Wilkinson v. Bd. of Univ. & Sch. Lands of State
| Decision Date | 10 November 2022 |
| Docket Number | 20220037 |
| Citation | 981 N.W.2d 853 |
| Parties | William S. WILKINSON ; Ann L. Nevins and Amy L. Perkins as Personal Representatives for the Estate of Dorothy A. Wilkinson; Barbara Caryl Materne, Trustee of the Petty Living Trust; Charlie R. Blaine and Vanessa E. Blaine, as Co-Trustees of the Charlie R. Blaine and Vanessa E. Blaine Revocable Trust; Lois Jean Patch, life tenant; and Lana J. Sundahl, Linda Joy Weigel, Deborah J. Goetz, Marva J. Will, Ronald J. Patch, Michael Larry Patch, and Jon Charles Patch, Remaindermen, Plaintiffs and Appellants v. The BOARD OF UNIVERSITY AND SCHOOL LANDS of the State of North Dakota, Brigham Oil & Gas, LLP; Statoil Oil & Gas LP, Defendants and Appellees and EOG Resources, Inc. ; XTO Energy Inc.; Petrogulf Corporation, and all other persons unknown who have or claim an interest in the property described in the Complaint, Defendants and North Dakota State Engineer, Intervenor and Appellee |
| Court | North Dakota Supreme Court |
Joshua A. Swanson (argued) and Robert B. Stock (appeared), Fargo, N.D., for plaintiffs and appellants.
Jennifer L. Verleger, Assistant Attorney General, Bismarck, N.D., for defendant and appellee The Board of University and School Lands of the State of North Dakota, and for intervenor and appellee North Dakota State Engineer.
John E. Ward, Bismarck, N.D., for defendants and appellees Brigham Oil and Gas, LLP, and Statoil Oil & Gas LP.
{¶1} The plaintiffs appeal from a judgment dismissing their takings, conversion, unjust enrichment, civil conspiracy, and 42 U.S.C. § 1983 claims against the Board of University and School Lands ("Land Board"), Department of Water Resources,1 and Statoil Oil & Gas LP.2 We affirm, concluding the district court did not err in dismissing these claims and denying damages, costs, and attorney's fees.
{¶2} J.T. Wilkinson and Evelyn M. Wilkinson acquired title to property located in Williams County described as:
In 1958, the Wilkinsons conveyed the property to the United States for construction and operation of the Garrison Dam and Reservoir, but they reserved the oil, gas, and other minerals in and under the property. The plaintiffs are the Wilkinsons’ successors in interest.
{¶3} The plaintiffs have leased their minerals numerous times since they conveyed the surface property to the United States. Most notably, in 2009, the plaintiffs (or their predecessors in interest) entered into oil and gas leases for 286 acres of their property. The plaintiffs received bonus payments of $300 per acre and a 3/16ths royalty rate. The leases provide they shall remain in effect as long as oil or gas is produced or drilling operations are continuously prosecuted, but drilling or production on pooled portions of the leases will not maintain the leases for the unpooled portions.
{¶4} In 2010 and 2011, the Land Board entered into four oil and gas leases with oil operators in Williams County, Township 153 North, Range 102 West, for the northwest and southwest quarters of Section 12 ("Section 12 leases") and northeast and northwest quarters of Section 13 ("Section 13 leases"). Statoil is the operator of the Lippert 1-12 1-H Well, which was spud in Section 1, Township 153 North, Range 102 West. The spacing unit3 for the Lippert Well consists of Sections 1 and 12. In November 2010, the Lippert Well began production. From August 2011 to April 2015, Statoil paid the Land Board royalties for its fractional portion of the leased acreage within the spacing unit.4 Section 13 has no associated spacing unit, and because no drilling operations or production commenced in Section 13, the Section 13 leases expired under their terms. The Land Board received and retained bonus payments from the oil operators under the Section 13 leases.5 The plaintiffs’ 2009 leases, likewise, remain in effect for Section 12, but have expired as to Section 13.
{¶5} In 2012, the plaintiffs sued the Land Board and oil operators to quiet title to disputed mineral interests in Sections 12 and 13. The plaintiffs amended their complaint, adding additional oil operators as defendants and the following claims: unconstitutional takings under the federal and state constitutions by the Land Board; deprivation of their constitutional rights under 42 U.S.C. § 1983 by the Land Board; and conversion, unjust enrichment, and civil conspiracy by the Land Board and oil operators, including Statoil. The district court granted the Department of Water Resources’ motion to intervene as a defendant. As a result of the title dispute over minerals within the spacing unit, Statoil suspended royalty payments to the plaintiffs. Statoil also began escrowing the Land Board's royalty payments at the Bank of North Dakota (the "Bank") starting in May 2015.
