Halliburton Oil Producing Co. v. Grothaus

1998 OK 110, 981 P.2d 1244, 69 O.B.A.J. 3784, 142 Oil & Gas Rep. 323, 1998 Okla. LEXIS 118, 1998 WL 762407
CourtSupreme Court of Oklahoma
DecidedNovember 3, 1998
Docket87304
StatusPublished
Cited by32 cases

This text of 1998 OK 110 (Halliburton Oil Producing Co. v. Grothaus) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Halliburton Oil Producing Co. v. Grothaus, 1998 OK 110, 981 P.2d 1244, 69 O.B.A.J. 3784, 142 Oil & Gas Rep. 323, 1998 Okla. LEXIS 118, 1998 WL 762407 (Okla. 1998).

Opinion

OPALA, J.

¶ 1 The dispositive issue on certiorari is whether the money held by Kerr-McGee Corporation is impressed with immunity from liability because it represents gas runs from restricted Indian land 1 — i.e. produc *1247 tion that occurred after restoration of the land’s restricted status. Because we cannot tell on this record whether garnishment-impressed funds are proceeds from pre- or post-restoration gas runs (runs that preceded or succeeded the land’s restoration to restricted status), the trial court’s post-deficiency payover order is reversed and the cause remanded for further proceedings to be consistent with today’s pronouncement.

I

THE ANATOMY OF LITIGATION

The Foreclosure Suit

¶ 2 Rosalie Grothaus and Sally K. Taylor [Grothaus and Taylor, deficiency-order debtors or defendants] inherited restricted Indian land. On 27 February 1976 they executed a promissory note and secured its payment by a mortgage on the inherited property. The note and mortgage were approved by the Bureau of Indian Affairs [BIA],

¶3 Halliburton Oil Producing Company [Halliburton, judgment creditor or mortgagee] succeeded by assignment to the ownership of the note and mortgage. Upon the defendants’ default, Halliburton brought suit on the note and foreclosed the mortgage. The property was then offered at sheriffs sale to satisfy the judgment. An October 5, 1992 deficiency determination for the unsatisfied amount of the adjudicated indebtedness followed the sale. The post-sale deficiency order and affidavit of judgment were filed of record in the office of the county clerk on 20 October 1992. 2

The Garnishment Proceedings

¶ 4 Upon learning, some three years later, that the defendants were receiving income from gas production {on other land than that included in the foreclosure) from property consisting of two separate tracts located in the county, Halliburton brought garnishment proceedings against Kerr-McGee Corporation [Kerr-McGee or garnishee]. 3 Garnishee’s amended answer states that it has on hand for defendant Taylor $1,057.54. Halliburton concedes the garnishment, insofar as it affects Grothaus’ indebtedness, may be subject to a prior claim by the IRS. 4 The deficiency-order debtors pressed separate claims for exemption from garnishment, maintaining that the production was from restricted Indian property. The answer by the Secretary of the Interior [Secretary] to the garnishment proceeding states that: (a) the two tracts of land in controversy are owned by Grothaus and Taylor; (b) on 5 September 1986 the BIA determined that the property was not restricted and executed a relinquishment of the land’s supervision; (c) the BIA later determined in August 1994, that the land was in fact restricted, basing its decision on a finding that the deficiency-order debtors had sufficient quantum of Indian blood and (d) the determination of their *1248 actual Indian blood relates back to their acquisition of the land. According to the Secretary, although restricted Indian land is generally not subject to creditors’ claims and notwithstanding the land’s current restricted status, “the royalty income from the property is subject to the preexisting judgment lien at the point that the restricted property was recognized by the BIA as restricted." 5 (Emphasis supplied.) The Secretary stated that he would have no objection to a determination that the royalties were “subject to the preexisting judgment lien.”

¶ 5 Grothaus and Taylor objected to the garnishment, arguing that: (a) Halliburton was attempting to encumber restricted assets to satisfy a judgment entered against property that is not the subject of the garnishment proceedings; (b) the Secretary had approved the mortgage to secure an indebtedness of 'the property that had been foreclosed upon; (c) but because there is no proof that the Secretary had approved an encumbrance upon the property in contest in the garnishment proceedings, it is invalid; (d) the federal jurisprudence relied upon by the Secretary is factually distinguishable from this case and (e) the trial court is without jurisdiction to encumber restricted Indian land without pri- or approval by the Secretary.

