Case Title: EOG Resources, Inc. v. Soo Line Railroad Co.

Citation: 

Docket Number: 20140122

State: north-dakota

Court: North Dakota Supreme Court

Date: 2015-07-15T00:00:00Z

Document:
IN THE SUPREME COURT STATE OF NORTH
DAKOTA 2015 ND 187EOG Resources,
Inc., a Delaware Corporation, Plaintiff and Appelleev.Soo Line Railroad
Company, d/b/a Canadian Pacific Railway, successor in interest to Minneapolis, St. Paul &
Sault Ste Marie Railway Company; G-4 LLC, Defendants, Third-Party Plaintiffs, and
Appellants andJeannette E. Gere; Lori Whitten; Kim Rachford; Skaar-Risan, LLLP;
Linda G. Johnson; Joel D. Johnson; and Whiting Oil and Gas Corporation, Defendants and Third
Party Plaintiffs v. Ralph A. Brendle, as Trustee of the Ralph A. Brendle Trust, Ralph A. Brendle
Living Trust, Brendle Family LLLP, Arlene Sherven, Todd Sherven, Rick Sherven, Gladys
Kirton, Alan L. Loen, Agribank, FCB, Wallace L. Nelson and Mary Ann Nelson, individually,
and as Trustees of the Nelson Family Trust, UDT 1/10/92, Cynthia M. Roberts a/k/a Cynthia
Roberts, Jeannette E. Gere, Lori Whitten, Kim Rachford, Linda G. Johnson, Joel D. Johnson,
Michael Johnson Trust, A.G. Andrikopoulos, AgriBank, FCB, Solomonson Family Mineral
Trust, Donna and Jerry Lyon, David and Doreene Pusc, Michael and Lorna Pusc, Steven and
Collette Pusc, Diana and Frank Wollschlager, Panther Creek (James Simmons, Presco, Inc., Fred
and Joyce Evans, Paladin Resources, Inc.), Dean and Sharon Solomonson, Richard W. Frazier,
1477521 Alberta LTD, Donald Nelson, Karolyn Nelson, Timothy Nelson, John Zimmerman,
Thomas Miller Gordon, Robert Crawford, and all other persons unknown and claiming any estate
or interest in or lien or encumbrance upon the property described in the Cross-Claim of the
Defendant G-4, LLC, Third-Party Defendants andRoger Wollschlager and Amanda Olson,
as Trustees of the Betsy Amanda Wollschlager Trust, Solveigm Swendsend, Roger Stenerson,
Joan Stenerson, Cynthia M. Roberts, Lovila Krueger, Herbert Krueger, Roger Wollschlager, as
Trustee of the Wollschlager Irrevocable Trust, Risan Limited Partnership, State of North Dakota,
Thomas T. Ritter, John D. Larue, as Trustee of the Stamford Minerals Organization, Roger
Wollschlager and Blane Wollschlager, individually, and as Co-Trustees of the Betsy Amanda
"Betty" Wollschlager Irrevocable Trust, Skaar-Risan LLLP, Whiting Oil and Gas Corporation,
Berry Ventures, Henry and Lorie Gordon, A.G Andrikopoulos Resources, Inc., Alicia Johnson,
Mark Johnson, Wollschlager Irrevocable Mineral Trust, Ryan Family Mineral Trust, Kootenani
Resources, Strata Resources, Michael S. Johnson Management One LLC, Michael S. Johnson
Management Two LLC, Third-Party Defendants and Appellees G-4, LLC, AppellantNo. 20140122Appeal from the District Court of Mountrail County, North
Central Judicial District, the Honorable Todd L. Cresap,
Judge.REVERSED AND REMANDED.Opinion of the Court by McEvers, Justice.Joseph J. Cassioppi (argued), 200
South 6th Street, Suite 4000, Minneapolis, Minn. 55402-1425; Lawrence Bender (appeared) and Danielle M. Krause (on brief), 1133 College Drive, Suite
1000, Bismarck, N.D. 58501 for plaintiff and appellee EOG Resources, Inc., a Delaware
Corporation and third-party defendants Berry Ventures, Inc., Strata Resources Inc., Michael S.
Johnson Management One LLC, Michael S. Johnson Management Two LLC, Mark Johnson,
Alicia Johnson, Henry Gordon, Lori Gordon, A.G. Andrikopoulos Resources, Inc., Ryan Family
Mineral Partnership, and Kootenani Resources.Janilyn
K. Murtha (argued), Assistant Attorney General, Office of Attorney General, 600 East
Boulevard Avenue, Department 125, Bismarck, N.D. 58505-0040 and Hope Lisa Hogan (on brief), Assistant Attorney General,
Office of Attorney General, 500 North Street, Bismarck, N.D. 58501-4509, for third-party
defendant and appellee State of North Dakota.Richard
P. Olson (on brief) and Andrew T. Forward (on
brief), P.O. Box 1180, Minot, N.D. 58702-1180, for appellee Skaar-Risan LLLP, and third-party
defendants and appellees Risan Limited Partnership, Solveig Swendseid, Roger Stenerson, Joan
Stenerson, Cynthia M. Roberts, Lovila Krueger, Herbert Krueger, John D. Larue as Trustee of the
Stamford Minerals Organization and Thomas T. Ritter.Michael J. Maus (on brief), P.O. Box 570, Dickinson,
N.D. 58602-0570, and Christina M. Wenko (on brief),
38 2nd Avenue East, Dickinson, N.D. 58601, for third-party defendants and appellees Roger
Wollschlager and Amanda Olson, as trustees of the Betsy Amanda Wollschlager trust; Roger
Wollschlager, as trustee of the Wollschlager Irrevocable trust; Roger Wollschlager and Blane
Wollschlager, individually and as co-trustees of the Betsy Amanda "Betty" Wollschlager
irrevocable trust; and the Wollschlager irrevocable mineral trust.Amy M. Oster (on brief) and Brian R. Bjella (on brief), P.O. Box 2798, Bismarck, N.D.
