## Facts

- Nekoma Farms, LLC (Nekoma) agreed to sell North Dakota real property to Bio-Sunn Technologies, Inc. (Bio-Sunn) under a contract for deed.
- The purchase price was $1,600,000, with $10,000 due at signing, $800,000 due in November 2017, and $790,000 due in January 2018.
- Bio-Sunn did not make the large scheduled payments and repeatedly asked Nekoma to extend the due dates.
- Nekoma granted extensions over the following years, and Bio-Sunn repeatedly represented that financing was about to close, but the money never became available.
- During the extension period, Bio-Sunn remained in physical possession of the property and performed maintenance and made improvements.
- In 2023, Nekoma sued in federal court under diversity jurisdiction seeking cancellation of the contract for deed on the ground that Bio-Sunn had abandoned the contract.
- Bio-Sunn argued that its possession and work on the property showed it had not abandoned the deal and that it should receive a redemption period rather than cancellation.
- Nekoma moved for summary judgment, and the court applied North Dakota substantive law.

## Issues

1. Whether Bio-Sunn’s prolonged failure to pay the core contract-for-deed installments, despite repeated extensions and assurances of imminent financing, constituted abandonment under North Dakota law.
2. Whether Bio-Sunn’s continued possession, maintenance, and improvements prevented a finding of abandonment or required the court to grant a redemption period instead of cancellation.
3. Whether Nekoma was entitled to summary judgment canceling the contract for deed as a matter of law.

## Decision

- The court granted Nekoma’s motion for summary judgment.
- The court held that Bio-Sunn abandoned the contract for deed under North Dakota law based on its extended nonpayment and failure to complete the purchase after years of extensions.
- The court rejected Bio-Sunn’s argument that possession, maintenance, and improvements were sufficient to defeat abandonment on these facts.
- The court granted cancellation of the contract for deed and denied Bio-Sunn the redemption-type relief it requested.
- Judgment was entered for Nekoma.

## Legal Principles

- Under North Dakota law, abandonment of a contract for deed may be shown when a buyer’s conduct, viewed as a whole, demonstrates an intent not to perform, including prolonged failure to pay essential purchase-price obligations.
- A buyer’s continued possession of the property, and even maintenance or improvements, does not by itself prevent a finding of abandonment when the buyer has not paid the primary amounts due for an extended period.
- When abandonment is established, a court may order cancellation of the contract for deed rather than providing further time to cure.
- Summary judgment is proper when the material facts concerning nonpayment and the length of default are not genuinely disputed and the legal effect of those facts entitles the seller to cancellation.

## Conclusion

In Nekoma Farms, the federal district court applying North Dakota law held that Bio-Sunn’s years of missed principal payments—despite repeated extensions and promises of imminent financing—amounted to abandonment of the contract for deed, and the seller was entitled to summary judgment canceling the contract without a redemption period.


Nekoma Farms, LLC v. Bio-Sunn Technologies, Inc., 2023 WL 9062874 (2023)