Nelson v. Pine View First Addition Association

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Justia Opinion Summary

Mark Nelson, operating North Country Weatherization Technologies, provided ice removal services to Pine View First Addition Association, a Minnesota non-profit homeowners' association, in spring 2023. Pine View's property manager, a North Dakota LLC, contacted Nelson for urgent ice removal due to water damage. Nelson completed the work and invoiced Pine View, but payment was delayed, allegedly due to Pine View's attempt to have insurance cover the costs. Nelson filed a lawsuit in North Dakota for breach of contract and unjust enrichment, seeking $79,695 plus interest and attorney’s fees.

The District Court of Cass County, East Central Judicial District, granted Pine View's motion to dismiss for lack of personal jurisdiction, concluding that North Dakota did not have jurisdiction over Pine View, as it is a Minnesota entity and the services were performed in Minnesota. The court also denied Pine View's motion for Rule 11 sanctions against Nelson and his attorney, as well as Nelson's request for prevailing party attorney’s fees.

The Supreme Court of North Dakota reviewed the case and reversed the district court's decision. The Supreme Court held that North Dakota has specific personal jurisdiction over Pine View because Pine View, through its North Dakota-based property manager, initiated contact with Nelson for the ice removal services. The court found that Pine View's contacts with North Dakota were sufficient to satisfy the state's long-arm provision and due process requirements. The Supreme Court also determined that the district court abused its discretion in denying Nelson's request for prevailing party attorney’s fees under Rule 11(c)(2), as Pine View's motion for sanctions against Nelson violated Rule 11(c)(5)(A). The case was remanded for further proceedings and to determine the amount of attorney’s fees Nelson is owed.

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IN THE SUPREME COURT STATE OF NORTH DAKOTA 2025 ND 9 Mark Nelson d/b/a North Country Weatherization Technologies, Plaintiff and Appellant v. Pine View First Addition Association, Defendant and Appellee No. 20240160 Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Wade L. Webb, Judge. REVERSED. Opinion of the Court by Tufte, Justice. Joel M. Fremstad, Fargo, North Dakota, for plaintiff and appellant. Steven K. J. McCarney (argued) and Finn S. Jacobsen (on brief), Bloomington, Minnesota, for defendant and appellee. Nelson v. Pine View First Addition Association No. 20240160 Tufte, Justice. [¶1] Mark Nelson appeals from a district court order granting Pine View First Addition Association’s (“Pine View”) motion to dismiss for lack of personal jurisdiction and denying Nelson’s request for prevailing party attorney’s fees under N.D.R.Civ.P. 11(c)(2). We reverse the order and remand for further proceedings. I [¶2] This case involves payment for ice removal services that Nelson provided Pine View in spring 2023. Nelson is a North Dakota resident and operates North Country Weatherization Technologies, an ice and snow removal business. Pine View is a Minnesota non-profit corporation and homeowners’ association that oversees fifty-two residential properties in Moorhead, Minnesota. Pine View’s property manager is 360 Properties LLC (“property manager”), a North Dakota limited liability company located in Fargo. [¶3] The management agreement between Pine View and its property manager provides that the property manager, as “Agent” of Pine View, “may make expenditures necessary to preserve and protect [Pine View’s] Property physically or from liability.” Regarding emergencies, the agreement provides that the property manager may “without prior written consent, expend any amount, or incur a contractual amount in any amount required to deal with emergency conditions which [may] involve a danger . . . to property . . . .” [¶4] Unusual snowfall during the winter of 2022-2023 resulted in thick layers of ice building up on the roofs of Pine View’s properties. Pine View’s property manager called Nelson in spring 2023, requesting urgent help in removing the ice buildup, which was causing water damage. Nelson advised the property manager of his rates but explained that the final price could not be determined until the work was complete. Although not required by the management agreement to do so, the property manager obtained Pine View’s prior approval 1 for Nelson to proceed with the work. Over the course of a