Case Title: BETTY MATHISEN, HAROLD SHIPLEY, PATRICIA BROWN, VICKI RUIZ, BOBBY SHIPLEY, JR., JIMMY SHIPLEY, MONICA MILLER and ROBIN SHIPLEY V. THUNDER BASIN COAL COMPANY, LLC, a Delaware Limited Liability Company, JACOBS RANCH COAL COMPANY, a Delaware corporation, CONSOL ENERGY, INC., a Delaware corporation and CONSOLIDATION COAL COMPANY, a Delaware corporation

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2007-10-11T00:00:00Z

Document:
BETTY MATHISEN, HAROLD SHIPLEY, PATRICIA BROWN, VICKI RUIZ, BOBBY SHIPLEY, JR., JIMMY SHIPLEY, MONICA MILLER and ROBIN SHIPLEY V. THUNDER BASIN COAL COMPANY, LLC, a Delaware Limited Liability Company,    JACOBS RANCH COAL COMPANY, a Delaware corporation, CONSOL ENERGY, INC., a Delaware corporation and CONSOLIDATION COAL COMPANY,  a Delaware corporation2007 WY 161169 P.3d 61Case Number: 06-276Decided: 10/11/2007
OCTOBER 
TERM, A.D. 2007

 
 
BETTY 
MATHISEN, HAROLD SHIPLEY, PATRICIA BROWN, VICKI RUIZ, BOBBY SHIPLEY, JR., JIMMY 
SHIPLEY, MONICA MILLER and ROBIN SHIPLEY,Appellants   (Plaintiffs),   v.THUNDER BASIN 
COAL COMPANY, LLC, a Delaware Limited Liability Company,    JACOBS RANCH COAL COMPANY, a 
Delaware corporation, CONSOL ENERGY, INC., a Delaware corporation and 
CONSOLIDATION COAL COMPANY,  a 
Delaware corporation,Appellees(Defendants).

 
 

Appeal 
from the DistrictCourtofCampbellCounty

The 
Honorable Michael N. Deegan, Judge

 
 
Representing 
Appellants:

Patrick 
Dixon, Casper, Wyoming.

 
 
Representing 
Appellee Thunder Basin Coal Company:

Thomas 
J. Davidson of Dorsey & Whitney LLP, Cheyenne, Wyoming.

 
 
Representing 
Appellees Jacobs Ranch Coal Company, Consolidation Coal Company and Consol 
Energy, Inc.:

Mark D. 
Taylor, Gillette, Wyoming; Thomas P. Johnson and Andrea Wang of Davis Graham 
& Stubbs LLP, Denver, Colorado.  
Argument by Mr. Johnson.   

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
KITE, 
Justice.

 
 
[¶1]      The appellants' 
predecessors in interest conveyed 120 acres in CampbellCounty to Appellee Consolidation Coal 
Company (Consol).  Even though the 
federal government owned the coal underlying the property and Consol did not 
have a right to mine it, the deed stated that part of the consideration for the 
transfer included a "surface royalty" for all coal removed and sold "by Consol" 
from the property.  Consol never 
acquired the right to mine the coal underlying the property; consequently, it 
never removed any coal or paid any surface royalty to the appellants or their 
predecessors.  Appellee Jacobs Ranch 
Coal Company (Jacobs Ranch) eventually acquired title to the property.  Appellee Thunder Basin Coal Company, LLC 
(TBCC) ultimately obtained the federal lease to mine the coal, leased the 
surface property from Jacobs Ranch, and began mining operations.  The appellants filed a complaint for 
payment of the surface royalty contemplated in the deed.  The district court concluded, as a 
matter of law, the appellees were not obligated to pay the surface royalty, and 
we affirm.    

 
 
ISSUES

 
 
[¶2]      Appellants raised 
the following issues on appeal:

 
 
            
A.        Does 
the phrase "for all coal mined, removed and sold by Consol" create a material 
condition precedent to performance by [a]ppellees?

