PANGAEA EXPLORATION Corp. v. RYLAND

• Decision Date: 25 March 2010
• Docket Number: No. 106,Division No. 3.,712. Released for Publication by Order of the Court of Civil Appeals of Oklahoma,106
• Parties: PANGAEA EXPLORATION CORPORATION, Successor to Mickey J. Overall, Plaintiff/Appellee, v. Sarah RYLAND, Marie Billings, Grace Arlene Billings, Barbara Ann Gill, Ross Lee Thomas, Judith Marie Teeple, Mildred Ellis, Georgia Burlingame, Jacob W. Blevins, Ruth M. Blevins, Bill Dolan, Barth Campbell, Denise Campbell, Kevin Campbell, James Lynn Blevins, Roy Phillip Blevins, Arleta Gayle Blevins, Steven Ellis Blevins, Michelle Blevins, Jeffery Kent Blevins, David M. Blevins, Elizabeth Billings, Phern Billings, and John M. Billings, Defendants/Third-Party Plaintiffs/Appellants, v. Oklahoma Title & Closing Company, Inc., Third-Party Defendant/Appellant.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

239 P.3d 160

2010 OK CIV APP 66

PANGAEA EXPLORATION CORPORATION, Successor to Mickey J. Overall, Plaintiff/Appellee,

v.Sarah RYLAND, Marie Billings, Grace Arlene Billings, Barbara Ann Gill, Ross Lee Thomas, Judith Marie Teeple, Mildred Ellis, Georgia Burlingame, Jacob W. Blevins, Ruth M. Blevins, Bill Dolan, Barth Campbell, Denise Campbell, Kevin Campbell, James Lynn Blevins, Roy Phillip Blevins, Arleta Gayle Blevins, Steven Ellis Blevins, Michelle Blevins, Jeffery Kent Blevins, David M. Blevins, Elizabeth Billings, Phern Billings, and John M. Billings, Defendants/Third-Party Plaintiffs/Appellants,

v.Oklahoma Title & Closing Company, Inc., Third-Party Defendant/Appellant.

No. 106,712. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 3.

Court of Civil Appeals of Oklahoma,Division No. 3.

Jan. 22, 2010.

Rehearing Denied March 25, 2010.

Appeal from the District Court of Logan County, Oklahoma; Honorable Donald L. Worthington, Judge.

AFFIRMED.

Richard Gore, Travis P. Brown, Mahaffey & Gore, P.C., Oklahoma City, OK, for Plaintiff/Appellee.

Timothy Allen Heefner, David D. Proctor, II, Goolsby, Proctor, Heefner & Gibbs, P.C., Oklahoma City, OK, for Defendants/Third-Party Plaintiffs/Appellants.

Robert S. Lafferrandre, Peter L. Wheeler, Larry G. Cassil, Jr., Pierce, Couch, Hendrickson, Baysinger & Green, L.L.P., Oklahoma City, OK, for Third-Party Defendant/Appellant, Oklahoma Title & Closing Company, Inc.

ROBERT DICK BELL, Vice Chief Judge.

¶ 1 Defendants/Third-Party Plaintiffs/Appellants, Sarah Ryland, Marie Billings, Barbara Ann Gill, Ross Lee Thomas, Mildred Ellis, Georgia Burlingame, Jacob W. Blevins, Ruth M. Blevins, Bill Dolan, Barth Campbell, Denise Campbell, Kevin Campbell, James Lynn Blevins, Roy Phillip Blevins, Arleta Gayle Blevins, Steven Ellis Blevins, Michelle Blevins, Jeffery Kent Blevins, David M. Blevins, and John M. Billings (Grantors) and Third-Party Defendant/Appellant, Oklahoma Title & Closing Company, Inc., ¹ appeal from the trial court's summary judgment granted in favor of Plaintiff/Appellee, Pangaea Exploration Corporation (Pangaea). The trial court determined Grantors' reformation action was time-barred before Grantors filed a claim against certain mineral interests in Logan County and before Pangaea's quiet title action arose. Based on these determinations, the trial court entered judgment quieting Pangaea's title to said mineral interests. We affirm.

¶ 2 On September 5, 1997, Grantors entered into a Contract of Sale of Real Estate with Larry K. Wilson and Shirley E. Wilson (Contract). The Contract expressly stated “There are no mineral rights that go with the property.” The warranty deeds dated October 3 and 23, 1997, which conveyed Grantors' interest in the subject real property, were filed of record January 12, 1998, with the Logan County Clerk. The warranty deeds contained no reservation of minerals.

