This a case highlighting a potentially all too common scenario where a corporate bank is taking advantage of unused and unclaimed mineral rights for decades by asserting a judicially created right to maintain those unused and unclaimed mineral rights.
The Hellmuth & Johnson trial team recently secured a significant victory in a legal battle over mineral rights in Williamson County, North Dakota. Representing the Surface Owners, attorneys Jordan Kolinski, Carol Moss, and Terry Moore successfully challenged a court-created trust account’s claim to the mineral interests, which it had been collaborating closely with major mining companies.
The dispute traces back to 1972 when the Surface Owners acquired 5/153 surface acres of property in Williamson County, North Dakota. At that time, the mineral interests on the property were severed from the surface estate and owned by seven individuals who could not be located (Unlocatable Owners), and public records showed no activity on these mineral interests since at least 1962.
In 1983, the North Dakota Legislature passed the Dormant Mineral Act (DMA), aiming to terminate mineral interests in land not used or claimed for 20 years and vesting them in the surface owners. Despite the DMA’s enactment, the Unlocatable Owners remained unreachable and inactive on their mineral interests by 1983.
The Surface Owners, seeking to assert their rights, conveyed a portion of the surface acreage to a gas processing company in 1983 while reserving all mineral rights for themselves. However, another mineral processing company applied for the creation of a trust (Trust) on behalf of the Unlocatable Owners to facilitate mining activities. The court approved the application, appointing a trustee to manage the Trust, which subsequently leased the mineral rights back to the applicant mineral processing company.
In 1988, the Surface Owners published and recorded Notices of Lapse, as per the DMA, to confirm their ownership of the mineral interests. However, the Trust, on behalf of the Unlocatable Owners, quickly filed Statements of Claim asserting superior ownership rights.
The legal battle persisted for decades, with both parties claiming rights to the mineral interests and engaging in activities to “use” them as defined by the DMA. Finally, in 2022, the Surface Owners filed a Quiet Title and Declaratory Judgment action against the Trust and related parties.
The Trust, in response, moved for Summary Judgment, arguing its validity and continuous use of the mineral interests since 1985.
The Surface Owners opposed the Trust’s motion, citing the DMA’s provisions and asserting their rights based on non-use by the Unlocatable Owners and valid Notices of Lapse filed in 1988. They argued that the Trust’s Statements of Claim were invalid as the mineral interests had reverted to them.
The court ruled in favor of the Surface Owners, denying the Trust’s motion for Summary Judgment. The court determined that the Trust lacked standing to file a Statement of Claim, the mineral interests had reverted to the Surface Owners due to non-use, and the Trust should not have been created in the first place.
As a result of this ruling, the Surface Owners became titled owners of the mineral interests dating back to 1982, entitling them to substantial mineral royalties both retroactively and in the future.