Larson v. Norheim - Appellant Brief

Larson v. Norheim - Appellant Brief

IN THE SUPREME COURT

STATE OF NORTH DAKOTA

Loren R. Larson, Kathryn L. Lervick,
and Renee L. Larson,
Plaintiffs, Supreme Court Case No. 20120236
-vs-
Divide County Civil No. 12-08-C-018
Thelma Larson Norheim,
Hans Norheim, Birgit Norheim Oyen
Kjellaug Norheim, Harald Tettum,
Olav Oyen,
and all other persons unknown claiming any
estate or interest in, or lien or encumbrance
upon the property described in the
Complaint in this matter, whether as heirs,
devisees, legatees, or personal
representatives of any of the above-named
persons who may be deceased, or under any
other title or interest,
Defendants.

APPEAL FROM THE DISTRICT COURT OF DIVIDE COUNTY

NORTHWEST JUDICIAL DISTRICT

DISTRICT COURT NO. 12-08-C-018

THE HONORABLE DAVID W. NELSON

APPELLANT'S BRIEF

Elizabeth L. Pendlay (ID# 06372)
Attorney for Plaintiffs-Appellants
206 N. Main Street, P.O. Box 289
Crosby, North Dakota 58730
Tel. (701) 965-6036

TABLE OF CONTENTS
Table of Authoritiesii-iii
Issues Presented...1
Statement of the Case..¶¶1-17
Statement of the Facts...¶¶18-43
Law and Argument...¶¶44-79
I. Standard of Review...¶¶47-52
II. The district court erred in determining that the Larson family had a statutory requirement to engage in reasonable inquiry under Section 38-18.1-06, N.D.C.C., and, even if such a requirement exists under the statute, this statutory element was met by the Larson family..¶¶53-68
III. The district court erred as a matter of law when it failed to address whether a mineral abandonment proceeding necessarily creates a reversionary interest in real property and further erred as a matter of law in finding the Defendants' Statement of Claim was adequate to prevent the lapse of the mineral interests at issue...¶¶69-79
Conclusion ..¶80

TABLE OF AUTHORITIES
CASES
Anderson v. Mooney, 279 N.W.2d 423 (N.D. 1979).28
Auction Effertz, Ltd. v. Schecher, 2000 ND 109, 611 N.W.2d 173..19
Dettler v. Sprynczynatyk, 2004 ND 54, 676 N.W.2d 799.20
State ex rel. Heitkamp v. Family Life Servs., 2000 ND 166, 616 N.W.2d 82619
Estate of Howser, 2002 ND 33, 639 N.W.2d 48520, 27
Johnson v. Taliaferro, 2011 ND 34, 793 N.W.2d 804.30, 31
Kee v. Redlin, 203 N.W.2d 423 (N.D. 1972)28
Mehus v. Mehus, 278 N.W.2d 625 (N.D. 1979)27
Melchior v. Lystad, 2010 ND 140, 786 N.W.2d 8.17
Piatz v. Austin Mutual Ins. Co., 2002 ND 115, 646 N.W.2d 681.19, 20, 27
Sorenson v. Felton, 2011 ND 33, 793 N.W.2d 799...19, 20, 21, 22, 24, 25, 26
Wheeler v. Gardner, 2006 ND 24, 708 N.W.2d 908.19
White v. Altru Health Sys., 2008 ND 48, 746 N.W.2d 173..21
STATUTES
N.D.C.C. § 1-02-1021
N.D.C.C. § 27-05-06..17
N.D.C.C. § 28-27-01..17
N.D.C.C. § 38-18.1-02.14, 31
N.D.C.C. § 38-18.1-04...31, 32, 33
N.D.C.C. § 38-18.1-06...1, 4, 18, 21, 22, 24, 34
N.D.C.C. § 47-04-0918, 31
N.D.C.C. § 47-10-0118, 32
OTHER
N.D. Const. art. VI, § 2..17
N.D. Const. art. VI, § 6..17
N.D. Const. art. VI, § 8..17
N.D.R.App.P. 4 .17
N.D.R.Civ.P. 52(a)...19, 27
N.D.R.Civ.P. 58(b)... 17

ISSUES PRESENTED

I. The district court erred in determining that the Larson family had a statutory requirement to engage in reasonable inquiry under Section 38-18.1-06, N.D.C.C., and, even if such a requirement exists under the statute, this statutory element was met by the Larson family.

II. The district court erred as a matter of law when it failed to address whether a mineral abandonment proceeding necessarily creates a reversionary interest in real property and further erred as a matter of law in finding the Defendants' Statement of Claim was adequate to prevent the lapse of the mineral interests at issue.

STATEMENT OF THE CASE

[¶ 1] The Judgment and Memorandum Opinion subject to this appeal arise out of a quiet title action taken by Plaintiffs, Loren R. Larson, Kathryn L. Lervick and Renee L. Larson ("the Larson family"), who alleged that they were the owners of 53.333 net mineral acres lying under the following described property, to wit:

In Divide County, North Dakota

Township 162 North, Range 99 West

Section 17: SE¼

Appx. at 1-7; 18-195.

[¶ 2] The quiet title action was commenced by the filing of a Summons and Notice of No Personal Claim, together with a Complaint, all of which were dated and filed with the district court the 28th day of April, 2008. Appx. at 1-7. The Complaint alleged that the Larson family had an estate or interest in the 53.333 net mineral acres lying under the SE¼ of Section 17-162-99, and the Complaint named Thelma Larson Norheim, Hans Norheim, Birgit Norheim Oyen, Kjelluag Norheim, Harald Tettum, Inge Oyen Norheim and Olav Oyen, and all other persons unknown claiming any interest in the property described in the Complaint. Appx. at 3-4.

[¶ 3] Initially, only two of the named-defendants in the action, Olav Oyen and Inge Oyen Norheim, made a responsive filing by way of a Notice of Appearance, dated June 18, 2008, which stated that Olav Oyen and Inge Oyen Norheim were to serve as "representatives of their relatives". Appx. at 46-47. The Notice of Appearance was filed with the district court on June 20, 2008. Appx. at 46. By Answer dated July 10, 2008, these two named-Defendants, Olav Oyen and Inge Oyen Norheim, filed an Answer with the court on July 11, 2008.

[¶ 4] Thereafter, due to the tardy filing of the Answer given by two of the named-Defendants and the lack of the filing of Answer by all other named Defendants, the Larson family moved for judgment on the pleadings, and, alternatively, moved for summary judgment. Appx. at 8-14. After a response from the counsel for Defendants Olav Oyen and Inge Oyen and a hearing on the Motion, the district court denied the Larson family's Motion. Appx. at D, index no. 31. This Order is not the subject of this appeal, but is noted for the purposes of procedural recitation.

[¶ 5] By Answer dated February 13, 2008, filed with the district court on February 17, 2008, Birgit Norheim Oyen, Kjellaug Norheim, Harald Tettum, "as well as all other possible heirs identified in the Notice of Appearance filed in this action" responded to the Larson family's quiet title action, alleging that they had properly filed a Statement of Claim in the Office of the Divide County Recorder's Office, thus precluding the Larson family from taking ownership of the mineral interests at issue. Appx. at 43-45.

