Smith v. B&G Royalties

Decision Date18 August 2020
Docket NumberS-19-0267
Citation469 P.3d 1206
Parties Roy Charles SMITH and the estate of Curt Allen Smith, Appellants (Plaintiffs), v. B&G ROYALTIES; Roy G. Barton, Jr.; Mark E. Hodge and William J. McCaw, Appellees (Defendants).
CourtWyoming Supreme Court

Representing Appellants: Thomas F. Reese, David E. Shields, and Will Reese, Williams, Porter, Day & Neville, P.C., Casper, Wyoming.

Representing Appellees: Lucas Buckley, Hathaway & Kunz, LLP, Cheyenne, Wyoming.

Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.

GRAY, Justice.

[¶1] Appellants Roy Charles Smith and the Estate of Curt Allen Smith sought a declaratory judgment and to quiet title in certain Campbell County, Wyoming property, asserting ownership of a royalty interest. The district court granted summary judgment and issued a Declaratory Judgment and Judgment Quieting Title to Real Property in favor of Appellees, concluding that Appellants’ predecessors in title, Charles B. Smith (Charles) and his wife (Marion) conveyed a 1/8 mineral interest to Roy G. Barton in 1989. We affirm.

ISSUES

[¶2] The issues are:

1. Did Charles and Marion convey an unrestricted 1/8 mineral interest to Roy G. Barton, Jr. by warranty deed in 1989?
2. Are Appellees entitled to attorneys’ fees and costs?
FACTS

[¶3] The facts are undisputed. From 1970 to 2018, conveyances of the property at issue here were made as follows:

1. July 30, 1970 Royalty Deed—Myrtle and Laurence Richmond conveyed to Charles a "Three and One-Eighth per cent ... Landowner's royalty of all of the oil and of all the gas produced and saved from" land located in Campbell County described as:
Township 42 North, Range 71 West 6th P.M.
Section 31: Lots 1, 2, 3, 4, E½W½
Containing 314.56 acres more or less.
2. February 19, 1976 Mineral Deed—Robert and Mary McKee conveyed to Charles "an undivided one-fourth (1/4th) interest in and to all of the oil, gas and other minerals in and under and that may be produced" from Campbell County lands described as:
Township 42 North, Range 71 West, 6th P.M.
Section 31: Lots 1, 2, 3, & 4; E½W½
[C]ontaining 314.54 acres, more or less[.]
3. June 25, 1976 Royalty Deed—Charles conveyed to F. H. Merback "AN UNDIVIDED 1.0416% interest in and to all of the oil, gas and other minerals, in, under and upon" the land described as:
Township 42 North, Range 71 West, 6th P.M.
Section 31: Lots 1, 2, 3, 4, E½W½
Containing 314.56 acres more or less.

The deed reserved to Charles "the exclusive right to lease said lands, or any part thereof, for oil and gas purposes, without interference ... upon the part of the grantee [F. H. Merback]."

4. December 1, 1983 Mineral Deed—Charles conveyed to W. Allene Smith "an undivided 50% of grantor's interest now owned and to all of the oil, gas and other minerals in and under and that may be produced" from lands in:
Township 42 North, Range 71 West, 6th P.M.
Section 31: Lots 1, 2, 3, 4, E½W½
...
[C]ontaining 314.54 acres, more or less[.]

On January 6, 1987, Charles executed a corrective deed to W. Allene Smith containing conveyance language identical to the 1983 deed.1 Both deeds conveyed the right to ingress and egress for the purposes of drilling and developing the land and both state "it is the intention of the grantor to convey one-half of the minerals it now owns in the described lands to the grantee."

5. December 1, 1983 Royalty Deed—Charles also conveyed to W. Allene Smith "an undivided one-half of his interest ... royalty of all of the oil and of all the gas produced and saved" from the lands described as:
Township 42 North, Range 71 West, 6th P.M.
Section 31: Lots 1, 2, 3, 4, E½W½
...
Containing 314.56 acres, more or less.

That deed specifically states the grant is "Subject to that certain Royalty Deed" from the Richmonds, #1 above.

6. January 5, 1987 Mineral Deed—Charles conveyed "an undivided 100%" of his "interest now owned and to all of the oil, gas and other minerals in and under and that may be produced from" land, inclusive of the 314.54 acres of land described in each of the preceding conveyances, to his wife Marion.
7. May 29, 1989 Mineral Deed—Charles and Marion conveyed to Roy G. Barton, Jr. "an undivided one-eighth (1/8th) interest in and to all of the oil, gas and other minerals in and under and that may be produced from":
Township 42 North, Range 71 West, 6th P.M.
Section 31, Lots 1, 2, 3, 4, E½W½
...
[C]ontaining 314.56 acres, more or less[.]

