Opinion
No. 108,365.
2013-04-5
Kendal L. GRECIAN and Barbara A. Grecian, Trustees of the Kendal and Barbara Grecian Living Trust (6/20/2005), Appellees, v. LEWCO LC, A Kansas Corporation, David H. Sutor, Richard Whitman and J.W. Anderson, Co–Trustees of the John James Sutor Testamentary Trust, Stanley Sutor, Admin. of the H. Thomas Sutor Estate, Becky Wessels Ind. Exe. for Jeanette M. Sutor Est. and George Sutor Exe. of the Alfaretta M. Sutor Est., Rebecca Wessels, Robert C. Mitchell, Debra A. Carr, George M. Sutor, Stanley Sutor, Laurie Sutor, and Steven Sutor, Appellants.
Appeal from Graham District Court; Preston Pratt, Judge. Ken Eland, of Sloan & Eland, of Hoxie, for appellants. E. Jay Deines, of Deines & Denies, of Wakeeney, and Kimberly Wolf Renyer, of Renyer Law, of Quinter, for appellees.
Appeal from Graham District Court; Preston Pratt, Judge.
Ken Eland, of Sloan & Eland, of Hoxie, for appellants. E. Jay Deines, of Deines & Denies, of Wakeeney, and Kimberly Wolf Renyer, of Renyer Law, of Quinter, for appellees.
Before MALONE, C.J., GREEN and STANDRIDGE, JJ.
MEMORANDUM OPINION
PER CURIAM.
This is an action brought by Kendal and Barbara Grecian, Trustees of the Kendal and Barbara Grecian Living Trust (Plaintiffs), who own the surface rights to a certain tract of land in Graham County, Kansas, to quiet title to the mineral rights to that tract of land. David H. Sutor, Richard Whitman, and J.W. Anderson, Co–Trustees of the John James Sutor Testamentary Trust, et al. (Defendants), who claim those mineral rights under a prior sale of gas and oil royalties, appeal the district court's decision granting summary judgment in favor of Plaintiffs. Defendants argue that the district court erred in determining that their mineral rights had lapsed due to nonproduction on that tract. Finding no error, we affirm the district court's judgment.
In 1938, a trust was created that held the surface and mineral rights to six tracts of land in Graham and Rooks Counties. The trustees conveyed the surface rights to four of those tracts, each by separate deed, from 1941 to 1955. Each of the four deeds contains a reservation clause whereby the trust retained all or part of the mineral rights to the tract, either indefinitely or for a defined period of time (10 or 20 years) and so long thereafter as production continued.
By separate deed dated January 21, 1959, the trustees sold the surface rights to the Southeast Quarter of Section 18, Township 9 South, Range 21 West (Subject Tract) to Frank Kortan. This deed was filed for record on June 3, 1959, and states in relevant part:
“WITNESSETH, that [the trustees on behalf of the trust] ... do by these presents GRANT, BARGAIN, SELL, WARRANT and CONVEY ... the [Subject Tract]: Excepting from this grant and reserving unto [the trustees on behalf of the trust], their heirs, successors and assigns forever, all minerals and all mineral rights of every kind and character now known to exist or hereafter discovered, including, without limiting the generality of the foregoing, oil and gas and rights thereto, together with the sole, exclusive and perpetual right to explore for, remove and dispose of said minerals ... this exception and reservation to continue for a period of twenty (20) years from the date [of this deed] and, if oil, gas or other minerals are being produced upon the termination of said twenty-year period, to continue thereafter so long as production continues.”
By separate deed also dated January 21, 1959, the trustees sold the South Half of Section 22, Township 9 South, Range 21 West (Producing Tract) to Warren Riffel. This deed was filed for record on March 27, 1959, and contains a reservation clause in all relevant respects identical to the reservation clause in the deed to the Subject Tract.
