Amoco Production Co. v. U.S., 85-2529
| Decision Date | 02 August 1988 |
| Docket Number | No. 85-2529,85-2529 |
| Citation | 852 F.2d 1574 |
| Parties | AMOCO PRODUCTION COMPANY, a Delaware corporation, Champlin Petroleum Corporation, a Delaware corporation, and Sun Oil Company (Delaware), a Delaware corporation, Plaintiffs-Appellants, v. UNITED STATES of America, et al, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Alan L. Sullivan (Samuel O. Gaufin with him on the briefs) of Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City, Utah, for plaintiffs-appellants.
John W. Horsley (Joseph J. Palmer and Royal I. Hansen with him on the brief) of Moyle & Draper, P.C., Salt Lake City, Utah, for defendants-appellees Bow Valley Petroleum Inc., John R. Anderson, and Beverly Lasrich.
Jacques B. Gelin, Atty., Dept. of Justice, Washington, D.C. (F. Henry Habicht II, Asst. Atty. Gen., and Robert L. Klarquist, Atty., Dept. of Justice; Brent D. Ward, U.S. Atty., D. Utah, and Glen Dawson, Asst. U.S. Atty., with him on the brief), for defendant-appellee U.S.
Before McKAY, SEYMOUR and BALDOCK, Circuit Judges.
In 1942, the Federal Farm Mortgage Corporation (FFMC) conveyed land in Summit County, Utah, to Hyrum and Florence Newton by special warranty deed. The original deed and all copies of the original no longer exist; however, a version of the deed was recorded in the Summit County Recorder's Office. The content of the original deed is the focal point of this case, because after the 1942 conveyance, both FFMC and the Newtons acted under contrary interpretations of the deed and conveyed overlapping mineral interests in the Summit County property.
FFMC believed it had retained a fifty percent mineral interest in the land, and, in 1957, conveyed that interest to the United States by quitclaim deed. In 1974, the United States leased portions of this mineral interest to the other named defendants.
The Newtons believed they had received all the mineral rights in the land through the 1942 conveyance. In 1960 the Newtons conveyed title in the land to a family corporation, and, in 1971, the family corporation conveyed a mineral lease in the land to Amoco Production Company (Amoco). Amoco subsequently conveyed portions of its leasehold to the other named plaintiffs.
On January 21, 1976, plaintiffs initiated an action under the Quiet Title Act of 1972, 28 U.S.C. Secs. 2409a, 1346(f), 1402(d) (1982 & Supp.IV 1986), to quiet title in the disputed mineral rights. Plaintiffs' principal argument was that the only remaining version of the deed, the one recorded in Summit County, contains no mineral reservation and thus the Newtons had received all the mineral interests in the land. The defendants contended that the original deed contained a reservation clause and that the Summit County Recorder erred in her recording. Defendants also claimed that FFMC's quitclaim deed to the United States in 1957 should have given plaintiffs constructive notice of the dispute and thus barred plaintiffs' suit, since it was not brought within the twelve-year limitations period specified in 28 U.S.C. Sec. 2409a(f) (1982):
Any civil action under this section shall be barred unless it is commenced within twelve years of the date upon which it accrued. Such action shall be deemed to have accrued on the date the plaintiff or his predecessor in interest knew or should have known of the claim of the United States. 1
Based on section 2409a(f), the defendants moved the district court for summary judgment, and plaintiffs moved for summary judgment on the merits. The district court denied defendants' motion but granted plaintiffs' motion. On appeal, we reversed the district court's entry of summary judgment and, on remand, directed the district court to determine whether erroneously excluded evidence concerning the original deed was otherwise admissible. Amoco Production Co. v. United States, 619 F.2d 1383, 1392 (10th Cir.1980) (Amoco I ). 2 If the evidence was admissible, we directed the district court to determine if the original deed contained a reservation of fifty percent of the mineral rights.
On remand, the district court held further hearings and received additional evidence. On August 7, 1981, the court ruled from the bench that the original deed contained a mineral reservation and that plaintiffs were not bona fide purchasers. Record, vol. 11, at 1-8. Moreover, the court concluded that in light of the additional evidence heard, plaintiffs' action was time-barred under section 2409a(f). Id. at 8-10. The government realized the district court's time-bar ruling potentially removed jurisdiction from the court to reach the merits of the quiet title issues. Thus, despite the time-bar ruling, the government sought to verify the court's jurisdiction to resolve the merits by claiming that its Answer contained a counterclaim on the quiet title question.
All of the parties stipulated that the United States' Answer contained a counterclaim, and, on December 17, 1981, the district court decided that the Answer would be treated as a Counterclaim and that "it shall not be necessary for defendant, United States of America, to file a separate counterclaim to assert its claim seeking an order quieting title to an undivided fifty percent mineral interest in the lands which are the subject of plaintiffs' Complaint." Record, vol. 1, doc. 105.
