Slaaten v. U.S., 92-1622

• Decision Date: 14 June 1993
• Docket Number: No. 92-1622,92-1622
• Citation: 990 F.2d 1038
• Parties: Doris SLAATEN, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1038

990 F.2d 1038

Doris SLAATEN, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 92-1622.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 12, 1992.

Decided April 8, 1993.

Rehearing and Rehearing En Banc

Denied June 14, 1993.

Orlin W. Backes, Minot, ND, argued, for plaintiff-appellant.

Cameron Wayne Hayden, Asst. U.S. Atty., Bismarck, ND, argued, for defendant-appellee.

Before JOHN R. GIBSON and MAGILL, Circuit Judges, and BOGUE, ^* Senior District Judge.

JOHN R. GIBSON, Circuit Judge.

Doris Slaaten appeals from the district court's dismissal of her suit against the United States for conversion of oil and gas royalty payments. The district court held that Slaaten's suit was barred by the Federal Tort Claims Act two-year statute of limitations. 28 U.S.C.A. § 2401(b) (Supp.1992). Slaaten argues that she complied with the two-year statute of limitations because her claim did not accrue until September 19, 1989, when an Interior Board of Land Appeals decision, reversing a long-standing government position and holding that the United States had no claim to the royalties, became final. We conclude that Slaaten complied with the two-year statute of limitations. Accordingly, we reverse and remand for further proceedings.

On May 25, 1937, Doris Slaaten's parents conveyed 160 acres located in North Dakota to the United States. The deed contained a mineral reservation in favor of the Slaatens, limited to twenty-five years with the option to extend the reservation. The deed also provided that the reservation would expire on November 4, 1961, and that any extension of the mineral rights would be limited to an area of twenty-five acres of land surrounding each well or mine that was producing at the time the right terminated.

In 1948, Maude Slaaten, Doris Slaaten's mother, leased the mineral interest to Thomas Dorough, who assigned the lease to Texaco. Texaco constructed two oil and gas wells on the property. In August 1961, Texaco and the United States interpreted the mineral reservation right in the deed to mean that the United States owned the mineral interest in all but the twenty-five acres of property surrounding each of the two existing wells. Accordingly, Texaco reduced Slaaten's royalties and entered into a compensatory royalty agreement with the United States, giving the government a portion of the royalties.

In 1967, a North Dakota district court held that the mineral reservation language in a deed identical to Slaaten's resulted in a relinquishment of the ownership of the mineral rights, except for twenty-five acres surrounding each producing well. ¹ United States v. Amax Petroleum Corp., Civil No. 712 (D.N.D. Oct. 16, 1967). Although the decision was unpublished and Slaaten was not a party to the suit, the court's interpretation supported the United States' position that it owned the mineral rights in all but the twenty-five acres surrounding each well. In 1968, Maude Slaaten wrote the Bureau, objecting to the compensatory royalty agreement and contending that she had repeatedly refused to recognize the government's claimed interest. The Bureau responded that the United States was entitled to payment under the Texaco royalty agreement and suggested that the question of the royalties Texaco owed to Slaaten was a private lease matter that she should negotiate with Texaco.

In 1985, the United States entered into an agreement with the Amerada Hess Corporation, authorizing Amerada Hess to develop the remaining 110 acres of land for oil and gas production. Amerada Hess paid the United States a bonus of $1,251,836 for the drilling and production rights. Amerada Hess completed an oil and gas well in 1985 and has paid royalties to the United States since that time.

On December 5, 1986, Doris Slaaten ² filed a letter of protest with the Bureau, disputing the United State's interest in the minerals. In support of her protest, she attached an engineer's analysis ³ of her rights. In January 1987 the Bureau dismissed her protest. The Bureau explained that "[i]t has been the Bureau's position, in response to numerous questions about these 25-acre reservations, the government acquired the entire present interest to the mineral estate in the lands covered by the respective deeds, excepting 25 acres surrounding (around) each producing well being drilled or developed at the end of the reservation period." The Bureau also stated that "[t]his position, we believe, was upheld by Judge Register's judgment" in Amax. The Bureau then advised Slaaten that she could appeal to the Interior Board of Land Appeals, and she filed a notice of appeal on February 11, 1987. On January 25, 1989, the Board issued a decision rejecting the Bureau's position and Amax, even though it recognized that the Bureau had "long interpreted" such restrictions in favor of the United States. Doris Slaaten, 107 IBLA 16, 20, 23 (1989). The Board concluded that the United States never had a right to the minerals. ⁴ Id. at 25. The Board denied the Bureau's petition for reconsideration on September 19, 1989, and the Bureau did not appeal the decision further.

