Court Opinion

ID: 9513206
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:32:49.21904+00
Date Added: 2024-06-11T09:05:46.492272
License: Public Domain

MESCHKE, Justice,
dissenting.
1 respectfully dissent. The majority reconsiders and refuses to follow Taurus Corp. v. Roman Yourk Equity Pure Trust, 264 N.W.2d 688, 689 (N.D.1978), thus depriving oil and gas lessors of an important tool that encourages development, instead of “warehousing,” of oil resources in this state.1 This decision afflicts oil and gas lessors in a way comparable to the debilitating process in aging humans that causes loss of skeletal muscle, known as sarcopenia (“vanishing flesh”). The process here is a form of legal sarcope-*790nia — a loss of legal muscle for mineral owners in the oil fields.
In Taurus, 264 N.W.2d at 693, this court held “the reasoning of the dissenting justices more convincing than that of the majority in Christiansen [v. Virginia Drilling Co., 170 Kan. 355, 226 P.2d 263 (Kan.1951) ],” the Kansas precedent interpreting the forerunner of our statutory procedure. The Taurus court explained why:
Section 47-16-36, N.D.C.C., would serve little purpose if a lessor were required to secure a judicial determination that the lease was forfeited or terminated before utilizing the statute. The legislature, in enacting Section 47-16-36, N.D.C.C., attempted to establish a simple method in which landowners could remove a cloud from their title without the necessity of going into court. If the lessee disputes the termination or forfeiture of the lease, the lessee may force the lessor to secure a judicial determination of the issue by giving notice to the register of deeds within the required time.
Id. Justice Pederson added in a separate concurrence:
It is not necessary that § 47-16-36, NDCC, be invalidated. There is merit in providing landowners the protection afforded by this statute, especially when they are “actively solicited and canvassed” by shrewd “entrepreneurs.” See Reiss v. Rummel, 232 N.W.2d 40, 43 (N.D.1975). But, as in the case of actions to quiet title, there is room for an escape hatch to prevent unconscionable results. Section 32-17-13, NDCC, permits, on such terms as are just, defenses to be heard even though there has been a default.
Id. Today, the court dissipates this Taurus precedent.
Because I disagree with this dissipation of the Taurus precedent, I have great difficulty in understanding how the majority can disregard the plain direction of NDCC 47-16-36 (“thereafter the record of the said lease shall not be notice to the public of the existence of said lease”) in affirming a summary judgment that EP’s failure to respond within 20 days of notice did not terminate the lease, and that “dissolved, vacated and purged from the records of said Register of Deeds” the statutory cancellation so as to reinstate the record of this Oil and Gas Lease.2
The majority believes NDCC 43-16-36 works an automatic forfeiture by EP, but the cancellation of a lease under the statute cannot possibly be called an automatic forfeiture. To obtain this form of cancellation of the lease, the landowners must strictly follow the procedure prescribed by the statute. Under it, the lessee has full right to compel a judicial determination of the question whether the lease has been actually forfeited.3 The statute specifically grants the lessee the right simply to deny the lease has been forfeited and, when the lessee does so by a timely filing with the register of deeds, no cancellation of record results and the landowner is relegated to the remedy of an action in court to establish the forfeiture of the lease by proof. Such a procedure does not create an automatic forfeiture.
In a prior decision, this court recognized the propriety of this procedure in a dispute *791over the breach of an implied covenant of farther development:
By letters of January 5, 1982, to the lessees, the lessors asserted expiration of the primary term of the lease and requested release of the lease except for the NW1/4 SE1/4 of Section 25. On February 3,1982, the lessors served upon the lessees notice, pursuant to § 47-16-36, N.D.C.C., that the lease (except for the NW1/4SE1/4 in Section 25) “has terminated or become forfeits ed by breach of the terms hereof’ and demanded a surrender of the lease. The lessees responded as required by statute. By letters of June 7, 1982, the lessors demanded of the lessees “that you comply with the implied covenant to further develop the balance of the property not included in the production unit. In the alternative, please release the property not included in the production unit.”
By summons and complaint filed in the district court on January 25, 1983, the lessors sought a judgment decreeing “that the lease has terminated as to those portions of the leased property lying outside the existing governmental spacing unit,” or, in the alternative, decreeing “that Defendants comply with the duties to reasonably develop and further explore the leased property within a time set by the Court or file a release of record.”
Johnson v. Hamill, 392 N.W.2d 55, 56 (N.D.1986). That case resulted in a decision favorable to the oil and gas lessee. Thus, the majority’s refusal to apply Taurus in this case makes a critical and drastic change in a well-established relationship between oil and gas lessors and lessees in this state. All that EP had to do to preserve its record position and to contest this cancellation was to respond timely to the Ridls’ statutory notice.
I disagree with the majority’s view that eáncellation of a lease on the ground it has become forfeited for violation of an implied covenant to explore and develop can be obtained only by judicial action. As Justice Wedell thoughtfully explained in the Kansas dissent adopted in Taurus, Christiansen, 226 P.2d at 269, this statute was enacted to provide an inexpensive and prompt method for a landowner to clear the cloud on the title to his minerals of a lease that he claims has become forfeited. The statutory procedure enables the landowner to obtain such a cancellation under the statute only if the lessee does not dispute the landowner’s claim of forfeiture. To refuse to apply the statute to a lease where forfeiture is disputed, either by its express terms or otherwise, and to hold that it applies only to a lease that has become forfeit on its face as a matter of law or by judicial decree, emasculates the statute.
Obviously, if a lease has been canceled by judicial decree, there is no need for the statute. To be effective, the statute must include leases where forfeiture is disputed. Otherwise, the statute is meaningless and worthless.
What is more, the statute itself says it applies to leases where the question of forfeiture is in dispute. In detailing what the landowner may do if the lessee denies the forfeiture by giving timely notice in writing to the register of deeds “that said lessee ... still claim that said lease is in full force and effect,” the statute directs,
then the said satisfaction of lease shall not be recorded but the register of deeds shall notify the owner of the real property of the action of the lessee, his successors or assigns, and the owner of the real property shall be entitled to the remedies now provided by law for the cancellation of such disputed lease.
NDCC 47-16-36 (part). There is no basis in the language of this statute for excluding from its operation a forfeiture resulting from a violation of an implied covenant. The statute does not make such a distinction, and courts are not authorized to legislate by reading exceptions into a statute that are not there. The statute applies to leases that “shall terminate or become forfeit.” Absent some restrictive language, that means forfeited for any reason.
We should not be concerned with the wisdom of this cancellation statute. That is a legislative province. In my opinion, the statute was intended to be operative in this *792situation. Therefore, I respectfully dissent from the majority’s gutting of the statute.
I would reverse the summary judgment.

