Ryberg v. Landsiedel , 2021 ND 56 ( 2021 )

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
MARCH 24, 2021
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2021 ND 56Jason Ryberg, individually and as heir
at law for Heather Ryberg, deceased, Plaintiff and Appellant
and
Nodak Insurance Company, Interested Party and Appellant
v.
Darren J. Landsiedel, Defendant and Appellee
No. 20200189
Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Bruce A. Romanick, Judge.
ORDER VACATED AND REVERSED.
Opinion of the Court by Crothers, Justice.
Scott K. Porsborg (argued) and Austin T. Lafferty (appeared), Bismarck, ND,
for plaintiff and appellants.
Lawrence E. King (argued) and Alyssa L. Lovas (appeared), Bismarck, ND, for
defendant and appellee.
Ryberg v. Landsiedel
No. 20200189
Crothers, Justice.
[¶1] Jason Ryberg appeals from a judgment dismissing his action with
prejudice after the district court granted the defendant Darren Landsiedel’s
motion to enforce a settlement agreement. Nodak Insurance Company
(“Nodak”) appeals the court’s order denying its motion to intervene in the case.
Because no evidence establishes the terms by which the parties intended to
settle Ryberg’s action, the district court erred in granting Landsiedel’s motion
seeking to enforce a settlement agreement. We vacate the order denying
intervention and reverse the judgment of dismissal.
I
[¶2] In November 2016, Ryberg’s wife, Heather Ryberg, was killed when
Landsiedel’s vehicle hit her on a rural Burleigh County highway in the early
morning hours. In March 2018, Ryberg sued Landsiedel for the wrongful death
of his wife.
[¶3] Landsiedel was insured by Allstate Insurance Company and had liability
policy limits of $25,000. Ryberg was insured by Nodak, with “substantial”
underinsured motorist (“UIM”) limits. Allstate offered Ryberg policy limits to
settle his wrongful death claim. Ryberg notified Nodak of Allstate’s offer of the
policy limits for “full and final settlement” of the wrongful death claim. Nodak
agreed to advance payment of $25,000 to Ryberg to maintain its
reimbursement or subrogation rights under N.D.C.C. § 26.1-40-15.5. According
to a letter from Nodak to Allstate, Nodak’s draft was issued to Ryberg on
March 13, 2018.
[¶4] On January 14, 2020, a week before the scheduled trial on Ryberg’s
wrongful death action against Landsiedel, Nodak and Ryberg agreed to settle
Ryberg’s UIM claim for $100,000, in addition to the $25,000 Nodak already
paid under the statute. After being notified, Landsiedel’s counsel filed a notice
of settlement with the district court, and the case was taken off the calendar.
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Because no closing documents were filed, the court set a status conference for
February 27, 2020.
[¶5] On the day of the status conference, Nodak moved to intervene in the
action, seeking to preserve its right of reimbursement or subrogation.
Landsiedel filed a substitution of counsel, moved for an extension of time, and
subsequently opposed the motion to intervene. The court denied Nodak’s
motion to intervene, finding it was untimely.
[¶6] In June 2020, Landsiedel filed a motion to enforce a settlement
agreement. Ryberg opposed the motion and requested oral argument. The
district court granted Landsiedel’s motion. Judgment was entered dismissing
the case with prejudice.
II
[¶7] This case tangentially involves Ryberg’s settlement of his UIM claim
against Nodak. UIM insurance is a first-party coverage and governed by
statute in North Dakota. See Gillespie v. Nat’l Farmers Union Prop. & Cas.
Co., 2016 ND 193, ¶ 8, 885 N.W.2d 771; Hasper v. Ctr. Mut. Ins. Co., 2006 ND
220, ¶ 7, 723 N.W.2d 409.
[¶8] Under North Dakota law, UIM coverage must pay “compensatory
damages which an insured is legally entitled to collect for bodily injury,
sickness, disease, including death resulting therefrom, of such insured, from
the owner or operator of an underinsured motor vehicle arising out of the
ownership, maintenance, or use of such underinsured motor vehicle.” N.D.C.C.
