Keith v. Kinney, No. 04CA0923.

Decision Date01 December 2005
Docket NumberNo. 04CA0923.
Citation140 P.3d 141
PartiesRaymond E. KEITH and Brenda Keith, Plaintiffs-Appellees, and Thomas K. Colbert and Virginia N. Colbert, Plaintiffs-Intervenors-Appellees, v. Stephen H. KINNEY, Defendant-Appellant.
CourtColorado Court of Appeals

Karsh, Fulton, Gabler & Joseph, P.C., Seymour Joseph, Ivan M. Call, Denver, Colorado, for Plaintiffs-Appellees and Plaintiffs-Intervenors-Appellees.

Jon Lewis Kelly, Cortez, Colorado; Charles G. Kinney, Oakland, California, for Defendant-Appellant.

GRAHAM, J.

Stephen H. Kinney appeals from the trial court's judgment quieting title in the surface owners, Raymond E. and Brenda M. Keith and Thomas K. and Virginia N. Colbert, as to the gravel and sand located on the subject property (04CA0923). In addition, Kinney and Rocky Mountain Bluebird Ranch (collectively Kinney) appeal from the judgment entered after a bench trial in favor of the surface owners and their lessee, Mountain Gravel and Construction Company, on Kinney's complaint for conversion and waste of gold (04CA1406). We consolidate these two appeals for the purposes of this opinion, dismiss that portion of the appeal in 04CA1406 regarding attorney fees, affirm both judgments, and remand the case in 04CA1406 for further proceedings.

I. Background

We begin with a review of the procedural history.

Over a span of years and numerous conveyances, several surface estate owners in Montezuma County conveyed title to the surface and reserved title to the minerals. Ultimately, the chains of these titles became confused and broken.

Kinney owns a portion of the mineral estate in Montezuma County land. The Keiths and Colberts own the surface estate of the property as well as a small portion of the mineral estate. Mountain Gravel leased from the surface owners the right to mine gravel from the property, known as the Keith Pit, and later commenced operations. The layers of material in the Keith Pit are topsoil, overburden, gravel, basal sand, and the bedrock layer referred to as mancos shale.

Before Mountain Gravel commenced operations in the Keith Pit, the Keiths commenced a C.R.C.P. 105 action against Kinney and others to establish ownership of the common rocks, sand, and minerals in the Keith Pit. The Colberts intervened as plaintiffs. Kinney counterclaimed to establish the respective interests of all the parties in the sand and gravel, to quiet title to the minerals, and to adjudicate completely the rights of all the parties. He specifically alleged that the term "minerals" included sand, gravel, and "other aggregate materials."

In 1995, the trial court entered partial summary judgment, ruling that the gravel belonged to the surface estate rather than to the mineral estate (gravel judgment). However, this order did not define exactly where the surface estate ended and the mineral estate began. Kinney obtained a C.R.C.P. 54(b) certification of finality and appealed.

A division of this court dismissed the appeal, explaining that C.R.C.P. 54(b) certification was improper because "the action to quiet title here must address the interests of all of the parties in the sand, gravel, and other mineral deposits." Keith v. Kinney, 961 P.2d 516, 519 (Colo.App.1997) (Kinney I). The case was remanded to the trial court for a final determination of the other property interests and all the parties' respective ownership therein.

In 1998, while his petition for certiorari in Kinney I was pending, Kinney commenced a separate action against the Keiths, the Colberts, and Mountain Gravel for an accounting, conversion of the minerals, sand and gravel, and waste. The Keiths, the Colberts, and Mountain Gravel moved to dismiss on the basis that all claims in this case were raised or should have been raised in the quiet title action. The trial court dismissed all claims concerning sand and gravel based on the gravel judgment, stating that Kinney has "no right, title or interest in said gravel." The trial court did not address the lack of finality noted in Kinney I.

Next, the Keiths, the Colberts, and Mountain Gravel filed a motion for summary judgment on Kinney's claim for conversion of minerals. The trial court entered partial summary judgment in favor of the Keiths, the Colberts, and Mountain Gravel because Kinney failed to show that Mountain Gravel's operations constituted "a distinct unauthorized act of dominion or ownership exercised by one person over personal property of another."

