Dep't of Transp. v. Gypsum Ranch Co., LLC

• Citation: 244 P.3d 127
• Decision Date: 10 January 2011
• Docket Number: No. 09SC456.,09SC456.
• Parties: DEPARTMENT OF TRANSPORTATION, State of Colorado, an agency of the State of Colorado, as successor in interest to the Colorado Department of Highways, Petitioner v. GYPSUM RANCH CO., LLC, a Colorado limited liability company; Antero Resources II Corporation, a Delaware corporation doing business in Colorado as Antero Resources Corporation; and Board of County Commissioners of the County of Garfield, State of Colorado, a quasi-municipal corporation, Respondents.
• Court: Supreme Court of Colorado

244 P.3d 127

DEPARTMENT OF TRANSPORTATION, State of Colorado, an agency of the State of Colorado, as successor in interest to the Colorado Department of Highways, Petitioner
v.
GYPSUM RANCH CO., LLC, a Colorado limited liability company; Antero Resources II Corporation, a Delaware corporation doing business in Colorado as Antero Resources Corporation; and Board of County Commissioners of the County of Garfield, State of Colorado, a quasi-municipal corporation, Respondents.

No. 09SC456.

Supreme Court of Colorado,
En Banc.

Nov. 30, 2010.
Rehearing Denied Jan. 10, 2011.^*

244 P.3d 128

John W. Suthers, Attorney General, Daniel D. Domenico, Solicitor General, Larry D. Tannenbaum, Senior Assistant Attorney General, Eric T. Meyer, Assistant Attorney General, Denver, CO, for Petitioner.

Balcomb & Green, PC, Edward Mulhall, Jr., Scott Grosscup, Glenwood Springs, CO, for Respondent Gypsum Ranch Co., LLC.

Bjork Lindley Little, PC, David R. Little, Denver, CO, for Respondent Antero Resources II Corporation.

No Appearance for Respondent Board of County Commissioners of the County of Garfield.

Justice COATS delivered the Opinion of the Court.

The department petitioned for review of the court of appeals' judgment in Gypsum Ranch Co. v. Board of County Commissioners, 219 P.3d 365 (Colo.App.2009), reversing summary judgment in its favor in an action by Gypsum Ranch to quiet title to the mineral estate in property previously condemned for a highway. The district court had found that in the earlier condemnation proceedings the department acquired a fee simple estate in the disputed parcel of land, to include the subsurface mineral estate. By contrast, the court of appeals concluded that the department could not have acquired the disputed mineral estate because it lacked statutory authority to do so when condemning property for highway purposes.

Because the court of appeals misconstrued the statutory scheme that existed prior to 2008 to prohibit the department from acquiring mineral interests in land condemned for highway purposes, without regard to the nature of the title the department otherwise took, its judgment is reversed and the case is remanded for further proceedings consistent with this opinion.

I.

In 1975, the predecessor of the Colorado Department of Transportation ¹ filed a Petition in Condemnation to acquire certain property interests within a parcel of land in Garfield County, asserting that they were necessary for construction of highway improvements. The authority and necessity for the taking were not disputed in the condemnation proceedings. After the resolution of several evidentiary issues, the parties agreed on an appropriate amount of compensation; and in 1987, the condemnation court issued its Rule and Order, awarding the agreed compensation and granting title to the department. The court's order was recorded in Garfield County.

Gypsum Ranch Co., LLC, subsequently acquired the greater parcel, subject to the

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property interests condemned by the department. In 2006, Gypsum filed this action seeking to quiet title in the mineral estate beneath the property that had been the subject of the condemnation proceeding, asserting that the department had acquired only rights-of-way or easements across the land, with an interest in the mineral estate extending no further than subsurface support. The department and Antero Resources II Corporation, an oil and gas company that had entered into leases related to the subject property with both Gypsum and the department, were joined in the proceedings. The department answered, contending that while some of the property interests taken were clearly easements, it had acquired a fee simple estate, including the mineral estate, in the disputed parcel.² Gypsum and the department both moved for summary judgment, and the district court granted the department's motion. The district court concluded that although Gypsum's predecessor in interest may, at the time of the condemnation proceedings, have had the option to keep the mineral estate, that right was not exercised, and the mineral estate transferred in exchange for compensation. The district court characterized the department's interest acquired in the disputed parcel of land as a fee simple absolute estate, to include the mineral estate.