§ 26.1-40-15.3(1) (emphasis added). The insured has the initial burden to
establish liability. See Gillespie, 2016 ND 193, ¶ 12. Under N.D.C.C. § 26.1-40-
15.1(2), an “[u]nderinsured motor vehicle” is defined as:
“a motor vehicle for which there is a bodily injury liability
insurance policy, or bond providing equivalent liability protection,
in effect at the time of the accident, but the applicable limit of
bodily injury liability of such policy or bond:
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a. Is less than the applicable limit for underinsured motorist
coverage under the insured’s policy; or
b. Has been reduced by payments to other persons injured in
the accident to an amount less than the limit for
underinsured motorist coverage under the insured’s policy.”
[¶9] In DeCoteau v. Nodak Mutual Insurance Company this Court discussed
when UIM coverage is triggered and a UIM insurer’s maximum liability:
“To trigger underinsured coverage under the current
statutory provisions for underinsured motorist coverage, a
tortfeasor’s motor vehicle must meet the statutory definition of
underinsured motor vehicle in N.D.C.C. § 26.1-40-15.1(2). If that
threshold definition is not satisfied, an insured is not entitled to
underinsured proceeds under our statutory scheme. If the
threshold definition of underinsured vehicle is satisfied, however,
the insurer’s maximum liability under N.D.C.C. § 26.1-40-15.3(2)
is the lowest of (1) the compensatory damages established but not
recovered [by any agreement, settlement, or judgment] from the
tortfeasor, or (2) the insured’s liability limits for underinsured
coverage. See Score[ v. Am. Fam. Mut. Ins. Co., 538 N.W.2d 206,
209 n.2 (N.D. 1995)] (stating current statutory provisions appear
to require excess coverage if the tortfeasor’s vehicle is
underinsured). The language of N.D.C.C. § 26.1-40-15.4(1) allows
insurers to reduce damages paid to the insured for underinsured
coverage only for amounts paid or payable under workers
compensation law and under the insured’s first-party motor
vehicle coverage.”
2001 ND 281, ¶ 16, 603 N.W.2d 906.
[¶10] A UIM insured who desires to settle with the underinsured tortfeasor is
required to give written notice of the proposed settlement to the UIM insurer;
coverage may be excluded if the insured fails to give notice. Hasper, 2006 ND
220, ¶ 7; see also N.D.C.C. § 26.1-40-15.6(7). “Upon receipt of notice of a
proposed settlement, the UIM insurer must substitute its own funds for the
proposed settlement to preserve its subrogation rights against the
underinsured tortfeasor.” Hasper, at ¶ 7. Regarding reimbursement and
subrogation, N.D.C.C. § 26.1-40-15.5 provides, in relevant part:
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“1. In the event of payment under uninsured or underinsured
motorist coverage, the insurer making payment to the extent of the
payment is entitled to the proceeds of any agreement, settlement, or
judgment resulting from the exercise of any rights of recovery of
such insured for compensatory damages or be entitled to exercise
a right of subrogation against any person or organization legally
responsible for the bodily injury, sickness, disease, or death for
which such payment is made.
2. No insurer providing underinsured motorist coverage has a
right of subrogation against an underinsured motorist if the
insurer has been provided with a written notice in advance of an
agreement, settlement, or judgment between its insured and the
underinsured motorist, and the insurer fails to advance a payment
to the insured in an amount equal to the tentative agreement or
settlement within thirty days following receipt of such notice. An
insurer advancing such payment has full rights of subrogation.”
(Emphasis added.) In Hasper, at ¶ 9, this Court further discussed this
procedure under the policy in that case and North Dakota law:
“[T]he insured should promptly notify the UIM carrier if a
tentative settlement has been reached with the tortfeasor and the
tortfeasor’s insurer. The UIM insurer then has thirty days to
investigate and determine whether there is a reasonable
possibility of collecting more than the policy limits from the
underinsured tortfeasor. The insurer then may decide whether to
substitute its check in an amount equal to the proposed settlement
to its insured and preserve its subrogation rights.”
[¶11] The issues in this case have arisen because Landsiedel’s ultimate
liability has not been finally determined but Ryberg’s action against
Landsiedel has been dismissed. Although the district court granted
Landsiedel’s motion to enforce a “settlement agreement,” the terms of the
parties’ agreement have not been established. The parties dispute on appeal
whether the case was settled.
