Court Opinion

ID: 9567970
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:59:22.666249+00
Date Added: 2024-06-11T10:24:05.800291
License: Public Domain

PER CURIAM.
¶ 1 Karl L. Goodall claims an overriding royalty interest in a well formerly operated by Trigg Drilling Company, Inc. The well has been shut in. Goodall sues for an accounting and his share of the production. Trigg challenges Goodall’s claim to ownership of the interest, and urges that in any event Goodall’s suit is barred by limitations.
¶ 2 The primary questions to be settled here are whether, the operator, Trigg, had a duty to inform the royalty owner, Goodall, of production, and, if so, whether Trigg’s failure to inform Goodall tolled the statute of limitations. We find that neither party is entitled to summary judgment at this time because there are disputed issues of material fact.
¶ 3 Goodall, a geologist, took as a fee for his services a number of overriding royalty interests in many different wells in OMa-homa. Goodall alleges that he owns an overriding royalty interest in a well in which Trigg was the operator. Goodall was listed as an owner of an overriding royalty interest in the initial title opinion, but his name was omitted in a supplemental opinion obtained in 1977. A fact question exists, therefore, as to whether Goodall was the owner of a mineral interest at the time of production. Goodall states by affidavit that he is the owner of this interest, and never conveyed it to another party. Although the well began producing in 1978 and ceased production in 1983, Goodall also avers that he had no knowledge of production until November 16, 1992. Neither party disputes that Goodall was never paid any royalties.
f 4 The first well drilled on this property was a dry hole. Trigg asserts that in an unrecorded agreement between Goodall and another party, Goodall relinquished his overriding royalty interest in consideration for the company’s agreement to drill another well. The attorney who rendered the supplemental title opinion stated that Goodall relinquished all rights to the well in 1977.
¶ 5 Goodall filed suit, seeMng an accounting and recovery of his portion of proceeds from the second well. Goodall also alleged a breach of fiduciary duty owed to him by Trigg and sought punitive damages. The trial court found that there were no disputed facts, and granted summary judgment for Goodall. It found that Goodall owned 1/32 of 8/8 overriding royalty interest in the well, *294and that the amount owing in royalties and interest was $128,490.97.
¶ 6 The Court of Civil Appeals reversed the trial court, holding that the statute of limitations had run on Goodall’s claim. The Court of Civil Appeals reasoned that Trigg was not a fiduciary, and thus the statute of limitations was not tolled until Goodall knew of the operator’s failure to pay proceeds to him. Because of its holding that the action was time-barred, the Court of Civil Appeals directed that judgment be entered in favor of Trigg. We granted certiorari on July 17, 1995. On appeal, several entities have filed amicus curiae briefs.1
¶ 7 There are two determinative issues in this appeal. First, did Goodall still own a mineral interest at the time of production, thereby imposing on Trigg a duty to notify Goodall of the fact of production? Second, did Goodall learn of the production by other means? If Goodall relinquished his interest in the minerals before production, then Trigg had no duty to notify him of production. Assuming that some form of notice was Goodall’s due, if Goodall knew or should have known of production in time to sue within the statute of limitations, Trigg’s failure to inform him that there had been production did not toll the statute. But if Goodall did own an interest in the minerals, and notice was due him which he did not receive and did not learn of production until shortly before he sued Trigg in 1992, then the statute of limitations was tolled because of Trigg’s failure to inform Goodall of production. We do not by these remarks, however, intend to limit the parties in the issues they present to the trier of fact upon remand.
¶ 8 The well began producing in 1978. Trigg claims, and Goodall denies, that Goodall knew the well was producing in 1978, but failed to bring suit until 1992. Goodall claims that he did not know the well was producing until 1992, and that he brought suit shortly after he received notice of its production. Trigg states that even if Goodall had no knowledge of the well’s production until 1992, his action is time-barred because the limitations period was not tolled. Goodall contradicts Trigg’s assertion by stating that he and Trigg were in a fiduciary or trust-like relationship, and thus the limitations period was tolled until the trust was repudiated in 1992.
