Foster v. United States

• Decision Date: 17 October 1979
• Docket Number: No. 34-75.,34-75.
• Citation: 607 F.2d 943
• Parties: Jack S. FOSTER et al. v. The UNITED STATES.
• Court: U.S. Claims Court

607 F.2d 943

Jack S. FOSTER et al. v. The UNITED STATES.

No. 34-75.

United States Court of Claims.

October 17, 1979.

Charles W. Willey, Santa Barbara, Cal., atty. of record, for plaintiffs.

Gerald S. Fish, Washington, D. C., with whom was Asst. Atty. Gen. James W. Moorman, Washington, D. C., for defendant.

Before FRIEDMAN, Chief Judge, COWEN, Senior Judge, and KUNZIG, Judge.

OPINION

KUNZIG, Judge:

Plaintiffs bring this claim for $4,368,750 plus interest, based on the Fifth Amendment of the Constitution, which declares, in part, "nor shall private property be taken for public use, without just compensation." They argue that as owners of certain mineral rights located on Government property, defendant's denial of access to such property constitutes a compensable taking within the Fifth Amendment. The Government denies that plaintiffs have any interest as claimed, and even if so, that no taking of such an interest has occurred. We hold for plaintiffs.¹

The mineral interests which are the subject of the instant case are located in southern California and are part of a tract of land (Tract 83) which was acquired by the United States in the activation of Camp Cooke, now Vandenberg Air Force Base, as an Army facility to train armored and infantry divisions. Activation of Camp Cooke was ordered in mid-1941; land acquisition commenced in September 1941; and defendant acquired an option to purchase Tract 83 on October 29, 1941, for $22,750.

The deed to the United States, dated June 11, 1942, contained the following provision:

EXCEPTING AND RESERVING to grantors, their successors and assigns, the following:

All oil, gas, asphaltum and other hydrocarbon substances and other minerals, including diatomaceous earth, in and under the land hereby conveyed, together with all easements, roads and privileges reasonably necessary to explore said land for, and to produce and transport therefrom, any of said minerals; provided, however, that the rights granted by virtue of this reservation shall not be exercised by grantors for a period of not less than five (5) years from the date hereon or during the present national emergency, whichever period is longer.

Defendant's title to Tract 83 was examined and approved by the Department of Justice. On July 9, 1942, the Attorney General reported to the Secretary of War that valid title was vested in the United States, subject to three described restrictions.² The Attorney General noted the Army had advised that the mineral reservation and rights incident thereto "will not interfere with the contemplated use of the land." The mineral rights reserved in Tract 83 could not be exercised for a period of not less than five years, or during the national emergency (now expired) then in effect.

At the time of the sale to the United States, the predecessors in interest to plaintiffs (the McClellans) were aware of the fact that Tract 83 contained various rock deposits that could have substantial commercial value. The McClellans, however, made no attempt during the time they owned the mineral rights in question to ascertain the composition or nature of such deposits.

No interest was shown, by either the McClellans or defendant, in exploring the mineral deposits on Tract 83 until 1969. In that year due to several requests to enter Tract 83 to extract various minerals thereon by private contractors and state officials, Headquarters at Vandenberg Air Force Base sought advice from the Chief of the Real Estate Division, Los Angeles District, United States Corps of Engineers, concerning the right to refuse entry to holders of mineral rights such as those reserved on Tract 83. In response to this request, Vandenberg was advised that "sand and gravel, as reserved in a deed, were not minerals," and, therefore, it assumed that "with regard to Tract 83, the government has the exclusive right to explore for and to remove sand, gravel, limestone, clay, and similar substances." Vandenberg was further advised that the grantors (the McClellans) of Tract 83 had no right to quarry stone, or to authorize contractors to quarry stone, on Tract 83 "as the right is exclusive to the Government."

On July 8, 1971, plaintiffs in the instant action acquired a real property interest in Tract 83 through a lease executed by C. M. McClellan as lessor and James and Virginia Mosby as lessee. Prior to the acquisition of this lease, James H. Mosby and Jack S. Foster had entered into an oral joint venture agreement for the acquisition of a mineral interest in Tract 83.³

The lease only permitted quarrying for riprap.⁴ It provided:

Lessee shall have the right to extract and remove and take from the premises all rip rap rock and this lease does not include sand, gravel, diatomaceous material or petroleum products.