week, Nelson and his crews removed ice and snow from fifty of Pine View’s fifty-two homes. [¶5] In April 2023, the property manager called Nelson and requested an estimate of what Pine View owed Nelson; Nelson emailed the property manager an invoice later that day. This initial invoice indicated a final balance due of $79,695, but Nelson discounted that amount to $57,756. Neither the property manager nor Pine View disputed the invoice, but they failed to pay Nelson over the following months, and Nelson ultimately withdrew the discount. Nelson alleges the delay in payment is due to Pine View’s fraudulent attempt to have insurance pay for his services. Nelson did not agree to wait for payment until Pine View received insurance reimbursement and alleges he would never agree to do so because ice removal services are generally not covered by insurance. Nelson filed suit against Pine View in February 2024, alleging breach of contract and unjust enrichment. Nelson seeks $79,695 plus interest as well as attorney’s fees and costs. [¶6] Pine View responded by moving to dismiss for lack of personal jurisdiction, arguing that North Dakota does not have personal jurisdiction over Pine View because Pine View is organized under Minnesota law, its properties are located in Minnesota, and the services at issue were performed in Minnesota. Pine View also moved the district court, under N.D.R.Civ.P. 11, to impose sanctions against Nelson and his attorney, because jurisdiction and venue were so obviously improper in North Dakota as to render the complaint frivolous. [¶7] The district court granted Pine View’s motion to dismiss and denied its motion for Rule 11 sanctions, concluding that Nelson’s complaint was not frivolous. The district court denied Nelson’s request for prevailing party attorney’s fees under N.D.R.Civ.P. 11(c)(2). II [¶8] Nelson argues the district court erred in concluding it lacked general and specific jurisdiction over Pine View. 2 [¶9] A district court’s order ruling on personal jurisdiction is fully reviewable on appeal. Wilkens v. Westby, 2019 ND 186, ¶ 4, 931 N.W.2d 229. “Analysis of a district court’s ruling regarding personal jurisdiction is a question of law, and we use the de novo standard of review for legal conclusions and a clearly erroneous standard for factual findings. A finding of fact is clearly erroneous if it is not supported by any evidence, if, although some evidence supports the finding, a reviewing court is left with a definite and firm conviction a mistake has been made, or if the finding is induced by an erroneous conception of the law.” Id. (cleaned up). [¶10] When a defendant challenges a court’s jurisdiction, the plaintiff has the burden to prove that personal jurisdiction exists. Bolinske v. Herd, 2004 ND 217, ¶ 7, 689 N.W.2d 397. “The plaintiff must make a prima facie showing of jurisdiction to defeat a motion to dismiss for lack of personal jurisdiction, and if the court relies only on pleadings and affidavits, the court must look at the facts in the light most favorable to the plaintiff. Questions of personal jurisdiction must be decided on a case-by-case basis, depending on the particular facts and circumstances.” Ensign v. Bank of Baker, 2004 ND 56, ¶ 11, 676 N.W.2d 786. [¶11] Nelson argues that Pine View is subject to specific personal jurisdiction in North Dakota under N.D.R.Civ.P. 4(b)(2)(A), because Pine View initiated contact with Nelson when it contacted him through its property manager regarding his ice removal services. A [¶12] A district court applies a two-part test to determine whether it may properly exercise specific personal jurisdiction over a nonresident defendant. Solid Comfort, Inc. v. Hatchett Hosp. Inc., 2013 ND 152, ¶ 10, 836 N.W.2d 415. The district court first determines whether the requirements of North Dakota’s longarm provision, N.D.R.Civ.P. 4(b)(2), are satisfied. Id. If so, the district court then must determine “whether the exercise of personal jurisdiction comports with due process. To satisfy due process concerns, the nonresident defendant must have sufficient minimum contacts with North Dakota so the exercise of personal 3 jurisdiction does not offend traditional notions of fair play and substantial justice.” Id. (quoting Ensign, 2004 ND 56, ¶ 9). [¶13] North Dakota’s long-arm provision, N.D.R.Civ.P. 4(b)(2), is “designed to permit the state courts to exercise personal jurisdiction to the fullest extent permitted by due process.” Hebron Brick Co. v. Robinson Brick & Tile Co., 234 N.W.2d 250, 255 (N.D. 1975). Rule 4(b)(2), N.D.R.Civ.P., provides: (2) Personal jurisdiction based on contacts. A court of this state may exercise personal jurisdiction over a person who acts directly or by an agent as to any claim for relief arising from the person’s having such contact with this state that the exercise of personal jurisdiction over the person does not offend against traditional notions of justice or fair play or the due process of law, under one or more of the following circumstances: (A) transacting any business in this state[.] N.D.R.Civ.P. 4(b). “The phrase ‘transacting any business in this state’ should be given an expansive interpretation. Transacting business is used in a broader sense than merely doing business. We recognize that operative facts vary in each case, but when a nonresident initiates contact, by telephone or other electronic medium, with a resident seeking a product or service, that action is generally sufficient to show the nonresident transacted business for purposes of establishing personal jurisdiction.” Bolinske, 2004 ND 217, ¶ 10. [¶14] Whether a nonresident defendant initiated contact with the plaintiff is dispositive when determining whether Rule 4(b)(2)(A) is satisfied. Bolinske, 2004 ND 217, ¶ 11 (the requirements of Rule 4(b)(2)(A) were not satisfied when plaintiff initiated contact with nonresident defendant); Auction Effertz, Ltd. v. Schecher, 2000 ND 109, ¶¶ 7–8, 611 N.W.2d 173 (North Dakota has specific personal jurisdiction over “a nonresident who initiated contact, by telephone or other electronic medium, seeking to have a resident of [North Dakota] provide a product to or service on behalf of the nonresident caller”). [¶15] Here, the district court concluded that the property manager’s initiation of contact with Nelson was insufficient to satisfy Rule 4(b)(2)(A). Conceding “it’s kind of a close call,” the district court determined, viewing the pleadings in the 4 light most favorable to Nelson, that Rule 4(b)(2)(A) was not met, “even with a broad definition—an expansive definition of what is transacting business in this state.” The district court “adopt[ed] the reason and rationale of the defense in regards to the first prong of the test not being met.” Pine View’s “reason and rationale” for its contention that its contacts with North Dakota are insufficient to satisfy Rule 4(b)(2)(A) was that the facts at issue here are distinct from the cases cited by Nelson: United Accounts, Inc. v. Quackenbush, 434 N.W.2d 567 (N.D. 1989) (personal jurisdiction existed over nonresident defendant who had been North Dakota resident when he obtained credit cards and made purchases at issue); Lund v. Lund, 2012 ND 255, 825 N.W.2d 852 (personal jurisdiction existed over nonresident defendant who had entered into implied contract at issue when she was a North Dakota resident); Auction Effertz, 2000 ND 109 (personal jurisdiction existed over nonresident defendant who initiated contact with resident, visited North Dakota over course of transaction at issue, and received a payment in state). B [¶16] We conclude that Pine View’s contacts with North Dakota satisfy the requirements of Rule 4(b)(2)(A). This Court has been clear that “‘transacting any business in this state’ should be given an expansive interpretation,” and “when a nonresident initiates contact, by telephone or other electronic medium, with a resident seeking a product or service, that action is generally sufficient to show the nonresident transacted business for purposes of establishing personal jurisdiction.” Bolinske, 2004 ND 217, ¶ 10 (quoting N.D.R.Civ.P. 4(b)(2)(A)). The Bolinske holding considered the singular action of a nonresident initiating contact with a resident plaintiff regarding the underlying cause of action; it did not posit that other actions in addition to the initiation of contact are required to satisfy Rule 4(b)(2)(A). Because Pine View, through its agent, initiated contact with Nelson regarding the underlying cause of action—his ice removal services—Rule 4(b)(2)(A) is satisfied. [¶17] To satisfy the second prong of the two-part specific personal jurisdiction test, “the nonresident defendant must have sufficient minimum contacts with North Dakota so the exercise of personal jurisdiction does not offend traditional 5 notions of fair play and substantial justice.” Solid Comfort, 2013 ND 152, ¶ 10. “We have identified five factors for assessing personal jurisdiction over a nonresident defendant: (1) the nature and quality of a nonresident defendant’s contacts with the forum state; (2) the quantity of the nonresident defendant’s contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the forum state’s interest in providing a forum for its residents; and (5) the convenience of the parties. While the first three factors are of primary concern, the fourth and fifth factors are of only secondary importance and are not determinative.” Beaudoin v. S. Texas Blood & Tissue Ctr., 2005 ND 120, ¶ 11, 699 N.W.2d 421. 