Benson v. Family Tree Corporation, Inc.
U.S. District Court, District of Minnesota
Benson v. Family Tree Corporation, Inc.
Trial Court Opinion
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
JOHN BENSON,
Plaintiff,
v. MEMORANDUM OF LAW & ORDER
Civil File No. 17-3839 (MJD/FLN)
FAMILY TREE CORP., INC., et al.
Defendants.
John Benson, pro se.
John A. Markert, Larson King, LLP, and Nicholas C. Grant, Ebeltoft. Sickler.
Lawyers PLLC, Counsel for Defendants Family Tree Corporation, Inc. and Desert
Partners IV, L.P.
I. INTRODUCTION
This matter is before the Court on Defendants Family Tree Corporation
and Desert Partners IV, L.P.’s Motion to Dismiss [Docket No. 15] and Plaintiff
John Benson’s Motion for a Judgment on the Pleadings [Docket Nos. 64-65]. The
Court heard oral argument on February 22, 2018. Because the Court lacks
personal jurisdiction over Defendants Family Tree Corporation and Desert
Partners IV, L.P., they are dismissed as defendants in the action. The Court does
not reach Defendants’ multiple alternative arguments for dismissal.
II. BACKGROUND
A. Factual Background
The Complaint and relevant public documents describe a detailed and
extensive history regarding the parties, property title at issue, and the years of
previous litigation. For the purpose of analyzing the motion to dismiss for lack
of personal jurisdiction, the Court provides only an abbreviated description of
the facts.
1. The Relevant Parties
Plaintiff John Benson is a Minnesota resident. (Compl. ¶ 1.) Elmer and
Frances Benson were his grandparents. (Id.)
Defendant Family Tree Corporation (“Family Tree”) is a Wyoming
corporation with its principal place of business in Lakewood, Colorado. (Dykes
Aff. ¶¶ 3, 4.) It buys and sells real property mineral interests and participates in
oil and gas wells. (Id. ¶ 7.) It has never had an office in Minnesota; has never
employed persons in Minnesota; has never owned any property in Minnesota;
and has never advertised in Minnesota. (Id. ¶¶ 5-6.)
When Family Tree identifies owners of real property mineral interests, it
sends them a letter expressing Family Tree’s interest. (Dykes Aff. ¶ 8.) The
mineral rights owner then decides whether or not to respond to Family Tree and
enter into negotiations. (Id. ¶ 9.) Family Tree has never bought or sold mineral
interests in Minnesota. (Id. ¶10.)
Defendant Desert Partners IV, L.P. (“Desert”) is a limited partnership
organized under the laws of the state of Texas. (Gieb Aff. ¶ 3.) None of the
partners of Desert are Minnesota residents. (Id. ¶ 4.) Desert is in the business of
buying and selling real property mineral interests. (Id. ¶ 7.) Desert has never
had an office in Minnesota, employed persons in Minnesota, owned property in
Minnesota, or advertised in Minnesota. (Id. ¶¶ 5-6.) It has never had any contact
with Defendant Ann Kemske or Geri Benson because it acquired its portion of
the mineral interests at issue from Family Tree. (Id. ¶ 8.)
2. Mineral Rights History
This lawsuit relates to certain mineral interests in, on, under, or relating to
real property located in McKenzie County, North Dakota, described as Township
152 North, Range 100 West, Section 33: E1/2SE1/4, Section 34: W1/2SW1/4
(“Property”). (Markert Aff., Ex. 1, N.D. Compl. ¶ 1.) The mineral interest at
issue is an undivided one-fifth mineral interest in the Property or 32 net mineral
acres (“Subject Mineral Interest”).
The Subject Mineral Interest was conveyed by Elmer and Frances Benson
to their granddaughter, Defendant Ann Kemske, by two quit claim deeds
executed in 1984 and 1985 (“1984 and 1985 Quitclaim Deeds”). (Markert Aff.,
Exs. 3-4.) Each of the 1984 and 1985 Quitclaim Deeds conveyed an undivided
one-tenth mineral interest to each of the 5 grantees: Ann Kemske, Plaintiff John
T. Benson, Edward A. Benson, Louise F. Benson, and Geri K. Benson Weidt
(“Benson grandchildren”), for a total transfer to Kemske of an undivided one-
fifth mineral interest.
Kemske conveyed the Subject Mineral Interest to Family Tree by a Mineral
Deed dated April 15, 2010, which was recorded on May 12, 2010, in the
McKenzie County Recorder’s Office as Document No. 401900 (“Kemske-FT
Deed”). (Markert Aff., Ex. 6.) Under the Kemske-FT Deed, Kemske conveyed to
Family Tree all of her “right, title and interest in and to all of the oil, gas, and
other minerals in and under” the Property. (Id.)
