Clifton Valentine v. Sugar Rock, Inc., 745 F.3d 729

Valentine filed a diversity action in the Northern District of West Virginia (Nov. 8, 2010) asserting ownership of fractional working interests in four mining partnerships (Cuthright Oil & Gas Co., Iams Gas Co., Iams Oil Co., Keith Gas Co.).
Sugar Rock, Inc. operates the wells and filed a counterclaim exceeding $14,000 for accrued costs attributed to Valentine’s asserted interests.
Valentine claims he purchased the working interests in the late 1950s and received net proceeds for ~40 years until 1999 when the Deem heirs transferred control to Sugar Rock, after which deficits were billed to Valentine.
Sugar Rock argues the working interests are real property interests that must be conveyed by deed or will under the West Virginia Statute of Frauds, and Valentine lacks such writings.
Valentine contends he holds an indirect ownership via a mining partnership (partnership in mining) formed by co-ownership of leases, joint operation, and shared profits/losses, which could be proven by parol evidence and conduct.
The district court held Valentine failed the first element of a mining partnership (ownership in land) and granted summary judgment; state court decisions in Washburn v. Sugar Rock suggested a broader conception of partnership evidence.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ownership in a mining lease may be proven via a mining partnership without deed/will	Valentine asserts a partnership in mining entitles him to the working interests.	Sugar Rock contends Statute of Frauds requires written conveyance to prove real-property interests.	Court certifies WV Supreme Court to answer the question.

McCullough Oil, Inc. v. Rezek, 346 S.E.2d 788 (W. Va. 1986) (real property interest in oil and gas leases.)
Miller v. Schwartz, 354 N.W.2d 685 (N.D. 1984) (working interest as real property interest under lease.)
Arbaugh v. Raines, 184 S.E.2d 620 (W. Va. 1971) (written agreement not required to convey mining interests if partnership exists.)
Childers v. Neely, 34 S.E. 828 (W. Va. 1899) (mining partnership exists where tenants in common work and share profits.)
Drake v. O’Brien, 130 S.E. 276 (W. Va. 1925) (partnerships in mining with profit/loss sharing implied.)
Lantz v. Tumlin, 81 S.E. 820 (W. Va. 1914) (evidence of partnership may suffice without express written agreement; statute of frauds limits not partnerships formed by conduct.)
Hoover v. Moran, 662 S.E.2d 711 (W. Va. 2008) (statute of frauds aims to prevent fraud, not enforce preexisting contracts.)
Timberlake v. Heflin, 379 S.E.2d 149 (W. Va. 1989) (pleading may suffice to evidence a contract for sale or lease of land.)
Brown v. Gray, 70 S.E. 276 (W. Va. 1911) (equitable treatment of partnership real estate as personalty for remedies.)