Opinion
J-S55022-15 No. 291 WDA 2015
09-29-2015
JOSEPH STEIMINGER AND MARJORIE STEIMINGER Appellee v. RONALD LEOPOLD, TAMARA BETTLEY JAHN, FRANK ROSSI LEOPOLD AND CATHY ANN LEOPOLD WHETZEL, Appellants
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order Entered January 28, 2015
In the Court of Common Pleas of Washington County
Civil Division at No(s): 2014-767
BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., and STRASSBURGER, J. MEMORANDUM BY BENDER, P.J.E.:
Retired Senior Judge assigned to the Superior Court.
Ronald Leopold, Tamara Bettley Jahn, Frank Rossi Leopold and Cathy Ann Leopold Whetzel (Defendants-Appellants) appeal from the order, dated January 28, 2015, that granted the motion for judgment on the pleadings filed by Joseph and Marjorie Steiminger (Plaintiffs-Appellees) in their quiet title action seeking to prevent Defendants-Appellants' entitlement to royalty and bonus payments related to oil and gas development. After review, we affirm.
In this appeal, Defendants-Appellants raise the following issue for our review:
Whether there are no material facts in dispute which entitle Appellees [to] the grant of a judgement [sic] on the [p]leadings?Defendant-Appellants' Brief at 6.
In reviewing an appeal from a judgment on the pleadings, we recognize that:
Our standard and scope of review in matters involving the grant or denial of judgment on the pleadings is as follows:
Appellate review of an order granting a motion for judgment on the pleadings is plenary. The appellate court will apply the same standard employed by the trial court. A trial court must confine its consideration to the pleadings and relevant documents. The court must accept as true all well pleaded statements of fact, admissions, and any documents properly attached to the pleadings presented by the party against whom the motion is filed, considering only those facts which were specifically admitted. Further, the court may grant judgment on the pleadings only where the moving party's right to succeed is certain and the case is so free from doubt that trial would clearly be a fruitless exercise.
Conrad v. Bundy , 777 A.2d 108, 110 (Pa. Super. 2001).
Pro Golf Manufacturing , Inc. v. Tribune Review Newspaper Co., 761 A.2d 553, 554 (Pa. Super. 2000).
We have reviewed the certified record, the briefs of the parties, the applicable law, and the thorough and well-crafted opinion of the Honorable Katherine B. Emery, President Judge of the Court of Common Pleas of Washington County, dated April 16, 2015. We conclude that Judge Emery's well-reasoned opinion correctly disposes of the issue presented on appeal and we discern no abuse of discretion or error of law. Accordingly, we adopt Judge Emery's opinion as our own and affirm the January 28, 2015 order on that basis.
Order affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/29/2015 IN THE COURT OF COMMON PLEAS OF WASHINGTON COUNTY, PENNSYLVANIA CIVIL DIVISION No.: 2014-767 FILED: April 16, 2015 Opinion Pursuant to Pa. Rules of Appellate Procedure Rule 1925(a) Emery, J.
The Plaintiffs-Appellees filed a Complaint in Action to Quiet Title to a 72-acre parcel seeking to forever bar the Defend ants-Appellants from asserting any interest, right or title in the royalty and bonus payments related to oil and gas development. After pleadings were closed, the Court granted the Plaintiffs' Motion for Judgment on the Pleadings and entered a final decree granting the action to quiet title on January 28, 2015. This timely appeal ensued.
I. Facts
On November 20, 1905, William O. and Ophelia A. Stevenson (hereinafter "the Stevensons") conveyed a 157-acre parcel in Smith Township, Washington County, Pennsylvania, to Peter Miller. The deed (hereinafter "1905 Deed") contained the following clause:
Should oil or gas be developed on said premises the proceeds derived therefrom as Royalty should be equally divided between the first and second party hereto, and should any Bonus be obtained for oil or Gas privileges the said first partyNo oil or gas was developed on said premises during the lives of the parties to the 1905 Deed.
hereto to receive the one third thereof and the said second party the two thirds of same.