On May 12, 2010, Family Tree conveyed 24 net mineral acres in the Subject
Mineral Interest to Desert, and the deed was recorded on June 14, 2010, in the
McKenzie County Recorder’s Office as Document No. 403773 (“FT-Desert
Deed”). (Markert Aff., Ex. 7.)
On June 10, 2010, Geri Benson, one of the Benson grandchildren, conveyed
by mineral deed all of her right, title, and interest in and to the minerals
underlying the Property to Family Tree (“Benson-FT Deed”), and the deed was
recorded in McKenzie County on July 9, 2010, as Document No. 404541.
(Markert Aff., Ex. 8.)
On April 9, 2012, a quitclaim deed signed December 13, 1990, was
recorded in the McKenzie County Recorder’s Office as Document No. 431969
(“1990 Quitclaim Deed”). (Markert Aff., Ex. 9.) The 1990 Quitclaim Deed
conveys to Thomas Benson, Plaintiff’s father, all of Ann Kemske and Defendant
Jon Kemske’s “right, title, and interest in and to” the Property. (Id.)
On June 3, 2010, a quitclaim deed dated May 7, 2010 was recorded in
McKenzie County as Document No. 403001 (“John Benson Quitclaim Deed”).
(Compl. ¶ 27; Compl., Ex. H.) The John Benson Quitclaim Deed purports to
convey Thomas Benson and Leatrice Benson’s right, title, and interest in and to
the Subject Mineral Interest to John Benson and his son, Brian Benson; however
the legal description was incorrect. (Id.) The John Benson Quitclaim Deed was
re-recorded as McKenzie County Document No. 434658 with a handwritten
revised legal description. (Id.)
3. North Dakota Action
In January 2013, Family Tree and Desert initiated a quiet title action in
North Dakota state court against Thomas Benson, Leatrice Benson, Plaintiff,
Brian Benson, Ann Kemske, and Jon Kemske. North Dakota Case No. 27-2013-
CV-30 (“North Dakota Action”). (Markert Aff., Ex. 1, N.D. Compl.; Markert Aff.,
Ex. 2, N.D. Answer and Counterclaim.) Family Tree and Desert sought to quiet
title to the Subject Mineral Interest. (N.D. Compl. ¶ 1, p.3.) They claimed that
they acquired the Subject Mineral Interest as good faith purchasers under the
Kemske-FT Deed without notice of the 1990 Quitclaim Deed, which was
unrecorded at the time that the Kemske-FT Deed was executed and recorded.
Plaintiff John Benson is a defendant and counterclaim plaintiff in the
North Dakota Action and claimed that he has a superior right and title to the
Subject Mineral Interest based on the 1990 Quitclaim Deed and on the John
Benson Quitclaim Deed. (See N.D. Compl.; Markert Aff., Ex. 2, N.D. Answer and
Counterclaim.)
On October 3, 2017, a bench trial was held in the North Dakota Action.
([Docket No. 61] Oct. 13, 2017, N.D. Memorandum Opinion & Order for
Judgment After Trial at 1.) John Benson failed to appear. (Id.) The North
Dakota district court awarded default judgment against John Benson and
dismissed Benson’s counterclaims as sanctions for his failure to appear. (Id.) In
the alternative, if the sanctions are found to be improper, the court issued
findings of fact and conclusions of law that Desert and Family Tree “completed a
diligent inquiry into ownership and are good faith purchasers for value” and
granted Desert and Family Tree’s request to quiet title in the Subject Mineral
Interest. (Id. at 4.) Judgment was entered in the North Dakota Action on January
17, 2018.
4. Minnesota State Court Action
On July 24, 2013, 6 months after the North Dakota Action was initiated,
Plaintiff sued Ann and Jon Kemske in Hennepin County Court in Benson v.
Kemske, Case No. 27-CV-13-13684 (“Minnesota Action”). (See Markert Aff., Ex.
10, Nov. 6, 2013, Minn. Action Order.) Plaintiff sought a declaration that he had
superior right and title to the Subject Mineral Interest on the same basis he
asserts in the North Dakota Action and in this lawsuit. (Id.) On November 6,
2013, the Minnesota state court dismissed the Minnesota Action based on a lack
of in rem jurisdiction over real property located in North Dakota and based on
Plaintiff’s failure to join Family Tree and Desert as indispensable parties over
which the court lacked jurisdiction. (Id.)