58502-2798, for Whiting Oil and Gas Corporation.Jon
R. Brakke (argued) and Whitney M. Irish (on
brief), P.O. Box 1389, Fargo, N.D. 58107-1389, for appellant G-4, LLC.Donald T. Campbell (argued) and Nathan E. Endrud (appeared), 150 South Fifth Street,
Suite 2300, Minneapolis, Minn. 55402, for defendant, third-party plaintiff and appellant Soo Line
Railroad Company, d/b/a Canadian Pacific Railway, successor in interest to Minneapolis, St.
Paul & Sault Ste Marie Railway Company.Michael C. McCarthy and Jesse D. Mondry, 3300 Wells Fargo Center, 90 South 7th
Street, Minneapolis, Minn. 55402, for amicus curiae Soo Line Railroad Company, d/b/a
Canadian Pacific Railway, successor in interest to Minneapolis, St. Paul & Sault Ste Marie
Railway Company.EOG Resources, Inc. v. Soo Line Railroad
Co.No. 20140122McEvers,
Justice.[¶1] Soo Line Railroad Company and G-4, LLC
appeal from a summary judgment declaring Soo Line does not own an interest in the minerals in
and under certain Mountrail County property and G-4 does not hold a valid leasehold interest in
the property. Soo Line and G-4 argue the district court erred in finding seven private deeds
conveyed only easements and not a fee simple title to Soo Line's predecessor-in-interest. We
reverse and remand.I[¶2] EOG Resources, Inc.
has an interest in an oil and gas leasehold estate in Mountrail County and operates oil and gas
wells. Soo Line is a railroad operating in North Dakota. G-4 has oil and gas exploration leases
with Soo Line.[¶3] EOG brought an action to quiet title to
minerals in and under certain Mountrail County property against Soo Line, G-4, and other
defendants claiming an interest in the property. EOG sought a declaration that Soo Line and G-4
have no interest in the minerals in and under the disputed property.[¶4] Soo Line answered and brought counterclaims against EOG and cross-claims
against the other defendants. Soo Line alleged it obtained a fee simple title to the surface and
minerals in the disputed property through a deed executed in 1914 by Henry Olson conveying a
legal interest in the property to Soo Line's predecessor in interest, Minneapolis, St. Paul &
Sault Ste. Marie Railway Company. Soo Line requested a judgment quieting title and declaring
Soo Line is the fee simple owner of the property and recognizing G-4's leasehold interests in the
property.[¶5] G-4 filed a separate answer and brought
counterclaims against EOG and cross-claims against the other defendants. G-4 requested the
court also quiet title to the mineral interests in and under fifteen additional tracts of land. G-4
alleged Soo Line obtained a fee simple title to the surface and minerals in the original disputed
property as well as fifteen additional tracts of land in Mountrail County through conveyances
under the March 2, 1899 Act of Congress, a condemnation order, and seven deeds. The seven
deeds were executed in 1914, 1915, and 1916 by Henry Olson, William and Lu Blatt, Dewar and
Rose Grant, Hans and Thea Larson, Olaf and Dina Faro, Joy Kline, and John and Inger Trana
conveying an interest in certain property to Soo Line's predecessor in interest. The parties did not
argue these deeds were involuntary and there is no evidence in the record indicating the deeds
were made in lieu of condemnation. G-4 sought to quiet title and requested a judgment declaring
Soo Line is the fee simple owner of all of the Mountrail County property in dispute and G-4 has a
leasehold interest in the property. Soo Line filed an answer to G-4's cross-claims and requested a
judgment quieting title and declaring it is the fee owner of the Mountrail County property,
including the original disputed property and the fifteen additional tracts of land, and recognizing
G-4's leasehold interest in the property.[¶6] The other defendants
filed separate answers to EOG's complaint and Soo Line and G-4's cross-claims, aligning with
EOG. They requested the court declare Soo Line and G-4 have no interest in the minerals in and
under the disputed property.[¶7] G-4 and Soo Line moved for
partial summary judgment on the interests conveyed under the condemnation order and private
deeds. EOG also moved for summary judgment, arguing judgment should be entered in its favor
because the railroad acquired only an easement under the 1899 Act, the condemnation order, and
the deeds. Soo Line and G-4 responded and stipulated that the railroad acquired only an easement
under the 1899 Act.[¶8] After a hearing and based on the parties'
stipulation, the district court partially granted EOG's motion for summary judgment and
dismissed G-4's claims related to the 1899 Act. The district court deferred ruling on the motions
for summary judgment on the remaining claims until all record owners with potential claims
related to the mineral interests for all of the disputed property were joined to the
proceeding.[¶9] G-4 filed an amended counterclaim and
cross-claim adding numerous third-party defendants with potential claims to the mineral
interests. The third-party defendants filed answers to G-4's amended counterclaim and
cross-claim.[¶10] Soo Line and G-4 moved for summary
judgment, requesting the district court quiet title to the remaining disputed property in Soo Line's
favor, and declare that Soo Line owns a fee simple interest in the surface and minerals in the
property conveyed by the seven deeds and the condemnation order and that G-4 has a valid
leasehold interest in the mineral interests by way of an oil and gas lease with Soo Line. Soo Line
and G-4 argued the deeds are unambiguous and convey a fee simple interest to the railroad as a
matter of law, and the court should find Soo Line owns the condemned property in fee simple
because the condemnation order expressly conveyed the property to Soo Line in "fee
simple."[¶11] EOG and several third-party defendants
(collectively "EOG parties") also moved for summary judgment, requesting the district court
quiet title in their favor and declare Soo Line owns only an easement across the surface of the
remaining disputed property. The EOG parties argued they were entitled to summary judgment as
a matter of law, the railroad acquired only an easement under the seven deeds and condemnation
order, Soo Line does not own the minerals in and under its railroad right of way, and G-4 did not
acquire a leasehold interest in the minerals through its oil and gas lease with Soo
Line.[¶12] After a hearing on the motion, the district court
denied Soo Line and G-4's motions for summary judgment and granted the EOG parties' motion
for summary judgment. The court concluded the condemnation order granted Soo Line an
easement over and across the property. The court also concluded the private deeds conveyed only
an easement to Soo Line's predecessor-in-interest. The court found there were no material facts in
dispute and the deeds were more indicative of a grant of an easement than of fee simple title
based on the case law the parties cited in support of their arguments. The court found all of the
deeds include language that is consistent with a grant of fee simple title because they all include
the same granting, warranty, and habendum clauses, but the language was not necessarily
conclusive of a grant of fee title. The court found that each of the deeds included the phrase
"right of way" in the title and the inclusion of that language creates an uncertainty about what the
grantors intended to convey. The court considered other factors in determining the deeds
conveyed an easement, including the size and shape of the conveyed interest, the purpose of the
conveyance, a provision in the deeds releasing the railroads from certain claims for damages, and
extrinsic evidence. A judgment was subsequently entered.II[¶13] The standard for reviewing summary judgments is well
established:Summary judgment is a procedural device for the prompt
resolution of a controversy on the merits without a trial if there are no genuine issues of material
fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be
resolved are questions of law. A party moving for summary judgment has the burden of showing
there are no genuine issues of material fact and the moving party is entitled to judgment as a
matter of law. In determining whether summary judgment was appropriately granted, we must
view the evidence in the light most favorable to the party opposing the motion, and that party will
be given the benefit of all favorable inferences which can reasonably be drawn from the record.