1. The nature and quality of Pine View’s contacts with North Dakota. [¶18] Pine View’s contacts with North Dakota, as described in the pleadings, are through its property manager. There are two contacts with North Dakota discernible from the pleadings: (1) the management agreement between Pine View and its property manager, which is located in, and organized under the laws of, North Dakota; and (2) the property manager’s initiation of contact with Nelson, a North Dakota resident, regarding his ice removal services. [¶19] Pine View’s property manager is organized under North Dakota law and has its principal place of business in North Dakota. The agreement between Pine View and its property manager provides that the property manager is to serve as Pine View’s agent in management of Pine View’s properties. In creating a principal-agent relationship between Pine View and the property manager, the management agreement represents an ongoing contact between Pine View and North Dakota. [¶20] Pine View’s other contact with North Dakota is its property manager’s initiation of contact with Nelson regarding his ice removal services. The property manager called Nelson in spring 2023, requesting urgent help with removing the ice buildup, which was causing water damage to the properties. [¶21] We have held that “when a nonresident initiates contact, by telephone or other electronic medium, with a resident seeking a product or service, that action is generally sufficient to show the nonresident transacted business for purposes 6 of establishing personal jurisdiction.” Bolinske, 2004 ND 217, ¶ 10. Pine View acknowledges this holding but refers us to our earlier statement in Lumber Mart, Inc. v. Haas Int’l Sales & Serv.: “Contacts consisting merely of long distance telephone calls have been held as not satisfying the minimal constitutional contacts requirements for due process.” 269 N.W.2d 83, 90 (N.D. 1978). [¶22] Pine View’s reliance on Lumber Mart is misplaced for several reasons. First, the nonresident defendant in Lumber Mart did not initiate contact with the plaintiff; the plaintiff sought out the nonresident’s services. Second, the telephone calls at issue in Lumber Mart occurred after the plaintiff had contacted the nonresident and were made between the parties in an attempt to negotiate a resolution to the nonresident’s alleged negligent workmanship. Finally, the cases cited by the Court in support of its statement in Lumber Mart are factually distinct from this case. In only one of the cases, Am. Steel, Inc. v. Cascade Steel Rolling Mills, Inc., did the court find personal jurisdiction over the nonresident defendant improper when the nonresident defendant initiated contact with the plaintiff. 425 F. Supp. 301, 303 (S.D. Tex. 1975) (“The mere consummation of a contract by telephone, telecommunications or mail with a Texas resident as principal without more does not indicate to this Court adequate minimum contact with this state so as to maintain jurisdiction here.”). In American Steel, however, this initiation of contact by telephone was the only contact the nonresident had with the forum state. In the other cases cited by the Court, personal jurisdiction over the nonresident defendant was determined improper when the plaintiff had initiated contact with the nonresident defendant. McBreen v. Beech Aircraft Corp., 543 F.2d 26 (7th Cir. 1976) (nonresident defendant received unsolicited phone call from plaintiff); Friberg v. Schlenske, 396 F. Supp. 124, 124 (D. Mont. 1975) (nonresident defendants “did not seek to do business in Montana. They were sought out.”). [¶23] Here, Pine View, through its North Dakota agent, reached out to Nelson, a North Dakota resident. If Pine View had no other contact with North Dakota beyond this initial telephone call, North Dakota’s exercise of personal jurisdiction over Pine View may offend due process, as the court concluded in American Steel. But Pine View also has an additional and ongoing contact with 7 North Dakota: its agent, the property manager, is organized under North Dakota law and maintains its principal place of business in North Dakota. 