that plastered dome both no duties to e c m under any contract or property law theory this court held that was error plastered don't signed a joint venture agreement saying it w remanded for a trial on this property law issue that child never happened so why are we back in front of you seven years later because it took a second remain and from this court in december of two thousand one to get the trial court to consider whether the particular clause that issue here section one thousand be ran with the leaseholder state upon receiving that second remand the trial court that the matter on for summary judgment again and that was the very first time that the trial court considered the issue that's in front of you today so what precisely did the district court get wrong in its analysis of this touching concern requirement the district court decided that when analyzing where that the covenant will run against the owner of the burden to state that the court should look only at the negative impacts of the c the promise or in isolation in the district court written opinion the court ignored all of the undisputed evidence about the purpose of the covenant to maintain an enhanced to me to be the weakest aspect of your argument and your i believe that's a total straw man and we have never argued and do not argue that section one thousand be required disclosure of anything other than information regarding the least property but it wasn't the most promising hole whatever that drill hole was in adjoining land as opposed to the land that was and knowing that there's this and i don't i'm not a gold miner so you're going to have to bear with me but isn't it the knowledge that that drill hole might containing commercially required information about the least claims and that is limited to the property that is defined in the lease as making up the leasehold estate that does not include i mean when you like to know if of gold that my depending on which way you run under a portion of your land to whether we would like to know or not this clause did not require them to tell us anything about what they what they have focused on is the idea that they were motivated to generate these reports about the least claims let me be even more specific everybody agrees that the gas to discovery area is directly on the least claims and everybody agrees that this drill hole nine one nine zero seven the hot hole was outside the lease claims ok so what they're saying is we were motivated to go and take a second look at the gas to discovery claims and generate reports and data about those claims by something we learned about adjacent property that you know maybe it's under here in the corner of my land if i just dig down deep enough and in the right place maybe i'll be able to tap into it well let's break it down first they don't have to disclose the motivation just what they've done on our claims if it is true that knowing something about our claims if knowing something about gas two leads us to the conclusion that there may  be a continuation of this geological feature on adjoining property if that is true it is slowly a result of the geology of the land and the fact that we humans have put lines across that are property lines that fact relates soley to the land it's not something personal between us and feel us or anyone else it's a characteristic of geology that than fact happens but that the obligation is a personal obligation to disclose information is it not and why isn't that more like a contract obligation and suppose a covenant that runs with the land well the question it is like a contract obligation that's what a covenant  makes running covenant unique is whether or not the type of promise that is made is one that is inherently tied up with ownership of land and the type of promise that one can make because one owns land and in this situation that is definitely true the purpose of this confidence is under spewed and we lived in a number of different purposes of this covenant but the one that everybody agrees on is this that under this lease the tenant has the obligation to perform what they called the assessment work they got to go under the property claims now section one thousand be required the less we need to disclose to the last or the reports and data regarding the mining claims specifically the information about mineral occurrence which is the geology of those claims and the economics or feasibility of mining those claims what is on the land and whether you can take it out of the land scuse me right lessee failed to do that and these are precisely the types of information that the less he would need to value is reversionary interest in the property so what we have to do is look at the connection between those purposes and estates and land because that's the one thing that's clear and all of the cases cited particular that's flying diamond case in which is relied on by both parties and the district court is that the focus has to be on the overall purpose of the company and the connection between the states and land so these are flying time and it's a little different factually i mean that really does have to do with disturbing the surface of the property which is also being the surface is understood understand it was being used by the sheep company for running livestock and and the mineral holder underneath wanted at the same time to what drill for oil i guess which is obviously going to have a direct impact on the ability to use the surface for running she so i can see in that case a more direct correlation between the covenant and the actual use of the land here it seems to me that the covenant is really oriented more towards helping both parties understand whether or not this land can and is of greater value both for purposes of determining you know what it's worth for lisa but also whether it's economically feasible to mining the flying diamond changed focuses on the question of whether the royalty payment runs and i mean a critical point there is that if you take the royalty payment in isolation it's just a promise to pay money so it if you look at it just a loan it cannot and to the extent that there should be some adjustment in the royalty or in the compensation i guess i can see a more direct correlation the question in that case was w benefit ran to the subsequent service owner so the key thing about what the court did there is the royal or the