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Yesel v. Brandon

Supreme Court of North Dakota

August 6, 2015

Phyllis Yesel and Gloria Van Dyke, Plaintiffs, Appellants, and Cross-Appellees
v.
Kristian Brandon, Olaf Brandon, Carl Forberg, Magnhild A. Olson, Ronnaug T. Olson, Marit T. Hosaroygard, Ola T. Aule, Tina T. Haugen, Gudrun T. Teigen, and Kristen Tofte; the Unknown heirs, devisees, and legatees of Kristian Brandon, Olaf Brandon, Carl Forberg, Magnhild A. Olson, Ronnaug T. Olson, Marit T. Hosaroygard, Ola T. Aule, Tina T. Haugen, Gudrun T. Teigen, and Kristen Tofte; and all other persons unknown claiming any estate or interest in or lien or encumbrance upon the property described in the Complaint, whether as heirs, legatees, or personal representative of any of the above-named persons who may be deceased or under any title or interest, Defendants and Appellees, Christian Tiegen, Appellee and Cross-Appellant

Page 678

Appeal from the District Court of McKenzie County, Northwest Judicial District, the Honorable Robin Schmidt, Judge.

Jordon J. Evert, Williston, N.D., for plaintiffs, appellants, and cross-appellees.

Theodore D. Standage, Sheridan, WY, for defendants and appellees.

Carol Ronning Kapsner, Daniel J. Crothers, Dale V. Sandstrom, Lisa Fair McEvers, Gerald W. VandeWalle, C.J.

OPINION

Page 679

Carol Ronning Kapsner, Justice.

[¶1] Phyllis Yesel and Gloria Van Dyke (" Yesel" ) appeal from a summary judgment concluding the abandoned mineral statutes do not apply to royalty interests, and alternatively, if the statutes apply to royalty interests, the royalty interests at issue here were not abandoned. Christian Teigen cross-appeals from a judgment denying his motion to file a counterclaim and motion for attorneys' fees. We affirm in part, reverse in part, and remand, concluding the mineral interests related to the royalty interests at issue in this case were used, and the district court misapplied the law in denying Teigen's motion to file a counterclaim.

I

[¶2] Yesel is the surface owner of the following real property located in McKenzie County:

Township 153 North, Range 96 West
Section 25: W1/2NW1/4
Section 26: E1/2NE1/4, NE1/4SE1/4

Teigen is an heir to the named defendants (" Brandon defendants" ), who owned nonparticipating royalty interests in the minerals in and under Yesel's real property. Yesel published a notice of lapse of mineral interest in the McKenzie County Farmer for each of the Section 25 and Section 26 properties asserting Yesel succeeded to the ownership of the Brandon defendants' royalty interests in the property.

[¶3] In September 2011 (" first action" ) and April 2012 (" second action" ), Yesel sued to quiet title to the Brandon defendants' royalty interests, claiming the interests were abandoned because they had not been used under the abandoned mineral statutes for more than 20 years before the first publication of the notice of lapse. The actions involved the same facts and parties; the only difference was the properties involved in each case. Yesel was granted a default judgment in the first action, but the judgment was vacated after Teigen answered in the second action. Teigen's answer alleged the Brandon defendants' royalty interests were used under the abandoned mineral statutes because the mineral interests related to the royalty interests in and under the subject property had been leased within the last 20 years, were subject to a pooling order issued from the North Dakota Industrial Commission, and an oil well had been spud and was producing.

[¶4] Teigen moved for summary judgment, arguing the abandoned mineral statutes do not apply to royalty interests. Teigen also argued that even if the abandoned mineral statutes apply to royalty interests, the royalty interests were not abandoned because the mineral interests related to the royalty interests were being used under the statutes. After a hearing, the district court granted Teigen summary judgment in May 2014.

[¶5] Approximately two weeks after Teigen was granted summary judgment, he moved to file counterclaims against Yesel, alleging unjust enrichment, conversion, slander of title, and negligence. The counterclaims pertained to royalty payments Yesel allegedly received attributable to the Brandon defendants' royalty interests. Teigen claimed he received the information regarding the royalty payments on the same day he moved to file the counterclaims. Teigen initially requested the royalty payment information from Yesel in May 2013. Teigen then moved for an order

Page 680

to compel discovery in August 2013, arguing the information he received from Yesel was incomplete, and more complete information was needed to determine whether any counterclaims could be asserted against Yesel. The discovery issues were also discussed at the summary judgment hearing in March 2014, where Teigen indicated he was still seeking the royalty payment information. In addition to his motion to file a counterclaim, Teigen moved for attorneys' fees alleging Yesel's quiet title actions were frivolous and made in bad faith. The court denied the motions, concluding Teigen should have asserted his counterclaims when he answered Yesel's complaint in the second action, and the quiet title actions were not frivolous or made in bad faith.

II

A

[¶6] In the district court proceedings, Yesel challenged whether Teigen had standing to defend this action. In moving to vacate the default judgment entered in the first action, Teigen recorded two statements of claim of mineral interest and filed an affidavit stating he is an heir of the Brandon defendants. The district court concluded Teigen's affidavit was sufficient to establish his standing as an heir. Yesel has not challenged Teigen's standing on ...


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