James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 96-1202

CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)
Writing for the CourtBefore SEYMOUR, Chief Judge, and HENRY and BRISCOE; SEYMOUR
Citation124 F.3d 1321
Parties97 CJ C.A.R. 1720 JAMES BARLOW FAMILY LIMITED PARTNERSHIP; John And Lois Haun Family Partnership; Barlow & Haun, Inc.; L.A. McPeek And Company; Barbara B. Crews; B.J. Bradshaw Estate, By First Interstate Bank Of Utah, Trustee; Alpha Exploration, Inc.; Chevron U.S.A., Inc., Plaintiffs-Appellees, v. DAVID M. MUNSON, INC., Defendant-Appellant. United States of America, Amicus Curiae.
Docket NumberNo. 96-1202,96-1202
Decision Date26 August 1997

Page 1321

124 F.3d 1321
97 CJ C.A.R. 1720
JAMES BARLOW FAMILY LIMITED PARTNERSHIP; John And Lois Haun
Family Partnership; Barlow & Haun, Inc.; L.A. McPeek And
Company; Barbara B. Crews; B.J. Bradshaw Estate, By First
Interstate Bank Of Utah, Trustee; Alpha Exploration, Inc.;
Chevron U.S.A., Inc., Plaintiffs-Appellees,
v.
DAVID M. MUNSON, INC., Defendant-Appellant.
United States of America, Amicus Curiae.
No. 96-1202.
United States Court of Appeals,
Tenth Circuit.
Aug. 26, 1997.
As Revised on Limited Grant of Rehearing Nov. 13, 1997.
Rehearing En Banc Denied Nov. 13, 1997.

Craig R. Carver of Alfers & Carver, LLC, Denver, CO, for Defendant-Appellant.

Page 1322

John F. Shepherd (Jane L. Montgomery with him on the brief) of Holland & Hart LLP, Denver, CO, for Plaintiffs-Appellees.

Peter Coppelman, Acting Assistant Attorney General; Robert L. Klarquist, Gerald L. Fish, and Jacques B. Gelin, Attorneys, Department of Justice, Environment and Natural Resources Division; and Karen Hawbecker, of counsel, Office of the Solicitor, Department of the Interior, Washington, DC, on the brief, for Amicus Curiae.

Before SEYMOUR, Chief Judge, and HENRY and BRISCOE, Circuit Judges.

SEYMOUR, Chief Judge.

This action involves a dispute between the Barlow Family Limited Partnership and others (the Barlows), owners of overriding royalty interests in certain federal oil and gas leases located in western Colorado, and David M. Munson, Inc. (Munson), as lessee and operator, over whether the Barlows are entitled to royalty payments from the federal leases. On cross motions for summary judgment, the district court held in favor of the Barlows. On Munson's appeal, we reverse and grant summary judgment in favor of Munson.

I.

The leases at issue in this case cover federal lands in western Colorado on which unpatented oil shale claims were located. For many years, oil shale claimants and the Department of the Interior were involved in disputes over the claimants' rights to mineral patents on these and other lands where oil shale claims were located. See generally Tosco Corp. v. Hodel, 611 F.Supp. 1130, 1145-56 (D.Colo.1985) (discussing background of oil shale disputes). The government contended that many oil shale claims were void for lack of valid discovery and for failure of the claimants to perform required annual assessment work. It therefore refused to issue mineral patents to the subject lands. A title dispute ensued in which the oil shale claimants sued the federal government seeking to compel issuance of mineral patents. Id. (Tosco claimants); Marathon Oil Co. v. Lujan, 751 F.Supp. 1454 (D.Colo.1990) (Marathon claimants); Ertl v. Hodel, No. 86-M-764 (D. Colo. filed Apr. 18, 1986) (Ertl claimants) (rec., vol. II at 382). Since the mineral claims were staked prior to 1920, the claims would, if valid, entitle the claim holders to patents including all minerals on the lands. See United States v. Etcheverry, 230 F.2d 193, 195-96 (10th Cir.1956); Union Oil Co. of Cal. v. Udall, 289 F.2d 790, 791 n. 1 (D.C.Cir.1961).

