Case Title: TUCKER v. SPECIAL ENERGY CORP.

Citation: 

Docket Number: 104464

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2008-06-17T00:00:00Z

Document:
TUCKER v. SPECIAL ENERGY CORP.  TUCKER v. SPECIAL ENERGY CORP. 2008 OK 57 187 P.3d 730 Case Number: 104464 Decided: 06/17/2008 THE SUPREME COURT OF THE STATE OF OKLAHOMA Don W. Tucker and Joseph H. Taft, Plaintiffs/Appellants, v. Special Energy Corp.; DPC Corp.; The Estate of Michael L. Ross, Deceased; Special Exploration Co., Inc.; SCM Development, L.L.C.; G&C Petroleum, Inc.; New Dominion, L.L.C.; Azar Minerals, Ltd.; DBS Investments, Ltd.; GBC Minerals, Ltd.; William L. Knobles; Resource Exploration & Development, Inc.; Krishna Family, L.L.C.; W. K. Chernicky, L.L.C.; The McDaniel Company, Inc.; Milagro Resources, Inc.; David J. Chernicky; Joseph D. Corpening; Alan W. Stracke; Chernico Exploration, Inc.; Sandra M. L. Watt; Kimberly A. Harper; Janett L. Gunzenheiser; Thomas C. Chernicky; Donald P. Chernicky; Gill Family Investments, Inc.; and David J. Chernicky Trust, Defendants/Appellees. CERTIORARI TO COURT OF CIVIL APPEALS DIVISION IV ¶0 Plaintiffs appealed from the dismissal of their lawsuit to quiet title to a mineral interest and obtain an accounting. The district court concluded that the lawsuit was an impermissible collateral attack on an order of the Oklahoma Corporation Commission and the Court of Civil Appeals affirmed. We hold that Plaintiffs' claim is not a collateral attack and that the district court erred in dismissing the lawsuit. COURT OF CIVIL APPEALS' OPINION VACATED; DISTRICT COURT'S JUDGMENT REVERSED; AND MATTER REMANDED FOR FURTHER PROCEEDINGS. Charles B. Davis; Norman, Oklahoma; for Plaintiffs/Appellants. Elizabeth C. Nichols; Elias, Books, Brown & Nelson, P.C.; Oklahoma City, Oklahoma; for Defendants/Appellees DPC Corporation; The Estate of Michael L. Ross, Deceased; New Dominion, L.L.C.; W. K. Chernicky, L.L.C.; David J. Chernicky; Chernico Exploration, Inc.; Sandra M. L. Watt; Kimberly A. Harper; Janett L. Gunzenheiser; Thomas C. Chernicky; Donald P. Chernicky; and David J. Chernicky Trust. Andrew J. Waldron; Walker & Walker; Oklahoma City, Oklahoma; for Defendants/Appellants Special Energy Corp.; Special Exploration Co., Inc.; SCM Development, L.L.C.; G&C Petroleum, Inc.; Azar Minerals, Ltd.; DBS Investments, Ltd.; GBC Minerals, Ltd.; William L. Knobles; Resource Exploration & Development, Inc.; Krishna Family, L.L.C.; The McDaniel Company, Inc.; Milagro Resources, Inc.; Joseph D. Corpening; Alan W. Stracke; and Gill Family Investments, Inc. COLBERT, J.: ¶1 Plaintiffs have appealed from an order of the district court dismissing their lawsuit to quiet title to a mineral interest and seeking an accounting of funds placed in escrow for their predecessor-in-title. The district court concluded that the lawsuit was an impermissible collateral attack on an order of the Oklahoma Corporation Commission. The Court of Civil Appeals affirmed. On certiorari, we conclude that Plaintiffs' claim is not an impermissible collateral attack on a Commission order, as the remedy they seek is not within the Commission's jurisdiction. BACKGROUND ¶2 William Howard Taft died intestate in 1958, survived by his wife, Hazel L. Taft, and two sons, including Joseph H. Taft, one of the plaintiffs in this matter. At the time of his death, W.H. Taft held the mineral rights to several acres in Lincoln County. His widow and one son subsequently died. Joseph Taft contends he is the sole heir to the mineral rights to 3.33 acres in Lincoln County. ¶3 On July 20, 1998, DPC Corporation filed an application with the Commission to forcibly pool a 160-acre drilling and spacing unit in Lincoln County. The proposed unit included the property in which W.H. Taft had held an interest. DPC listed W.H. Taft, deceased, and Hazel L. Taft as respondents, but provided no address for either. On August 11, 1998, the Commission entered an order (1998 Pooling Order) force pooling the unit. The Commission found that DPC had exercised due diligence to locate each respondent and required DPC to escrow any funds payable to those respondents who could not be located. ¶4 On June 23, 2005, Don Tucker filed an amended application with the Commission, asking it to "construe, clarify and vacate" the 1998 Pooling Order. According to the September 1, 2005, report of the administrative law judge (ALJ), Tucker