Nygaard v. Getty Oil Co., et al.
| Docket Number: | 2004-CA-01614-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 06-30-2005 Opinion Author: Dickinson, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Unpaid royalties - Statute of limitations - Constructive trust - Fraudulent concealment - M.R.C.P. 56(e) Judge(s) Concurring: Smith, C.J., Waller and Cobb, P.JJ., Easley, Carlson, Graves and Randolph, JJ. Non Participating Judge(s): Diaz, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 07-30-2004 Appealed from: Marion County Circuit Court Judge: Michael R. Eubanks Disposition: Granted summary judgment to Getty and Texaco and partial summary judgment to Pounds. Case Number: 2002-0143 |
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| Consolidated: Consolidated with 2003-CA-01605-SCT Thomas Max Nygaard, Trustee of the Daisy Keith Trust v. Getty Oil Company, Chevron Texaco, Corporation f/k/a Texaco U.S. and J.R. Pounds, Inc.; Marion Circuit Court; LC Case #: 2002-0143; Ruling Date: 06/17/2003; Ruling Judge: Michael R. Eubanks | ||
| Party Name: | Attorney Name: | |||
| Appellant: | Thomas Max Nygaard |
BEN F. GALLOWAY |
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| Appellee: | Getty Oil Company, Chevron Texaco Corporation f/k/a Texaco U.S. and J. R. Pounds, Inc. | DAVID L. MARTINDALE, FOREST M. DANTIN |
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| Topic: | Contract - Unpaid royalties - Statute of limitations - Constructive trust - Fraudulent concealment - M.R.C.P. 56(e) |
| Summary of the Facts: | Nine years following notice of the claim, Thomas Max Nygaard, as trustee for the Daisy Keith Trust, filed a lawsuit against Getty Oil Company, Chevron Texaco Corporation, and J.R. Pounds., Inc. to recover underpaid oil and gas royalties. The defendants filed motions for summary judgment, asserting that the statute of limitations barred Nygaard’s claims. The court granted summary judgment to Getty and Texaco, and partial summary judgment to Pounds. The court made final the summary judgment and partial summary judgment in accordance with Rule 54(b). Nygaard appeals. |
| Summary of Opinion Analysis: | Issue 1: Statute of limitations Mississippi has no specific statute of limitations for claims of unpaid royalties. The defendants argue that the general three-year statute of limitations applies. However, Nygaard argues that his claim for unpaid royalties equates to a claim for recovery of an interest in land. If so, then Nygaard’s claim would be governed by section 15-1-7 and/or 15-1-9, both of which prescribe a ten-year limitation period. Although the right to receive royalty payments in the future from underlying mineral deposits is considered an interest in land, royalty proceeds, once paid, are personal property and no longer considered an interest in land. Since accrued royalties are personal property and not an interest in land, section 15-1-7 is inapplicable. There being no applicable specific statute of limitations for actions seeking recovery of accrued royalties, the general, three-year statute must be applied. Issue 2: Constructive trust Nygaard argues that the defendants are holding the unpaid royalties in a constructive trust, bringing into play section 15-1-39 which provides for a ten-year limitations period. The relationship between Nygaard and the defendants is governed by written contracts. There is no allegation or fact suggesting that any defendant assumed or agreed to a trust relationship. Issue 3: Fraudulent concealment Nygaard argues that even if the general three-year statute of limitations applies, it was tolled by section 15-1-67 because of fraudulent concealment. In order to toll a statute of limitations, a plaintiff must prove that the defendant engaged in affirmative acts of concealment and despite investigating with due diligence, the plaintiff was unable to discover the claim. Nygaard’s own actions indicate knowledge of a potential claim. It is certainly possible that, until September 1993, Getty Oil and Texaco engaged in fraudulent concealment. However, even if they did, Texaco mailed Nygaard a letter and a check for past-due royalties in 1993. Nygaard was thus put on notice that royalties had been withheld from the trust. He had a duty to investigate, and the statute began to run. Since no suit was filed by September, 1996, the statute of limitations ran. In order to comply with M.R.C.P. 56(e) and succeed on a claim of fraudulent concealment against Pounds, Nygaard must allege with specificity that Pounds engaged in affirmative acts of concealment. Nygaard alleged no specific affirmative act by Pounds to conceal the true amount of royalties owed the Trust. |
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