Nelson v. McAlester Fuel Company
2017 ND 49
N.D.2017Background
- Ronnie L. Nelson (surface owner) published statutory notices of mineral lapse in early 2007 and mailed a mailed notice to P.O. Box 210 (address from a 1958 mineral deed); a 1968 oil & gas lease of record listed a different, more recent P.O. Box address for McAlester Fuel Co.
- McAlester did not file a statement of claim within 60 days; Nelson obtained a default judgment quieting title in 2009 after serving notice attempts; the certified mail receipt later showed the 2007 mailing was undeliverable.
- In 2015 McAlester moved to vacate the default judgment under N.D.R.Civ.P. 60(b)(4) and (6), producing the 1968 lease showing the later address of record; the district court vacated the default judgment, concluding Nelson failed to comply with the statutory notice procedure.
- McAlester then moved to dismiss Nelson’s quiet title action; the district court granted dismissal with prejudice, finding Nelson never acquired the minerals and thus lacked standing to bring a quiet title claim.
- Nelson appealed, arguing (1) the statute did not require mailing to the most recent address of record and (2) the district court impermissibly considered materials outside the pleadings without converting to summary judgment or giving him opportunity to respond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mailing to an older address of record satisfies the § 38-18.1-06(2) mail-notice requirement when a more recent address of record exists | Nelson: mailing to an address shown of record (1958 deed) complied; statute only requires reasonable inquiry if no address appears of record | McAlester: statute requires mailing to "the address of record," i.e., the most recent address of record | Held: Surface owner must mail to the most recent address of record; Nelson did not comply, so title did not vest in him |
| Whether the default judgment could be vacated under N.D.R.Civ.P. 60(b)(4) as void | Nelson: default judgment properly entered and should stand | McAlester: judgment void because Nelson never satisfied statutory notice procedure and thus never obtained the underlying interest | Held: District court properly vacated the judgment as void because Nelson failed to comply with the statutory notice requirements and therefore lacked the interest needed to maintain quiet title |
| Whether the district court improperly considered materials outside the pleadings (requiring conversion to summary judgment and additional opportunity to respond) | Nelson: court considered outside material and should have converted motion or given chance to present evidence | McAlester: lease and address were alleged or integral to the complaint; court could consider them without converting to summary judgment; parties had opportunity to brief | Held: Court appropriately relied on record documents referenced in the complaint and, even if treated as summary judgment, Nelson had adequate opportunity to respond; dismissal upheld |
| Whether a surface owner must conduct reasonable inquiry even when an address appears of record | Nelson: prior caselaw limits reasonable-inquiry duty to situations with no address of record; sending to any recorded address suffices | McAlester: when multiple recorded addresses exist, the duty is to mail to the most recent one | Held: Reasonable-inquiry requirement is triggered only when no address appears of record; but when multiple addresses appear, mail must be to the most recent recorded address |
Key Cases Cited
- Eggl v. Fleetguard, Inc., 583 N.W.2d 812 (N.D. 1998) (Rule 60(b)(4) vacatur for void judgments is mandatory)
- Peterson v. Jasmanka, 842 N.W.2d 920 (N.D. 2014) (abandoned-minerals procedure is self-executing; title vests upon statutory compliance)
- Johnson v. Taliaferro, 793 N.W.2d 804 (N.D. 2011) (statutory interpretation of abandoned-minerals notice provisions)
- Sorenson v. Felton, 793 N.W.2d 799 (N.D. 2011) (procedure for surface owner to claim abandoned minerals; amendments not retroactive)
- Capps v. Weflen, 855 N.W.2d 637 (N.D. 2014) (address of record need not be correct; reasonable-inquiry duty arises only when no address appears of record)
- Kjolsrud v. MKB Mgmt. Corp., 669 N.W.2d 82 (N.D. 2003) (quiet-title plaintiff must have a real interest in the subject property to maintain action)
- State v. Rosenquist, 51 N.W.2d 767 (N.D. 1952) (plaintiff must prove an estate or interest even if defendant defaults)
- McDowell v. Gillie, 626 N.W.2d 666 (N.D. 2001) (statutory interpretation principles; plain meaning and avoiding absurd results)
- YellowBird v. N.D. Dep’t of Transp., 833 N.W.2d 536 (N.D. 2013) (significance of definite article "the" in statutory language)