Ogren v. Sandaker
2017 ND 105
| N.D. | 2017Background
- In 1958 Mike and Lorene Albert executed an instrument assigning “the Seven-eighths (7/8 SHARE) royalty” in described lands to Mike’s seven siblings, with an intent clause stating each assignee would receive an undivided one-eighth share of the total royalty.
- The instrument expressly covered the royalty “under the lease now covering said lands as well as any lease, or leases, that may be hereafter made.”
- Over time ownership shifted: Lorene conveyed the remaining 1/8 royalty in 2004 to her children; through subsequent assignments, portions of the 7/8 royalty ended up with the parties now disputing rights (the Ogrens vs. Sandaker, Walden, Rulon).
- In 2009 Sandaker, Walden and Rulon leased the property for a 3/16 royalty; conflicting title opinions in 2011 and 2012 reached different conclusions whether the 1958 instrument conveyed a fixed fractional royalty or a floating fraction of the royalty.
- The Ogrens sued to quiet title; cross-motions for summary judgment addressed solely the legal question whether the 1958 assignment conveyed a fractional (fixed share of production) royalty or a fraction of the royalty (a floating share tied to lease royalty).
- The district court granted summary judgment holding the 1958 assignment conveyed a fraction of the royalty; the Ogrens appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1958 assignment conveyed a fractional royalty (fixed share of production) or a fraction of royalty (floating share of the lease royalty) | Ogrens: Conveying language (“Seven‑eighths royalty… of all the oil… produced and saved”) is typical of a fixed fractional royalty | Sandaker/Walden/Rulon: The instrument’s intent clause and express reference to future leases show the grant was a fraction of the royalty, not a fixed share of production | Court: Held the instrument, read as a whole, unambiguously conveyed a fraction of the royalty (floating royalty) |
Key Cases Cited
- Knox v. Krueger, 145 N.W.2d 904 (N.D. 1966) (distinguishes “1/8 royalty” vs. “1/8 of royalty” and effect on amount conveyed)
- Corbett v. La Bere, 68 N.W.2d 211 (N.D. 1955) (recognizes royalty assignment as a grant under state law)
- Hysaw v. Dawkins, 483 S.W.3d 1 (Tex. 2016) (defines and contrasts fractional (fixed) royalties and fractions of royalties (floating))
- Kittleson v. Grynberg Petroleum Co., 876 N.W.2d 443 (N.D. 2016) (contract interpretation principles: construe instrument as a whole to give effect to each provision)