Capps v. Weflen

855 N.W.2d 637

Patricia R. CAPPS, f/k/a Patricia Anderson, Terrel A. Anderson, a/k/a Terral Anderson, Plaintiffs, Appellants and Cross–AppelleesandThe Estate of Ruth A. Nelson, Deceased, Plaintiff and Appellee

v. Colleen L. WEFLEN, a/k/a Colleen Weflen, a single woman, Marleen Weflen, f/k/a Marleen W. Tiedt, Sharon Kruse, a/k/a Sharon O. Kruse, f/k/a Sharon Weflen, a married woman dealing in her sole and separate property, Catherine Harris, f/k/a Cathy Gunderson, a single woman, Norris Weflen, a/k/a Norris L. Weflen, a single man, Windsor Bakken, LLC, a Delaware Limited Liability Company, Defendants, Appellees and Cross–AppellantsandJohn H. Holt Oil Properties, Inc., Atomic Oil & Gas, a Colorado Limited Liability Company, DefendantsandGulfport Energy Corporation, EOG Resources, Inc., Whiting Oil and Gas Corporation, Defendants, Appellees and Cross–AppellantsandCade Oil and Gas, LLC, Gerald C. Wools, Penny Brinks, Michael Lee, Gwen Hassan, and Melissa Kellor, DefendantsPenny Brinks, Michael Lee, Gwen Hassan, and Melissa Kellor, Appellees.

No. 20140110.

Supreme Court of North Dakota.

Oct. 31, 2014.

Zachary E. Pelham (argued), Patrick W. Durick (on brief) and Benjamin W. Keup (on brief), Bismarck, N.D., for plaintiffs, appellants and cross-appellees.

Amy L. De Kok (argued), Lawrence Bender (on brief) and Jillian R. Rupnow (on brief), Bismarck, N.D., for defendants, appellees and cross-appellants EOG Resources, Inc.

Richard P. Olson (appeared), Andrew T. Forward (on brief) and Wanda L. Fischer (on brief), Minot, N.D., for defendants, appellees and cross-appellants Cathy Gunderson, Sharon Kruse, Colleen Weflen, Marleen Weflen and Norris Weflen.

Monte L. Rogneby (appeared), Bismarck, N.D., for defendants, appellees and cross-appellants Gulfport Energy Corporation and Windsor Bakken LLC.

David J. Smith (argued) and Tyler J. Malm (on brief), Bismarck, N.D., for defendants and appellees Penny Brinks, Michael Lee, Gwen Hassan, and Melissa Kellor.

Paul J. Forster (on brief), Bismarck, N.D., for defendant, appellee and cross-appellant Whiting Oil and Gas Corporation.

Opinion

SANDSTROM, Justice.

[¶ 1] Patricia Capps and others (“Capps”) appeal, and Colleen Weflen and others (“Weflens”) cross-appeal, from a judgment quieting title to certain Mountrail County mineral interests in the Capps and the heirs of Ruth Nelson's estate (“Hassans”). Because the district court erred as a matter of law in ruling the Weflens did not comply with the notice requirements in the abandoned mineral statutes, N.D.C.C. ch. 38–18.1, and because those requirements are constitutional, we reverse and remand for entry of judgment quieting title to the subject mineral interests in the Weflens.

I

[¶ 2] In 1975, Ruth Nelson conveyed the subject real property in Mountrail County to Olaf and Rose Weflen, reserving to herself one-half of the minerals in the property. The deed was recorded the same year. In 1979, Nelson granted to Patricia Capps and Terrel Anderson “an undivided 1/2 mineral interest” in the property, and the deed explained “[i]t is the intent hereof to transfer a 1/2 interest in and to the remaining minerals.” Nelson died later in 1979, and this 1979 mineral deed was not recorded until 2009.

[¶ 3] The Weflens, who are the successors-in-interest to Olaf and Rose Weflen, currently own the subject property. On December 28, 2005, the Weflens published in the Mountrail County Promoter a notice of lapse of mineral interest dated November 29, 2005. Subsequent notices were published on January 4 and 11, 2006. On January 13, 2006, the Weflens sent copies of the notice of lapse by certified mail, return receipt requested, with restricted delivery to the two last known addresses of Nelson which appeared in the recorded 1975 deed, in Tacoma, Washington, and a recorded 1973 oil and gas lease, in Lyons, Oregon. Both mailings were returned undelivered, and no statement of claim was filed within 60 days after the first publication of the notice of lapse. On March 6, 2006, the Weflens recorded a termination of mineral interest, affidavit of publication, affidavit of mailing, and notice of lapse of mineral interest with the Mountrail County recorder.