On appeal, this Court decides whether the information available to the district court precluded
the existence of a genuine issue of material fact and entitled the moving party to judgment as a
matter of law. Whether the district court properly granted summary judgment is a question of law
which we review de novo on the entire record. Hamilton v. Woll, 2012 ND 238, ¶ 9, 823 N.W.2d 754 (quoting
Wenco v. EOG Res., Inc., 2012 ND 219,
¶ 8, 822 N.W.2d 701). Summary
judgment may not be granted if reasonable differences of opinion exist about the inferences to be
drawn from the undisputed facts. Hamilton, at ¶ 9. Issues of fact become issues of
law when reasonable persons can reach only one conclusion from the facts. Id.III[¶14] Soo Line and G-4 argue the district court erred in granting summary
judgment and concluding the seven deeds conveyed only an easement. Soo Line and G-4 contend
all seven deeds unambiguously conveyed a fee simple interest to Soo Line's predecessor in
interest. Soo Line and G-4 do not argue the district court erred in finding the railroad acquired
only an easement through the condemnation order.[¶15] We
interpret deeds in the same manner as we interpret contracts. N.D.C.C. § 47-09-11. The
primary purpose in interpreting a deed is to ascertain and effectuate the grantor's intent. Wagner v. Crossland Constr. Co., Inc., 2013 ND
219, ¶ 8, 840 N.W.2d 81. The
intent must be ascertained from the writing alone, if possible. Id.  When a deed is unambiguous we
determine the parties' intent from the instrument itself. Id. A deed is ambiguous if rational
arguments can be made in support of contrary positions as to the meaning of the term, phrase, or
clause in question. See In re Estate of
Dionne, 2009 ND 172, ¶ 16, 772 N.W.2d 891. Whether a
deed is ambiguous is a question of law, which is fully reviewable on appeal. Wagner, at ¶ 8.[¶16] If a deed is ambiguous, the court may consider extrinsic evidence to
determine the parties' intent. Dionne, at
¶ 16. Resolution of an
ambiguity in a deed by extrinsic evidence is a finding of fact, reviewed under the clearly
erroneous standard. See Rolla v.
Tank, 2013 ND 175, ¶ 5, 837 N.W.2d 907. Generally,
summary judgment is not appropriate if the deed is ambiguous and reasonable differences of
opinion exist as to the interpretation of a deed. Cf. Hillerson v. Bismarck Pub. Sch., 2013 ND 193,
¶ 17, 840 N.W.2d 65
(interpretation of terms of a contract).A. Lalim[¶17] The EOG parties argue this Court's decision in Lalim v. Williams
Cnty., 105 N.W.2d 339 (N.D. 1960), sets the standard for interpreting the deeds in this case.
They claim the Court's analysis in Lalim should be applied in this case and compels the
conclusion that the deeds conveyed only an easement to the railroad.[¶18] In Lalim, 105 N.W.2d  at 342, this Court considered whether the
county acquired an easement or a fee simple interest in certain land used for highway purposes.
The deed at issue was "a warranty deed purporting to grant, bargain, sell and convey to [the
county], its successors and assigns forever, 'all that tract or parcel of land and real estate'"
described as a strip of land 40 feet wide adjacent to the section line, "excepting all that portion
lying within 33 ft. of the section line." Id. at 342. The deed's property description also
referred to the property being shown and marked on a plat, which was a blueprint "right of way
plat" filed for record in the county register of deeds office. Id. at 342-43. The deed
contained a habendum clause and a provision stating the grantors "do covenant with the party of
the second part, its heirs and assigns, that they are well seized in fee of land, real estate and
premises aforesaid, and have good right to sell and convey the same in manner and form
aforesaid[.]" Id. at 343.[¶19] This Court held the
grantors retained a fee simple interest in the 33 foot strips under the highway because the State
received only an easement for the 33 foot strips under a statute and that land was excepted from
the deed. Id. at 344. The Court held the deed conveying the seven-foot strips conveyed
only an easement. Id. at 347. The court explained the deed on its face was a grant and a
fee simple title was presumed to be intended to pass by a grant of real property under N.D.R.C.