The lease had a five-year term (June 1, 1971 through May 31, 1976), renewable at lessee's option for an additional five-year term; an annual rental of $300, payable on June 1; and a supplemental monthly payment of 25 cents per ton of rock removed. Time was declared to be of the essence. Title to any rock removed from its natural state would "remain in the Lessor" until removed from the premises. The lease extended to, and inured to the benefit of the "heirs, legal representatives, successors, and assigns of the Lessor and the Lessee."

On November 3, 1971, James Mosby telephoned the Chief of the Acquisition Branch, Real Estate Division, Los Angeles District Engineers, to ask about permission "to remove a rock known as Dolomite" under the lease. The dolomite was said to be urgently needed for construction on Highway 101. In this conversation, Mosby was advised that previous requests for access to the same land had been rejected.

Permission to survey and drill test the dolomite deposit for riprap rock was requested formally on November 4, 1971, in a letter that stated a local highway project on Highway 101 (the Rincon project) needed a large quantity of 12-ton rock before the coming winter storms. Permission was denied in a letter dated November 18, 1971, on the ground that dolomite was not a mineral within the meaning of the reservation in the deed "because it is desired for use as rock and not for the extraction of any minerals therefrom."

Plaintiffs' request for permission under the lease to extract dolomite for use as riprap rock was reiterated in a letter dated November 19, 1971. This letter pointed out that dolomite has a definite chemical composition and that the subject deposit could be quarried for 12-ton size rocks for use as riprap. Plaintiffs claimed they had an oral contract with Green Construction Company (Green) to supply a minimum of 50,000 tons of dolomite riprap rock for use on the Rincon project at a price of $4 per ton. Plaintiffs emphasized that continued denial of access to the dolomite deposits would jeopardize the contract with Green and lead to legal action for "damages in inverse condemnation for the governmental taking of the entire dolomite deposit on this property."

Although there was no direct response to plaintiffs' November 19, 1971 letter, in response to a further inquiry by Representative Charles M. Teague, Member, United States Congress, defendant explained on January 27, 1972, that access under the McClellan lease had been denied because dolomite, when it was intended to be used as riprap, was not considered to be included in the phrase "other minerals" in the rights reserved in the deed.

After defendant denied access under the lease to quarry dolomite for use as riprap, plaintiffs purchased all of the mineral rights the McClellans had reserved on Tract 83. By deed dated May 2, 1972, plaintiffs acquired a grant of the following real property in Tract 83:

All oil, gas, asphaltum and other hydrocarbon substances and other minerals, including diatomaceous earth, in and under the land described below, together with all easements, roads, and privileges reasonably necessary to explore said land for, and to produce and transport therefrom any of said minerals.

Plaintiffs purchased this property for $5,000, a price which was established by the McClellans. At the time plaintiffs purchased this reserved mineral interest, they knew that the United States claimed ownership to the dolomite deposit.

On April 12, 1974, plaintiffs reasserted a right to quarry and produce dolomite from the deposits on Tract 83. Plaintiffs reviewed previous correspondence, declared that site investigation by a geologist had disclosed that the dolomite deposit was ideally suited for economic and profitable extraction as riprap, and asserted "it is not the dolomite mineral as such which is profitable to extract, but the dolomite rock as it exists in its natural state."

Defendant's response, dated October 29, 1974, concluded that plaintiffs, as assignees of all of the rights retained by the McClellans, did not acquire any right to remove dolomite rock because the dolomite deposit was not a mineral within the scope of the reservation clause. Furthermore, they responded that the anti-assignment statute barred⁵ from asserting this claim against the Government. Plaintiffs were denied access to the Tract 83 dolomite deposit on the ground that title to the deposit had vested in the United States in the original 1942 deed. Plaintiffs thereafter timely brought suit in this court in February 1975.

I.

The dispute in this case is limited to the right of plaintiffs to quarry and remove dolomite rock from two deposits on Tract 83. The Government does not contest plaintiffs' right under the terms of the 1942 deed to Tract 83 to explore for and remove all oil, gas, asphaltum and other hydrocarbon substances. Rather, the Government asserts that the phrase "and other minerals" contained in the deed does not include dolomite. As such, plaintiffs have no vested right that the Government has violated.

As an alternative ground, defendant argues that, even if dolomite is a mineral within the meaning of the 1942 deed, the...