Rox Petroleum, L.L.C. v. New Dominion, L.L.C.

Citations: 184 P.3d 502; 2008 OK 13; 169 Oil & Gas Rep. 337; 2008 Okla. LEXIS 11; 2008 WL 375843Docket: No. 104,664

Court: Supreme Court of Oklahoma; February 11, 2008; Oklahoma; State Supreme Court

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Rox Petroleum, LLC (Rox) initiated a lawsuit against several defendants, including surface owners New Dominion, L.L.C., GingerLynn, Inc., Oklahoma Title Clearing Corporation, Norma L. Doerfler, and Hoster Brothers, Inc., seeking to quiet title to mineral interests in a specific property. All surface owners, except GingerLynn, Inc., filed counterclaims. The primary issue for the court was whether the district court erred in granting summary judgment in favor of the surface owners, which the court concluded it did.

The standard of review for summary judgment emphasizes that such a ruling is appropriate only when there are no disputes regarding material facts and the moving party is entitled to judgment as a matter of law. The history of the property reveals that in 1927, Jennie Clauer conveyed mineral interests to Indian Territory Illuminating Oil Company and Foster Petroleum Corporation for ten years, with rights extending as long as oil and gas were produced. By 1942, the property ownership had transferred to Jennie A. Clauer and others. In 1955, quitclaim deeds from Mary Jane Herring and others reserved mineral rights, which were later conveyed to The Oklahoma City Chamber of Commerce in 1956 through a warranty deed, with similar reservations. The surface owners claim title to the minerals based on these 1955 quitclaim deeds.

After Rox and the surface owners both moved for summary judgment, the district court ruled in favor of the surface owners, allocating mineral shares. Rox appealed, and the Court of Civil Appeals affirmed based on precedent. The higher court subsequently granted a writ of certiorari for further review.

Rox contended that the 1955 quitclaim deeds to The Oklahoma City Chamber of Commerce reserved a reversionary interest in the minerals beneath the property. In contrast, surface owners cited several cases, arguing that the deeds did not explicitly reserve such an interest. The determination of a reversionary interest hinges on the parties' intent, which must be unambiguous and unequivocal, as established in Knight v. Kimble and Ford v. Raab. According to Oklahoma Statutes title 16, section 29, unless explicitly limited, an estate in land is presumed to be in fee simple. This presumption applies to both quitclaim and warranty deeds, implying that a grantor conveys all interests unless a clear reservation is stated.

The legal framework indicates that the intention to reserve must be clearly articulated within the deed itself, and parol evidence is inadmissible to contradict this presumption. In the 1955 quitclaim deeds, the grantors reserved "all that portion of [the oil, gas, and other] minerals now owned by grantors." To clarify the nature of this interest, the analysis turns to the 1927 mineral deed, which transferred a determinable fee subject to a conditional limitation. Such a deed creates a fee simple that can be terminated by a specific event, leaving the grantor with a possibility of reverter.

The 1927 mineral deed established a determinable fee with a possibility of reverter, which the grantors retained for minerals they still owned when executing the 1955 quitclaim deeds. These deeds explicitly excepted "all that portion of such minerals now owned by the grantors being reserved," clearly indicating an intention to reserve the possibility of reverter. This expression of intent is unambiguous, and altering it would require disregarding the explicit language of the deeds. Consequently, when oil and gas production ceased, the conveyed minerals reverted to the grantors and were later transferred to Rox, Inc. The 1927 deed indicated that the grantor retained half of the minerals, while conveying a determinable fee on the other half, along with the possibility of reverter. The 1955 quitclaim deeds preserved this possibility of reverter, which was transferable and passed through the title chain to Rox, Inc., with no interest in the conveyed minerals going to the surface owners. The court found that Rox, Inc. should have been granted clear title to the conveyed minerals. The Court of Civil Appeals' decision was vacated, the district court’s judgment reversed, and the case remanded for further proceedings. Markeeta A. Hopwood, initially a defendant, conveyed her interest to Rox and was dismissed from the suit. While there are disputed facts regarding property vesting, these do not materially affect the case. The decision also references confusion arising from the case Ford v. Raab regarding the expression of intent to reserve mineral interests, clarifying that a clear expression in a warranty clause can reserve such interests.