§ 47-1013 (1943), but the presumption was not conclusive. Id. at 344. The
Court examined the deed and noted that it conveyed seven-foot strips of land lying adjacent to an
easement for highway purposes, which was located over land the grantors owned in fee simple
and which the grantors excepted and retained. Id. at 345. The Court also considered that
the deed showed the strips of land were part of a federal aid project and were shown on a plat, the
plat was of record when the deed was given, the plat contained the descriptions of the parcels that
were set forth in the deed and showed the seven-foot strips were additions to the right of way for
the highway already established. Id. This Court concluded the deed and the plat created
an ambiguity. Id. The Court looked at other factors to determine the parties' intent,
including the general rule that the right the public acquires in land for highway purposes is
ordinarily an easement, the county would have acquired an easement if it had taken the land
under the power of eminent domain, and the meaning of the word "land" as it was used in the
deed may include any estate or interest in land. Id. at 346. The Court concluded the deed
conveyed an easement to the county, explaining:[T]he deed to [the
county] when considered with the plat to which it refers is sufficiently ambiguous to permit of
judicial construction. The purpose of the conveyance was to widen by seven feet the right of way
for a highway over the grantors' land, which right of way consisted of an easement over strips of
land 33 feet wide lying adjacent to section lines, to which strips the grantors owned the fee title
as a part of their title to larger tracts adjacent to the highway. The deed by its terms excepts the
fee title of the 33-foot strips. If construed to convey a fee title to the 7-foot strips, they would
completely divide the grantors' fee to the 33-foot strips from their fee title to the larger tracts of
which all of the strips were originally a part. Id. at
346-47.[¶20] This case is different from Lalim. The
deed in Lalim was between a private party and the government related to a highway for the
public's use. In this case, the deed is between a private party and a company and is related to the
construction and operation of a railroad for the company's use. Moreover, the seven deeds in this
case do not contain the same language as the deed in Lalim. Lalim does not
compel this Court to hold all of the deeds in this case conveyed only an easement to the
railroad.[¶21] All of the deeds are on pre-printed forms,
containing similar provisions. Each deed contains additional typewritten information, including
the grantor's name, the consideration given, the county and state where the property was located,
and the specific description of the property. Some of the deeds also include additional provisions
typewritten onto the printed form. Although the deeds are all similar, they do not reference each
other and we must consider the language of each deed separately to determine whether the deed
is ambiguous. See Nichols v.
Goughnour, 2012 ND 178, ¶ 14, 820 N.W.2d 740. The parties'
intent must be ascertained from the writing alone, and if the deed is unambiguous we will not
consider extrinsic evidence and will determine the parties' intent from the deed itself. Wagner, 2013 ND 219, ¶ 8, 840 N.W.2d 81.B. Grant, Olson, Blatt, Kline, and Trana Deeds[¶22] The Grant, Olson, Blatt, Kline, and Trana deeds are all very similar and
contain most of the same provisions using identical language. All of the deeds are titled
"WARRANTY DEED—RIGHT OF WAY" and provide:[The named
grantors] of [County of Mountrail State of North Dakota] parties of the first part, for and in
consideration of the sum of [a stated dollar amount], to them in hand paid by the Minneapolis, St.
Paul & Sault Ste. Marie Railway Company, party of the second part, the receipt whereof is
hereby acknowledged, do hereby GRANT, BARGAIN, SELL and CONVEY unto the said party
of the second part, its successors and assigns, a piece, parcel or tract of land, situated in the
[County of Mountrail and State of North Dakota] described as follows, to-wit:[property
description]. . . .To have and to hold the same, Together with all the appurtenances
thereunto belonging to the said party of the second part, its successors and assigns,
FOREVER.And the said parties of the first part hereby grant unto the said party of the
second part, its successors and assigns, the right to protect its railway, on said land, by erecting
on both sides thereof and within one hundred and fifty feet from the centre [sic] line of said
railway, portable snow fences; provided however, that such fences shall not be erected
before the 15th day of October of each year and shall be removed on or before the 1st day of
April of the year next ensuing their erection.And the said [grantors] for themselves, their
heirs, executors and administrators, do convenant with the party of the second part, its successors
and assigns, that they are well seized in fee of the lands and premises aforesaid; that the same are
free from all incumbrances whatsoever and the above granted lands and premises in the quiet
enjoyment and peaceable possession of the said party of the second part, its successors and
assigns, against all persons lawfully claiming or to claim the whole or any part thereof, the said
parties of the first part will forever WARRANT and DEFEND.And the said parties of the
first part, for themselves, their heirs, administrators and assigns, do release the party of the
second part, its successors and assigns, from all claims from any and all damages resulting to the
lands through and across which the piece or strip of land hereby conveyed is located, by reason of
the location, grade, construction, maintenance, and operation of a railway over and upon the
premises hereby conveyed. Each deed specifically describes the property
conveyed, including that the conveyed property is parallel with and either 50, 75, or 125 feet
distant from the center line of the main track of the railroad.[¶23] Soo Line and G-4 argue the plain language of the granting, habendum, and
warranty clauses demonstrate an unambiguous intent to convey fee simple interests. They
contend the granting clause conveys an absolute interest in "land," without exception or
limitation, and the habendum and warranty clauses are equally absolute.[¶24] "[T]he specific language of the granting clause of the deed controls the
interests the grantor purported to give the grantee." Waldock v. Amber Harvest Corp., 2012 ND
180, ¶ 10, 820 N.W.2d 755. A
deed that conveys a strip, piece, parcel, or tract of land generally indicates an intent to convey a
fee simple title. See, e.g., Bockelman v. MCI Worldcom, Inc., 403 F.3d 528,
532 (8th Cir. 2005); Elton Schmidt & Sons Farm Co. v. Kneib, 507 N.W.2d 305,
307 (Neb. Ct. App. 1993); see also 65 Am. Jur. 2d Railroads § 45
(2015). A deed that conveys a "right" or "right of way" generally indicates an intent to convey an
easement. See Bockelman, at 531-32; Haggart v. United States, 108 Fed. Cl. 70, 87 (2012) (applying Washington law); see also Riverwood Commercial Park, LLC v. Standard Oil Co.,
Inc., 2005 ND 118, ¶¶ 10-11, 698 N.W.2d 478
(easements grant a right or permission to use or control land for a specific, limited purpose); 65
Am. Jur. 2d Railroads § 45 (2015). A deed that limits the use of the parcel
to railroad purposes also indicates an intent to convey an easement. Bockelman, at
531-32; Schmitt v. United States, 203 F.R.D. 387, 399 (S.D. Ind. 2001). "As a general
rule, conveyances to railroads that purport to grant and convey a strip, piece, parcel, or tract of
'land,' and do not contain additional language relating to the use or purpose to which the land is
to be put, or in other ways cut down or limit, directly or indirectly, the estate conveyed, are
usually construed as passing an estate in fee." 65 Am. Jur. 2d Railroads
§ 45 (2015).[¶25] In this case, the deeds state the
grantor grants, bargains, sells, and conveys "a piece, parcel, or tract of land." The granting clause
does not limit the use of the land to railroad purposes or contain any other limitations. The
granting clause is not ambiguous and it indicates an intent to convey a fee simple interest.
