Gibbs Cattle Co. v. Bixler
| Decision Date | 24 May 2013 |
| Docket Number | No. S–12–687.,S–12–687. |
| Citation | 285 Neb. 952,831 N.W.2d 696 |
| Parties | GIBBS CATTLE CO., A Nebraska Corporation, appellee, v. Edna F. BIXLER et al., appellees, and Margaret Bixler and Edward Stephen Cassells, appellants. |
| Court | Nebraska Supreme Court |
OPINION TEXT STARTS HERE
Syllabus by the Court
[285 Neb. 952]1. Equity: Appeal and Error. On appeal from an equity action, an appellate court tries factual questions de novo on the record and, as to questions of both fact and law, is obligated to reach a conclusion independent of the conclusion reached by the trial court.
2. Mines and Minerals: Decedents' Estates: Title. The “record owner” of mineral interests, as used in Neb.Rev.Stat. § 57–229 (Reissue 2010), may be determined not only from the register of deeds, but also from probate records in the county where the interests are located.
3. Statutes: Pleadings: Parties.Neb.Rev.Stat. § 25–201.02(2) (Reissue 2008) applies only to an amendment that “changes the party or the name of the party” and that refers to a substitution, rather than to an addition, of parties.
John F. Simmons, Simmons Olsen Law Firm, P.C., Scottsbluff, for appellants.
Steven C. Smith, Scottsbluff and Lindsay R. Snyder, Smith, Snyder & Petitt, G.P., for appellee Gibbs Cattle Co.
Gibbs Cattle Co. is the surface owner of various tracts of land in Sioux County, Nebraska. Gibbs sued the owners of severed mineral interests in those tracts under Nebraska's dormant mineral statutes 1 to reacquire their allegedly abandoned interests. Mineral interests are deemed abandoned unless the “record owner” has taken certain steps to publicly exercise his or her ownership rights during the 23 years preceding the surface owner's suit. 2 This case primarily involves two issues: (1) whether the “record owner” may be determined only from the register of deeds in the county where the interests are located or also from other public records, such as probate records in the county; and (2) whether an amended complaint adding, rather than changing (i.e., substituting), a new party defendant may relate back to the original complaint.
In interpreting the relevant statutes, we conclude that the “record owner” of mineral interests, as used in § 57–229, includes an individual identified by probate records in the county where the interests are located. We also conclude that Neb.Rev.Stat. § 25–201.02(2) (Reissue 2008) applies only to an amendment that “changes the party or the name of the party” and that refers to a substitution, rather than to an addition, of parties. We reverse the district court's contrary rulings.
Although there are numerous defendants, only two are involved in this appeal: appellant Margaret Bixler and appellant Edward Stephen Cassells. The facts are undisputed and set forth below.
Gibbs filed its initial complaint on December 21, 2010. Thereafter, Gibbs discovered that the register of deeds listed John H. Bixler as an owner of mineral interests in some of Gibbs' land. So on March 18, 2011, Gibbs amended its complaint to add John as a defendant. But John had died in 1996, and Margaret, as John's widow and personal representative of his estate, had completed the probate process. Margaret filed an answer, as John's personal representative, requesting the court to order that all title to John's mineral interests remain in John. Margaret then filed an amended answer stating that through John's will she had a life estate in the mineral interests, and she requested the court to order all title to the mineral interests remain in her. The probate records confirmed Margaret's factual assertions, though none of the records (such as the inventory sheets, deed of distribution, or inheritance tax determinations) specifically mentioned the mineral interests.
Both Gibbs and Margaret moved for summary judgment. Gibbs argued that John, the record owner, had not publicly exercised his ownership rights in the mineral interests in the 23 years prior to Gibbs' complaint. As such, Gibbs argued that John had abandoned those rights and that the mineral interests should vest with Gibbs, the surface owner. Margaret argued that John's conveyance of the mineral interests to her through his will was a public exercise of ownership. Margaret also argued that based on the probate records, she was the “record owner” of the mineral interests, and that her 23 years had not yet elapsed.