Notwithstanding the ongoing title dispute, the government issued federal oil and gas leases on some of the lands which were involved in oil shale disputes. The Barlows (or their predecessors-in-interest) acquired in the early 1970s federal leases which were subject to outstanding oil shale claims.

In the late 1970s, Munson became interested in exploring for oil and gas on federal land in western Colorado. Since much of the area of interest was covered by disputed oil shale claims, Munson was uncertain how to lease oil and gas rights. Faced with this uncertainty of title, Munson prudently acquired both private and federal oil and gas leases. Munson acquired the private leases from the estate of Tell Ertl and others (Ertl), and from Marathon Oil Company, both of which were successors in interest to oil shale claimants. Munson acquired duplicative federal oil and gas leases by assignment from the Barlows. Under the parallel lease scheme, Munson secured its right to drill for and to produce oil and gas regardless of whether the private or the federal claims ultimately prevailed in the title dispute.

Munson also protected itself from duplicative royalty payments under the private and federal leases. The terms of the private leases provided that Munson would pay the lessors royalty for one year: if title remained unresolved after expiration of that year, Munson would, at its option, pay royalty only to the federal government pending final resolution of the title dispute. In addition, the federal unit operating agreement under which oil and gas was produced permitted Munson to hold in suspense payments of royalties due unit members until settlement of any title disputes.

There is one significant difference between the private and federal leases acquired by Munson. On the federal leases, Munson would pay not only a standard 12.5% royalty

Page 1323

to the United States, but also a 5.8% to 11.25% overriding royalty to the Barlows which they retained as consideration for the assignment. On the private leases, however, Munson would pay only a 12.5% royalty to Ertl and to Marathon. Because its royalty burden is less under the private leases, it is in Munson's interest to have the private leases validated.

Munson discovered gas on the leases in 1980. Since the beginning of production, Munson has exercised its right under clause 27 of the unit operating agreement, to hold in escrow the royalty payments potentially due the Barlows pending resolution of the Barlows' and Munson's competing claims to royalty payments.

The oil shale disputes were eventually settled. See Tosco Corp. v. Hodel, 826 F.2d 948 (10th Cir.1987) (dismissing as moot the Tosco claimants' cases); Marathon Oil Co. v. Lujan, 771 F.Supp. 1556 (D.Colo.1991) (closing Marathon case upon issuance of patent to Marathon); rec., vol. II at 384 (describing district court dismissal of the Ertl action). The Barlows contend that the settlements validated their federal leases, that Munson's conduct binds it to the contractual terms of the settlement agreements, and that any assertion of rights under the private leases constitutes an impermissible collateral attack on the validity of the settlements. Munson argues that the settlements resulted in the issuance of federal mineral patents to the oil shale claimants which, under the canons of general mining law, validated its private leases and voided the federal leases. The Barlows and Munson brought cross motions for summary judgment. The district court granted summary judgment for the Barlows and ordered Munson to pay to the Barlows the royalty payments held in suspense.

II.

We review the district court's grant of summary judgment de novo, Ellis v. United Airlines Inc., 73 F.3d 999, 1003 (10th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 2500, 135 L.Ed.2d 191 (1996), applying the same legal standard used by the district court under Fed. R. Civ. P. 56(c). Summary judgment should not be granted unless the evidence, viewed in the light most favorable to the party opposing the motion, shows there are no genuine issues of material fact and the moving party is due judgment as a matter of law. Harrison Western Corp. v. Gulf Oil Co., 662 F.2d 690, 691-92 (10th Cir.1981). Where, as here, the parties file cross motions for summary judgment, we are entitled to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if disputes remain as to material facts. Id. at 692.

We begin our analysis by reviewing and analyzing the settlement agreements to which Munson is alleged to be bound.

