D–mil Prod. Inc. v. Dkmt

• Decision Date: 12 September 2011
• Docket Number: No. 99715.,99715.
• Citation: 260 P.3d 1262,2011 OK 55
• Parties: D–MIL PRODUCTION, INC., Appellee,v.DKMT, CO., Appellant.
• Court: Oklahoma Supreme Court

260 P.3d 1262

2011 OK 55

D–MIL PRODUCTION, INC., Appellee,

v.DKMT, CO., Appellant.

No. 99715.

Supreme Court of Oklahoma.

June 21, 2011.Rehearing Denied Sept. 12, 2011.

CERTIORARI REVIEW OF A CERTIFIED INTERLOCUTORY ORDER FROM THE DISTRICT COURT OF MCCLAIN COUNTY¶ 0 Owner of a foreign corporation purporting to be a duly domesticated pipeline company in the State of Oklahoma, initiated this condemnation proceeding against a landowner to obtain an easement. Prior to the filing of the commissioners' report, the landowner answered, challenging the corporation's status as a “pipeline company” and filed a counterclaim asserting trespass upon his land. The corporation filed a motion for summary judgment. The District Court, McClain County, Honorable Noah Ewing, found that no genuine issue of fact or law existed, and sustained partial summary judgment in favor of the corporation as to all issues concerning the corporation's status as a pipeline company, the necessity of the taking, the corporation's business activities, and the corporation's compliance with the Oklahoma Statutes, thereby entitling the corporation to maintain an action for eminent domain. Further, the court certified the order as final and immediately appealable pursuant to title 12, sections 994(A) and 953. Having recast this proceeding and granted the petition to review a certified interlocutory order, and reviewed the cause de novo, we reverse and hold summary adjudication in favor of the foreign corporation was inappropriate.CERTIORARI TO REVIEW CERTIFIED INTERLOCUTORY ORDER GRANTED; DISTRICT COURT'S CERTIFIED INTERLOCUTORY ORDER REVERSED; CAUSE REMANDED WITH INSTRUCTIONS.Ralph A. Sallusti, Oklahoma City, for Appellee.James Bruce Blevins, Purcell, for Appellant.PER CURIAM.

¶ 1 The Appellant-landowner, DKMT (Landowner), seeks review of the district court's August 7, 2003, certified order sustaining D–Mil Production, Inc.'s (D–Mil) Motion for Summary Judgment as to all issues concerning D–Mil's status as a “pipeline company” for purposes of eminent domain. The primary issue on appeal is whether D–Mil established that it meets the constitutional and statutory definition of a “pipeline company.” Based on our review of the summary judgment record and applicable law, we reverse the district court's order.

BACKGROUND AND PROCEDURAL HISTORY

¶ 2 D–Mil is a Texas corporation, authorized to do business in the State of Texas. Its Articles of Incorporation, as filed in the State of Texas, permit D–Mil “to transact any or all lawful business for which Corporations may be incorporated under this act.”

¶ 3 D–Mil became domesticated in the State of Oklahoma on December 8, 1985. Its Amended Articles of Domestication advised that the “business which the Corporation proposes to do in the State of Oklahoma is the business the Corporation is authorized to do in the jurisdiction of its incorporation.” The Articles of Domestication also stated that D–Mil's purpose of transacting business in Oklahoma was for “mineral leasing.” However, when required to designate in its Articles of Domestication “the total length of line everywhere, and the length of line to be located in Oklahoma during the current fiscal year,” D–Mil answered “N/A.”

¶ 4 On May 28, 2003, D–Mil initiated this condemnation proceeding in McClain County. It sought to appropriate easements from Landowner for the purpose of construction, operation, and maintenance of a natural gas pipeline for the transmission of natural gas. D–Mil's petition attached a plat of Landowner's land, including the land description designating the centerline of the easement, and the natural gas pipeline to be located thereon. D–Mil contended the easements and rights of way were necessary for its natural gas pipeline, as “authorized by its Articles of Incorporation and the laws of the State of Oklahoma.” D–Mil asserted that the easements and rights of way described will remain the property of Landowner, subject to D–Mil's use as described in its petition. The petition also alleges that D–Mil's good faith efforts to secure easements and rights of way from Landowner were unsuccessful.

¶ 5 On June 17, 2003, Landowner filed an Answer and Counterclaim. Its answer challenged D–Mil's status as a “pipeline company,” the necessity of the right of way, and D–Mil's statutory authority to exercise eminent domain. Landowner alleges that D–Mil's Articles of Domestication, filed of record in the Office of the Secretary of State of the State of Oklahoma, stated in the application that the provisions concerning pipeline companies are not applicable to D–Mil's corporate structure. Landowner contended further that D–Mil failed to comply with the title 52 requirements, and D–Mil's continued operations constitute an unlawful act pursuant to section 25 ¹; and is punishable under section 31 ² of the Oklahoma Statutes. Lastly, Landowner's counterclaim asserted D–Mil committed trespass on its property when D–Mil entered Landowner's property to procure the plat.