B. Procedural History
On August 18, 2017, Benson filed a Complaint against Family Tree, Desert,
Ann Kemske, Jon Kemske, Brigham Oil & Gas, L.P., and Oasis Petroleum Inc.1 in
this Court. The Complaint alleges four counts: Count 1 seeks a declaration under
the federal Declaratory Judgments Act, 28 U.S.C. § 2201, and Minnesota Declaratory Judgments Act,Minn. Stat. §§ 555.01
-.16, that the 1984 and 1985 Quitclaim Deeds from Elmer and Frances Benson to the Benson grandchildren each conveyed an undivided 1/10 mineral interest in the Property as “tenants in common to share and share alike,” and that, because the deeds created an undivided interest, none of the Benson grandchildren could sell any of their interests without the consent of the other grandchildren or by Thomas Benson as Power of Attorney. (Compl. ¶¶ 84-85.) Count 2 seeks supplementary relief based on the declaratory judgment under28 U.S.C. § 2202
and Minnesota Statute 1 On November 9, 2017, Oasis was dismissed as a Defendant in this action. [Docket No. 60] § 555.08 for a money judgment against Oasis to release to John Benson and Brian Benson any amounts held in suspense related to the Subject Mineral Interest based on Plaintiff’s allegation that Plaintiff and Brian Benson are the legal owners of the Subject Mineral Interest. (Compl. ¶ 106.) Count 3 seeks supplementary relief based on the declaratory judgment under28 U.S.C. § 2202
andMinn. Stat. § 555.08
, for a money judgment against Family Tree and for any
amounts Family Tree has received from Oasis and/or SM Energy, less the
amounts paid to Geri Benson, based on Plaintiff’s allegation that he is the owner
of the mineral interests previously conveyed by Geri Benson to Family Tree
under a 2015 Stipulation of Interest under which Thomas Benson used his Power
of Attorney to give the Subject Mineral Interest to his son, Plaintiff, and
grandson, John Benson (Compl., Ex. P) and to rescind the grant to Family Tree.
(Compl. ¶¶ 109-13.) Count 4 requests injunctive relief through a temporary
restraining order and/or an injunction staying the North Dakota Action trial until
this Court rules. (Compl. ¶ 115.)
In the motion now before the Court, Family Tree and Desert request that
the Court dismiss the claims against them based on lack of personal jurisdiction,
failure to state a claim, the doctrine of abstention, and the doctrine of prior
exclusive jurisdiction.
The Court heard oral argument on February 22, 2018. On March 5, 2018,
Plaintiff filed a letter requesting jurisdictional discovery in order to supplement
arguments regarding issue preclusion and personal jurisdiction. [Docket No. 79]
III. DISCUSSION
A. Personal Jurisdiction
1. Personal Jurisdiction Standard
To survive a motion to dismiss for lack of personal jurisdiction, a
plaintiff must state sufficient facts in the complaint to support a
reasonable inference that [the defendants] can be subjected to
jurisdiction within the state. Once jurisdiction ha[s] been
controverted or denied, [the plaintiff] ha[s] the burden of proving
such facts. The plaintiff’s prima facie showing must be tested, not
by the pleadings alone, but by the affidavits and exhibits presented
with the motions and in opposition thereto.
Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072(8th Cir. 2004) (citations omitted). “A two-step inquiry is employed when determining whether a federal court has jurisdiction over a non-resident party: (1) whether the facts presented satisfy the forum state’s long-arm statute, and (2) whether the nonresident has minimum contacts with the forum state, so that the court’s exercise of jurisdiction would be fair and in accordance with due process.” Soo Line Railroad Co. v. Hawker Siddeley Canada, Inc.,950 F.2d 526, 528
(8th Cir. 1991) (citation omitted). “The Minnesota long-arm statute extends jurisdiction to the fullest extent permitted by the due process clause.”Id.
The due process clause requires there be minimum contacts
between the defendant and the forum state before the forum state
may exercise jurisdiction over the defendant. Sufficient contacts
exist when the defendant’s conduct and connection with the forum
State are such that he should reasonably anticipate being haled into
court there, and when maintenance of the suit does not offend
traditional notions of fair play and substantial justice. In assessing
the defendant’s reasonable anticipation, there must be some act by
which the defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws.
Id.at 528–29 (citations omitted). In order to determine whether the exercise of jurisdiction comports with due process, the Court examines five factors: (1) the nature and quality of the contacts with the forum state; (2) the quantity of contacts with the forum; (3) the relation of the cause of action to these contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties. Stanton v. St. Jude Med., Inc.,340 F.3d 690, 694
(8th Cir. 2003) (citation omitted). The first three factors are primary, while the last two factors are secondary.Id.
A court can exercise either specific or general personal jurisdiction over a party. “Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant’s actions within the forum state, while [g]eneral jurisdiction . . . refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.” Coen v. Coen,509 F.3d 900, 905
(8th Cir. 2007) (citation omitted). General personal jurisdiction exists when a party has “continuous and systematic” contacts with the forum state.Id.
(citation omitted).