. The length of time that exploratory drilling has been delayed is material not only to the reasonableness of the lessee’s conduct but to the degree of harm suffered by the lessor. The longer the lessee has delayed exploratory drilling, the greater the harm to the lessor. Thus, leases have been cancelled as to untested acreage, without proof that further drilling would probably be profitable, where the lessee had failed to drill for a prolonged period. These unreasonable periods of time have ranged from 35 years, 25 to 30 years, 26 years, 20 years, 17 years, 14 years, 13 years, 12 years, 11 years, and 10 years, down to five years, three years, two years, fourteen months, and finally to as few as five months.
2 Williams & Meyers, Oil and Gas Law, § 843.1, pp. 287-88 (1995) (footnotes omitted).

. The majority’s footnote 4 also gratuitously suggests "[t]he 1969 lease may well have merged with the 1973 lease.” But EP carefully explained the leases are still separate:
The premises described in the lease are now and at all times since December 20, 1973, have also been subject to a March 19, 1969 Oil and Gas Lease granted by the parents of Plaintiffs Ridl. This 1969 lease is NOT in controversy in this action. A portion of the lands which are the subject of this action have been unitized and included as a part of the Dickinson Heath Sand Unit and have been producing at all times since March 15, 1973. Notwithstanding this production, the predecessor in interest of EP Operating in mistaken belief that the property was unleased paid Ridls' parents approximately $11,000 for the December 20, 1973 Oil and Gas Lease. It is this 1973 Oil and Gas Lease Ridls seek to cancel in part.
Neither side gave a satisfactory explanation for the furor over this redundant lease, but there was no suggestion by either side of an intent to merge the leases, a necessary predicate for merger, and certainly a question of fact that could not be resolved by summary judgment on this record.

. Certainly, twenty days is not an unreasonable period of time for the legislature to require a response. See NDRCivP 12(a) (“A defendant who is served with a summons shall serve an answer thereto within 20 days after service of the summons ... ”).