By deed dated August 27, 1986, Plaintiffs Joseph and Marjorie Steiminger acquired a 72-acre Smith Township parcel. Plaintiffs' land had originally been contained within the 157 acres described in the 1905 Deed. Although Plaintiffs have entered an oil and gas lease with Range Resources, the latter has withheld royalties in light of "uncertainty in interpretation of the language in the 1905 Deed." Complaint in Action to Quiet Title, ¶ 12. Defendant members of the Leopold family, the "sole surviving heirs" of the Stevensons, assert that the 1905 Deed entitles them to "one-half of the oil and gas, leases, lease payments and royalties underlying the subject real estate." Answer and New Matter, ¶ 6, 20.
Plaintiffs contend that Defendants have no interest in their Smith Township property, and initiated this quiet title action on February 11, 2014, After the relevant pleadings were closed, Plaintiffs moved for judgment on the pleadings, which Defendants opposed. On January 28, 2015, this Court granted Plaintiffs' motion, holding that the pertinent royalty clause "created a reservation for grantor, and not an exception," which was "extinguished at grantor's death, and did not pass on to Defendants." Court Order of January 28, 2015. Defendants appealed.
II. Standard of Review
"After the relevant pleadings are closed, but within such time as not to unreasonably delay the trial, any party may move for judgment on the pleadings." Pa.R.Civ.P. 1034(a). "A trial court must confine its consideration to the pleadings and relevant documents." Pro Golf Mfg., Inc. v. Tribune Review Newspaper Co., 761 A.2d 553, 555 (Pa. Super. 2000). The trial court shall "accept as true all well pleaded statements of fact, admissions, and any documents properly attached to the pleadings presented by the party against whom the motion is filed, considering only those facts which were specifically admitted." Id. Judgment on the pleadings may be granted "only where the moving party's right to succeed is certain and the case is so free from doubt that trial would clearly be a fruitless exercise." Id.
III. Discussion
A. Issues on Appeal
Defendants raise the following complaints on appeal:
1. The Judge erred in granting Plaintiffs' Motion for Judgment on the Pleadings.
2. The Judge erred in finding that as a matter of law that Defendants had no interest in or right to royalties and bonus payments as set forth in the 1905 deed from Stevenson to Miller dated Nov. 20, 1905 recorded in Deed Book 324 page 498.
3. The Judge erred in finding that the royalty interested created in the 1905 deed was extinguished at the death of the Grantors and did not pass on to Defendants.
B. Legal Analysis
The dispositive issue in this matter is whether the 1905 Deed's royalty clause created a reservation or an exception, as these categories differ considerably in legal effect. A reservation will reserve a grantor's rights in "incorporeal things that do not exist at the time the conveyance is made." Ralston v. Ralston, 55 A.3d 736, 741-742 (Pa. Super. 2012) (citing Walker v. Forcey, 151 A.2d 601, 606 (Pa. 1959)). "If there is a reservation, it ceases at the death of the grantor, because the thing reserved was not in existence at the time of granting and the thing reserved vests in the grantee." Id. at 742. An exception, in contrast, "retains in the grantor the title of the thing excepted." Id. at 742 (citing Silvis v. Peoples Natural Gas Co., 126 A.2d 706, 708 (Pa. 1956)). An exception remains property of the grantor in fee simple, and thus passes to grantor's heirs. Silvis, 126 A.2d at 709; Ralston, 55 A.3d at 741-742; In re Luellen's Estate, 43 Pa. D. & C.2d 467, 472-473 (C.P. Washington 1967).
The terms "reservation" and "exception" are used interchangeably in deeds, and thus "there is no magic in words" for courts seeking to determine which category of rights were created. Silvis, 126 A.2d at 708 (quoting Mandle v. Gharing, 100 A. 535, 537 (Pa. 1919)). "[W]hether the language used, in any particular case, creates an exception or a reservation must be determined from the intention of the parties ascertained from the entire instrument." Id. If a clause is construed as a reservation, the same must contain words of inheritance if the parties intend for the reservation to pass to grantor's heirs. If the clause is an exception, words of inheritance are unnecessary, as the title to the excepted section has never been transferred to the grantee. Id.; In re Luellen's Estate, 43 Pa. D. & C.2d at 470-471.
