15 N.E.3d 75
Ind. Ct. App.2014Background
- In 2009 the Kathleen A. Briggs Trust (substituted by George Woodcock III) filed a quiet-title action to a Posey County mineral interest; Carolyn Stinson was the sole remaining defendant.
- A 1958 deed to Stinson’s predecessor granted a mineral interest for 30 years from 1940 and "as long thereafter as oil and/or gas is produced".
- Oil has been continuously produced from the land; Stinson received royalties and paid taxes related to the interest.
- Stinson produced Posey County tax statements labeled "Real Estate Tax Statement" and "Oil Property Tax Statement" showing assessments and payments.
- The trial court entered summary judgment for Woodcock concluding the mineral interest lapsed; Stinson appealed.
- The issue on appeal concerned whether Stinson’s payment of taxes (ad valorem oil taxes on royalties) constituted "use" under Indiana’s Dormant Mineral Act and thus prevented lapse.
Issues
| Issue | Plaintiff's Argument (Woodcock) | Defendant's Argument (Stinson) | Held |
|---|---|---|---|
| Whether payment of ad valorem taxes on royalties by the mineral owner prevents lapse under the Dormant Mineral Act (I.C. § 32-23-10) | Tax payments were only ad valorem on royalties, not public-record payments on the mineral interest; county records do not establish owner-level mineral tax entries, so lapse should occur | Stinson actually paid ad valorem oil/real-estate taxes on her mineral interest; tax payments qualify as "use" under § 32-23-10-3(a)(6) and prevent lapse | Reversed: Stinson’s payment of taxes prevented lapse; summary judgment for Woodcock reversed and remanded for entry of judgment for Stinson |
| Whether continued production (by lessee) alone would toll the Act regardless of who pays taxes | (Implicit) Payments/recording matter; ownership-record requirements may be necessary | Continued production from the land has occurred; production is an independent ground for "use" under § 32-23-10-3(a)(1) | Majority based decision on tax-payment ground; concurrence explained production alone would also toll the statute and concurred in result |
Key Cases Cited
- Manley v. Sherer, 992 N.E.2d 670 (Ind. 2013) (standard of review and summary judgment principles)
- Consolidation Coal Co. v. Mutchman, 565 N.E.2d 1074 (Ind. Ct. App. 1990) (common-law rule that minerals did not lapse by nonuse)
- Miller v. Weber, 839 N.E.2d 204 (Ind. Ct. App. 2005) (payment of capital gains taxes on royalties does not create public record and does not constitute "use" under the Act)
- Cartersville Ranch, LLC v. Dellinger, 758 S.E.2d 781 (Ga. 2014) (ad valorem tax payments on mineral rights prevented lapse under Georgia statute)
- Short v. Texaco, 406 N.E.2d 625 (Ind. 1980) (legislative purpose of promoting marketability and productivity of mineral-bearing land)