¶ 3 In May 2004, the Wilsons had the minerals in and under the subject property appraised. Grantors claimed the Wilsons' actions in 2004 provided the first notice that the Wilsons were adversely claiming an interest in the minerals. In July 2004, Grantors recorded the Contract and a Notice of Claim of Interest to All Mineral Rights (Notice) against the subject property with the Logan County Clerk. The Notice claimed Grantors did not intend to convey the minerals with the surface.

¶ 4 On January 11, 2005, Larry Wilson executed a quit claim mineral deed conveying the minerals in and under the real property to Mickey Overall. Overall filed the instant quiet title action August 11, 2005. Grantors' answer asserted Overall's quiet title action was barred by mistake and estoppel. Grantors filed a counterclaim for quiet title and for reformation of the deeds due to mutual mistake. Grantors claimed they were entitled to this equitable relief because (1) the Contract expressly excluded mineral rights from the sale, but through a scrivener's error, the warranty deeds failed to reserve the mineral interests in the real property, and (2) Overall was on notice of Grantors' adverse claim to the minerals before he obtained title to the minerals.

¶ 5 Pangaea was substituted as Plaintiff. Pangaea filed a motion for summary judgment asserting Grantors' quiet title claim-which necessitated the reformation of the October 3 and 23, 1997, deeds due to mutual mistake-was time-barred under the five year limitations period of 12 O.S.2001 § 95(A)(12). Grantors refuted their counterclaim was untimely. Grantors argued the limitations period to bring their reformation claim did not begin to run until they discovered the mistake in May 2004, when the Wilsons took actions adverse to the Grantors' interests.

¶ 6 The trial court held the five year limitations period at § 95(A)(12) was applicable. It determined the filing of the deeds constituted constructive notice of and afforded a means to discover the mistake. Pursuant to Overholt v. Indep. School Dist. No. 2, Tulsa County, 1993 OK CIV APP 75, 852 P.2d 823, the trial court charged Grantors with constructive notice of the mistake. The trial court concluded Grantors reformation claim-which was made more than five years after the deeds were recorded-was time-barred and it quieted Pangaea's title in and to the minerals.

¶ 7 Grantors appealed that judgment in Case No. 104,402. The Court of Civil Appeals (COCA) reversed. COCA held the trial court should have determined whether the limitations period for the reformation counterclaim expired before Pangaea's claim arose pursuant to 12 O.S.2001 § 2013(C). ² COCA found the fifteen-year limitations period for Pangaea's quiet title claim began to run when the Notice-which created a cloud on the title to the minerals-was filed. COCA held the five year limitations period for reformation of a deed, based on a mutual mistake, began to run when Grantors knew or should have known of the mistake. COCA noted Grantors and the Wilsons were operating under a mutual mistake of fact as to the terms of the deeds and remanded for trial the issues as to when Grantors knew or should have known of the mistake and whether Grantors' counterclaim was timely under § 2013(C).

¶ 8 On remand, Pangaea again moved for summary judgment in its favor. Pangaea claimed Grantors' reformation claim was barred under § 2013(C) because the counterclaim was time-barred prior to the time Pangaea's quiet title action arose. Pangaea cited Overholt and Horn v. Horn, 2007 OK CIV APP 114, 172 P.3d 228, for the proposition that the recording of the deeds was constructive notice of the mistake; thus, the limitations period ran from the recording date. The trial court sustained Pangaea's motion for summary judgment and quieted Pangaea's title to the minerals. The court held Grantors' claim to reform the deeds dated October 3 and 23, 1997, and filed of record on January 12, 1998, was time-barred prior to the filing by Grantors of their Notice on July 13, 2004, and the filing of the Pangaea's quiet title case. Grantors and Oklahoma Title & Closing Company, Inc. now appeal from that judgment. This matter stands submitted for accelerated appellate review on the trial court record pursuant to Rule 13(h), Rules for District Courts, 12 O.S. Supp.2002, Ch. 2, App. 1, and Rule 1.36, Oklahoma Supreme Court Rules , 12 O.S. Supp.2003, Ch. 15, App. This Court's standard of review of a trial court's grant of summary judgment is de novo. Hoyt v. Paul R. Miller, M.D., Inc., 1996 OK 80, ¶ 2, 921 P.2d 350, 351-52.

¶ 9 For summary judgment purposes, the parties conceded the deeds dated October 3 and 23, 1997, mistakenly failed to reserve the mineral interests. They also agreed an action for reformation, due to mistake, must be brought within five years after the cause of action has accrued and that said action accrues when the plaintiff discovered or should have discovered the mistake. The question on appeal is when did the limitations period begin to run? In the trial court proceeding, Grantors asserted the...