reasoning of the court what the court said is we're going to look at this overall purpose and specifically what they said is the purpose of this royalty agreement that the surface owner in the mineral estate owner reached was to give the service owner incentive to let the mineral owner come onto the land and do this work and the key point that the court focused on is they could have done that using their already existing interest in land because there are  the mineral owner come onto the surface for that purpose so the court said we're going to find a purpose of this very specifically to be awarding disputes they created this additional incentive to give the surface on or a stake in the mining operation exactly the opposite of what the jury did in this case what pastor don't was asking you to do is to not look at this overall purpose they want you to just focus on the purpose this overall purpose relates directly to ownership of the property and title to the property the key point is under this lease the tenant have the obligation to do this assessment work and we all agree if that wasn't overall purpose of this clause in the specific lease it is directly tied to their positions as the owner of the lease holder state the present owner and their owner  need a section well the way this works is that the only things that you can do on these claims to begin with i mean that you don't have unlimited rights as an owner about unpadded mining claim to go on the property and do whatever you want to that it's true that when you file the affidavit you don't put in every single report that you generated but if the tenant failed to do this and the landlord needed to step in the landlord would need all of those reports in order to put together the affidavit saying yes we spent this much money and we acted diligently to pursue these claims with those two section thirteen deals with a different kind of report and section nine feet right no i don't agree with at the t the types of reports that are that are at issue here and there's many many of them that are in the record are standard geologic reports that are generated by people that do this type of exploration work at this point i'll reserve the rest of my time very well reality the real key word here is interpretive reports that's what are really at issue if you look at the record below there are two kinds of evidence that you see and the still claiming it's not disclosed to it by plastered all men should have been one are the kinds of reports and data that royal gold generated solely from the gas claims the only place where well gold operate it those reports cannot support a cause of action for e c m because  c m has admitted that it received all of those reports and all of that data in other words e c m knew everything it was supposed to know about data and reports solely based on data from the gascoigne's what is really at issue in this case is the hot hole and what it met the mineral ice friend documents are the ones that are at issue that is the mineral ice trend of several miles which was hypothesized by p t us in cortez geologists by looking at the data from the gas cloud but indeed far more materially and importantly data from outside the gas claims particularly d h nine  seven the drill results that goldfields has shared with p d us during their negotiations so what we have here is indeed two very different kinds of reports this case has always been about the disclosure of the second kind of report when it was a rico case thirteen years ago it was about that kind of disclosure when it went to trial ten years ago to a jury for two months an intentional fr about that kind of disclosure and in between we litigated in numerable theories about that kind of disclosure under the law that you sherry's is that your point is that your position that all the reports regarding the least property were already given to all of the reports which are based on data taken solely from the gas claims either e c m already had because it have the data from royal or they read the reports that they've prepared or that p t us prepared were in substance identical and not materially different from what royal had an as you heard council saying that all they wanted was the reports and the data regarding the least properties of your position the record shows that they got that what they got that except there's a word game going on here because it has to do with the word regarding and the word game is the key i think what you'll see if you look carefully at the briefs and at the record what they are saying is that we were supposed to have agreed acted discussion of the mineral ice trend that ran across the gas claims to only talk about the mineral ice trend as it went over the gas claims but as a matter of common sense you can't do that and the point is simply this you wouldn't be talking about a mineral ice trend across the gas claims if there weren't a mineral ice trend in the entire area that's what the evidence  in other words the mineral ice trend is a function of d h nine one nine zero seven the hot hole it's a function of the goldfields drill results further to the south from mine when nine eleven and the gas claims drill are where it ended up or where it was more valuable in one place of the other but that trend is that which would be a burden on your lease home ownership because i've given up that information it's likely that in renegotiation of terminations he would not give up as much as they did give up first of all with that with the purpose we're talking about a purpose in negotiating a new state or a new deal which by about the trend on the gas claims is to ever acknowledge that there is a trend at the time the record is undisputed that they that there was no discovery that the gas to drill drill results were mixed they did not show a trend they did not noble or body they did not amount to a discovery that is undisputed on the record it's only because of d h nine one nine zero seven and other drill results between the cortez placer go on property to the north and the gas claims it's only because of that additional data from outside the gas claims that you can hypothesize a mineralized trend so if the  the reports that they say they're entitled to had been given to then it would necessarily have to disclose maybe not specific data would have to disclose the existence of very very powerful data even if you