Cf. Bockelman, 403 F.3d  at 532 (deed uses the term "strip of land" and does
not limit the use of the land to railroad purposes, which indicate the conveyance of a fee simple
absolute); Whispell Foreign Cars, Inc. v. United States, 97 Fed. Cl. 324, 334-37 (2011)
(deed conveyed fee simple when it conveyed land, warrants title, and contains no limitations on
use of land); Union Pac. R.R. Co. v. Ethington Family Trust, 50 P.3d 450, 453 (Idaho
2002); Bailey v. Town of Saltville, 691 S.E.2d 491, 494 (Va. 2010). "A fee simple title
is presumed to be intended to pass by a grant of real property unless it appears from the grant that
a lesser estate was intended." N.D.C.C. § 47-10-13; see also N.D. Compiled Laws
§ 5527 (1913) (law in effect at the time the deeds were signed, contains the same
language as N.D.C.C. § 47-10-13).[¶26] The
habendum and warranty clauses also support Soo Line and G-4's contention that the deeds
conveyed a fee simple interest. A habendum clause defines the duration or extent of the grantee's
interest and may limit the interest conveyed in the granting clause. See Egeland v. Continental Res., Inc., 2000 ND 169,
¶ 3 n.1, 616 N.W.2d 861;
Harney v. Wirtz, 30 N.D. 292, 152 N.W. 803, 807 (1915); 23 Am. Jur. 2d
Deeds § 16 (2015). Here, the habendum clause states, "To have and to hold
the same, Together with all the appurtenances thereunto belonging to the said party of the second
part, its successors and assigns, FOREVER." Other courts have held the use of similar language
is evidence of an intent to convey a fee simple. See Bockelman, 403 F.3d  at
532; Poznic v. Porter Cnty. Dev. Corp., 779 N.E.2d 1185, 1191 (Ind. Ct. App. 2002); 65
Am. Jur. 2d Railroads § 45 (2015). The habendum clause in these deeds
does not contain any exceptions or reservations or limit the conveyance, either in duration or any
other way. Each deed also contains a warranty clause, which warrants a clear title and uses
warranty deed language, and is illustrative of an intent to convey a fee simple title. See
Whispell, 97 Fed. Cl.  at 337; Elton Schmidt, 507 N.W.2d  at 309;
Bailey, 691 S.E.2d  at 494; see also 20 Am. Jur. 2d Covenants, Etc.
§ 58. The habendum and warranty clauses do not modify or limit the granting
clause.[¶27] Other courts that have construed deeds containing
similar granting, habendum, and warranty clauses have held the deed conveyed a fee simple title.
See Hubbert v. United States, 58 Fed. Cl. 613, 616 (2003); Poznic, 779 N.E.2d  at 1189-92. These provisions of the deeds indicate the parties intended the deeds to
convey a fee simple title. However, "'[t]he parties' intent must be ascertained from the entire
instrument, and every clause, sentence, and provision should be given effect consistent with the
main purpose of the [deed].'" Valley Honey Co.,
LLC v. Graves, 2003 ND 125, ¶ 12, 666 N.W.2d 453 (quoting
U.S. Bank v. Koenig, 2002 ND 137, ¶ 8, 650 N.W.2d 820). We must
also consider the other provisions of each deed.[¶28] The EOG
parties contend the deeds are ambiguous because the title of the deeds contains the phrase "right
of way." They argue that a deed referencing the use of the property for a railroad right of way is
generally construed to convey only an easement.[¶29] The
phrase "right of way" has two meanings when it is used in a railroad deed; it refers either to the
strip of land upon which the track is laid or the legal right to use the strip of land. See,
e.g., Hubbert, 58 Fed. Cl.  at 615 (applying Missouri case law); State v.
Hess, 684 N.W.2d 414, 424 (Minn. 2004); Brown v. State, 924 P.2d 908, 914
(Wash. 1996). When the phrase is included in the granting clause limiting the estate conveyed or
specifying the purpose of the grant, courts have often held the use of the language supports
finding an easement was conveyed. See Hubbert, at 615-16; Diaz v. Home
Fed. Sav. & Loan Ass'n of Elgin, 786 N.E.2d 1033, 1042 (Ill. Ct. App. 2002);
Brown, at 913. However, when the phrase is included only in the title or caption of the
deed, courts have generally held it is not a significant factor in determining whether the deed
conveys an easement or a fee simple interest. See Haggart, 108 Fed. Cl.  at 94
(use of the words "Right of Way Deeds" in the caption, alone, was not sufficient to indicate an
easement was conveyed); Brown, at 915 (deed captioned "Right of Way Deed"
conveyed a fee simple title regardless of the caption because the purpose of the conveyance was
not limited). Moreover, this Court has said when there is a conflict between provisions of a deed,
the specific provision qualifies the general provision, and "a caption on a deed 'is of no effect