[¶ 6] The Larson family's basis for the quiet title action pled within the Complaint was a mineral abandonment proceeding the Larson family had taken under the provisions of Chapter 38-18.1, N.D.C.C., "Termination of Mineral Interests".

[¶ 7] With regard to the underlying mineral lapse or abandonment proceeding that gave rise to the quiet title action, the Larson family were surface owners in the SE¼ of Section 17-162-99. Appx. at 20, 60; Trial Trans. at 36-40,42, 51-52. A Memorandum of Title secured by the Larson family from Divide County Abstract Inc. revealed that 53.333 net mineral acres under the SE¼ of Section 17-162-99 appeared to belong to Thelma Larson Norheim and/or Hans Norheim. Appx. at 60-67; Trial Trans. at 53-54. The Memorandum of Title further revealed that the 53.333 net mineral acres which appeared of record to belong to Thelma Larson Norheim and/or Hans Norheim had been without title activity for 20 or more years. Appx. at 60-67; Trial Trans. at 53-54.

[¶ 8] Due to the period of inactivity in the chain of title with regard to the 53.333 net mineral acres, the Larson family caused to be published a Notice of Lapse of Mineral Interest in The Journal, Divide County's official newspaper on June 28, July 5 and July 12, 2006, with regard to the mineral acres at issue. Appx. at 86. However, the mailing of copies of the Notice of Lapse to the lapsed mineral owners, Thelma Larson Norheim and Hans Norheim, was not mailed to their last record address in Youngstown, AZ, until September 1, 2006. Appx. at 86. Thus, the Notice of Lapse was mailed in excess of the 10-day mailing period prescribed by N.D.C.C. 38-18.1-06. Trial Trans. at 61-62. No Statement of Claim was filed within the 60 days that followed this flawed attempt at the mineral abandonment publication and mailing process.

[¶ 9] Mindful of their failure to mail a copy of Notice of Lapse within the 10-day timeframe required under the statute, the Larson family undertook yet another abandoned mineral proceeding under Chapter 38-18.1, N.D.C.C., causing the same Notice of Lapse to be again published in The Journal on May 9, 16 and 23, 2007. Appx. at 83. At this point, and in strict compliance with N.D.C.C. 38-18.1-06, a copy of the Notice of Lapse was mailed to Thelma Larson Norheim and Hans Norheim on May 25, 2007. Appx. at 84.

[¶ 10] Following the second publication of the Notice of Lapse on May 9, 16 and 23, 2007, and a mailing of the same to Thelma Larson Norheim and Hans Norheim May 25, 2007, a Statement of Claim of Mineral Interests was filed for record in the Divide County Recorder's Office on June 27, 2007. Appx. 87-88. The Statement of Claim named Birgit Norheim Oyen, Kjellaug Norheim, Harald Tettum, Inge Oyen Norheim, and Olav Oyen, as "the rightful heirs of Hans and Thelma Norheim", but was executed only by Olav Oyen and Inge Oyen. Appx. at 87. An Affidavit of Lapse of Mineral Interest of Thelma Larson Norheim and Hans Norheim was filed for record in the Office of the Divide County Recorder's Office on August 1, 2007.

[¶ 11] After the completion of the second mineral lapse publication process, the filing of the Summons, Notice of No Personal Claim and Complaint, and the filing of the Answers described above, probate proceedings for the Estates of Thelma Larson Norheim and Hans Norheim were commenced in Divide County. Appx. at 51-59. An Order of Intestacy and Determination of Heirs was granted by the district court in the Estate of Thelma Larson Norheim, finding that Hans Norheim was her only intestate heir. Appx. at 51-52. An Order of Intestacy and Determination of Heirs was granted by the district court in the Estate of Hans Norheim, finding that there were several intestate heirs of Hans Norheim, but only one of these intestate heirs, Birgit Norheim, appeared on the Statement of Claim of Mineral Interests, which was executed only by Inge Oyen and Olav Oyen. Appx. at 51-52.

[¶ 12] Ultimately, the quiet title action came for trial on November 1 and 2, 2011, in Crosby, Divide County, North Dakota, before the Honorable David W. Nelson, Judge of the District Court. Appx. at 3.

[¶ 13] Following trial, the Larson family and the Defendants filed post-trial briefs and post-trial rebuttal briefs at the direction of the district court. Appx. at 131-184.

[¶ 14] On the 18th day of January, 2012, the Honorable Judge David W. Nelson issued a Memorandum Opinion, which found in favor of the Defendants and determined that the Larson family had not acquired the mineral interests at issue in the mineral abandonment proceeding. Appx. at 185-193. This Memorandum Opinion provided the district court's reasoning in finding for the Defendants. Appx. at 185-193.

[¶ 15] On March 19, 2012, a Judgment was prepared and filed with the district court in accordance with the district court's Memorandum Opinion, dated January 18, 2012. Appx. at 194-195.

[¶ 16] No Notice of Entry of Judgment was ever served upon the Larson family or their counsel. See Appx. at A-H, 196-197.

[¶ 17] The Larson family timely took this appeal, by the filing of a Notice of Appeal dated and served on May 14, 2012. Appx. at 196-198. In their Notice of Appeal, the Larson family stated that they were appealing the District Court Order Denying Plaintiff's Motion for Judgment on the Pleadings, and, in the alternative, Motion for Summary Judgment, dated July 7, 2009, and the Memorandum Opinion dated January 18, 2012, together with the related Judgment, dated March 19, 2012. However, with the filing of this brief, the Larson family appeals only the Memorandum Opinion dated January 18, 2012, together with the related Judgment, dated March 19, 2012, arguing that the district court erred in quieting title in favor of the Defendants.

STATEMENT OF THE FACTS

[¶ 18] The central issues in this appeal arise out of the Larson family's mineral abandonment proceeding, taken pursuant to Chapter 38-18.1 of the North Dakota Century Code and the related effect, or lack thereof, of a Statement of Claim of Mineral Interests filed by the Defendants in Divide County, North Dakota. Indeed, for the most part, inasmuch as the facts surrounding the underlying mineral abandonment action are concerned, most of these facts are not subject to dispute.

[¶ 19] The undisputed facts relevant to the underlying mineral abandonment proceeding and trial on that matter are as follows:

[¶ 20] Loren Larson, Kathryn Lervick, and Renee Larson, at the commencement of the quiet title action(1)

, were the surface owners of certain real property located in Divide County, North Dakota, to wit:

In Divide County, North Dakota

Township 162 North, Range 99 West

Section 17: SE¼

[¶ 21] In 2006, the Larson family sought to reclaim 53.333 net mineral acres underlying the above-described property, by virtue of North Dakota Century Code Chapter 38-18.1, Termination of Mineral Interest. In doing so, the Larson family hired an attorney, Michel W. Stefonowicz, to investigate the possibility of a prospective mineral abandonment proceeding. The Larson family secured a Memorandum of Title for the SE¼ of Section 17-162-99 from Divide County Abstract Inc., a licensed abstract company located within Divide County, North Dakota.

