Corman v. State
2012 ND 215
| N.D. | 2012Background
- In 1954, Dockters conveyed a 64/160 royalty interest to Northwestern National Bank against the subject land.
- In 1957, Dockters conveyed a 1/2 mineral interest to Grinnan, subject to rights of record; no reference to Bank’s royalty was made.
- Wenco purchased the remaining Dockters’ minerals in 1993; 2003 deed to Wenco preserved prior mineral reservations “now of record.”
- 2006 Wenco lease to Context Energy, later assigned to EOG; drilling title opinion and division order positioned Wenco at 0.03335841 and QEP at 0.24376880 royalty interests but not signed by Wenco or QEP.
- 2008 revised royalty opinion reduced Wenco to 0.02505015 and increased QEP to 0.25; division order amended accordingly.
- 2010 Wenco sued to quiet title, claiming conversion and unjust enrichment; district court granted summary judgment for EOG and QEP, applying Acoma to hold the Bank’s burden rested entirely on Wenco.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Acoma control the burden of the Bank’s royalty on later conveyed interests? | Wenco argues Acoma dictates proportional burden should apply or be reconsidered. | EOG/QEP contend Acoma controls, burden lies entirely on the later grantee who received the encumbered interest. | Acoma governs; Wenco bears the entire burden. |
| Did EOG or QEP waive rights to challenge the Bank burden? | Waiver by EOG or QEP should apply to limit challenge to division orders. | No effective waiver; actions do not amount to relinquishing rights to challenge royalty assignment. | No waivers by either party as a matter of law. |
| Was summary judgment proper given waiver arguments and Acoma application? | Dispute over waiver and misapplication of Acoma creates genuine issues of material fact. | Acoma controls; waivers not proven; summary judgment appropriate. | District court correctly granted summary judgment; Acoma controls. |
Key Cases Cited
- Acoma Oil Corp. v. Wilson, 471 N.W.2d 476 (N.D. 1991) (Duhig-style burden—retained minerals must satisfy prior royalty when conveying undivided interests)
- Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878 (Tex. 1940) (grantor cannot reserve and convey the same mineral interest; superior obligation applies)
- Yzaguirre v. KCS Res., Inc., 47 S.W.3d 532 (Tex. Ct. App. 2000) (division orders do not rewrite or supersede lease contracts; context of royalty burdens)