McCoy v. Richards

623 F. Supp. 1300, 87 Oil & Gas Rep. 495, 1984 U.S. Dist. LEXIS 22833
CourtDistrict Court, S.D. Indiana
DecidedOctober 11, 1984
DocketNo. EV 82-48-C
StatusPublished
Cited by1 cases

This text of 623 F. Supp. 1300 (McCoy v. Richards) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCoy v. Richards, 623 F. Supp. 1300, 87 Oil & Gas Rep. 495, 1984 U.S. Dist. LEXIS 22833 (S.D. Ind. 1984).

Opinion

MEMORANDUM OF DECISION

BROOKS, District Judge.

This matter is presently before the Court upon the agreement of the parties, that in lieu of a formal trial, the Court may render a decision in this cause based upon the trial briefs submitted, the stipulations of fact filed herein, the depositions of Vivian McCoy and Harry E. Richards, and the complaint, answer and other pleadings which have been filed in this case.

The Court having considered the briefs of the parties filed herein, the evidence present .in the record, as well as the law applicable to the facts of this case, now enters its Findings of Fact and Conclusions of Law in memorandum form pursuant to Rule 52(a), Federal Rules of Civil Procedure.

In August, 1942, Harry and Florence Richards (hereinafter “Richards”) deeded to Vivian McCoy and Oscar McCoy (hereinafter “McCoys”) thirty three and one-half (33.5) acres of land in Posey County, Indiana. At the time of the conveyance to the McCoys, the Richards reserved a one-half (V2) interest in the minerals in and under said land. On March 31, 1951 and June 29, 1951 the McCoys and the Richards, respectively, leased their interests in the oil and gas underlying the thirty three and one-half (33.5) acres to Superior Oil Company for a primary term of three (3) years. Each lease provided that if drilling operations were not commenced within one (1) year from the date of the execution of the lease the lease would terminate unless delay rental was paid, in which case drilling operations could be deferred for successive one (1) year periods during the primary term of the lease. According to the deposition testimony of Harry Richards, payment under the lease with Richards was made for the first year only, no drilling operations were commenced, and the lease was therefore terminated.

[1302]*1302The next recorded transactions involving the mineral interests in the subject property occurred in 1960. On October 4, 1960, the McCoys entered into a three (3) year oil and gas lease with one Forest Lindsay. Two days later Lindsay executed another lease agreement with Edmond Richards, a brother of Harry Richards. While this lease covered property in which the record interests were owned by Edmond Richards, it also included that portion of the interest in the thirty three and one-half (33.5) acres of which Harry and Florence Richards were the record owners and in which Edmond Richards had no recorded interest. It is undisputed that no drilling operations were commenced by Lindsay under the provisions of either of these leases and presumably the leases terminated at the end of, or prior to, the three (3) year term.

In June and July of 1973 the McCoys and the Richards, respectively, conveyed by deed their interests in the coal only to Seneca Coal Corporation and Ohio Valley Coal Company. No other activity with respect to the parties’ interests in the thirty three and one-half (33.5) acre tract occurred until mid 1980. At that time Vivian McCoy, whose husband had died, and the Richards executed oil and gas leases for a term of one (1) year to Coy Oil Incorporated. Both leases provided that the lessee could pool or unitize the leases with either other land or other leases, and an oil well was in fact started and completed to production within the one (1) year period under the McCoy lease on land other than the thirty three and one-half (33.5) acre tract involved herein. On July 10, 1981, no drilling having been commenced on the thirty three and one-half (33.5) acre tract, Coy Oil Incorporated secured a new lease from the Richards and by January, 1982 a producing oil well had been drilled thereon.

On February 9, 1982 plaintiff, Vivian McCoy, commenced this action in the Posey Circuit Court seeking an order quieting title to the thirty three and one-half (33.5) acre tract in question as against all claims of the Richards for the reason that under the Indiana Dormant Mineral Interests Act, Indiana Code 32-5-11-1 et seq., the Richards’ one half (V2) interest in the minerals had terminated because of non-use and failure to file a statement of claim. Ash-land Oil Company was named as a defendant to answer as to its interest since Ash-land was purchasing oil from the producing oil wells on the property in question. The case was subsequently removed to this Court by the Richards on February 26, 1982 pursuant to Title 28 Sections 1332 and 1441(a).

Thereafter, the Richards filed a motion for summary judgment and McCoy filed a motion for partial summary judgment on the narrow issues of whether the 1973 conveyance of Richards’ interest in the coal only to Ohio Valley Coal Company constituted a sufficient use under the Indiana statute so as to preserve to the Richards their interests in all other minerals, and whether the filing of the deed conveying the coal was sufficient to constitute a filing of a statement of claim under the statutory scheme. The Court in its memorandum order dated November 23, 1983 found, that while the Richards’ conveyance of the coal to Ohio Valley created a new mineral interest pursuant to Indiana Code 32-5-11-2, the conveyance was insufficient to constitute a use under Indiana Code 32-5-11-3. In addition, the Court found that the filing of the deed reflecting Richards’ conveyance of their interest in the coal did not literally or substantially comply with the statement of claim provision of the Dormant Mineral Interest Act. See, McCoy v. Richards, 581 F.Supp. 143 (S.D.Ind.1983).

In light of the Court’s earlier ruling, with respect to the 1973 conveyance, the remaining issue to be decided, and the one which the parties have consented to the Court determining without a plenary trial, is whether under the facts as recited above the Richards’ interest in the thirty three and one-half (33.5) acre tract has, pursuant to Indiana Code 32-5-11-1 et seq., lapsed.

The Indiana General Assembly, on September 2, 1971 enacted the Dormant Mineral Interests Act, Indiana Code 32-5-11-1 et seq., which provided in pertinent part that:

[1303]*1303Any interest in coal, oil, gas and other minerals, shall, if unused for a period of 20 years, be extinguished unless a statement of claim is filed in accordance with section five [32-5-11-5] hereof and the ownership shall revert to the then owner of the interest out of which it was carved. IC 32-5-11-1.

Section 4 of the Act (I.C. 32-5-11-4) provided for a two (2) year grace period from the effective date of the Act for the filing of a statement of claim which would preserve an outstanding mineral interest. Section 3 (I.C. 32-5-11-3) provided for essentially three types of activities which, when engaged in by the owner of the mineral interest, would be deemed “uses” for purposes of the statute. They are:

(1) actual or attempted production of the minerals,
(2) payment of rents or royalties, and
(3) payment of taxes on the mineral interest.

As the Court noted in its memorandum order of November 23, 1983 there are few cases which deal with Indiana’s Dormant Mineral Interests Act, although numerous articles have been written which discuss, in varying degrees, the Act’s provisions. See, e.g. Legislation, Existing & Proposed, Concerning Marketability of Mineral Titles, 7 Land & Water L.Rev. 73 (1972); Constitutionality of Retrospective Land Statutes—Indiana Model Dormant Mineral Act,

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Related

Ohning v. Buckskin Coal Corp.
528 N.E.2d 493 (Indiana Court of Appeals, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
623 F. Supp. 1300, 87 Oil & Gas Rep. 495, 1984 U.S. Dist. LEXIS 22833, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccoy-v-richards-insd-1984.