A. Settlement Agreements

1. United States/Ertl Settlement Agreement

On August 4, 1986, Ertl entered into a settlement agreement with the United States. Rec., vol. II at 390 (Agreement To Settle Pending Litigation Between The United States And The Owners Of Certain Oil Shale Mining Claims In Colorado). 1 In order for the claimants to be able to exploit oil shale while the United States retained the right to oil, gas and coal currently under federal lease, the United States agreed to grant the claim owners all minerals except oil, gas and coal. The United States attempted to effectuate the agreement by issuing to the claim owners standard mining claim patents in return for the claim owners' "simultaneous" conveyance by special warranty deed of all oil, gas and coal within the claims. The parties intended that the issuance of the patent and the reconveyance of the oil, gas and coal should "occur precisely simultaneously, with no temporal gap whatsoever in ownership by the United States of

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the interests it retains." Id. at 399. The conveyances under the settlement agreement were intended "not [to] affect the validity or duration of [the] existing [federal] oil and gas leases." Id. at 400. On November 7, 1986, Ertl was issued mineral patents covering its claims. By warranty deed signed by the relevant parties between September 18 and November 7, 1986, Ertl conveyed to the United States oil, gas and coal.

2. United States/Marathon Settlement Agreement

Marathon independently reached a settlement with the...

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  • Flannery v. Allstate Ins. Co., Civ.A.97-B-210.
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    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • June 3, 1999
    ...that no evidence need be considered other than that filed by the parties. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th Cir.1997). Nevertheless, summary judgment is inappropriate if genuine issues of material fact exist. Summary judgment is also ap......
  • Vanderhurst v. Colorado Mountain College Dist., Civil No. 97-B-563.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • August 18, 1998
    ...summary judgment is inappropriate if disputes remain as to material facts. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th B. Defendants' motion for summary judgment 1. Claim one for breach of contract Defendants contend they are entitled to summary ......
  • Robertson v. Bd. of County Com'Rs County of Morgan, Civil Action No. 96-B-629.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • December 9, 1999
    ...summary judgment is inappropriate if disputes remain as to material facts. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th Cir.1997). III. As an initial matter, as part of its summary judgment motion, Defendant seeks judgment as a matter of law on al......
  • Planned Parenthood, Rocky Mountains Serv. V. Owens, Civ.A. 99-WM-60.
    • United States
    • Colorado Supreme Court of Colorado
    • August 16, 2000
    ...I need not consider evidence other than that filed by the parties. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th Cir.1997). Accordingly, I have limited my review to the evidence the parties have submitted with their many filings as part of their cr......
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15 cases
  • Flannery v. Allstate Ins. Co., Civ.A.97-B-210.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • June 3, 1999
    ...that no evidence need be considered other than that filed by the parties. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th Cir.1997). Nevertheless, summary judgment is inappropriate if genuine issues of material fact exist. Summary judgment is also ap......
  • Vanderhurst v. Colorado Mountain College Dist., Civil No. 97-B-563.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • August 18, 1998
    ...summary judgment is inappropriate if disputes remain as to material facts. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th B. Defendants' motion for summary judgment 1. Claim one for breach of contract Defendants contend they are entitled to summary ......
  • Robertson v. Bd. of County Com'Rs County of Morgan, Civil Action No. 96-B-629.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • December 9, 1999
    ...summary judgment is inappropriate if disputes remain as to material facts. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th Cir.1997). III. As an initial matter, as part of its summary judgment motion, Defendant seeks judgment as a matter of law on al......
  • Planned Parenthood, Rocky Mountains Serv. V. Owens, Civ.A. 99-WM-60.
    • United States
    • Colorado Supreme Court of Colorado
    • August 16, 2000
    ...I need not consider evidence other than that filed by the parties. James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 124 F.3d 1321, 1323 (10th Cir.1997). Accordingly, I have limited my review to the evidence the parties have submitted with their many filings as part of their cr......
  • Request a trial to view additional results

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