By separate instrument titled “Sale of Gas and Oil Royalties” (Royalty Instrument) dated January 21, 1959, the trustees purportedly conveyed the mineral rights and associated royalty interests in all six tracts to the trust beneficiaries. The Royalty Instrument was prepared in conjunction with the termination of the trust. The Royalty Instrument was filed for record on March 26, 1959, and states in relevant part:
“WHEREAS, the Trustees under said trust deed have heretofore conveyed their legal title to the surface of certain tracts of land in Rooks and Graham Counties, Kansas, excepting from such grants and reserving unto themselves, their successors and assigns, all minerals and mineral rights of every kind and character now known to exist or hereafter discovered, including, without limiting the generality of the foregoing, oil and gas and rights thereto, together with the sole, exclusive and perpetual right to explore for, remove and dispose of said minerals for a period of twenty (20) years and as long as oil and gas production continues on such properties, and
“WHEREAS, the said Trustees are the owners in trust of all said oil and gas, mineral rights and royalty interests therein, which are more specifically described as follows:
One-half Royalty Interest on the Southeast Quarter of Section 34, Township 9 South, Range 21 West, Graham County, Kansas, for a period of 20 years from September 11, 1941, or as long thereafter as oil and gas is produced.
One-half Royalty Interest on the East Half of the East Half of Section 6, Township 10 South, Range 21 West, Graham County, Kansas, or as long thereafter as oil and gas is produced.
All Royalty Interest on the Southeast Quarter of Section 18, Township 9 South, Range 21 West [Subject Tract], Graham County, Kansas, for a period of 20 years from January 21, 1959, or as long thereafter as oil and gas is produced.
All Royalty Interest on the Southwest Quarter of Section 23, Township 9 South, Range 22 West, Graham County, Kansas, for a period of 10 years from September 12, 1955, or as long thereafter as oil or gas is produced.
All Royalty Interest on the South Half of Section 22, Township 9 South, Range 21 West [Producing Tract], Graham County, Kansas, for a period of 20 years from January 21, 1959, or as long thereafter as oil or gas is produced.
One-half Royalty Interest in the Northeast Quarter of Section 33, Township 10 South, Range 19 West, Rooks County, Kansas, and
“WHEREAS, the trust created in said trust deed, pursuant to the terms of said trust deed, has terminated, and the Trustees, as required by the terms of said trust deed intend by this instrument to convey to the beneficiaries of said trust as disclosed by trust certificates now outstanding their respective fractional interests in all the trust property now vested in the Trustees,
“NOW, THEREFORE, the said Trustees above named, in consideration of the premises, and pursuant to the authority vested in them in said trust deed, do hereby grant, sell, convey, assign and deliver all and every property interest now vested in said Trustees, including royalty interests as hereinbefore described, to the following persons, their heirs, devisees and assigns....
....
“To have and to hold the above described property, together with all and singular the rights and appurtenances in any way belonging thereunto to the above named grantees, their heirs, devisees and assigns, in the proportions above set out, for a period of twenty (20) years from January 21, 1959, and as long thereafter as oil and/or gas is produced from the above described premises.”
In 1991, Plaintiffs acquired the surface rights to the Subject Tract. The deed of conveyance reserved for the grantors the mineral rights to the Subject Tract for a period of 10 years from December 16, 1991, and so long thereafter as production continued. In 2006 and 2009, Plaintiffs filed affidavits of nonproduction, stating that oil and gas production on the Subject Tract had ceased. However, it is undisputed that there has been continuous production on the Producing Tract.
On July 15, 2011, Plaintiffs filed an action to quiet title, arguing that they were the owners of the mineral rights to the Subject Tract because any other claims to the mineral rights had lapsed due to nonproduction on the Subject Tract. Defendants, who are the successors in interest to the trust beneficiaries who received mineral rights under the Royalty Instrument, filed an answer and denied that their mineral rights to the Subject Tract had lapsed.
On November 23, 2011, Plaintiffs filed a motion for summary judgment. Plaintiffs asserted that it was uncontroverted that all production had ceased on the Subject Tract. Plaintiffs further asserted that continuing production on any of the other five tracts mentioned in the Royalty Instrument was irrelevant, because the mineral rights to each tract were separately created by the separate deeds that conveyed the surface rights but retained the mineral rights. Thus, Plaintiffs asserted that production on another tract could not extend the primary term on the Subject Tract so as to prevent the lapse of Defendants' mineral rights to the Subject Tract.
