Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-16657/USCOURTS-ca9-13-16657-0/pdf.json

Parties Involved:
John H. Anderson
Appellant
Peter Haakon Anderson
Appellant
Todd Christian Anderson
Appellant
Cuprite Mine Partners LLC
Appellee
Margaret Jane Anderson Liljemquist
Appellant
Stacey Elizabeth Anderson Ord
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CUPRITE MINE PARTNERS LLC, an

Arizona limited liability company,

Plaintiff-Appellee,

v.

JOHN H. ANDERSON, a married man,

acting in his sole and separate

capacity; TODD CHRISTIAN

ANDERSON, a married man, acting in

his sole and separate capacity;

MARGARET JANE ANDERSON

LILJEMQUIST, a married woman,

acting in her sole and separate

capacity; PETER HAAKON

ANDERSON, a single man; STACEY

ELIZABETH ANDERSON ORD, a

married woman, acting in her sole

and separate capacity,

Defendants-Appellants.

No. 13-16657

D.C. No.

4:12-cv-00286-

DCB-LAB

OPINION

Appeal from the United States District Court

for the District of Arizona

David C. Bury, District Judge, Presiding

Argued and Submitted

November 17, 2015—San Francisco, California

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2 CUPRITE MINE PARTNERS V. ANDERSON

Filed December 31, 2015

Before: FERDINAND F. FERNANDEZ and MILAN D.

SMITH, JR., Circuit Judges, and BRIAN M. MORRIS,*

District Judge.

Opinion by Judge Milan D. Smith, Jr.

SUMMARY**

Arizona Law / Mining Claims

The panel affirmed the district court’s summary

judgment, and held that the district court properly applied

Arizona substantive law regarding partition of mining claims

and federal procedural standards for summary judgment.

Plaintiff is a limited liability company formed by children

of GuyAnderson (or their successors-in-interest) who wished

to sell their interests in Guy’s mining claims on a piece of

property in Arizona’s Copper Mountain Mining District, and

the defendants were Guy’s remaining child, and his children,

who did not want to sell their interest in the mining claims. 

The district court entered judgment ordering partition by sale,

and approved the sale of the property.

* The Honorable Brian M. Morris, District Judge for the U.S. District

Court for the District of Montana, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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CUPRITE MINE PARTNERS V. ANDERSON 3

The panel held that the district court did not abuse its

discretion in allowing all of the defendants to be joined in a

single partition action.

The panel held that the district court did not err in

granting summary judgment in favor of plaintiff. As an

initial matter, the panel held that plaintiff had a legal right to

partition under Arizona law which gives any owner or

claimant of property held in cotenancy the right to compel

partition without regard to the preferences of other owners or

claimants. The panel also held that the district court properly

concluded that partition by sale was more appropriate than

partition in kind. The panel further held that the district court

reasonably structured the partition sale, and the sale did not

violate any terms of the operative Arizona statute.

The panel held that the district court properly resolved the

summary judgment motion according to the Federal Rules of

Civil Procedure. Specifically, the panel held that even if

Arizona law prohibited summary judgment and instead

required a trial in a suit for partition by sale, such a suit was

procedural in nature and a federal court sitting in diversity

was required to follow federal, not state, procedural rules.

The panel held that according to the facts as presented on

summary judgment the outcome – partition by sale – would

have been identical even if the district court had held a trial.

The panel concluded that the district court properly granted

relief on summary judgment where there was no genuine

dispute of material fact to be resolved at trial.

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4 CUPRITE MINE PARTNERS V. ANDERSON

COUNSEL

Gary Frank Urman (argued), John Carleton Lacy, DeConcini

McDonald Yetwin & Lacy, P.C., Tucson, Arizona, for

Plaintiff-Appellee.

Todd C. Anderson (argued), Troy C. McMahan, John

Anderson Law, San Clemente, California, for DefendantsAppellants.

OPINION

M. SMITH, Circuit Judge: 

This is an appeal of a diversity action to partition mining

claims under Arizona law. We conclude that the district court

properly applied Arizona’s substantive law regarding

partition and federal procedural standards for summary

judgment, and we affirm.