¶ 9 Clearly, if there is no tolling of the statute of limitations, the suit is time-barred whether the applicable statute of limitations is five years (for a written contract, 12 O.S. 1991 § 95 First) or some lesser time. Relying on Becker v. State ex rel. Dept. Of Public Welfare, 312 P.2d 935 (Okla.1957), Goodall asserts that if there is a fiduciary relationship the limitation period does not begin to run until the beneficiary receives notice of the trustee’s repudiation of the trust, be it express or constructive. See also Jones v. Jones, 459 P.2d 603, 604 (Okla.1969); Ludey v. Pure Oil Co. 157 Okla. 1, 11 P.2d 102, 104 (1931) (fiduciary relationship between lessee and interest owner in gas wells prevented statute of limitations from running until the termination of the trust or relationship). The statute of limitations issue thus hinges on the nature of the relationship between the owner of a royalty interest like Goodall and the operator of a well like Trigg.
¶ 10 During the period at issue in this case, Oklahoma recognized the existence of certain duties owed by well operators to royalty owners. For example, an operator was required, under title 52, section 540, to pay “[t]he proceeds derived from the sale of oil or gas production from any oil or gas well... .to persons legally entitled thereto.” 52 O.S. 1981 § 540(A); see also 52 O.S.Supp.1995 § 570.10(A)(An operator is required to “hold revenue or proceeds for the benefit of owners legally entitled thereto.”). Further, operators were liable for lack of payments to the legal royalty owners as a result of failing to act diligently in determining these owners. Olansen v. Texaco Inc., 587 P.2d 976 (Okla.1978). These duties have been continued and even extended through current legislation. See 52 O.S.Supp.1995 §§ 570.4(C)& 570.10(A).
*295¶ 11 As noted, the operator has a duty to pay proceeds from the sale of oil or gas to the legal owner, 52 O.S.1981 § 540(A); 52 O.S.Supp.1995 § 570.10, and to act diligently in determining the legal owners. Olansen, 587 P.2d at 976. Further, an operator is liable for mispayments caused by its failure to act diligently in determining the legal owner. Id,.; see also 52 O.S.Supp.1995 § 570.4(C). We hold that under Oklahoma law, a controversy of a material fact as to whether GoodaH’s action was barred by the statute of limitations existed.
¶ 12 There is a material dispute as to whether Goodall was in fact an owner of an overriding royalty interest. Goodall claims that he neither conveyed nor relinquished his interest in the well. The record contains conflicting inferences concerning Goodall’s ownership. If Goodall owned an overriding royalty interest in the well, and if it was of record so as to place Trigg on notice of its existence, or Trigg had actual notice of Goodall’s ownership, there is a question if Trigg may have had a duty to inform Goodall of production.
¶ 13 There is also a material dispute as to when Goodall became aware of production from the well and thus knew Trigg owed him money. Trigg claims that Goodall learned about production in 1978. Goodall, however, claims that he did not learn of production until 1992. Thus, neither party is entitled to summary judgment here. Summary judgment is only proper when the record shows that there is no issue of material fact, and that one party is entitled to judgment as a matter of law. Meadows v. Fain, 776 P.2d 1270, 1272 (Okla.1989); Flanders v. Crane, 693 P.2d 602 (Okla.1984).
¶ 14 We make no observation as to whether Trigg is liable under its duty to account. That is a determination which must be made by the trier of fact upon consideration of the evidence. Finally, of course, Trigg cannot be charged with breach of any duty if Goodall’s interest was unknown to him and was not of record so as to impose upon Trigg the duty to account for Goodall’s share of production.
¶ 15 Because we find that summary judgment was inappropriate, we reverse the judgment of the District Court. The opinion of the Court of Appeals is vacated. This matter is remanded for proceedings consistent with the opinion.
CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS’ OPINION VACATED; TRIAL COURT JUDGMENT REVERSED AND REMANDED.
HODGES, SIMMS, HARGRAVE, OPALA, WILSON, and WATT, JJ., concur.
KAUGER, C.J., SUMMERS, V.C.J., and LAVENDER, J., concur in result.

. Oklahoma Independent Petroleum Association, Oklahoma Mid-Continent Oil and Gas Association, National Association of Royalty Owners and the Oklahoma Chapter of the National Association of Royalty Owners have filed briefs as ami-cus curiae.