 
 
            
B.        Is 
the "surface royalty" provision a covenant that runs with the 
land?

 
 
            
C.        Is 
the Warranty Deed ambiguous? and

 
 
            
D.        Is 
TBCC a successor in interest to Consol?

 
 
[¶3]      Appellees filed 
two separate briefs on appeal.  
Jacobs Ranch, Consol, and Consolenergy, Inc., filed a joint brief and did 
not specifically identify issues on appeal.  TBCC presented the issues 
as:

 
 
            
A.        
Whether the district court correctly determined that Consol's personal 
obligation to pay for coal mined by Consol did not run with the land to any 
party who ever mines coal from beneath the property?

 
 
            
B.        
Whether the district court correctly determined that the warranty deed 
between the Shipleys and Consol is clear and unambiguous?

 
 
FACTS

 
 
[¶4]      On June 19, 1975, 
Harold and Hattie Shipley conveyed a 120 acre surface estate in CampbellCounty (the Property) to Consol via a 
warranty deed.  The underlying coal 
was owned by the federal government and the parties agree that, at the time of 
the sale, Consol owned no interest in it.  
Even so, as part of the consideration for the Property, Consol agreed to 
pay a "surface royalty" to the Shipleys on the coal it removed and sold from the 
Property.   

 
 
[¶5]      Consol never 
acquired the right to mine the coal beneath the Property and never removed any 
coal.  Consol sold the Property in 
1982 and, after that, title to the Property transferred several times, 
eventually to Jacobs Ranch.1  TBCC leased the coal from the federal 
government and the Property from Jacobs Ranch and, after 1998, began mining the 
coal.    

 
 
[¶6]      Meanwhile, 
whatever surface royalty interest the Shipleys retained was conveyed to four of 
their children  Betty Mathisen, Harold Shipley, Patricia Brown and Vicki Ruiz  
and four grandchildren  Bobby Shipley, Jr., Jimmy Shipley, Monica Miller and 
Robin Shipley (the Mathisens).  The 
Mathisens received no royalty payments when TBCC mined the coal on the Property 
and brought this action against Consol and its successors, TBCC and Jacobs 
Ranch, seeking payment of the surface royalty described in the warranty deed 
between the Shipleys and Consol and other damages.    

 
 
[¶7]      The district 
court granted TBCC's motion to dismiss and a judgment on the pleadings in favor 
of Consol and Jacobs Ranch.  In its 
decision, the court ruled that, under the plain language of the deed, Consol was 
not obligated to pay the surface royalty because it never mined any coal from 
the Property.  The court further 
ruled the absence of language in the warranty deed obligating Consol's 
successors to pay the surface royalty demonstrated that the surface royalty 
obligation did not run with the land.  
The court thus concluded, as a matter of law, that Consol's successors 
were not obligated to pay the surface royalty to the Mathisens.  

 
 
STANDARD 
OF REVIEW

 
 
[¶8]      When a district 
court considers materials outside the pleadings in entering a judgment on the 
pleadings or in ordering a W.R.C.P. 12(b)(c) dismissal, we treat the ruling as a 
summary judgment.  Ballinger v. Thompson, 2005 WY 101, ¶ 9, 
118 P.3d 429, 433 (Wyo. 2005); Vigil v. 
Ruettgers, 887 P.2d 521, 
523 (Wyo. 1994).  Because the district court considered 
materials presented by the parties in addition to the pleadings in this case, 
the summary judgment standard is appropriate.

