The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court
Before the Court is the Plaintiffs' Motion for Summary Judgment filed on October 22, 2010. See Docket No. 10. The Government filed a response in opposition to the motion on January 31, 2011. See Docket No. 21. Before the Court is also the Government's Motion to Dismiss filed on January 31, 2011. See Docket No. 19. The Plaintiffs filed a response in opposition to the motion on February 10, 2011. See Docket No. 22. The Government filed a reply brief on February 25, 2011. See Docket No. 24. For the reasons explained below, the Court grants the Government's motion to dismiss, denies the Plaintiffs' motion for summary judgment as moot, and dismisses the Plaintiffs' complaint with prejudice.
On May 17, 1939, the Federal Farm Mortgage Corporation ("FFMC") acquired a parcel of land in Dunn County, North Dakota through a sheriff's sale. The land has the following description:
North Half of Southeast Quarter (N1/2 SE1/4 ): also South Half of Northeast Quarter (S1/2 NE1/4 ), all in Section Twenty-two (22), Township One Hundred Forty-three (143) North, Range Ninety-four (94) West.
See Docket No. 11-1. The sheriff's deed was recorded on February 29, 1940. On October 1, 1940, Dunn County acquired the same parcel of land through a tax foreclosure. See Docket No. 11-2. The tax foreclosure resulted from unpaid taxes for the year 1934. The auditor's tax deed was recorded on December 10, 1940.
On August 21, 1941, the FFMC issued a quitclaim deed to R. R. Eberhard. See Docket No. 11-4, p. 19. The FFMC retained a fifty percent mineral interest. The quitclaim deed from the FFMC was recorded on September 4, 1941, at 2:25 p.m. On September 2, 1941, Dunn County also issued a quitclaim deed to Eberhard. See Docket No. 11-3. The quitclaim deed from Dunn County was recorded five minutes earlier than the FFMC deed, at 2:20 p.m. on September 4, 1941. See Docket No. 11-4, p. 18. On August 23, 1944, Eberhard and his wife conveyed the land to John Kuntz via a warranty deed. See Docket No. 11-4, p. 20. The warranty deed was recorded on December 21, 1950.
On September 6, 1957, the FFMC conveyed its mineral interest in the property to the United States of America, to be administered by the Secretary of the Interior. See Docket No. 20-1. The mineral quitclaim deed was recorded on November 5, 1957. See Docket No. 11-4, p. 23.
On April 6, 1993, John and Helen Kuntz conveyed the land to the plaintiffs, Franklin and Pauline Appledoorn, via a warranty deed, which was recorded on the same day it was signed. See Docket No. 11-4, p. 32. The Appledoorns' deed states that they receive the following property:
Township 143 North, Range 94 West, 5th P.M. Section 14: S1/2 S1/2 Section 22: S1/2 NE1/4 , NE1/4 NE1/4 , SE1/4 Section 23: ALL Subject to all easements, exceptions, reservations and mineral conveyances of record; and
That included within this conveyance are all mineral interests of the parties of the first part of which they are presently seized.
See Docket No. 11-4, p. 32.
Both the Government and the Appledoorns leased their mineral interests. On February 22, 1994, the Appledoorns leased their mineral interest to Sundance Oil & Gas, Inc. See Docket No. 20-2. The Government leased its fifty percent mineral interest to Sundance Oil & Gas, Inc. on August 25, 1994. See Docket No. 20-3. Franklin Appledoorn testified in a deposition that ever since he and his wife leased their mineral interests, they have always been paid as though they own half of the minerals. See Docket No. 20-4, p. 40-41.
Franklin Appledoorn testified that "a few years" after the Appledoorns received the property in 1993, he "thought it would be worthwhile checking into it, see who owns the minerals in . . . the parcels that we had." See Docket No. 20-4, p. 9. Franklin Appledoorn had a lawyer and two landmen review the abstract of title for Appledoorns' land. They were all of the opinion that the Appledoorns own the minerals in full. The Appledoorns contend in their memorandum in support of their motion for summary judgment that they "were unaware of any claim by the United States until August of 2008, when the existence of a dispute became apparent as the result of a title opinion prepared by the Bureau of Land Management." See Docket No. 11. The title opinion states, "Our title records reflect that the Federal Farm Mortgage Corporation transferred a 50 percent mineral interest in the above lands to the United States." See Docket No. 11-5.
On June 2, 2010, the Appledoorns filed a complaint to quiet title to the property. See Docket No. 1. The Appledoorns filed a motion for summary judgment on October 22, 2010. See Docket No. 10. The Appledoorns contend that the tax deed issued to Dunn County supersedes the sheriff's deed issued to the FFMC, such that the Government's fifty percent mineral interest is invalid. On January 31, 2011, the Government filed a motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure, contending that the Appledoorns' claim is barred by the statute of limitations. See Docket No. 19
Rule 12(b)(1) of the Federal Rules of Civil Procedure provides that a claim can be dismissed if the Court lacks subject matter jurisdiction. It is well-established that "a district court 'has authority to consider matters outside the pleadings when subject matter jurisdiction is challenged under Rule 12(b)(1).'" Harris v. P.A.M. Transp., Inc., 339 F.3d 635, 637 n.4 (8th Cir. 2003) (quoting Osborn v. United States, 918 F.2d 724, 728 n.4 (8th Cir. 1990)). Jurisdictional issues, whether they involve questions of law or fact, are for the court to decide. Osborn, 918 F.2d at 729.
When considering a motion to dismiss under Rule 12(b)(1), the Court must distinguish between a "facial attack" and a "factual attack." Id. A facial attack restricts the Court to review the face of the pleadings to determine whether the plaintiff has alleged a basis of subject matter jurisdiction. Id. However, a factual attack "challenges the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered." Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980).
The Government seeks dismissal under Rule 12(b)(1) based on the Court's lack of subject matter jurisdiction because it contends the statute of limitations has run. Because the motion at issue is a factual 12(b)(1) motion, "no presumptive truthfulness attaches" to the Plaintiffs' allegations. Osborn, 918 F.2d at 730. Further, the Plaintiffs bear the burden of proof that jurisdiction does in fact exist. V S Ltd. P'ship v. Dep't of Hous. & Urban Dev., 235 ...