Part III of III: The Effect of Avulsion on Riparian Mineral Ownership
 [April 1, 2020]

Unlike the gradual processes of accretion, reliction, and erosion, discussed in the preceding post for this series, avulsion is a “sudden inundation or sweeping away of land resulting from a sudden change in the course of a waterbody.” Eaton v. Francis, 484 P.2d 128, 131 (Colo. App. 1971). Avulsion results from both man-made and natural events. For example, the government may divert a river’s course for agricultural purposes, creating a “new” channel covering lands that were not previously riparian. A flood may also create avulsion, resulting in an entirely different landscape as homes, roads, and agricultural developments are completely wiped out. In this final part of our series on riparian land title, we examine how avulsion events impact mineral title.

Avulsion can result in several distinct types of changes to the landscape, with each result having a different effect on property ownership. In North Dakota, the statutory scheme deals with the multiple types of avulsion. First, sudden changes to the banks are addressed:

If a river or stream … carries away by sudden violence a considerable and distinguishable part of a bank and bears it to the opposite bank or to another part of the same bank, the owner of the part carried away may reclaim it within a year after the owner of the land to which it has been united takes possession thereof.”  N.D.C.C. § 47-06-06.

The statute above clearly lays out the title remedies if a situation occurs where the bank of a river is suddenly carried away and attached to another part of the bank. A more complex type of change occurs when the entire course of river is relocated. For example, let’s say a river previously ran through Sections 16 and 17, but because a governmental entity diverted the river, it now runs through Sections 20 and 21. An abandoned channel now lies in Sections 16 and 17. Who obtains title to that abandoned channel, and what recourse do landowners in Sections 20 and 21 have? A majority of states have adopted a provision derived from the Napoleonic Code.  Unlike a majority of our legislation, this statute is not based on common law, but rather on French and Roman Civil Law. The North Dakota version of the statute states the following:

If a stream, navigable or non-navigable, forms a new course abandoning its ancient bed, the owners of the land newly occupied take by way of indemnity the ancient bed abandoned, each in proportion to the land of which the owner has been deprived. N.D.C.C. § 47-06-07.

In other words, the landowners of Sections 20 and 21 would now acquire title to the abandoned channel in Sections 16 and 17, in proportion to the lands they originally owned in Sections 20 and 21. Louisiana, Oklahoma, and South Dakota have also applied this doctrine of indemnification if avulsion occurs. See L.A. Civ. Code Ann. Art. 504 (West 1980); 60 Okl. St. § 340; S.D. Codified Laws Ann. § 43-17-11 (1983). Texas has applied a similar, but different approach to indemnifying owners. The Supreme Court of Texas has followed Mexican Civil Law and held that if an avulsion event occurs, the riparian owners are entitled to the abandoned channel in proportion to their frontage.

Finally, it is important to note that accretion, rather than avulsion, is presumed if a river changes course. If you suspect avulsion has occurred, you must obtain and record proof. This can often be found in surveys, land records, plats, or even quiet title decisions. Moreover, you should provide all aerial photos and related surveys to your attorney when conducting mineral title examination.

Through the course of this riparian title series, we have examined how navigability, the shift of water bodies due to accretion, reliction, and erosion, and avulsion events affect mineral title.  Although not exhaustive, each discussion provides basic principles that should be considered when examining title in a drilling unit that encompasses riparian lands.

 

Part II of III: How do Changes in the Boundaries of Bodies of Water Affect Mineral Ownership?
 [March 25, 2020]

As discussed in Part I, grantees of riparian land conveyances take to the center of the non-navigable river, while the state owns the minerals underlying navigable bodies of water up to their ordinary high watermarks. Over time, however, bodies of water shift their course. What effect do these changes have on underlying mineral ownership of riparian land? Below, we discuss the effects of accretion, reliction, and erosion upon mineral ownership. Before we begin, a brief definition of our terms is as follows. Accretion is the “deposit and addition of soil along the bank of a waterbody caused by gradual shift of the waterbody away from the accreting bank,” while reliction is “the gradual receding of water resulting in the gradual baring of previously submerged land.” Erosion occurs when the bank of a waterbody loses soil because of “the gradual encroachment of water into the eroding bank.” J.P. Furlong Enters. v. Sun Exploration & Prod. Co., 423 N.W.2d 130, 140 (N.D. 1988).