is a landman who searched for the heirs of W.H. Taft and obtained an agreement with Joseph Taft to attempt to recover the funds DPC had placed in escrow. The ALJ concluded that the notice given in the 1998 matter was sufficient and that, because Joseph Taft was not a record owner in 1998, he would not have been a proper party. The ALJ also concluded that Tucker's application was an impermissible collateral attack on the 1998 Pooling Order. ¶5 DPC also refused to accept Joseph Taft's claim to the funds escrowed for W.H. Taft's interest. In an effort to obtain those funds, Tucker and Taft filed this action in district court seeking an order "determining and quieting title" in Tucker's leasehold interest and Taft's mineral interest as well as an accounting of the proceeds from the production of minerals attributable to those interests. Defendants are DPC and the other participants/owners in the production unit. ¶6 Defendants filed motions to dismiss, each asserting that Plaintiffs' action constituted a collateral attack on the 1998 Pooling Order. STANDARD OF REVIEW ¶7 Because Defendants' motions to dismiss included evidentiary materials, they should have been treated as motions for summary judgment. Okla. Stat. tit. 12, § 2012(B) (Supp. 2007). In their motions, Defendants asserted that Plaintiffs failed to state a claim for which relief could be granted. Id. § 2012(B)(6). "A pleading must not be dismissed for failure to state a legally cognizable claim unless the allegations indicate beyond any doubt that the litigant can prove no set of facts which would entitle him to relief." Frazier v. Bryan Mem'l Hosp. Auth., DISCUSSION ¶8 The Court of Civil Appeals concluded in this matter that Plaintiffs' claim was a collateral attack on the Commission's order. After Plaintiffs filed their petition for certiorari, another division of the Court of Civil Appeals reached the opposite conclusion on the same issue. A conflict between the divisions of the Court of Civil Appeals calls for the exercise of the Supreme Court's supervisory authority. Rule 1.178(a)(3), Okla. Sup. Ct. Rules, Okla. Stat. tit. 12, app. 1 (2001). With this opinion, we agree with and adopt the reasoning of Division 3 of the Court of Civil Appeals in Tucker v. New Dominion, L.L.C., ¶9 Although the Corporation Commission has the authority of a court of record, it has limited jurisdiction. Tenneco Oil Co. v. El Paso Natural Gas Co., ¶10 The Commission does not have the authority to determine the effect of its order on a legal title to property. Nilsen v. Ports of Call Oil Co., ¶11 According to their pleadings, Plaintiffs are not attempting to obtain an order declaring the 1998 Pooling Order void. Such an effort would be an impermissible collateral attack. Okla. Stat. tit. 52, § 111 (2001); ¶12 Defendants, as participants in and operators of the unit that includes the rights originally owned by W.H. Taft, are holding funds in escrow arguably payable to the successors-in-interest to W.H. Taft. Since Defendants have refused Plaintiffs' claim to those funds, Plaintiffs filed an action in district court to establish their right, if any, to those funds. Plaintiffs' instant action to settle mineral interest ownership in the Subject Property and for an accounting from the pooled interests constitutes a private dispute properly brought in district court. Plaintiffs' petition, which includes the unrefuted allegation that they are the owners of certain mineral interests in the pooled property, adequately states a claim for relief. Tucker, CONCLUSION ¶13 Plaintiffs' lawsuit was improperly dismissed by the district court as a collateral attack on the Commission's order. "Considering all allegations in the . . . pleading, we cannot say it is legally impossible for [Plaintiffs] to establish any of them to be true." Frazier, COURT OF CIVIL APPEALS' OPINION VACATED; DISTRICT COURT'S JUDGMENT REVERSED; AND MATTER REMANDED FOR FURTHER PROCEEDINGS. CONCUR: Winchester, C.J.; Edmondson, V.C.J.; Hargrave, Opala, Kauger, Watt, Taylor, Colbert, Reif, JJ. Opala, J., concurring I concur solely in the court's reversal of the trial court's order that dismissed the action and in the expressed legal ground ascribed in today's opinion to the court's conclusion. As is clearly stated in today's pronouncement, the court expresses no view whatsoever upon any element of the pressed claim's merits. FOOT