Murray v. Billings Garfield Land Co.

• Decision Date: 20 May 2016
• Docket Number: CV 14-106-BLG-SPW
• Citation: 187 F.Supp.3d 1203
• Parties: Mary Ann Murray and Lige M. Murray, Plaintiffs, v. Billings Garfield Land Company, Robert E. Severson, Severson Minerals, LLC, BEJ Minerals, LLC, RTWF, LLC and John Does 1-10, Defendants. BEJ Minerals, LLC, RTWF, LLC Counter-Claimants, v. Mary Ann Murray and Lige M. Murray, Counter-Defendants.
• Court: U.S. District Court — District of Montana

187 F.Supp.3d 1203

Mary Ann Murray and Lige M. Murray, Plaintiffs,

v.Billings Garfield Land Company, Robert E. Severson, Severson Minerals, LLC, BEJ Minerals, LLC, RTWF, LLC and John Does 1-10, Defendants.

BEJ Minerals, LLC, RTWF, LLC Counter-Claimants,

v.Mary Ann Murray and Lige M. Murray, Counter-Defendants.

CV 14-106-BLG-SPW

United States District Court, D. Montana, Billings Division.

Signed May 20, 2016

Eric Edward Nord, Harlan B. Krogh, Crist, Krogh, Butler & Nord, LLC, Billings, MT, Patrick K. Duffy, Patrick K. Duffy, LLC, Rapid City, SD, for Plaintiffs.

Brian C. Lake, Shane R. Swindle, Perkins Coie LLP, Phoenix, AZ, Stephanie Malinda Regenold, Perkins Coie, LLP, Boise, ID, for Defendants.

OPINION and ORDER

SUSAN P. WATTERS, United States District Judge

Before the Court are competing summary judgment motions filed by Plaintiffs/Counter-Defendants Mary Ann Murray and Lige E. Murray (collectively the "Murrays") and Defendants/Counter-Claimants BEJ Minerals, LLC and RTWF, LLC (collectively the "Seversons"). The motions present the question of whether dinosaur fossils found on a ranch are included in the surface estate or the mineral estate. For the reasons that follow, the Court finds that fossils are not included in the ordinary definition of "mineral." Accordingly, the Court determines that the dinosaur fossils found on the ranch are part of the surface estate.

I. Background¹

A. Factual Background

George Severson formerly owned a large amount of farm and ranch property located in Garfield County, Montana. (Doc. 33 at 3.) Beginning in 1983, the Murrays leased the land from George Severson and worked there as ranchers. (Mary Ann Murray Depo. 30:3-31:8 , Doc. 48-4 at 5-6.)

Over the years, George Severson transferred portions of his interests in the property to his sons Jerry and Robert Severson and sold the other portions of his property interests to the Murrays. (Doc. 33 at 3.) From approximately 1991 through mid-2005, the Murrays operated the property in partnership with Jerry and Robert Severson under the name Murray Severson Ranch Partnership. (Id. at 4.)

In 2005, Jerry and Robert Severson (and/or entities they owned and managed) sold their surface ownership rights in the property to the Murrays. (Id. ) At the time of the 2005 sale, the mineral estate was severed from the surface estate. (Id. ) The purchase agreement provided that at closing, the parties would execute a mineral deed apportioning ownership of the mineral rights as follows: 1/3 to Robert Severson, 1/3 to Jerry Severson's company Severson Minerals, LLC, and 1/6 each to Lige and Mary Ann Murray. (Id. ) One exception was a parcel where half the mineral rights were owned by an unrelated third party known as the Billings Garfield Land Company. (Id. at 5.) On that parcel, ownership of the mineral rights was apportioned as follows: 50% to Billings Garfield Land Company, 16.67% to Robert E. Severson, 16.67% to Severson Minerals, LLC, and 16.67% to the Murrays. (Id. )

The mineral deed provided that the Seversons and the Murrays would own as tenants in common "all right title and interest in and to all of the oil, gas, hydrocarbons, and minerals in, on and under, and that may be produced from the [property]." (Id. at 6.) The parties executed and recorded the deed in connection with the sale of the surface estate. (Id. at 4.) At the time of the sale, neither the Seversons nor the Murrays suspected that dinosaur fossils existed on the property. (Doc. 55 at 6.) Robert Severson's interest is now held by BEJ Minerals, LLC. (Doc. 33 at 5.) Severson Minerals, LLC's interest is now held by RTWF LLC. (Id. at 4.) To avoid being involved in this lawsuit, Billings Garfield Land Company has subsequently transferred to the Seversons any interest it had in any fossils found on the property. (Doc. 53 at 8.)

After the severance of the mineral and surface estates, the Murrays discovered several dinosaur fossils on the property. The first fossil was a "spike cluster" from a Pachycephalosaur found in the fall of 2005. (Doc. 53 at 12.) At the time, the Murrays did not consider this fossil to be significant. (Id. )

Sometime prior to December 2006, the Murrays discovered fossils of two separate dinosaurs that appear to have been locked in battle when they died. (Doc. 53 at 12, 14-15.) Subsequently nicknamed the Dueling Dinosaurs, one of the Murrays' experts described it as a "one-a-kind find." (Peter Larson Depo. 131:10 , Doc. 48-4 at 141.) Fossils of dinosaurs that appear to have interacted are rare, and the Dueling Dinosaurs "have huge scientific value." (Phillip Manning Depo. 120:11-25 , Doc. 48-4 at 185). An appraiser concluded that the Dueling Dinosaurs have a market value of between $7 million and $9 million. (Doc. 55 at 17.) The Murrays attempted to sell the Dueling Dinosaurs at a New York City auction, but nobody bid over the reserve of $6 million. (Doc. 55 at 17; Mary Ann Murray Aff. ¶ 3 , Doc. 55-2 at 2.)

