Pete Lien & Sons, Inc. v. Zellmer
| Decision Date | 13 May 2015 |
| Docket Number | No. 26982.,26982. |
| Citation | 865 N.W.2d 451 |
| Court | South Dakota Supreme Court |
| Parties | PETE LIEN & SONS, INC, a South Dakota Corporation, Plaintiff and Appellee, v. Steve ZELLMER; Cesar Conde; Sunset Properties, LLC, a Colorado Corporation; GCC of America, Inc., a Delaware Corporation; and GCC Dacotah, Inc., a South Dakota Corporation, Defendants and Appellants. |
Larry M. Von Wald of Beardsley, Jensen & Von Wald, Prof., LLC, Rapid City, South Dakota, Attorneys for plaintiff and appellee.
Kyle L. Weise, James S. Nelson of Gunderson, Palmer, Nelson & Ashmore, LLP, Rapid City, South Dakota, Attorneys for defendants and appellants.
[¶ 1.] Justice Severson delivers the opinion of the Court, holding that title to mining claims CHUCK NO.2012–02, CHUCK NO.2012–03, CHUCK NO.2012–04, CHUCK NO.2012–05, CHUCK NO.2012–06, CHUCK NO.2012–07, CHUCK NO.2012–08, CHUCK NO.2, CHUCK NO.3, CHUCK NO.4, CHUCK NO.5, CHUCK NO.6, AND CHUCK NO.7 is quieted in Pete Lien & Sons, Inc. Chief Justice Gilbertson concurs. Justices Zinter and Wilbur and Retired Justice Konenkamp concur in result.
[¶ 2.] Justice Zinter delivers the opinion of the Court, holding that title to mining claim CHUCK No.2012–01, a.k.a. CM–5, is quieted in GCC Dakota Inc. Justice Wilbur and Retired Justice Konenkamp concur. Chief Justice Gilbertson and Justice Severson dissent.
[¶ 3.] SEVERSON, Justice, writing the opinion regarding mining claims CHUCK NO.2012–02, CHUCK NO.2012–
[¶ 4.] GCC Dacotah, Inc. and Pete Lien & Sons, Inc., claim mineral rights to the same 280 acres of U.S. Forest Service land in Lawrence County, South Dakota. Pete Lien & Sons, Inc. (PLS) filed a complaint to quiet title on September 14, 2012. Both parties subsequently moved for summary judgment on October 16, 2013, which the circuit court granted to PLS on January 2, 2014. The circuit court held that GCC Dacotah, Inc. (GCC) had failed to follow federal and state law regarding the proper location of placer mining claims. GCC appeals.
[¶ 5.] On April 6, 2007, Steve Zellmer, then president of GCC, signed and filed with the Lawrence County Register of Deeds fourteen placer mining claims. Throughout this opinion Appellants will be interchangeably referred to as GCC or Zellmer. Each claim covers twenty acres of U.S. Forest Service land in Lawrence County for a total of 280 acres. That same day, Gene Nelson, an employee of GCC, placed one discovery monument containing notices of the fourteen claims on the northeast corner of the 280 acres. Zellmer transferred the claims by quitclaim deed on June 6, 2007, to Sunset Properties, LLC, a company owned by GCC of America, Inc. Sunset Properties, LLC recorded the deed on September 11, 2007.
[¶ 6.] On April 20, 2007, Sam Brannan, on behalf of PLS, posted notices of location certificates on six placer mining claims covering some of the same 280 acres claimed by Zellmer. PLS marked each twenty-acre section with corner and side-center posts.1 Notices of location were attached to discovery monuments at each claim. On February 13, 2012, Sam Brannan made discovery of eight more placer mining claims and marked the boundaries in the same manner as in 2007. These eight claims were also previously claimed by Zellmer. As a result, both GCC and PLS now claim that they each have rights to the same 280 acres.
[¶ 7.] PLS filed a complaint to quiet title on September 14, 2012, alleging that Zellmer did not follow federal or state law to properly locate his placer mineral claims and the property remained open for claims. GCC replied, alleging that only one monument is needed and that the notice of the fourteen claims in the monument gave actual notice of his rights. Furthermore, GCC argued that anyone trying to claim the same mineral rights had constructive notice of GCC's claim because the claims were filed with the county register of deeds. As a result, GCC argued, no future claimants could obtain an interest in the same minerals.