On direct appeal by Gypsum, the intermediate appellate court reversed, concluding that it was unnecessary to determine the precise nature of the interest acquired by the department in the condemned property because, in the appellate court's view, the applicable statutes plainly barred the acquisition of a mineral estate in condemnation proceedings for highway purposes. Basically, the court of appeals reasoned that the provisions of the statutory scheme governing eminent domain proceedings specified that no right of way acquired by condemnation could include any interest in mineral resources except as required for subsurface support, and the provisions of the statutory scheme governing transportation matters defined a "state highway" as a "right of way." The appellate court understood legislation enacted in 2008, amending both the eminent domain provisions of title 38 and the transportation provisions of title 43 by expressly limiting the department's authority to acquire a subsurface estate by condemnation, to merely clarify, rather than change, the meaning of existing statutory provisions.

We granted the department's petition for certiorari to address its statutory authority to take title to a mineral estate in condemnation proceedings and settlements.

II.

The power of eminent domain lies dormant in the state until the General Assembly speaks. Dep't of Transp. v. Stapleton, 97 P.3d 938, 941 (Colo.2004). The right to condemn private property is therefore a creature of statute and exists to the extent, and only to the extent, permitted by the General Assembly. See Potashnik v. Pub. Serv. Co., 126 Colo. 98, 101, 247 P.2d 137, 138 (1952). See also generally 9 Thompson on Real Property § 80.07(a)(1) (David A. Thomas ed., 1999); Bd. of Educ. v. Vic Regnier Builders, Inc., 231 Kan. 731, 648 P.2d 1143, 1146 (1982); Burnett v. Cent. Neb. Pub. Power & Irrigation Dist., 147 Neb. 458, 23 N.W.2d 661, 667 (1946).

Articles 1 through 7, of title 38, of the revised statutes govern the power of eminent domain in this jurisdiction. In particular, section 38-1-105(3), C.R.S. (2010), concerning compensation and transfer of title, directs the court to enter, at the conclusion of condemnation proceedings, an order, referred to since its enactment more than a century ago as a "rule," describing the property condemned and the compensation paid therefor. The court's rule or order is then to be recorded and indexed in the office of the county clerk and recorder and given the same effect as if it were a deed of conveyance. Id. The immediately following subsection of the statute designates the interest in which the petitioner in condemnation will then become seized. See

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§ 38-1-105(4), C.R.S. (2010). While the statute indicates that a petitioner will generally become seized in whatever interest it has sought, as described in the recorded rule, it includes a disclaimer, which until 2008 specified that "[n]o right-of-way or easement acquired by condemnation shall ever give the petitioner any right, title, or interest to any vein, ledge, lode, or deposit found or existing in the premises condemned, except insofar as the same may be required for subsurface support." § 38-1-105(4), C.R.S. (2007). ³

Title 43 of the revised statutes is devoted to transportation matters, and as relevant here, the powers and duties of the Department of Transportation and Transportation Commission relative to highways. According to the transportation provisions, the commission is authorized to acquire land for state highway purposes through the power of eminent domain, according to articles 1 to 7 of title 38. § 43-1-208(3), C.R.S. (2010). The department is not limited to condemning for its current needs but is permitted to condemn excess rights-of-way whenever the public interest, safety, or convenience will be served, see § 43-1-210(2), C.R.S. (2010), and even to condemn rights-of-way for anticipated future needs, see § 43-1-210(3), C.R.S. (2010). Whenever the department acquires real property for highway purposes, whether by condemnation, purchase, lease, or any other means, the right to subsurface support is automatically deemed to have been acquired along with it, § 43-1-209, C.R.S. (2010), but until 2008, nothing in title 43 purported to limit the department from taking a greater interest in the subsurface estate.

Also relevant to the scope of the estate or interest subject to acquisition for highway purposes, title 43 deals extensively with the department's powers over the condemned property. For example, property condemned by the department for highway purposes may thereafter be leased until it is needed, § 43-1-210(3), or disposed of altogether if the department determines that it will not be needed for transportation purposes in the foreseeable future, § 43-1-106(8)(n), C.R.S. (2010); § 43-1-210(5), C.R.S. (2010). In addition, if taking part of a parcel for highway purposes would leave the remainder in such shape or condition as to be of little value to its owner or give rise to claims or litigation concerning severance or other damage, the department is authorized to condemn the entire parcel, § 43-1-210(1), C.R.S. (2010). In that event, the statute makes clear that the owner may, but need not, retain the mineral or gravel rights, subject only to the right of subsurface support. Id. The department is also expressly authorized to sell, lease, or exchange the excess condemned property. Id.

In 2008, the General Assembly enacted legislation amending both titles 38 and 43 in several key respects. S.B. 08-041, 66th Gen....