North Dakota Supreme Court hears dispute over settlement release language in ICON HD v. National Sports Opportunity Partners

Bismarck — The North Dakota Supreme Court on Monday heard argument in file No. 20240265 on whether a settlement agreement from May 22, 2023, prevents ICON HD LLC from pursuing collection claims against National Sports Opportunity Partners (NSOP).

At issue is paragraph 9 of the settlement agreement: paragraph 9(a) contains a limited release, and paragraph 9(b) provides that “notwithstanding the foregoing” the release “shall not apply” to certain claims, including “any claims arising out of conduct relating to unnamed third parties,” language the parties dispute.

Appellant ICON HD, through attorney Nick Evans, told the court the settlement “unambiguously carves out a number of claims including the collection claims ICON HD has asserted against National Sports Opportunity Partners in the current action.” Evans argued that NSOP was not a party to the prior litigation and therefore falls within the settlement’s carve‑out. “By its plain and ordinary meaning an NSOP is an unnamed third party to the former lawsuit,” Evans said, adding that, “if not, at a minimum, an ambiguity exists” requiring a remand for factual findings about the parties’ intent.

Counsel for the appellees, Benjamin Thomas, urged the court to uphold the district court’s dismissal. Thomas emphasized North Dakota’s policy favoring settlement and the trial judge’s reading that the release and related provisions (including paragraph 8, which dismisses claims and counterclaims with prejudice) bar the later suit. “Settlement agreements should where possible be considered as disposing of all disputed matters which were contemplated by the parties at the time of the settlement,” Thomas said, and argued the current suit “contains allegations that are virtually identical to those in the former lawsuit.”

A central factual dispute the advocates pressed before the justices was whether NSOP was effectively treated as an unnamed third party or instead was sufficiently identified in the former case’s counterclaim so as to be covered by the release. Thomas noted the former counterclaim repeatedly described NSOP’s role and said the last pay request in the NSOP project occurred about nine months before the settlement. Evans countered that NSOP “was not a party to the former lawsuit,” was not listed on the caption and therefore is an unnamed third party under the contract language.

The parties also briefed and argued whether res judicata (claim preclusion) applies. Thomas told the court that the former litigation’s dismissal with prejudice and overlapping factual allegations support preclusion. Evans responded that the collection claims here are distinct in their legal theory — contract collection against a third party, plus a piercing‑the‑corporate‑veil claim against Michael Koontz only if commingling is shown — and that the district court improperly relied on facts and inferences that were not briefed by the parties.

During argument the court asked questions about the breadth of the phrase “arising out of conduct relating to unnamed third parties,” whether the adjective “unnamed” requires the party to have been literally unnamed in the caption, and whether treating any entity referenced in allegations as a named party would render the term “third” superfluous. Counsel also discussed the settlement’s recitals and paragraph 8 (dismissal with prejudice) and how those provisions interact with the paragraph 9 release language.

No decision was announced. The court took the case under advisement. The justices in the courtroom were Chief Justice Daniel Crothers, Justice Lisa Fair McEvers, Justice Jared Tufte, Justice Douglas Barr and Justice John Jensen. The court adjourned the argument session and indicated the matter would be decided in due course.

Votes or orders were not issued from the bench; the matter remains under advisement by the court.