[¶ 22] A review of the Memorandum of Title by counsel revealed that 53.333 net mineral acres under the description appeared of record to belong to Thelma Larson Norheim and Hans Norheim. The review of the Title Memorandum further revealed that the last title activity in the chain of title was appeared at Entry No. 5 under the heading "Mineral & Royalty Reservations and Conveyances", which was identified as a Claim of Mineral Interests executed by Thelma Larson Norheim, with the said Claim being dated June 11, 1985, in the Divide County Recorder's Office. Because this was the last entry with regard to the 53.333 mineral acres at issue, Mr. Stefonowicz testified that there was an apparent twenty-year period in the chain of title with no title activity as of 2006. Thus, counsel for the Larson family determined that there was a period of 20 or more years of inactivity in the chain of title with regard to the interests belonging of record to Thelma Larson Norheim and Hans Norheim as of 2006, and, therefore, a mineral abandonment proceeding with regard to these interests was ripe under Chapter 38-18.1.

[¶ 23] At the trial on the quiet title action, Attorney Stefonowicz testified that the Larson family authorized him to pursue a mineral abandonment proceeding based upon the appearance of the 20 years of inactivity with regard to the minerals at issue.

[¶ 24] Mr. Stefonowicz testified that prior to preparing the Notice of Lapse for the signatures of the Larson family and causing publication of the same, he had come to learn that both Thelma Larson Norheim and Hans Norheim were deceased. He testified that based upon this information, he checked the records of the Divide County Clerk of Clerk to look for any probate proceedings relating to either Hans or Thelma. He testified that he was unable to find any probate filings for the Estates of Hans Norheim and Thelma Larson Norheim in Divide County, North Dakota. He also testified that he had information that Hans and Thelma had, at least for a time, resided near Phoenix, Arizona, so he checked the court records in Maricopa County, Arizona, for any type of probate proceeding or filings for either Hans Norheim and Thelma Larson Norheim. He testified he could not find any probate filings in that county. He further testified that he learned of their prior address in Youngstown, Arizona, due to the address provided on the Claim of Mineral Interests in Entry No. 5 of Title Memorandum, and he checked for any probate filings in the county in which Youngstown, AZ was located. Again, he found nothing for Hans Norheim and Thelma Larson Norheim. He further testified that he conducted an internet search to look for information relating to Hans Norheim and Thelma Larson Norheim and any of their possible heirs. Again, he testified he could not find any information as a result of his internet search.

[¶ 25] After these inquiries, Mr. Stefonowicz prepared a Notice of Lapse of Mineral Interest that was signed by all of the Larson family surface owners, dated June 26, 2006, and he caused the same to be published in The Journal, which is the official newspaper of Divide County, North Dakota. He testified that the Notice was published for three consecutive weeks on June 28, 2006, July 5, 2006 and July 12, 2006. He testified, however, that he failed to timely mail the Notice of Lapse within the 10-day time frame required under the statute, explaining that the Notice had not been mailed until September 1, 2006. He testified that he believed this tardy mailing destroyed the mineral abandonment proceeding he had commenced. Mr. Stefonowicz testified that, due to the tardy mailing, he determined that he would have to begin another mineral abandonment proceeding in order to strictly comply with the mineral abandonment statute.

[¶ 26] He testified that in the time between the first imperfect mineral abandonment proceeding described above and the time at which he began the second proceeding (described immediately below), he did not receive any new information about Hans Norheim or Thelma Larson Norheim or any of their possible heirs.

[¶ 26] Mr. Stefonowicz testified that he then caused the Notice of Lapse of Mineral Interest, dated June 26, 2006, and to be re-published in The Journal, for three consecutive weeks. The re-publication dates were May 9, 2007, May 16, 2007 and May 23, 2007. He testified that the Notices and Affidavit of Mailings were timely mailed in this second mineral abandonment proceeding, with the mailing having been made to the last known addresses for Hans and Thelma, in Youngstown, Arizona, which he retrieved from Entry No. 5 of the Title Memorandum. He testified that the mailing of Notices occurred on May 25, 2007, in accordance with the 10-day time period required in the mineral abandonment statute. The Notice of Lapse, Affidavits of Publication (2006 and 2007) and Affidavits of Mailing (2006 and 2007) were admitted into evidence as Plaintiffs' Exhibit No. 5 at trial.

[¶ 28] Mr. Stefonowicz testified that after the three 2007 re-publications of the Notice of Lapse, he became aware that a Statement of Claim of Mineral Interest had been filed in the Office of the Divide County Recorder. He testified that the names listed on the Statement of Claim were: Birgit Norheim Oyen, Kjellaug Norheim, Harald Tettum, Inge Oyen and Olav Oyen. He testified that the Statement of Claim was executed only by Inge Oyen and Olav Oyen. He testified that none of the parties listed on the Statement of Claim appeared to be defined as an "owner's representative" on the face of the Claim itself. The recording information on the Statement of Claim provided that it was filed for record in the Divide County Recorder's Office on June 27, 2007. Thus, the Statement of Claim, executed only by Inge Oyen and Olav Oyen, was filed within the 60 days of the first 2007 publication - the first publication occurred on May 7, 2007, and the recording of the Statement of Claim occurred 49 days after the first publication, exclusive of the first day of publication.

[¶ 29] Mr. Stefonowicz testified that he prepared, signed, and filed for record an Affidavit of Lapse of Mineral Interest of Thelma Larson Norheim and Hans Norheim with regard to the SE¼ of 17-162-99. The Affidavit was dated the 31st day of July, 2007, and was filed for record August 1, 2007. The Affidavit was recorded with the Notice of Lapse of Mineral Interest, the 2007 Affidavit of Publication and the 2007 Affidavit of Mailing. These documents were filed for record in the Divide County Recorder's Office.

[¶ 30] Mr. Stefonowicz testified that based upon the apparent successful completion of the second (2007) mineral abandonment proceeding, he commenced a quiet title action on behalf of the Larson family.

[¶ 31] Mr. Stefonowicz testified that he later withdrew as counsel in the quiet title action and was replaced by the Larson family's current attorney of record. He further testified that after the filing of the quiet title action and after his resignation as counsel for the Larson family, he became aware of two probate proceedings that had been commenced in Divide County for the Estates of Thelma Larson Norheim and Hans Norheim. He became aware of these estate proceedings by virtue of legal publication in The Journal, the official newspaper of Divide County. The Orders of Intestacy and Determination of Heirs that issued in these estate proceedings were admitted into evidence at trial.

[¶ 32] The Order for the Estate of Thelma Larson Norheim provided that her sole heir was her surviving spouse, Hans Norheim. The Order in the Estate of Hans Norheim provided for multiple heirs; however, the only heir that appeared in the Order and the Statement of Claim of Mineral Interest was Birgit Norheim Oyen.(2) Based upon the information contained within the Order for the Estate of Hans Norheim and the Statement of Claim filed by Olav Oyen and Inge Oyen after the commencement mineral abandonment proceeding, Mr. Stefonowicz testified that "at best" it may have been possible that Birgit Norheim Oyen, as an heir of Hans Norheim, avoided the abandonment of the minerals she would have otherwise taken as an heir of Hans Norheim. He testified that based upon the contents of the Order in the Hans Norheim Estate, if Birgit Norheim Oyen did avoid the mineral abandonment by virtue of her name appearing on the face of the Statement of Claim, her share of the minerals at issue would have been one-third of the 53.333 that would have passed through the Hans Norheim Estate.