don't give them the actually numbers it that controlled right we have the drill hole ninety one nine zero seven outside of it and then we have another area which is outside to the south actually it's between it's between we have we have cortez land up here we're second area that's outside looks pretty good and there's some sort of proprietary scientific theory that somebody has applied to suggest that we might have alcohol in a vein i don't know if that's the right term but a geological trend that may run all the way across including underneath e c m right and what if you look at just the gas state at the gas claims day that that that that they had a right to it that they did have they testified that's only one one chance and five based on that data alone that there would be a minor or a body discovered on the gas claims now he also testified interesting enough a trial that even if you had the other data from the properties to the north in ding ours it's still only one in five but they also said we would like to have known that because it would have put us in a better position to bargain with you over royalty and look at a lot better than if we're just looking at the exults of exactly only only because d h nine when i know seven is truly a hot hole it was it was the all american full of nine hundred ninety one i mean if you can imagine it was all pro in every respect it was a tremendously remarkable hole it was just one hole but it changed know what was on their piece of property are you telling me that you told me it was only if we told them they had all the data we weren't the operator on the ground at the time that the time royal gold was the one providing with the information they've acknowledged that they have all the data from w gold well we didn't tell them is what we could infer about their property but only because of what we learned from outside the property i think that's probably the easiest way to put it and that's one of the reasons why the just record recognize that the scope of the obligation that e c m had to argue here for under one thousand b was not bounded by the gas claims it wasn't bounded by the lease property as a matter of fact it wasn't even bounded by property at all let me give you an example it really depended upon what you knew not what you own who are example if plaster dome was conducting exploration in some other part of the world and had learned proprietary information about certain  geologic formations which happens frequently with a company that does exactly this all over the world if the if the geological formations that i learned about were similar to the geological formations that they had found on the gap that royal had found in the gas plains now peter us would have an obligation to tell e c m this data this information is used in this report this inference about the gas claims even though it's based on some theory that isn't even connected to la that's why the obligation by nature must be what we call personal or are actually quit better here collateral ownership is the phrase that's been used it is noteworthy i submit your honors that since spencer's case was decided in fifteen thirty six and the doctrine of running covenants first established we have not found neither side has found a single case we're a duty to disclose information about lan has run with the land now you would think somewhere in six hundred years and the last thirteen years of litigation where we've looked at i can't say we've looked at every case in the last six hundred years but i'll bet we come very close to  but it's not a matter of revealing information about police property you've given a man through a royal gold he found the only thing that you didn't give them was the inference that thousand one held that the area of influence covenant in the same lease did not run with the land in the reason it did not is because it necessarily extended and had a scope of obligation be on the boundaries of the least property so by analogy again here the obligation to make or reveal inferences based upon data from outside the property would define that school again it's not what you own that controls your your obligation to disclose it's what you know i think it's also important which you know from elsewhere we know why what you know from anywhere i think is way to put it's not poised it's not bounded to the land i think it might be important to look if we can quickly at some of the cases that have been already discussed and point out to important facets we're talking about nevada real property law there hasn't been much on this subject for forty years but what is there pretty clearly requires this before a burden is going to be enforced against the successor of the and original covenant tour that burden is going to have to be shown to touch and concern the land not merely the benefit to the dominant of state and the reno versus matley case by the nevada supreme court makes pretty clear that a burden does not run as easily as a benefit and in fact the court says and points out that the reason the burden runs much more difficult it's harder to run the burden on the burden side if because it goes to the public policy regarding the alien ability in restraints on alienation of property obviously the success or being able to claim the benefit does not restrain the only nation of the state the dominant state but burdening the servian state d as i was preparing for this argument today i want to i do want to emphasize that the district court recognized that this particular comment it had no physical connection it didn't require anybody to go and do anything on the land that's very important in a burden case so one of the analogies you might do is look at other companies that don't require physical acts like for example how about the payment of money that doesn't require a physical act on the property or doesn't physically connect with the property in pair in footnote ten of the flying diamond case that we refer to there is a case which emphasized the scene emphasizes this very point it says find that a minute the promise to pay money is necessary dependent on the purpose of the payment and thus should not stand alone accordingly most courts have considered promises to pay money in the context of bennett the to the covenant or however where the issue was burden we have seven cases cited in the footnote however a covenant to pay often does