¶ 6 The trial court (a) found that the proceeds from gas production which Kerr-McGee holds in obedience to the garnishment process are available for the satisfaction of the debt, (b) denied Grothaus’ and Taylor’s claim of exemption based on the land’s restricted status and (c) ordered the funds paid over to the judgment creditor. The defendants unsuccessfully pressed the trial court to “reconsider” 6 its denial of their separate claims for exemption from execution, arguing that (a) the property in contest has always been restricted because none of the requirements for removal of the restrictions has occurred and (b) the Secretary’s answer in the garnishment incorrectly states that both tracts of land (whose production proceeds are sought) were determined to be unrestricted on 5 September 1986. 7

¶ 7 The Court of Civil Appeals reversed, holding that (a) whatever lien rights may have attached during the land’s unrestricted status were contingent upon the resolution of the controversy over the quantum of defendants’ Indian blood and (b) the lien’s enforcement by garnishment or other process was barred upon restoration of the land to restricted status. Because the garnishment summons were issued to Kerr-McGee after the land’s restricted-status restoration, the defendants were deemed entitled to a full exemption of the royalty proceeds from garnishment.

II

THERE IS NO LEGAL INFIRMITY IN THE FORECLOSURE DECREE, ORDER OF SALE, CONFIRMATION-OF-SALE ORDER AND IN THE DEFICIENCY DETERMINATION

¶ 8 The deficiency-order debtors attack the foreclosure decree, order of sale, confirmation-of-sale order and the deficiency order as void because separate appraisals were not submitted for the surface and mineral estates. They claim that because the process of conducting the sheriffs sale was contrary to statutory requirements, (a) the order confirming the sale is void and (b) the court lacked subject matter jurisdiction to deter *1249 mine any deficiency on the obligation adjudged in the foreclosure decree. Defendants also urge the deficiency determination does not meet the sine qua non prerequisites for a lien. This is so because the statutory formula requires a determination of “a fair and reasonable market value of the mortgaged premises,” 8 whereas the trial court merely used the appraisal submitted to the sheriff.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

HERRING v. GRAHAM
2019 OK CIV APP 1 (Court of Civil Appeals of Oklahoma, 2018)
IN THE MATTER OF THE ADOPTION OF B.T.S.
2016 OK CIV APP 21 (Court of Civil Appeals of Oklahoma, 2016)
Charles Sanders Homes, Inc. v. Cook & Associates, Engineering, Inc.
2016 OK CIV APP 45 (Court of Civil Appeals of Oklahoma, 2015)
A.B. STILL WEL-SERVICE v. ANTINUM MIDCON I
417 P.3d 1235 (Court of Civil Appeals of Oklahoma, 2015)
Wellington Resource Group LLC v. Beck Energy Corp.
975 F. Supp. 2d 833 (S.D. Ohio, 2013)
City of Broken Arrow v. Bass Pro Outdoor World, LLC
2011 OK 1 (Supreme Court of Oklahoma, 2011)
Chaparral Energy, L.L.C. v. Pioneer Exploration, Ltd.
2010 OK CIV APP 126 (Court of Civil Appeals of Oklahoma, 2010)
Fleetwood v. Chevron U.S.A. Production Co.
2010 OK CIV APP 63 (Court of Civil Appeals of Oklahoma, 2010)
Bank of Oklahoma, N.A. v. Red Arrow Marina Sales & Service, Inc.
2009 OK 77 (Supreme Court of Oklahoma, 2009)
Ashikian v. STATE EX REL. OHRC
2008 OK 64 (Supreme Court of Oklahoma, 2008)
House of Realty, Inc. v. City of Midwest City
2004 OK 97 (Supreme Court of Oklahoma, 2004)
State v. Torres
2004 OK 12 (Supreme Court of Oklahoma, 2004)
Brennen v. Aston
2003 OK 91 (Supreme Court of Oklahoma, 2003)
Holleyman v. Holleyman
2003 OK 48 (Supreme Court of Oklahoma, 2003)
Johnson v. Bryan
2003 OK 70 (Supreme Court of Oklahoma, 2003)
Booth v. McKnight
2003 OK 49 (Supreme Court of Oklahoma, 2003)
In Re Estate of Tytanic
2002 OK 100 (Supreme Court of Oklahoma, 2002)
Walker v. Group Health Services, Inc.
2001 OK 2 (Supreme Court of Oklahoma, 2001)
Patterson v. Beall
2000 OK 92 (Supreme Court of Oklahoma, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
1998 OK 110, 981 P.2d 1244, 69 O.B.A.J. 3784, 142 Oil & Gas Rep. 323, 1998 Okla. LEXIS 118, 1998 WL 762407, Counsel Stack Legal Research, https://law.counselstack.com/opinion/halliburton-oil-producing-co-v-grothaus-okla-1998.