McCormick v. Union Pacific Resources Co., No. 99SC243.

• Citation: 14 P.3d 346
• Decision Date: 28 November 2000
• Docket Number: No. 99SC243.
• Parties: G. Todd McCORMICK, Maura C. McCormick, Paul Hoshiko, Jean Hoshiko, Sylva Kunzman, Glen P. Rouse, Peg M. Wykes and Ritchey Land & Cattle Co., Inc., a Colorado corporation, Petitioners, v. UNION PACIFIC RESOURCES COMPANY, a Delaware corporation; Snyder Oil Corporation, a Delaware corporation; Amoco Production Company, a Delaware corporation; Elk Exploration, Inc., a California corporation; L. Alice Collister; Damson Investment Group, Inc., a Delaware corporation; Farmers Independent Ditch Company, a Colorado not-for-profit corporation; Betty Wise Guida; HS Resources, Inc., a Delaware corporation; B. Brian Neary; Soco Wattenberg Corporation, a Delaware corporation; Union Pacific Land Resources Company, a Nebraska corporation; Michael Youel, and all unknown persons who claim an interest in the subject matter of this action, Respondents.
• Court: Colorado Supreme Court

14 P.3d 346

G. Todd McCORMICK, Maura C. McCormick, Paul Hoshiko, Jean Hoshiko, Sylva Kunzman, Glen P. Rouse, Peg M. Wykes and Ritchey Land & Cattle Co., Inc., a Colorado corporation, Petitioners, v. UNION PACIFIC RESOURCES COMPANY, a Delaware corporation; Snyder Oil Corporation, a Delaware corporation; Amoco Production Company, a Delaware corporation; Elk Exploration, Inc., a California corporation; L. Alice Collister; Damson Investment Group, Inc., a Delaware corporation; Farmers Independent Ditch Company, a Colorado not-for-profit corporation; Betty Wise Guida; HS Resources, Inc., a Delaware corporation; B. Brian Neary; Soco Wattenberg Corporation, a Delaware corporation; Union Pacific Land Resources Company, a Nebraska corporation; Michael Youel, and all unknown persons who claim an interest in the subject matter of this action, Respondents.

No. 99SC243.

Supreme Court of Colorado, En Banc.

November 28, 2000.

As Modified December 14, 2000.

Carpenter & Klatskin, PC, Willis V. Carpenter, Max Minnig, Jr. & Associates, LLC, Max A. Minnig, Jr., Denver, for Petitioners.

Covington & Burling, Russell H. Carpenter, Jr., J. Michael Hemmer, David M. Grable, Washington, D.C., Welborn, Sullivan, Meck & Tooley, P.C., John F. Welborn, Keith D. Tooley, Denver, for Respondent Union Pacific Resources Company.

Clanahan, Tanner, Downing and Knowlton, P.C., Michael J. Wozniak, Denver, for Respondents Snyder Oil Corporation, Damson Investment Group, Inc. and Soco Wattenberg Corporation.

Deisch and Marion, P.C., Timothy F. Marion, Michael R. Smith, Denver, for Respondent Amoco Production Company.

Welborn, Sullivan, Meck & Tooley, P.C., Keith D. Tooley, Denver, for Respondents Elk Exploration, Inc. and HS Resources, Inc.

Justice HOBBS delivered the Opinion of the Court.

The question we answer in this case is whether Colorado follows the majority rule that a deed reservation for "other minerals" reserves oil and gas. We conclude that it does. Accordingly, we affirm the judgment of the court of appeals. See McCormick v. Union Pac. R.R. Co., 983 P.2d 84 (Colo.App. 1999).

I.

In this quiet title action filed in 1994, Plaintiffs ("Landowners") and Defendant, Union Pacific Resources Company ("UPRC"), are successors in interest to deeds executed between 1906 and 1909 involving grants of defendant Union Pacific Railroad Company ("Railroad"). The five properties at issue are located in Weld County. The deed reservations for three of the properties reserved "all coal and other minerals within or underlying said lands." The Landowners of these three properties alleged in their amended complaint that UPRC "improperly claimed the oil and gas in, under and associated with" these properties. The deed reservations for the other two properties reserved "all oil, coal and other minerals within or underlying said lands." The Landowners of these two properties alleged that UPRC has "improperly claimed the gas in, under and associated with" those properties.

In the context of UPRC's summary judgment motion, Landowners sought a trial to determine the meaning of these reservations, claiming that failure to specify the reservation of oil and gas, as to three of the properties, and gas, as to two of the properties, demonstrated intent by the Railroad not to include them. They further argued that oil and gas production was not generally occurring in this vicinity of Colorado at the time of the deeds; hence, the parties did not contemplate the reservation of these substances unless so specified. Finally, they pointed to the Railroad's various formulations of deed reservation language in other deeds at the close of the nineteenth century and early twentieth century — first reserving coal and other minerals, later coal, oil and other minerals, and still later, coal, oil, gas, and other minerals. They argued that this progressive insertion of particular substances in the deed reservation language indicated the Railroad's prior intent not to include them until specified.