FACTS AND PROCEDURAL BACKGROUND

Guy Anderson (Guy) owned sixteen mining claims in

Arizona’s Copper Mountain Mining District.1 Upon his death

in 1975, he bequeathed them to his six children, with each

child receiving an undivided one-sixth interest in each mining

claim.

1 The record indicates that the property as a whole has historically been

treated as one piece of property that comprises sixteen mining claims.

Copper mining claims are limited in area to 1500 feet along a vein and

300 feet on either side of the middle of the vein. 30 U.S.C. § 23.

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CUPRITE MINE PARTNERS V. ANDERSON 5

Five of Guy’s children (or their successors in interest)

wished to sell their interests in the mining claims to FreeportMcMoRan Morenci Inc. (Freeport), the owner of an open-pit

copper mine operating on adjacent property. Guy’s remaining

child, John H. Anderson (John), did not want to sell his

interest in the mining claims. Those who wished to sell

formed the Plaintiff entity Cuprite Mine Partners, LLC

(Cuprite), which filed a partition action against John in the

District of Arizona. In the original complaint, Cuprite prayed

alternatively for partition in kind or partition by sale.

Shortly after the complaint was filed, John executed a

series of quitclaim deeds in which he granted his interest in

twelve of the mining claims to his four children. Each child

received three of the mining claims, and John kept four for

himself. He apportioned the claims among his children in

such a way that no single owner would have an interest in

contiguous claims.

After John executed the quitclaim deeds, Cuprite filed an

Amended Complaint to add John’s children as additional

defendants (collectively, the Defendants). Instead of

requesting either partition in kind or partition by sale, the

Amended Complaint requested only partition by sale. Cuprite

alleged that because the quitclaim deeds diffused John’s

interest over multiple non-contiguous tracts of land, the

property could no longer be realistically partitioned in kind

without depreciating its value, and that partition by sale

would be more beneficial. Ariz. Rev. Stat. § 12-1218(B).

In response to the Amended Complaint, the Defendants

filed a motion to dismiss, arguing that it was improper to join

all of the Defendants in a single partition action. The district

court denied the motion.

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6 CUPRITE MINE PARTNERS V. ANDERSON

Cuprite moved for summary judgment, arguing that no

material facts were in dispute, and that as a matter of law it

was entitled to judgment ordering partition by sale. The

district court granted summary judgment to Cuprite. The

court appointed a commissioner to execute the sale of the

property, and directed the commissioner to sell the property

on terms “at least as favorable” as the terms outlined in an

outstanding offer letter from Freeport. The commissioner was

instructed not to sell the property for sixty days following the

entry of the order, during which time any party could procure

and present a better offer to purchase the property. The

commissioner was ordered to proceed with whatever offer he

believed to be the most favorable after the sixty-day period

had passed.

By the end of the sixty-day period, no one but Freeport

had submitted an offer to purchase the property.

2 On April 24,

2014, the district court approved the sale of the property to

Freeport.

The Defendants timely appealed.

JURISDICTION AND STANDARD OF REVIEW

The district court had diversity jurisdiction in this case

pursuant to 28 U.S.C. § 1332, and we review the court’s final

judgment pursuant to 28 U.S.C. § 1291. We review the

district court’s denial of the motion to dismiss for improper

2 After the expiration of the sixty-day deadline, another company

submitted an “expression of interest” to the commissioner. In addition to

being untimely, the district court found that the letter was not an actual

binding offer, and that it was “only debatable” whether the terms were

better than those proposed by Freeport.

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CUPRITE MINE PARTNERS V. ANDERSON 7

joinder for abuse of discretion. See Bakia v. Cty. of Los

Angeles, 687 F.2d 299, 301 (9th Cir. 1982). “A district

court’s grant of summary judgment is reviewed de novo.”

Davis v. City of Las Vegas, 478 F.3d 1048, 1053 (9th Cir.

2007).

