Justia Real Estate & Property Law Opinion Summaries

A party with a royalty interest in a property, who has not signed a division order with an oil company, may recover underpayments from the oil company. Newfield Production Company ("Newfield") operates four oil and gas wells on the property at issue here. The Trustees of the George S. Maragos Residuary Trust ("the Trust") asserted they owned a 1/8 of 1% royalty interest in the property. While operating the wells, Newfield relied upon a division order-title opinion ("division order") to allocate the royalty interest for the property. The Trust argued it acquired its interest in the royalties through the following process: H. H. Hester possessed a royalty interest in the property and conveyed to George S. Maragos a 1/8% royalty interest in December 1937. George S. Maragos retained his interest until his death when the administrators of his estate assigned the royalty interest to the Trust in January 1985. The Trust sued Newfield for an accounting and all unpaid revenue from the 1/8% royalty interest in the property. The Trust moved for summary judgment. Newfield filed a cross-motion for summary judgment, arguing it was not a proper party defendant because it did not have a competing interest in the 1/8% royalty interest. The district court granted Newfield's cross-motion for summary judgment, holding the Trust claim was really a quiet title claim, Newfield was not a proper party defendant, the proper parties are the other competing royalty interest owners, and the Trust was not entitled to attorney's fees and interest under N.D.C.C. 47-16-39.1. The Trust appealed the district court's summary judgment in favor of Newfield, determining Newfield was not a proper party defendant. Because Newfield failed to establish they were entitled to judgment as a matter of law, the North Dakota Supreme Court reversed and remanded. View "Maragos v. Newfield Production Company" on Justia Law

Appeals from decisions of the Industrial Commission cannot be turned into inverse condemnation actions; the Industrial Commission was authorized to modify previously designated spacing units. Arthur Langved appealed an Industrial Commission grant of Continental Resources, Inc.'s application to terminate existing oil and gas well spacing units, to create new spacing units, and to modify well setback requirements for portions of the Elm Tree-Bakken and Sanish-Bakken pools. Langved owned leased and unleased mineral interests in property covered by spacing units created by the Commission in 2013 and 2014. In 2015, Continental filed an application to amend these Commission orders to terminate the existing spacing units and to create new spacing units. On appeal, Langved stated the issue was "[w]hether the [Commission] could constitutionally, statutorily, or discretionally reunitize a producing drilling and spacing unit and thereby diminish his vested property rights and take his surface estate to afford Continental and the state of North Dakota an opportunity to access submerged minerals under the sections added in the enlarged unit." The North Dakota Supreme Court determined the Commission regularly pursued its authority, and its findings and conclusions were sustained by the law and by substantial and credible evidence. Accordingly, the Court affirmed the judgment. View "Langved v. Continental Resources, Inc." on Justia Law

Absent a prior conveyance of pore space to a third party, the owner of a surface estate owns the pore space beneath the surface. A surface owner may recover damages from a mineral developer for the developer's use of pore space for saltwater disposal. Plaintiffs Randall Mosser, Douglas Mosser, Marilyn Koon, and Jayne Harkin owned a surface estate in a quarter section of land in Billings County. When the plaintiffs acquired their surface estate, it was subject to a 1977 oil and gas lease granted by the plaintiffs' predecessors-in-interest, who had owned both the surface and mineral estate in several tracts of land included in the lease. In 2003, the Industrial Commission approved a plan for unitization of several tracts of land in Billings County, including the plaintiffs' surface estate. Denbury Onshore, LLC operated a well located on the plaintiffs' surface estate, and used the well for saltwater disposal since September 2011. Plaintiffs sued Denbury for saltwater disposal into their pore space, alleging claims for nuisance, for trespass and for damages under the Oil and Gas Production Damage Compensation Act in N.D.C.C. ch. 38-11.1. Plaintiffs moved for partial summary judgment on liability, claiming Denbury's liability was clear and the only issue for trial was the amount of their damages. Denbury moved for summary judgment dismissal of the plaintiffs' action, contending it had the right to dispose of saltwater into the plaintiffs' pore space without providing them compensation. A federal magistrate judge denied the parties' motions, but ruled the plaintiffs owned the pore space beneath their surface estate and Denbury could be liable for saltwater disposal into their pore space under N.D.C.C. ch. 38-11.1. Denbury filed a second motion for summary judgment, seeking dismissal of the plaintiffs' statutory claim for damages on the ground they failed to proffer any evidence to establish that they were currently using the pore space beneath their surface estate, that they had any concrete plans to do so in the near future, or that their property had diminished in value. The federal magistrate judge deferred ruling on that motion and certified several questions of North Dakota law to the North Dakota Supreme Court involving the plaintiffs' right to recover compensation for Denbury's disposal of saltwater into the pore space beneath the plaintiffs' surface estate under N.D.C.C. ch. 38-11.1. View "Mosser v. Denbury Resources, Inc." on Justia Law