 
 
[¶9]      Our standard for 
reviewing summary judgments is de 
novo and was well stated in Caballo Coal Co. v. Fid. Exploration & 
Prod. Co., 2004 WY 6, ¶ 7, 
84 P.3d 311, 
313-14 (Wyo. 2004) (quoting McGee v. Caballo Coal 
Co., 2003 WY 68, ¶ 6, 69 P.3d 908, 
910-11(Wyo. 2003)):

 
 
Summary 
judgment motions are determined under the following language from W.R.C.P. 
56(c):

 
 
            
The judgment sought shall be rendered forthwith if the pleadings, 
depositions, answers to interrogatories, and admissions on file, together with 
the affidavits, if any, show that there is no genuine issue as to any material 
fact and that the moving party is entitled to a judgment as a matter of 
law.

 
 
            
The purpose of summary judgment is to dispose of suits before trial that 
present no genuine issue of material fact. Moore v. Kiljander, 604 P.2d 204, 207 (Wyo. 1979). 
Summary judgment is a drastic remedy designed to pierce the formal allegations 
and reach the merits of the controversy, but only where no genuine issue of 
material fact is present. Weaver v. Blue Cross Blue Shield of Wyoming, 609 P.2d 984, 986 (Wyo. 1980). A fact is material if proof 
of that fact would have the effect of establishing or refuting one of the 
essential elements of a cause of action or defense asserted by the parties. 
Schuler v. Community First Nat. Bank, 999 P.2d 1303, 1304 (Wyo. 2000). 
The summary judgment movant has the initial burden of establishing by admissible 
evidence a prima facie case; once this is accomplished, the burden shifts and 
the opposing party must present specific facts showing that there is a genuine 
issue of material fact. Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 (Wyo. 1987); 
Gennings v. First Nat. Bank of Thermopolis, 654 P.2d 154, 156 (Wyo. 
1982).

 
 
            
This Court reviews a summary judgment in the same light as the district 
court, using the same materials and following the same standards. Unicorn 
Drilling, Inc. v. HeartMountain Irr. Dist., 3 P.3d 857, 860 (Wyo. 2000) (quoting 
Gray v. Norwest Bank Wyoming, N.A., 
984 P.2d 1088, 1091 (Wyo. 1999)). The 
record is reviewed, however, from the vantage point most favorable to the party 
who opposed the motion, and this Court will give that party the benefit of all 
favorable inferences that may fairly be drawn from the record. Garcia v. 
Lawson, 928 P.2d 1164, 1166 
(Wyo. 
1996).

 
 
DISCUSSION

 
 
[¶10]   Although the parties address 
several corollary issues and arguments in their briefs, the core questions in 
this case are: whether, under the terms of the deed, Consol was obligated to pay 
the surface royalty even though it never mined the coal; and whether the surface 
royalty clause ran with the land so as to obligate Consol's successors, Jacobs 
Ranch and/or TBCC, to make surface royalty payments to the Mathisens when the 
coal was mined.  

 
 
[¶11]   In determining whether Consol is 
obligated to pay surface royalties to the Mathisens, we start with the language 
of the deed in which the Shipleys conveyed the Property to Consol.  The majority of the deed referred to the 
Shipleys as the "parties of the first part" and to Consol as the "party of the 
second part."  The surface royalty 
clause, however, abandoned the "parties" nomenclature and referred to them as 
"Owner" and "Consol."  The last 
paragraph before the Shipleys' signatures stated:

 
 
            
As further consideration for the sale and conveyance of said lands by 
Owner to Consol, Consol shall pay to Owner a surface royalty for all coal mined, 
removed and sold by Consol from said lands for two cents (2¢) per ton of 2,000 
pounds or one half of one percent ( ½ of 1%) F.O.B. the mine, whichever is the 
greater[.]

 
 
[¶12]   In Hickman v. Groves, 2003 WY 76, ¶ 6, 
71 P.3d 256, 258 (Wyo. 2003), we repeated our well known standard for interpreting 
deeds, as a type of contract.  
                       
 

"According 
to our established standards for interpretation of contracts, the words used in 
the contract are afforded the plain meaning that a reasonable person would give 
to them. When the provisions in the contract are clear and unambiguous, the 
court looks only to the four corners' of the document in arriving at the intent 
of the parties. In the absence of any ambiguity, the contract will be enforced 
according to its terms because no construction is appropriate." Amoco 
Production Company v. EM Nominee Partnership Company, 2 P.3d 534, 539-40 (Wyo. 2000) (citations 
omitted).  