2. The quantity of Pine View’s contacts with North Dakota. [¶24] This factor generally weighs against North Dakota exerting jurisdiction over Pine View. As discussed, Pine View has two contacts with North Dakota discernible from the pleadings: (1) its agent, the property manager, is organized under North Dakota law and maintains its principal place of business in North Dakota; and (2) the property manager’s initiation of contact with Nelson. In contrast, Pine View has more contacts with Minnesota: it is organized under Minnesota law, its properties are located in Minnesota, and the services at issue here were performed in Minnesota. 3. The relation of the cause of action to Pine View’s contacts with North Dakota. [¶25] Both of Pine View’s contacts with North Dakota relate to the cause of action. The cause of action centers on the ice removal services Nelson provided to Pine View. Pine View’s property manager, which is organized under North Dakota law and maintains its principal place of business in North Dakota, contacted Nelson. Pine View’s contact with North Dakota through its principalagent relationship with the property manager thus relates, albeit indirectly, to the cause of action. Pine View’s other contact with North Dakota—that it contacted Nelson, a North Dakota resident, through its agent—is directly related to the cause of action. 4. North Dakota’s interest in providing a forum for its residents. [¶26] North Dakota has an obvious interest in providing a forum to its residents. Hebron Brick, 234 N.W.2d at 258 (“long-arm provisions are designed to offer protections for residents of the forum state”). Even if Minnesota law applies to resolution of the claims, that fact is not controlling for determination of whether personal jurisdiction over Pine View comports with due process. [¶27] We have distinguished between personal jurisdiction and choice of law determinations. In Lumber Mart, the Court discussed United States Supreme 8 Court decisions holding that a State does not acquire personal jurisdiction because it is the “center of gravity” for the action: In Hanson v. Denckla, 357 U.S. 235, 254 (1958), the United States Supreme Court said: “It [the State] does not acquire that [personal] jurisdiction by being the ‘center of gravity’ of the controversy, or the most convenient location for litigation. The issue is personal jurisdiction, not choice of law.” In Shaffer v. Heitner, 433 U.S. 186, 204 (1977), after reviewing some of the discussions and holdings in International Shoe [Co. v. Washington, 326 U.S. 310 (1945),] the Court said: “Thus, the relationship among the defendant, the forum, and the litigation, rather than the mutually exclusive sovereignty of the States on which the rules of Pennoyer [v. Neff, 95 U.S. 714 (1878),] rest became the central concern of the inquiry into personal jurisdiction.” Shaffer also reaffirmed the proposition that the State does not acquire jurisdiction by being the center of gravity of the controversy or the most convenient location for litigation. Lumber Mart, 269 N.W.2d at 87 (internal citations cleaned up). [¶28] Nelson provided ice removal services in Minnesota for Pine View, a Minnesota resident. Even if Minnesota law were to govern resolution of this action, our determination of whether North Dakota has personal jurisdiction over Pine View does not depend on the choice of law determination. 5. The convenience of the parties. [¶29] Pine View argues it would “greatly inconvenience” Pine View to have to defend itself in North Dakota, “a state and legal system which Pine View is unfamiliar with, especially for a dispute over work that was performed in Minnesota subject to its rules and regulations.” This argument is not persuasive. As Nelson points out, if the case were to proceed in Minnesota, that courthouse is only 2.5 miles away from the Cass County, North Dakota, courthouse where he filed the action. Further, Pine View’s property manager is located in Fargo, North Dakota, right across the state border from its Moorhead, Minnesota, properties. The fact that Pine View’s agent is organized under North Dakota law 9 and maintains its principal place of business in North Dakota significantly undercuts Pine View’s argument that the idea of defending itself in a North Dakota court is inconceivable. [¶30] Although perhaps a close call, these factors weigh in favor of determining that North Dakota’s exercise of personal jurisdiction over Pine View comports with due process. Pine View contacted Nelson, a North Dakota resident, through its agent, which is organized under North Dakota law and maintains its principal