403 P.3d 997
Wyo.2017Background
- Lon V. Smith’s will gave his wife, Marguerite, a life estate in all oil & gas interests (including a 5% Carbon County ORRI), with the remainder to the Lon V. Smith Foundation.
- California probate (1983) distributed many specified oil & gas interests to Marguerite for life and listed remainder interests to the Foundation, but did not specifically list the Wyoming ORRI; it also granted the residue to Marguerite.
- Wyoming entered an ancillary probate (1985) under Wyo. Stat. § 2-11-201, admitting the California proceedings as original and conclusive; no appeal was taken to challenge those orders.
- Devon, lessee/operator (later sold to Linn), paid royalties over time to both the Trust (Marguerite’s testamentary trust) and the Foundation; dispute arose over ownership of ORRI and about Devon’s handling of suspended proceeds in a non-interest-bearing internal account.
- District court granted summary judgment to Devon and the Trust: the ancillary California decree controlled (ORRI passed to Marguerite in fee simple, then to the Trust), the Foundation had no WRPA claim, and neither party was entitled to WRPA attorney fees; the Supreme Court of Wyoming affirmed.
Issues
| Issue | Plaintiff's Argument (Foundation) | Defendant's Argument (Devon/Trust) | Held |
|---|---|---|---|
| Whether the California probate order and Wyoming ancillary probate govern ownership of the ORRI | Will controls; testator intended life estate to Marguerite then remainder to Foundation; probate decree must be construed with reference to the will | The adopted California decree is final and supersedes the will; ancillary probate under §2-11-201 adopted the foreign decree as original Wyoming proceedings | Held: The ancillary Wyoming order adopting the California decree controls; ORRI fell in the probate residuary to Marguerite and passed to the Trust |
| Whether the ORRI is “other and after-discovered” property (so Will should control) | ORRI was omitted from California inventory and thus qualifies as after-discovered, so the Will governs | The probate order’s residuary clause covers omitted, known interests; after-discovered clause serves different purpose; ORRI is residue, not after-discovered | Held: ORRI is residue under the California probate order, not after-discovered property; passes under residuary clause to Marguerite |
| Whether corrective affidavits attaching the Will (recorded later) altered title or probate decree | Corrective affidavits gave notice and should permit Will to control distribution | Statutory procedures govern what affidavits may affect title; recorded probate decree controls title; affidavits did not comply with statutory categories and cannot modify decree | Held: Corrective affidavits do not alter the probate decree or title; decree controls |
| Whether Foundation can state a claim under the Wyoming Royalty Payment Act (WRPA) for Devon’s suspension-account handling and whether either party is entitled to WRPA attorney fees | Foundation contends suspended funds statute was violated and it (as eventual owner / by settlement with Linn) is entitled to relief and fees | Devon admits not placing funds in Wyoming interest-bearing escrow but argues WRPA protection applies only to persons "legally entitled" to proceeds via a preexisting legal obligation; no such relationship existed here | Held: Foundation was not legally entitled to the ORRI (decree controls), so it cannot pursue WRPA claims; WRPA fees unavailable because no preexisting legal relationship/obligation gave rise to a valid WRPA proceeding |
Key Cases Cited
- In re Estate of Novakovich, 101 P.3d 931 (Wyo. 2004) (probate decree supersedes will; decree final as to title)
- In re Estate of Callnon, 449 P.2d 186 (Cal. 1969) (a final probate decree controls over a conflicting will; collateral attack is improper)
- ANR Prod. Co. v. Kerr-McGee Corp., 893 P.2d 698 (Wyo. 1995) (WRPA applies only where a preexisting legal obligation for payment exists)
- Ultra Res., Inc. v. Hartman, 226 P.3d 889 (Wyo. 2010) (WRPA claim requires claimant to be legally entitled to payment; scope of "proceedings" under WRPA and prevailing-party analysis)
- Ultra Res., Inc. v. Hartman, 346 P.3d 880 (Wyo. 2015) (clarifies WRPA fee awards to prevailing parties where statutory prerequisites and preexisting payment obligations exist)