Court Opinion

ID: 5156841
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:23:37.9216+00
Date Added: 2024-06-11T08:25:24.129398
License: Public Domain

HILL, Justice,
dissenting, in which KITE, Chief Justice, joins.
[¶ 38] I respectfully dissent from the majority opinion in this case. The Whitney/Terry deed clearly and unambiguously reserves a one-half mineral interest to the seller, Whitney. That reservation may, very well, have been a mistake. However, that mistake should not be corrected by torturing our rules of contract interpretation to essentially remove the reservation from the deed and allow the one-half mineral interest to be conveyed to the buyers, the Terrys.
[¶ 39] Whitney conveyed the Ranchester property to the Terrys in a Limited Warranty Deed dated February 25, 1980, which stated, in relevant part:
... [Whitney] ... does hereby grant, bargain, sell and convey unto [the Ter-rys] ... all of the real property situate in Sheridan County, State of Wyoming, described in Exhibit A attached hereto and made a part hereof, SUBJECT, HOWEVER, to the exceptions, restrictions, and reservations set forth in the Warranty Deed from [the Kaufmanns] to the Grantor herein, the easements and rights-of-ways of record; to all mineral and oil royalty reservations or conveyances contained in prior instruments of record; and all existing mineral leases affecting said lands.
Grantor warrants title solely against the acts and deeds of Grantor and no other.
Exhibit A included a legal description of the Ranchester property, the reservation specifically at issue here, and a reference to the Zimmerman life estate:
EXCEPTING AND RESERVING, HOWEVER, to the sellers and to their heirs and assigns, one-half of all coal, ... oil, gas, ... and all other minerals of every kind and character, contained in or underlying said lands.
ALSO SUBJECT to that certain life estate now held by Clyde Zimmerman, as a result of the reservation set forth in the Warranty Deed from [Zimmerman and others] which reservation extends to the lands above described.
[¶ 40] The Whitney/Terry deed, therefore, included a reservation to the sellers of a one-half mineral interest and gave notice of reservations and exceptions contained in two other deeds-the Kaufmann/Whitney deed and the Zimmerman/Kaufmann deed. The Kaufmann/Whitney deed reserved to the Kaufmanns one-half mineral interest. The Zimmerman/Kaufmann deed conveyed the Ranchester property to the Kaufmanns and stated the following with regard to the reserved life estate:
RESERVING, HOWEVER, to the Grantors [Zimmerman, et al.] and to the surviv- or of them, for the term of their natural lives, one-half of all coal, oil, gas and other minerals contained or underlying said lands[.]
[¶ 41] A deed is a contract and we employ our typical contract interpretation principles to interpret it. Ecosystem Resources, LC v. *674Broadbent Land & Resources LLC, 2007 WY 87, ¶ 9, 158 P.3d 685, 688 (Wyo.2007); Carlson v. Flocchini Inv., 2005 WY 19, ¶ 15, 106 P.3d 847, 854 (Wyo.2005).
In considering the meaning of a contract, we focus on the parties' intent. If possible, we determine their intent from the language used in the agreement. Where the language is clear and unambiguous, we limit our inquiry to the four corners of the document, giving the words contained therein their ordinary meaning. The parties are free to incorporate within their agreement whatever lawful terms they desire, and we are not at liberty, under the guise of judicial construction, to rewrite the agreement. It is only when a contract is ambiguous that we construe the document by resorting to rules of construction. A contract is ambiguous if indefiniteness of expression or double meaning obscures the parties' intent.
Davidson Land Co. LLC v. Davidson, 2011 WY 29, ¶ 14, 247 P.3d 67, 71-72 (Wyo.2011) (citations omitted). We consider parol evidence to construe a deed only if it is, first, found to be ambiguous on its face. Belden v. Thorkildsen, 2007 WY 68, ¶ 16, 156 P.3d 320, 324 (Wyo.2007). In other words, parol evidence may not be used to create an ambiguity. Schulz v. Miller, 837 P.2d 71, 75 (Wyo. 1992).
[¶ 42] The district court stated that "[alt-tempting to give meaning to the multiple reservations which appear to overlap and be repetitive prevents a clear and unambiguous determination as to what minerals were reserved." The majority agreed with this assessment. "[If a grantor intends to keep some property interest when conveying the property, he 'reserves' that interest." Sunshine Custom Paints & Body, Inc. v. South Douglas Highway Water & Sewer Dist., 2007 WY 206, ¶ 18, 173 P.3d 398, 403 (Wyo.2007) (emphasis in original). The Whitney/Terry deed, therefore, contains only one true reservation-the reservation of one-half minerals to the sellers in Exhibit A. The remainder of the exceptions in the deed simply gave notice of other encumbrances by stating that the conveyance was "subject to" the one-half mineral interest the Kaufmanns had already reserved, other reservations of record and the Zimmerman life estate.
