Great N. Props. v. Extraction Oil & Gas, Inc., 21CA0700

Docket Nº21CA0700
Citation2022 COA 110
Case DateSeptember 15, 2022
CourtCourt of Appeals of Colorado

2022 COA 110

Great Northern Properties, LLLP, a Colorado limited liability limited partnership, Plaintiff-Appellant,
v.

Extraction Oil and Gas, Inc., Richmark Energy Partners, LLC, and Richmark Royalties, LLC, Defendants-Appellees.

No. 21CA0700

Court of Appeals of Colorado, Fourth Division

September 15, 2022


SUMMARY

The centerline presumption is a common law rule of conveyance, which generally provides that "a conveyance of land abutting a road or highway is presumed to carry title to the center of that roadway to the extent the grantor has an interest therein, unless a contrary intent appears on the face of the conveyance." Asmussen v. U.S., 2013 CO 54, ¶ 15. In this quiet title action, a division of the court of appeals resolves an issue of first impression in Colorado: Does the common law centerline presumption apply to convey the mineral interests beneath a dedicated right-of-way to the owners of abutting parcels?

Applying settled principles of property law, the division concludes, as a matter of first impression, that when the centerline presumption applies, it applies to convey all interests a grantor possesses in the property underlying a right-of-way, including mineral interests. The division also clarifies the conditions that must be met before the centerline presumption applies.

Weld County District Court No. 19CV30091 Honorable Shannon D. Lyons, Judge

Witwer, Oldenburg, Barry & Groom, LLP, Patrick M. Groom, Kent A. Naughton, Greeley, Colorado, for Plaintiff-Appellant

Welborn Sullivan Meck & Tooley, P.C., Joseph C. Pierzchala, Samuel S. Bacon, Jens Jensen, Denver, Colorado, for Defendant-Appellee

Vogt [*] and Hawthorne * , JJ., concur

OPINION

BROWN JUDGE

¶ 1 The common law centerline presumption generally provides that when grantors convey land abutting a right-of-way, they intend to convey title to the center of the right-of-way, unless the conveyance reveals a contrary intent. Asmussen v. United States, 2013 CO 54, ¶ 15. In this quiet title action, plaintiff, Great Northern Properties, LLLP (GNP), and defendant, Extraction Oil and Gas, Inc. (Extraction), ask us to resolve an issue of first impression in Colorado: Does the centerline presumption apply to convey the mineral interests beneath a dedicated right-of-way to the owners of abutting parcels?

¶ 2 Applying settled principles of property law, we conclude that, when the centerline presumption applies, it applies to all interests a grantor possesses in the property underlying a right-of-way, including mineral interests. We also clarify the conditions that must be met before the centerline presumption applies.

¶ 3 We therefore affirm the district court's C.R.C.P. 56(h) determination of law and that part of its final judgment denying GNP's quiet title claim. But because the judgment quieted title to mineral interests beyond those claimed by the two landowner defendants that had participated in the proceeding, we reverse the

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judgment and remand to the district court with directions to correct the decree quieting title and dismiss the case as to the remaining defendants.

I. Background

¶ 4 As of February 1974, a real estate developer owned in fee simple absolute a parcel of land located in the N.W. ¼ of the N.W. ¼ of Section 12, Township 5 North, Range 66 West of the 6th P.M., City of Greeley, County of Weld, State of Colorado. At some point, the developer subdivided the property into individual lots.

¶ 5 On February 15, 1974, the developer dedicated a right-of-way across its land to the City of Greeley. The City accepted the dedication on April 16, 1974. The right-of-way became known as West 11th Street Road (11th Street).

¶ 6 On March 11 and March 27, 1974, the developer conveyed two parcels of land abutting 11th Street to two different grantees. The deeds conveying these parcels describe the property by metes and bounds but do not reference 11th Street. The deeds do not expressly reserve to the developer any mineral interests.

¶ 7 On November 12, 1975, the developer conveyed a third parcel of land abutting 11th Street. The deed conveying this parcel

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describes the property by metes and bounds with reference to 11th Street. This deed does not expressly reserve to the developer any mineral interests. Once the developer conveyed this third parcel, it no longer owned any property adjacent to 11th Street.[1]

¶ 8 More than forty years later, on January 2, 2019, the developer conveyed whatever interest it had in the minerals beneath 11th Street to GNP.[2] The same month, GNP brought a C.R.C.P. 105 action to quiet title to the mineral estate under the relevant section of 11th Street. As we understand the record, Extraction has oil and gas leases from the owners of all parcels abutting the relevant section of 11th Street and from GNP. Extraction is therefore entitled to drill and produce oil and gas from beneath the relevant portion of 11th Street regardless of who owns the mineral estate, but ownership dictates to whom Extraction must pay royalties.