How do the above processes affect mineral title? Let’s hypothesize that originally, Landowner A owns Lots 1, 2, and 3, lying west and adjacent to the river. Landowner B owns Lots 4, 5, and 6, lying east and adjacent to the river. The river moves eastward overtime. In doing so, its movement leaves behind accreted lands, those lands to the west that were previously underwater but are now exposed. Likewise, the river completely subsumes Lots 4, 5, and 6 by the process of erosion. The majority rule states that title to accreted and relicted lands belongs to the adjacent riparian owner. See Eaton v. Francis, 484 P.2d 128, 131 (Colo. App. 1971). Conversely, title to the eroded land is lost. N.D.C.C. § 47-06-05. Here, Landowner A would now gain title to the accreted lands, while Landowner B would lose title to Lots 4, 5, and 6. The severity of these rules may be surprising, but Courts have stated that the rules are based on the equitable idea that a riparian landowner should be aware of the risks involved. If one owner is subject to the hazard of loss by erosion, the same owner may also have the opportunity to gain by accretion. J.P. Furlong Enterprises, Inc., 423 N.W.2d at 133.

Occasionally, lots that have been eroded away eventually re-surface as the river continues to shift. In our example above, imagine that the river continued its movement eastward so that portions of Lots 4, 5, and 6 eventually re-surfaced. In situations such as these, jurisdictions vary in their rules of ownership. Because the analysis varies from state-to-state, the landman or title attorney should consult case law within that jurisdiction.

Additionally, it is important to note that federal lands are also subject to the doctrines of accretion, reliction, and erosion. In the example above, if the United States owned Lots 4, 5, and 6, it would also lose its land by the hazard of erosion. If federal lands are leased, then “lost” to the river, the operator should ask that the lease be cancelled pursuant to 43 C.F.R. 3108.3(c). The Secretary of the Interior, rather than the BLM, has the authority to cancel the lease.

Finally, if there are multiple riparian owners whose lands lie adjacent to accreted lands, ownership of the accreted lands is divided on the basis of the rule of apportionment. Under this rule, ownership of the accreted lands is allocated in proportion to each owner’s share of the original shoreline, and a line is drawn from the owner’s respective points to the new shoreline. Nord v. Herrman, 577 N.W.2d 782, 786 (N.D. 1998); Gardner v. Green, 271 N.W. 775, 783 (N.D. 1937). While this rule is practical for a circular body of water, it would likely result in an inaccurate allocation if the body of water is irregular. At minimum, a survey should be conducted. For security of title, landowners that find themselves in this situation may want to execute a stipulation of interest and cross-conveyance that references a professional survey.

In our upcoming and final discussion in this series on riparian land title, we will examine the effects of avulsion on mineral title.

 

Part I of III: Ownership Underlying Navigable and Non-Navigable Water Bodies
 [March 18, 2020]

With nearly 265,000 square miles of water, the United States offers a diverse landscape. Inevitably, some of the largest bodies of water are located in targeted areas for oil and gas drilling. Texas, for example, contains over 7,300 square miles of water, while North Dakota has nearly 1,700 square miles of water, including the large Yellowstone and Missouri Rivers.1 Mineral title examination underlying riparian lands, those lands that lie contiguous with and underneath bodies of water, has its own set of rules. This article discusses navigability, the first step in the title analysis. We also discuss mineral ownership allocation underlying non-navigable waters.

The first step in riparian mineral title examination is determining whether a body of water is navigable or non-navigable. Navigable bodies of water are deemed navigable in fact “when they are used, or susceptible of being used, in their ordinary conditions, as highways for commerce, over which trade or travel may be conducted.” The Daniel Ball, 77 U.S. 557, 563 (1871). This test of whether a body of water could have been used as a commercial highway is applied to the body of water as it existed at the time of statehood. From a title perspective, we typically look to court decisions for guidance on whether a river is navigable or non-navigable. For example, some courts have considered whether traders and fur trappers used the river as a basis for navigability. This test is also applied on a segment-by-segment basis. Thus, your drilling unit may include a river with both navigable and non-navigable waters.

How does navigability affect mineral ownership? At common law, the original thirteen states owned title to navigable bodies of water by virtue of their sovereignty. Pollard v. Hagan, 44 U.S. 212 (1845). Before a state is admitted to the union, the United States holds navigable waters in trust for the new states. Upon admission, the new state obtains title to the beds of navigable bodies of water on “equal footing” with the original states. Pollard at 224. The states therefore own the minerals underlying navigable waters, up to their ordinary high watermarks.2 In bodies of water that are non-navigable, we analyze mineral title differently. If a conveyance of real property is made where a non-navigable river is the boundary line, the riparian owner takes to the center of the river. Hanlon v. Hobson, 52 P. 433, 435 (Colo. 1897). See also Hunzicker v. Kleeden, 17 P.2d 384, 385 (Okla. 1932).

