proceedings. Cf. Stetson v. Inv’rs Oil, Inc., 176 N.W.2d 643, 647-52 (N.D.
1970) (stating two well-established exceptions exist to the general rule that
beneficiaries are necessary parties in actions by or against a trustee relating
to the trust property—where absent parties are properly represented; and,
when a trustee is made a party to the suit affecting the beneficiaries’ interest.
In such case, the beneficiaries are bound by the decree as if they were
individually made parties to the action).
[¶29] Moreover, this Court has “drawn a clear distinction between the
statutory abandoned minerals procedure under N.D.C.C. ch. 38-18.1 [which is
wholly self-executing, see N.D.C.C. § 38-18.1-02] and a subsequent quiet title
action, and [has] emphasized they are entirely separate, distinct procedures.”
Peterson v. Jasmanka, 2014 ND 40, ¶¶ 12-13, 842 N.W.2d 920. Under N.D.C.C.
§ 38-18.1-06.1(1), providing the process for perfecting title in a surface owner,
surface owners who have completed the procedure found in N.D.C.C. § 38-18.1-
06 may commence an action to obtain “a judgment in quiet title in the owner
or owners of the surface estate.” “This action must be brought in the same
11
manner and is subject to the same procedure as an action to quiet title
pursuant to chapter 32-17.” N.D.C.C. § 38-18.1-06.1(1). See generally William
P. Pearce, The North Dakota Supreme Court Deals With the Abandoned
Minerals Act, 93 N.D. L. Rev. 355, 383-86 (2018) (discussing “separate”
statutory quiet title action under N.D.C.C. § 38-18.1-06.1, and characterizing
it as “curious” and “odd” since a surface owner had been able to bring a quiet
title action to obtain a judgment confirming title under existing statutes). The
underlying 2011 action under N.D.C.C. ch. 38-18.1, seeking to quiet title in the
surface owners, was a “separate, distinct procedure” and involved multiple
defendants.
[¶30] Under these facts and circumstances, we conclude that privity does not
apply and the heirs’ respective claims in the NPRI were not litigated, nor were
they required to be litigated in the prior action commenced under the separate,
distinct procedures of N.D.C.C. ch. 38-18.1. We conclude the district court
erred in holding res judicata applied to bar Robert Hall’s present claims of
ownership to the NPRI at issue. We therefore conclude the court erred in
granting summary judgment to the Hall defendants. We reverse and remand
for further proceedings on Robert Hall’s alleged sole ownership interest of the
NPRI.
IV
[¶31] We affirm in part, reverse in part, and remand for further proceedings
consistent with this opinion.
[¶32] Lisa Fair McEvers
Gerald W. VandeWalle
Jerod E. Tufte
Daniel J. Crothers
Jon J. Jensen, C.J.
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