867 N.W.2d 677
N.D.2015Background
- Surface owner Phyllis Yesel (joined by Gloria Van Dyke) published notices of lapse claiming nonparticipating royalty interests (owned by the Brandon defendants) had been abandoned under North Dakota’s abandoned-mineral statutes, seeking to quiet title to those royalty interests.
- Christian Teigen, an heir of the Brandon defendants, answered and defended the actions; multiple suits involved adjoining sections of McKenzie County land and overlapping facts.
- Teigen moved for summary judgment arguing (1) the abandoned-mineral statutes do not apply to royalty interests and (2) in any event the related mineral interests had been used within 20 years (leases, pooling order, producing wells).
- The district court granted summary judgment for Teigen, concluding either the statutes don’t apply to royalties or the related mineral interests were used within 20 years.
- After summary judgment, Teigen moved for leave to file counterclaims (conversion, unjust enrichment, slander of title, negligence) based on royalty payments Yesel received; the court denied leave as the counterclaims were compulsory and should have been pleaded earlier, and denied Teigen’s request for attorneys’ fees.
- The Supreme Court affirmed summary judgment on the ground that the related mineral interests were used within the 20-year period, reversed the denial of leave to amend (remanded for reconsideration), and affirmed denial of attorneys’ fees.
Issues
| Issue | Plaintiff's Argument (Yesel) | Defendant's Argument (Teigen) | Held |
|---|---|---|---|
| Do the abandoned-mineral statutes apply to nonparticipating royalty interests? | Yesel: the statutory definition of "mineral interest" ("any interest") includes royalty interests. | Teigen: statutes do not apply to royalty interests; royalties differ from mineral estate rights. | Court: unnecessary to decide; resolved on usage ground (did not rule generally). |
| Were the royalty interests abandoned (unused for 20 years) under N.D.C.C. ch. 38-18.1? | Yesel: royalties abandoned because not "used" by royalty owners for 20+ years. | Teigen: related mineral interests were used (leases, pooling order, production), so royalties cannot be deemed abandoned. | Held: related mineral interests were used within 20 years (production, leases, pooling), so royalties not abandoned. |
| Can Teigen file counterclaims after summary judgment though he did not plead them in his answer? | Yesel: counterclaims were compulsory and should have been asserted in the answer; thus barred. | Teigen: only learned of royalty-payment details through discovery and moved promptly after receiving them; Rule 15 should allow amendment. | Held: district court misapplied law by mechanically treating omission as preclusive; remanded to reconsider leave to amend under Rule 15. |
| Are Yesel’s quiet-title suits frivolous such that Teigen is entitled to attorneys’ fees? | Yesel: suit raises a novel statutory question; not frivolous. | Teigen: suit was frivolous and brought in bad faith. | Held: novel legal question of first impression; denial of fees affirmed. |
Key Cases Cited
- Acoma Oil Corp. v. Wilson, 471 N.W.2d 476 (N.D. 1991) (distinguishes mineral and royalty interests; mineral owner’s rights to enter and develop land are key)
- Texaro Oil Co. v. Mosser, 299 N.W.2d 191 (N.D. 1980) (characterizes main attribute of mineral interest as right to explore, drill, and produce)
- Rickert v. Dakota Sanitation Plus, Inc., 812 N.W.2d 413 (N.D. 2012) (summarizes North Dakota summary judgment standards)
- Security Nat’l Bank v. Wald, 536 N.W.2d 924 (N.D. 1995) (discusses compulsory counterclaims and abuse-of-discretion in denying leave to assert omitted compulsory claims)