not run with the land even though it arises out of a covenant that does and they cite one case from new york nassau county versus kensington where the promise to pay assessments in development was held not to touch and concern the land because the covenant itself did not specify the purpose of the paines the covenant itself this covenant specifies no purpose let's look if i may at the three things that i think this covenant is missing if there's any hope as i said for six hundred years there's no case anyone  found were due to disclose information has been held to run run with the run with the state but let's look at what might at least arguably be a covenant if you look at the case law first of all if there's  requirement that you have to go on the land and generate the information from the land in other words if the covenant required the left seat to go on the land and generate data or information secondly that it required the lessee to reveal and disclose that data to the less or and not interpretation of the data because as soon as you interject interpretation you're objecting the personal characteristics or traits of your covenants for and that will destroy any chance that the obligation will be a covenant running with the land it becomes a personal or a personal covenant or covenant collateral to ownership and the third thing that would be required because this is not a covenant that has sufficient physical contact the purpose would have to be specified in the common itself and that purpose would have to be one which in some way altered or impacted the ownership interests of the serving of the state those would be at a minimum the requirements to even have an argument that a duty to disclose information about land was a covenant that ran with the land this covenant meets not one of those delegates first of all there is judge is just that is this a court pointed out there is no requirement to go on the land and do anything there's no requirement can you talking about is paragraph one thousand be one thousand this is a very important real property concept it's almost like you have to take one thousand be in separate off here and look at it and say it's a part of the property it's a part of the real property you have to do that with each column in it before you can determine whether the covenant runs with leaks or runs with the land the one thousand b c does not require anyone to do anything on this land secondly it doesn't require the disclosure according to the c m of merely data taken from the land because if that were the case we wouldn't be here today they're claiming that anything regarding the land includes interpretation of the data and that interjects the personal characteristics of the interpreter of the covenant tour of the ababa or more accurately and thirdly this particular covenant specifies no purpose let alone a purpose restricted to ownership of land i think it's important to recognize as well in the flying diamond case one of the quote the comment in question to run with the land have is a burden and yet you promise to do something it's presumptively especially in this context of a burden we're talking about rather than a benefit it is presumptively a personal obligation that isn't forcible by contract and by cruelty of contract through an assignment of the lease with an assumption by the success of trust grantee which is the way it is typically done in the mining industry by the way as the record shows but in this situation to run the covenant with the land you would have to alter the rights of ownership in the serving in the state merely by the existence of the covenant as written not the way it might be used indirectly which of course brings me to the other point and i believe i've run out of time ok thank you thank you very much council what information about the lease property did you not get about the lease probably not about the heart whole not about goldfields with about the least property let me be absolutely clear and i think this document which is the first exhibit to the blue brief will help this area here that i'm pointing to is the gas to discovery area there were twenty eight holes drilled there by royal that raw data regarding those holes was disclosed earlier ok we didn't get that from class and we got it from royal now there's a whole series of very specific reports and data generated by placer geologists regarding specifically that gas to discovery area and if you turn on you the site it's to our initial excerpts of record section or it's page eighty  seven page ninety page ninety six you'll get examples of those they follow that for example one of them was a preliminary block model or reserve study done specifically just on this area on the claims not on a trend another was an optimization model to find out whether it was economic to take the or out of this specific area on the claims none of that was provided to e c m the idea that that information is somehow about other information or other property is simply wrong that information is absolutely and specifically about the e c m claims what he's really focusing on is the materiality argument here somehow that well you didn't really need this and when they told you anything new because you already had the raw data the district court who had tried this case ten years ago and knew all about all these reports did not rule on the basis that this information that we required to be disclosed was not material and that's not an issue that's before you today if there's any materiality question at all well first of all this is a contract if they owed this duty it's unfortunate the contract they are liable for breach of that contract and it's not a materiality question at all this is not a  law that governs whether or not there's a breach and whether there's damage is actually i reason i thought you were going back to your contract no it's just the law of contract and whether or not this is a material breach or not what is the difference between the reports you go saying here is a black model showing exactly how now these twenty eight drill holes can be extrapolated to model the actual orebody that exist in the ground on the e c m your position that goes to the economic ability to mine the place it goes to both the specific geology and the economics those are these are this is an example of something that is typically created and directly covered by this