DISCUSSION

On appeal, the Defendants assert that they were

improperly joined into a single partition action. They also

contend that the district court erred in applying Arizona’s

partition statute by: (1) not following the procedures outlined

in each and every provision of the partition statute, and

instead proceeding immediately to partition by sale;

(2) ordering sale to Freeport instead of sale at auction; and

(3) ordering sale on summary judgment instead of after a

trial. We find all of the Defendants’ arguments to be

unavailing, and we affirm.

I. Joinder of the Defendants

The district court did not abuse its discretion in allowing

all of the Defendants to be joined in a single partition action.

The district court concluded that because of the close

proximity of the mining claims and the nature of strip mining,

partitioning each claim individually could adverselyaffect the

property rights of the adjacent claim holders. This suggests

that joinder was mandatory under Fed. R. Civ. P. 19(a).

However, even if joinder was not mandatory, it was certainly

permissive. All the properties included in the partition action

are part of the same cotenancy created by Guy, Cuprite is

seeking the same relief from each party, and the relevant law

and facts are common to all the Defendants. Fed. R. Civ. P.

20(a)(2). Permissive joinder is to be liberally construed to

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8 CUPRITE MINE PARTNERS V. ANDERSON

promote the expeditious determination of disputes, and to

prevent multiple lawsuits. League to Save Lake Tahoe v.

Tahoe Reg’l Planning Agency, 558 F.2d 914, 917 (9th Cir.

1977). The district court acted well within its discretion in

concluding that a single partition action was the most

expeditious way of resolving this dispute, and in allowing all

of the Defendants to be joined in that action.

II. Partition

The district court did not err when it granted summary

judgment in favor of Cuprite and ordered partition by sale to

Freeport.

As an initial matter, Cuprite has a legal right to partition

under Arizona law. The Defendants suggest that instead of

partition, Cuprite could have sold its fractional interest to

Freeport, which as a cotenant could mine the land and pay

royalties to the Defendants. Even if this plan were feasible,

Arizona’s partition statute gives any owner or claimant of

property held in cotenancy the right to compel partition

without regard to the preferences of other owners or

claimants. Ariz. Rev. Stat. § 12-1211(A); McCready v.

McCready, 810 P.2d 624, 626 (Ariz. Ct. App. 1991) (“[T]he

right of partition is an incident of common ownership and is

specifically authorized by statute.”).

The Defendants’ remaining contentions are that the

district court erred by improperly applying the Arizona

partition statute in ordering sale without following the

procedures in each provision of the statute, in ordering sale to

Freeport instead of a public auction, and in ordering a sale on

summary judgment instead of after a trial. We address each

contention in turn.

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CUPRITE MINE PARTNERS V. ANDERSON 9

A. Partition by Sale

The district court properlyconcluded that partition bysale

was more appropriate than partition in kind. The statute gives

courts broad authority to order partition by sale when

appropriate:

If on the trial of the action, it appears to the

court that fair partition of the property cannot

be made without depreciating the value

thereof, or that for any reason a sale is more

beneficial to the parties or any of them, it

shall in the first instance, enter a judgment

directing that the real property be sold.

Ariz. Rev. Stat. § 12-1218(B). The Defendants argue that the

district court should have followed the procedural

requirements of all of the other provisions in the partition

statute, including appointing a panel of three commissioners

to survey the property and divide it into tracts. See id. § 12-

1215(B). But not every provision applies to every partition.

The Arizona Supreme Court has held that where partition by

sale is appropriate under section 12-1218(B), the provisions

applying to partition in kind (such as appointing

commissioners to survey and divide the land) need not be

followed. Bledsoe v. Hood, 36 P.2d 564, 565–66 (Ariz.

1934).3

Instead, the court may order such a sale “on its own

motion” and “without the aid of commissioners.” Id. at 565.

Thus, when the court determines that partition by sale is

appropriate, section 12-1218(B)isthe operative provision and

3 The Bledsoe court was interpreting an earlier version of the statute that

is substantively identical to the current statute at issue. Compare Ariz.

Rev. Stat. § 12-1218(B) (2013) with Ariz. Rev. Stat. § 4335 (1928).

