Miller Land & Mineral Co. v. State Highway Com'n of Wyoming

• Decision Date: 14 July 1988
• Docket Number: No. 87-288,87-288
• Parties: MILLER LAND & MINERAL COMPANY, a Wyoming corporation, Appellant (Plaintiff), v. STATE HIGHWAY COMMISSION OF WYOMING, Wyoming Highway Department, State of Wyoming, and Robert L. Mitchell and Jane G. Mitchell, husband and wife, Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 1001

757 P.2d 1001

MILLER LAND & MINERAL COMPANY, a Wyoming corporation, Appellant (Plaintiff), v. STATE HIGHWAY COMMISSION OF WYOMING, Wyoming Highway Department, State of Wyoming, and Robert L. Mitchell and Jane G. Mitchell, husband and wife, Appellees (Defendants).

No. 87-288.

Supreme Court of Wyoming.

July 14, 1988.

William L. Miller of Hursh, Miller & Fasse, P.C., Riverton, for appellant.

Joseph B. Meyer, Atty. Gen., Peter J. Mulvaney, Deputy Atty. Gen., and Lawrence A. Bobbitt, III, Sr. Asst. Atty. Gen., for appellees State Highway Com'n of Wyoming, Wyoming Highway Dept., and State of Wyo.

M.L. Barton of Hill, Young & Barton, Riverton, for appellees Robert L. Mitchell and Jane G. Mitchell.

Before BROWN, C.J., THOMAS, CARDINE and MACY, JJ., and ROONEY, Ret. J.

MACY, Justice.

This is an appeal from a summary judgment granting appellees Robert L. Mitchell and Jane G. Mitchell title to the gravel in, on, or under the surface of their lands on the basis of the finding that gravel is not a mineral.

We affirm.

Appellant Miller Land & Mineral Company raises the following issues:

"A. Whether the District Court erred in holding that gravel was not included in the mineral reservation in the deed which is the subject of this action, which states:

'Reserving unto Grantor, all mineral[s] and mineral rights existing under said above lands and premises or appurtenant thereto, together with the right to enter upon said lands to explore for and produce the same.'

"B. Whether the District Court erred in holding that as a matter of law, in the context of this case, both from the objective evidence and the status of gravel pursuant to custom and usage in the State of Wyoming, absent specific intent being expressed in a deed, gravel is not deemed to be a reserved mineral and is claimed as a part of the surface estate."

The property located west of Crowheart, Wyoming, which was owned by John L. Miller at the time of his death, was sold from his estate to Dale Urbigkit and Patricia Urbigkit. Mr. Miller owned the surface and mineral rights to this property. The deed conveying this property to the Urbigkits contained the following reservation:

"Reserving unto Grantor, all minerals and mineral rights existing under said above lands and premises or appurtenant thereto, together with the right to enter upon said lands to explore for and produce the same * * *."

All the minerals and mineral rights were conveyed to appellant by an administrator's deed pursuant to an order contained in the decree of distribution entered on April 17, 1981, in the Matter of the Estate of John L. Miller, Deceased.

While the highway department was constructing a section of highway west of Crowheart in 1985 and 1986, the State entered into a materials agreement with the Urbigkits for the purchase of certain materials, including gravel. Title to the property was subsequently transferred from the Urbigkits to the Mitchells, so the State also entered into a materials agreement with the Mitchells. On May 13, 1985, the Urbigkits assigned all their rights in their materials agreement with the State to the Mitchells.

The highway department removed approximately 105,016.6 tons of gravel from below the surface of this property for highway construction use, and the State has paid the Mitchells for this gravel. Through a complaint originating suit filed October 9, 1986, appellant notified the State that it was the owner of the mineral rights for such property, which included the gravel being purchased by the State, and that payment for this gravel should be made to appellant. The court eventually entered summary judgment in favor of appellees, and this appeal was taken.

Appellant first contends that, if the language in the deed does not express a clear intent to reserve gravel under the lands conveyed, it was error to not consider an affidavit showing such intent which supported its motion for summary judgment.

Our relevant general standards for interpreting a written instrument are that, if it is free from ambiguity, the intention of the parties is to be secured from the words of the instrument, Farr v. Link, Wyo., 746 P.2d 431 (1987); Nelson v. Nelson, Wyo., 740 P.2d 939 (1987), and that the interpretation of an instrument to determine whether an ambiguity exists is a question of law for the courts to decide. Western Utility Contractors, Inc. v. City of Casper, Wyo., 731 P.2d 24 (1986); State v. Moncrief, Wyo., 720 P.2d 470 (1986). The courts, however, may augment these general rules by considering pertinent extrinsic factors when interpreting a conveyance of a mineral interest. Cheyenne Mining and Uranium Company v. Federal Resources Corporation, Wyo., 694 P.2d 65 (1985).

