Hess v. Hobart.
2020 COA 139. No. 19CA0661. Real Property—Mineral Interests—Life Estate.
September 17, 2020
The Hesses purchased 160 acres of vacant land from Hobart by warranty deed (the deed). The purchase contract provided that Hobart reserved a life estate in all mineral rights on the property, and the deed contained a reservation clause stating, “except grantor reserves a life estate in all mineral rights on the property including but not limited to all oil, gas, hydrocarbons and any other minerals.” Hobart then entered into numerous oil and gas leases on the property. The Hesses later learned that they might possess rights to income and bonuses as remaindermen of Hobart’s life estate in the minerals, and they sued Hobart. Hobart moved to dismiss under CRCP 12(b)(5). The district court found that the deed unambiguously conveyed a life estate in the mineral interests to Hobart and granted the motion.
On appeal, the Hesses argued that the district court erred in dismissing their complaint because it ignored their rights under various principles of oil and gas law and the Uniform Principal and Income Act (UPIA). However, the phrase “a life estate in all mineral rights” unambiguously conveys a life estate in exactly that to Hobart. This broad language does not contemplate any surrender of those rights to the Hesses or any sharing of income with them that Hobart receives from minerals during her life. Further, (1) the open mines doctrine applies only when a lease is created before the creation of the life estate, which did not occur here; (2) the UPIA only applies in the context of wills, trusts, and estates; (3) the general practice of dividing rights between a life tenant and a remainderman does not apply here because the parties did not agree to divide the mineral rights; and (4) the Hesses were not entitled to damages for waste because and the deed and contract unambiguously gave Hobart unfettered rights concerning the minerals during her life tenancy. As a matter of law, the Hesses made no plausible claims, and the district court did not err by dismissing the complaint.
The judgment was affirmed and the case was remanded to determine the amount of Hobart’s reasonable appellate attorney fees.
Real Property Mineral Interests Life Estate