Lario Oil & Gas Company, a foreign corporation, Gene F. Lang & Co., a foreign corporation, Plaintiffs Lario Oil & Gas Company, a foreign corporation, Appellee
EOG Resources, Inc., a foreign corporation, Defendant and Appellant
Appeal from the District Court of Mountrail County, Northwest Judicial District, the Honorable Richard L. Hagar, Judge.
Charles L. Neff, for appellee.
Michael D. Schoepf (argued), Amy Lynn De Kok (appeared) and Lawrence Bender (on brief), for defendant and appellant.
[¶ 1] EOG Resources, Inc., appeals a district court judgment granting Lario Oil & Gas Co.'s motion for summary judgment and quieting title of an oil and gas leasehold estate in Lario's favor. We reverse and remand, concluding the district court erred by deciding EOG did not lease the rights to the oil and gas interests.
[¶ 2] In 2004, several landowners executed oil and gas leases covering their interests in land adjacent to White Lake in Mountrail County, North Dakota, to Context Energy Company. Context assigned the leases to EOG. At the time, White Lake apparently was considered a navigable waterway and therefore all rights, including mineral rights, to land under the lake belonged to the State of North Dakota under the "equal footing" doctrine. See Hild v. Johnson, 2006 ND 217, ¶ 2, 723 N.W.2d 389. In 2005, an Assistant North Dakota Attorney General provided a Deputy Land Commissioner a memorandum suggesting White Lake was not navigable when North Dakota became a State.
[¶ 3] In 2008, Gene F. Lang & Co. executed oil and gas leases with the same riparian landowners who previously entered into leases with Context. Lang assigned these leases to Lario. The Lang leases covered only the land beneath the bed of White Lake. In 2009, the State disclaimed ownership of the land beneath White Lake, including the minerals. EOG tendered bonus payments to the lessors for the additional acres, which were refused.
[¶ 4] Lario commenced this action against EOG in 2010, seeking a judgment declaring the Lario leases to be valid and enforceable and quieting title to the oil and gas interest in the lake bed to Lario. Lario moved for summary judgment, and EOG filed a cross-motion for summary judgment. The district court granted Lario's motion, concluding EOG's leases failed to specifically describe the "wet acreage" and quieting title to the oil and gas interest in the lake bed to Lario. EOG appeals, arguing the lessors who entered into the 2004 leases intended to convey their entire interest in their respective properties, including their interests under the lake bed. EOG also argues the inclusion of "Mother Hubbard" clauses in the leases demonstrates the parties' intent to include all adjoining or contiguous land not specifically described. A common definition of a "Mother Hubbard" clause is "[a] provision in an oil-and-gas lease protecting the lessee against errors in the description of the property by providing that the lease covers all the land owned by the lessor in the area." Black's Law Dictionary 1106 (9th ed. 2009).
[¶ 5] Our standard for reviewing a summary judgment is well established:
"Under N.D.R.Civ.P. 56, summary judgment is a procedural device for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. The party moving for summary judgment must show there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. A district court's decision on a motion for summary judgment is a question of law that we review de novo on the record. In determining whether summary judgment was appropriately granted, we view the evidence in the light most favorable to the party opposing the motion, giving that party the benefit of all favorable inferences which can reasonably be drawn from the record."
Brigham Oil and Gas, L.P. v. Lario Oil & Gas Co., 2011 ND 154, ¶ 13, 801 N.W.2d 677 (quotation omitted). Both parties moved for summary judgment, and no genuine issues of fact exist. The sole dispute here stems from interpretation of two sets of leases. "The same general rules that govern interpretation of contractual agreements apply to oil and gas leases." Irish Oil and Gas, Inc. v. Riemer, 2011 ND 22, ¶ 11, 794 N.W.2d 715 (quotation omitted). "Interpretation of a contract is a question of law, and on appeal this Court independently examines and construes the contract to determine if the district court erred in its interpretation." Id. "A contract must be read and considered in its entirety so that all of its provision[s] are taken into consideration to determine ...