Calvert Joint Venture# 140 v. Snider

• Decision Date: 13 February 2003
• Docket Number: No. 52,52
• Citation: 373 Md. 18,816 A.2d 854
• Parties: CALVERT JOINT VENTURE # 140, v. Ross R. SNIDER et ux.
• Court: Maryland Court of Appeals

816 A.2d 854

373 Md. 18

CALVERT JOINT VENTURE # 140, v. Ross R. SNIDER et ux.

No. 52, Sept. Term, 2002.

Court of Appeals of Maryland.

February 13, 2003.

Carlton M. Green (Green, Leitch & Steelman; Walter W. Green of Law Offices of Walter W. Green, on brief), College Park, for appellant.

John Marshall (Moldawer & Marshall, P.C., on brief), Rockville, for appellees.

Argued before BELL, C.J. ELDRIDGE, RAKER, WILNER, CATHELL, HARRELL and BATTAGLIA, JJ CATHELL, Judge.

This case arises out of a November 1987 land installment contract and subsequent conveyance between petitioner, Calvert Joint Venture # 140,¹ and respondents, Ross and Nancy Snider. In the contract, respondents contracted to convey the subject property (tracts 1, 2 and 3) to petitioner for the stated purpose of building a residential subdivision while reserving an interest in all "oil, gas, or other mineral rights" in the property. No express easements over the surface of the parcel were reserved with the mineral rights. This litigation centers on petitioner's declaratory judgment action requesting a determination on respondents' ability to enter and use the surface of petitioner's property in the exercise of respondents' mineral rights pursuant to a deed emanating from a previous declaratory judgment action dealing with that land installment contract.

On November 23, 1987, petitioner contracted to purchase from respondents approximately 145 acres in Calvert County (the "Calvert Property") pursuant to a land installment contract. That contract included language that the Calvert Property was being purchased by petitioner to develop into a residential subdivision,² as well as a provision whereby respondents reserved the Calvert Property's mineral rights. In August 1995, a declaratory judgment action³ was filed by petitioner in the Circuit Court for Calvert County, Maryland, alleging that respondents were unable to convey marketable title on tract 3, approximately 28 acres, of the Calvert Property. As a result of the declaration originating out of that action, a special warranty deed for tracts 1 and 2, the remaining approximately 115 acres of the Calvert Property, was delivered to petitioner on October 17, 1996, which included respondents' reservation of mineral rights but failed to include the clause contained in the land installment contract, out of which the declaratory action and deed arose, that had references to the residential development purpose of the original contract.⁴ Respondents kept title to, and possession of, tract 3, which abutted on the Calvert Property. Petitioner's brief to the Court stated: "Appellees retained tract 3 that adjoined tracts 1 and 2" (emphasis added). Respondents do not contradict this statement of petitioners. Moreover, respondents adduced no evidence to the contrary, nor any that sought to quantify the effect of the abutment, adjacency or adjoinment.

It is not easy to discern from looking at the maps and plats in the record the extent of the respondents' ownership of lands adjacent to the lands at issue. At least some of that type of documentary evidence, standing alone, can certainly be construed as indicating minimal actual physical contact between the properties, i.e., tracts 1, 2 and 3, as depicted on the plat attached to the 1987 contract. However, no issue was raised or evidence adduced by respondents that they did not retain land abutting the subject property through which subsurface access might be possible.

At the trial below, accessing the minerals from the adjoining property of the respondents was touched-on in cross-examination of a witness for the petitioners.

Respondents' counsel: "Why would you buy one [piece of property] that had mineral rights reserved?"

Petitioner: "Because it is not inconceivable that any oil and gas that they believe to be under the surface could be extracted without disturbing the surface."

Later petitioner's representative was asked:

Respondents' counsel: "....What rights do you think they have?"

Petitioner: "They have the right to any income that would be produced by any oil or gas that was removed from underground."

Respondents' counsel: "So long as that came from—was siphoned off without touching your property."

Petitioner: "They have adjoining property."

Respondents' counsel: "That may be true and it may not be true, but so long as they don't come on your property, as long as they can somehow magically get these minerals from outside your property, they can get to it. Is that what you are saying?"

Petitioner: "Yes."