place of business in North Dakota; the cause of action relates directly to this contact. Nelson provided his services to properties in Minnesota, which is the “center of gravity” for the case, but that fact is not controlling for determination of whether personal jurisdiction over Pine View is proper. [¶31] The Due Process Clause “gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). “Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this ‘fair warning’ requirement is satisfied if the defendant has ‘purposefully directed’ his activities at residents of the forum, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984), and the litigation results from alleged injuries that ‘arise out of or relate to’ those activities, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984).” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 (1985). [¶32] Pine View purposely directed its inquiry for services at North Dakota, and the alleged injury—Pine View’s failure to pay—relates to this contact. North Dakota’s exercise of personal jurisdiction over Pine View therefore comports with due process. We reverse the district court’s order granting Pine View’s motion to dismiss for lack of personal jurisdiction and remand for further proceedings. Because we hold that North Dakota has specific jurisdiction over Pine View in this case, we need not address the district court’s ruling regarding general jurisdiction. Olander Contracting Co. v. Gail Wachter Invs., 2002 ND 65, ¶ 48, 643 N.W.2d 29 (“We need not address questions, the answers to which are unnecessary to the determination of an appeal.”). 10 III [¶33] Nelson argues the district court abused its discretion in denying his request for prevailing party attorney’s fees under N.D.R.Civ.P. 11(c)(2). He argues that the district court was required, under Rule 11(c)(2), to determine whether attorney’s fees were warranted and that it erred in failing to do so. Nelson further argues that the district court’s failure to award him prevailing party attorney’s fees was an abuse of discretion, because Pine View’s motion for sanctions against Nelson was contrary to the plain language of Rule 11(c)(5)(A) and constituted a “weaponization of Rule 11.” [¶34] Under Rule 11(c)(2), the district court has discretion to award attorney’s fees to the party who prevails on a Rule 11 motion: “If warranted, the court may award to the prevailing party the reasonable expenses, including attorney’s fees, incurred for the motion.” N.D.R.Civ.P. 11(c)(2). “A court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, it misinterprets or misapplies the law, or when its decision is not the product of a rational mental process leading to a reasoned determination.” Puklich v. Puklich, 2022 ND 158, ¶ 16, 978 N.W.2d 668. [¶35] Pine View’s attorney, Steven McCarney, filed a Rule 11 motion against both Nelson and his attorney, Joel Fremstad, arguing that jurisdiction and venue were so obviously improper in North Dakota as to render the complaint frivolous. McCarney sought monetary sanctions against Nelson and Fremstad as well as an award of costs and attorney’s fees for Pine View. In his brief in opposition, Fremstad pointed out that McCarney’s motion for Rule 11 sanctions against Nelson was directly contrary to Rule 11(c)(5)(A), which provides that “[t]he court must not impose a monetary sanction . . . against a represented party for violating Rule 11(b)(2)[.]” N.D.R.Civ.P. 11(c)(5)(A). In his reply brief, McCarney ignored Fremstad’s warning, arguing that “Defendant’s Motion for Rule 11 Sanctions should be granted in its entirety.” [¶36] In the hearing on the motions to dismiss and for Rule 11 sanctions, Fremstad explained that Pine View’s Rule 11 motion for sanctions against Nelson violated the plain language of Rule 11(c)(5)(a): 11 [L]et’s look at [Pine View]’s reply brief and [Pine View]’s argument today because it illustrates why their motion for sanctions must be denied and why Nelson is entitled to attorney’s fees, not as a sanction—and this is my client, Mr. Nelson—entitled attorney’s fees—but as a prevailing party. First, as I noted in my brief in opposition, [Pine View] is impermissibly seeking attorney fees as a sanction against Nelson personally. And they’re still doing it today, despite my briefs outlining that this is inappropriate. But they still haven’t explained how it is appropriate, even though they had the opportunity to do so in their brief. Specifically, [Pine View] was and still is claiming a violation of Rule 11(b)(2). It’s clear at page 2 of the [reply] brief that they