Great Northern Properties v. Extraction Oil and Gas

Colorado Court of Appeals·Decided September 15, 2022·No. 21CA0700·Published

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY

September 15, 2022

2022COA110

No. 21CA0700, Great Northern v. Extraction Oil & Gas — Real Property — Quiet Title — Conveyances — Centerline Presumption — Mineral Estates

The centerline presumption is a common law rule of conveyance, which generally provides that “a conveyance of land abutting a road or highway is presumed to carry title to the center of that roadway to the extent the grantor has an interest therein, unless a contrary intent appears on the face of the conveyance.” Asmussen v. U.S., 2013 CO 54, ¶ 15. In this quiet title action, a division of the court of appeals resolves an issue of first impression in Colorado: Does the common law centerline presumption apply to convey the mineral interests beneath a dedicated right-of-way to the owners of abutting parcels?

Applying settled principles of property law, the division concludes, as a matter of first impression, that when the centerline presumption applies, it applies to convey all interests a grantor possesses in the property underlying a right-of-way, including mineral interests. The division also clarifies the conditions that must be met before the centerline presumption applies.

COLORADO COURT OF APPEALS 2022COA110

Court of Appeals No. 21CA0700 Weld County District Court No. 19CV30091 Honorable Shannon D. Lyons, Judge

Great Northern Properties, LLLP, a Colorado limited liability limited partnership,

Plaintiff-Appellant, v.

Extraction Oil and Gas, Inc., Richmark Energy Partners, LLC, and Richmark Royalties, LLC,

Defendants-Appellees.

JUDGMENT AFFIRMED IN PART, REVERSED IN PART AND CASE REMANDED WITH DIRECTIONS

Division IV

Opinion by JUDGE BROWN

Vogt* and Hawthorne*, JJ., concur

Announced September 15, 2022

Witwer, Oldenburg, Barry & Groom, LLP, Patrick M. Groom, Kent A. Naughton, Greeley, Colorado, for Plaintiff-Appellant

Welborn Sullivan Meck & Tooley, P.C., Joseph C. Pierzchala, Samuel S. Bacon, Jens Jensen, Denver, Colorado, for Defendant-Appellee

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2021.

¶1 The common law centerline presumption generally provides that when grantors convey land abutting a right-of-way, they intend to convey title to the center of the right-of-way, unless the conveyance reveals a contrary intent. Asmussen v. United States, 2013 CO 54, ¶ 15. In this quiet title action, plaintiff, Great Northern Properties, LLLP (GNP), and defendant, Extraction Oil and Gas, Inc. (Extraction), ask us to resolve an issue of first impression in Colorado: Does the centerline presumption apply to convey the mineral interests beneath a dedicated right-of-way to the owners of abutting parcels?

¶2 Applying settled principles of property law, we conclude that, when the centerline presumption applies, it applies to all interests a grantor possesses in the property underlying a right-of-way, including mineral interests. We also clarify the conditions that must be met before the centerline presumption applies.

¶3 We therefore affirm the district court’s C.R.C.P. 56(h) determination of law and that part of its final judgment denying GNP’s quiet title claim. But because the judgment quieted title to mineral interests beyond those claimed by the two landowner defendants that had participated in the proceeding, we reverse the

judgment and remand to the district court with directions to correct the decree quieting title and dismiss the case as to the remaining defendants.

I. Background

¶4 As of February 1974, a real estate developer owned in fee simple absolute a parcel of land located in the NW ¼ of the NW ¼ of Section 12, Township 5 North, Range 66 West of the 6th P.M., City of Greeley, County of Weld, State of Colorado. At some point, the developer subdivided the property into individual lots.

¶5 On February 15, 1974, the developer dedicated a right-of-way across its land to the City of Greeley. The City accepted the dedication on April 16, 1974. The right-of-way became known as West 11th Street Road (11th Street).

¶6 On March 11 and March 27, 1974, the developer conveyed two parcels of land abutting 11th Street to two different grantees. The deeds conveying these parcels describe the property by metes and bounds but do not reference 11th Street. The deeds do not expressly reserve to the developer any mineral interests.

¶7 On November 12, 1975, the developer conveyed a third parcel of land abutting 11th Street. The deed conveying this parcel

describes the property by metes and bounds with reference to 11th Street. This deed does not expressly reserve to the developer any mineral interests. Once the developer conveyed this third parcel, it no longer owned any property adjacent to 11th Street.1

¶8 More than forty years later, on January 2, 2019, the developer conveyed whatever interest it had in the minerals beneath 11th Street to GNP.2 The same month, GNP brought a C.R.C.P. 105 action to quiet title to the mineral estate under the relevant section of 11th Street. As we understand the record, Extraction has oil and gas leases from the owners of all parcels abutting the relevant section of 11th Street and from GNP. Extraction is therefore entitled to drill and produce oil and gas from beneath the relevant portion of 11th Street regardless of who owns the mineral estate, but ownership dictates to whom Extraction must pay royalties.

¶9 In May 2019, Extraction filed a motion for determination of a question of law pursuant to C.R.C.P. 56(h) in which it argued that,

1 These three parcels have since been further subdivided and conveyed to new owners. 2 Neither the developer nor GNP has acquired or reacquired any

mineral interests in any of the parcels abutting the road. GNP does not claim an interest in the mineral estate beneath those parcels.

applying the centerline presumption, the owners of the parcels abutting 11th Street own the mineral rights beneath 11th Street to the centerline of the road. After hearing oral argument, in a forty- nine-page order (the November 2019 Order), the district court granted the motion and ruled that the developer “conveyed the mineral estate to the centerline of the roadway if the abutting lot owners carry their burden of proving” the conditions it discerned from the Colorado Supreme Court’s decision in Asmussen.

¶ 10 Despite this ruling, GNP filed a motion for summary judgment asking the district court to enter a final judgment decreeing that it owns the mineral interests beneath the relevant portion of 11th Street. Relying on the legal conclusions in its November 2019 Order and the parties’ stipulations regarding the then-current ownership of the parcels abutting 11th Street, the court denied the motion and entered final judgment quieting title to the disputed mineral interests in the two landowner defendants that had participated in the proceeding. II. Application of the Centerline Presumption to Mineral Estates

¶ 11 GNP contends that the district court erred by applying the centerline presumption to conclude that a deed conveying a

grantor’s interest in property adjacent to a right-of-way also conveys any interest the grantor may have in the mineral estate beneath and to the center of the right-of-way. We disagree.

A. Standard of Review

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