 
 
The 
determination of the parties' intent is our prime focus in interpreting or 
construing a contract. If an agreement is in writing and its language is clear 
and unambiguous, the parties' intention is to be secured from the words of the 
agreement. When the agreement's language is clear and unambiguous, we consider 
the writing as a whole, taking into account relationships between various parts. 
In interpreting unambiguous contracts involving 
mineral interests, we have 
consistently looked to surrounding circumstances, facts showing the relations of 
the parties, the subject matter 
of the contract, and the apparent purpose of making the contract. 
Boley v. Greenough, 22 P.3d 854, 858 (Wyo. 2001). . . . 
Differing interpretations of contracts alone do not constitute ambiguity 
requiring extrinsic evidence. Moncrief v. LouisianaLand and Exploration Co., 861 P.2d 516, 524 (Wyo. 
1993).

 
 
We must 
first examine the terms of the deed and give them their plain and ordinary 
meaning. Wolter v. Equitable Resources Energy Co., Western Region, 979 P.2d 948, 951 (Wyo. 1999); Pete Lien & Sons, Inc. v. 
Ellsworth Peck Construction Co., 
896 P.2d 761, 763 (Wyo. 1995). Plain meaning is that 
"meaning which [the] language would convey to reasonable persons at the time and 
place of its use." Moncrief, 
861 P.2d  at 524. 

 
 

See 
also, 
Newman v. RAG Wyoming Land Co., 
2002 WY 132, ¶ 11, 53 P.3d 540, 544 (Wyo. 2002); WADI Petroleum v. 
Ultra Resources, Inc., 2003 WY 41, 
¶ 10, 65 P.3d 703, 707-08 (Wyo. 2003).  

 
 
Whether 
an ambiguity exists, as a matter of law, is for the court to determine. In making this 
determination, the court may consider extrinsic 
evidence bearing upon 
the meaning of the written terms, such as 
evidence of local usage and of 
the circumstances surrounding the making of the 
contract.   However, the court may not 
consider the parties' own extrinsic expressions of intent.

 
 

Hickman, 
¶ 11, 71 P.3d  at 259-60 (quoting KN Energy, Inc. v. Great Western Sugar 
Co., 698 P.2d 769, 776-77 (Colo. 1985)).  Even if the words of a deed are plain 
and unambiguous, when a party establishes the existence of a material issue of 
fact regarding whether a particular term or phrase used in a deed had a special 
meaning at the time and place of its use, we will consider extrinsic evidence to 
resolve that issue.  Mullinnix 
LLC v. HKB Royalty Trust, 2006 WY 14, ¶ 26, 126 P.3d 909, 921 (Wyo. 2006). 

 
 
[¶13]   The plain language of the deed in 
question in this case stated in relevant part:  "Consol shall pay to Owner a surface 
royalty for all coal mined, removed and sold by Consol from said lands . . . 
."  The obligation to pay the 
royalty is limited, by its plain language, to coal mined, removed and sold by 
Consol.  The language is clear that, 
in order to trigger the obligation to pay the surface royalty, Consol had to 
mine and sell the coal.  The 
district court succinctly stated:  
"Since Consolidation Coal mined nothing, they owe nothing."  The clear and unequivocal language of 
the deed supports the district court's ruling that, because Consol did not mine 
any coal, it was not obligated to pay the Mathisens a surface royalty.  

