Court Opinion

ID: 2791130
Source: CourtListenerOpinion
Date Created: 2015-04-02 19:01:06.579318+00
Date Added: 2024-06-11T08:50:10.819660
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                              No. 12-2273

CLIFTON G. VALENTINE,

                Plaintiff – Appellant,

           v.

SUGAR ROCK, INC.; GERALD D. HALL; TERESA D. HALL,

                Defendants – Appellees.

Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg.    Irene M. Keeley,
District Judge. (1:10-cv-00193-IMK)

Argued:   December 10, 2013                 Decided:   April 2, 2015

Before KING, GREGORY, and FLOYD, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published
opinion.   Judge King wrote the opinion, in which Judge Gregory
and Judge Floyd joined.

ARGUED: James Scott Huggins, THEISEN BROCK, LPA, Marietta, Ohio,
for Appellant.   W. Henry Lawrence, IV, STEPTOE & JOHNSON PLLC,
Bridgeport, West Virginia, for Appellees.       ON BRIEF: Daniel
Patrick Corcoran, THEISEN BROCK, LPA, Marietta, Ohio, for
Appellant.    Amy Marie Smith, William J. O'Brien, STEPTOE &
JOHNSON PLLC, Bridgeport, West Virginia, for Appellees.
KING, Circuit Judge:

     Clifton        G.      Valentine      filed    this     diversity       action    on

November 8, 2010, in the Northern District of West Virginia,

alleging     that      he    owns    fractional      working      interests    in     four

mining partnerships, which in turn own six oil and gas wells on

four separate leaseholds located in Ritchie County.                            Named as

defendants in Valentine’s lawsuit are Sugar Rock, Inc., and two

of   its     officers,         Gerald      D.      Hall     and    Teresa      D.     Hall

(collectively, “Sugar Rock”).                   Valentine demands an accounting

of the four partnerships and seeks compensatory and punitive

damages, together with reimbursement of his attorney fees and

litigation costs.            On January 13, 2011, Sugar Rock answered the

complaint and filed a counterclaim for the cumulative operating

expenses attributable to Valentine’s asserted working interests

in the partnerships.

     By its Memorandum Opinion and Order of September 18, 2012,

the district court awarded summary judgment to Sugar Rock and

dismissed Valentine’s case with prejudice.                         See Valentine v.

Sugar    Rock,    Inc.,      No.     1:10-cv-00193        (N.D.   W.   Va.    Sept.    18,

2012),     ECF   No.     79.        The   court    determined      that,     under    West

Virginia law, a mining partnership requires each partner to be a

co-owner of the property that is the subject of the partnership.

Consequently, the court concluded that Valentine’s assertion of

interests    in     the     four    mining      partnerships      failed     because    he

                                             2
could not produce a writing that evidenced, in conformance with

the Statute of Frauds, his co-ownership of the subject leases or

wells.

     In tandem with its award of summary judgment to Sugar Rock,

the court denied Valentine’s motion to voluntarily dismiss his

complaint without prejudice so that he could join a putative

class action, styled Washburn v. Sugar Rock, Inc., brought and

pursued in the Circuit Court of Ritchie County by nine other

purported    owners       of    working     interests          in   the     four    mining

partnerships.       Thereafter, during the pendency of this appeal,

by Order of July 19, 2013, the state circuit court granted the

Washburn plaintiffs’ motion for partial summary judgment.                                 See

Washburn    v.    Sugar    Rock,    Inc.,       No.    11-C-61      (W.    Va.    Cir.    Ct.

Ritchie Cnty. July 19, 2013).               In so ruling, the court declared

that the plaintiffs were partners in the mining partnerships and

owned the claimed working interests, notwithstanding that such

assertions could not be corroborated with a deed, will, or other

written instrument.

     By    our    Order    of   Certification          to   the     Supreme       Court    of

Appeals of West Virginia, we authorized Valentine to supplement

the record with the Washburn Order and related materials.                                 See

Valentine    v.    Sugar    Rock,    Inc.,       745 F.3d 729,      733    (4th    Cir.