The Murrays also discovered the fossilized remains of a Tyrannosaurus rex on the property. (Doc. 55 at 7-8.) Subsequently nicknamed the "Murray T. Rex," there are only about a dozen Tyrannosaurus rex skeletons as well preserved and complete as the Murray T. Rex. (Id. at 18.) The Murray T. Rex has been sold to a Dutch museum for a negotiated price in the millions of dollars. (Id. ) The proceeds from the sale are being held in escrow pending the outcome of this action. (Id. at 8.)

A Triceratops skull and part of a Triceratops foot have also been found on the property. (Doc. 33 at 6.) The Murrays' agent who helped prepare the Triceratops skull for display wrote that it was "the best specimen I have ever worked on and i [sic ] have done 27 Triceratops skulls." (Chris Morrow Email , Doc 48-6 at 27.) Clayton Phipps, who helped the Murrays locate and excavate the fossils found on the property, described the skull to a potential purchaser as "one of the best if not the best Triceratops skull ever found and the best one available for sale now.² " (Clayton Phipps Email , Doc. 48-6 at 23.) The Murrays have offered to sell the Triceratops skull for between $200,000 and $250,000. (Doc. 55 at 20.) They sold the Triceratops foot by itself for $20,000. (Id. at 21.)

The Murrays entered into contracts and arrangements with third parties relating to the excavation and sale of the fossils found on the property. (Id. at 10.) The Murrays did not notify the Seversons upon discovery of the fossils or before attempting to sell the fossils. (Id. ) The parties agree that the Dueling Dinosaurs, the Murray T-Rex, and the Triceratops fossils are rare, exceptional, and have special value. (Id. at 18, 19, and 21.)

B. General Information about Fossils

The parties' experts differ slightly in describing the process of how the dinosaur bones found on the property became "fossilized." The Seversons' expert Raymond Rogers described fossilization "as a preservational process." (Raymond Rogers Depo. 89:9-10 , Doc. 48-4 at 234.) Bones and teeth naturally contain a mineral called hydroxylapatite. (Raymond Rogers Ex. Disclosure at 6 , Doc. 48-4 at 199.) In the vast majority of instances after a vertebrate's death, the bones are decomposed and destroyed. (Id. at 7 , Doc. 48-4 at 200.) However, in some circumstances, the bones and teeth can be stabilized and fossilized after a material called collagen is removed. (Id. ) Rogers opined that fossilization refers to the "recrystallization" of organic bone matter into more stable forms. (Id. ) Further, minerals are sometimes added to the bone by filling preexisting open spaces in the bone structure and the space formerly occupied by decomposed collagen. (Id. ) Such minerals include calcite, pyrite, barite, apatite, chlorite, and silica. (Id. ) However, minerals do not fill voids in all fossils. (Id. at 8 , Doc. 48-4 at 201.)

In reviewing the dinosaur fossils found on the Murrays' ranch, Rogers concluded that the dinosaur bones recrystallized into a compound called francolite. (Id. at 10 , Doc. 48-4 at 203.) According to Rogers, "[f]rancolite is a carbonate and fluorine enriched apatite group mineral." (Id. at 9 , Doc. 48-4 at 202.) Rogers stated that francolite is the most common mineral found in recrystallized fossil bone. (Id. at 8-9 , Doc. 48-4 at 201-02.) Rogers reviewed x-ray diffractograms performed on the fossils found on the property, and he concluded that francolite is present in the fossils. (Id. at 9-10 , Doc. 48-4 at 202-03.) Rogers opined "that the fossil dinosaur bones in question were recrystallized to the mineral francolite during fossilization." (Id. at 10 , Doc. 48-4 at 203.)

The Murrays' experts largely agree with the fossilization process described by Rogers, but they differ on the conclusion that francolite is a mineral compound. Expert Peter Larson opined that "francolite has not been recognized as a distinct, valid mineral species since 2008." (Peter Larson Rebuttal Ex. Report at 1 , Doc. 55-6 at 6.) Larson stated that the fossils are composed of the mineral hydroxylapatite. (Peter Larson Depo. 223:12-14 , Doc. 48-4 at 156.) As mentioned above, hyrdoxylapatite is not unique to fossils, as it is found in the bones of living vertebrates. Larson compared the x-ray diffraction patterns of the Murray T. Rex and a modern bison bone, and he concluded that the samples contained identical patterns of hydroxylapatite. (Id. at 219:17-221:17 , Doc. 48-4 at 219-221.) Larson opined that the fossil "has not been replaced by minerals in any way, shape, or form. It is hydroxylapatite just as when it was alive." (Id. at 224:15-18 , Doc. 55-3 at 7.) Larson does not consider minerals that fill voids in the bone to be part of the fossil. (Id. )

While the Dueling Dinosaurs, the Murray T. Rex, and Triceratops skull and foot are indisputably valuable, not all dinosaur fossils are rare and valuable. (Doc. 53 at 16-17.) Fragments of fossils that have little or no value are sometimes referred to as "chunkosaur" or "junkasaur." (Id. ) Clayton Phipps stated that he has "walked by...