 
 
[¶14]   The next question is whether 
Consol's successors in interest, Jacobs Ranch and/or TBCC, were obligated to pay 
the surface royalty to the Mathisens when the coal was actually mined.  In support of their position, the 
Mathisens maintain that the "surface royalty" provision runs with the land. A 
covenant that runs with the land is considered to be "appurtenant" to the 
land.  See Seven Lakes Dev. Co., L.L.C. v. Maxson, 
2006 WY 136, ¶ 18, 144 P.3d 1239, 1247 (Wyo. 2006).  Many years ago, this Court explained 
that a covenant that runs with the land "inures to the benefit of, or must be 
fulfilled by, whatever party holds the land at the time when fulfillment is 
due."  Lingle Water Users' Ass'n v. Occidental 
Bldg. & Loan Ass'n, 43 Wyo. 41, 297 P. 385, 387 (Wyo. 
1931).  A party seeking to establish 
that a covenant runs with the land must demonstrate:  (1) the original covenant is enforceable; 
2) the parties to the original covenant intended that the covenant run with the 
land; 3) the covenant touches and concerns the land; and 4) there is privity of 
estate between the parties to the dispute.  
Jackson Hole Racquet Club Resort v. Teton 
Pines Ltd. Partnership, 839 P.2d 951, 956 (Wyo. 1992).  See also, 21 CJS Covenants § 32 (2007).   

 
 

[¶15]   Because 
it is determinative to the outcome of this case, we begin our analysis with the 
second element necessary for a covenant to run with the land:  The original parties intended the 
covenant to run with the land.  The 
provision creating the surface royalty stated that the obligation belonged to 
Consol specifically and did not refer to Consol's successors or assigns.  Moreover, the benefit was given to the 
Shipleys as "Owner" and did not indicate that it was to pass to the Shipleys' 
heirs or successors.  Although not 
dispositive in determining the intent of the parties, the use of words of 
succession suggests that the provision runs with the land, while omission of 
such words may suggest the intent that the obligation is personal rather than 
appurtenant.  See generally, 21 C.J.S. Covenants § 33 (2007); Seven Lakes, ¶ 18, 144 P.3d  at 1247 
(noting the use of words of succession in ruling that hunting and fishing 
privileges in deeds were profits which ran with the land rather than licenses 
which were personal and revocable).  

 
 
[¶16]   The Mathisens argue, however, that 
the appearance of the phrase "successors and assigns" in seven other places in 
the deed indicates the parties also intended the royalty provision to benefit 
the Shipleys' successors and obligate Consol's successors.   While our precedent requires that 
we construe the deed as a whole and in light of all of its provisions, see, e.g., Hickman, ¶ 6, 71 P.3d  at 258, 
the inclusion of "successors and assigns" in many places and its omission 
in the royalty clause harms the Mathisens' position more than it helps.  This selective inclusion of the terms of 
succession in specific places throughout the deed strongly indicates that the 
failure to include similar language in the surface royalty provision was 
deliberate.  See generally, Stutzman v. Office of Wyo. State Eng'r, 
2006 WY 30 ¶ 16, 130 P.3d 470, 475 (Wyo. 2006) (stating, in a statutory 
interpretation case, "omission of words from a statute is considered to be an 
intentional act by the legislature, and this court will not read words into a 
statute when the legislature has chosen not to include them").  Given the fact that the surface royalty 
provision refers to Consol specifically and the "successors or assigns" 
terminology exists in other places throughout the deed, the absence of words of 
succession in the royalty provision indicates that the original parties did not 
intend the surface royalty to the run with the land.  

 
 
[¶17]   In addition to the lack of words of 
succession, we note that the provision specifically stated that the surface 
royalty obligation was given "[a]s further consideration for the sale and 
conveyance of said lands by Owner to Consol."  This phrase indicates that the 
obligation was personal between the Shipleys and Consol and was related only to 
the original sale.   We, 
therefore, conclude the plain language of the deed provided that the surface 
royalty was personal to the parties to the transaction and did not run with the 
land.     