[¶ 4] While on a North Dakota hunting trip in 2008, Patricia Capps' husband and her brother noticed oil wells in the area of the Weflens' property. Patricia Capps contacted an attorney and filed a statement of claim in 2008. In 2009, the Capps recorded the 1979 mineral deed and brought this action against the Weflens seeking to quiet title to their mineral interests. The estate of Ruth Nelson and the Hassans were eventually joined as parties. After a series of cross-motions for summary judgment, the district court ruled the Weflens had failed to comply with the notice requirements in the abandoned mineral statutes, N.D.C.C. ch. 38–18.1, and therefore they had no claim to a one-half mineral interest reserved by Nelson in 1975. Although other claims between the parties were unresolved, the court certified the judgment as final under N.D.R.Civ.P. 54(b), and the Weflens appealed. In Capps v. Weflen, 2013 ND 16, ¶ 1, 826 N.W.2d 605, this Court dismissed the appeal, concluding the district court abused its discretion in directing entry of a final judgment. The major remaining issue before the court, a dispute between the Capps and the Hassans, was whether Nelson's 1979 deed to the Capps conveyed all of the mineral interests held by Nelson or only one-half of her remaining one-half interest. On cross-motions for summary judgment, the court ruled as a matter of law the 1979 deed conveyed only one-half of Nelson's one-half interest in the minerals to the Capps, and the Hassans owned the other one-quarter interest reserved by Nelson in the deed.

[¶ 5] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27–05–06. The appeal and cross-appeals were timely under N.D.R.App.P. 4. We have jurisdiction under N.D. Const. art. VI, § 6, and N.D.C.C. § 28–27–01.

II

[¶ 6] The dispositive issue raised by the Weflens in their cross-appeal is whether the district court erred in ruling on summary judgment that the Weflens failed to comply with the notice provisions of the abandoned mineral statutes, N.D.C.C. ch. 38–18.1, as they existed during the abandonment procedure in 2005 and 2006. See Larson v. Norheim, 2013 ND 60, ¶ 10, 830 N.W.2d 85 (law in effect at time of abandonment procedure governs).

[¶ 7] This Court's standard of review for summary judgment is well-established:

“Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.”

Anderson v. Zimbelman, 2014 ND 34, ¶ 7, 842 N.W.2d 852 (quoting Arndt v. Maki, 2012 ND 55, ¶ 10, 813 N.W.2d 564 ).

A

[¶ 8] “Rights of property and of person may be waived, surrendered, or lost by neglect in the cases provided by law.” N.D.C.C. § 1–01–08. A mineral interest is deemed to be abandoned if it is unused for 20 years, and N.D.C.C. ch. 38–18.1 provides the procedure for a surface owner to succeed to the ownership of an abandoned mineral interest under the land. Peterson v. Jasmanka ex rel. Clark, 2014 ND 40, ¶ 12, 842 N.W.2d 920. There is no dispute that the subject mineral interests were unused for more than 20 years within the meaning of N.D.C.C. § 38–18.1–03, and that no statement of claim was filed within 60 days after first publication of the notice of lapse. See N.D.C.C. § 38–18.1–05. The method for providing notice of lapse of mineral interests is contained in N.D.C.C. § 38–18.1–06(1) and (2), which provided during the relevant time period:

1. Any person intending to succeed to the ownership of a mineral interest upon its lapse shall give notice of the lapse of the mineral interest by publication.

2. The publication provided for in subsection 1 must be made once each week for three weeks in the official county newspaper of the county in which the mineral interest is located; however, if the address of the mineral interest owner is shown of record or can be determined upon reasonable inquiry, notice must also be made by mailing a copy of the notice to the owner of the mineral interest within ten days after the last publication is made.

[¶ 9] Because the abandoned mineral statutes are in derogation of the common law, courts “must review for strict construction and application of statutory requirements.” Spring Creek Ranch, LLC v. Svenberg, 1999 ND 113, ¶ 10, 595 N.W.2d 323. The district court listed three reasons why the Weflens failed to comply with the statutory provisions: 1) the Weflens “had knowledge that Ruth Nelson was dead at the time they mailed” the notice of lapse to her addresses of record, and “[m]ailing notice to a dead person at their address of record is absurd;” 2) “[m]ailing notice certified, restricted delivery is not required and mailing notice to a dead person by certified, restrictive delivery guarantees notice will not be received by the mineral owner;” and 3) because “property devolves to the deceased's heirs upon death” under the provisions of the North Dakota Uniform...