The Stevensons' interest in future hypothetical oil and gas proceeds constituted a reservation, because said proceeds did not exist at the time the 1905 Deed was executed. A similar scenario was considered and aptly reasoned by Judge Marino of this bench in In re Luellen's Estate:
It is evident that the lease is the common and usual type which provides for money royalty payments. In such a lease, the oil and gas money payments are not for the minerals in place but are payable only when produced or raised to the surface. Hence, when part of this royalty is reserved by the grantor, something is effected which was not in esse before. Although provision had been made for payment of royalties, they are not actually payable until the oil and gas are raised to the surface in paying quantities; and although payments had already been made to the grantors before grant of the land to Wyels, and thereafter until the death of both Mr. and Mrs. Luellen, yet each payment would be dependent upon continued production of the wells, and is not due until the minerals, gas and oil, are separated from the land and raised to the surface. Hence, something new has been created, a money royalty dependent upon continuing production. It is, therefore, properly classified as a "reservation", and in order to pass this right or royalty to the heirs must necessarily have words of inheritance attached. Since none was employed, the reservation of the right to royalties ceased on the death of the grantors.43 Pa. D. & C.2d at 473-474 (C.P. Washington 1967).
Moreover, the 1905 Deed, when considered in its entirety, provides further justification for finding the royalty clause was a reservation, and not an exception. The paragraph preceding that related to gas rights specifically creates an exception of the property's coal for a third-party and the third-party's heirs. This coal clause uses the common language "excepting and reserving," and specifies that the coal will remain the property of the third-party, his heirs, and assigns. 1905 Deed. Therefore, the Stevensons knew how to make clear their intent to create exceptions to the conveyance, and the absence thereof is a strong indication that gas royalties were merely meant to be reserved. See Heidt v. Aughenbaugh Coal Co., 176 A.2d 400, 402 (Pa. 1962) ("It is also beyond controversy, that a written document must be construed most strongly against the parties drafting it"),
Defendants' arguments contain no discussion of the distinctions between reservation and exceptions. Instead, Defendants asserted that the Stevensons' oil and gas interest passed to their heirs because the clause did not contain language of limitation (e.g., "so long as," "during"). In support of this position, Defendants relied on Guthrie v. Guthrie, 7 A.2d 137 (Pa. Super. 1939), wherein a grantor retained oil and gas royalties for a specific period of 20 years from September 25, 1905. Id. at 138. According to Defendants, the Stevensons' omission of such limiting language supports their "contention that such rights did pass to Defendants." Defendants' Brief in Opposition to Motion for Judgment on the Pleadings. However, Guthrie is inapposite, as it made no holding regarding inheritance, because the plaintiff was the original grantor. 7 A.2d 137. The Stevenson heirs also contended that their royalty rights persist "until all of the oil and gas" is removed, citing Snyder Brothers v. Peoples Natural Gas Co., 676 A.2d 1226 (Pa. Super. 1996). Defendants are incorrect, as Snyder Brothers--which concerned landowners who leased the oil and gas rights under property they still owned--is wholly distinguishable from the case sub judice. 676 A.2d 1226.
In summary, the language of the 1905 Deed is clear. The grantors, the Stevensons, reserved one-half of any royalty payments from oil or gas development to themselves and reserved one-third of any bonus payments made for oil and gas. No words of inheritance were used. This reservation was extinguished at the grantor's death and the Stevenson heirs would therefore have nothing to inherit. The 1905 Deed did not create an exception for payments related to oil and gas. The 1905 Deed did, by contrast, create an exception for the Pittsburgh vein of coal. Therefore, judgment on the pleadings in favor of the Plaintiffs was proper and the Order of January 28, 2015 should be affirmed.
BY THE COURT:
/s/_________
Katherine B. Emery, President Judge