Mathisen v. Thunder Basin Coal Co., LLC
| Decision Date | 11 October 2007 |
| Docket Number | No. 06-276.,06-276. |
| Citation | 2007 WY 161,169 P.3d 61 |
| Parties | Betty MATHISEN, Harold Shipley, Patricia Brown, Vicki Ruiz, Bobby Shipley, Jr., Jimmy Shipley, Monica Miller and Robin Shipley, Appellants (Plaintiffs), v. THUNDER BASIN COAL COMPANY, LLC, a Delaware Limited Liability Company, Jacobs Ranch Coal Company, a Delaware corporation, Consol Energy, Inc., a Delaware corporation and Consolidation Coal Company, a Delaware corporation, Appellees (Defendants). |
| Court | Wyoming Supreme Court |
Representing Appellee Thunder Basin Coal Company: Thomas J. Davidson of Dorsey & Whitney LLP, Cheyenne, Wyoming.
Representing Appellees Jacobs Ranch Coal Company, Consolidation Coal Company and Consol Energy, Inc.: Mark D. Taylor, Gillette, Wyoming; Thomas P. Johnson and Andrea Wang of Davis Graham & Stubbs LLP, Denver, Colorado. Argument by Mr. Johnson.
Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.
[¶ 1] The appellants' predecessors in interest conveyed 120 acres in Campbell County to Appellee Consolidation Coal Company (Consol). Even though the federal government owned the coal underlying the property and Consol did not have a right to mine it, the deed stated that part of the consideration for the transfer included a "surface royalty" for all coal removed and sold "by Consol" from the property. Consol never acquired the right to mine the coal underlying the property; consequently, it never removed any coal or paid any surface royalty to the appellants or their predecessors. Appellee Jacobs Ranch Coal Company (Jacobs Ranch) eventually acquired title to the property. Appellee Thunder Basin Coal Company, LLC (TBCC) ultimately obtained the federal lease to mine the coal, leased the surface property from Jacobs Ranch, and began mining operations. The appellants filed a complaint for payment of the surface royalty contemplated in the deed. The district court concluded, as a matter of law, the appellees were not obligated to pay the surface royalty, and we affirm.
[¶ 2] Appellants raised the following issues on appeal:
A. Does the phrase "for all coal mined, removed and sold by Consol" create a material condition precedent to performance by [a]ppellees?
B. Is the "surface royalty" provision a covenant that runs with the land?
C. Is the Warranty Deed ambiguous? and
D. Is TBCC a successor in interest to Consol?
[¶ 3] Appellees filed two separate briefs on appeal. Jacobs Ranch, Consol, and Consolenergy, Inc., filed a joint brief and did not specifically identify issues on appeal. TBCC presented the issues as:
A. Whether the district court correctly determined that Consol's personal obligation to pay for coal mined by Consol did not run with the land to any party who ever mines coal from beneath the property?
B. Whether the district court correctly determined that the warranty deed between the Shipleys and Consol is clear and unambiguous?
[¶ 4] On June 19, 1975, Harold and Hattie Shipley conveyed a 120 acre surface estate in Campbell County (the Property) to Consol via a warranty deed. The underlying coal was owned by the federal government and the parties agree that, at the time of the sale, Consol owned no interest in it. Even so, as part of the consideration for the Property, Consol agreed to pay a "surface royalty" to the Shipleys on the coal it removed and sold from the Property.
[¶ 5] Consol never acquired the right to mine the coal beneath the Property and never removed any coal. Consol sold the Property in 1982 and, after that, title to the Property transferred several times, eventually to Jacobs Ranch.1 TBCC leased the coal from the federal government and the Property from Jacobs Ranch and, after 1998, began mining the coal.
[¶ 6] Meanwhile, whatever surface royalty interest the Shipleys retained was conveyed to four of their children — Betty Mathisen, Harold Shipley, Patricia Brown and Vicki Ruiz — and four grandchildren — Bobby Shipley, Jr., Jimmy Shipley, Monica Miller and Robin Shipley (the Mathisens). The Mathisens received no royalty payments when TBCC mined the coal on the Property and brought this action against Consol and its successors, TBCC and Jacobs Ranch, seeking payment of the surface royalty described in the warranty deed between the Shipleys and Consol and other damages.