where the conveyance is clear.'" Rolla,
2013 ND 175, ¶ 7, 837 N.W.2d 907 (quoting Clark v. CSX Transp., Inc., 737 N.E.2d 752, 763 (Ind. Ct. App. 2000)).
Although the deeds contain the phrase "right of way" in the title, use in the title alone is not
sufficient to create ambiguity and it is of no effect when the conveyance is clear.[¶30] Each of the deeds contains a provision granting the railroad the right to
erect snow fences within 150 feet from the center line of the railway. None of the deeds convey
property more than 125 feet from the center line of the railway. This provision creates an
easement granting the railroad a right to erect and maintain snow fences on lands the grantors
own that were not included in the property conveyed. This provision shows the parties knew the
appropriate language to use to create an easement, which indicates the grantors intended to
convey a fee simple interest in the disputed property. See Hess, 684 N.W.2d  at
425; Elton Schmidt, 507 N.W.2d  at 308.[¶31] Citing
Brookbank v. Benedum-Trees Oil Co., 131 A.2d 103 (Pa. 1957), the EOG parties argue
the deeds contain a release provision which creates an ambiguity and supports their claim that the
deeds convey an easement. They claim a deed that releases the grantee from liability for damage
to land generally conveys less than a fee simple title.[¶32] In
Brookbank, the court considered the language of a written agreement between the
landowner and the railroad company to determine what interest the railroad company had in the
minerals under an abandoned railroad bed. The agreement included a release provision,
stating:Together with the right to enter upon the said land and lay out,
construct, maintain and operate a railroad over and across the lands belonging to the parties
above mentioned, taking and using such earth, stones and gravel, as may be needed for grading
and filling such road, and hereby fully releasing said railroad company, its successors and
assigns, from all liability by reason of the location, construction and operation of the said
railroad. Brookbank, 131 A.3d  at 106. The court said the language
in this provision gave the railroad rights that naturally and lawfully arise from ownership of land
in fee simple and therefore the provision would be surplusage if the parties intended the railroad
receive a fee in the land. Id. at 110. The court noted the railroad would have the right to
locate, construct, and operate a railroad over the land if it had been given a fee interest in the land
and said, "The only situation where any liability might accrue to the railroad from the location,
construction and operation over this land would be in the event the railroad secured simply a
'right of way' over the land." Id. The court held the railroad acquired a "right of way" for
railroad purposes under the agreement and the railroad's rights ceased and reverted to the owner
of the fee when the strip of land involved ceased to be used for railroad purposes. Id. at
111-12.[¶33] The release language included in the deeds in this
case is significantly different from the release provision in Brookbank. In this case, the
provision releases the railroad from liability "from all claims from any and all damages resulting
to the lands through and across which the piece or strip of land hereby conveyed is
located . . . ." The railroad is released from liability to the lands
"through and across" which the land conveyed is located. The phrase "through and across" is
used to describe the location and identify the land the release refers to. See Kynerd
v. Hulen, 5 F.2d 160, 162 (5th Cir. 1925) (use of the words "over" and "through" does not
indicate an intent to convey an easement, use was descriptive); Tazian v. Cline, 686 N.E.2d 95, 99 (Ind. 1997) (deed does not contain any language in the granting clause limiting the
use or purposes of the land and use of the phrase "over, across and through" was descriptive).
The phrase describes the land adjacent to the conveyed land. The provision releases the railroad
from claims of damages to land adjacent to the conveyed land that the grantor continued to own.
It does not release the railroad from claims for damages to the land being conveyed in the deed.
Unlike the release provision in Brookbank, the release in this case does not support an
interpretation of the deeds conveying only an easement. Cf. Turner v. Unknown
Claimants of Land in Sec. 4, 87 North Twp., Range 32 West of 5th Principal Meridian, 207 N.W.2d 544, 546 (Iowa 1973) (holding deed conveyed fee simple and provision stating grantor
"releases all damages to his other lands by reason of constructing, operating, and maintaining a
railroad on said strip of land" did not create ambiguity).[¶34]
The Grant, Olson, and Blatt deeds also contain an additional provision releasing the railroad from
any duty or obligation to establish or permit any crossing under or across its "tracks, right of way
or other lands, for the use or benefit of the owners or occupants of the lands and premises now
owned by the parties of the first part adjoining the second party's said railroad." Although this
provision uses the phrase "right of way," it refers to the strip of land upon which the track is laid
and it does not limit the interest conveyed. Cf. Hubbert, 58 Fed. Cl.  at 615 (use
of the "right of way" language provided a means to identify the relevant property and was not
intended to limit the interest conveyed).[¶35] The Grant, Olson,
Blatt, Kline, and Trana deeds all contain the same granting clause, which conveys a piece, parcel,
or tract of land and does not contain any limitations or exceptions. The property descriptions are
also similar and do not contain any language that can be considered a limitation or exception.
Unlike the deed in Lilam, these deeds do not reference a plat that may be considered to
determine the parties' intent. The deeds contain the same habendum and warranty clauses, which
do not contain any limitations or exceptions. The deeds also contain the same provision granting
the railroad a right to erect snow fences on the grantors' property, showing the parties understood
the difference between an easement and a fee simple. The deeds all contain the same language
releasing the railroad from liability for damages to the grantors' adjacent property.[¶36] We conclude the Grant, Olson, Blatt, Kline, and Trana deeds are
unambiguous. They convey land, warrant title, and do not use any words limiting the grant,
which indicates the parties' intent to convey a fee simple interest. There are no other provisions
or language that creates ambiguity in the type of interest conveyed. The deeds are unambiguous
and extrinsic evidence will not be considered. We conclude the Grant, Olson, Blatt, Kline, and
Trana deeds conveyed a fee simple interest to the railroad. The district court erred in ruling as a
matter of law that the railroad acquired only an easement under these deeds.C.
Larson Deed[¶37] Like the Grant, Olson, Blatt, Kline, and Trana
deeds, the Larson deed contains the same granting, habendum, and warranty clauses, and the
same provisions granting the railroad the right to erect snow fences and releasing the railroad
from claims for damages to adjacent lands. However, the description of the property conveyed is
different from the other deeds.[¶38] The Larson deed describes
the conveyed property as:A strip, piece or parcel of land One hundred
fifty (150) feet in width, the same being Seventy-five (75) feet in width on each side of the center
line of the main track of the railroad of the said party of the second part, as the same is now
located. . . . The strip of land One hundred (100) feet in width, Fifty (50) feet
in width on each side of said track center line having been heretofore acquired by said Railway
Company by the approval of its maps of definite location filed with the Department of the
Interior under the Act of March 2nd, 1899. The property description notes
that the railroad had already acquired a portion of the land under the 1899 Act. The district court
determined, based on the parties' stipulation, that the railroad only acquired an easement to
property under the 1899 Act.[¶39] The EOG parties argue the
reference to the previously obtained easement is significant and supports finding the deed
conveyed only an easement. Although the property description notes the prior interest, it did not
except that property from the conveyance. The property description does not create an ambiguity.
Including land the railroad had already acquired an easement for in the property conveyed by the
deed supports finding the parties intended the deed convey a fee simple interest. If the parties had
intended to convey only an easement, it would be unnecessary to note the railroad had already
obtained an easement and to include that property in the conveyance.[¶40] The Larson deed also contains a second release provision,
stating:And for the consideration aforesaid the parties of the first part, for
themselves, their heirs, administrators and assigns do release the said Railway Company, its
successors and assigns of and from all claims for any and all damages and trespass done or
committed by the Railway Company, its agents or contractors while engaged in the construction
of its line of railroad over and across said Government subdivision and adjoining
lands[.] This release is similar to the other release included in all of the
deeds, but it releases the railroad from all claims for any and all damages or trespass done or
committed while the railroad constructed its railway. It does not create any ambiguity in the
deed.[¶41] The Larson deed conveys a strip, piece, or parcel of
land to the railroad and includes warranty and habendum clauses. There are no other provisions
or language limiting the interest conveyed or creating ambiguity in the type of interest conveyed.