2. Nature, Quality, and Quantity of the Contacts
Neither Family Tree nor Desert has ever maintained an office in
Minnesota, employed persons in Minnesota, advertised in Minnesota, or owned
property in Minnesota. Family Tree has never bought or sold mineral interests in
Minnesota. Desert purchased the mineral rights at issue from Family Tree, and
so has had no contact with Ann Kemske or Geri Benson. There is no general
jurisdiction based on continuous and systemic contacts.
3. Relation of the Cause of Action to the Contacts
The injury claimed by Plaintiff relates to the ownership of real property
mineral interests in North Dakota. Plaintiff asks the Court to declare the
meaning of various conveyances of North Dakota mineral interests. The 1984
and 1985 Quitclaim Deeds conveyed North Dakota property. Neither Family
Tree nor Desert was a party to those deeds. The Kemske-FT Deed and the
Benson-FT Deed, which Plaintiff claims are invalid, both conveyed North Dakota
property. Moreover, Desert did not negotiate with Ann Kemske or Geri Benson
for the purchase of the mineral interests, but, instead, negotiated with Family
Tree, so there is no Minnesota contact alleged at all with respect to Desert. The
lawsuit before the Court relates to the validity of various conveyances of the
North Dakota property and whether Family Tree and Desert did a diligent title
search in North Dakota. Thus, the relation of the cause of action to any
Minnesota contacts is tenuous. There is minimal connection between the alleged
injury or claims and any contact with Minnesota.
4. Interest of the Forum State
Minnesota has little interest in this action because the action concerns
property rights for property located in North Dakota.
5. Convenience of the Parties
The convenience of the parties factor is, at most, neutral. Litigation in
Minnesota is convenient for Plaintiff because he is a Minnesota resident.
However, litigation in North Dakota is also convenient for Plaintiff, as he has
already been actively engaged in litigation in North Dakota for multiple years
regarding the same issues and parties. And litigation in Minnesota is not
convenient for Family Tree and Desert Partners, who have no connection to
Minnesota.
B. Plaintiff’s Request for Jurisdictional Discovery
Once a defendant has denied the facts to support jurisdiction, the plaintiff
has the burden to prove them with affidavits and exhibits. Here, Plaintiff has
failed to allege or offer evidence of facts that would support a finding of personal
jurisdiction.
After oral argument on the motion to dismiss, Plaintiff filed a request for
jurisdictional discovery. That request is denied. The motion to dismiss was filed
on September 8, 2017. Plaintiff had ample time to raise the issue of jurisdictional
discovery previously, but failed to do so. The Court notes that Plaintiff’s
previous Minnesota state lawsuit regarding the same issues was dismissed, in
part, because Minnesota did not have personal jurisdiction over these Family
Tree and Desert; thus, Plaintiff has known of the lack of personal jurisdiction for
some time.
At this time, Plaintiff has offered no indication of what evidence he expects
to find to support a finding of personal jurisdiction over Family Tree or Desert.
“[W]hen a plaintiff offers only speculation or conclusory assertions about
contacts with a forum state, a court is within its discretion in denying
jurisdictional discovery.” Viasystems, Inc. v. EBM-Papst St. Georgen GmbH &
Co., KG, 646 F.3d 589, 598(8th Cir. 2011) (citation omitted). Here, Plaintiff’s “request for jurisdictional discovery is not specifically targeted to flesh out connections already shown to exist, but instead is more akin to a fishing expedition in which a plaintiff intends to cast a wide net for potential contacts with a forum state.” Greenbelt Res. Corp. v. Redwood Consultants, LLC,627 F. Supp. 2d 1018, 1028
(D. Minn. 2008). Therefore, the request for
jurisdictional discovery is denied.
The Court concludes that it lacks personal jurisdiction over Defendants
Family Tree and Desert. Therefore, they must be dismissed as Defendants in this
lawsuit.
C. Conclusion
Because the Court concludes that it lacks personal jurisdiction over Family
Tree and Desert and must dismiss the claims against them, the Court does not
reach Family Tree and Desert’s alternative arguments for abstention, prior
exclusive jurisdiction, or failure to state claim.
Because Plaintiff’s Motion for Judgment on the Pleadings was directed
against Defendants Family Tree and Desert and they have now been dismissed
from this lawsuit, Plaintiff’s motion is denied without the Court reaching the
merits of the motion.
Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1. Defendant Family Tree Corporation and Desert Partners IV,
L.P.’s Motion to Dismiss [Docket No. 15] is GRANTED, and
Family Tree Corporation and Desert Partners IV, L.P. are
DISMISSED as Defendants in this lawsuit.
2. Plaintiff John Benson’s Motion for a Judgment on the
Pleadings [Docket Nos. 64-65] is DENIED.