Defendants filed a response to the summary judgment motion and did not dispute the fact that all production had ceased on the Subject Tract. However, Defendants argued that the Royalty Instrument, not the separate deeds, created the mineral rights to all six tracts, including the Subject Tract and the Producing Tract. Defendants argued that under Kansas law, when a deed or other instrument creates defeasible term mineral rights in two or more tracts of land, production on any one tract will extend the primary term as to all other tracts. Because it was uncontroverted that there was continuing production on the Producing Tract, Defendants argued that production extended the term of their mineral rights to the Subject Tract.
After considering the parties' briefs and oral arguments, the district court issued a decision granting Plaintiffs' motion for summary judgment. The district court found that there were no genuine issues of material fact. The district court agreed with Defendants that under Kansas law, when a single instrument creates defeasible term mineral rights in two or more tracts of land, production on any one tract will extend the primary term as to all other tracts. But reading the instruments together, the district court found that the separate deeds, not the Royalty Instrument, created the mineral rights to the six tracts, including the Subject Tract and the Producing Tract. The district court determined that continuing production on the Producing Tract was insufficient to prevent the lapse of Defendants' mineral rights to the Subject Tract. Thus, the district court granted plaintiffs quiet title to the mineral rights to the Subject Tract. Defendants timely appealed.
On appeal, Defendants argue that the Royalty Instrument created the mineral rights at least as to the Subject Tract and the Producing Tract, and that therefore continuing production on the Producing Tract extended the term of Defendants' mineral rights to the Subject Tract. Plaintiffs contend that by construing the instruments as a whole and in light of applicable legal principles, it is clear that the Royalty Instrument did not create the mineral rights to the Subject Tract but merely conveyed the rights that already had been created by the separate deeds. Thus, Plaintiffs assert that continuing production on the Producing Tract could not extend the term of Defendants' mineral rights to the Subject Tract.
The parties agree that there are no controverted issues of material fact. Where there is no factual dispute, appellate review of an order granting summary judgment is de novo. David v. Hett, 293 Kan. 679, 682, 270 P.3d 1102 (2011). Also, the interpretation and legal effect of written instruments are matters of law, and an appellate court exercises unlimited review. National Bank of Andover v. Kansas Bankers Surety Co., 290 Kan. 247,263, 225 P.3d 707 (2010).
The parties agree on the controlling legal principle that when a single instrument creates defeasible term mineral rights in two or more tracts of land, production on any one tract will extend the primary term as to all other tracts. See Classen v. Federal Land Bank of Wichita, 228 Kan. 426, 434, 617 P.2d 1255 (1980) (citing Baker v. Hugoton Production Co., 182 Kan. 210, 212–13, 320 P.2d 772 [1958] ). Thus, the only question for this court to decide is whether the district court correctly determined that the separate deeds—not the single Royalty Instrument—created the mineral rights to the Subject Tract and the Producing Tract.
The fundamental rule in construing the effect of a written instrument is that the intent and purpose of the parties is to be determined from an examination of the instrument as a whole. Thus, language used anywhere in the instrument should be taken into consideration and construed in harmony with other provisions. Where the application of pertinent rules of interpretation to the instrument as a whole fails to make certain which of two or more meanings is conveyed by the words employed by the parties, the instrument is ambiguous. If there is ambiguity, the courts looks to the facts and circumstances surrounding the execution of the instrument in order to ascertain and carry out the intention of the parties. Central Natural Resources v. Davis Operating Co., 288 Kan. 234, 244–45, 201 P.3d 680 (2009); Heyen v. Hartnett, 235 Kan. 117, 122–23, 679 P.2d 1152 (1984).
Plaintiffs contend that the language in the Royalty Instrument stating that the trust had “heretofore” conveyed the surface rights and retained the mineral rights to six specifically-described tracts of land—including the Subject Tract and the Producing Tract—is clear evidence, based on the plain language of the Royalty Instrument, that the mineral rights were created in the separate deeds and that the trustees only intended the Royalty Instrument to convey the mineral rights that previously had been created and reserved to the trust. Plaintiffs further point out that the specific descriptions of the mineral rights held by the trust correspond to the reservations made in each separate deed, the earliest deed dating to 1941, which also indicates that the mineral rights were created by the separate deeds and not by the single Royalty Instrument.
