Hallin v. Inland Oil & Gas Corporation
2017 ND 254
| N.D. | 2017Background
- In 2007 Hallin and Bradford each executed oil and gas leases to Inland covering a described 160-acre tract (S½SW¼ Sec.14 and N½NW¼ Sec.23) and containing language leasing “all that certain tract of land” and stating "containing 160.00 acres, more or less."
- At execution there were title inconsistencies: it was unclear whether Hallin and Bradford collectively owned 60 or 80 net mineral acres; payment drafts given to them showed each was paid as for 30 acres.
- In a separate quiet-title action (Hallin v. Lyngstad) the court later determined Hallin and Bradford collectively owned 80 net mineral acres.
- Hallin and Bradford sued Inland claiming they had only leased 60 acres and that the remaining 20 acres were not leased; Inland argued the leases conveyed all mineral interests the lessors owned.
- The district court granted summary judgment for Inland, holding the leases were unambiguous and conveyed whatever mineral interest Hallin and Bradford owned when the leases were executed.
- The Supreme Court affirmed: the plain lease language conveying “all” of the described tract was unambiguous; extrinsic evidence (payment drafts) was inadmissible; the “more or less” acreage notation did not alter the specific description.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the leases conveyed only 60 acres or all mineral interests owned by Hallin and Bradford | Hallin/Bradford: payment drafts and surrounding circumstances show intent to lease only 60 acres (30 each) | Inland: lease language conveys all of lessors’ mineral interests in the described tract | Leases are unambiguous; they conveyed all mineral interests the lessors owned at execution |
| Whether extrinsic evidence (payment drafts) may be used to interpret the leases | Hallin/Bradford: drafts should be read with leases to show limited acreage leased | Inland: clear lease language controls; extrinsic evidence inadmissible | Extrinsic evidence barred because written leases are clear and unambiguous |
| Whether the phrase "160.00 acres, more or less" creates ambiguity about the extent of the grant | Hallin/Bradford: acreage phrase creates ambiguity permitting extrinsic evidence | Inland: specific legal description controls over stated acreage | Specific legal description controls; "more or less" does not make the grant ambiguous |
| Whether Borth (partial-payment/"unless" clause case) controls here | Hallin/Bradford: Borth compels limiting the lease to paid-for acreage | Inland: Borth factually distinguishable (in Borth title was clear and an "unless" clause/partial payments existed) | Borth distinguishable; equitable relief there inapplicable here |
Key Cases Cited
- Nichols v. Goughnour, 820 N.W.2d 740 (court refused extrinsic evidence where separate instruments were clear)
- Borth v. Gulf Oil Exploration & Prod. Co., 313 N.W.2d 706 (equitable relief and partial-payment result where clear title and an "unless" clause produced underpaid rents)
- THR Minerals, LLC v. Robinson, 892 N.W.2d 193 (summary judgment standard and contract interpretation principles)
- Lario Oil & Gas Co. v. EOG Res., Inc., 832 N.W.2d 49 (specific legal description controls over stated acreage)
- Hild v. Johnson, 723 N.W.2d 389 ("more or less" acreage notation does not alter conveyance of entire described tract)