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10 CUPRITE MINE PARTNERS V. ANDERSON

the provisions that apply to partition in kind are not

applicable.

On the undisputed facts in the record, the district court

properly wielded the power granted to it by section 12-

1218(B) in concluding that partition by sale was “more

beneficial to the parties or any of them.”

First, the nature of mining claims generally make them

unsuitable for partition in kind. Manley v. Boone, 159 F. 633,

636 (9th Cir. 1908). The mining claims at issue apparently

will need to be strip mined in order to obtain maximum value.

The district court found that strip mining “takes two feet on

the surface for each foot of ground mined underneath,”

making “in-kind partition of one-sixth of each claim

impossible.” Even if strip mining five-sixths of the area of

each of the claims were technically possible, it would

“seriously depreciate the value of the mining claims.”

Second, the “parties are so at odds with each other that inkind partition would be impossible.” Partition by sale is

appropriate where the parties are “unable to deal with each

other in their best interests,” or where there is a “problem

with access to a portion of the property.” Arnold v. Cesare,

668 P.2d 891, 895–96 (Ariz. Ct. App. 1983). Such is the case

here; if the land were partitioned in kind, it is unlikely that the

parties would be able to cooperate with one another to ensure

that Cuprite (or its successor) could fully mine its property,

and at the same time ensure that the Defendants could still

access their small, scattered, and isolated tracts. Based on the

undisputed facts before it, the district court properly applied

section 12-1218(B) in concluding that partition by sale was

“more beneficial to the parties or any of them.”

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CUPRITE MINE PARTNERS V. ANDERSON 11

B. Sale to Freeport

The Defendants next assert that it was inappropriate to

order sale to Freeport instead of individually auctioning off

each claim to the highest bidder. They reason that each

Defendant separately “would enjoy a tremendous strategic

position,” and that each acre would sell for more money than

if the entire parcel were sold at once. This is both speculative

and irrelevant.

It is speculative because it is not at all clear that each

Defendant would necessarily have made more money in

individual auctions; they could have very well made less.

Given the proximity of its mining operations, all of the parties

concede that Freeport is the logical buyer of the claims. No

firm buyer materialized during the sixty-dayoffer window set

by the district court, so there is no reason to believe that one

would have attended an auction for individual tracts within a

similar time frame. If Freeport had been the only interested

buyer at an auction, and the Defendants were required to

accept the highest bid, Freeport could potentially have

purchased the property for less than the terms in its operative

offer. Further, the purchase price of each individual claim

might have varied significantly using this method of sale,

depending on the order in which they were auctioned off, as

well as their location and accessibility.

Arguendo, even if the Defendants are correct, and at least

some claims could have commanded a higher price at auction,

the statute does not require the district court to order sale in

a way that maximizes the proceeds to particular individual

owners. Instead, the statute only directs the court to “appoint

a commissioner to make the sale . . . and return the proceeds

into court to be divided between the persons entitled thereto

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12 CUPRITE MINE PARTNERS V. ANDERSON

according to their respective interests.” Ariz. Rev. Stat. § 12-

1218(C). “Such commissioner shall sell the real property in

the time and manner, and after notice, as directed by the

court.” Id. The district court did not err in exercising the

discretionary authority granted to it by the statute in a way

that took advantage of Freeport’s offer and ensured that the

proceeds were divided equally among the owners “according

to their respective interests.” Id. Accepting the current offer

or any better terms that could be had was a reasonable way

for the district court to structure the partition sale, and does

not violate any terms of the operative statute.

C. Summary Judgment

Finally, the Defendants contend that the summary

judgment order should be reversed because a trial is required

in an Arizona partition action. We acknowledge that section

12-1218(B) contemplates partition by sale “on the trial of the

action.” It is not clear whether this language means that

summary judgment is never appropriate in a partition action

under Arizona law.4

4 Like the federal rules, the Arizona rules of procedure allow for

summary judgment when there are no genuine disputes of material fact.

