Dixon v. McKENZIE COUNTY GRAZING ASSOCIATION

2004 ND 40, 675 N.W.2d 414, 2004 N.D. LEXIS 51, 2004 WL 346129
CourtNorth Dakota Supreme Court
DecidedFebruary 25, 2004
Docket20030005
StatusPublished
Cited by10 cases

This text of 2004 ND 40 (Dixon v. McKENZIE COUNTY GRAZING ASSOCIATION) 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
Dixon v. McKENZIE COUNTY GRAZING ASSOCIATION, 2004 ND 40, 675 N.W.2d 414, 2004 N.D. LEXIS 51, 2004 WL 346129 (N.D. 2004).

Opinion

SANDSTROM, Justice.

[¶ 1] John Dixon appealed from a judgment dismissing his action against the McKenzie County Grazing Association (“MCGA”) and awarding MCGA $2,500 in attorney’s fees and $4,536.59 in costs. We hold Dixon’s claim against MCGA for breach of a fiduciary duty is barred by the statute of limitations, the trial court did not err in finding MCGA acted properly in finding Dixon engaged in 1994 and 1997 unauthorized grazing uses, MCGA had authority to change Dixon’s ranch from an inventory to a turn-in headquarters, and the trial court did not abuse its discretion in awarding MCGA attorney’s fees and costs. We affirm.

I

[¶ 2] MCGA is a cooperative grazing association organized under N.D.C.C. ch. 36-08 to lease national grasslands in McKenzie County from the federal government and to issue grazing permits to MCGA members. During the 1930s, the federal government purchased grasslands in McKenzie County to revegetate those lands and to stabilize the local economy. On behalf of the federal government, the Forest Service administers those leases with MCGA. The Forest Service and MCGA have adopted Grazing and Management Agreements with rules of management to govern grazing on the grasslands under MCGA’s jurisdiction.

[¶ 3] To become a MCGA member and obtain a grazing permit on grasslands under MCGA’s jurisdiction, an applicant must either own or lease “base property,” which is defined under MCGA’s rules of management as “designated property on which a grazing preference was established as original members came into the MCGA. Base property is identified in the MCGA records on the original applications and consisted of both deeded and leased *418 acres.” In 1936, the federal government conducted a survey to determine prior grazing use of the grasslands. The 1936 survey and original base property were used to determine grazing preferences, which confer the right to graze a specified number of cattle for a specified number of months on the federal grasslands. A 1938 grazing agreement between MCGA and the United States required MCGA to classify grazing preferences as either a class A preference for applicants with a priority of use, or a class B preference for applicants without a priority of use. In 1966, MCGA adopted a policy that “[a]ll existing preferences shown on the records of the Association as of June 9, 1966, shall be recognized subject to the rules and regulations of the Association.” According to Dixon, MCGA’s action “lessened the rights of the original base property owners,” and in the early 1990s, MCGA addressed issues about base property and grazing preferences. During this process, the term “phantom rights” was used to refer to grazing preferences not attached to original base property. In 1993, the MCGA executive board issued a report that referred to phantom rights, and voted to accept the report after changing the reference to phantom rights to “the difference between the original rights and today[’s] rights.”

[¶ 4] In November 1942, Dixon’s grandfather applied for reinstatement as a member of MCGA. MCGA’s records state the application was for a “back membership” with fees paid for 1940, 1941, 1942, and 1943. MCGA approved the application in 1943. In 1952, MCGA approved an application to change the membership for the Dixon ranch from Dixon’s grandfather to Dixon’s father, W.D. Dixon. In 1972, W.D. Dixon’s membership in MCGA was transferred to the W.D. Dixon Trust. In 1983, MCGA approved an application to change the membership for the Dixon ranch from the W.D. Dixon Trust to W.D. Dixon, Shirley Dixon, and John Dixon. In 1986, John Dixon began managing the Dixon ranch.

[¶ 5] Since 1943, the grazing preference for the Dixon ranch has been set at 100 animal units on MCGA controlled land, and since the 1950s, the Dixon ranch has been classified as an “inventory headquarters,” which is defined under MCGA’s rules of management as “[a] ranch headquarters with private and allocated [Forest Service] lands, and on which the total number of animals are limited by the grazing preference.”

[¶ 6] In October 1993, MCGA’s Unauthorized Use Committee investigated an unauthorized-grazing-use complaint by the Forest Service against Dixon. Under MCGA’s rules of management, an unauthorized grazing use means “grazing livestock in excess or deviation of ... [an] annual permit, whether on headquarters or in a common grazing allotment.” An exception to an unauthorized grazing use is allowed “when excess units on inventory headquarters are in connection with normal management practices, i.e. branding, weaning, delay of turnout date, treating sick animals, etc., as long as the National Grasslands is not being abused.” According to MCGA’s president, MCGA found Dixon had not violated the unauthorized grazing use regulation, because, in addition to his annual permit, he had been issued a temporary permit that allowed him to temporarily have more than the permitted number of livestock on his ranch. According to MCGA’s secretary, after the 1993 complaint against Dixon, the Forest Service directed MCGA to “tighten up” how it issued temporary permits, and in 1994, MCGA developed a new form for temporary grazing permits, which was included in minutes sent to MCGA members.

*419 [¶ 7] On December 15, 1994, MCGA’s Unauthorized Use Committee investigated an unauthorized-grazing-use complaint by a MCGA member against Dixon. MCGA concluded Dixon had engaged in an unauthorized grazing use in allowing 254 head of cattle over his permitted limit on his inventory headquarters without having been issued a temporary permit. MCGA changed the classification of Dixon’s ranch from an inventory headquarters to a turn-in headquarters, which is defined under MCGA’s rules of management as “[a] ranch headquarters with no allocated [Forest Service] land and only a summer dependency for the grazing preference.” The change in Dixon’s headquarters placed the federal land on his headquarters into common grazing area. According to MCGA, a member with an inventory headquarters can graze cattle on common federal land during the summer grazing season, but subjects his private deeded land to MCGA regulations and permit requirements, while a member with a turn-in headquarters can graze cattle on common federal land during the summer grazing season, but does not subject his deeded land to MCGA regulations and permit requirements. According to Dixon, the change in headquarters allowed him to increase his summer grazing on common federal land to 139 animal units, but decreased the size of his headquarters and required him to provide extra feed for the 139 animal units when he was not grazing on common federal land.

[¶ 8] In August 1997, MCGA’s Unauthorized Use Committee investigated an unauthorized-grazing-use complaint against Dixon. MCGA concluded Dixon had engaged in a willful, unauthorized grazing use in which his cattle were found in a part of a common grazing pasture where they were not authorized, and MCGA fined Dixon.

[¶ 9] In 1995, Dixon sued MCGA, alleging, among other things, MCGA diluted his grazing preference by issuing grazing preferences to individuals who originally did not own base property, MCGA acted arbitrarily and capriciously in finding him guilty of the 1994 unauthorized grazing use, and MCGA lacked authority to change his ranch from an inventory to a turn-in headquarters. In an amended complaint, Dixon alleged MCGA acted arbitrarily and capriciously in finding him guilty of the 1997 unauthorized grazing use.

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Bluebook (online)
2004 ND 40, 675 N.W.2d 414, 2004 N.D. LEXIS 51, 2004 WL 346129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dixon-v-mckenzie-county-grazing-association-nd-2004.