[¶ 43] The district court and, apparently, the majority ascribe significance to the deed's reference to the Zimmerman life estate and indicate that somehow renders the deed ambiguous. The Terrys maintained that the deed would not have referred to the life estate unless the parties intended the life estate to encumber the one-half interest that supposedly transferred to them. It is axiomatic that neither Whitney nor the Terrys had the authority to affect, in any way, the encumbrances or prior reservations already extant in the chain of title Thus, Whitney and the Terrys could not "assign" the life estate to either half of the minerals in the Whitney/Terry deed. The only legal purpose for referring to the life estate was to give notice that the life estate was part of the chain of title. Furthermore, delving into the issue of which part of the mineral estate the life estate burdened ignores our precedent which clearly states that quiet title actions involve and bind only the parties before the court. Ultra Resources, Inc. v. Hortman, 2010 WY 36, 1152-53, 226 P.3d 889, 911-12 (Wyo.2010). The life tenants are not involved in this matter and, from the record, it appears they are deceased. As such, the life estate does not affect the only true reservation in the Whitney/Terry deed-the reservation of one-half mineral interest to the sellers.
[¶ 44] The majority rules that the deed is ambiguous because the reservation in Exhibit A uses the word "sellers" instead of the word "grantor" like in the body of the deed. In making that ruling, the majority apparently accepted the Terrys' argument that the term "sellers" refers to the Kaufmanns. While it is not artful to use two different terms to identify a party in a deed, there is no question that Whitney was the seller in the deed. In fact, the granting clause states: "[Whitney] ... does hereby grant, bargain, sell and convey unto [the Terrys] ... all of the real property situate in Sheridan County, State of Wyoming, described in Exhibit A." To suggest that the Kaufmanns, who were *675not even parties to the deed, were the sellers defies logic.
[¶ 45] The majority also finds ambiguity in the use of the plural "sellers" since Whitney should have been referred to in the singular and indicates that this reinforces the argument that the reference to sellers is to the Kaufmanns. In considering this argument, it is important to remember that the actual grantor in the deed was Peter Kiewit Sons, Inc. Obviously, Peter Kiewit Sons, Inc. is a corporation and should have been referred to in the singular; however, the name of the corporation "Peter Kiewit Sons," stated in the plural, lends itself to the plural reference. Reading the inadvertent use of the plural to refer to Peter Kiewit Sons makes much more sense than reading that reference to mean, as the Terrys advocate, the Kaufmanns who were not even parties to the deed.
[¶ 46] If we ignore, as the majority does, that the reservation in Exhibit A uses the active voice, i.e., the sellers "reserve," and interpret the reservation to the sellers as simply giving notice of the Kaufmanns' prior reservation of their one-half mineral interest, we encounter another deed interpretation problem. Such an interpretation results in there being two provisions in the deed which give notice of the Kaufmanns' reservation-the first one in the granting clause where specific reference is made to the reservation in the Kaufmann/Whitney deed and the see-ond in Exhibit A where the sellers reserve the mineral interest. This interpretation violates a basic principle of contract interpretation, which requires that we give separate effect to each provision so as to avoid rendering a provision meaningless. Shaffer v. WINhealth Partners, 2011 WY 131, ¶ 17, 261 P.3d 708, 713 (Wyo.2011).
[¶ 47] I, therefore, disagree with the district court's and majority's conclusion that the deed is ambiguous. There is nothing indefinite or confusing in the deed language that obscures the parties' intent with regard to the meaning of the reservation-Whitney, the only "seller" involved in the Whitney/Terry deed, reserved one-half mineral interest to itself, The majority improperly stretches
the language and relies on implausible assumptions to conclude the deed is ambiguous.
[¶ 48] Here, the seller, which unquestionably was Whitney within the context of the Whitney/Terry deed, reserved one-half the minerals in the Ranchester property. The majority concludes, completely contrary to the deed language, that the parties actually intended to comvey one-half mineral interest to the buyers. Similarly, the Terrys' contention that the reference to sellers in the deed was to the Kaufmanns makes no sense because the Kaufmanns were not parties to this deed and, therefore, could not reserve anything in it. The district court and majority improperly used parol evidence to contradict the terms of the contract. See, Bixler v. Oro Management, LLC, 2004 WY 29, ¶ 20, 86 P.3d 843, 850 (Wyo.2004); Schulz, 837 P.2d at 75.
[¶49] Another problem is that much of the evidence and testimony offered by the Terrys at the trial and relied upon by the district court in reaching its decision pertained to the Terrys' subjective intent with regard to the transaction. Peggy Terry, Clarence Terry, and their attorney testified that it was always the parties' intent that Whitney simply act as a conduit in the like-kind exchange and transfer whatever interest it received from the Kaufmanns to the Terrys. The Terrys stated that they were to obtain the one-half mineral interest in the property. The district court found Ms. Terry's testimony particularly credible. Regardless of her credibility, we have repeatedly stated that "the parties' statements of what they intended the contract to mean are not admissible" to interpret deed language. Hickman v. Groves, 2003 WY 76, ¶ 13, 71 P.3d 256, 260 (Wyo.2003); Jacobs Ranch Coal Co. v. Thunder Basin Coal Co., 2008 WY 101, ¶ 17, 191 P.3d 125, 131 (Wyo.2008). Thus, the parties' statements as to their subjective intent were not relevant or admissible under any cireumstances to interpret the deed.