We conclude the Larson deed is unambiguous and conveys a fee simple title. The district court
erred in entering summary judgment to the contrary.D. Faro
Deed[¶42] The Faro deed is different from the other deeds in this
case. It contains the same granting, warranty, and habendum clauses, and includes the same title
and the same provisions giving the railroad the right to erect snow fences and releasing the
railroad from claims for damage to adjacent property. However, the property description is
materially different. The property conveyed is described as:A strip of
land one hundred fifty (150) feet in width . . . which is included within two
lines running parallel with and respectively seventy-five (75) feet distant Northerly and
seventy-five (75) feet distant Southerly from the center line of the main track of the railroad of
said party of the second part. Excepting therefrom a strip of land one hundred (100) feet in width,
being fifty (50) feet in width on each side of said main track center line heretofore acquired from
the United States of America by virtue of the approval of the maps of definite location of said
Railway Company's railroad by the Honorable Secretary of the
Interior.[¶43] The EOG parties and the
North Dakota Board of University & School Lands argue the deed is ambiguous and is
similar to the deed in Lalim. Like the deed in Lalim, the Faro deed indicates
that 100 feet of the 150 feet of property conveyed was excepted from the conveyance. The parties
stipulated the railroad acquired an easement under the 1899 Act, and therefore acquired only an
easement for the 100 feet of land excepted from the conveyance. In Lalim,105 N.W.2d 
at 345, this Court held the grantors excepted and retained the easement property under a deed
using similar language. This Court also determined the shape and location of the property
conveyed was significant, because the land the grantors owned in fee would be divided and cut
off from other lands the grantors owned in fee if the deed was construed to convey a fee title to
the county for the seven-foot strips. Id. at 346-47. In cases of railroad deeds, other courts
have also held the size and shape of the property conveyed was a factor in determining whether
the railroad acquired a fee simple interest or an easement. See Ballard v. Louisville
& N. R. Co., 5 S.W. 484, 486 (Ky. 1887) (shape of the land conveyed contradicts the
claim that the intention was to grant an easement); Nashville, C. & S. L. Ry. v.
Bell, 39 S.W.2d 1026, 1027 (Tenn. 1931) (the size and shape of the tract excludes any
inference the property was conveyed for a right of way).[¶44]
Although the deed on its face conveys the property in fee simple, the property description creates
ambiguity about whether the parties intended to convey a lesser estate. Because the deed is
ambiguous, extrinsic evidence may be considered. Resolution of an ambiguity in a deed by
extrinsic evidence is a finding of fact, reviewed under the clearly erroneous standard.
See Rolla, 2013 ND 175, ¶ 5, 837 N.W.2d 907. The district
court considered extrinsic evidence in determining the deeds conveyed only an easement,
including the court's opinion that "in 1914, 1915, and 1916, mineral interests probably interested
no one," which was not based on evidence in the record. Summary judgment is not appropriate if
the court must draw inferences and make findings on disputed facts to support the judgment.
Hamilton, 2012 ND 238, ¶ 13, 823 N.W.2d 754.[¶45] We agree with the district court that the Faro deed is
ambiguous, but reasonable differences of opinion exist as to the inferences to be drawn from the
language in the deed and summary judgment was not appropriate. The ambiguities in the deed
create a question of fact to be determined with the aid of extrinsic evidence. We conclude the
district court erred in granting summary judgment. We reverse the district court's decision on the
Faro deed and remand for a trial only on that deed. On remand, the court may consider extrinsic
evidence to clarify the parties' intentions. If no further evidence can be produced that was not
already before the court, the parties may provide a stipulation of facts and exhibits, together with
any argument permitted, for trial based on the record submitted. See Golden v. SM Energy Co., 2013 ND 17, ¶ 18, 826 N.W.2d 610.IV[¶46] We conclude the Grant, Olson, Blatt,
Kline, Trana, and Larson deeds are unambiguous and conveyed a fee simple title to the railroad.
We conclude the Faro deed is ambiguous, but summary judgment was not appropriate. We
reverse the summary judgment in favor of the EOG parties with respect to the deeds, and we
remand for further proceedings on the Faro deed and for entry of judgment in favor of Soo Line
and G-4 for the property covered by the Grant, Olson, Blatt, Kline, Trana, and Larson
deeds.[¶47] Lisa Fair
McEversDaniel J. CrothersZane Anderson, D.J. [¶48] The Honorable Zane Anderson,
D.J., sitting in place of Kapsner, J.,
disqualified.VandeWalle, Chief Justice,
concurring and dissenting.[¶49] I concur in part III D of the
majority opinion. I dissent to part III A and B.[¶50] The majority
opinion concludes that except for the Faro deed, the deeds are unambiguous and reverses the trial
court's summary judgment for the EOG parties and orders summary judgment for Soo Line and
G-4 parties. The dissent appears to conclude the deeds are ambiguous based on the facts cited in
the dissenting opinion. I agree with the majority that the Faro deed is ambiguous and summary
judgment for EOG on that deed should be reversed. I disagree with the majority that the other
deeds are unambiguous. The dissent also disagrees and relies on facts outside of the
deeds.[¶51] Justice Sand, writing for the Court, stated that "[a]n
ambiguity exists when good arguments can be made for either of several contrary positions as to
the meaning of a term." Kruger v. Soreide,
246 N.W.2d 764, 768 (N.D. 1976). I believe
both the majority and dissent make good arguments for the construction of the deeds in question.
Therefore I conclude they are ambiguous and that summary judgment for any of the parties was
improper. I would reverse and remand for trial. On remand, the trial court would be able to
consider the facts and analysis of both the majority and dissenting opinions as well as any other
admissible facts the parties may offer into evidence.[¶52] Gerald W. VandeWalle, C.J.
