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Nichols v. Satkin Corp.

June 18, 2010

RANDY NICHOLS; BONNIE L. NICHOLS; ROBBY NICHOLS; JACI NICHOLS; RICK NICHOLS; JERRY NICHOLS; DEBBIE NICHOLS; AND KIMBERLY J. VACHAL, TRUSTEE OF THE RON NICHOLS AND SUE NICHOLS FAMILY MINERAL TRUST UTD MARCH 20, 2008, PLAINTIFFS,
v.
SATKIN CORPORATION; BEN G. BARNETT; JP MORGAN CHASE BANK NA AND GARY Q. WARD, TRUSTEES OF THE BEN BARNETT FOUNDATION; JOE A. WORSHAM; BESS J. CRAFTAN; AND ALL OTHER PERSONS UNKNOWN, CLAIMING ANY ESTATE OR INTEREST IN OR LIEN OR ENCUMBRANCE UPON THE PROPERTY DESCRIBED IN THE COMPLAINT INCLUDING ANY HEIR, DEVISEE, LEGATEE OR PERSONAL REPRESENTATIVE OF ANY OF THE ABOVE NAMED PERSON WHO MAY BE DECEASED OR UNDER ANY OTHER TITLE OR INTEREST, DEFENDANTS.
ROBBY NICHOLS AND JACI NICHOLS, PLAINTIFFS,
v.
SATKIN CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court

ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Before the Court is the Defendants'*fn1 motion for summary judgment filed on April 1, 2010. See Case No. 4:09-cv-028, Docket No. 18; Case No. 4:09-cv-029, Docket No. 17. The Plaintiffs filed a response in opposition to the motion on May 3, 2010. See Case No. 4:09-cv-028, Docket No. 28; Case No. 4:09-cv-029, Docket No. 27. The Defendants filed a reply brief on May 17, 2010. See Case No. 4:09-cv-028, Docket No. 34; Case No. 4:09-cv-029, Docket No. 33. For the reasons set forth below, the Defendants' motion for summary judgment is denied.

I. BACKGROUND

The Plaintiffs are residents of North Dakota and own the surface interest in certain real property in Mountrail County, North Dakota. Defendant Satkin Corporation is a Texas corporation with its principal place of business in Fort Worth, Texas. Defendant Ben G. Barnett is deceased. Defendant JP Morgan Chase Bank, NA is a national banking association organized under the laws of the United States with its principal place of business in New York, New York. The Dallas, Texas office of JP Morgan Chase Bank, NA is the co-trustee of the Ben G. Barnett Foundation. Defendant Gary Q. Ward is a trust officer of JP Morgan Chase Bank, NA. Defendant Joe A. Worsham is deceased.

The only differences between Case Nos. 4:09-cv-028 and 4:09-cv-029 are that (1) two of the plaintiffs involved in the former, Robby Nichols and Jaci Nichols, are the sole plaintiffs in the latter, and (2) the real property in dispute. The plaintiffs in Case No. 4:09-cv-028 claim an interest in the real property described as:

Township 154 North, Range 89 West of the 5th PM Section 19: SE/4 Section 20: SE/4, W/2 The plaintiffs in Case No. 4:09-cv-029 claim an interest in the real property described as:

Township 154 North, Range 89 West of the 5th PM Section 20: SW1/4 In the 1950's and 1960's, Satkin Corporation, Joe A. Worsham, and Ben G. Barnett acquired mineral acres in certain properties in Mountrail County, North Dakota in which the Plaintiffs currently own the surface interest. In 1983, the North Dakota Legislative Assembly adopted the Dormant Minerals Act, N.D.C.C. chapter 38-18.1. The Dormant Minerals Act provides that any mineral interest is deemed to be abandoned if the mineral interest has been unused for a period of twenty years and no statement of claim has been properly recorded. N.D.C.C. § 38-18.1-02. The abandoned mineral interest vests in the surface owner. In 1985, Satkin Corporation filed a statement of claim in the Mountrail County Recorder's Office.

In 2005, Randy Nichols hired Connie Longmuir of Mountrail County Abstract to complete a title report on the SE1/4 of Section 19 and the NW1/4 and S1/2 of Section 20. Robby Nichols later hired Longmuir to prepare an ownership report on the SW1/4 of Section 20. The title reports listed numerous mineral owners which include: "BEN G. BARNETT (12-1-50), Dallas, TX", "JOE A. WORSHAM (6-23-52), 502 Dallas National Bldg, Dallas, TX", and "SATKIN CORPORATION (6-20-85), 1200 Interfirst Forth Worth Bldg, 500 W. 7th St Ft. Worth, TX 76102." See Case No. 4:09-cv-028, Docket No. 19-1, pp. 18-22; Case No. 4:09-cv-029, Docket No. 18-1, pp. 18-22.

The Nichols hired an attorney, Wade Enget, to assist them in terminating the severed mineral interests under the North Dakota Dormant Minerals Act. Enget published a Notice of Termination three times in the Mountrail County Reporter as required by statute. In addition, he sent a Notice of Lapse of Mineral Interest to Barnett and Worsham in May 2005 and to Satkin Corporation in February 2006 at the addresses shown on the title reports. The notices that were mailed to Barnett and Worsham were undelivered and stamped "RETURN TO SENDER ATTEMPTED NOT KNOWN." See Case No. 4:09-cv-028, Docket No. 19-1, pp. 24, 26; Case No. 4:09-cv-029, Docket No. 18-1, pp. 24, 26. The notice sent to Satkin Corporation was also undelivered and stamped "RETURN TO SENDER NOT DELIVERABLE AS ADDRESSED UNABLE TO FORWARD." See Case No. 4:09-cv-028, Docket No. 19-1, p. 27; Case No. 4:09-cv-029, Docket No. 18-1, p. 27.

On May 18, 2009, the Plaintiffs filed complaints in two separate actions in state court in Mountrail County, North Dakota. See Case No. 4:09-cv-028, Docket No. 1-1; Case No. 4:09-cv-029, Docket No. 1-1. On June 9, 2009, the Defendants removed the actions to federal district court. See Case No. 4:09-cv-028, Docket No. 1; Case No. 4:09-cv-029, Docket No. 1. The Plaintiffs seek quiet title of the real properties' mineral acres. The Defendants contend that the Plaintiffs failed to comply with the notice requirements of the North Dakota Dormant Minerals Act and also seek quiet title of the mineral acres.

II. STANDARD OF REVIEW

Summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, indicates that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Davison v. City of Minneapolis, Minn., 490 F.3d 648, 654 (8th Cir. 2007); see Fed. R. Civ. P. 56(c). Summary judgment is not appropriate if there are factual disputes that may affect the outcome of the case under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is genuine if the evidence would allow a reasonable jury to return a verdict for the non-moving party.

The Court must inquire whether the evidence presents a sufficient disagreement to require the submission of the case to the fact-finder or whether the evidence is so one-sided that one party must prevail as a matter of law. Diesel Mach., Inc. v. B.R. Lee Indus., Inc., 418 F.3d 820, 832 (8th Cir. 2005). The moving party bears the burden of demonstrating an absence of a genuine issue of material fact. Simpson v. Des Moines Water Works, 425 F.3d 538, 541 (8th Cir. 2005). The non-moving party "may not rely merely on allegations or denials in its own pleading; rather, its response must . . . set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e)(2).

This action is based on diversity jurisdiction. Therefore, the Court will apply the substantive law of North Dakota. See Paracelsus Healthcare Corp. v. Philips Med. Sys., ...


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