John Dixon appealed a judgment that reformed a warranty deed to except and reserve mineral interests in certain real property from the conveyance and retain the minerals as the property of the Shirley A. Dixon Trust. Dixon argued the district court erred in reforming the deed because there was no evidence of a mutual mistake and the statute of limitations precluded the reformation claim. Finding no error in the reformation, the North Dakota Supreme Court affirmed. Furthermore, the Court concluded Dixon’s statute of limitations argument was waived. View "Dixon v. Dixon" on Justia Law

Drilling operations commence when: (1) work is done preparatory to drilling; (2) the driller has the capability to do the actual drilling; and (3) there is a good faith intent to complete the well. It is not necessary that the drill bit actually penetrate the ground. GADECO, LLC, appealed a judgment and orders declaring its oil and gas lease with Laurie Abell was terminated, dismissing its counterclaim against Abell, and awarding Abell her costs and attorney fees. GADECO and Abell began negotiating a surface use and damage agreement in mid-November 2011. GADECO sent Abell a proposed agreement on December 26, 2011, and later attempted to contact Abell about the agreement, but she refused to execute it. GADECO applied for a well permit in early 2012, shortly before the primary term of the lease was set to expire, and the permit was approved on January 23, 2012. Two days later, Abell leased the same mineral interests to Kodiak Oil & Gas. Unable to secure a surface use and damage agreement from Abell, GADECO relocated the well off the subject property but within the spacing unit, and a producing oil and gas well was completed in 2013. After giving notice of termination, Abell brought this lawsuit seeking a determination that GADECO's lease had terminated and an award of costs and attorney fees. GAEDCO counterclaimed for breach of contract and damages. The North Dakota Supreme Court found that where the failure to produce oil or gas from leased land is due to the fault of the lessor, the lease is not terminated at the end of the primary term, since the lessor is not entitled to set up termination of the lease where she has prevented the lessee from conducting operations which might bring about an extension of the lease. The Court reversed and remanded, finding genuine issues of material fact precluding summary judgment, and remanded for further proceedings. View "Abell v. GADECO, LLC" on Justia Law

In an eviction action, a district court must have both subject matter and personal jurisdiction to enter a valid order or judgment. Barbara Vondell appealed a judgment entered for Spirit Property Management, evicting her from possession of real property and awarding a money judgment against her. For over twenty-five years Luetta Vondell owned a mobile home on a rented lot. Sometime after Luetta was diagnosed with dementia, her daughter Barbara moved in with her, becoming her full-time care giver and agent under a durable power of attorney. In July 2014 Barbara and Luetta Vondell, through Barbara under the power of attorney, signed a one-year lease for the mobile home lot. The lease commenced on July 1, 2014, continuing on a month-to-month basis after the lease term. Luetta died in September 2015. In March 2016 Spirit Property filed suit for eviction and possession of real property for nonpayment of rent. Barbara answered the suit, denying Spirit Property's claims and asserting various defenses. At a May 2016 eviction hearing the district court found Barbara moved out of the home in November 2015, but the mobile home continued occupying Spirit Property's lot. The court found that while lot rent was partially paid for September 2015, no rent was paid in October and November 2015. The court entered an order and judgment against Barbara granting Spirit Property possession of the property and awarding $2,440 for unpaid rent and costs. Barbara argued the district court erred in deciding it had subject matter jurisdiction of the eviction action under N.D.C.C. ch. 47-32 when the court found Barbara terminated the lease and vacated the property in November 2015. The North Dakota Supreme Court concluded the district court had both subject matter jurisdiction over the eviction and personal jurisdiction over Vondell, and affirmed. View "Spirit Property Management v. Vondell" on Justia Law