The courts which have held that the general reservation of "all minerals" is inherently ambiguous have traveled over a long and tortuous path in a complex and hopeless search to discover the particular minerals the parties intended to reserve. The only reliable rule which surfaces from the confusing and inconsistent approaches taken by those courts attempting to ferret out the subjective intent of the parties is that the word "mineral" means what the court says it means. The result is title uncertainty and the need to litigate each general reservation of minerals to determine which minerals it encompasses. Spurlock v. Santa Fe Pacific Railroad Company, 143 Ariz. 469, 694 P.2d 299 (1984), cert. denied 472 U.S. 1032, 105 S.Ct. 3513, 87 L.Ed.2d 642 (1985); Reeves, The Meaning of the Word "Minerals," 54 N.D.L.Rev. 419 (1978).

Although we may consider the extrinsic evidence presented by appellant to support its motion for summary judgment, we see no need to do so. We hold that the mineral reservation "[r]eserving unto Grantor, all minerals and mineral rights existing under said * * * lands" expresses a clear and unambiguous intent by the grantor to reserve all the minerals, whatever they may be.

We recognize, however, that gravel cannot be reserved in a general mineral reservation unless it is a mineral. The threshold question of law of first impression before this Court therefore is whether or not gravel is a mineral, not whether the grantor intended to reserve gravel.

Appellant has launched a three-pronged attack to support its contention that gravel is a mineral. It reasons that (1) the Ad Valorem Tax Division of the Department of Revenue and Taxation taxes gravel production in the same manner as it does mineral production; (2) the Wyoming legislature has included gravel as part of the definition of a mineral in the Wyoming Environmental Quality Act, § 35-11-103(e)(ii), W.S.1977; and (3) we should follow the emerging law that gravel is a mineral posited in the United States Supreme Court case of Watt v. Western Nuclear, Inc., 462 U.S. 36, 103 S.Ct. 2218, 76 L.Ed.2d 400 (1983).

Appellant has directed our attention to a copy of an unsigned memorandum dated December 29, 1980, from the Ad Valorem Tax Division stating that sand, gravel, and aggregate production is considered mineral production in Wyoming. Appellant concludes that, since the State of Wyoming taxes gravel production in the same manner as it taxes mineral production, gravel is a mineral. This conclusion has no merit whatsoever. Even if this administrative agency has taken the position that gravel is a mineral, we fail to see how its determination in any way can affect the decision of this Court.

Appellant also refers this Court to a section in the Wyoming Environmental Quality Act which includes gravel in the definition of a mineral for reclamation purposes. Appellant argues that "the way in which our legislature views gravel certainly is a reflection of the ordinary citizens' mind and definition of gravel and minerals." We understand this to mean that, if the State of Wyoming considers gravel to be a mineral for reclamation purposes, parties to a conveyance or reservation of "all minerals" should consider gravel as an included mineral. We disagree and do not consider this to be a cogent argument which we are obliged to discuss. Edwards v. Edwards, Wyo., 732 P.2d 1068 (1987); Dawson v. City of Casper, Wyo., 731 P.2d 1186 (1987).

Additionally, we recognize that, in the case of Watt v. Western Nuclear, Inc., the United States Supreme Court specifically limited its holding to the statutory interpretation of the Stock-Raising Homestead Act of 1916. That court declared that "gravel is a mineral reserved to the United States in lands patented under the SRHA." Id., 103 S.Ct. at 2231. We also agree with the South Dakota Supreme Court when it stated in the case of Rysavy v. Novotny, S.D., 401 N.W.2d 540, 542 (1987), that:

"In Watt, the Supreme Court relied heavily upon congressional intent behind the SRHA, and other federal statutes dealing with mineral rights. It is therefore of little help in deciding the present case in which those statutes do not apply."

We further do not subscribe to appellant's thesis that to hold contrary to the Watt case would create confusion. If there is any confusion, we suspect that the Watt case is the culprit as the vast majority of courts have held for various reasons that gravel is not a mineral estate in general private grants or reservations of minerals. Reeves, The Meaning of the Word "Minerals," supra at 428.

In spite of all the attention the topic of whether gravel is or is not a mineral has received, many problems remain. ¹ The courts which have decided whether gravel is or is not a mineral have relied on various doctrines, ² which spawn confusion, inconsistent results, and litigation to resolve questions of fact. Additionally, although legal writers and law professors are quick to point out these problems, they have failed to suggest any alternatives which are faultless. According to Professor John S. Lowe, this dilemma is the "tar baby" of natural resource law. He asserts that the more the courts attack the problems the more stuck they become. Lowe, What Substances Are...