Clay v. Mountain Valley Mineral Ltd. P'ship

• Decision Date: 11 June 2015
• Docket Number: No. S–14–0197.,S–14–0197.
• Parties: George W. CLAY, IV and Dana Clay, husband and wife; Louis Oswald, III, Trustee of the Oswald Family Trust, dated April 27, 1998; Jonathan S. Roderick, Trustee of the Jonathan S. Roderick Living Trust, dated February 8, 2007; Alma L. Tisher and Kelly B. Tisher, wife and husband; Linda L. Connell; L–K–E Investments, a Texas company; Steven A. Tofte, successor Trustee of the Edwin A. Tofte Mineral Trust, dated July 31, 1995; Joe W. King, Trustee for the Joe W. King Revocable Living Trust dated December 1, 1995; Robert L. Ostlund; Mary Sue Ostlund Van Newkirk; Pollie Ann Ostlund Madden; Welfelt Interests, LLC, a Texas company; McMahon Energy Partners, Limited Partnership, a Colorado limited partnership; Tofte Energy Partners, Limited Partnership, a Wyoming limited partnership; Hess Corporation, successor in interest to American Oil and Gas, Inc., a Colorado corporation; Converse County Land and Minerals, LLC, a Wyoming limited liability company; John O. Bullington; John L. Hoppe, Jr. and Ward F. Hoppe, as Co–Trustees of the John L. Hoppe Revocable Trust dated February 26, 1998 and Pumpkin Buttes, LLC, a Wyoming Company, Appellants (Defendants), v. MOUNTAIN VALLEY MINERAL LIMITED PARTNERSHIP, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

351 P.3d 961

2015 WY 84

George W. CLAY, IV and Dana Clay, husband and wife; Louis Oswald, III, Trustee of the Oswald Family Trust, dated April 27, 1998; Jonathan S. Roderick, Trustee of the Jonathan S. Roderick Living Trust, dated February 8, 2007; Alma L. Tisher and Kelly B. Tisher, wife and husband; Linda L. Connell; L–K–E Investments, a Texas company; Steven A. Tofte, successor Trustee of the Edwin A. Tofte Mineral Trust, dated July 31, 1995; Joe W. King, Trustee for the Joe W. King Revocable Living Trust dated December 1, 1995; Robert L. Ostlund; Mary Sue Ostlund Van Newkirk; Pollie Ann Ostlund Madden; Welfelt Interests, LLC, a Texas company; McMahon Energy Partners, Limited Partnership, a Colorado limited partnership; Tofte Energy Partners, Limited Partnership, a Wyoming limited partnership; Hess Corporation, successor in interest to American Oil and Gas, Inc., a Colorado corporation; Converse County Land and Minerals, LLC, a Wyoming limited liability company; John O. Bullington; John L. Hoppe, Jr. and Ward F. Hoppe, as Co–Trustees of the John L. Hoppe Revocable Trust dated February 26, 1998 and Pumpkin Buttes, LLC, a Wyoming Company, Appellants (Defendants)

v.MOUNTAIN VALLEY MINERAL LIMITED PARTNERSHIP, Appellee (Plaintiff).

No. S–14–0197.

Supreme Court of Wyoming.

June 11, 2015.

Representing Appellants: Timothy M. Stubson and Jeff Oven of Crowley Fleck PLLP, Casper, Wyoming; James Edwards, Gillette, Wyoming; Harry B. Durham, III of Brown, Drew, Massey & Durham, Casper, Wyoming. Argument by Mr. Stubson and Mr. Edwards.

Representing Appellee: Dan Riggs and Amanda K. Roberts of Lonabaugh & Riggs, LLP, Sheridan, Wyoming. Argument by Ms. Roberts.

Before BURKE, C.J., and HILL, KITE, DAVIS, and FOX, JJ.

Opinion

KITE, Justice.

[¶ 1] Appellants George and Dana Clay, et. al (hereinafter referred to collectively as “the Clays”) assert the district court erred by declaring Appellee Mountain Valley Mineral Limited Partnership (Mountain Valley) owned title to mineral interests in certain Converse County, Wyoming property. The district court granted summary judgment in favor of Mountain Valley, concluding as a matter of law that its predecessor acquired title to the mineral interest in a 1976 quiet title action that was not contested by the Clays' predecessors.

[¶ 2] We affirm.

ISSUES

[¶ 3] The Clays present the following issues on appeal:

A. Whether the district court erroneously found that [the Clays] were barred under the doctrine of res judicata from litigating the issue of the [Clays'] respective mineral rights where the identity in subject matter and the issues were different from those adjudicated in 1976.

B. Whether the district court erred by failing to address the [Clays'] argument that [Mountain Valley] [was] barred by the doctrine of laches from asserting its ownership interest in the entire estate.

Mountain Valley restates the issues as:

A. Did the district court properly determine that [the Clays'] claims to the subject mineral estate were previously adjudicated by the unambiguous 1976 decree and are now barred by the doctrine of res judicata?

B. Did the district court properly determine that laches does not apply in light of the 1976 decree?

FACTS

[¶ 4] In 1914 and 1915, the United States issued patents to Marcus and Frank Githens for property in Converse County, Wyoming, reserving only its interest in coal. The Githens conveyed one-fifth interests in the property to Henry Sidles, Charles Stuart, Alfred James, Jay Rice and Leslie Stire. Sidles and Stuart conveyed their interests to Jay Rice, giving him a 60% ownership interest. Rice died and his heirs took title to his interest as follows: Grace Rice—30%; Jay Rice, Jr.—15%; and Margaret Walters—15%.