 
 
[¶18]   The Mathisens argue, however, that 
the district court erred by failing to consider the circumstances surrounding 
the transfer of the Property.  On 
appeal, the Mathisens argue:

 
 
[T]he 
court should consider the circumstances surrounding the transaction.  In 1975, the industry was just beginning 
to develop the tremendous resources of the ThunderBasin.  The value of the Shipley property was 
dependent upon the value of the underlying coal.  As that was an unknown, the parties 
crafted the method whereby that value could be tied to future 
production.

 
 
In 
another place in their brief, the Mathisens suggest that the district court 
erred by failing to consider, in deciding whether the surface royalty provision 
runs with the land, the facts that Consol had no legal right to mine the coal 
when it purchased the Property and that Consol contemplated its successors in 
interest might one day mine the coal.   

 
 
[¶19]   Our precedent clearly establishes 
that, in appropriate cases, we will consider the facts and circumstances 
surrounding a transaction in order to discern the meaning of the words used in a 
deed, even when the language of the deed is clear and unambiguous.  See, e.g., Hickman, ¶ 6, 71 P.3d  at 258; Newman, ¶ 12, 53 P.3d  at 544; Ecosystem Res., L.C. v. Broadbent Land & 
Res., L.L.C., 2007 WY 87, ¶¶ 35-36, 158 P.3d 685, 694 (Wyo. 2007).  We agree with the Mathisens that the 
undisputed fact that Consol did not have the federal lease to mine the coal when 
it purchased the Property from the Shipleys is a circumstance that should be 
considered in interpreting the deed because it pertains to the "purposes of the 
grant in terms of respective manner and enjoyment of surface and mineral 
estates."  Newman, ¶ 19, 53 P.3d  at 546, quoting 
Comment, New Values Under Old Oil and Gas 
Leases:  Helium, Who Owns It?, 
62 Mich. L. Rev. 1158, 1169 (1964).  
That circumstance does not, however, advance the Mathisens' position that 
the parties intended the surface royalty to run with the land because it could 
both support and undermine such an interpretation.  On one hand, the fact that Consol did 
not have a legal right to mine the coal could suggest that the parties intended 
the provision to run with the land so that the Shipleys and/or their successors 
would eventually receive further compensation when the coal was mined.  On the other hand, a contrary inference 
could also be made that Consol, uncertain it would ever be able to mine the 
coal, may not have wanted to encumber the Property with a burden that runs with 
the land because such a burden would diminish the value of the Property when 
Consol decided to sell it.2  Because these contradictory inferences 
are equally plausible, the fact that Consol did not have the right to mine the 
coal when it purchased the Property is not helpful in divining the parties' 
intent. The Mathisens' interpretation requires us to speculate regarding that 
intent, and we decline to do so. 

 
 
[¶20]   With regard to the Mathisens' 
suggestion that the value of the coal was unknown at the time the deed was 
executed and the royalty payment would have been necessary for them to have 
received fair value for their property, they provided no evidence in support of 
their position.  In order to avoid a 
summary judgment, the party advancing an argument concerning the interpretation 
of a contract in light of the facts and circumstances of its execution must 
present evidence to the district court to support its position.  We have explained this basic tenet of 
summary judgment jurisprudence as follows: 

 
 
   "After a movant has adequately 
supported the motion for summary judgment, the opposing party must come forward 
with competent evidence admissible at trial showing there are genuine issues of 
material fact.  The opposing party 
must affirmatively set forth material, specific facts in opposition to a motion 
for summary judgment, and cannot rely only upon allegations and pleadings . . ., 
and conclusory statements or mere opinions are insufficient to satisfy the 
opposing party's burden."  

 
 
   The evidence opposing a prima facie 
case on a motion for summary judgment "must be competent and admissible, lest 
the rule permitting summary judgments be entirely eviscerated by plaintiffs 
proceeding to trial on the basis of mere conjecture or wishful 
speculation."   Speculation, 
conjecture, the suggestion of a possibility, guesses, or even probability, are 
insufficient to establish an issue of material fact.  