[¶ 33] After the testimony of Mr. Stefonowicz, the Plaintiffs' called Birgit Norheim Oyen, Kjellaug Norheim, Harald Tettum and Inge Oyen, whose names appeared on the Statement of Claim. For the sake of brevity in this brief, the testimony of Birgit Norheim Oyen, Kjellaug Norheim, Harald Tettum and Inge Oyen can be summarized by saying that the testimony of all of these parties appeared to consistently provide that Olav Oyen and Inge Oyen were the only individuals who actually signed the Statement of Claim, but Olav Oyen and Inge Oyen were "representing all of their family members" according to testimony. However, according to the testimony of these witnesses, this agency or representative agreement was never reduced to writing and no written evidence of this alleged agreement could be produced by any of the Defendants at trial.

[¶ 34] After the Larson family concluded their case at trial, the Defendants called several of the heirs of Thelma Larson Norheim and Hans Norheim, who testified about familial relationships and put various exhibits into evidence in support of the same. The testimony of these witnesses consistently provided that the parties named as heirs in the Orders for the Estates of Thelma Larson Norheim and Hans Norheim were correct.

[¶ 35] The Larson family stipulated in the Post-Trial Brief they filed following trial, that the Orders in the Estates of Thelma Larson Norheim and Hans Norheim correctly provided for the heirship in both estate proceedings and did not disagree with the lengthy testimony provided by the family members of Hans Norheim, but asserted in their Post-Trial Brief, as they continue to maintain on appeal, that heirship in this case, in light of other relevant facts, is largely irrelevant because this matter was tried as a quiet title action and not a contested probate proceeding .

[¶ 36] The witnesses called by the Defendants at trial also repeatedly testified that they were acting in various "representative" capacities with regard to parties that either did not appear on the Statement of Claim or parties who had not executed the Statement of Claim. That said, none of the Defendants' witnesses could testify with specificity as to when and where these alleged agreements were reached, what the specific terms of the "representative" agreements were, how long the agreements were to last, the duties of the alleged agents under the alleged agreements, and none of the witnesses produced any written documents establishing an agency relationship with regard to the parties that executed or appeared in the Statement of Claim as opposed to heirs of Hans Norheim who either did not appear on the Statement of Claim or heirs that never executed the Statement of Claim. Overwhelmingly, the witnesses testified that the alleged agreements allowing for various agreements for representative capacities were only verbal in nature. The only witness that testified that a written agreement existed was Harald Tettum, but he could not produce the alleged written agreement during trial, and he testified that the written agreement was only between he and his siblings and not the parties that actually executed the Statement of Claim, Olav and Inge Oyen.

[¶ 37] While the Defendants' witness testimony regarding heirship was thorough and enlightening on that front, it provided absolutely no evidence of a written agency relationship between Olav Oyen and Inge Oyen, the only two individuals that executed the Statement of Claim and the heirs of Hans Norheim as determined by the Order in Hans Norheim's estate proceeding.

[¶ 38] At the conclusion of trial, the district court directed counsel for both parties to file simultaneous post-trial briefs to provide the district court with what the parties perceived to be the applicable legal and factual arguments in this case. Both parties did so.

[¶ 39] The Larson family asserted in its post-trial briefing that the relevant issues for the district court's analysis in deciding the quiet title action included consideration of the multiple amendments to North Dakota's mineral abandonment statute, contained within Chapter 38-18.1. The Larson family asserted that the controlling version of the statute for the purposes of this case was N.D.C.C. § 38-18.1-02 (2004), or the the "pre-2007" version of this statute. In applying this statute, the Larson family further argued that: 1) the reasonable inquiry element of the statute was met by the Larson family, assuming that this particular statutory element was applicable in this case; 2) while the Statement of Claim was timely filed by certain named Defendants and/or their heirs or successors in this case, there was a question as to what effect, if any, the Statement of Claim had with regard to the mineral abandonment proceeding; 4) that a mineral abandonment proceeding necessarily provoked consideration of the type of real property interests that arise in the context of a mineral abandonment proceeding, which the Larson family argued was a reversionary interest in the parties against whom the abandonment is taken; 5) whether the Statement of Claim and the real property interest(s) involved in mineral abandonment proceeding would have invoked the applicability of a statute of frauds; and 6) what effect any applicable statute of frauds has with regard to the facts in this case.

[¶ 40] In the Defendants' post-trial briefing, the Defendants stipulated and agreed that the pre-2007 version of the mineral abandonment statute was applicable in this case. However, the Defendants argued that the reasonable inquiry element of the statute was applicable in this case and that the Larson family had failed to conduct a reasonable inquiry. The Defendants further argued that there was no reversionary interest in the context of a mineral abandonment action and that as a result, there was reason that the statute of frauds would apply.

[¶ 41] After reviewing the post-trial briefing of the parties, the district court issued a Memorandum Opinion, in which it determined that the Defendants were the rightful owners of the 53.333 acres at issue. Appx. at 184-193. In making this determination, the district court first found that "regardless of the year's statute we use, pre- or post-2007 . . . under the circumstances of this case, the statute should be read to require a 'reasonable inquiry'". Appx. at 185. The district court further found that the Larson family "did not satisfy that requirement." Appx. at 185. The district court found for the Defendants in determining that the "Defendants also complied with the statute sufficiently to keep the minerals from transferring to the Plaintiffs." Appx. at 185. Finally, the district court found that the Defendants were not provided proper notice in the mineral abandonment proceedings and that the action was flawed because Han Norheim and Thelma Larson Norheim were the "record owners", but that Hans Norheims heirs were the actual owners in light of various provisions of the North Dakota's probate code and notice and inquiry should have been directed to them. Appx. at 185-193.

[¶ 42] In its Memorandum Opinion, the district court did not address any of the legal arguments posed by the Larson family, including the nature of the real property interest at issue in a mineral abandonment proceeding (i.e., a reversionary interest) or whether or not the Statement of Claim was flawed or of limited or no effect due to the statute of frauds. The Order is totally devoid of any finding or conclusion to this end.

[¶ 43] Ultimately, Judgment issued on March 19, 2012, finding for the Defendants and incorporating the Memorandum Opinion as the district court's findings of facts and conclusions of law.

LAW AND ARGUMENT

[¶ 44] The district court had jurisdiction for the quite title proceeding under N.D. Const. art. VI, § 8, and 27-05-06. See also Melchior v. Lystad, 2010 ND 140, ¶ 6, 786 N.W.2d 8.

[¶ 45] The Defendants timely filed this appeal under N.D.R.App.P. 4, because no Notice of Entry of Judgment was ever filed or served upon the Larson family. Because no Notice of Entry of Judgment was served upon the Larson family, the provisions of N.D.R.Civ.P. 58(b) becomes relevant to determining the timeliness of this appeal. The relevant portion of this Rule reads:

"Service of notice of entry of judgment is not required to begin the time for filing a post-judgment motion or appeal if the record clearly evidences actual knowledge of entry of judgment through the affirmative action of the moving or appealing party."

N.D.R.Civ.P. 58(b). In this case, prior to the filing of the Notice of Appeal, there is nothing in the record that demonstrates that the Larson family was aware of the filing of the Judgment, except the filing of the Notice of Appeal, dated May 14, 2012, which in and of itself constitutes affirmative action on the part of the Larson family, making this appeal both ripe and timely.

[¶ 46] This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. 28-27-01. See also Melchior v. Lystad, at ¶ 6.

