Scott v. Peters

388 P.3d 699

2016 OK 108

Steven Boyd Scott, Plaintiff/Appellant,

v.Martin Peters, Jr. And Tammy Lynn Peters, Defendants/Appellees.

No. 114,913

Supreme Court of Oklahoma.

FILED OCTOBER 25, 2016

T. Matthew Smith, William R. Pace, Oklahoma City, Oklahoma, for Plaintiff/Appellant.

Barry K. Roberts, Tammy Lynn Peters, Norman, Oklahoma, for Defendants/Appellees.

KAUGER, J.:

¶ 1 We retained this cause to address the dispositive issue of whether notice imposed upon the grantor by the filing of a deed with the county clerk precludes this action as untimely. We hold it does.

FACTS

¶ 2 The plaintiff/appellant, Steven Boyd Scott (Scott/grantor) owned real property in Canadian County, Oklahoma.¹ On August 11, 1997, Scott executed a warranty deed conveying 120 acres of the property to the defendants/appellees, Martin Peters, Jr. and Tammy Lynn Peters (the Peters/grantees). Scott alleges that he only conveyed his surface interest in the 120 of the acres of the NE/4 of Section 5, Township 13 North, Range 6 West.² In June of 2000, Scott agreed to convey the surface only in the remaining 40 acres to the Peters, for a total of 160 acres of the NE/4 of Section 5, Township 13 North, Range 6 West. The warranty deed was executed on June 12, 2000, and filed on June 16, 2000, in the Canadian County Clerk's office. However, no mineral interests were retained by the grantor in this 40 acre deed.

¶ 3 On February 2, 2001, the grantor, despite the previous transfers, deeded the same real property covering the NE/4 of Section 5, Township 13 North, Range 6 West, to Larry Russell, d/b/a/ Larry Russell Homes. This warranty deed was filed on March 19, 2001, and it also made no reference to reserving minerals interests. Russell in turn, in August of 2001, conveyed the same property to Raymond E. Wichert and Peggy Jo Wichert Revocable trust, also with no reference to minerals being reserved.³

¶ 4 According to the Peters, they subsequently sought a mortgage on the property and discovered Scott's additional conveyances as a cloud on their title. To clear the title, the Peters obtained a quit-claim deed from the Wicherts in January of 2002, and filed the deed on January 28, 2002. Presumably, this cleared the title, at least as far as the mortgage was concerned, to all 160 acres of the NE/4 of Section 5, Township 13 North, Range 6 West. Again, no mineral interests were reserved. The Peters leased the minerals in and under the 160 acre property to Summit Land Company in a lease executed on March 23, 2008, and filed with the Canadian County Clerk on May 1, 2008.

¶ 5 On August 5, 2014, Scott filed suit against the Peters, seeking to quiet title in the mineral interests in and under the real property which he had deeded to the Peters in August of 1997 (one hundred twenty acres) and June of 2000 (forty acres).⁴ On September 17, 2014, the Peters answered Scott's allegations and asserted a slander of title claim against the grantor, arguing that they are the owners of the mineral interests in all 160 acres, due to his various conveyances over the years.

¶ 6 On February 2, 2015, the Peters filed a motion for summary judgment. With regard to the forty acre tract, because it contained no reservation of minerals of any sort, they raise the same arguments which were raised in recent cases No. 114,957, Calvert v. Swinford, 2016 OK 100, 382 P.3d 1028, No. 115,015, Calvert v. Swinford, 2016 OK 104, 382 P.3d 1039; and No. 115,165, Calvert v. Swinford, 2016 OK 105, 382 P.3d 1037 [which is that the statute of limitations bars the lawsuit] because the grantor had notice of what the deeds conveyed when he signed and filed them with the county clerk.

¶ 7 With regard to the 120 acre tract [the 1997 deed], the Peters contend that the grantor insufficiently reserved any mineral interests. However, they also argue that, even if it had properly reserved mineral interests, the reservation clause is irrelevant to this cause because the same property was later deeded by Scott in 2001, to Russell, who in turn five months later deeded it to the Wicherts, who deeded it to the Peters in 2002 with no inclusion of any mineral reservations in any of the deeds. Consequently, the Peters argue that any claims relating to the 120 acre tract are also barred by the five year statute of limitations for reformation because the cause was brought more than thirteen years after the Russell deed was filed, and more than six years after their oil and gas lease was filed.⁵

¶ 8 The trial court held a hearing on the summary judgment motion on May 29, 2015, and filed a journal entry on June 8, 2015, overruling the summary judgment motion. On June 18, 2015, the Peters asked the trial court to reconsider summary judgment. After the parties extensively briefed the limitations issue, the trial court held a hearing on January 22, 2016. In Scott's supplemental brief on the issue of statute of limitations, he concedes that the five year limitation period for reforming the deed filed in 2000 had expired and that he was consequently precluded from reforming that deed.⁶