[¶4] The May 29, 1989 deed stated it "is the intent of Grantor to convey to Grantee 39.32 net mineral acres" and conveyed the right of ingress and egress for mining activities along with the right to market and remove minerals from the land. The May 29, 1989 deed also contained the following warranty language:

[Charles and Marion] do hereby warrant said title to [Mr. Barton,] his heirs, executors, administrators, personal representatives, successors and assigns forever and do hereby agree to defend all and singular the said property unto [Mr. Barton,] his heirs, successors, executors, personal representatives, and assigns against every person whomsoever claiming or to claim the same or any part thereof.
On June 7, 1989, Charles and Marion executed a Corrective Mineral Deed to Mr. Barton amending the legal description from the May 29, 1989 deed. The corrected description set forth the acreage described in each transfer above but added additional acres. The corrective deed specified that it contained "320.68 acres, more or less" and stated that it was Charles and Marion's intent to convey "40.085 net mineral acres." The corrective deed contained the same warranty language as the May 29, 1989 deed. We refer to the May 29, 1989 Mineral Deed and the June 7, 1989 Corrective Mineral Deed collectively as the 1989 Deed.
8. October 10, 2017 Decree of Distribution—following Charles's death, the Converse County district court entered an order of distribution, transferring his "oil and gas interest" in the property at issue here as described in the preceding conveyances to his two sons, Roy Smith and Curt Smith (Curt Smith died and his estate along with Roy Smith, the Appellants in this case, are referred to here as the Sons).
9. January 11, 2018 Quit Claim Deed—Marion conveyed to the Sons "all of her right, title and interest" in the property described as:
Township 42 North, Range 71 West, 6th P.M.
Section 31: Lots 7, 8, 9, 10, 15, 16, 17, 18,
formerly described as: W1/2

The deed describes the interest as a "landowner's royalty as set forth, the said oil and gas so produced and saved from said lands ...."

[¶5] On September 21, 2018, the Sons filed this action seeking declaratory judgment and to quiet title to a 1.0417% royalty interest2 in the property described in the conveyances supra . The action named B&G Royalties, Roy G. Barton, Jr., Mark E. Hodge, and William J. McCaw as defendants. Roy G. Barton, Jr. is the original grantee and the remaining defendants are successor grantees. We refer to the defendants/appellees collectively as B&G. B&G filed an answer and counterclaim, also seeking a declaratory judgment, quiet title, and other alternative relief. The parties filed cross-motions for summary judgment. After a hearing, the district court granted summary judgment in favor of B&G followed by a declaratory judgment and judgment quieting title in B&G to a 1/8 mineral interest "including all royalty interests ... in said 1/8 mineral interest." The Sons appeal.

DISCUSSION

[¶6] The district court determined that the 1989 Deed was unambiguous, and Charles and Marion conveyed a 1/8 mineral interest in the described property—including the royalty interest—to B&G, reserving nothing. On appeal, the Sons argue that the mineral interest conveyed by the 1989 Deed did not include the royalty interest. They assert Charles and Marion retained the royalty interest, and it was distributed to the Sons out of Charles's estate and by Marion's quit claim deed. B&G contends that the 1989 Deed unambiguously included the 1/8 royalty interest and that B&G is entitled to attorneys’ fees and costs incurred in this appeal.

I. Did Charles and Marion convey an unrestricted 1/8 mineral interest to Roy G. Barton, Jr. by warranty deed in 1989?
A. Standard of Review

[¶7] Summary judgment can be granted only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c) ; Montierth v. Deutsche Bank Nat'l Tr. Co. for Ameriquest Mortg. Sec. Tr. 2005-R7, asset-backed pass-through certificate, series 2005-R7 , 2018 WY 41, ¶ 6, 415 P.3d 654, 658 (Wyo. 2018).

We review a district court's order granting summary judgment de novo and afford no deference to the district court's ruling. Thornock v. PacifiCorp , 2016 WY 93, ¶ 10, 379 P.3d 175, 179 (Wyo. 2016). This Court reviews the same materials and uses the same legal standard as the district court. Id. The record is assessed from the vantage point most favorable to the party opposing the motion, and we give a party opposing summary judgment the benefit of all favorable inferences that may fairly be drawn from the record. Id. A material fact is one that would have the effect of establishing or refuting an essential element of the cause of action or defense asserted by the parties. Id.

Bd. of Trustees of Laramie Cty. v. Bd. of Cty. Comm'rs of Laramie Cty. , 2020 WY 41, ¶ 6, 460 P.3d 251, 254 (Wyo. 2020) (quoting Estate of Weeks by and through Rehm v. Weeks-Rohner , 2018 WY 112, ¶ 15, 427 P.3d 729, 734 (Wyo. 2018) ).

[¶8] Warranty deeds are contracts, Caballo Coal Co. v. Fid. Expl. & Prod. Co. , 2004 WY 6, ¶ 11, 84 P.3d 311, 314 (Wyo. 2004), and are construed by examining the "specific language of the deed." Gilstrap v. June Eisele Warren Tr. , 2005 WY 21, ¶ 12, 106 P.3d 858, 862 (Wyo. 2005) (citation omitted). Summary judgment is appropriately entered in the interpretation of a contract when the contract language is clear and unambiguous. Trabing v. Kinko's, Inc. , 2002 WY 171, ¶ 20, 57 P.3d 1248, 1254 (Wyo. 2002) ; Questar Expl. & Prod. Co. v. Rocky Mountain Res., LLC , 2017 WY...

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