The district court agreed with Plaintiffs that the separate deeds, not the Royalty Instrument, created the mineral rights to the six tracts, including the Subject Tract and the Producing Tract. The district court focused on the language in the Royalty Instrument stating that the trust had “heretofore” conveyed the surface rights and retained the mineral rights to the six tracts of land. Specifically, the district court stated:
“The ‘Royalty Instrument’ clearly states that the trustees have ‘heretofore’ conveyed their title to the surface of certain tracts of land, reserving the mineral interests. Heretofore means previously.
....
“It is clear from the undisputed facts that it is the reservations in the surface deeds which creates the term mineral interests. The ‘Royalty Instrument’ creates nothing, it simply transfers the previously created defeasible term mineral interests from the trust, which had terminated, to the beneficiaries.”
Defendants point out that there is language in the Royalty Instrument which purports to convey to the beneficiaries the “above described property”—meaning the mineral rights and associated royalty interests in the six tracts—“together with all and singular the rights and appurtenances in any way belonging thereunto to the above named grantees, their heirs, devisees and assigns ... for a period of twenty (20) years from January 21, 1959, and as long thereafter as oil and/or gas is produced from the above described premises.” But as Plaintiffs argue, to the extent this clause conflicts with the more specific language describing the mineral rights and associated royalty interests that the trust held in each tract, the more specific language prevails. See Exchange State Bank v. Kansas Bankers Surety Co., 39 Kan.App.2d 232, 233, 177 P.3d 1284,rev, denied 286 Kan. 1177 (2008) (specific provisions in a written instrument control over general ones). And as discussed above, the specific descriptions correspond to the reservations made in each separate deed and thus indicate the trustees' intent to make the Royalty Instrument subject to the previously executed deeds.
Plaintiffs also argue that the clause relied upon by Defendants in the Royalty Instrument cannot be read to create the mineral rights in the six tracts for a term of 20 years beginning in 1959, because the trust only reserved for itself shorter-term mineral rights (10 years) in the 1955 deed. Thus, the reading advocated by Defendants would violate the fundamental principle of property law that one cannot convey a greater interest than one possesses on the date of the purported conveyance. See Jeremiah 29:11, Inc. v. Seifert, 36 Kan.App.2d 19, 28, 136 P.3d 957 (2006) (Greene, J., concurring), rev'd on other grounds284 Kan. 468, 161 P.3d 750 (2007).
Defendants argue that the trustees' intent to create the mineral rights by the Royalty Instrument can be inferred from the fact that the Royalty Instrument was filed before the separate deeds to the Subject Tract and the Producing Tract. But Defendants cite no legal authority to support their assertion that the filing date controls over the date the instrument was executed. Failure to support a point with pertinent authority or show why it is sound despite a lack of supporting authority or in the face of contrary authority is akin to failing to brief the issue. State v. Berriozabal, 291 Kan. 568, 594, 243 P.3d 352 (2010). An issue not briefed by the appellant is deemed waived and abandoned. Superior Boiler Works, Inc. v. Kimball, 292 Kan. 885, 889, 259 P.3d 676 (2011).
We agree with the district court that reading the instruments together, it is clear that the trustees intended the Royalty Instrument merely to convey the mineral rights and associated royalty interests that already had been created by the reservations in the separate deeds, including the deeds to the Subject Tract and the Producing Tract. The Royalty Instrument was prepared in conjunction with the termination of the trust. It was intended to set forth the trust beneficiaries' mineral rights and associated royalty interests in all six tracts of land that “heretofore” had been created by separate deeds. Because the mineral rights to the Subject Tract and the Producing Tract were created by separate deeds, not by the single Royalty Instrument, continuing production on the Producing Tract could not extend the term of Defendants' mineral rights to the Subject Tract. Thus, we conclude the district court did not err by granting summary judgment in favor of Plaintiffs on their action to quiet title to the mineral rights to the Subject Tract.
Affirmed.