Ariz. R. Civ. P. 56(a). And the partition statute states that the rules of

procedure “which govern all other civil actions shall govern actions for

partition when not in conflict with the proceedings provided by this

article.” Ariz. Rev. Stat. § 12-1224(B). The Defendants urge us to

conclude that the “trial” language from section 12-1218(B) conflicts with

Rule 56, making it inapplicable to partition actions. Arizona courts do not

appear to take this view. In Register v. Coleman, the Arizona Supreme

Court held that it was appropriate to order partition by sale on summary

judgment, but without specifically addressing the “trial” referenced in

section 12-1218(B). 633 P.2d 418, 421 (Ariz. 1981).

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CUPRITE MINE PARTNERS V. ANDERSON 13

But we need not (and do not) decide whether the statute

requires Arizona state courts to conduct a trial in all partition

by sale cases. Regardless of whether an Arizona state court

would have been required to hold a trial, the district court

correctly resolved the summary judgment motion according

to the Federal Rules of Civil Procedure.

Under the Erie doctrine, federal courts sitting in diversity

apply state substantive law and federal procedural rules.

Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427

(1996). The “procedural aspects of summary judgment” are

governed by the Federal Rules of Civil Procedure, and “the

law of the forum controls the substantive issues.” Caesar

Elecs. Inc. v. Andrews, 905 F.2d 287, 290 n. 3 (9th Cir. 1990).

We hold that even if Arizona state law prohibits summary

judgment and instead requires a trial in a suit for partition by

sale, such a requirement is procedural in nature and a federal

court sitting in diversity is required to follow federal, not

state, procedural rules. See e.g. Maroules v. Jumbo, Inc.,

452 F.3d 639, 645–46 (7th Cir. 2006) (“Federal courts may

. . . grant summary judgment under Rule 56 upon concluding

that no reasonable jury could return a verdict for the party

opposing the motion, even if the state would require the judge

to submit an identical case to the jury.”).

In determining whether a state law is substantive or

procedural, we ask whether the law is outcome determinative;

in other words, whether it would “significantly affect the

result of a litigation for a federal court to disregard a law of

a State that would be controlling in an action upon the same

claim by the same parties in a State court[].” Gasperini,

518 U.S. at 427 (quoting Guaranty Trust Co. v. York,

326 U.S. 99, 109 (1945)). We do not apply this test

mechanically, but rather, guided by “the twin aims of the Erie

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14 CUPRITE MINE PARTNERS V. ANDERSON

rule: discouragement of forum-shopping and avoidance of

inequitable administration of the laws.” Id. at 428 (quoting

Hanna v. Plumer, 380 U.S. 460, 468 (1965)).

Even if Arizona courts required trials in suits for partition

by sale, that would not be outcome determinative here.

According to the facts as presented on summary judgment,

the outcome—partition by sale—would have been identical

even if the district court had held a trial.5 There are no

material disputed facts that would suggest that Cuprite is not

entitled as a matter of law to partition by sale. Cuprite has an

interest in the property and wishes to end its cotenancy with

the Defendants. The Defendants speculated, without a

genuine basis, that a more beneficial result could be achieved

by not ordering partition, ordering partition in kind, or

ordering sale by auction, but nothing in the record suggests

that these issues needed to be elucidated in a trial for the

district court to apply the appropriate legal standards. See

supra Part II.A.

The district court properly applied all of the substantive

provisions of Arizona’s partition statutes that are relevant to

this case, and properly applied Fed. R. Civ. P. 56(a) in

granting relief on summary judgment where there was no

genuine dispute of material fact to be resolved at trial.

5 We applied similar reasoning in Snead v. Metro. Prop. &Cas. Ins. Co.,

237 F.3d 1080, 1091 (9th Cir. 2010). In that case, we held that the federal

McDonnell Douglas standard should be applied in a diversity action for

employment discrimination, even where the law of the forum allowed the

plaintiff to meet a lower standard to survive summary judgment. Id. at

1090. The panel reasoned that if the plaintiff could not satisfy the

heightened federal standard at summary judgment, she would certainly not

prevail at trial. Id. at 1091.

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CUPRITE MINE PARTNERS V. ANDERSON 15

AFFIRMED.

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