Dated: March 7, 2018 s/ Michael J. Davis
Michael J. Davis
United States District Court Trial Court Opinion
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
JOHN BENSON,
Plaintiff,
v. MEMORANDUM OF LAW & ORDER
Civil File No. 17-3839 (MJD/FLN)
FAMILY TREE CORP., INC., et al.
Defendants.
John Benson, pro se.
John A. Markert, Larson King, LLP, and Nicholas C. Grant, Ebeltoft. Sickler.
Lawyers PLLC, Counsel for Defendants Family Tree Corporation, Inc. and Desert
Partners IV, L.P.
I. INTRODUCTION
This matter is before the Court on Defendants Family Tree Corporation
and Desert Partners IV, L.P.’s Motion to Dismiss [Docket No. 15] and Plaintiff
John Benson’s Motion for a Judgment on the Pleadings [Docket Nos. 64-65]. The
Court heard oral argument on February 22, 2018. Because the Court lacks
personal jurisdiction over Defendants Family Tree Corporation and Desert
Partners IV, L.P., they are dismissed as defendants in the action. The Court does
not reach Defendants’ multiple alternative arguments for dismissal.
II. BACKGROUND
A. Factual Background
The Complaint and relevant public documents describe a detailed and
extensive history regarding the parties, property title at issue, and the years of
previous litigation. For the purpose of analyzing the motion to dismiss for lack
of personal jurisdiction, the Court provides only an abbreviated description of
the facts.
1. The Relevant Parties
Plaintiff John Benson is a Minnesota resident. (Compl. ¶ 1.) Elmer and
Frances Benson were his grandparents. (Id.)
Defendant Family Tree Corporation (“Family Tree”) is a Wyoming
corporation with its principal place of business in Lakewood, Colorado. (Dykes
Aff. ¶¶ 3, 4.) It buys and sells real property mineral interests and participates in
oil and gas wells. (Id. ¶ 7.) It has never had an office in Minnesota; has never
employed persons in Minnesota; has never owned any property in Minnesota;
and has never advertised in Minnesota. (Id. ¶¶ 5-6.)
When Family Tree identifies owners of real property mineral interests, it
sends them a letter expressing Family Tree’s interest. (Dykes Aff. ¶ 8.) The
mineral rights owner then decides whether or not to respond to Family Tree and
enter into negotiations. (Id. ¶ 9.) Family Tree has never bought or sold mineral
interests in Minnesota. (Id. ¶10.)
Defendant Desert Partners IV, L.P. (“Desert”) is a limited partnership
organized under the laws of the state of Texas. (Gieb Aff. ¶ 3.) None of the
partners of Desert are Minnesota residents. (Id. ¶ 4.) Desert is in the business of
buying and selling real property mineral interests. (Id. ¶ 7.) Desert has never
had an office in Minnesota, employed persons in Minnesota, owned property in
Minnesota, or advertised in Minnesota. (Id. ¶¶ 5-6.) It has never had any contact
with Defendant Ann Kemske or Geri Benson because it acquired its portion of
the mineral interests at issue from Family Tree. (Id. ¶ 8.)
2. Mineral Rights History
This lawsuit relates to certain mineral interests in, on, under, or relating to
real property located in McKenzie County, North Dakota, described as Township
152 North, Range 100 West, Section 33: E1/2SE1/4, Section 34: W1/2SW1/4
(“Property”). (Markert Aff., Ex. 1, N.D. Compl. ¶ 1.) The mineral interest at
issue is an undivided one-fifth mineral interest in the Property or 32 net mineral
acres (“Subject Mineral Interest”).
The Subject Mineral Interest was conveyed by Elmer and Frances Benson
to their granddaughter, Defendant Ann Kemske, by two quit claim deeds
executed in 1984 and 1985 (“1984 and 1985 Quitclaim Deeds”). (Markert Aff.,
Exs. 3-4.) Each of the 1984 and 1985 Quitclaim Deeds conveyed an undivided
one-tenth mineral interest to each of the 5 grantees: Ann Kemske, Plaintiff John
T. Benson, Edward A. Benson, Louise F. Benson, and Geri K. Benson Weidt
(“Benson grandchildren”), for a total transfer to Kemske of an undivided one-
fifth mineral interest.
Kemske conveyed the Subject Mineral Interest to Family Tree by a Mineral
Deed dated April 15, 2010, which was recorded on May 12, 2010, in the
McKenzie County Recorder’s Office as Document No. 401900 (“Kemske-FT
Deed”). (Markert Aff., Ex. 6.) Under the Kemske-FT Deed, Kemske conveyed to
Family Tree all of her “right, title and interest in and to all of the oil, gas, and
other minerals in and under” the Property. (Id.)