I. STANDARD OF REVIEW

[¶ 47] This appeal involves both questions of law and questions of fact. The Larson family appeals the district court's Memorandum Opinion and Judgment, alleging the district court erred in quieting title in favor of the Defendants and against the Larson family because: 1) the district court erred as a matter of law when it determined that it was irrelevant to consider whether the pre- or post-2007 version of Section 38-18.1-06, N.D.C.C., should be applied in this case and found that "under the circumstances and the facts of this case, the statute should be read to require a 'reasonable inquiry'"; 2) district court erred as a matter of law when it implicitly determined that the interest subject to the mineral abandonment or lapse proceeding did not constitute a "reversion" in real property as the term is defined in Section 47-04-09,N.D.C.C., and further erred as a matter of law in implicitly determining that the statute of frauds, contained in Section 47-10-01, N.D.C.C., was inapplicable to this case, and thus, the Defendant's Statement of Claim was adequate to prevent the lapse of the mineral interests at issue; and 3) the weight of the evidence does not support the order of the district court in light of the above listed errors.

[¶ 48] The questions of law before this Court are whether the district court improperly determined that it was irrelevant to consider which version of 38-18.1-06, N.D.C.C, applied in this case and whether the district court erred in determining that under either version of the statute, the Larson family "should" have been required to engage in a reasonable inquiry. Additionally, there is a question of law as to what type of real property interests are involved in a mineral abandonment proceeding, such as reversionary interests, and, relatedly, whether the statute of frauds comes into play as a result of those real property interests. Next, there is a question as to whether various provisions of the probate code affect the statute involving a mineral lapse proceeding, and, if so, in what manner.

[¶ 49] "Interpretation of a statute is a question of law, fully reviewable on appeal." Sorenson v. Felton, 2011 ND 33, ¶ 8, 793 N.W.2d 799 (quoting Wheeler v. Gardner, 2006 ND 24, ¶ 10, 708 N.W.2d 908).

[¶ 50] Factual findings made by a trial court, however, are reviewed under the clearly erroneous standard set forth in N.D.R.Civ.P. 52(a). Piatz v. Austin Mutual Ins. Co., 2002 ND 115, ¶ 24, 646 N.W.2d 681 (citing Auction Effertz, Ltd. v. Schecher, 2000 ND 109, ¶ 10, 611 N.W.2d 173). "A trial court's findings of fact on appeal are presumed to be correct, and the complaining party bears the burden of demonstrating a finding is clearly erroneous." Piatz v. Austin Mutual Ins. Co., at ¶ 24 (citing State ex rel. Heitkamp v. Family Life Servs., 2000 ND 166, ¶ 19, 616 N.W.2d 826). Findings of fact are not clearly erroneous if the fact has support in the evidence, and this Court is "not left with a definite and firm conviction a mistake has been made." Piatz v. Austin Mutual Ins. Co., at ¶ 24 (citations omitted). Moreover, in the context of a bench trial, this Court has explained:

"In a bench trial, the trial court is 'the determiner of credibility issues and we do not second-guess the trial court on its credibility determinations.' We do not reweigh evidence or reassess credibility, nor do we reexamine findings of fact made upon conflicting testimony. We give due regard to the trial court's opportunity to assess the credibility of the witnesses, and the court's choice between two permissible views of the evidence is not clearly erroneous."

Piatz v. Austin Mutual Ins. Co., at ¶ 24 (quoting Estate of Howser, 2002 ND 33, ¶ 10, 639 N.W.2d 485).

[¶ 51] Finally, there is a possible mixed question of law and fact in determining whether the Larson family engaged in a reasonable inquiry, assuming that this Court reaches the conclusion that reasonable inquiry was required on the part of the Larson family at all.

[¶ 52] "The conclusion as to whether the facts meet the legal standard" is also a question of law that is fully reviewable on appeal. Dettler v. Sprynczynatyk, 2004 ND 54, ¶ 10 676 N.W.2d 799 (Citation omitted). Here, the legal standard would be the "reasonable inquiry" requirement, if such a statutory requirement exists in this case.

II. THE DISTRICT COURT ERRED IN DETERMINING THAT THE LARSON FAMILY HAD A STATUTORY REQUIREMENT TO ENGAGE IN REASONABLE INQUIRY, AND, EVEN IF SUCH A REQUIREMENT EXISTS UNDER THE STATUTE, THIS STATUTORY ELEMENT WAS MET

[¶ 53] Following the trial, the district court, in its Memorandum Opinion, dated January 18, 2012, stated:

"First, regardless of the year's statute we use, pre- or post- 2007, I find that under the circumstances and the facts of this case, the statute should be read to require a 'reasonable inquiry.' I further find that the Plaintiffs did not satisfy that requirement. "

Appx. at 185 (Emphasis added).

[¶ 54] With regard to the applicable mineral abandonment statute in this case, a review of the North Dakota Supreme Court opinion in Sorenson v. Feldon, 2011 ND 33, ¶ 9, 793 N.W.2d 799, is instructive:

"Chapter 38-18.1, N.D.C.C., provides the procedure for a surface owner to succeed to the ownership of an abandoned mineral interest under his land. Section 38-18.1-06, N.D.C.C., was amended effective August 1, 2007 and August 1, 2009. The amendments do not affect this case because the abandonment proceedings occurred before the 2007 amendment went into effect. The quiet title action was commenced before the 2009 amendments became effective. Neither the 2007 nor the 2009 amendments were made retroactive. See N.D.C.C. § 1-02-10 ("No part of this code is retroactive unless it is expressly declared to be so."); White v. Altru Health Sys., 2008 ND 48, ¶ 17, 746 N.W.2d 173 (stating the Legislature is required to give explicit notice if a statute is to apply retroactively)."

(Emphasis added).

[¶ 55] Like the facts in Sorenson v. Feldon, in the instant case, the mineral abandonment proceeding at issue here was commenced by publication of the Notice of Lapse of Mineral Interest signed by the Larson family surface owners, dated June 26, 2006, and published in The Journal, for three consecutive weeks, on May 9, 2007, May 16, 2007 and May 23, 2007. Thereafter, the undisputed evidence presented at trial shows that the recording information on the Statement of Claim provides that it was filed for record in the Divide County Recorder's Office on June 27, 2007, as Document No. 237470. Additionally, the Affidavit of Lapse of Mineral Interest of Thelma Larson Norheim and Hans Norheim with regard to the SE¼ of 17-162-99 was dated the 31st day of July, 2007, and was filed for record August 1, 2007 in the Divide County Recorder's Office. Thus, the same statute applied in the Sorenson v. Feldon, the pre-2007 version of the statute, applies in the instant case because the lapse of the mineral interests occurs at the first publication, the 2007 and 2009 statutes "were not made retroactive" and the quiet title action now subject to this appeal was commenced prior to the 2007 and 2009 statutes, making the 2004 version of the statute controlling in this case. Sorenson v. Feldon, at ¶¶ 9, 10.

[¶ 56] Therefore, the first finding of fact and conclusion of law made by the district court was incorrect as a matter of law and the applicable statute in this case reads as follows:

"Any mineral interest is, if unused for a period of twenty years immediately preceding the first publication of the notice required by section 38-18.1-06, deemed to be abandoned, unless a statement of claim is recorded in accordance with section 38-18.1-04. Title to the abandoned mineral interest vests in the owner or owners of the surface estate in the land in or under which the mineral interest is located on the date of abandonment."

