Owens v. Tergeson

• Citation: 363 P.3d 826
• Decision Date: 05 November 2015
• Docket Number: Court of Appeals No. 14CA2146
• Parties: Barbara G. OWENS and G. Charles Gadbois, Plaintiffs–Appellees, v. Edward H. TERGESON, as Trustee of the Harold Furrow Family Trust and as Personal Representative of the Estate of Esther A. Furrow; AED Group, LLC; and Pegasus Minerals, LLC, Defendants–Appellants.
• Court: Court of Appeals of Colorado

363 P.3d 826

Barbara G. OWENS and G. Charles Gadbois, Plaintiffs–Appellees,

v.Edward H. TERGESON, as Trustee of the Harold Furrow Family Trust and as Personal Representative of the Estate of Esther A. Furrow; AED Group, LLC; and Pegasus Minerals, LLC, Defendants–Appellants.

Court of Appeals No. 14CA2146

Colorado Court of Appeals, Div. II.

Announced November 5, 2015

Poulson, Odell & Peterson, LLC, Scott M. Campbell, Aaron G. Norris, Denver, Colorado, for Plaintiffs–Appellees.

Otis, Bedingfield & Peters, LLC, Jennifer Lynn Peters, Christian J. Schulte, Greeley, Colorado, for Defendants–Appellants.

Opinion by JUDGE DAILEY

¶ 1 In this dispute over mineral rights, defendants Edward H. Tergeson, as trustee of the Harold Furrow Family Trust and as personal representative of the Estate of Esther A. Furrow; AED Group, LLC; and Pegasus Minerals, LLC (collectively, the Furrow Defendants), appeal the district court's order denying their motion for summary judgment and granting summary judgment in favor of Plaintiffs, Barbara G. Owens and G. Charles Gadbois. We affirm.

I. Background

¶ 2 Plaintiffs and the Furrow Defendants both assert that they are the rightful owners of certain mineral interests located in four adjacent tracts of land (Tracts A–D) in Weld County.

¶ 3 The parties' conflicting claims revolve, in the first instance, around an interpretation of two warranty deeds dated November 25, 1950 (1950 Deeds). One conveyed Tract A; the other conveyed Tracts B–D. The parties disagree whether the language in the 1950 Deeds reserved all oil, gas, and other mineral interests in the land to the original grantors or fully conveyed those interests to the deeds' grantees. Plaintiffs argue that, as successors-in-interest to the deeds' grantors, they are the rightful owners of the mineral rights reserved in the deeds. The Furrow Defendants, as successors-in-interest to the grantees on the deed, argue that, inasmuch as no such reservation of rights occurred, they own the rights.

¶ 4 In addition, the Furrow Defendants argue that, by way of a 1973 quiet title action (1973 Action) and a subsequent conveyance, they became the rightful owners of at least some of the disputed mineral rights. Plaintiffs, however, argue that the 1973 Action was void because they were not named as parties in the action and their predecessors-in-interest were not properly served in the case.

¶ 5 In the district court, the parties presented their arguments in cross-motions for summary judgment. The district court ruled in favor of Plaintiffs, concluding,

• as a matter of law, that, in the 1950 Deeds, the grantors, Plaintiffs' predecessors-in-interest, validly reserved their interest in the mineral rights in Tracts A–D; and

• the judgment in the 1973 Action affected only Tract A but was void because of invalid service of process on Plaintiffs' predecessors-in-interest.

¶ 6 Consequently, the district court granted Plaintiffs' motion for summary judgment while denying the Furrow Defendants' cross-motion for summary judgment.

II. Analysis

¶ 7 The Furrow Defendants contend that they, rather than Plaintiffs, should have been granted summary judgment with respect to the 1950 Deeds and the effect of the 1973 Action. Alternatively, they contend that, at the very least, disputed issues of fact existed with respect to those issues, precluding summary judgment in Plaintiffs' favor. We are not persuaded.

¶ 8 Initially, we note that, while the denial of summary judgment is usually not appealable, Moss v. Members of Colo. Wildlife Comm'n, 250 P.3d 739, 742 (Colo.App.2010), it is appealable when, as here, it effectively puts an end to the litigation, as when cross-motions result in entry of judgment for one party and a denial for the other, Glennon Heights, Inc. v. Cent. Bank & Tr., 658 P.2d 872, 875 (Colo.1983) ; Mahaney v. City of Englewood, 226 P.3d 1214, 1217 (Colo.App.2009).

¶ 9 Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Geiger v. Am. Standard Ins. Co., 192 P.3d 480, 482 (Colo.App.2008). We review a grant or denial of summary judgment de novo. Id.

¶ 10 With these principles in mind, we address the issues raised by the Furrow Defendants on appeal.

A. Interpretation of 1950 Deeds

1. Facts

¶ 11 Plaintiffs' predecessors-in-interest on the deed conveying Tract A were Frankie Alice Gadbois and G.C. Gadbois (the Gadbois); Plaintiffs' predecessors-in-interest on the deed conveying Tracts B–D were Frankie Alice Gadbois and William Van Pelt.¹

¶ 12 The grantee on both 1950 Deeds (and, thus, a predecessor-in-interest to the Furrow Defendants) was Hubert A. Brown.