Finally, the Keiths, the Colberts, and Mountain Gravel filed a motion for summary judgment as to Kinney's remaining waste and accounting claims. The trial court granted summary judgment in favor of the Keiths, the Colberts, and Mountain Gravel on the basis that, although waste could be considered "where there are concurrent owners of mineral interests," here "[Kinney] and [the Keiths, the Colberts, and Mountain Gravel] are not concurrent mineral owners." In reaching this conclusion, the trial court noted its previous determination that sand and gravel belong to the surface estate owners and are not a mineral interest, apparently referring to the gravel judgment. Again, the trial court said nothing about finality in the quiet title action. Kinney appealed.

A division of this court reversed the trial court's judgment, explaining that the gravel judgment still lacked finality because it did not address the rights of all parties to gravel, sand, and other minerals in the Keith Pit, and therefore the gravel judgment could not be the basis of any of the trial court's three rulings. Kinney v. Keith (Colo.App. No. 01CA1573, June 6, 2002), 2002 WL 31082123 (not published pursuant to C.A.R. 35(f)) (Kinney II). To provide guidance to the trial court on remand, the division advised that an owner of a mineral estate need not prove recovery, sale, or separation of minerals to establish conversion and that "[e]ven small amounts of minerals found on the surface have been recognized as part of the mineral estate." The case was remanded to the trial court for a complete adjudication of the rights of all parties, including adjudication of the scope and ownership of the surface and mineral estates.

On remand, the trial court ordered all known interested parties to submit briefs and supporting documentation regarding their complete interests in any or all of the property. In 2004, the trial court issued its final judgment in the quiet title action, finding that the Keiths and Colberts owned the surface estate and have exclusive right to the sand, gravel, and other aggregate minerals which are part of the surface estate. The court also found that the Keiths, the Colberts, and Kinney, as owners of interests in the mineral estate,

have rights to extract such minerals that comprise a separate and independent development of the Mineral Estate from the Surface Estate. Mineral Estate owners are to have reasonable access to extract such minerals, and have a duty to support the surface and to not interfere with the development of the Surface Estate.

In reaching its conclusion, the trial court looked at the chain of title to the property, including the mineral reservations contained in the deeds, and evidence of the original contracting parties' intent regarding their respective mineral reservations. Kinney appealed this judgment (04CA0923).

A bench trial was held on Kinney's claims for waste and conversion. At the start of the trial, Rocky Mountain Bluebird Ranch was joined as a coplaintiff because Kinney had transferred some of his mineral interests to the corporation and then leased back the right to mine those interests. The trial court found in favor of the Keiths, the Colberts, and Rocky Mountain Gravel on Kinney's waste and conversion claims. Kinney also appealed this judgment (04CA1406).

II. Quiet Title Action (04CA0923)

Kinney contends that the trial court erred in concluding that sand and gravel are not minerals that are subject to his mineral estate, but are part of the surface estate. We disagree.

In a quiet title action, each party is required to assume the burden of establishing by competent evidence its title to the lands respectively claimed. Gilpin Inv. Co. v. Perigo Mines Co., 161 Colo. 252, 421 P.2d 477 (1966).

A.

The issue before us requires a brief examination of the ownership of the land in which the mineral interest is claimed.

The property consists of 345 acres in three parcels: section 2, section 11, and section 12. All 345 acres were used for ranching and farming.

Through a series of sales, transfers, and mineral reservations beginning in 1950, the surface of the parcels was conveyed separately from the mineral estate. By 1993, the Colberts were owners of the surface estate in section 12 and a portion of section 11, and the Keiths owned the remainder of the surface in section 11 and section 2. The Keiths also owned a percentage of the mineral estate in sections 2 and 11. The Colberts owned a portion of the mineral interests in section 12 and a portion of those interests in section 11. Kinney owned a portion of the mineral interests in all three parcels.

The reservations and conveyances of minerals designated percentage interests using various descriptive phrases, such as "in and to the oil, gas and other minerals lying in, on and under said lands," or "oil, gas and other minerals," or "[a]ll oil, gas, carbon dioxide, and any other minerals in, on, or under," or "[a]ll the minerals, oil, gas and other interests," or "one-half interest in and to all oil, gas and minerals lying in, under or upon said premises," or "all oil, gas and other minerals not previously conveyed."

B.

First, Kinney argues that the reservations are not ambiguous and that as a matter of law sand and gravel are included in the mineral reservations. Because in his view the mineral reservations are unambiguous, he argues that the trial court erred in considering...

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