[¶ 7] The district court granted TBCC's motion to dismiss and a judgment on the pleadings in favor of Consol and Jacobs Ranch. In its decision, the court ruled that, under the plain language of the deed, Consol was not obligated to pay the surface royalty because it never mined any coal from the Property. The court further ruled the absence of language in the warranty deed obligating Consol's successors to pay the surface royalty demonstrated that the surface royalty obligation did not run with the land. The court thus concluded, as a matter of law, that Consol's successors were not obligated to pay the surface royalty to the Mathisens.
[¶ 8] When a district court considers materials outside the pleadings in entering a judgment on the pleadings or in ordering a W.R.C.P. 12(b)(6) dismissal, we treat the ruling as a summary judgment. Ballinger v. Thompson, 2005 WY 101, ¶ 9, 118 P.3d 429, 433 (Wyo.2005); Vigil v. Ruettgers, 887 P.2d 521, 523 (Wyo.1994). Because the district court considered materials presented by the parties in addition to the pleadings in this case, the summary judgment standard is appropriate.
[¶ 9] Our standard for reviewing summary judgments is de novo and was well stated in Caballo Coal Co. v. Fid. Exploration & Prod. Co., 2004 WY 6, ¶ 7, 84 P.3d 311, 313-14 (Wyo.2004) (quoting McGee v Caballo Coal Co., 2003 WY 68, ¶ 6, 69 P.3d 908, 910-11(Wyo.2003)):
Summary judgment motions are determined under the following language from W.R.C.P. 56(c):
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
The purpose of summary judgment is to dispose of suits before trial that present no genuine issue of material fact. Moore v. Kiljander, 604 P.2d 204, 207 (Wyo. 1979). Summary judgment is a drastic remedy designed to pierce the formal allegations and reach the merits of the controversy, but only where no genuine issue of material fact is present. Weaver v. Blue Cross Blue Shield of Wyoming, 609 P.2d 984, 986 (Wyo.1980). A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. Schuler v. Community First Nat. Bank, 999 P.2d 1303, 1304 (Wyo.2000). The summary judgment movant has the initial burden of establishing by admissible evidence a prima facie case; once this is accomplished, the burden shifts and the opposing party must present specific facts showing that there is a genuine issue of material fact. Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 (Wyo.1987); Gennings v. First Nat. Bank of Thermopolis, 654 P.2d 154, 156 (Wyo. 1982).
This Court reviews a summary judgment in the same light as the district court, using the same materials and following the same standards. Unicorn Drilling, Inc. v. Heart Mountain Irr. Dist., 3 P.3d 857, 860 (Wyo.2000) (quoting Gray v. Norwest Bank Wyoming, N.A., 984 P.2d 1088, 1091 (Wyo.1999)). The record is reviewed, however, from the vantage point most favorable to the party who opposed the motion, and this Court will give that party the benefit of all favorable inferences that may fairly be drawn from the record. Garcia v. Lawson, 928 P.2d 1164, 1166 (Wyo.1996).
[¶ 10] Although the parties address several corollary issues and arguments in their briefs, the core questions in this case are: whether, under the terms of the deed, Consol was obligated to pay the surface royalty even though it never mined the coal; and whether the surface royalty clause ran with the land so as to obligate Consol's successors, Jacobs Ranch and/or TBCC, to make surface royalty payments to the Mathisens when the coal was mined.
[¶ 11] In determining whether Consol is obligated to pay surface royalties to the Mathisens, we start with the language of the deed in which the Shipleys conveyed the Property to Consol. The majority of the deed referred to the Shipleys as the "parties of the first part" and to Consol as the "party of the second part." The surface royalty clause, however, abandoned the "parties" nomenclature and referred to them as "Owner" and "Consol." The last paragraph before the Shipleys' signatures stated:
As further consideration for the sale and conveyance of said lands by Owner to Consol, Consol shall pay to Owner a surface royalty for all coal mined, removed and sold by Consol from said lands for two cents (2¢) per ton of 2,000 pounds or one half of one percent (½ of 1%) F.O.B. the mine, whichever is the greater[.]
[¶ 12] In Hickman v. Groves, 2003 WY 76, ¶ 6, 71 P.3d 256, 258 (Wyo.2003), we repeated our well known standard for interpreting deeds, as a type of contract.
Amoco Production Company v. EM Nominee Partnership Company, 2 P.3d 534, 539-40 (Wyo.2000) (citations omitted).
The determination of the parties' intent is our prime focus in interpreting or construing a contract. If an agreement is in writing and its language...
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