{¶6} The Land Board and Department of Water Resources (collectively, "State") moved for summary judgment. The district court granted the State's motion, concluding the State owned the disputed minerals. After the court entered summary judgment and the plaintiffs appealed, the Legislative Assembly enacted N.D.C.C. ch. 61-33.1, relating to the ownership of mineral rights of land inundated by the Pick-Sloan Missouri Basin Project dams. 2017 N.D. Sess. Laws ch. 426. In Wilkinson v. Board of University & School Lands , 2017 ND 231, 903 N.W.2d 51 (" Wilkinson I "), we reversed the judgment and remanded for the court to determine whether N.D.C.C. ch. 61-33.1, governing state ownership of the Missouri riverbed, applied and governs ownership of the minerals in this case.
{¶7} On remand, the district court granted the plaintiffs’ motion for summary judgment, concluding N.D.C.C. ch. 61-33.1 applied and the plaintiffs own the disputed minerals. In Wilkinson v. Board of University & School Lands , 2020 ND 179, ¶¶ 16, 20, 947 N.W.2d 910 (" Wilkinson II "), although a final judgment disposing of all the claims against all the parties was not entered, we exercised our supervisory jurisdiction. We affirmed the judgment in part, concluding N.D.C.C. ch. 61-33.1 applied and the disputed mineral interests are above the ordinary high water mark of the historical Missouri riverbed channel and are not state sovereign lands. Id. at ¶ 32. We reversed in part, concluding the statutory process was not completed, and remanded to resolve the remaining claims and determine damages. Id.
{¶8} Following Wilkinson II , the escrowed royalties were released to Statoil.
In November 2020, Statoil paid the plaintiffs the outstanding royalties owed to them, dating back to November 2010, totaling $571,094. After a bench trial, the district court dismissed the plaintiffs’ remaining claims and denied damages on those claims, including interest on the royalties, disgorgement of the Section 13 bonus payments made to the State, and costs and attorney's fees. The plaintiffs appeal.
{¶9} In an appeal from a bench trial, the court's findings of fact are reviewed under the clearly erroneous standard of review, and its conclusions of law are fully reviewable. Serv. Oil, Inc. v. Gjestvang , 2015 ND 77, ¶ 12, 861 N.W.2d 490. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, after reviewing all the evidence, we are left with a definite and firm conviction a mistake has been made. Id. The trial court is "the determiner of credibility issues and we do not second-guess the trial court on its credibility determinations." Id. "A trial court's choice between two permissible views of the weight of the evidence is not clearly erroneous, and simply because we may have viewed the evidence differently does not entitle us to reverse the trial court." Id. at ¶ 13. The court's findings are adequate if the record enables us to understand its factual determinations and the basis for its conclusions of law and judgment. Id.
{¶10} The plaintiffs argue the district court erred by dismissing their conversion claim against the State. The State asserts the district court lacked subject matter jurisdiction over the claim under N.D.C.C. § 32-12.2-04(1), which requires a claim against the State for an injury be presented to the director of the office of management and budget ("OMB") within 180 days after the alleged injury is discovered or reasonably should have been discovered. "Absent the timely filing of a notice of claim under N.D.C.C. § 32-12.2-04(1), the court lacks subject matter jurisdiction to entertain the lawsuit." Ghorbanni v. N.D. Council on Arts , 2002 ND 22, ¶ 8, 639 N.W.2d 507. We review challenges to the district court's subject matter jurisdiction de novo when jurisdictional facts are not in dispute. State ex rel. Stenehjem v. Maras , 2021 ND 68, ¶ 8, 958 N.W.2d 475.
{¶11} It is undisputed the plaintiffs failed to present a notice of claim to OMB. They argue, however, that the State waived this argument because the judgment and order for judgment do not address this issue and the State did not appeal from the court's November 2015 order holding the statute did not apply to the conversion claim. Although the court dismissed the conversion claim on the merits, not for failure to file a notice of claim, the plaintiffs’ waiver argument is unpersuasive. The November 2015 order denied the Land Board's motion to dismiss. Thus, the order was not an appealable order. Dimond v. State ex rel. State Bd. of Higher Educ. , 1999 ND 228, ¶ 12, 603 N.W.2d 66 (). Further, because the issue implicates the court's subject matter jurisdiction, Ghorbanni , 2002 ND 22, ¶ 8, 639 N.W.2d 507, the issue cannot be waived and may be raised at any time. N.D.R.Civ.P. 12(h)(3) ; Earnest v. Garcia , 1999 ND 196, ¶ 7, 601 N.W.2d 260 (...
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...Clause. There is no dispute that Vohs may bring her takings claim in North Dakota state court. See Wilkinson v. Bd. of Univ. &Sch. Lands, 981 N.W.2d 853, 863-66 (N.D. 2022). But the Eleventh Amendment bars a claim against the State in federal court as long as state courts remain open to ent......