Wicklund v. Sundheim
367 P.3d 403
Mont.2016Background
- In 1953 Chester and Jennie Teisinger conveyed land to Ole and Iver Sundheim reserving “three-fifths (3/5ths) of landowners’ oil, gas and mineral royalties and three-fifths (3/5ths) of any and all delay rentals on present and existing oil and gas leases now of record.”
- A preexisting Hill lease on parts of the property was released in 1958; parties dispute whether the 3/5ths royalty reservation survives termination of that lease or applied only to then-existing leases/delay rentals.
- Little development occurred until the 1970s and early 1980s: parties signed a 1975 Communitization Agreement and Teisinger predecessors received 3/5ths royalty payments (1982–1985) without objection from Sundheim predecessors.
- No significant activity occurred again until 2011–2012 when new drilling prompted title reviews; Whiting Law noted the 1953 reservation was “arguably ambiguous,” stopped royalty payments pending resolution, and Sundheims refused to stipulate.
- Teisingers sued in 2013 for quiet title to the 3/5ths royalty; district court found the deed ambiguous, admitted expert grammatical testimony for Sundheims, resolved the ambiguity for Sundheims, and applied laches to bar Teisingers’ claim.
- The Supreme Court reversed: it held the English-professor’s interpretive opinion was inadmissible as a legal conclusion, that the deed ambiguity should have been resolved in favor of the grantor under §70‑1‑516, MCA, and that laches did not bar Teisingers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of English‑professor expert (Dr. Plunkey) interpreting deed language | Plunkey could confirm ambiguity via grammar but not resolve legal meaning; grammatical opinion cannot displace statutory rules of construction | Plunkey’s grammatical expertise assisted the trier of fact and his reasonable interpretation should be credited | Court: Admission was error — expert’s interpretation of contract/deed language invaded court’s role and stated a legal conclusion inadmissible under M. R. Evid. 705 |
| Construction of ambiguous reservation in 1953 deed (scope of “present and existing oil and gas leases”) | Deed ambiguity should be resolved in favor of grantor (Teisingers); extrinsic evidence (Communitization Agreement, division orders, past royalty payments) supports that 3/5ths survives | Ambiguity may be resolved against grantor under general contract rule (§28‑3‑206); extrinsic evidence was minimal/self‑serving and payments stemmed from erroneous title opinions | Court: Deed is ambiguous; controlling statute §70‑1‑516 requires construing reservations in favor of the grantor — district court erred by resolving ambiguity for Sundheims and by discounting relevant extrinsic evidence; remanded to quiet title for Teisingers |
| Application of laches to bar claim | Teisingers consistently asserted rights when development occurred; they sued promptly after learning of dispute in 2012; no prejudice to Sundheims shown | Long passage of time (decades) and longstanding use by Sundheims prejudiced their ability to defend; Hunter factors support laches | Court: District court erred — plaintiff’s delay was not unreasonable under circumstances and defendant failed to show requisite prejudice; laches inapplicable |
Key Cases Cited
- Moerman v. Prairie Rose Res., Inc., 371 Mont. 338, 308 P.3d 75 (standards for review of district court findings)
- Whary v. Plum Creek L.P., 374 Mont. 266, 320 P.3d 973 (contracts/deed interpretation are questions of law for the court)
- Perdue v. Gagnon Farms, Inc., 314 Mont. 303, 65 P.3d 570 (expert may not testify to legal conclusions)
- Hunter v. Rosebud County, 240 Mont. 194, 783 P.2d 927 (factors for assessing laches)
- Van Hook v. Jennings, 295 Mont. 409, 983 P.2d 995 (ambiguities in reservation construed for grantor)
- Ferriter v. Bartmess, 281 Mont. 100, 931 P.2d 709 (same rule for reservations)
- Mary J. Baker Revocable Trust v. Cenex Harvest States, Coops., Inc., 338 Mont. 41, 164 P.3d 851 (extrinsic evidence considered when contract ambiguous)