The term “boundary line” can have different meanings, and it is important to define for purposes of allocating ownership. A deed that references a non-navigable river as the boundary line is referring to the ordinary high watermark, unless the instrument of grant indicates a different intent. A meander line, the line used in surveys to establish the curves of a body of water, is often mistaken as the boundary line. Even if a deed does describe the boundary using a meander line, the property is still conveyed to the ordinary high watermark. North Shore v. Wakefield, 530 N.W.2d 297, 300 (N.D. 1995). See also, Twin Lakes Reservoir & Canal Co. v. Bond, 157 Colo. 10, 14 (1965) (holding that in consideration of the attached survey and reference to acreage, the grant intended to limit the boundaries of the conveyance). Courts have defined the ordinary high watermark as “the point up to which the presence and action of the water is so contiguous as to destroy the value of the land for agricultural purposes by preventing the growth of … an ordinary agricultural crop.” In re ownership of Bed of Devil’s Lake, 423 N.W.2d 141, 145 (N.D. 1988). Because the ordinary high watermark is subject to change based on the Court’s analysis above, it is always important to obtain a professional survey of riparian lands within your drilling unit.

Part II of this series will look at the effect that changes in boundaries of water bodies may have on underlying mineral ownership.

2. Recent legislation has affected this analysis in North Dakota. Please see www.dmr.nd.gov for more information regarding navigable rivers and their ordinary high watermarks in North Dakota.
 
 

[November 12, 2019]

Operators today have access to geographic information that far outstrips the information once commonly available.  County Assessor’s records are routinely linked through GIS (Geographic Information Services) to provide interactive maps that allow for detailed and accurate mapping and measurement.  At the same time, mineral ownership in large subdivisions has created the need for accurate acreage measurement of numerous parcels.  These factors have led operators to undertake mapping and acreage determinations in order to allocate royalty payments and working interest ownership. What happens when these acreage determinations differ from acreages stated in pre-existing leases?  Where the newly determined acreage is smaller than the stated estimate of area it may result in reduced royalties.  Where the acreage is larger a more problematic question arises.  Is the “new acreage” covered by the lease?

In Hild v. Johnson, 723 N.W.2d 389, 391 (N.D. 2006), the North Dakota Supreme Court ruled that an unambiguous property description controls over a statement of acreage.  In 1960, Hild took title to all of Section 21 by marshal’s deed, which described the land as “containing 582.76 acres, more or less,” which represented the section less the lands underlying the Little Missouri River. The same year, Hild conveyed an undivided 382.76/582.76 interest in the minerals of all of Section 21 to Harding.  The Deed described the land as “All of Section Twenty-one in Township One Hundred Thirty-Nine (139) North of Range One Hundred Two (102) West, containing 582.76 acres, more or less.”

In 1992, the 8th Circuit ruled that the Little Missouri River was non-navigable at the time of statehood for North Dakota, and as such, the state did not own the land or minerals underlying the river as previously thought. Instead the minerals underlying the river belonged to the adjoining parcels.  This increased the acreage of Section 21 from 582.76 to 640 acres.

Hild argued that the 1960 deed conveyed only 382.76 acres. The Court disagreed and held that the fraction used in the 1960 deed from Hild to Harding represented an undivided interest, rather than a specified acreage. Id. at 393-394. The Court ruled that “[w]here the deed purports to convey the whole of a designated tract, with the description of it as containing a given number of acres ‘more or less,’ the primary significance of that deed is that the grantor intended to convey all the land in the tract described, whatever may be its acreage, and the grant is not defeated by a discrepancy between the recited and the actual area” Id. At 394 (quoting 16 Am. Jur. Deeds,§ 282).Thus, the 1960 deed conveyed undivided 382.76/582.76 interest in the 640 acres of Section 21.

That same logic was applied to acreage statements in North Dakota Oil and Gas Leases by the Court in Lario Oil & Gas Co. v. EOG Res. Inc., 832 N.W. 2d 49, 53 (N.D. 2013). Colorado has not yet expressly adopted these principles, but numerous other jurisdictions have. See, e.g., Anderson-Prichard Oil Corp. v. Key Okla. Oil Co., 299 P. 850 (Okla. 1931); Koennicke v Maiorano, 682 A.2d 1046, 1053 (Conn. 1996). Moreover, Colorado courts presume that general descriptions include the acreage of adjoining strips.  See Near v. Calkins, 946 P.2d 537, 541 (Colo. 1997). Accordingly, we believe that a Colorado court would agree with the outcomes in the Hild and Lario cases.

Katie Moisan and Jon Tjornehoj authored the article "Lis Pendens and the Shelter Rule" featured in the April, 2017 Rocky Mountain Landman newsletter published by the Denver Association of Petroleum Landmen. The article discusses the nature of a notice of lis pendens and its relationship to state recording statutes.  You can read our full article by clicking here.