¶ 9 In May 2019, Extraction filed a motion for determination of a question of law pursuant to C.R.C.P. 56(h) in which it argued that,

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applying the centerline presumption, the owners of the parcels abutting 11th Street own the mineral rights beneath 11th Street to the centerline of the road. After hearing oral argument, in a forty-nine-page order (the November 2019 Order), the district court granted the motion and ruled that the developer "conveyed the mineral estate to the centerline of the roadway if the abutting lot owners carry their burden of proving" the conditions it discerned from the Colorado Supreme Court's decision in Asmussen.

¶ 10 Despite this ruling, GNP filed a motion for summary judgment asking the district court to enter a final judgment decreeing that it owns the mineral interests beneath the relevant portion of 11th Street. Relying on the legal conclusions in its November 2019 Order and the parties' stipulations regarding the then-current ownership of the parcels abutting 11th Street, the court denied the motion and entered final judgment quieting title to the disputed mineral interests in the two landowner defendants that had participated in the proceeding.

II. Application of the Centerline Presumption to Mineral Estates

¶ 11 GNP contends that the district court erred by applying the centerline presumption to conclude that a deed conveying a

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grantor's interest in property adjacent to a right-of-way also conveys any interest the grantor may have in the mineral estate beneath and to the center of the right-of-way. We disagree.

A. Standard of Review

¶ 12 We review an order granting a motion for a determination of a question of law de novo, applying the same standard as the district court. In re Estate of McCreath, 240 P.3d 413, 417 (Colo.App. 2009). "If there is no genuine issue of any material fact necessary for the determination of the question of law, the court may enter an order deciding the question." C.R.C.P. 56(h).

B. When the Centerline Presumption Applies, It Applies to All Interests a Grantor Possesses in the Property Beneath the Right-of-Way, Including Mineral Interests

¶ 13 Considering the centerline presumption along with other well-settled principles of property law, we conclude that, when the centerline presumption applies (that is, when all preconditions to its application are met, as discussed in Part II.C, below), it applies to all interests the grantor possesses in the property underlying the right-of-way, including mineral interests.

¶ 14 The centerline presumption, a common law rule of conveyance, provides that "a conveyance of land abutting a road or

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highway is presumed to carry title to the center of that roadway to the extent the grantor has an interest therein, unless a contrary intent appears on the face of the conveyance." Asmussen, ¶ 3; see also Skeritt Inv. Co. v. City of Englewood, 79 Colo. 645, 652, 248 P. 6, 9 (1926) ("[W]hen land abuts on a street or highway it is presumed that the grantor intended by his deed thereof to convey to the center of such street or highway."); Overland Mach. Co. v. Alpenfels, 30 Colo. 163, 170, 69 P. 574, 575 (1902) ("[A] conveyance of a lot which borders upon a highway presumptively carries the title to the center of the street, if the grantor owns the land on which the highway is laid out . . . .").

¶ 15 The law also presumes that a grantor intends to convey along with the property all its appurtenant advantages and rights, Asmussen, ¶ 19, and that a grantor conveying property by deed intends to convey their entire interest unless a portion of that interest is expressly excepted from the conveyance, Enerwest, Inc. v. Dyco Petroleum Corp., 716 P.2d 1130, 1132 (Colo.App. 1986). See also Overland, 30 Colo. at 170, 69 P. at 575 ("[O]ne is presumed to convey the highest estate he owns in the lands granted, unless a smaller estate is described."); Olin v. Denver & Rio Grande R.R. Co.,

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25 Colo. 177, 180, 53 P. 454, 455 (1898) ("When there is no reservation in an absolute deed, the most valuable estate passes of which the grantor is seised.").

¶ 16 As to mineral interests specifically, "a conveyance of land by general description, without any reservation of a mineral interest, passes title to both the land and the underlying mineral deposits." O'Brien v. Vill. Land Co., 794 P.2d 246, 249 (Colo. 1990). The reservation or exception of a mineral estate severs it from the surface estate, creating multiple estates in the same land. See Mitchell v. Espinosa, 125 Colo. 267, 273-74, 243 P.2d 412, 413 (1952); Calvat v. Juhan, 119 Colo. 561, 566, 206 P.2d 600, 603 (1949). The severance of a mineral estate from a surface estate "must be by clear and distinct wording in the conveyance." Radke v. Union Pac. R.R. Co., 138 Colo. 189, 209, 334 P.2d 1077, 1088 (1959). Until such a severance occurs, however, "the ownership of...

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