Sorenson v. Feldon, at ¶ 10 (citing N.D.C.C. § 38-18.1-02 (2004) and providing that this is the applicable statute to be considered based upon the time the mineral abandonment proceeding was taken). Therefore, contrary to the district court's assertion that it did not matter which statute was used, it is clear that the "pre-2007", or 2004 mineral abandonment statute, was the controlling statute in this case.

[¶ 57] Had the 2004 version of the statute been properly considered and applied by the district court, per the Sorenson v. Feldon opinion discussed above, it becomes clear based upon the undisputed evidence presented at trial that the Larson family met each and every element of the mineral abandonment statute and the Larson family should have prevailed in the quiet title action at least with regard to a portion of the minerals at issue.

[¶ 58] The undisputed evidence remitted during the course of the trial makes clear that each statutory element was met. First, it is clear that the individuals who comprise the Larson family were the record owners of the surface fee of the subject property at the time the mineral abandonment proceeding was commenced. This element of the applicable statute was met; the Larson family members were the surface owners of the land at issue and thus had standing to cause a mineral abandonment proceeding to be commenced.

[¶ 59] Next, the undisputed evidence at trial provided that prior to executing and publishing the Notice of Lapse of Mineral Interest, the Larson family, through their then-attorney, secured the Title Memorandum for the SE¼ of 17-162-99. Mr. Stefonowicz testified at trial that he was able to determine after the review of the Title Memorandum, that one-third (1/3), or 53.333 net acres, of the mineral interests under the SE¼ of 17-162-99 appeared of record to belong to Thelma Larson Norheim and/or Hans Norheim. This factual assertion was undisputed as well. Mr. Stefonowicz further testified at trial that his review of the Title Memorandum led to the conclusion that there was lapse in or absence of title activity with regard to these 53.333 acres for a period of twenty or more years at the time of his review and at the commencement of the mineral lapse proceeding. He testified that this conclusion was based upon Entry No. 5 under the heading "Mineral & Royalty Reservations and Conveyances" in the Title Memorandum. Entry No. 5 was identified as a Claim of Mineral Interests executed by Thelma Larson Norheim, with the said Claim being dated June 11, 1985, and having been filed for record on June 18, 1985. Because this was the last entry with regard to the 53.333 mineral acres at issue, Mr. Stefonowicz testified that there was an apparent twenty-year period in the chain of title with no title activity as of the second 2007 mineral abandonment proceeding. Therefore, this element of the applicable statute was met in that the Title Memorandum showed that the 53.333 net mineral acres at issue in the quiet title action were ripe for abandonment when the second mineral abandonment proceeding in 2007 was taken.

[¶ 60] As to the next element of the statute, reasonable inquiry versus mailing to the record address of prior mineral owners, again, a review of Sorenson v. Feldon, 2011 ND 33, 793 N.W.2d 799, is controlling. In that case, Plaintiff Sorenson argued that the district court erred by finding the pre-2007 version of section 38-18.1-06, N.D.C.C., required a surface owner to conduct a reasonable inquiry for the mineral owner's address even when an address appears of record. Sorenson v. Feldon, 2011 ND 33, ¶ 7. Defendant Felton argued that the surface owner under the statute was required to conduct a reasonable inquiry irrespective of whether the mineral owner's address appeared of record. Id. This Court held that under the applicable pre-2007 statute:

"The words 'shown of record' and 'determined upon reasonable inquiry' relate to separate and alternative considerations for how a surface owner is to obtain the mineral owner's address for mailing the notice. N.D.C.C. § 38-18.1-06(2) (2004). These phrases have independent legal significance because each requires different conduct based on the information available to the surface owner. Therefore, we conclude the word 'or' is disjunctive as used in section 38-18.1-06(2). N.D.C.C. § 38-18.1-06(2) (2004).

Under our construction, Sorenson [the Plaintiff and surface owner] was required to conduct a reasonable inquiry only if Felton's [the prior mineral owner] address was not shown of record. . . ."

Sorenson v. Feldon, 2011 ND 33, ¶¶ 13-14 (emphasis and alterations added).

[¶ 61] At trial, Mr. Stefonowicz testified that in conducting the mineral abandonment proceeding, which formed the basis of the quiet title action at issue in this appeal, he did mail to the last address of record for the prior record owners, Thelma Larson Norheim and Hans Norheim, which was retrieved from the Title Memorandum's Entry No. 5, the Claim of Mineral Interests. According to this Court's holding in Sorenson v. Feldon, this act was sufficient to meet this element of the applicable statute.

[¶ 62] For these reasons, the district court erred in determining that "regardless of the year's statute we use . . . , the statute should be read to require a 'reasonable inquiry'" and, in turn, erred in finding that the Larson family did not meet the statute's requirements. Therefore, the Judgment of the district court should be reversed, and the matter should be remanded for a district court ruling consistent with the statute as it actually exists.

[¶ 63] That said, even if this Court were to determine that Sorenson v. Feldon is not controlling in the case at bar, the undisputed evidence remitted to the district court at trial provides that the Larson family, by and through their then-counsel, did engage in a reasonable inquiry. Mr. Stefonowicz testified that even though the last known address for Hans Norheim and Thelma Larson Norheim appeared of record in the Claim of Mineral Interests, he still conducted a reasonable inquiry because he had come to learn that both Thelma Larson Norheim and Hans Norheim were deceased. Based upon this information, he testified that he checked the records of the Divide County Clerk of Court to look for any probate proceedings relating to either Hans Norheim or Thelma Larson Norheim. He testified that he was unable to find any probate filings for Hans Norheim or Thelma Larson Norheim in Divide County. He also testified he had information that Hans Norheim and Thelma Larson Norheim had, at least for a time, resided near Phoenix, Arizona, so he checked the court records in Maricopa County, Arizona, for any type of probate proceeding or filings for either Thelma Larson Norheim or Hans Norheim. He testified he could not find any probate filings for either of them in Maricopa County, Arizona. He further testified that he learned of their prior address in Youngstown, Arizona, due to the address provided on the Claim of Mineral Interests in Entry No. 5 of Title Memorandum, and he checked for any probate filings in the county in which Youngstown was located. Again, he found nothing for Hans Norheim or Thelma Larson Norheim in that county. He further testified that he conducted an internet search to look for information relating to Hans Norheim or Thelma Larson Norheim and any of their possible heirs. Again, he testified he could not find any information. For all of these reasons, even if there was a statutory requirement to engage in a reasonable inquiry, despite that fact that the last known address of Hans Norheim or Thelma Larson Norheim appeared of record, this element of the statute was met according to the holding in Sorenson v. Feldon, and the Defendants did not present any evidence to the contrary at trial.

[¶ 64] In this vein, it is noted that the district court found that "[w]hile the lawyer for the Plaintiffs may have done a reasonable effort [to locate the owners of the interests at issue], the parties themselves are responsible for the inquiry." Appx. at 189. The district court further found that "the lawyer [for the Larson family] was hindered by the lack of information provided by his clients." Appx. at 189. The district court further found that:

"In this matter, we are not dealing with unknown strangers. The Plaintiff was a nephew of the Norheims and is related to the Defendants. The Plaintiffs had visited their common ancestor's home in Norway.

