Knife River Coal Mining Co. v. Neuberger

466 N.W.2d 606
CourtNorth Dakota Supreme Court
DecidedFebruary 27, 1991
DocketCiv. 900297, 900291
StatusPublished
Cited by4 cases

This text of 466 N.W.2d 606 (Knife River Coal Mining Co. v. Neuberger) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knife River Coal Mining Co. v. Neuberger, 466 N.W.2d 606 (N.D. 1991).

Opinion

ERICKSTAD, Chief Justice.

The defendants, Dennis and Shirley Neu-berger, who are acting as the personal representatives of the Ella Neuberger Estate, and Dale Neuberger (Neubergers), appeal from the judgment of the District Court for the South Central Judicial District dated July 25,1990. The district court denied the Neubergers’ counterclaims which sought damages from Knife River Coal Mining Company (Knife River) under the Surface Owner Protection Act. The Neubergers assert that the district court erred in holding that Knife River was not liable for payments under the Surface Owner Protection Act, by allowing parol evidence concerning the interpretation of the two coal leases to be admissible at trial, and by finding that the six-year statute of limitations barred any relief under the Act prior to 1981. The Neubergers also seek the recovery of reasonable attorney fees. We affirm.

Knife River initiated this action seeking to establish a binding allocation of payments due under two coal leases to the Neubergers. Payments under the leases had been placed in an escrow account after Knife River was informed that a dispute had arisen among the Neubergers regarding the proper distribution of the payments. The Neubergers responded to Knife River’s action by filing counterclaims for payments under the Act, and by initiating a number of crossclaims between each other pertaining to the ownership of the property in question.

Knife River moved to sever, for trial, the issue of whether or not payments were due under the Act from the claims concerning the ownership of the property. The motion was granted by the district court on July 11, 1989.

The Neubergers moved to strike those parts of Knife River’s responsive pleadings which claimed recovery under the Act would be limited by the six-year statute of limitations. In a memorandum opinion and order denying Neubergers’ motion, dated September 20, 1989, the district court determined that the statute of limitations was applicable, and therefore barred any possible recovery of damages which may have occurred prior to 1981. In the same order, the district court determined that the Dead Man’s Statute would not apply in this action and reiterated its position that it would allow parol evidence concerning the issue of whether or not surface damages were included within the payments under the lease.

The trial concerning the issue of whether or not Knife River would be liable for payments under the Act commenced on November 9, 1989. The district court held no payments were due under the Act and dismissed the Neubergers’ counterclaims. The district court’s decision was incorporated into findings of fact, conclusions of law and an order dated February 14, 1990. En *608 try of judgment was reserved pending the resolution of the claims concerning the allocation of payments among the Neubergers under the lease.

On June 20, 1990, the district court approved a settlement agreement which provided for an equal distribution of payments among the Neubergers. This agreement eliminated the necessity of Knife River’s initial action seeking to settle the allocation of payments. The district court then ordered the entry of judgment dismissing all of Neubergers’ counterclaims and cross-claims, and provided for the equal distribution of all the deposited funds and future funds among the Neubergers.

In 1959, Adam and Ella Neuberger leased to Knife River Section 7 of Township 143 North, Range 87 West, in Oliver County, for the purpose of allowing Knife River to engage in coal mining operations. Two leases were entered into, one covering the North Half of Section 7, and one covering the South Half of Section 7. Adam and Ella were the owners of 100 percent of the coal in the South Half of Section 7 and 50 percent of the coal in the North Half of Section 7. The remaining 50 percent interest in the coal in the North Half of Section 7 is owned by the State of North Dakota. Adam and Ella owned the entire surface interest of Section 7. Following Adam’s and Ella’s deaths, the defendants in this case assumed the ownership interests in the land. Other facts relevant to this decision will be disclosed as necessary.

During oral argument questions arose concerning the apparent conflict between the contract clause of the federal constitution and the retroactive application of the Act. 1 However, we will not address new issues for the first time on appeal. E.g., Lynch v. Williston City Com’n, 460 N.W.2d 136, 138 (N.D.1990). Knife River specifically stated in its brief on appeal that it has not raised this issue: “It is important to bear in mind that Knife River does not suggest that the Surface Owner Protection Act is inapplicable to these 1959 leases on the grounds that they predate its enactment in 1975.”

Section 38-18-03, N.D.C.C., provides us with the purpose and intentions of the legislature in enacting the Act:

“38-18-03. Purpose and interpretation. It is the purpose of this chapter to provide the maximum amount of constitutionally permissible protection to surface owners from the undesirable effects of development, without their consent, of minerals underlying their surface. This chapter is to be interpreted in light of the legislative intent expressed herein. The provisions of this chapter shall be interpreted to benefit surface owners, regardless of how the mineral estate was separated from the surface estate and regardless of who executed the document which gave the mineral developer the right to conduct mining operations on the land. [Emphasis added.]”

We have previously said that the legislature's intent must initially be sought from the language of the statute. E.g., Milbank Mut. Ins. Co. v. Dairyland Ins. Co., 373 N.W.2d 888, 891 (N.D.1985). “Statutory language must be given its plain, ordinary, and commonly understood meaning.” E.g., State v. Hersch, 445 N.W.2d 626, 630 (N.D.1989).

Upon reviewing the Act, we note that the purpose of the statute is to protect surface owners from the undesirable effects of development “without their consent.” § 38-18-03, N.D.C.C. The language of the statute further provides that the provisions of the Act are to be interpreted to benefit the surface owners “regardless of how the mineral estate was *609 separated from the surface estate.” 2 § 38-18-03, N.D.C.C. (emphasis added). We conclude the legislature intended the Act to apply only where the surface owner had not consented to the development.

Section 38-18-06(3), N.D.C.C., discusses the effect of leases in determining consent:

“3.

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466 N.W.2d 606, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knife-river-coal-mining-co-v-neuberger-nd-1991.