 
 

Cook, ¶ 12, 
126 P.3d  at 890, quoting Jones v. 
Schabron, 2005 WY 65, ¶¶ 9-11, 113 P.3d 34, 37 
(Wyo.2005).

 
 

Hatton 
v. Energy Elec. Co., 2006 WY 
151, ¶ 9, 148 P.3d 8, 12-13 (Wyo. 2006).

 
 
[¶21]   The Mathisens' musings about the 
state of the industry in the ThunderBasin when the deed was executed and the 
value of the Shipleys' property being dependent on the underlying coal are pure 
conjecture and speculation.  The 
lack of evidence to support these aspects of the Mathisens' facts and 
circumstances argument distinguishes this case from others where we have ruled 
that consideration of extrinsic evidence is warranted.  In Hickman, we reversed a summary judgment 
which held that a reservation of oil rights in a land transfer did not reserve 
any rights to coal bed methane gas.  
The record included evidence of circumstances at the time of the transfer 
indicating that "it was common for rural residents to refer to oil rights' when 
referring to both oil and gas rights, without differentiating between the two 
substances."  Hickman, ¶ 14, 71 P.3d  at 261.  This evidence raised a material question 
of fact concerning the meaning of "oil rights" within the context of the deed 
that required reversal of the summary judgment.  Id.  

 
 
[¶22]   In Ecosystem, we considered whether timber 
interests reserved by the railroad in deeds conveying the surface rights were 
limited to a "reasonable time" even though the deeds did not contain a statement 
about the duration of the interests.  
We held that evidence presented by the appellant about the nature of the 
railroad's use of timber in its business activities and the consideration paid 
by the surface owners for the conveyances  was sufficient to create a genuine issue 
of material fact about the surrounding circumstances.  Ecosystem, ¶¶ 35-36, 158 P.3d  at 
689.  Here, the Mathisens presented 
no evidence to support their claim that the facts and circumstances surrounding 
the Consol transaction should be evaluated by the court.  They failed to bring forth specific 
evidence to support their position regarding these alleged facts and 
circumstances and, therefore, create a material issue of fact to avoid summary 
judgment.  

 
 
[¶23]   Because neither the plain language 
of the deed nor evidence of the circumstances surrounding the transfer raise a 
question of material fact, we find no basis for overturning the trial court's 
conclusion that the parties to the deed did not intend for Consol's successors 
to be bound by the surface royalty obligation.  Our finding that the parties did not 
intend that the surface royalty provision run with the land is dispositive; 
consequently, it is unnecessary for us to consider the other requirements for a 
covenant to run with the land or the other arguments presented by the parties in 
this case.

 
 
CONCLUSION

 
 
[¶24]   We hold the district court properly 
granted judgment as a matter of law to the appellees.  The plain language of the deed 
establishes that Consol was not obligated to pay a surface royalty to the 
Mathisens because it never mined the coal on the Property.  Moreover, the Mathisens failed to 
establish an essential element required for the surface royalty provision to run 
with the land, i.e., the original parties intended it to run with land.  Thus, Consol's successors in interest 
were not obligated to make surface royalty payments to the Mathisens when the 
coal was mined.

 
 
[¶25] Affirmed. 

 
 
FOOTNOTES

 
 

1In 1982, 
Consol conveyed the Property to Kerr McGee Corporation, which conveyed it to the 
Kerr McGee Coal Corporation.  
Kennecott Energy and Coal Company purchased Kerr McGee Coal Corporation 
and renamed it Jacobs Ranch Coal Company.     

 
 

2The 
undisputed facts are that Consol, having been unsuccessful in obtaining the coal 
lease, sold the Property to Kerr McGee which also did not mine the coal, and 
ultimately sold to Kennecott which renamed the company Jacobs Ranch Coal 
Company.  Finally, TBCC did obtain 
the federal coal lease and leased the Property from Jacobs Ranch to facilitate 
its mining operation.