The court found for Gibbs. The court reasoned that John was the record owner of the mineral interests because he was the person listed in the register of deeds. And the court determined that although John's mineral interests transferred through his will,3 this was not a public exercise of ownership because that occurred by operation of law rather than by John's action. Margaret does not challenge this latter determination on appeal.
Furthermore, the court concluded that Margaret was not a “record owner” of the mineral interests and so it was immaterial whether she had exhausted the 23–year statutory period. The court noted that the dormant mineral statutes did not define the term “record owner,” but that it was defined in Neb.Rev.Stat. § 19–4017.01 (Reissue 2012) as being “ ‘the fee owner of real property as shown in the records of the register of deeds office in the county in which the business area is located.’ ” The court concluded that to satisfy the dormant mineral statutes' purpose, “record owner” could only mean the person listed in the register of deeds in the county where the property was located. The court vested title to the disputed mineral interests in Gibbs.
Gibbs' initial complaint also named Virginia Audrey Cassells as one of the defendants. On January 8, 2011, Gibbs received a letter from Edward, Virginia's son, which impliedly asserted that he and Virginia both owned the disputed mineral interests. On January 14, Edward filed a verified claim of interest with the Sioux County register of deeds. And on February 22, Edward moved to intervene, which the court allowed. On March 18, Gibbs amended its complaint to add Edward as a defendant. In his answer, Edward claimed that he owned a portion of the disputed mineral interests and requested the court to order all title to his mineral interests remain in him.
Following Gibbs' motion for summary judgment, Edward likewise moved for summary judgment. There was no dispute that Edward and Virginia were the record owners of the mineral interests. Rather, the sole issue before the court was whether Gibbs' amended complaint adding Edward as a defend ant related back to the original complaint. This was because Edward had filed a verified claim of interest with the Sioux County register of deeds in January 2011, after Gibbs' original complaint in December 2010, but before Gibbs' amended complaint in March 2011. And § 57–229 requires a public exercise of ownership rights within 23 years of the operative complaint to preserve the record owner's mineral interests.
The record showed the reason for Gibbs' failure to include Edward in the original complaint. The deed conveying the mineral interests listed the grantors as “Virginia Audrey Cassells & Edward Cassells, her husband,” and the grantees as “Virginia Audrey Cassells & Edward Stephen Cassells” as joint tenants. The title examiner, after reviewing the deed, concluded that the two Edwards were the same person. And the title examiner, “knowing that Virginia's husband, Edward Cassells” had died, concluded that Virginia was the sole owner of the mineral interests. So Gibbs named only Virginia as a defendant, rather than Virginia and Edward. This was incorrect, as the two Edwards in the deed were distinct individuals and Edward was still alive and a joint owner of the mineral interests.
The court found that under § 25–201.02(2), Gibbs' amended complaint related back to the original complaint's date of filing. That section provides, in relevant part:
If the amendment [to a pleading] changes the party or the name of the party against whom a claim is asserted, the amendment relates back to the date of the original pleading if (a) the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth ... in the original pleading, and (b) within the period provided for commencing an action the party against whom the claim is asserted by the amended pleading (i) received notice of the action such that the party will not be prejudiced in maintaining a defense on the merits and (ii) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.4
The court concluded that Gibbs had met the first requirement because the amended complaint simply added Edward as the other owner for property already described in the original complaint. The court also found that Edward had proper notice of the action, based on his letter to Gibbs, and that he would not be prejudiced on the merits by having the amendment relate back. And the court concluded that Edward “knew he should have been included” because “his letter indicated his belief that [Gibbs] ‘had sued us,’ ” meaning him and Virginia.
Edward argued that the relation-back doctrine did not apply because Gibbs did not “change[ ] the party or the name of the party” 5 but instead added an entirely new party. The court rejected that argument, and concluded that the word “change” should be liberally construed to include adding a new party. The court reasoned that modern pleading rules were more relaxed and that such a construction fell squarely within the remedial nature of the relation-back doctrine. Moreover, the court found that Gibbs' mistake in failing to name Edward as a defendant was “made despite [Gibbs'] due diligence.” Finally, the court rejected Edward's argument that the relation-back doctrine could not apply because the 23–year period under § 57–229 was not a statute of...
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