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Sandvick v. LaCrosse

Supreme Court of North Dakota
747 N.W.2d 519 (N.D. 2008)


Facts

In May 1996, Sandvick (plaintiff), Bragg (plaintiff), LaCrosse (defendant), and Haughton (defendant) jointly purchased three oil and gas leases (the Horn leases) for the purpose of selling them for profit during their five-year terms. Empire Oil Company (Empire Oil), which was owned by LaCrosse, held title to the Horn leases. The purchase was made using credits that each of the parties had in Empire Oil’s checking account. The Horn leases had no provisions for extensions or renewals. In November 2000, six months before the expiration of the Horn leases, Haughton and LaCrosse purchased three five-year oil and gas leases (the Horn top leases) that were, in effect, extensions of the Horn leases. The terms of the Horn leases and the Horn top leases were identical, except that Sandvick and Bragg were not parties to the Horn top leases. Sandvick and Bragg were not informed of Haughton and LaCrosse’s acquisition. Sandvick and Bragg brought suit against LaCrosse and Haughton, alleging that they breached their fiduciary duties by failing to offer Sandvick and Bragg the chance to participate in the purchase of the Horn top leases. The district court ruled that neither a partnership nor a joint venture existed with respect to the Horn leases and that, therefore, no fiduciary duty was owed.

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