BTA Oil Producers v. MDU Resources Group, Inc.

2002 ND 55, 642 N.W.2d 873, 47 U.C.C. Rep. Serv. 2d (West) 1057, 153 Oil & Gas Rep. 364, 2002 N.D. LEXIS 82, 2002 WL 554755
CourtNorth Dakota Supreme Court
DecidedApril 16, 2002
Docket20010122
StatusPublished
Cited by48 cases

This text of 2002 ND 55 (BTA Oil Producers v. MDU Resources Group, Inc.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BTA Oil Producers v. MDU Resources Group, Inc., 2002 ND 55, 642 N.W.2d 873, 47 U.C.C. Rep. Serv. 2d (West) 1057, 153 Oil & Gas Rep. 364, 2002 N.D. LEXIS 82, 2002 WL 554755 (N.D. 2002).

Opinion

SANDSTROM, Justice.

[¶ 1] BTA Oil Producers, Cenex Harvest States Cooperatives, Conoco, Inc., Equitable Resources Energy Company, Exxon Mobil Corporation, Midgard Energy Company, Sinclair Oil Corporation, Kerr McGee Oil & Gas Onshore, L.P., TBI Exploration, Inc., Tipperary Oil & Gas Corporation, and Tom Brown, Inc. (collectively “BTA”) appeal from a judgment that dismissed most of their claims against MDU Resources Group, Inc., and Williston Basin Interstate Pipeline Company, Inc. (collectively “MDU”), and Koch Industries, Inc., and Koch Hydrocarbons Company (collectively “Koch”), and that awarded Exxon $404,122.34 from Koch for breach of contract for miscalculating treating fees. We affirm in part, reverse in part, and remand, concluding: (1) MDU was not barred by judicial estoppel from disputing BTA’s claims; (2) the district court did not err in granting summary judgment dismissing BTA’s unjust enrichment and implied trust claims against MDU; (3) the district court did not err in dismissing BTA’s breach of contract and unjust enrichment claims against Koch; (4) BTA failed to present competent admissible evidence establishing a genuine issue of material fact on its claim against Koch for an accounting for liquid hydrocarbons; (5) the district court applied the appropriate statute of limitations to Exxon’s treating fees claim; and (6) the district court erred in determining Exxon first asserted its treating fees claim when it moved to amend the complaint on September 3, 1997.

I

[¶ 2] During the time relevant to this case, Koch bought and processed natural gas at its processing plant in McKenzie County. BTA and the other appellants produced natural gas and sold it to Koch. The contracts between Koch and BTA were percentage-of-proceeds contracts, which did not establish a set price for the gas purchased. Under these contracts, Koch took title to the raw natural gas, processed it, and paid BTA a percentage of the price Koch received when it resold the gas. Although the contracts between Koch and the various producers differed slightly, on average the producers received seventy-five percent of the resale price of the gas when sold by Koch.

[¶ 3] MDU operates a natural gas distribution system. In 1979, when natural gas was in short supply, MDU and Koch entered into a ten-year contract, with MDU agreeing to purchase certain minimum volumes of gas at the highest price permitted by the Natural Gas Policy Act of 1978. MDU originally bought all of the gas available from Koch. In 1983 a surplus of gas developed, and natural gas prices fell. MDU reduced the volume of its gas purchases, taking less than Koch had available.

[¶ 4] MDU continued paying the maximum price allowed under the Natural Gas Policy Act through 1984. On January 1, 1985, prices for natural gas were deregulated and a dispute arose over the price of gas under the contract. MDU contended the lower, unregulated market price should apply. Koch argued the last regulated price, which was higher than market price, should be applied.

[¶ 5] In 1986, Koch acquired the rights of another seller, Phillips Petroleum Company, which had a similar gas purchase contract with MDU running through 2000. *878 Similar disputes over gas pricing arose under that contract.

[¶ 6] In January 1987, Koch sued MDU in federal district court for breach of contract. On May 6, 1987, MDU advised Koch it would no longer take gas under the contracts. The federal district court held MDU had breached the contract, but Koch was only entitled to recover damages based upon its twenty-five percent share of the proceeds of its sales to MDU. Koch was not allowed to recover damages based upon the seventy-five percent of the sale proceeds that went to BTA and other producers. The United States Court of Appeals for the Eighth Circuit affirmed the percentage-of-proceeds reduction in damages, and remanded to the district court on other issues. See Koch Hydrocarbon Co. v. MDU Resources Group, Inc., 988 F.2d 1529 (8th Cir.1993). Koch and MDU subsequently settled all of their claims.

[¶ 7] Shortly thereafter, two of Koch’s producers sued MDU in state court. These producers claimed they were third-party beneficiaries of the MDU-Koch contracts, MDU had been unjustly enriched by being allowed to retain profits after defaulting on its contracts, and MDU held the remaining seventy-five percent of the alleged “damages” in an implied trust. The district court concluded the producers were not third-party beneficiaries under the MDU-Koch contracts, MDU was not unjustly enriched, and there was no evidence establishing an implied trust. We affirmed the district court judgment. Apache Corp. v. MDU Resources Group, Inc., 1999 ND 247, 603 N.W.2d 891.

[¶ 8] In March 1997, while the Apache case was still pending in district court, BTA brought this action against MDU and Koch. BTA alleged unjust enrichment and implied trust claims against MDU, and alleged breach of contract, unjust enrichment, fraud, and civil conspiracy claims against Koch. In July 1997, Exxon was permitted to intervene in this action as a plaintiff. Exxon pleaded an additional breach of contract claim, alleging Koch had underpaid Exxon for its gas by miscalculating “treating fees” under the contract.

[¶ 9] MDU and Koch moved for partial summary judgment. Relying upon Apache, the district court dismissed all claims except Exxon’s treating fees claim against Koch. After further discovery, Exxon and Koch both moved for summary judgment on the treating fees claim. The district court concluded Koch had breached its contract with Exxon by miscalculating treating fees and found damages of $404,122.34. Judgment was entered dismissing all claims except the treating fees claim and awarding damages to Exxon on its treating fees claim. BTA appealed.

[¶ 10] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 27-05-06. The appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const, art. VI, § 6, and N.D.C.C. § 28-27-01.

II

[¶ 11] Summary judgment is a procedural device for promptly and expeditiously disposing of an action without a trial if either party is entitled to judgment as a matter of law and if no dispute exists as to either the material facts or the reasonable inferences to be drawn from undisputed facts or if resolving the factual disputes will not alter the result. E.g., Anderson v. Meyer Broadcasting Co., 2001 ND 125, ¶ 14, 630 N.W.2d 46; Van Valkenburg v. Paracelsus Healthcare Corp., 2000 ND 38, ¶ 17, 606 N.W.2d 908. On appeal, we review the evidence in the light most favorable to the party opposing the motion for summary judgment, and we give that party the benefit of all favorable inferences that reasonably can be drawn from the *879 evidence. Jaskoviak v. Gruver, 2002 ND 1, ¶ 11, 638 N.W.2d 1.

[¶ 12] We outlined the duty of a party opposing a summary judgment motion in Anderson, 2001 ND 125, ¶ 14, 630 N.W.2d 46 (quoting Peterson v. Zerr, 477 N.W.2d 230, 234 (N.D.1991) (internal citations omitted)):

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Bluebook (online)
2002 ND 55, 642 N.W.2d 873, 47 U.C.C. Rep. Serv. 2d (West) 1057, 153 Oil & Gas Rep. 364, 2002 N.D. LEXIS 82, 2002 WL 554755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bta-oil-producers-v-mdu-resources-group-inc-nd-2002.