¶ 9 However, Scott argues that the five year limitation period on reformation of the 1997 deed does not begin to accrue when the deed was filed because it did contain a mineral reservation, but the reservation is alleged to have been insufficient in that deed and a layman, such as himself, should not be held to know the legal effect of such an insufficiency until the legal effect is questioned or disputed, relying on Nelson v. Daugherty, 1960 OK 205, 357 P.2d 425. For the first time, Scott also relied on the limitation period of 12 O.S. 2011 § 93⁷ for adverse possession claims which was also applied by Nelson, supra. He argues that summary judgment would be premature regarding the 1997 deed because the equitable 15 year limitation period of § 93 should be applied.

¶ 10 The trial court issued a summary order on January 22, 2016, and filed it on March 21, 2016, vacating its previous summary judgment ruling, and instead granted the Peters' motion for summary judgment. On April 19, 2016, Scott appealed. We retained this cause on May 27, 2016, to address same statute of limitations issue along with our previous cases of No. 114,957, Calvert v. Swinford, 2016 OK 100, 382 P.3d 1028, No. 115,015, Calvert v. Swinford, 2016 OK 104, 382 P.3d 1039 ; and No. 115,165, Calvert v. Swinford, 2016 OK 105, 382 P.3d 1037.

THE STATUTE OF LIMITATIONS FOR AN ACTION BROUGHT BY A GRANTOR BEGINS TO ACCRUE WHEN THE DEED IS FILED WITH THE COUNTY CLERK.

¶ 11 The Peters argue that constructive notice imposed upon Scott by the filing of a deed precludes this action. Specifically, they contend that Scott's deed in 2001 to Larry Russell covered the same property. Because it did not include a mineral interest reservation, it precluded this action because Scott had notice. When the deed, which did not reserve mineral interests was filed with the county clerk, he did nothing about it for more than 12 years. Larry Russell then deeded the property without reserving mineral interests to the Wicherts also in 2001, and the Wicherts deeded the property to the Peters in 2002, again with no mineral reservation.

¶ 12 Scott has conceded that he is precluded from challenging the 2000 deed, which deeded forty acres to the Peters, but argues that any applicable statute of limitations is tolled until he learned of any issue regarding the insufficiency of the mineral reservation language in the 1997 deed. He contends that he did not learn of the mistake regarding mineral interests until February of 2014. With regard to the 2001 warranty deed to Russell, Scott merely insists that minerals were not intended to be included in this transaction either, and that he did not prepare the deed.

¶ 13 We recently decided No. 114,957, Calvert v. Swinford, 2016 OK 100, 382 P.3d 1028, No. 115015, Calvert v. Swinford, 2016 OK 104, 382 P.3d 1039 ; and No. 115,165, Calvert v. Swinford, 2016 OK 105, 382 P.3d 1037 wherein grantors/sisters conveyed real property in deeds which neglected to reserve mineral interests as allegedly intended. After waiting more than twelve years, the sisters brought claims for quiet title and unjust enrichment against the abstract company, the lawyer who drafted the deeds and his law firm, and the grantees who purchased the property. We affirmed the trial court's determination that the lawsuit was untimely because the grantor sisters had signed the deeds, and they were filed with the county clerk.

¶ 14 The sisters had the opportunity and obligation to read or at least inquire as to what they were signing. In other words, the sisters were not diligent in investigation of the transaction and did not exercise reasonable diligence in discovering the mistake, the statute of limitations period would not be tolled—in equity or otherwise. We distinguished those cases in which mutual mistakes were made in which the amount of mineral interests actually conveyed and/or where the circumstances warranted.⁸ We also noted that circumstances were not warranted under the facts of the case.

¶ 15 Quoting Board of Comm'rs of Garfield County v. Renshaw, 1909 OK 4, ¶ 6, 23 Okla. 56, 99 P. 638, we said:

Where the transaction is a matter of public record, either through conveyances registered as required by law or through other means, so that the party complaining has abundant means of finding out the fact of the transaction and its nature, there can be no concealment, and he will be charged with notice of the transaction and of facts which a diligent investigation thereof would develop. A party must be presumed to know what, by the exercise of reasonable diligence, he might have discovered; ...⁹

¶ 16 Scott relies on Nelson v. Daugherty, 1960 OK 205, 357 P.2d 425, to argue that equity should allow reformation even after several years. Nelson involved an estate administratix who brought an action to quiet title to "(A)n undivided ½ interest in the oil, gas and other minerals and mineral rights" and to reform two warranty deeds....