Landowners characterized this evidence as "extrinsic" evidence warranting trial on the issue of the intent of the parties to the particular deeds. They argued that the term "other minerals" is inherently ambiguous, therefore requiring trial. UPRC contended that the issue was one of law, requiring no trial, because oil and gas are subsurface substances that are included in a deed reservation for "other minerals" as a matter of law.

In granting UPRC's summary judgment motion, the trial court ruled that the term "other minerals" is unambiguous and includes all subsurface valuable substances. On appeal, Landowners argued that the trial court erred in refusing to take extrinsic evidence. Based on its review of Colorado law and the precedent of other jurisdictions, the court of appeals held that the deed term "other minerals" unambiguously includes oil and gas and restricted the scope of the trial court's order to those substances.

We agree with the court of appeals that the term "other minerals" in a deed reservation in Colorado has the settled meaning of including oil and gas. We also agree with the court of appeals' judgment restricting the effect of the trial court's declaratory judgment to oil and gas. Despite the broad wording of the certiorari issue, oil and gas were the only substances actually in dispute between the parties regarding these five properties. The issue petitioners stated on certiorari is:

Whether, in a case of admitted first impression, the court of appeals erred in determining that (i) the term "minerals" used in a general deed reservation is unambiguous as a matter of law, thereby excluding any extrinsic evidence of the parties' intent; and (ii) "minerals" includes, as a matter of law, all oil, gas and valuable subsurface substances.

We do not render advisory opinions on certiorari; hence, we do not address whether the railroad deeds in this case reserve minerals other than oil and gas.

II.

We hold that Colorado adheres to the majority rule that the deed reservation language "other minerals" reserves oil and gas.

A. The Oil and Gas Mineral Reservation Majority Rule

We review the trial court's grant of the Railroad's and UPRC's motion for summary judgment under C.R.C.P. 56. Under this rule, a motion for summary judgment should be granted when there are no genuine issues as to any material fact and the moving party is entitled to a judgment as a matter of law. C.R.C.P. 56(c); Bebo Constr. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 83 (Colo.1999). While the moving party has the initial burden to show that there is no genuine issue as to any material fact, once that initial burden is met, the burden shifts to the nonmoving party to establish that there is a triable issue of fact. Greenwood Trust v. Conley, 938 P.2d 1141, 1149 (Colo.1997).

A reservation is a vehicle by which a grantor creates and reserves to the grantor some right or interest in the estate conveyed, which interest had no previous existence. See Lincoln Sav. & Loan Ass'n v. State, 768 P.2d 733, 735 (Colo.App.1988). The grantor may reserve a wide variety of interests, such as easements, profits, timber, water rights, or mineral rights. As one commentator notes: "[T]he grantor conveys away an estate and receives back, in the classic metaphor of property law, one of the sticks in the bundle of ownership." 9 Thompson on Real Property Law § 82.09, at 596 (David A. Thomas ed., 1994).

The reservation of a mineral estate necessarily severs it from the surface estate, creating multiple estates in the same land. See Smith v. Moore, 172 Colo. 440, 441-43, 474 P.2d 794, 795 (1970) (holding that mineral estate owner owed a duty of surface support); Mitchell v. Espinosa, 125 Colo. 267, 273-74, 243 P.2d 412, 413 (1952) (holding that the habendum clause of the deed created a reservation for oil and gas); Calvat v. Juhan, 119 Colo. 561, 566, 206 P.2d 600, 603 (1949) (holding that a reservation of oil, gas, and mineral rights precluded possession of the severed mineral estate by the surface possessor); cf. Radke v. Union Pac. R.R. Co., 138 Colo. 189, 209, 334 P.2d 1077, 1087 (1958) (holding that language referring to prospecting did not reserve a mineral interest).

The word "mineral" can be used in different senses, depending upon the context. For example, "the scientific division of all matter into the animal, vegetable or mineral kingdom[s] would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom[,]" and, thus, could not be excepted from the grant without being destructive of it. Watt v. Western Nuclear, Inc., 462 U.S. 36, 43, 103 S.Ct. 2218, 2223, 76 L.Ed.2d 400, 407 (1983). Thus, the term "minerals" "is not capable of a definition of universal application." Lin Patterson, A Survey of Problems Associated with Ascertaining the Ownership of "Other Minerals", 25 Rocky Mtn. Min. L. Inst. 21-1, 21-8 (1980).

We uphold the trial court's determination that summary judgment was appropriate in this case. Although the term "minerals" is not inherently unambiguous and extrinsic evidence may be required to ascertain the parties' intent in certain circumstances, our study of Colorado legal precedent, custom, and usage convinces us that Colorado adheres to the majority rule that deed reservation language reserving "other minerals" reserves oil and gas. Leading Colorado commentators are in agreement:

Barring the unusual case where ambiguities exist in the language of [a] grant or reservation and parol evidence is allowed to prove what was really intended in a given conveyance, the law is basically settled.. . . Now, almost universally in mineral-producing jurisdictions, including Colorado, minerals can be separated and severed from surface ownership. Barring other factors, most courts today will hold or have held that a general grant or reservation of "minerals" or of "all minerals" will be inclusive of oil and gas and all constituent hydrocarbons. Generally, too, a grant or

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