¶ 13 The deed conveying Tract A contains the following granting language:

WITNESSETH, That the said parties of the first part, for and in consideration of the sum of DOLLARS ($10) and other good and valuable considerations, [to] the said parties of the first part in hand paid by the said party of the second part, the receipt wherof is hereby confessed and acknowledged, have granted, bargained, sold and conveyed, and by these presents do grant, bargain, sell, convey and confirm, unto the said party of the second part, his heirs and assigns forever, all the following described lots or parcels of land, situate, lying and being in the County of Weld and State of Colorado, to-wit:

[Tract A]

TOGETHER with all and singular the hereditaments and appurtenances thereto belonging, or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof; and all the estate, right, title, interest, claim and demand whatsoever of the said parties of the first part, either in law or equity, of, in and to the above bargained premises, with the hereditaments and appurtenances.

Immediately after this granting clause appears a habendum clause, which states:

TO HAVE AND TO HOLD the said premises above bargained and described, with the appurtenances, unto the said party of the second part, his heirs and assigns forever. And the said parties of the first part, for themselves their heirs, executors, and administrators, do covenant, grant, bargain, and agree to and with the said party of the second part, his heirs and assigns, that at the time of the ensealing and delivery of these presents, they are well seized of the premises above conveyed, as of good, sure, perfect, absolute and indefensible estate of inheritance, in law, in fee simple, and have good right, full power and lawful authority to grant, bargain, sell and convey the same in manner and form as aforesaid, and that the same are free and clear from all former and other grants, bargains, sales, liens, taxes, assessments and encumbrances of whatever kind or nature soever. except reserving all oil, gas and other minerals and the right to use so much of the surface as is necessary to develop, produce and care for the same; also 1950 taxes; and the above bargained premises in the quiet and peaceable possession of the said party of the second part, his heirs and assigns against all and every person or persons lawfully claiming or to claim the whole or any part thereof, the said parties of the first part shall and will WARRANT AND FOREVER DEFEND.

(Enlarged font in original.) (Emphasis added.)

¶ 14 The deed conveying Tracts B–D contains virtually identical language to that of the deed conveying Tract A, the only exception being a variation of the reservation contained in the habendum clause:

Except reserving all oil, gas and other mineral and the right to use so much of the surface as is necessary to develop, produce and care for the same; Also except a 1/128th royalty interest to second party; also 1950 Taxes....

(Enlarged font in original.) (Emphasis added.)

2. Analysis

¶ 15 Deeds are usually construed in accordance with the general rules of construction of written instruments. Terry v. Salazar, 892 P.2d 391, 393 (Colo.App.1994), aff'd, 911 P.2d 1086 (Colo.1996). In accordance with those rules, where a deed is unambiguous, its terms must be enforced as written. See City of Aurora v. N. Colo. Water Conservancy Dist., 236 P.3d 1222, 1226 (Colo.2010) (considering a contract). If, however, an ambiguity exists in an instrument's reservation of oil and gas rights, the construction must favor the grantee. See Clevenger v. Cont'l Oil Co., 149 Colo. 417, 421, 369 P.2d 550, 552 (1962) ; Keith v. Kinney, 140 P.3d 141, 146 (Colo.App.2005).

¶ 16 "[T]he fact that the parties have different opinions about the interpretation of the deed does not of itself create an ambiguity." Hudgeons v. Tenneco Oil Co., 796 P.2d 21, 22 (Colo.App.1990) (emphasis added). "In ascertaining whether certain provisions of an instrument are ambiguous, we must examine the instrument's language and construe it in harmony with the plain and generally accepted meaning of the words employed. Terms are ambiguous when they are susceptible of more than one reasonable interpretation." Allen v. Reed, 155 P.3d 443, 445 (Colo.App.2006).

¶ 17 The interpretation of a deed and the determination of whether it is ambiguous are questions of law subject to de novo review by this court. See Littlehorn v. Stratford, 653 P.2d 1139, 1144 n. 6 (Colo.1982) ; Terry, 892 P.2d at 393.

¶ 18 The Furrow Defendants assert that, where the provisions of a "granting clause" and those of "a warranty (or habendum) clause" conflict, the provisions of the granting clause (here, reserving no mineral interests) must prevail. That indeed was the common law view endorsed by the supreme court in Million v. Botefur, 90 Colo. 343, 345, 9 P.2d 284, 284 (1932). See, e.g., CNX Gas Co. v. Rasnake, 287 Va. 163, 752 S.E.2d 865, 867–68 (2014) (discussing the common law rule). However, in Mitchell v. Espinosa, 125 Colo. 267, 243 P.2d 412 (1952), the supreme court rejected that rule in favor of the more modern view that the overall intent from the deed considered as a whole should control. See id. at 274, 243 P.2d at 415.²

¶ 19 This evolution in the law has...