One of the Defendants had actually stayed as a guest at the Plaintiffs home when she was a teenager.

. . . . I can attribute no innocent motive to Plaintiffs' silence and do not feel that they should be able to profit from their actions, or rather lack thereof.

The Defendants could have been found by Plaintiffs. Indeed, the Defendants were able to be located by a complete stranger . . . .

The duties required by statute, to make reasonable inquiry, are the duties of the parties, not just counsel. By withholding relevant, necessary information, the Plaintiffs handicapped their counsel. What might have been reasonable for a stranger was not reasonable for these Plaintiffs."

Appx. at 189-190.

[¶ 65] In reviewing the findings and conclusions of the district court, a review of Rule 52(a) of the North Dakota Rules of Civil Procedure is necessary; Rule 52(a), N.D.R.Civ.P., provides, in part:

"In an action tried on the facts without a jury or with an advisory jury, the court must find the facts specially and state its conclusions of law separately. The findings and conclusions may be stated on the record after the close of the evidence or may appear in an opinion or a memorandum of decision filed by the court."

[¶ 66] With regard to the specific findings and conclusions made under Rule 52(a), this Court has further explained:

Piatz v. Austin Mutual Ins. Co., at ¶ 24 (quoting Estate of Howser, 2002 ND 33, ¶ 10, 639 N.W.2d 485). However, the clearly erroneous standard for findings is met when:

"'[A]lthough there is some evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been made.' See, e.g., Mehus v. Mehus, 278 N.W.2d 625 (N.D. 1979). We have also said that in applying this rule this court gives great weight to findings and inferences of the trial court, and will set them aside only if they are found to be clearly erroneous based upon all the evidence, and not merely because the appeals court might have reached a different result. See, e.g., Kee v. Redlin, 203 N.W.2d 423 (N.D. 1972).

Anderson v. Mooney, 279 N.W.2d 423, 426 (N.D. 1979).

[¶ 67] In the instant case, even ignoring the issues with regard to the interpretation of the statute itself, after reviewing all of the evidence, this Court can only reach the firm and definite conclusion that a mistake was made by the district court in finding that the Larson family somehow hampered and prevented the possibility of a reasonable inquiry, which was clearly taken by their attorney.

[¶ 68] The findings by the district court are absolutely contrary to the evidence presented at trial and these findings grossly misrepresent the testimony Loren Larson, who was the only witness who testified as to this particular issue. Mr. Larson testified, emphatically, that he did not know Hans Norheim's relatives. Trial Trans. at 237-245. Indeed, when asked, under oath at trial, if he knew any of the Defendants, Mr. Larson stated "No". Trial Trans. at 238. When asked if he had ever heard of any of the Defendants, Mr. Larson testified he had not. Trial Trans. at 238. When asked if his father had ever been to Norway to meet relatives, Mr. Larson testified that when his father was five years old, his father had visited Norway and that his father had visited Norway in 1976. Trial Trans. at 243-244. Mr. Larson testified that in 1976, he had traveled to Norway with his father, but that he and his father had not met with or visited any of Hans Norheim's family and that Thelma Larson Norheim was not in Norway at the time he was there in 1976, so Mr. Larson had not met Thelma Larson Norheim in Norway either. Trial Trans. at 244-245. Based upon the testimony of Loren Larson, who was the only witness to testify on this point, there is absolutely no evidence that the Defendants were more than mere strangers to him, and there was no evidence that he "withheld" any relevant or helpful information from his then-counsel for the purposes of conducting a reasonable inquiry. Thus, this finding by the district court, while likely totally irrelevant in the face of the controlling statute, is against the weight of the evidence. For these reasons, the Judgment of the district court should be reversed.

III. THE DISTRICT COURT ERRED AS A MATTER OF LAW WHEN IT FAILED TO ADDRESS WHETHER A MINERAL ABANDONMENT PROCEEDING NECESSARILY CREATES A REVERSIONARY INTEREST IN REAL PROPERTY AND FURTHER ERRED AS A MATTER OF LAW IN FINDING THAT THE DEFENDANTS' STATEMENT OF CLAIM WAS ADEQUATE TO PREVENT THE LAPSE OF THE MINERAL INTERESTS AT ISSUE

[¶ 69] At the close of trial, the Larson family argued that the issue in this case, at its core, boiled down to the validity of the Statement of Claim, which was executed by only two of the named Defendants, Inge Oyen and Olav Oyen, neither of whom were heirs to the Estate of Hans Norheim, according the Order that issued in Hans Norheim's estate proceeding. Trial Trans. at 292-307. The issue of the questionable validity of the Statement of Claim was further presented to the district court in the Larson family principal and rebuttal post-trial briefs. Apps. At 140-184.

[¶ 70] Strangely, the district court, in its Memorandum Opinion, did not speak to the real property interests involved in a mineral abandonment proceeding or the possible application of a statute of frauds. The only reference that the district court made with regard to the Statement of Claim, was that "though the Defendants' document did not have the exact language and signatures that we would have liked to have seen, the Defendants did preserve their interest by the filing of their notice." Appx. at 190. Aside from this statement in the Memorandum Opinion, the district court completely failed to address that Larson family's arguments as to the nature of the real property interests involved and whether these interests invoked the application of a statute of frauds. Thus, the Court erred as a matter of law in finding the Defendants' Statement of Claim to be adequate, because the Statement of Claim does, indeed, violate the statute of frauds relevant to this case.

[¶ 71] The evidence at trial showed that a Statement of Claim was filed for record in the Divide County Recorder's Office on June 27, 2007. The Statement of Claim was filed within the 60 days of the first 2007 publication - the first publication occurred on May 7, 2007, and the recording of the Statement of Claim occurred 49 days after the first publication, exclusive of the first day of publication. Therefore, under the mineral abandonment statute, and without considering any applicable statute of frauds, it can be argued that the abandoned mineral interest abandoned in favor of the Larsons reverted back, in part, to one of the heirs of Hans Norheim, namely, Birgit Norheim Oyen, who appeared on the face of the Statement of Claim and in the Order for the Hans Norheim Estate. However, as the Plaintiffs argued in their closing statement at trial, there is, indeed, an applicable statute of frauds that prevents this conclusion due to the fact that the mineral abandonment statute creates a reversionary interest in real property by operation of law for sixty days following the first publication of the Notice of Lapse of Mineral Interest. Therefore, further consideration must be given as to what effect, if any, the Statement of Claim had in this case.

[¶ 72] In analyzing this inquiry, is important to note that a "mineral interest [i]s abandoned as of the date of first publication" of the Notice of Lapse. Johnson v. Taliaferro, 2011 ND 34, ¶ 13, 793 N.W.2d 804 (citing N.D.C.C. § 38-18.1-02 (2004)). Further, "[t]itle to the abandoned mineral interest vests in the owner or owners of the surface estate in the land in or under which the mineral interest is located on the date of abandonment." Id. (alterations in original).

