Young v. Young, No. 85-77

• Court: United States State Supreme Court of Wyoming
• Writing for the Court: Before THOMAS; RAPER
• Citation: 709 P.2d 1254
• Parties: Melba YOUNG, Appellant (Plaintiff), v. William R. YOUNG, Appellee (Defendant).
• Docket Number: No. 85-77
• Decision Date: 21 November 1985

Page 1254

709 P.2d 1254 Melba YOUNG, Appellant (Plaintiff),
v.
William R. YOUNG, Appellee (Defendant). No. 85-77. Supreme Court of Wyoming. Nov. 21, 1985.

Page 1255

Neil J. Short, Casper, for appellant (plaintiff).

Kevin P. Meenan, Casper, for appellee (defendant).

Before THOMAS, C.J., and ROSE, ^* ROONEY, and BROWN, JJ., and RAPER, J., Retired.

RAPER, Justice, Retired.

The district court, on statute-of-limitations grounds, denied Melba Young (appellant) any relief in an action against her former husband, William R. Young (appellee), for recovery of overriding oil and gas royalties she claimed were due her by virtue of a November 1, 1970, assignment of the same by appellee, as ordered in a divorce decree dated August 26, 1969. She appeals from that part of the court's order denying recovery for the four years preceding the filing of her complaint.

Appellant states the issues to be:

"1. Whether an overriding royalty interest in severed minerals or cash realized from their sale is an interest in real or personal property.

"2. Whether W.S. § 1-3-105[ (a) ](iv)(B) ¹ bars Appellant's claim against Appellee for overriding royalty payments received by Appellee within four years of the time Appellant asserted her claim." (Bracketed material added.)

We will affirm in part, reverse in part, and remand with directions.

Appellant and appellee were divorced in the Natrona County District Court on August 26, 1969. By that decree appellant was awarded, along with other property, one-third of the parties' mineral and royalty interests, including interests in oil and gas leases. Following an appeal and affirmance of the district court's decree of divorce reported as Young v. Young, Wyo., 472 P.2d 784 (1970), appellee, on November 1, 1970, ² transferred by assignment to the appellant

" * * * that percentum of overriding royalty of all of the oil and gas and other hydrocarbons produced, saved and marketed from the lands located in the State of Wyoming set forth opposite said percentum figure, by virtue of the oil and gas lease issued by the United States of America set forth opposite said lands, to-wit:

"Serial Overriding Royalty Description

No. Interest Conveyed: of

Conveyed Lands."

Then followed a list of over 60 separate royalty units in 14 different Wyoming counties.

Though it was delivered, appellant failed to file the assignment for record in some counties and to notify some crude oil purchasers of her interest. The result was that, in many instances, appellee was paid royalties that should have gone to appellant.

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He did not, after April 1971, account to her for those royalties to which she was over the years entitled.

When appellant discovered in 1982 she was not receiving royalties, she filed in the several counties and delivered copies of the divorce decree and assignment to crude oil purchasers; they then started distributing overriding royalty payments to her for production attributable to her interests. Appellant, on March 16, 1983, commenced the district court action for recovery, against appellee, of royalties he received which she claimed should have been paid to her, the proceedings in which we now review.

The appellee moved to dismiss appellant's claim on the ground that it was barred because of laches or running of a statute of limitations. Following oral argument, the district judge held that more of a factual basis was necessary before a decision could be made, so he denied the motion.

Appellee thereafter filed an answer to an amended complaint of appellant, renewing the affirmative defenses of bar by the applicable statute of limitations and laches. Appellee thereafter filed a motion for summary judgment. In support, the depositions of both parties were submitted, along with appellee's affidavit alleging his full compliance with the divorce decree and that during the past 15 years since the divorce he had not attempted to hide his whereabouts or in any way hinder, misrepresent or circumvent the transfer of royalties. He also produced a letter dated April 30, 1971, from him to appellant which indicated he had to that day in 1971 paid the royalties directly to her and indicated there had been more than sufficient time for her to have placed the assignments of record and notified and sent copies to royalty disbursing agencies. At that time in 1971, he demanded a return of any duplicate payment of royalties.

Appellant also filed a motion for summary judgment, attaching in support a copy of the divorce decree and an affidavit of appellant in which she explained she did not know the mechanics necessary, following an assignment, of filing and recording and of notification to crude oil purchasers of her interests; but, upon learning she was entitled to royalties, friends helped her with the filing and recording and with notification. The divorce decree does provide that appellee was to file and record transfers of title. It is inconsistent, however, with other later proceedings in the divorce case by which appellant was to assume the burden of filing and recording. She does not now urge that to have been the responsibility of appellee.

The trial judge denied the motions for summary judgment. Counsel then stipulated that the parties would waive an evidentiary hearing and submit their cases through interrogatories, affidavits, depositions, and exhibits submitted to support the summary judgment motions, other evidence they might have, and argument of counsel. Very little further evidence of consequence was received by the court. The case was taken under advisement and a decision letter was issued by the trial judge on February 6, 1985.

By its decision, the court held that the claim of plaintiff was barred by the four-year statute of limitations covering fraud and conversion actions which, in either case, were discovered or could have been discovered in the exercise of reasonable diligence by November of 1970.

At oral argument on appeal, appellant's counsel informed this Court that he was convinced by the trial judge's decision that all of appellant's claim was barred, except that converted by appellee to his own use during the four years preceding commencement of the appellant's action. Appellant argued to the district court that if it did not see fit to allow all of appellant's claim, she was at least entitled to royalties received by appellee during that four-year period. It is on that score we agree with appellant and will reverse accordingly, though otherwise affirm.

The evidence is clear that appellant was at fault for not filing and recording the assignments and notifying purchasers of crude oil of her interest. At the same time

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it was also clear that appellee was not turning over to her a share of royalties to which she was entitled. As he testified during the taking of his deposition:

"Q. Do you dispute the fact that Melba Young should have received one-third of those amounts over the years?

"A. No, I don't dispute that had she lived up to her end of this order and put these of record she would have been receiving this from back in 1971 under her own name. That I don't dispute."

From long experience as a geologist in the oil business and having acquired substantial interests in oil and gas producing properties over the years, appellee, as he testified, should have known and, he admitted during the taking of his deposition, from division orders ³ he received from crude oil purchasers which he had to sign he did know whether appellant had, by actual or constructive notice by filing or recording, notified such purchasers of her interest. He therefore knowingly retained and converted to his own use appellant's rightful share of royalties paid.

The trial court had to find that the appellee was guilty of either conversion or fraud in...