On May 12, 2010, Family Tree conveyed 24 net mineral acres in the Subject
Mineral Interest to Desert, and the deed was recorded on June 14, 2010, in the
McKenzie County Recorder’s Office as Document No. 403773 (“FT-Desert
Deed”). (Markert Aff., Ex. 7.)
On June 10, 2010, Geri Benson, one of the Benson grandchildren, conveyed
by mineral deed all of her right, title, and interest in and to the minerals
underlying the Property to Family Tree (“Benson-FT Deed”), and the deed was
recorded in McKenzie County on July 9, 2010, as Document No. 404541.
(Markert Aff., Ex. 8.)
On April 9, 2012, a quitclaim deed signed December 13, 1990, was
recorded in the McKenzie County Recorder’s Office as Document No. 431969
(“1990 Quitclaim Deed”). (Markert Aff., Ex. 9.) The 1990 Quitclaim Deed
conveys to Thomas Benson, Plaintiff’s father, all of Ann Kemske and Defendant
Jon Kemske’s “right, title, and interest in and to” the Property. (Id.)
On June 3, 2010, a quitclaim deed dated May 7, 2010 was recorded in
McKenzie County as Document No. 403001 (“John Benson Quitclaim Deed”).
(Compl. ¶ 27; Compl., Ex. H.) The John Benson Quitclaim Deed purports to
convey Thomas Benson and Leatrice Benson’s right, title, and interest in and to
the Subject Mineral Interest to John Benson and his son, Brian Benson; however
the legal description was incorrect. (Id.) The John Benson Quitclaim Deed was
re-recorded as McKenzie County Document No. 434658 with a handwritten
revised legal description. (Id.)
3. North Dakota Action
In January 2013, Family Tree and Desert initiated a quiet title action in
North Dakota state court against Thomas Benson, Leatrice Benson, Plaintiff,
Brian Benson, Ann Kemske, and Jon Kemske. North Dakota Case No. 27-2013-
CV-30 (“North Dakota Action”). (Markert Aff., Ex. 1, N.D. Compl.; Markert Aff.,
Ex. 2, N.D. Answer and Counterclaim.) Family Tree and Desert sought to quiet
title to the Subject Mineral Interest. (N.D. Compl. ¶ 1, p.3.) They claimed that
they acquired the Subject Mineral Interest as good faith purchasers under the
Kemske-FT Deed without notice of the 1990 Quitclaim Deed, which was
unrecorded at the time that the Kemske-FT Deed was executed and recorded.
Plaintiff John Benson is a defendant and counterclaim plaintiff in the
North Dakota Action and claimed that he has a superior right and title to the
Subject Mineral Interest based on the 1990 Quitclaim Deed and on the John
Benson Quitclaim Deed. (See N.D. Compl.; Markert Aff., Ex. 2, N.D. Answer and
Counterclaim.)
On October 3, 2017, a bench trial was held in the North Dakota Action.
([Docket No. 61] Oct. 13, 2017, N.D. Memorandum Opinion & Order for
Judgment After Trial at 1.) John Benson failed to appear. (Id.) The North
Dakota district court awarded default judgment against John Benson and
dismissed Benson’s counterclaims as sanctions for his failure to appear. (Id.) In
the alternative, if the sanctions are found to be improper, the court issued
findings of fact and conclusions of law that Desert and Family Tree “completed a
diligent inquiry into ownership and are good faith purchasers for value” and
granted Desert and Family Tree’s request to quiet title in the Subject Mineral
Interest. (Id. at 4.) Judgment was entered in the North Dakota Action on January
17, 2018.
4. Minnesota State Court Action
On July 24, 2013, 6 months after the North Dakota Action was initiated,
Plaintiff sued Ann and Jon Kemske in Hennepin County Court in Benson v.
Kemske, Case No. 27-CV-13-13684 (“Minnesota Action”). (See Markert Aff., Ex.
10, Nov. 6, 2013, Minn. Action Order.) Plaintiff sought a declaration that he had
superior right and title to the Subject Mineral Interest on the same basis he
asserts in the North Dakota Action and in this lawsuit. (Id.) On November 6,
2013, the Minnesota state court dismissed the Minnesota Action based on a lack
of in rem jurisdiction over real property located in North Dakota and based on
Plaintiff’s failure to join Family Tree and Desert as indispensable parties over
which the court lacked jurisdiction. (Id.)