Subsequent to the August 7, 1981 Order, the district court reconsidered its rulings at least two times and ultimately concluded that (1) the original deed contained a reservation of mineral rights, (2) plaintiffs were not good-faith purchasers, and (3) plaintiffs' action was time-barred by section 2409a(f). See record, vol. 1, doc. 135. In light of its time-bar holding, the court also ruled that the expiration of the twelve-year period extinguished plaintiffs' claims not only procedurally but also substantively. Record, vol. 1, doc. 135, at 5-7. Thus, the court concluded that the plaintiffs' claims were "gone forever" and quieted title in the defendants. The district court also concluded that the counterclaim was moot because the time-bar had effectively quieted title in the defendants as requested by the counterclaim. Id. at 7. Plaintiffs now appeal all rulings.
We first consider whether the district court had jurisdiction to resolve the merits of this quiet title suit. Historically, quiet title actions could not be brought against the United States unless the United States waived its sovereign immunity. See Block v. North Dakota, ex rel. Board of University and School Lands, 461 U.S. 273, 280, 103 S.Ct. 1811, 1816, 75 L.Ed.2d 840 (1983). In 1972, Congress created an exception to the United States' sovereign immunity in quiet title actions through the Quiet Title Act of 1972, 28 U.S.C. Secs. 2409a(f), 1346(f), 1402(d) (1982 & Supp.IV 1986). However, this exception was subject to a twelve-year limitation. 3
The plaintiffs' action against the United States was initiated on January 21, 1976, and thus would be barred if any of the plaintiffs or their predecessors "knew or should have known" prior to January 22, 1964, that the United States had a claim to the minerals. In Amoco I, we determined that plaintiffs' action was not time-barred by section 2409a(f). 4 However, in that case we were reviewing the disposition of motions for summary judgment and, in particular, whether the 1957 quitclaim deed gave constructive notice to the plaintiffs so as to bar their suit. We were never asked to address the question of whether there was sufficient evidence to conclude that the plaintiffs had actual knowledge of the United States' claims. It was not until additional evidence was submitted on remand that the district court had an adequate opportunity to delve into the subjective knowledge of the parties and thereby learn whether plaintiffs or their predecessors had actual knowledge of the United States' claim to the minerals. In light of the evidence heard on remand, the district court reconsidered whether section 2409a(f) would bar the plaintiffs' suit. 5
After hearing the evidence, the district court found that, no later than 1957, Hyrum Newton had received at least one letter from FFMC advising him of FFMC's claim of a fifty percent mineral interest. Record, vol. 1, doc. 135, at 3. Based on this finding, the district court ruled that Hyrum Newton had "notice and actual knowledge of the government's interest" prior to January 22, 1964, and that the plaintiffs' action against the United States to quiet title in one-half of the minerals was time-barred. Id. at 3-7.
Our review of the district court's finding that plaintiffs had actual knowledge of the government's interest prior to 1964 is governed by the "clearly erroneous" standard as set forth in Rule 52(a) of the Federal Rule of Civil Procedure. See Anderson v. Bessemer City, 470 U.S. 564, 573-76, 105 S.Ct. 1504, 1511-13, 84 L.Ed.2d 518 (1985). The record reveals that (1) the FFMC employed "fail safe" methods in carrying out its reservation and notice program, and (2) the FFMC conformed to these methods in sending letters to Hyrum Newton, no later than 1957, advising him of FFMC's mineral interest. In light of these facts and the balance of the evidence, we cannot say that the district court's finding that at least one of the letters gave Newton actual notice of the United States' claim in the minerals no later than 1957 is clearly erroneous. 6
We also are satisfied that the district court's finding of actual knowledge leads to the conclusion that plaintiffs' action was time-barred under section 2409a(f). However, the district court's conclusions of law that this time-bar extinguished plaintiffs' substantive claims to the mineral property interest and precluded the government's counterclaim are erroneous.
Once the district court determined that plaintiffs' suit was time-barred by section 2409a(f), the suit was extinguished procedurally and the district court was precluded from reaching the substantive merits of the plaintiffs' suit....
To continue reading
Request your trial
- Mitchell v. Bank of N.Y. Mellon
-
Elfelt v. U.S., 98-10256-BC.
... ... § 7425. The government's appellate brief tells us that the district court had jurisdiction over the complaint by reason of ... Although no Sixth Circuit precedent speaks to this issue, in Amoco Production Co. v. United States, 852 F.2d 1574 (10th Cir.1988), the court ... ...
-
Doko Farms v. U.S.
... ... Our predecessor court, the Court of Claims, the decisions of which bind us, South Corp. v. United States, 690 F.2d 1368, 1369, 215 USPQ 657, 658, 1 ... In Amoco Prod. Co. v. United States, 852 F.2d 1574 (10th Cir.1988), the court of ... ...
- Amoco Production Co. v. Newton Sheep Co., s. 94-4242