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III
[¶12] Ryberg and Nodak argue the district court erred in granting Landsiedel’s
motion seeking to enforce an alleged settlement agreement.
[¶13] “A settlement agreement is a contract between parties, and thus contract
law applies.” Lund v. Swanson, 2021 ND 38, ¶ 9; see also Kuperus v. Willson,
2006 ND 12, ¶ 11, 709 N.W.2d 726. “In North Dakota, the law looks with favor
upon compromise and settlement of controversies between parties, and where
the settlement is fairly entered into, it should be considered as disposing of all
disputed matters which were contemplated by the parties at the time of the
settlement.” Kuperus, at ¶ 10 (quoting Vandal v. Peavey Co., 523 N.W.2d 266,
268 (N.D. 1994)); see also Thomas C. Roel Assoc., Inc. v. Henrikson, 295 N.W.2d
136, 137 (N.D. 1980). “When a settlement is fairly made before trial, it ‘takes
on the character of a contract between the parties and is final and conclusive,
and based on good consideration.’” Kuperus, at ¶ 10 (quoting Bohlman v. Big
River Oil Co., 124 N.W.2d 835, 837 (N.D. 1963)). “A settlement will not be set
aside absent a showing of fraud, duress, undue influence, or any other grounds
for rescinding a contract.” Id. (citing Bohlman, at 837-39).
[¶14] This Court has recognized that an attorney may not compromise a
client’s claims in the absence of express authority and that an attorney may
not waive a client’s substantial rights without the client’s consent. Midwest
Fed. Savings Bank v. Dickinson Econo-Storage, 450 N.W.2d 418, 421 (N.D.
1990). Whether an attorney has been given express authority to settle a claim
normally presents a question of fact. Id. at 420.
[¶15] In Tarver v. Tarver this Court explained that the existence of an oral
contract and the extent of its terms present questions of fact:
“Courts will not enforce a contract which is vague, indefinite, or
uncertain, nor will they make a new contract for the parties. An
oral contract can be enforced only when the parties have agreed on
its essential terms. An agreement which is so uncertain and
incomplete as to any of its essential terms that it cannot be carried
into effect without new and additional stipulations between the
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parties is not enforceable. Indefiniteness as to any essential
element of the agreement may prevent the creation of an
enforceable contract. An agreement to agree in the future which is
not sufficiently definite to enable a court to give it an exact
meaning is not an enforceable obligation.”
2019 ND 189, ¶ 9, 931 N.W.2d 187 (citations and quotations omitted).
[¶16] Ryberg and Nodak argue Ryberg has raised legitimate questions
regarding the “existence and legitimacy of the alleged settlement agreement.”
They assert Landsiedel has not provided the district court or this Court with a
copy of the settlement agreement and relies only on the assertions of
Landsiedel’s counsel. Ryberg maintains he did not sign or agree to settlement
and requests Landsiedel to produce the agreement as clear, convincing, and
satisfactory evidence of its existence. Moreover, they argue the court violated
N.D.R.Ct. 3.2(a)(3) when it decided Landsiedel’s motion to enforce without
giving them an opportunity for a hearing, despite their request.
[¶17] Landsiedel argues the district court correctly granted his motion to
enforce a settlement agreement. He rejects the appellants’ claim that only
Ryberg and Nodak entered into a settlement relating to Ryberg’s UIM claim
against Nodak, resulting in the January 2020 Notice of Settlement. Landsiedel
asserts there is no UIM claim in the underlying action and both Nodak’s
representative and Ryberg’s former counsel “confirmed a full settlement.” He
asserts none of Ryberg’s former attorneys objected to the notice of settlement
or offered some sort of clarification with the court. He also argues N.D.R.Ct.
3.2(a)(3) was not violated because Ryberg did not contact the calendar clerk to
schedule a hearing nor was a notice of hearing served on all parties.
[¶18] Here, the district court order granting Landsiedel’s motion to enforce a
settlement agreement is conclusory. In dismissing with prejudice, the order
merely states the “terms of the settlement agreement entered into by the
parties are to be enforced in their entirety.” While Landsiedel’s attorney filed
a notice of settlement indicating Ryberg’s action against Landsiedel had been
settled and the scheduled trial was canceled, no written settlement agreement
between the parties was filed with Landsiedel’s motion to enforce the
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agreement. Further, in granting the motion to enforce a settlement agreement,
the court did not hold a hearing, made no findings of fact as to the terms of the
settlement, and no evidence appears in the record as to the agreement’s terms.