B. Procedural History
On August 18, 2017, Benson filed a Complaint against Family Tree, Desert,
Ann Kemske, Jon Kemske, Brigham Oil & Gas, L.P., and Oasis Petroleum Inc.1 in
this Court. The Complaint alleges four counts: Count 1 seeks a declaration under
the federal Declaratory Judgments Act, 28 U.S.C. § 2201, and Minnesota Declaratory Judgments Act,Minn. Stat. §§ 555.01
-.16, that the 1984 and 1985 Quitclaim Deeds from Elmer and Frances Benson to the Benson grandchildren each conveyed an undivided 1/10 mineral interest in the Property as “tenants in common to share and share alike,” and that, because the deeds created an undivided interest, none of the Benson grandchildren could sell any of their interests without the consent of the other grandchildren or by Thomas Benson as Power of Attorney. (Compl. ¶¶ 84-85.) Count 2 seeks supplementary relief based on the declaratory judgment under28 U.S.C. § 2202
and Minnesota Statute 1 On November 9, 2017, Oasis was dismissed as a Defendant in this action. [Docket No. 60] § 555.08 for a money judgment against Oasis to release to John Benson and Brian Benson any amounts held in suspense related to the Subject Mineral Interest based on Plaintiff’s allegation that Plaintiff and Brian Benson are the legal owners of the Subject Mineral Interest. (Compl. ¶ 106.) Count 3 seeks supplementary relief based on the declaratory judgment under28 U.S.C. § 2202
andMinn. Stat. § 555.08
, for a money judgment against Family Tree and for any
amounts Family Tree has received from Oasis and/or SM Energy, less the
amounts paid to Geri Benson, based on Plaintiff’s allegation that he is the owner
of the mineral interests previously conveyed by Geri Benson to Family Tree
under a 2015 Stipulation of Interest under which Thomas Benson used his Power
of Attorney to give the Subject Mineral Interest to his son, Plaintiff, and
grandson, John Benson (Compl., Ex. P) and to rescind the grant to Family Tree.
(Compl. ¶¶ 109-13.) Count 4 requests injunctive relief through a temporary
restraining order and/or an injunction staying the North Dakota Action trial until
this Court rules. (Compl. ¶ 115.)
In the motion now before the Court, Family Tree and Desert request that
the Court dismiss the claims against them based on lack of personal jurisdiction,
failure to state a claim, the doctrine of abstention, and the doctrine of prior
exclusive jurisdiction.
The Court heard oral argument on February 22, 2018. On March 5, 2018,
Plaintiff filed a letter requesting jurisdictional discovery in order to supplement
arguments regarding issue preclusion and personal jurisdiction. [Docket No. 79]
III. DISCUSSION
A. Personal Jurisdiction
1. Personal Jurisdiction Standard
To survive a motion to dismiss for lack of personal jurisdiction, a
plaintiff must state sufficient facts in the complaint to support a
reasonable inference that [the defendants] can be subjected to
jurisdiction within the state. Once jurisdiction ha[s] been
controverted or denied, [the plaintiff] ha[s] the burden of proving
such facts. The plaintiff’s prima facie showing must be tested, not
by the pleadings alone, but by the affidavits and exhibits presented
with the motions and in opposition thereto.
Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072(8th Cir. 2004) (citations omitted). “A two-step inquiry is employed when determining whether a federal court has jurisdiction over a non-resident party: (1) whether the facts presented satisfy the forum state’s long-arm statute, and (2) whether the nonresident has minimum contacts with the forum state, so that the court’s exercise of jurisdiction would be fair and in accordance with due process.” Soo Line Railroad Co. v. Hawker Siddeley Canada, Inc.,950 F.2d 526, 528
(8th Cir. 1991) (citation omitted). “The Minnesota long-arm statute extends jurisdiction to the fullest extent permitted by the due process clause.”Id.
The due process clause requires there be minimum contacts
between the defendant and the forum state before the forum state
may exercise jurisdiction over the defendant. Sufficient contacts
exist when the defendant’s conduct and connection with the forum
State are such that he should reasonably anticipate being haled into
court there, and when maintenance of the suit does not offend
traditional notions of fair play and substantial justice. In assessing
the defendant’s reasonable anticipation, there must be some act by
which the defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws.
Id.at 528–29 (citations omitted). In order to determine whether the exercise of jurisdiction comports with due process, the Court examines five factors: (1) the nature and quality of the contacts with the forum state; (2) the quantity of contacts with the forum; (3) the relation of the cause of action to these contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties. Stanton v. St. Jude Med., Inc.,340 F.3d 690, 694
(8th Cir. 2003) (citation omitted). The first three factors are primary, while the last two factors are secondary.Id.
A court can exercise either specific or general personal jurisdiction over a party. “Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant’s actions within the forum state, while [g]eneral jurisdiction . . . refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.” Coen v. Coen,509 F.3d 900, 905
(8th Cir. 2007) (citation omitted). General personal jurisdiction exists when a party has “continuous and systematic” contacts with the forum state.Id.
(citation omitted).