Slaaten then presented a claim for $1,764,941.10 to the Bureau on April 17, 1990, claiming that the United States had negligently and wrongfully converted her property to its own use since November 1961. Because the Bureau did not respond within six months, she filed this action with the district court in March 1991.

The government requested summary judgment, which the district court granted with "great reluctance" because it believed the Federal Tort Claims Act two-year statute of limitations applied and barred consideration of Slaaten's claim. Slaaten v. United States, No. A4-91-038, slip op. at 8 (D.N.D. Jan. 2, 1992). The district court found that Slaaten had the requisite knowledge of her claim on December 5, 1986, but failed to file a claim for a sum certain until April 17, 1990. Id. The court also ruled that no equitable considerations were present to toll the statute of limitations. Id. The court noted that its reluctance was predicated upon the fact that the plaintiff and her family appear to have been victimized by the government ... for many years, and even after winning a favorable result in the administrative process, were told that a judicial decree was necessary to obtain relief. When seeking such a judicial decree they are met with great objection.

Id.

We review the district court's grant of summary judgment de novo, and will affirm only "when there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); McKee v. Federal Kemper Life Assur. Co., 927 F.2d 326, 328 (8th Cir.1991). We view the facts in the light most favorable to the nonmovant, and give it the benefit of all reasonable inferences. Schrader v. Royal Caribbean Cruise Line, Inc., 952 F.2d 1008, 1013 (8th Cir.1991).

Section 2401(b) of the Federal Tort Claims Act requires that claimants present a claim to an appropriate federal agency within two years after the claim accrues and file an action within six months of the agency's certified or registered mailing of a claim's final denial. 28 U.S.C.A. § 2401(b). In addition, the presented claim must be for a sum certain in damages. 28 C.F.R. § 14.2(a) (1992); Melo v. United States, 505 F.2d 1026, 1029 (8th Cir.1974).

A claim "accrues" when the plaintiff knows or reasonably should know both the existence and cause of the injury. United States v. Kubrick, 444 U.S. 111, 121-23, 100 S.Ct. 352, 359-60, 62 L.Ed.2d 259 (1979); General Elec. Co. v. United States, 792 F.2d 107, 110 (8th Cir.1986). When the plaintiff knew or should have known is a question of federal law, which the court must determine in light of the surrounding circumstances. United States v. LePatourel, 593 F.2d 827, 830 (8th Cir.1979) (LePatourel II ).

Slaaten contends that her claim did not accrue until September 19, 1989, when the Board's decision, rejecting Amax and determining that the United States did not have an interest in the oil and gas, became final. Relying on our decisions in United States v. LePatourel, 571 F.2d 405 (8th Cir.1978) (LePatourel I ), and LePatourel II, 593 F.2d at 827, Slaaten claims that before the Board's decision she did not have a reasonable expectation that a Federal Tort Claims Act suit would be successful because Amax was decided in the same district where her suit would have been filed, it interpreted language identical to that in her deed, and the holding was directly contrary to her position.

In LePatourel, a federal judge, driving on official business, was involved in a car accident which injured Valerie LePatourel. 571 F.2d at 406. LePatourel and her husband diligently attempted to obtain legal counsel to represent them in an action against the judge, but had a difficult time doing so. LePatourel II, 593 F.2d at 829. When they finally retained counsel and were ready to file a state tort action, they received a letter from a United States Attorney advising them that the FTCA applied (because the judge had been driving on official business) and the two-year statute of limitations barred their claims. Id. at 829-30. After they filed suit in state court, the United States substituted itself as a party and removed the case to federal court under the FTCA. LePatourel I, 571 F.2d at 406. The district court, however, held that removal was improper because federal judges were not within the purview of the FTCA. Id. at 407.

When LePatourel I came before this court, we reversed the district court and held (for the first time) that the FTCA applied to federal judges. Id. at 410. We also held, however, that the FTCA two-year statute of limitations barred the LePatourels' claims. Id. On petition for rehearing, we considered whether our holding should be applied prospectively, and remanded the case to the district court to determine why the LePatourels had...