Benson v. Family Tree Corporation, Inc.

Background

The court had previously granted the defendants’ motion to dismiss, dismissed the case with prejudice, and entered judgment. John Benson and Brian Benson, both representing themselves, filed a motion under Federal Rule of Civil Procedure 59(e) asking the court to alter or amend that order and judgment.

Rule 59(e) standard

The court explained that a Rule 59(e) motion has a limited purpose: correcting a clear error of law or fact or considering newly discovered evidence. It cannot be used to introduce new evidence, present new legal theories, or repeat arguments that could have been made before judgment.

Court’s analysis

The plaintiffs argued that the defendants’ motion to dismiss should not have been considered because it was filed before the defendants answered the amended complaint, before discovery ended, and without permission from the magistrate judge. They also argued that the defendants’ agreement to let them amend their complaint prevented the defendants from later seeking dismissal. The court rejected these arguments. It concluded that the arguments could have been raised earlier, that the motion was properly filed under Rules 12(b)(1), 12(b)(6), and 12(b)(7), and that neither the scheduling order nor the earlier agreement barred the motion.

The plaintiffs also argued that the defendants waived claim preclusion—also called res judicata—by failing to include that defense in their answer. The court rejected that argument because the defendants had properly raised claim preclusion in their motion to dismiss, filed before the answer.

The plaintiffs asserted that the court had improperly converted the dismissal motion into a summary-judgment motion by considering matters outside the pleadings and had made factual findings that should have been left to a jury. The court disagreed. It stated that, when deciding a dismissal motion, it could consider the complaint, public records, items in the case record, and materials necessarily embraced by the pleadings. The court said its conclusions about the plaintiffs’ prior North Dakota litigation were based on the pleadings and a transcript from that proceeding.

The plaintiffs argued that the court failed to recognize that they sought lost royalty payments rather than title to lost mineral rights. They relied on a later Eighth Circuit decision concerning claim preclusion and the relationship between an oil-and-gas lessee and lessor. The court found that decision inapplicable because all four parties in this case had been parties to the North Dakota action, so there was no issue about whether the required legal relationship existed.

The plaintiffs further argued that they could not have brought their claims until after judgment in the North Dakota action and that the court had misapplied North Dakota claim-preclusion law. The court found that these arguments had already been made and rejected, and that Rule 59(e) could not be used to repeat them.

Finally, the plaintiffs argued for the first time in their reply that their declaratory-judgment claim concerned 50,000 acres in 30 counties in North Dakota and Montana, rather than 160 acres in McKenzie County, North Dakota. The court held that the amended complaint’s plain language limited the claim to the 160 acres. It also concluded that the plaintiffs had waived the argument by not raising it earlier, including when responding to the report and recommendation.

Disposition

The court concluded that the plaintiffs had not shown a clear legal or factual error and had not presented newly discovered evidence. It therefore DENIED the plaintiffs’ Motion for Rule 59(e) to Alter or Amend Order and Judgment.