Sandstrom, Justice, dissenting.[¶53] I respectfully dissent.[¶54] A hundred
years ago, when the railroad sought the legal right to cross their land in Mountrail County, some
landowners gave deeds to the railroad in lieu of condemnation. We are asked to decide whether
the railroad actually took greater property rights from those landowners than it took from
condemnation or from the federal government deeds. For its rights-of-way from condemnation
and from the federal government, the railroad received only an easement. There is compelling
law and fact on which to conclude the railroad took through those deeds from private landowners
only what it would have received from condemnation, that is, easements.[¶55] Early in the twentieth century, the Minneapolis, St. Paul & Sault Ste.
Marie Railway Company, the predecessor to the Soo Line Railroad Company, sought continuous
right-of-way across Mountrail County to construct and operate its rail line. It obtained that
right-of-way in part under the 1899 Act of Congress, in part by condemnation, and in part by
deeds from private landowners. The various segments of right-of-way under deeds from private
landowners were interspersed with right-of-way secured under the 1899 Act and by
condemnation. If the private landowners had not conveyed the right-of-way by deed, the railroad
had the authority to take the right-of-way by eminent domain ("condemnation").[¶56] I note the majority agrees that through condemnation and from the federal
government, the railroad received only easements.[¶57] In
analyzing most of the deeds from private landowners, the majority focuses on the pre-printed
"boilerplate" language of the deeds, and omits and ignores the crucial typewritten language. See
the majority opinion, at ¶ 22,
where it omits the typewritten provisions and replaces them with "[property description]." The
typewritten provisions prevail over the pre-printed language, and any handwritten language
would prevail over both. See N.D.C.C. § 9-07-16. The typewritten language in the
deeds, the main portion of which is omitted in the majority's analysis, supports the logical
conclusion that the deeds from private landowners conveyed to the railroad only what it would
have taken through condemnation.[¶58] Here is the typewritten
language from the Olson deed, which parallels language of the other
deeds:—All that part of the South half of Southwest quarter
(S½ of SW½) of Section Twenty-seven (27), in Township One hundred fifty-two
(152) North of Range Ninety (90) West, which lies Southerly of a line that is Northerly of,
parallel with and one hundred twenty-five (125) feet distant from the center line of the main
track of said Railway Company's railroad as the same is now located over and
across Sections Twenty-seven (27) and Thirty-four (34), in said Township and Range. The
land hereby conveyed containing eight and sixty-five (8.65) hundredths Acres, more or less,
being a part of the land selected by and now occupied by the first party, by virtue of the
Homestead laws of the United States under Homestead entry No. 09385, made at the Minot Land
Office, on October 29, 1912.——And for the consideration aforesaid, said party of the first
part, for himself, his heirs, successors and assigns, does hereby release and discharge said party
of the second part, its successors and assigns of and from all and every obligation now existing or
hereafter arising to locate, establish, maintain or permit any crossing, over, upon, under or
across its tracks, right of way or other land for the use or benefit of the owners or occupants
of the lands and premises now owned by the party of the first part adjoining the second party's
said railroad. (Emphasis added.)[¶59] The
deed language reflects an intent not to convey all, but to convey "all of that part," and talks of the
"railroad as the same is now located over and across" the land. I believe this language is
reflective of an easement. The second typewritten paragraph recited above is also inconsistent
with conveyance of the entire fee ownership in that the paragraph would not have been necessary
had the railroad been taking more than an easement. The deeds from the private landowners also
carry the label "Right of Way" in their titles.[¶60] While the
majority may point to boilerplate and other language to argue the railroad took more than an
easement, ambiguity would properly be resolved against the railroad which drew the language.
See N.D.C.C. § 9-07-19.[¶61] Ambiguity takes us
beyond the four corners of the deeds to the context of the deeds and suggests that the
deeds from the private landowners conveyed to the railroad only what the railroad
would have taken by condemnation—an easement—and that the mineral interests in dispute here
properly belong not to the railroad but to the heirs and successors of the homesteaders of a
hundred years ago.[¶62] In Lalim v. Williams Cnty.,
105 N.W.2d 339, 341 syll. 7 (N.D. 1960), this Court held:A deed must be
interpreted to further the intention of the parties and in determining that intention the court may
consider the subject matter, the object to be obtained, and the circumstances and conditions
existing at the time the deed was executed.[¶63] Here the purpose was undisputably to provide right-of-way for the
railroad. This Court further held in Lalim, 105 N.W.2d  at 341 syll.
10:In determining the intent of the parties to a deed, the grantee of which
possesses the power to acquire the property granted by eminent domain for public use and it
appears that the property is being obtained for such use, the limitations of the estate which the
grantee may acquire by eminent domain may be considered in determining the intent of the
parties.[¶64] In Lalim, this Court
held that when a party which possesses the power to take by eminent domain obtains a property
interest by private deed, "the limitations of the estate which the grantee may acquire by eminent
domain may be considered in determining the intent of the parties." Lalim, 105 N.W.2d 
at 341 syll. 10. And the Court held the deed to an entity that could take by condemnation
conveyed only an easement. Lalim, at 347.[¶65] As
Professor James E. Leahy in his treatise on our North Dakota Constitution makes clear, the
railroad had the authority to take by eminent domain (condemnation). James E. Leahy, The
North Dakota State Constitution 50 (2003). See Gram Const. Co. v.
Minneapolis, St. P. & S.S.M. Ry. Co., 36 N.D. 164, 161 N.W. 732, 734
(1916).[¶66] Here, again, it is undisputed that by condemnation
the railroad could have taken only an easement. The Lalim precedent says that the
railroad received only an easement here.[¶67] The majority
argues, at ¶ 5, "The parties did
not argue these deeds were involuntary and there is no evidence in the record indicating the deeds
were made in lieu of condemnation." While Lalim would say that where the taking
entity has the authority to take by condemnation this does not matter, it seems absurd to argue
that if the private landowners had not executed the right-of-way deeds, the railroad would not
have used condemnation. Without the right-of-way over the private landowners' property, the
record clearly shows that the rail line in question would have consisted of unconnected segments
of track.[¶68] Although a strong argument can be made for the
district court's analysis ruling as a matter of law for the heirs and successors of the homesteaders,
I would conclude that the boilerplate language of the deeds relied on by the majority and the
crucial typewritten language of the deeds omitted by the majority, as well as the legal authority of
the railroad to take by condemnation and the historical context, create a question of fact to be
resolved by trial.[¶69] Dale V. Sandstrom