¶ 6 D–Mil subsequently moved to strike and dismiss Landowner's Answer and Counterclaim, and motioned for summary judgment on all issues raised in Landowner's Answer. Specifically, D–Mil alleged that a court's jurisdiction in condemnation proceedings is limited to three substantive pleadings—a petition, an objection to the commissioners' report, and a demand for jury trial. Answers and counterclaims, however, are not among them. It further defended that the survey of Landowner's property was lawful, and asserted that all foreign corporations domesticated in Oklahoma may exercise eminent domain. In support, D–Mil proffered its State of Oklahoma Certificates of Good Standing and Authority issued by the Office of the Secretary of the State of Oklahoma; and the Acceptance attaching the Plat filed in the Corporation Commission.

¶ 7 Landowner, on the other hand, denied D–Mil's capacity to exercise eminent domain and contended not all foreign corporations are vested with this right upon domestication. Landowner urged the district court to take notice that D–Mil failed to establish it is a domesticated pipeline company authorized to maintain an action for eminent domain in Texas-a condition precedent to becoming a “pipeline company” in Oklahoma under title 18, section 1130B(2)e (2001) ³, of the Oklahoma Statutes. Landowner asserted D–Mil had not satisfied the statutory scheme. In support, Landowner tendered D–Mil's Articles of Domestication and Correction issued by the State of Texas; Amended Certificate of Qualification filed with the Oklahoma Secretary of State; proof of D–Mil's Franchise Tax Return filed with the Oklahoma Tax Commission; and several Assignments and Bills of Sale of oil and gas leases for properties located in McClain County, Oklahoma. Landowner further alleged D–Mil's admissions contained in the Oklahoma Secretary of State filings, described its business purpose in Oklahoma as “mineral leasing,” but neither the Texas nor the Oklahoma filings submitted designate D–Mil's alleged business activities as transporting or transmitting natural gas by pipelines.

¶ 8 By order dated June 23, 2003, three commissioners were appointed to inspect and determine just compensation for the proposed easements and rights of way described in D–Mil's petition. Landowner immediately sought to vacate the appointment over D–Mil's objection. On July 10, 2003, the Commissioners filed their report and assessed damages at $5,280.

¶ 9 The district court issued a cumulative order on August 7, 2003, to resolve all pending motions and claims. It began by overruling Landowner's Motion to Vacate Appointment of Commissioners; and sustained, in part, D–Mil's Motion for Summary Judgment. Specifically, the court determined that no material issues of fact or law existed, and found as a matter of law, that D–Mil was a Texas corporation, properly domesticated in Oklahoma. The court concluded that D–Mil transported natural gas to market as part of its lawful business activities. Based on that determination, the district court found that D–Mil was “entitled to file an action for eminent domain under 52 O.S. (2001) § 1, et seq. and § 26, et seq.; 18 O.S. (2001) § 1, et seq.; 60 O.S. (2001) §§ 53 and 55.” Additionally, Landowner was directed to file any other objections, to the Report of the Commissioners, within the statutorily time prescribed.

¶ 10 The district court also found that the August 7, 2003, order was final and subject to immediate appeal under title 12, sections 953 ⁴ and 994(A),⁵ of the Oklahoma Statutes. Landowner appealed.⁶

¶ 11 This Court directed Landowner to show cause why the appeal should not be dismissed for lack of an appealable order. Upon consideration of Landowner's response, this Court permits the action to proceed as review of a certified interlocutory order because the order affects a substantial part of the merits of the controversy.⁷

STANDARD OF REVIEW

¶ 12 This appeal challenges the trial court's legal conclusion drawn from the undisputed facts presented in the summary judgment record. Where, “as in this matter, the dispute concerns the legal effect of the relevant facts, the question [before this Court] is whether the party seeking enforcement is entitled to judgment as a matter of law. Rules for Dist. Cts., Okla. Stat. tit. 12, ch. 2, app., Rule 13(e) (Supp. 2008).” In re De–Annexation of Certain Real Property from City of Seminole, 2009 OK 18, ¶ 7, 204 P.3d 87, 89. And because “summary judgment disposes solely of issues of law, we review it de novo” without any deference to the trial court's legal ruling. Young v. Macy, 2001 OK 4, ¶ 9, 21 P.3d 44, 47; Kluver v. Weatherford Hosp. Auth., 1993 OK 85, ¶ 14, 859 P.2d 1081, 1084.

ANALYSIS

¶ 13 Condemnation, otherwise known as eminent domain, is a special proceeding that empowers an entity to take private property for the public use. State ex rel. Dept. of Transp. v. Mehta, 2008 OK CIV APP 25, ¶ 17, 180 P.3d 1214, 1218. Its powers and...