[¶50] The majority incorrectly applies our rules of deed interpretation to reach a desired result, that being the implementation of the parties' overall intent without regard for the deed language. I understand that *676sentiment; in fact, I would agree that, looking at the inadmissible parol evidence of the overall transaction, Whitney and the Terrys probably intended that the Terrys obtain ownership of the one-half mineral interest. However, that unwritten intent is directly contrary to the language they used in the deed. As such, they obviously made a mistake in drafting the deed. The legal avenue to correct a mutual mistake in a deed is to bring an action to reform the deed.
[¶ 51] "Reformation is an equitable remedy available in cases where a mistake in the drafting of the written contract makes the writing convey the intent or meaning of neither party to the contract." Ohio Cas. Ins. Co. v. W.N. McMurry Const. Co., 230 P.3d 312, 320 (Wyo.2010); Hutchins v. Payless Auto Sales, Inc., 2002 WY 8, ¶ 19, 38 P.3d 1057, 1063 (Wyo.2002). "The remedy is appropriate when a written instrument does not accurately memorialize the parties' agreement." Sanders v. Sanders, 2010 WY 77, 12, 234 P.3d 348, 348 (Wyo.2010). A party seeking to reform an instrument must demonstrate by clear and convincing evidence: "(1) a meeting of the minds-a mutual understanding between the partiee-prior to the time a writing is entered into, (2) a written contract, or agreement, or deed (8) which does not conform to the understanding, by reason of mutual mistake." Id. This is exactly what the Terrys are claiming in this case-the parties had agreed that the Terrys would receive the mineral interest and the deed actually executed by Whitney did not conform to that understanding as a result of a mutual mistake. If we condone use of parol evidence to "interpret" a contract to correct an obvious mistake in the instrument, there will no longer be any need for the remedy of reformation.
[¶ 52] The legal concept of reformation has been analyzed in cases remarkably similar to the present one. In Town of Glenrock v. Abadie, 71 Wyo. 414, 259 P.2d 766 (1958), Engelking agreed to sell certain property to Skinner, while reserving one-half of the mineral interest. When he executed the deed; however, he failed to reserve the mineral interest. Skinner then entered into an agreement to sell the property to the Town of Glenrock. The agreement stated that one-half of the mineral rights had been reserved by Engelking and that the Town would be receiving only one-half of the mineral rights. Skinner then executed a warranty deed to the Town without reserving any mineral rights. After he had already transferred his interest in the property to the Town, Skinner gave Engelking a deed purporting to convey to him one-half of the minerals. Later, the Town conveyed back to Skinner one-half of the mineral interest. Id. at 766-68. In a subsequent quiet title action, the Town sought a declaration of its ownership.
[¶53] We determined that a mistake had been made by failing to reserve Engelking's mineral interest, and that "[sluch an action is an action to correct or reform a deed." Town of Glenrock, 259 P.2d at 770. A reformation claim was, however, barred by the applicable statute of limitations because the limitations period began to run upon the recording of the deed and over thirty years had passed before the action to recover the mistakenly conveyed interest was commenced. Id. at 770-72. The only substantive difference between the case at bar and Town of Glenrock is that here a reservation was allegedly mistakenly included rather than omitted. See also, Sanders, ¶¶ 11, 20, 234 P.3d at 346-49 (discussing plaintiffs' efforts to reform a deed to remove a joint tenant whom they claimed was only intended to have survivor rights and no right to present possession of the property and holding that reformation was not proper because naming the defendant as a joint tenant in the deed was not a mutual mistake, even though the parties did not actually intend to give the defendant all of the rights of a joint tenant); Samuel Mares Post No. 8, American Legion, Dept. of Wyoming v. Board of County Commissioners of County of Converse, 697 P.2d 1040, 1042 (Wyo.1985) (addressing the Legion's contention that it had conveyed the property "to be used solely as an airport and if the property ever ceased to be used as such, the land would revert back to the Legion," and concluding that, even if that was the parties' intent at the time of conveyance, the deed was unambiguous, did not contain a condition subsequent, and could not be re*677formed some 50 years later to include such a condition).
[¶ 54] In this case, the Terrys essentially sought to remove the mistaken reservation of a one-half mineral interest to Whitney. That is a classic reformation action. The general ten-year statute of limitations applies to actions to reform a deed, and the limitations period began to run when the deed was recorded. Wyo. Stat, Ann. § 1-8-109 (LexisNexis 2011).4 See also, Samuel Mares Post No. 8, 697 P.2d at 1042; Town of Glenrock, 259 P.2d at 770-71. The Whitney/Terry deed was recorded on February 25, 1980; consequently, the limitations period on any claim for reformation or correction of the mistaken reservation had expired when the Terrys' filed their quiet title action in 2009. I would conclude that the district court erred by saving the Terrys from the reformation statute of limitations by improperly using deed interpretation principles to completely remove a mistaken, but clear, reservation of mineral interest.

. Section 1-3-109 states: "An action for relief, not hereinbefore provided for, can only be brought within ten (10) years after the cause of action accrues."