Baker v. Autos, Inc. , 2022 ND 41 ( 2022 )

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
FEBRUARY 18, 2022
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2022 ND 41Darilyn Baker, individually, and on behalf
of all persons similarly situated, Plaintiff and Appellant
v.
Autos, Inc., a North Dakota Corporation, d/b/a
Global Auto; James Hendershot, an individual,
and Robert Opperude, an individual, Defendants
and
RW Enterprises, Inc., a North Dakota Corporation;
Randy Westby, an individual, Defendants and Appellees
No. 20210202
Appeal from the District Court of Ward County, North Central Judicial
District, the Honorable Gary H. Lee, Judge.
AFFIRMED.
Opinion of the Court by Crothers, Justice.
Larry M. Baer, West Des Moines, IA, for plaintiff and appellant.
Bryan L. Van Grinsven, Minot, ND, for defendants and appellees.
Baker v. Autos, Inc., et al.
No. 20210202
Crothers, Justice.
[¶1] Darilyn Baker, individually and on behalf of the certified class, appealed
from an order denying her motion for a new trial after a jury returned a verdict
in favor of RW Enterprises, Inc. and Randy Westby. Baker argues the district
court erred in instructing the jury on the laws of usury, partnership, and acting
in concert. We affirm.
I
[¶2] This case has been before this Court three times. Baker v. Autos, Inc.,
2015 ND 57, 860 N.W.2d 788 (“Baker I”); Baker v. Autos, Inc., 2017 ND 229,
902 N.W.2d 508 (“Baker II”); and Baker v. Autos, Inc., 2019 ND 82, 924 N.W.2d
441 (“Baker III”). The facts of this case are provided in Baker III, at ¶¶ 2-8, and
we will repeat them only as necessary to explain the issues in this appeal.
[¶3] Prior to the Baker III decision, the district court dismissed Baker’s
claims after finding the defendants did not violate disclosure requirements of
the North Dakota Retail Installment Sales Act (“RISA”). Baker appealed. In
Baker III, this Court concluded the retail installment contracts did not comply
with RISA’s disclosure requirements. 2019 ND 82, ¶ 19. We reversed the
district court’s judgment and remanded for consideration of a willful violation
of RISA and the remedies available for noncompliance with the disclosure
requirements. Id. at ¶ 20.
[¶4] On remand, Baker filed a motion requesting the district court to approve
a settlement with Autos, Inc., Robert Opperude, and James Hendershot,
dismiss all claims under RISA, and grant summary judgment on the usury
claim against RW Enterprises and Westby. The court approved the settlement
but denied the motions to dismiss and for summary judgment.
[¶5] At trial, Baker requested the jury be instructed on a partnership between
the defendants. The district court declined to provide the partnership
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instruction, but provided an instruction on “acting in concert” in order for
Baker to establish the defendants worked together.
[¶6] The jury found RW Enterprises and Westby did not violate RISA. By
answering “no” to the RISA violation, the verdict form instructed the jury to
stop answering other questions and return the form to the court. Had the jury
found RW Enterprises and Westby in violation, the next question was whether
the contract charged usurious interest and if so, what damages were suffered
by the plaintiffs.
[¶7] Baker moved for a new trial arguing the district court provided an
improper verdict form and jury instructions. The district court denied Baker’s
motion.
II
[¶8] Baker argues the district court erred in instructing the jury on the laws
of usury, partnership, and acting in concert. This Court reviews the district
court’s decision on a motion for a new trial for abuse of discretion. N.B. v.
Terwilliger, 2021 ND 74, ¶ 13, 958 N.W.2d 487. “A district court abuses its
discretion when it acts in an arbitrary, unreasonable, or unconscionable
manner, when it misinterprets or misapplies the law, or when its decision is
not the product of a rational mental process leading to a reasoned
determination.” Id.III
[¶9] Baker claims the district court failed to correctly instruct the jury on
usury laws. Baker argues by instructing the jury to first find whether RW
Enterprises and Westby “willfully” violated RISA, the district court added an
element to usury that the law does not require.
[¶10] The law of the case doctrine and the mandate rule restrict proceedings
on remand to the district court. Montana-Dakota Utilities Co. v. Behm, 2020
ND 234, ¶ 8, 951 N.W.2d 208. The law of the case doctrine “applies when an
appellate court has decided a legal question and remanded to the district court
for further proceedings, and a party cannot on a second appeal relitigate issues
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which were resolved by the Court in the first appeal[.]” Id. The mandate rule
requires the district court to follow this Court’s pronouncements in subsequent
proceedings of the case and carry out this Court’s mandate according to its
terms. Id.[¶11] In Baker III, this Court reversed the district court’s judgment concluding
the contracts at issue did not comply with RISA’s disclosure requirements.
