Robert G. Fowler v. LAC Minerals (USA), LLC
2012 U.S. App. LEXIS 19113
| 8th Cir. | 2012Background
- LAC Minerals (USA), LLC and Fowler are bound by a 1984 joint venture relating to 944 acres; Viable reserved a reconveyance right under the deed and RJVA.
- LAC and Viable later entered a 1988 Restated Joint Venture Agreement (RJVA) governing the property, including section 4.3, which allows removing portions and reassigning them to Viable upon certain conditions.
- In 1992 a state stop order halted mining due to acid drainage; no exploration occurred since 1993, with LAC obligated to ongoing reclamation and monitoring.
- Fowler acquired Viable’s rights in November 1999; he formally requested release of unused land on October 11, 2001.
- From 2001 onward, LAC sporadically reviewed potential releases but never decided; Fowler sued in 2008 for declaratory relief, specific performance, and quiet title.
- The district court held LAC holds the land in fee simple subject to a condition subsequent to reassign to Fowler when mining purposes are exhausted, and affirmed a reversionary interest in Fowler; on appeal, the Eighth Circuit affirmed that Fowler retains the reversionary interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether section 4.3 creates a condition subsequent or a covenant. | Fowler argues 4.3 creates a condition subsequent. | LAC argues 4.3 creates a covenant, with damages as remedy. | 4.3 constitutes a condition subsequent. |
| Whether Viable’s right of reentry could be assigned under §43-4-3. | Fowler contends Viable’s reversion rights could be assigned by 11.1 to Fowler. | LAC argues §43-4-3 precludes such assignment. | Assignment permitted; rights run with land via 11.1. |
| Whether Fowler’s right to reassign portions persists despite the cessation of exploration in 1993. | Fowler argues “such portions” includes all portions similar to those identified, ongoing duty. | LAC argues no such portions exist post-1993, nullifying the duty. | “Such portions” includes ongoing duty to reassign; Fowler retains reversionary interest. |
Key Cases Cited
- Full House, Inc. v. Stell, 640 N.W.2d 61 (S.D. 2002) (deed construed as contract; terms interpreted in context)
- Gloe v. Union Ins. Co., 694 N.W.2d 252 (S.D. 2005) (deed language evaluated for plain meaning)
- Swaby v. N. Hills Reg’l R.R. Auth., 769 N.W.2d 798 (S.D. 2009) (deed construal; covenant vs. condition analysis)
- Elrod v. Gen. Cas. Co. of Wis., 566 N.W.2d 482 (S.D. 1997) (plain and ordinary meaning of contract terms)
- DeHaven v. Hall, 753 N.W.2d 429 (S.D. 2008) (forfeiture vs. damages in covenant interpretation)
- Rowbotham v. Jackson, 5 N.W.2d 36 (S.D. 1942) (distinguishing condition subsequent from covenant)
- Eckert v. Titan Tire Corp., 514 F.3d 801 (8th Cir. 2008) (standard of review for bench trial findings)