[¶19] Because no evidence establishes the terms by which the parties intended
to settle Ryberg’s action, the district court erred in granting Landsiedel’s
motion seeking to enforce a settlement agreement. We reverse the judgment
dismissing the action.
IV
[¶20] Ryberg and Nodak argue the district court erred in denying Nodak’s
motion to intervene as plaintiff in this matter.
[¶21] Whether a party may intervene as a matter of right under N.D.R.Civ.P.
24(a) presents a question of law, fully reviewable on appeal. Pub. Serv. Comm’n
v. Grand Forks Bean Co., Inc., 2017 ND 201, ¶ 15, 900 N.W.2d 255; Fisher v.
Fisher, 546 N.W.2d 354, 355 (N.D. 1996). In considering a party’s motion to
intervene under N.D.R.Civ.P. 24(a), this Court reviews the district court’s
findings of fact under the clearly erroneous standard of review in N.D.R.Civ.P.
52(a). Grand Forks Bean, at ¶ 15. A court’s decision on permissive intervention
under N.D.R.Civ.P. 24(b) is reviewed for an abuse of discretion. Grand Forks
Bean, at ¶ 16. A court abuses its discretion if it acts in an arbitrary,
unreasonable, or unconscionable manner, its decision is not the product of a
rational mental process leading to a reasoned determination, or it
misinterprets or misapplies the law. Id.[¶22] Here, the district court denied Nodak’s motion to intervene, essentially
concluding that it was untimely. Nodak and Ryberg argue, however, that
Nodak had protected its rights under N.D.C.C. § 26.1-40-15.5 and the court’s
denial of its motion to intervene and dismissal with prejudice extinguished its
statutory right to subrogation. They argue the court’s order has placed Nodak
in an “impossible position” because the order suggests Nodak had an obligation
to intervene before the underlying case settled and before any UIM benefits
were paid. Nodak asserts this result would inject the insurer into the
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underlying litigation between its insured and the tortfeasor and inject the
existence of insurance into the underlying lawsuit.
[¶23] Nodak and Ryberg further argue the district court’s order denies Nodak’s
statutory right to recovery, the court ignored the “unique circumstances” of
this case, and the finding that Nodak should have intervened earlier in the
case was clearly erroneous. They contend Landsiedel was not prejudiced by
Nodak’s decision to wait to intervene until after settling the UIM claim. They
assert the district court failed to make findings of fact on the requirements of
N.D.R.Civ.P. 24(a)(1) and (2), Nodak is entitled to intervention of right under
N.D.R.Civ.P. 24, and, at the very least, the court abused its discretion in
denying permissive intervention under N.D.R.Civ.P. 24(b).
[¶24] Landsiedel responds that Nodak placed itself in an “impossible position”
because Nodak did not need to intervene in the tort action to protect its
interests. He asserts Nodak had two “theoretical alternatives”: (1) file a
separate lawsuit against Landsiedel; or (2) allow the case to proceed to trial,
pay any UIM judgment, and pursue its subrogation rights against Landsiedel.
He asserts the court’s order does not conflict with well-established public policy
and does not deny Nodak its statutory right to recovery. Landsiedel contends
he was prejudiced when the notice of settlement was filed a week before the
potential trial and it took over a month following the notice for Nodak to
intervene. He asserts that if Nodak was allowed to intervene, every party to
the action would be impacted and prejudiced by the additional time and
expense incurred.
[¶25] Because the district court erred in granting Landsiedel’s motion to
enforce a settlement agreement and we have reversed the judgment of
dismissal, we also vacate without prejudice the court’s related order denying
Nodak’s motion to intervene. Because of our disposition, the order is not
decisive of the question involved, nor does it prejudice Nodak’s right to raise
the question at a subsequent stage of proceedings, if necessary.
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V
[¶26] The remaining issues raised by the parties are unnecessary to resolve
the disposition of this case. We vacate the order denying intervention and
reverse the judgment of dismissal.
[¶27] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
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