No evidence contrary to the testimony of this witness was presented by respondents. The evidence proffered by petitioner is the only evidence in the record as to accessibility from the adjoining property.

Additionally, in petitioner's opening argument to this Court, it stated:

"He [respondents] has an adjoining piece of property. He could drill a well, or whatever, to get down to gas, oil on his own property and he could take the substance out from under this property as long as he can do it without interference. That's a reasonable use of his rights."

Respondents, in their oral argument, as in their brief, never challenged petitioner's assertions that they owned an abutting parcel of property, and never, at the trial, in their brief to this Court, or in oral argument, posited that any minerals, i.e., coal, gas or oil at issue could not be mined from that abutting property. During respondents' oral argument, there were additional acknowledgments that respondents retained abutting property. The following occurred:

Judge Harrell: "What are your client's rights with regard to that lot? Can you just come in there and—"

Respondent's Counsel: "—start tearing it up"

Judge Harrell: "—prospect with a test well?"

Respondent's Counsel: "I think the answer to that question is that we have a reasonable right to access the minerals."⁵

...

Respondent's Counsel: "I don't think... my client can go in and raze the development."

...

Judge Cathell: "My understanding is when you reserve mineral rights you reserve the right to mine in from the side, but I could be wrong about that." Respondent's Counsel: "I would respectfully disagree with that your Honor, but, if it were to be proven that was the least intrusive way to get at the minerals then that would be the most reasonable use."

...

Judge Wilner: "[Do your clients own] abutting property?"

Respondent's Counsel: "Yes."

Judge Wilner: "So there is the possibility then of using that property to extract?"

Respondent's Counsel: "But, we can't speak to that possibility.

Judge Cathell: "Because if you owned the abutting property at the time you sold this property, then at that time you had the means available to extract subsurface minerals without going through the surface of the property you had sold away by diagonally drilling or by the way they do it in the coal fields. If later on you sell that adjacent property so that you remove the means ... your client removes the means to mine without disturbing at all the surface of the property you sold.... It has some relevance."

...

Judge Cathell: "Is the adjacent piece of property [of respondents] for sale?"

Respondent's Counsel: "No. Not that I know of."

Accordingly, as do the parties, we accept that the tracts adjoin and underground access could be made from the property retained by respondents. We resolve the issues on that basis.⁶

Subsequently, petitioner requested that respondents sign and execute five plats on December 16, 1999, which subdivided the 115 acres of the Calvert Property conveyed to petitioners and other acreage obtained from a third party into 29 lots. The plats also contained language that purported to restrict respondents' ownership interest in the Calvert Property's mineral rights to a life interest, limited respondents' access to the surface of the Calvert Property and subordinated respondents' mineral rights in the Calvert Property to the use of the surface as a residential subdivision.

After respondents declined to execute the plats because of the conditions contained on the plats, petitioner filed another Complaint for Declaratory Relief and Other Appropriate Relief in the Circuit Court for Montgomery County, Maryland⁷ on March 24, 2000. It is this later action that forms the basis for this petition.

Petitioner's complaint included three counts. Count I requested the court to declare the extent to which respondents could use the surface of the Calvert Property it now owned in exercising their rights under the reservation of mineral rights in the deed, the effect of statutes on mining within a residential subdivision and the duration of the mineral rights reservation. In Count II, petitioner sought reformation of the October 1996 deed, while Count III requested specific performance requiring respondents to sign the five subdivision plats given to respondents in December of 1999.

Judge Paul J. McGuckian, for the Circuit Court for Montgomery County, Maryland, issued an Opinion and Order on April 24, 2001, which declared that the deed's reservation created two distinct interests in the Calvert Property, the surface owned by petitioner and the mineral rights owned by respondents. He additionally stated that these rights must be exercised with due respect as to the other party's interest. Judge McGuckian also declared that respondents own a fee simple interest in the minerals under the Calvert Property. Judge McGuckian did not speak to any "[i]ssues relating to the procedure, method, or timing of extraction of the disputed substances upon the surface estate," and declined to address the relief sought under Counts II and III.

Petitioner filed a Motion to Alter or Amend Judgment asking the court to order that respondents not disturb the surface of the land within the Calvert Property where petitioner has subdivided lots, planned roads, designated open space and other features of the intended living environment, and asking the trial...