[¶ 73] According to the relevant case law, at the first publication, on May 9, 2007, the Larson family surface owners became the owners of the mineral interests subject to the abandonment proceeding. However, by operation of the 2004 version of N.D.C.C. 38-18.1-04, a reversionary real property interest is created in the prior record owner of the mineral interest for a period of sixty days following the first publication. The North Dakota Century Code, at Section 47-04-09, defines the specific estate of a reversionary interest in real property as follows:

"Reversion defined. A reversion is the residue of an estate left by operation of law in the grantor or the grantor's successors or in the successors of a testator commencing in possession on the determination of a particular estate granted or devised."

(Emphasis added).

[¶ 74] Based upon the contents of the relevant mineral abandonment statute at Chapter 38-18.1 and a consideration of the statute quoted immediately above at N.D.C.C. 47-04-09, it is clear that the mineral abandonment statute creates a reversionary real property interest in the prior record owners of the mineral interest, or their heirs, for a period of sixty days following the first publication. This analysis is correct based upon the fact that the "mineral interest [i]s abandoned as of the date of first publication" and "[t]itle to the abandoned mineral interest vests in the owner or owners of the surface estate in the land in or under which the mineral interest is located on the date of abandonment", but for a period of sixty days after first publication, the interest can revert back to the prior record owners or their heirs by the proper filing of a Statement of Claim in accordance with N.D.C.C. 38-18.1-04. Thus, the mineral abandonment statute meets the definition of reversion in real property, in favor of the prior record mineral owners, under the definition of reversion as stated in N.D.C.C. 47-04-09. A reversion is a real property interest, and, thus, any transfer of the same must be completed according to the relevant statute of frauds.

[¶ 75] The relevant statute of frauds in this context can be found at N.D.C.C. 47-10-01, and reads as follows:

"Method of transfer. An estate in real property, other than an estate at will or for a term not exceeding one year, can be transferred only by operation of law or by an instrument in writing, subscribed by the party disposing of the same or by the party's agent thereunto authorized by writing. This does not abridge the power of any court to compel the specific performance of any agreement for the sale of real property in case of part performance thereof."

(Emphasis added). The above-quoted statute of frauds causes the Defendants' Statement of Claim to fail under the facts of this case. The reasons that the Statement of Claim failed to preserve any of the mineral interests subject to abandonment, including the interest that would have otherwise reverted to Birgit Norheim Oyen, is because only two individuals, who were not determined to be heirs of Hans Norheim, Olav Oyen and Inge Oyen, actually executed the Statement of Claim. The existence of the signatures of only Olav Oyen and Inge Oyen on the Statement of Claim does not meet the requirements of the statute of frauds above because there is no evidence that they were "authorized by writing" to act as agents for the "whole family", as they testified at trial. See N.D.C.C 47-10-01. Because of the total absence of any agreement in writing, that would have allowed Olav Oyen and Inge Oyen to act as agents for the heirs of Thelma and Hans Norheim, the "estate in real property" (i.e., the reversionary interest created under N.D.C.C. 38-18.1-04) was not transferred back to the heirs by an "instrument in writing" (i.e., the Statement of Claim) because there was no evidence, presented at trial or filed for record with the Statement of Claim, that the heirs' alleged agents, Olav Oyen and Inge Oyen, were "authorized by writing" to act as agents in executing the Statement of Claim.

[¶ 76] For these reasons, the Statement of Claim at issue in this case, which was signed only by Olav Oyen and Inge Oyen, did not properly transfer the reversionary interest or permit the minerals to revert back to the heir of Hans Norheim, Birgit Norheim Oyen, named in the Statement of Claim.

[¶ 77] The final step in this mineral abandonment proceeding was completed when the Affidavit of Lapse of Mineral Interest of Thelma Larson Norheim and Hans Norheim, dated the 31st day of July, 2007, and was filed for record August 1, 2007 in the Divide County Recorder's Office. The Affidavit was recorded with the Notice of Lapse of Mineral Interest, the 2007 Affidavit of Publication and the 2007 Affidavit of Mailing.

[¶ 78] Based upon the analysis above, it is clear that the Larson family surface owners successfully abandoned the minerals formerly belonging to Thelma Larson Norheim and Hans Norheim by meeting each and every element of the applicable 2004 mineral abandonment statute. Further, it is clear that the Statement of Claim failed to permit the reversionary interest to vest in the only one of Hans Norheim's heirs named in the Statement of Claim, Birgit Norheim Oyen, because only Olav Oyen and Inge Oyen signed the Statement of Claim and there is no evidence that a written agreement between Birgit Norheim Oyen and Olav and Inge Oyen exists, authorizing Olav and Inge Oyen to act as agents for Birgit Norheim Oyen. Thus, the district court erred as a matter of law when it determined that the Statement of Claim was sufficient to prevent title to the minerals from vesting in the Larson family.

[¶ 79] Therefore, the Judgment of the district court should be reversed and this matter should be remanded for further proceedings consistent with this analysis.

CONCLUSION

[¶ 80] The district court erred in determining that the Larson family had a statutory requirement to engage in reasonable inquiry under Section 38-18.1-06, N.D.C.C., and, even if such a requirement exists under the statute, this statutory element was met by the Larson family; the district court further erred when it failed to address whether a mineral abandonment proceeding necessarily creates a reversionary interest in real property and found the Defendants' Statement of Claim was adequate to prevent the lapse of the mineral interests at issue, and, therefore, the Larson family respectfully requests this court reverse the district court Judgment and remand this matter for further proceedings consistent with a correct applicable of the controlling law.

Dated this ____ day of November, 2012.
Respectfully Submitted:
ELIZABETH L. PENDLAY (ID# 06372)
Attorney for Plaintiffs-Appellants
206 N. Main Street
P.O. Box 289
Crosby, North Dakota 58730
Tel. (701) 965-6036
Fax (701) 965-6428
ependlaysteflaw

1. At the outset of the underlying mineral abandonment proceeding, Rodella Larson was a life tenant in the surface fee of the property at issue and the remaindermen at that time were Loren R. Larson, Kathryn L. Lervick and Renee L. Larson. According to the testimony of Loren R. Larson and Michel W. Stefonowicz, life tenant, Rodella Larson passed away prior to the commencement of this quiet title action, thus extinguishing her life tenancy, and vesting full ownership of the surface fee in Loren R. Larson, Kathryn L. Lervick and Renee L. Larson. Therefore, Loren R. Larson, Kathryn L. Lervick and Renee L. Larson are the named Plaintiffs in this action and Rodella Larson was not included as a named Plaintiff in the quiet title action, although she was participatory in the underlying mineral abandonment proceeding.

2. It is noted, again, that while the name "Birgit Norheim Oyen" appeared on the face of the Statement of Claim of Mineral Interest, Birgit did not execute the recorded Statement of Claim; indeed, the only parties who signed the Statement of Claim were Inge Oyen and Olav Oyen, who were determined to be the children of Birgit Norheim Oyen through testimony given at trial.

Elizabeth L. Pendlay (ID# 06372)
Attorney for Plaintiffs-Appellants
206 N. Main Street, P.O. Box 289
Crosby, North Dakota 58730
Tel. (701) 965-6036

Dated this ____ day of November, 2012.
Respectfully Submitted:
						ELIZABETH L. PENDLAY (ID# 06372)
						Attorney for Plaintiffs-Appellants
						206 N. Main Street
P.O. Box 289
						Crosby, North Dakota 58730
						Tel. (701) 965-6036
						Fax (701) 965-6428
						ependlaysteflaw