[¶ 8.] PLS and GCC each moved for summary judgment. The circuit court granted summary judgment to PLS on January 2, 2014. The court found that federal regulations require the location of the placer mining claims to be staked and monumented at the corners of each twenty-acre claim. The court also found that federal regulations provide that the procedure to stake and monument surface mining claims must also meet any state requirements not inconsistent with federal law. Further, it found SDCL 45–4–3 requires additional posts to mark the centers of each claim's sides, for a total of eight posts on each claim. The court found that Zellmer did not follow federal or state law to claim the minerals; however, it found that PLS followed all applicable laws and was therefore entitled to the mining claim subject to the paramount title of the United States.
[¶ 9.] GCC appeals, raising the following issues:
Standard of Review
[¶ 10.] The circuit court in this case interpreted federal and state statutes when it granted summary judgment.
Our standard of review on a grant or denial of summary judgment is well settled. Summary judgment is proper where[ ] the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. SDCL 15–6–56(c).
Luther v. City of Winner, 2004 S.D. 1, ¶ 6, 674 N.W.2d 339, 343. “We view all reasonable inferences drawn from the facts in the light most favorable to the [nonmoving] party.” Roden v. Gen. Cas. Co. of Wis., 2003 S.D. 130, ¶ 5, 671 N.W.2d 622, 624. Statutory interpretation is a question of law reviewed de novo. Martinmaas v. Engelmann, 2000 S.D. 85, ¶ 49, 612 N.W.2d 600, 611.
[¶ 11.] I. Whether the court erred in deciding that GCC's fourteen placer mineral claims on 280 acres of U.S. Forest Service property in Lawrence County, South Dakota, were invalid.
[¶ 12.] Federal law allows citizens to explore and purchase mineral rights on certain United States property. 30 U.S.C. § 22 (2012). In order to claim an interest in minerals on federal lands open to such exploration, citizens must follow both federal law and state law “so far as the are applicable and not inconsistent with the laws of the United States.” Id. A citizen who has discovered minerals on U.S. land must properly locate the claim. Locate is a term of art within mining laws. Locating a claim means “(1) establishing the exterior lines of a mining claim or site on lands open to mineral entry to identify the exact land claimed; and (2) [r]ecording a notice or certificate of location as required by state and Federal law[.]” 43 C.F.R. §§ 3832.1(a)(1)-(2) (2014). Additional state and federal requirements provide the manner in which the exterior lines are to be established and claims are to be recorded.See id. § 3832.1(b)(1) (); 30 U.S.C. § 28 (2012) (); id. § 35 (2012) (); 43 C.F.R. § 3832.11 (2014) ().
[¶ 13.] Federal law provides for different types of mining claims; the two types at issue in this case are “placer” and “lode or vein” claims. A placer claim covers “ground within defined boundaries which contains mineral in its earth ...; ground that includes valuable deposits not in place, that is, not fixed in rock, but which are in a loose state, and may in most cases be collected by washing or amalgamation without milling.” United States v. Iron Silver Mining Co., 128 U.S. 673, 679, 9 S.Ct. 195, 197–98, 32 L.Ed. 571 (1888). In contrast, vein or lode claims cover “lines or aggregations of metal embedded in quartz or other rock in place.” Id. The fourteen claims over limestone in this case are placer claims.
[¶ 14.] The Dakota Territory first enacted laws regarding mines and mining claims in 1875, before South Dakota became a state. 1875 Dakota Sess. Laws ch. LXVII, § 6.3 Many of those laws remain largely the same today and are codified at SDCL chapter 45–4. Our statutes only refer to placer claims within SDCL 45–4–20, which makes it a misdemeanor to associate with another to obtain possession of mining claims by force, violence, threat of violence, or stealth. The other provisions within the mining chapter mention lode claims or just generally refer to mining claims. Because of the lack of a specific reference to placer claims within chapter 45–4, the parties dispute whether SDCL 45–4–3 governs the marking of a placer claim. SDCL 45–4–3 provides:
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