2014).      We    also     recognized,       inter      alia,       that    the    summary

judgment decisions of the federal district court in this case

                                            3
and the state circuit court in Washburn “manifest irreconcilable

outcomes     though     both       courts    have    sought     to   apply   the     same

precepts of West Virginia law to the identical Ritchie County

properties.”           Id.    at   735    n.3.       Availing     ourselves     of    the

privilege afforded by the State of West Virginia through the

Uniform Certification of Questions of Law Act, see W. Va. Code

§§ 51-1A-1      to     -13,   we     requested      that    the   Supreme    Court     of

Appeals of West Virginia exercise its discretion to decide the

following question of state law:

       Whether the proponent of his own working interest in a
       mineral lease may prove his entitlement thereto and
       enforce his rights thereunder by demonstrating his
       inclusion within a mining partnership or partnership
       in mining, without resort to proof that the lease
       interest has been conveyed to him by deed or will or
       otherwise in strict conformance with the Statute of
       Frauds.

Valentine, 745 F.3d at 730.                 Additionally, we acknowledged that

the state supreme court “may reformulate the question,” id. at

735,   and   we      affirmed      the   federal    district      court’s    denial    of

Valentine’s       motion      to     voluntarily     dismiss      his   complaint      to

ensure   that     we    did    not    ask    the    state   supreme     court   for    an

advisory opinion, id. at 733 n.2.

       In a November 14, 2014 Opinion delivered by Justice M.E.

Ketchum, the Supreme Court of Appeals of West Virginia exercised

its discretion to accept and rephrase our certified question of

                                             4
law.     See Valentine v. Sugar Rock, Inc., 766 S.E.2d 785 (W. Va.

2014).    Justice Ketchum explained:

            The certified question from the federal court
       essentially has two parts.        First, if a person
       contends he/she owns an interest in a common-law
       “mining partnership,” then does the Statute of Frauds
       require the person to prove he/she is a partner of the
       mining partnership through a deed, will, or other
       written conveyance?     We answer this part of the
       question “yes.”   A person can only be a partner in a
       mining partnership if he/she is a co-owner of the
       mineral interest with the other partners.        Hence,
       proving   a   partnership   interest   in  the   mining
       partnership requires first proving the person has a
       deed, will, or other written instrument showing
       partial ownership of the mineral interest in the land.

            The second part of the question is this:     if a
       partnership is a general partnership (as defined in
       and governed by the West Virginia Revised Uniform
       Partnership Act), and the partnership owns leases to
       extract oil and gas from real property, then does the
       Statute of Frauds require a person to produce a
       written instrument to prove he/she is a partner in the
       general partnership?     We answer this part of the
       question “no.”   Under the Revised Uniform Partnership
       Act, W. Va. Code § 47B-2-3 (1995), general partnership
       property belongs solely to the partnership and not to
       the partners. A person does not need a deed, will or
       other written instrument to establish a partnership
       stake in the general partnership, even if the general
       partnership owns an interest in real property.

Id. at 787-88.     Significantly, the Opinion contains a series of

original syllabus points concerning, on the one hand, common law

mining partnerships and, on the other hand, general partnerships

as defined in and governed by the West Virginia Revised Uniform

Partnership Act.    See id. at 787; see also Syl. Pt. 1, State v.

McKinley, 764 S.E.2d 303, 306 (W. Va. 2014) (“Signed opinions

                                  5
containing     original      syllabus          points         have    the      highest

precedential    value     because   the       Court    uses     original      syllabus

points to announce new points of law or to change established

patterns of practice by the Court.”).

     In view of, and having hereby adopted, the November 14,

2014 Opinion of the Supreme Court of Appeals of West Virginia

reformulating and answering our certified question of law, we

vacate the judgment of the district court and remand for such

other and further proceedings as may be appropriate.                          Although

we   concomitantly      affirm      the       district        court’s     denial    of

Valentine’s motion to voluntarily dismiss his complaint without

prejudice, we express no view as to how the court should rule on

remand   if   Valentine    renews    his      effort     to    join     the   Washburn

action in the Circuit Court of Ritchie County.

                                                                 AFFIRMED IN PART,
                                                                  VACATED IN PART,
                                                                      AND REMANDED

                                          6