Opinion ID: 2196702
Heading Depth: 1
Heading Rank: 1

Heading: Minex v. The Estate

Text: The dispute between Minex and the Estate centers upon what interest in Mosser 1-26 was conveyed in the personal representative's deed. The parties agree that the characterization of their respective positions on this issue in Justice Meschke's opinion for the Court in Minex, supra, 467 N.W.2d at 696-697, is accurate: The Estate argues that, by transferring to Minex all of `Grantor's working interest' in the six wells on the leasehold, including the Mosser 1-26, the Estate conveyed everything Kathleen owned including her working interest. The Estate reasons that `net revenue interest' is the lessee's share of production after subtracting all overriding royalty, oil payments, and other nonoperating interests, so that the term includes the lessee's working-interest expenses as well as the net profit after those expenses are deducted. The Estate claims that the `-0-' listed under `Working Interest,' as explained by the referenced phrase, `Grantor's share of costs on Mosser 1-26 are paid by the operator,' was merely a means of informing Minex that there was a contractual duty owed by a third party to pay those expenses. The Estate contends that the payment of those expenses by Patrick was a beneficial contract right that was assigned to Minex by the granting language of the deed. Minex relies on the testimony of Rustan, the personal representative of the Estate, and of Dennis Tippets, president of Minex, for its definitions of `net revenue interest' and `working interest.' Both Rustan and Tippets testified to the effect that `net revenue interest' meant the income from a well and that `working interest,' as used in the agreement, meant the costs and expenses associated with a well. Minex argues that placement of the `-0-' under the heading `Working Interest' means that Minex did not acquire any working interest through the conveyance. Minex argues that the referenced phrase, `Grantor's share of costs on Mosser 1-26 are paid by the operator,' means that the working-interest expenses were not included in the conveyance because the expenses were being paid by the operator. Minex also relies on post-conveyance correspondence between the parties which indicates that expenses on the Mosser 1-26 were not Minex's responsibility. [Footnotes omitted]. We concluded in our prior opinion that the language of the deed was ambiguous, and remanded for resolution of the factual issue of the parties' intent. The trial court found that the parties intended that no working interest, but only a net revenue interest, in Mosser 1-26 would be transferred by the deed to Minex. Our review of that finding is governed by the clearly erroneous standard of Rule 52(a), N.D.R.Civ.P. A finding of fact is clearly erroneous only when, although there is some evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. Dakota Grain Co. v. Ehrmantrout, 502 N.W.2d 234 (N.D.1993). Rule 52(a) was recently amended to clarify that this standard applies when, as in this case, the findings are based upon documentary evidence. See Rule 52(a), N.D.R.Civ.P., and Explanatory Note. We have previously, on this identical record, held that the deed was ambiguous and remanded for findings of fact on the parties' intent. We would not have remanded for resolution of this factual dispute if the evidence were such that only one conclusion could be drawn. A question of fact becomes a question of law if the evidence is such that reasonable minds could draw but one conclusion. Wanner v. Getter Trucking, Inc., 466 N.W.2d 833 (N.D.1991); Bjorgen v. Kinsey, 466 N.W.2d 553 (N.D.1991). The Estate stresses technical definitions of the terms net revenue interest and working interest to challenge the court's finding that the parties did not intend to transfer the working interest. The Estate, however, essentially ignores the testimony of Dennis Tippets, the president of Minex, and Rustan, the personal representative of the Estate at the time of this transaction. Their testimony supports the court's finding, as do two letters from Rustan written after the transaction had occurred. See Johnson Construction, Inc. v. Rugby Municipal Airport Authority, 492 N.W.2d 61 (N.D.1992) [court may consider parties' actions after entering into a contract to determine intent]; Stracka v. Peterson, 377 N.W.2d 580 (N.D.1985) [parties' conduct after deed's execution may be used to determine intent]. On this record, we are not left with a definite and firm conviction that a mistake has been made, and the court's finding that the parties intended to transfer a net revenue interest, and not a working interest with associated operating expenses, is not clearly erroneous.