2019 ND 82, ¶¶ 19-20. We stated:
“Because the district court erroneously concluded the retail
installment contracts complied with the disclosure requirements
of N.D.C.C. ch. 51-13, the court did not address issues about a
willful violation of the statute and the remedies available for
noncompliance with those disclosure requirements. We reverse the
judgment and remand for consideration of those issues.”
Id. at ¶ 20. This Court mandated that a factfinder decide whether the
defendants willfully violated RISA and remedies for such violation. The district
court was required to carry out the mandate. Behm, 2020 ND 234, ¶ 8.
[¶12] At trial, the district court told the parties that if the jury answered “no”
to the defendants willfully violating RISA, that would be the end of their
inquiry. Baker objected, claiming usury was a separate issue. The district court
responded:
“You’ve . . . got to be able to show that they willfully violated
RISA to take RISA—the retail installment sales contract out of the
regulated lender statute and put it into other remedies. If you can’t
show that they willfully violated the retail installment sales
contract, this case is over. And that’s the North Dakota Supreme
Court’s ruling on this. This case is over if you can’t show
willfulness. So that’s the threshold question here.”
In the context of Baker’s arguments in this case, the district court was correct.
[¶13] Although RISA and usury are separate areas of law, under the theories
advanced in this case, it was necessary for Baker to first prove RW Enterprises
and Westby violated RISA to establish involvement in the installment
contracts. Baker’s theory of the case was that a RISA disclosure violation took
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the defendants out of regulated lender status under N.D.C.C. § 51-13-03(1) and
subjected them to the usury law in N.D.C.C. § 47-14-09. Baker III, 2019 ND
82, ¶ 9. Thus, if RW Enterprises and Westby willfully violated RISA, they could
be liable for charging a usurious interest rate on the installment contracts.
[¶14] The district court followed the law of the case doctrine and the mandate
rule by requiring the jury to find a willful violation of RISA before considering
available remedies. Therefore, the court did not abuse its discretion in denying
Baker’s motion for a new trial on issues related to usury.
IV
[¶15] Baker argues a partnership existed between Autos, Inc. and RW
Enterprises, and the district court should have instructed the jury on the
partnership relationship and joint and several liability each partner shares.
Baker also argues the court erred by instructing the jury on “acting in concert”
because it was not warranted by the pleadings or evidence presented at trial.
[¶16] “Jury instructions should fairly inform the jury of the law applicable to
the case. They should also fairly cover the claims made by both sides of the
case.” Tidd v. Kroshus, 2015 ND 248, ¶ 7, 870 N.W.2d 181. When the district
court chooses a specific instruction, this Court is not quick to second-guess its
choice. Id. This Court reviews jury instructions as a whole, and they are
sufficient if they correctly advise the jury of the law, even if parts of them,
standing alone, may be erroneous. Id.[¶17] At trial, Baker requested the jury be instructed on a partnership between
RW Enterprises and Autos. Baker’s request was based on Autos assigning its
retail installment contract to RW Enterprises prior to Baker defaulting on her
loan with Autos. Baker III, 2019 ND 82, ¶¶ 2-4. The district court denied the
partnership instruction to keep the trial issues simple for the jury. In denying
the partnership instruction, the court said “I don’t think we need to confuse
the issues by trying to create an involuntary partnership . . . I think it’s just
adding another layer of things for the jury that’s not really necessary. I want
to keep this simple for the jury, as simple as possible.”
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[¶18] In the district court’s order denying a new trial, the court expounded its
reasoning and stated the partnership issue was not raised until discussions on
final jury instructions during trial. The court found because a partnership
claim was not made in the third amended complaint nor raised in advance of
trial, the partnership instruction was not required. We agree.
[¶19] In order to allow Baker to establish the defendants worked together, the
district court provided an instruction on “acting in concert.” Baker argues that
instruction added an element of proof unnecessary to her claim. However, the
instruction did not require the jury to find the defendants acted in concert in
order for them to have willfully violated RISA. The instruction provided an
avenue for the jury to determine the defendants worked together and were
liable for the violations.
[¶20] As a whole, the jury instructions fairly informed the jury of the
applicable law to the case. Tidd, 2015 ND 248, ¶ 7. Thus, the district court did
not abuse its discretion in denying Baker’s motion for a new trial based on the
jury instructions.
V
[¶21] We affirm the district court’s order.
[¶22] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
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