filed last night—at paragraph 2. But if you look at Rule 11(c)(5), it provides limitations on monetary sanctions. The Court must not impose a monetary sanction, A, against a represented party for violating Rule 11(b)(2). They’ve had multiple chances to back up the train, but they haven’t. Instead, they’ve doubled down. Fremstad also argued that Pine View’s Rule 11 motion was “an improper attempt to weaponize Rule 11 and try to force settlement.” [¶37] The district court denied Pine View’s motion for Rule 11 sanctions and both parties’ requests for attorney’s fees without directly addressing the fact that Pine View’s Rule 11 motion for sanctions against Nelson violated the plain language of N.D.R.Civ.P. 11(c)(5)(A). In denying both parties’ requests for attorney’s fees, the district court explained: “I don’t find that either attorney or claim for relief or defense was frivolous in regards to this matter, so no attorney’s fees.” Fremstad then clarified with the court that Nelson was the prevailing party on Pine View’s Rule 11 motion, which exposed the district court’s erroneous belief that Nelson had also filed a motion for Rule 11 sanctions: Fremstad: I would just ask the Court to clarify for the record that being the Rule 11 motion was denied that Mr. Nelson is the prevailing party on that motion. 12 District Court: Since Mr. Nelson—well, I think there were Rule 11 sanctions that were requested by both parties in regards to this matter. Fremstad: No, Your Honor. Court: Okay. Tell me how. [ . . . ] I’ve got Defendant’s Motion for Rule 11 Sanctions. [ . . . ] I have your request for attorney’s fees under a separate section of Rule 11 where you’re asking for attorney’s fees as well. [ . . . ] I could just as easily grant him attorney’s fees on his prevailing motion to dismiss if you want me to. Fremstad: No, because on a motion to dismiss under Rule 12, there’s not language that provides for prevailing party attorney’s fees. But under Rule 11(c)(2), there is language that says the Court may award, to the prevailing party, the reasonable expenses, including attorney fees incurred for the motion. So I have never once asked for sanctions—attorney fees as sanctions, but here, Mr. McCarney made a motion under Rule 11 that we had to put in a vigorous response to, and without proving up Rule 11—and I cited multiple cases to this—then the Court can award attorney fees to the prevailing party. So I’m simply asking—I understand you are denying attorney’s fees— Court: Yep. Fremstad: —but I would like you to clarify because I think it’s important for the record that Mr. Nelson prevailed by the Court denying the Rule 11 sanctions motion. Court: I denied their Rule 11 sanction motion. That is correct. So Mr. Nelson prevailed, but yeah, by definition [ . . . ] if you prefer, I choose—and I think it is discretionary with the Court not to order any Rule 11 sanctions nor attorney’s fees in regards to this matter. [¶38] Here, the district court’s conclusion that prevailing party attorney’s fees are not warranted constitutes an abuse of discretion because it relies on a misinterpretation of the law. Rule 11(c)(2) provides that, “[i]f warranted, the court may award to the prevailing party the reasonable expenses, including attorney’s fees, incurred for the motion.” N.D.R.Civ.P. 11(c)(2). Pine View’s 13 motion for Rule 11 sanctions against Nelson violated the plain language of Rule 11(c)(5)(A) and was thus improper. Nelson’s responsive brief quoted Rule 11(c)(5)(A), but at the motion hearing Pine View persisted with this claim against Nelson. Where a Rule 11 motion is contrary to the plain language of the rule, the district court must explain why an award of prevailing party attorney’s fees is not warranted. See Gratech Co. v. Wold Eng'g, P.C., 2007 ND 46, ¶¶ 19-20, 729 N.W.2d 326. We reverse and remand with instructions to reconsider whether prevailing party attorney’s fees are warranted under a correct application of the rule, and if so, determine the amount of fees. IV [¶39] We reverse the order granting Pine View’s motion to dismiss for lack of personal jurisdiction and denying Nelson’s motion for prevailing party attorney’s fees under N.D.R.Civ.P. 11(c)(2). We remand for further proceedings and with instructions to determine the amount of prevailing party attorney’s fees Nelson is owed for having to respond to Pine View’s motion for Rule 11 sanctions against him. [¶40] Jon J. Jensen, C.J. Daniel J. Crothers Lisa Fair McEvers Jerod E. Tufte Douglas A. Bahr 14

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