Black Stone Minerals Co., L.P. v. Brokaw
2017 ND 110, 2017 WL 1462897, 893 N.W.2d 498 (2017)
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Rule of Law:
A quiet title judgment vesting "fee simple absolute" in multiple persons without specifying fractional shares creates a tenancy in common with equal shares, limiting a grantor's subsequent conveyance to their actual interest. To establish adverse possession of severed mineral interests, actual physical use, such as drilling, is required, not merely executing leases; similarly, the Marketable Record Title Act and bona fide purchaser protections are inapplicable if statutory requirements are not met or prior judgments are recorded.
Facts:
- In 1945, Lyman Brokaw acquired a full, undivided interest in 160 acres through a Williams County tax deed.
- Later in 1945, Lyman Brokaw and his wife, Martha Brokaw, initiated a quiet title action concerning the property.
- The district court entered a default judgment quieting title in Lyman and Martha Brokaw, decreeing them "the owners in fee simple absolute of [the property]."
- In 1958, Lyman Brokaw conveyed "an undivided full interest" in the minerals under the property to North American Royalties Inc.
- Later in 1958, North American Royalties Inc. conveyed an undivided one-half interest in the minerals to Claud B. Hamill.
- Over the next fifty years, North American Royalties Inc. transferred other fractional interests to various entities.
- The first well on the property was spudded in 2013.
Procedural Posture:
- Lyman and Martha Brokaw initiated a quiet title action in district court (Williams County).
- The district court entered a judgment by default quieting title in Lyman and Martha Brokaw.
- Missouri River Royalty Corporation and Bauer Family LLP (North American Successors) initiated the current action against the Brokaw family to quiet title in the minerals in district court.
- The Brokaw family moved for summary judgment, arguing the 1945 judgment vested a one-half interest in Martha Brokaw.
- North American Successors also moved for summary judgment, arguing the 1945 judgment did not vest a one-half interest in Martha, or in the alternative, that the Marketable Record Title Act, adverse possession, or bona fide purchaser doctrines supported their claims.
- The district court granted Brokaw's motion for summary judgment, quieting title to one-half of the minerals in the Brokaw family and vesting the other one-half interest in "North American Royalties Inc. and Successors in interest (Plaintiffs)."
- The four plaintiffs (including Missouri River Royalty Corp. and Bauer Family LLP) moved the district court to correct the judgment, arguing it vested title in a non-party (North American Royalties Inc.).
- The district court denied the motion to correct judgment.
- Missouri River Royalty Corporation and Bauer Family LLP (North American Successors) appealed the district court's decision to the Supreme Court of North Dakota.
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Issue:
1. Does a 1945 quiet title judgment vesting "fee simple absolute" in a husband and wife, without specifying fractional interests, convey equal one-half interests to each, thereby limiting the husband's subsequent conveyance of a "full interest" in minerals to only his one-half share? 2. Did North American Successors adversely possess Martha Brokaw's one-half mineral interest merely by executing oil and gas leases without actual physical production? 3. Did the district court err by denying a Rule 60(a) motion to correct a judgment that improperly vested title in a non-party, even if a more detailed distribution among current parties would constitute a substantive change?
Opinions:
Majority - Tufte, Justice.
Yes, the 1945 judgment vested equal one-half interests in Lyman and Martha Brokaw. The court found that when a judgment decrees ownership in "fee simple absolute" to multiple parties without specifying their relative ownership, it creates a tenancy in common. Under N.D.R.C. § 47-0208, an interest created in favor of several persons in their own right is presumed to be an interest in common, and a property interest owned by tenants in common is presumed to be equal. Since no evidence was presented to rebut this presumption, Lyman and Martha each owned a one-half interest. Therefore, Lyman Brokaw could only convey his one-half interest to North American Royalties Inc. because he could not convey what he did not own. No, North American Successors did not adversely possess Martha Brokaw's one-half interest. The court reiterated that "possession" of oil and gas minerals for adverse possession purposes requires more than merely executing oil and gas leases; it demands actual, visible, continuous, notorious, distinct, hostile occupation that unmistakably indicates exclusive ownership. Actual physical use, such as spudding a well, did not occur until 2013, which was insufficient for adverse possession. The 2013 amendment to N.D.C.C. § 47-19.1-07, expanding the definition of "possession" for the Marketable Record Title Act, is explicitly limited to that chapter and does not apply to adverse possession. No, North American Successors' claims also fail under the Marketable Record Title Act because they did not comply with the statutory requirement of filing affidavits of possession under N.D.C.C. § 47-19.1-07. Furthermore, they are not protected as good-faith purchasers under N.D.C.C. § 47-19-41 because the 1945 judgment, which is considered an "instrument" and "conveyance" affecting title, was filed for record in the county land records prior to any mineral conveyance they relied upon. The doctrine of laches is also inapplicable as it cannot be used offensively to divest a surface owner of mineral interests through inaction. Yes, the district court abused its discretion in part by denying the Rule 60(a) motion. While redistributing the one-half interest among the various plaintiffs would have been a substantive change beyond the scope of Rule 60(a) (which corrects clerical mistakes, not deliberate judicial decisions), vesting any share of title in North American Royalties Inc. was a clerical error. North American Royalties Inc. was not a party to the action and the record contained no evidence that it currently held an interest. The court should have corrected the judgment to exclude North American Royalties Inc. as an owner.
Analysis:
This case significantly clarifies the interpretation of property ownership derived from quiet title judgments where fractional interests are not explicitly stated, affirming the presumption of equal ownership for tenants in common. It reinforces the stringent requirements for establishing adverse possession of severed mineral interests, emphasizing actual physical use over mere leasing activity, and limits the application of statutory definitions of possession. The ruling also delineates the precise scope of Rule 60(a) motions, allowing corrections for clerical errors (like naming a non-party) but not for substantive changes or relitigation of decided matters. Future cases will cite this decision for guiding interpretations of ambiguous quiet title decrees and establishing the high bar for claiming mineral rights through adverse possession.