[¶ 5] In 1963, Jay Rice, Jr. conveyed one-half of his mineral interest (7.5% of the whole) to Walters. When Grace Rice died, she apparently left her interest in the property to Jay Rice, Jr. and Walters. In 1971, Jay Rice, Jr. conveyed an undivided “three tenths surface interest” in the subject lands together with all of his mineral interest to Walters, giving her a 60% interest in the property.

[¶ 6] The Stire 20% interest descended to Mary Stire and when she died in 1965, she left it to Ruby Shepherd for life with the remainder to William, Harold and John Hoppe. In 1974, the Hoppes conveyed their interest in the surface estate to Ruby Shepherd, giving her fee title instead of a life estate in 20% of the surface. The Hoppes reserved their remainder interest in the mineral estate. The James' 20% interest descended to family members.

[¶ 7] In 1974, Mountain Valley's predecessor Art and Hope Sims began to acquire record title to the surface of the property. They had apparently been grazing their sheep on it for some period of time prior to that. On May 16, 1974, Walters conveyed to the Sims “an undivided three-fifths interest” (60%) in the property, expressly reserving all of her mineral interest. On August 5, 1974, pursuant to a probate court decree, James conveyed to the Sims a one-fifth interest (20%) reserving the associated mineral interest, which was conveyed to Energetics, Inc. later in the year. On July 1, 1975, Shepherd conveyed to the Sims “an undivided one-fifth interest” (20%) in the property, but reserved her mineral interest. Thus, by 1975, the Sims had ostensibly acquired all of the surface interest in the property by deed. The owners of the mineral interest were: Walters—60%; Shepherd/Hoppes—20%; and Energetics—20%.

[¶ 8] On May 14, 1976, the Sims filed a quiet title action against Rice, Walters, Stire, Shepherd, Stuart, Sidles, Githens, Hoppe, and any person claiming by, through or under them. Some of those named as defendants only owned mineral interests. The only interest owner not named in the action was Energetics. The Sims' complaint stated they were the owners in fee simple of the Converse County land, the defendants asserted some “right, title, interest in, or claim to, or lien or encumbrance upon the real property,” and their right, title, or interest in the property was inferior to the plaintiffs. The complaint alleged that the Sims and their predecessors had paid all taxes against the real property “for more than ten (10) years last past” and had maintained “actual, open, visible, exclusive, continuous, adverse and notorious possession of said real property for more than ten years preceding the filing of this Complaint.”

[¶ 9] The prayer for relief was broad:

1. That said Defendants be required to set forth their adverse claims to the premises hereinbefore described, and that the Court adjudge and decree that the title of the Plaintiffs in said real property is the full, free and valid fee simple ownership therein and that the Plaintiffs are entitled to possession of said real property.

2. That the Court adjudge and decree that the claims, titles and interests, if any, of said Defendants are subservient and inferior to the claims and title of Plaintiffs and have no force and effect.

3. That the Defendants be adjudged to have no right, title, estate or interest in, and lien or encumbrance in or upon said described real property or any portion thereof.

[¶ 10] The district court entered a judgment and decree in favor of the Sims on October 7, 1976. The judgment recited that the defendants had all been “duly served by publication according to law.” The district court stated that it had appointed an attorney to represent any of the defendants who were in military service and a guardian ad litem (GAL) to represent any defendants who were not competent to respond. The attorney and GAL filed a general denial on behalf of the unknown defendants, but no other response to the complaint was filed. All of the other defendants, which included the Clays' predecessors, failed to appear or answer the complaint's allegations.

[¶ 11] The district court ruled in favor of the plaintiffs on all claims. The judgment stated that default had been entered against all defendants except those represented by the attorney and GAL, a trial had been held on the claims against the defendants so represented, and the plaintiffs were entitled to judgment against all defendants. The judgment included the following declarations:

1. That all and each of the Defendants have been lawfully notified of this action and that no additional notice be or need be given to any of the Defendants.

2. That the Defendants who have not answered Plaintiffs' Complaint or who have not otherwise appeared herein or defended pursuant to the Wyoming Rules of Civil Procedure, or otherwise, are in default herein and the Entry of Default heretofore entered is hereby confirmed.

3. That the Plaintiffs were at the time of filing their Complaint herein, and are now, the true and lawful owners and entitled to possession of the following described real property situate in Converse County, State of Wyoming: [legal description].

4. That the Plaintiffs have Judgment against the Defendants as prayed for in their Complaint and that Plaintiffs' title to and possession of the above-described real property be, and is hereby, declared good and valid, and quieted against any and all of the Defendants and persons claiming through, by or under the Defendants or any of them, and each and every adverse claim and demand of any of said Defendants or persons is hereby adjudged to be of no force and effect.

5. That each Defendant and their unknown heirs, devisees, executors, administrators, and assigns, or any other persons claiming by, through or under them, and each of them, is hereby adjudged to have no right, title, interest or estate whatsoever in or to said real property and is forever enjoined, barred and estopped from asserting any claim, right, title, interest or estate in or to said property or any part or parcel thereof.

Because Energetics was not named a defendant in the action, its 20% mineral interest was not affected in any way by the 1976 judgment.

[¶ 12] The record includes the first page of an unrecorded mineral lease for the property...