Hallin also argued that this case was factually similar to Borth v. Gulf Oil Exploration & Production Co., 313 N.W.2d 706 (N.D. 1981), a North Dakota Supreme Court case wherein a lease was executed that contained an “unless” clause which provided the lease would terminate unless the lessee paid a delayed rental, absent production to hold the lease. This provision required that the lease terminate automatically should the rental payments not be paid on time or in the correct amount. The operator made payments based on the assumption that the lessor owned 60 net mineral acres. After a determination was made that the lessor actually owned 80 net mineral acres, the lessor sued to cancel the entire lease. The district court determined that the lease terminated as to twenty net mineral acres, but was valid as to the remaining 60 net
mineral acres. The Court affirmed the decision stating that both parties failed to accurately check record title to resolve the inconsistency. In addition, the lessor failed to object to the payment for numerous years. The Court distinguished Borth from the facts in this case reasoning that in Borth, there were no title inconsistencies as there were in this case and that it was the parties’ responsibility to determine the correct acreage covered by a lease containing an “unless” clause. In this case, the title inconsistencies existed when the leases were executed and notwithstanding those inconsistencies, Hallin executed unambiguous leases covering all of their mineral interest to Inland. Author’s Note: The author’s law firm represented Inland Oil & Gas Corp. in this case.
Case Involving Ownership Dispute for Minerals Underlying the Missouri River Reversed and Remanded
On September 28, 2017, the North Dakota Supreme Court reversed and remanded the district court’s decision in Wilkinson v. Board of University and School Lands, 2017 ND 231, 903 N.W.2d 51, a case which involves the determination of ownership of minerals underlying portions of the Missouri River that the United States acquired for operation of the Garrison Dam and Reservoir. Prior to the following, J.T. Wilkinson and Evelyn M. Wilkinson (“Wilkinsons”) acquired certain property located in Williams County. In 1958, the Wilkinsons conveyed the surface to the United States for the construction and operation of the Garrison Dam and Reservoir, reserving the oil and gas rights in and under the property. Subsequently, the Missouri River was flooded to form Lake Sakakawea, altering the channel of the Missouri River. In 2012, Plaintiffs, the successors in interest to the Wilkinsons, sued the Board of University and School Lands of the State of North Dakota (“Land Board”), and others, seeking to determine ownership of the minerals underlying the property. Thereafter, the Land Board and State Engineer moved for summary judgement, requesting the court determine that the State holds title to the bed of the Missouri River up to the current ordinary high
watermark and that the disputed property is located below the current ordinary high watermark. In response, Plaintiffs argued that the property is not part of the State’s sovereign lands, there was no navigable body of water on the property at the time of statehood, the surface property was purchased by the United States as part of the Garrison Project, the property was flooded by Lake Sakakawea and lastly, the property is located above the historical ordinary high watermark. The district court granted the State’s motion, ruling that the State owns all of the minerals and the surface of the disputed property and dismissed Plaintiff ’s claims. The district court further explained that the State owns those lands that are within the ordinary high watermark of navigable lakes and streams, noting that the Missouri River is not distinguishable from Lake Sakakawea, and that the Missouri River was navigable at the time of statehood. The district court therefore concluded that the property in dispute was below the ordinary high watermark and that both the surface and minerals are sovereign lands and belong to the State. Plaintiffs appealed the decision to the North Dakota Supreme Court. Subsequent to the district court’s decision and while the appeal to the Supreme Court was pending, the North Dakota legislature passed Senate Bill 2134 which was enacted as N.D.C.C. ch. 61-33.1. N.D.C.C. ch. 61-
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