Kathy Roberts v. Unimin Corporation
883 F.3d 1015 (2018)
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Rule of Law:
A lease that specifies its duration by reference to the continuation of certain activities creates a determinable leasehold, not a tenancy at will, even if the specified activities could potentially continue indefinitely.
Facts:
- The Williamson family has leased a plot of land in Arkansas for silica mining for over a century.
- In 1961, the parties' predecessors signed the current lease agreement.
- The lease provided for an initial fixed term ending in 2007.
- After 2007, the lease term was defined to continue 'as long thereafter as' siliceous materials are shipped from the lessee's mill and at least one of several specified mining-related activities occurs on the property.
- Kathy Roberts and Karen McShane are the current lessors (landowners).
- Unimin Corporation is the current lessee and continues to conduct the activities specified in the lease.
- Roberts and McShane demanded that Unimin vacate the land, asserting the right to terminate the lease.
Procedural Posture:
- In 2015, lessors Kathy Roberts and Karen McShane filed a lawsuit against lessee Unimin Corporation in the U.S. District Court for the Eastern District of Arkansas, seeking a declaratory judgment.
- The complaint alleged the lease created a tenancy at will, was unconscionable, and that Unimin was unjustly enriched.
- After the discovery phase, the lessors dismissed their unconscionability claim with prejudice.
- The district court (the federal trial court) granted summary judgment in favor of Unimin on the remaining claims.
- The lessors, as appellants, appealed the district court's judgment to the U.S. Court of Appeals for the Eighth Circuit, with Unimin as the appellee.
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Issue:
Does a mining lease that continues for an initial term of years and then 'as long thereafter as' specified mining and shipping activities occur create a determinable leasehold, or does its potentially indefinite duration render it a tenancy at will terminable by the lessor?
Opinions:
Majority - Arnold, Circuit Judge
No. A lease that continues 'as long as' specified activities occur creates a determinable leasehold, not a tenancy at will. Under Arkansas law, a tenancy at will is created only when a lease is silent as to its duration or does not grant the land for any definite time. This lease is not silent; it explicitly defines its duration by the continuation of specific events. This creates a determinable estate, which is an interest that 'may continue forever, but ... is liable to determine by some act or event circumscribing its continuance.' The fact that the terminating event may not occur for an indefinite period, or ever, is a characteristic feature of a determinable estate and does not convert it into a tenancy at will. The conditions for termination, such as 'mining operations,' are not fatally vague, as such terms are common in the mining industry and have been consistently enforced by Arkansas courts.
Analysis:
This decision reinforces the legal distinction between a tenancy at will, which arises from a lack of specified duration, and a determinable leasehold, whose duration is tied to an external event. The ruling provides significant security for lessees in industries like mining or resource extraction, where operations may continue for an unpredictable length of time. It clarifies that a lease 'for as long as' certain commercial activities persist is a valid and enforceable property interest, protecting substantial long-term investments against a lessor's unilateral desire to terminate the agreement.
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