Murray v. Bej Minerals, LLC

464 P.3d 80 (2020)

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Nature of the Case

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Facts

George Severson owned and operated a farm and ranch until 1983 when he began leasing the land to Mary Ann and Lige Murray (Ps), who worked there as ranchers. George Severson periodically transferred portions of his interest in the property to his sons, Jerry and Robert Severson (Ds), and sold his remaining interests to Ps. From approximately 1991 until mid-2005, for nearly fifteen years, Ps ran the property in partnership with Ds under the Murray Severson Ranch Partnership. In 2005, Ds severed the surface estate of the property from the mineral estate and sold their remaining interests in the surface estate to Ps. The purchase agreement required the parties to execute a mineral deed at closing, apportioning one-third of the mineral rights to Robert Severson, one-third to Jerry Severson, and one-third to Ps. Ps thereafter owned the entire surface estate and a minority interest in the mineral estate. The mineral deed expressly provided for the parties' ownership, together as tenants in common. When the sale was completed in 2005, no one suspected that there were valuable dinosaur fossils on the property and whether dinosaur fossils would be included in the mineral estate as defined in their 2005 mineral deed. Ds' majority interest in the mineral estate is presently held by two entities. Robert Severson's one-third interest is owned by BEJ Minerals, LLC (D), and Jerry Severson's one-third interest is owned by RTWF LLC (RTWF). Hereinafter, the Seversons, D, and RTWF are collectively referred to as 'D.' In the fall of 2005, shortly after the conveyance, Ps happened upon a 'spike cluster' fossil on the property. Ps found and excavated several valuable dinosaur fossils on the property. The T. Rex fossil is one of only a dozen intact Tyrannosaurus rex skeletons of its quality ever found and was sold by Ps to a Dutch museum in 2014 for several million dollars. The funds are being held in escrow pending resolution of this litigation. In 2013, D claimed an ownership interest in the fossils, as a mineral titleholder. Ps sought a declaratory judgment affirming that the fossils found on the property are owned solely by Ps. D removed the case asserting diversity jurisdiction. D filed a counterclaim, requesting a declaratory judgment that, under Montana law, the fossils are 'minerals' and part of the mineral estate. The court granted summary judgment to Ps, reasoning that fossils 'are not included in the natural and ordinary meaning of 'mineral. ''The Ninth Circuit reversed the district court decision. Ps filed a petition for rehearing and rehearing en banc. The Ninth Circuit, proceeding en banc, entered a stay and certified the question