Statoil Oil & Gas LP appealed judgments dismissing without prejudice its actions against numerous defendants, seeking a determination of the proper distribution of oil and gas revenues from Williams and McKenzie County wells on land adjacent to the Missouri River and under Lake Sakakawea. It was undisputed that the United States claimed an interest in the property and, although the United States waived sovereign immunity regarding real property title disputes, those actions against the United States had to be brought and resolved in a federal court. The parties therefore agreed that joinder of the United States was not feasible for purposes of N.D.R.Civ.P. 19(a). The provisions of N.D.R.Civ.P. 19(b) come into play:"(b) When Joinder Is Not Feasible. If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. Considering N.D.R.Civ.P. 19(b)(1), the district court noted the United States would be prejudiced to some extent by its absence in the proceedings because, although it would not be bound by a state court judgment, a judgment in favor of other mineral owners would cloud its record title to the disputed property. This could force the United States to institute a proceeding to protect its interests in the property, resulting in a waste of judicial and party resources. The trial court concluded there was a risk of substantial prejudice to the United States (including both its mineral interests and its sovereignty) if this matter proceeded in its absence, and therefore the first factor favors dismissal. The North Dakota Supreme Court affirmed, concluding the district court did not abuse its discretion in dismissing the actions because Statoil failed to join the United States as an indispensable party. View "Statoil Oil & Gas, LP v. Abaco Energy, LLC" on Justia Law

Under the abandoned mineral statutes, the surface owner must mail a copy of the notice of lapse to the mineral interest owner's address if the mineral interest owner's address is shown of record. Ronald and Sherry Huebner appealed a district court's findings of fact, conclusions of law and order for judgment and judgment denying their request to quiet title in certain Burke County mineral interests. The Huebners argued the district court erred in ruling they did not comply with the notice requirements in the abandoned mineral statutes, N.D.C.C. ch. 38-18.1. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Huebner v. Furlinger" on Justia Law

Only a person having an interest in, or claiming an interest in, real property may challenge a court's rulings in a quiet title action. William Everett and 14 others appealed a judgment quieting title to certain McKenzie County mineral interests in Craig and Barbara Sorenson. In 2010, the Sorensons sued the Everett defendants and others to quiet title to certain mineral interests, claiming they had succeeded to ownership of those interests because the interests were abandoned under the Termination of Mineral Interest Act. In 2012, the Sorensons commenced another quiet title action against the same defendants claiming entitlement to the same minerals because those interests were abandoned under N.D.C.C. ch. 38-18.1.  2016, the Everett defendants filed a N.D.R.Civ.P. 60(b) motion in the 2010 case to vacate the stipulated judgments because the judgments were based on the "mistaken belief" that they "did not own a portion of the mineral interests at issue." In 2016, the district court in the 2012 litigation granted the Sorensons' cross-motion for summary judgment and quieted title in favor of them against the Everett defendants. The court ruled the Everett defendants' lack of counsel when they entered into the stipulations disclaiming any interests they may have had in the minerals was "not grounds for invalidating the valid and binding Judgments." A month later, the court entered an order in the 2010 case denying the Everett defendants' N.D.R.Civ.P. 60(b) motion to vacate the stipulated judgments because the motion was untimely and the Everett defendants' "mistaken belief they had no interest in the minerals at issue is not a sufficient reason for disturbing final judgment." The court denied the Everett defendants' motion for reconsideration of the judgment in the 2012 litigation, and the Everett defendants appealed that judgment. The North Dakota Supreme Court affirmed because collateral estoppel barred the Everett defendants' arguments in this case. View "Sorenson v. Bakken Investments, LLC" on Justia Law

An action for equitable relief generally cannot be combined with a statutory appeal seeking a review of a local governing body's decision. Donald Cossette and the Angela R. Cossette Revocable Living Trust appealed a district court order dismissing their complaint against the Cass County Joint Water Resource District. The District passed a resolution of necessity determining the Cossettes' property was necessary for the Diversion Project and the District intended "to acquire a Permanent Right of Way Easement over, across, and through the [Cossettes'] Property." The Cossettes sought a declaration that the District inappropriately passed the resolution, and appealed from the District's resolution of necessity relating to the District's intent to acquire an interest in the Cossettes' real property through eminent domain. The North Dakota Supreme Court affirmed that part of the district court order dismissing the Cossettes' request for declaratory relief. The Court reversed that part of the district court order concluding the Cossettes were not entitled to appeal the District's resolution of necessity, and remanded. View "Cossette v. Cass County Joint Water Resource District" on Justia Law