2. Nature, Quality, and Quantity of the Contacts
Neither Family Tree nor Desert has ever maintained an office in
Minnesota, employed persons in Minnesota, advertised in Minnesota, or owned
property in Minnesota. Family Tree has never bought or sold mineral interests in
Minnesota. Desert purchased the mineral rights at issue from Family Tree, and
so has had no contact with Ann Kemske or Geri Benson. There is no general
jurisdiction based on continuous and systemic contacts.
3. Relation of the Cause of Action to the Contacts
The injury claimed by Plaintiff relates to the ownership of real property
mineral interests in North Dakota. Plaintiff asks the Court to declare the
meaning of various conveyances of North Dakota mineral interests. The 1984
and 1985 Quitclaim Deeds conveyed North Dakota property. Neither Family
Tree nor Desert was a party to those deeds. The Kemske-FT Deed and the
Benson-FT Deed, which Plaintiff claims are invalid, both conveyed North Dakota
property. Moreover, Desert did not negotiate with Ann Kemske or Geri Benson
for the purchase of the mineral interests, but, instead, negotiated with Family
Tree, so there is no Minnesota contact alleged at all with respect to Desert. The
lawsuit before the Court relates to the validity of various conveyances of the
North Dakota property and whether Family Tree and Desert did a diligent title
search in North Dakota. Thus, the relation of the cause of action to any
Minnesota contacts is tenuous. There is minimal connection between the alleged
injury or claims and any contact with Minnesota.
4. Interest of the Forum State
Minnesota has little interest in this action because the action concerns
property rights for property located in North Dakota.
5. Convenience of the Parties
The convenience of the parties factor is, at most, neutral. Litigation in
Minnesota is convenient for Plaintiff because he is a Minnesota resident.
However, litigation in North Dakota is also convenient for Plaintiff, as he has
already been actively engaged in litigation in North Dakota for multiple years
regarding the same issues and parties. And litigation in Minnesota is not
convenient for Family Tree and Desert Partners, who have no connection to
Minnesota.
B. Plaintiff’s Request for Jurisdictional Discovery
Once a defendant has denied the facts to support jurisdiction, the plaintiff
has the burden to prove them with affidavits and exhibits. Here, Plaintiff has
failed to allege or offer evidence of facts that would support a finding of personal
jurisdiction.
After oral argument on the motion to dismiss, Plaintiff filed a request for
jurisdictional discovery. That request is denied. The motion to dismiss was filed
on September 8, 2017. Plaintiff had ample time to raise the issue of jurisdictional
discovery previously, but failed to do so. The Court notes that Plaintiff’s
previous Minnesota state lawsuit regarding the same issues was dismissed, in
part, because Minnesota did not have personal jurisdiction over these Family
Tree and Desert; thus, Plaintiff has known of the lack of personal jurisdiction for
some time.
At this time, Plaintiff has offered no indication of what evidence he expects
to find to support a finding of personal jurisdiction over Family Tree or Desert.
“[W]hen a plaintiff offers only speculation or conclusory assertions about
contacts with a forum state, a court is within its discretion in denying
jurisdictional discovery.” Viasystems, Inc. v. EBM-Papst St. Georgen GmbH &
Co., KG, 646 F.3d 589, 598(8th Cir. 2011) (citation omitted). Here, Plaintiff’s “request for jurisdictional discovery is not specifically targeted to flesh out connections already shown to exist, but instead is more akin to a fishing expedition in which a plaintiff intends to cast a wide net for potential contacts with a forum state.” Greenbelt Res. Corp. v. Redwood Consultants, LLC,627 F. Supp. 2d 1018, 1028
(D. Minn. 2008). Therefore, the request for
jurisdictional discovery is denied.
The Court concludes that it lacks personal jurisdiction over Defendants
Family Tree and Desert. Therefore, they must be dismissed as Defendants in this
lawsuit.
C. Conclusion
Because the Court concludes that it lacks personal jurisdiction over Family
Tree and Desert and must dismiss the claims against them, the Court does not
reach Family Tree and Desert’s alternative arguments for abstention, prior
exclusive jurisdiction, or failure to state claim.
Because Plaintiff’s Motion for Judgment on the Pleadings was directed
against Defendants Family Tree and Desert and they have now been dismissed
from this lawsuit, Plaintiff’s motion is denied without the Court reaching the
merits of the motion.
Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1. Defendant Family Tree Corporation and Desert Partners IV,
L.P.’s Motion to Dismiss [Docket No. 15] is GRANTED, and
Family Tree Corporation and Desert Partners IV, L.P. are
DISMISSED as Defendants in this lawsuit.
2. Plaintiff John Benson’s Motion for a Judgment on the
Pleadings [Docket Nos. 64-65] is DENIED.
Dated: March 7, 2018 s/ Michael J. Davis
Michael J. Davis
United States District Court Reference
- Status
- Unknown