Aarco Oil & Gas Co. v. EOG Res., Inc.


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Docket Number: 2008-CA-01219-SCT
Oral Argument: 09-16-2009
 

 

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Supreme Court: Opinion Link
Opinion Date: 10-29-2009
Opinion Author: Kitchens, J.
Holding: Affirmed
Additional Case Information: Topic: Real property - Mineral rights - Constitutional issues - M.R.C.P. 24(d)(2) - Validity of supplemental assessment - Section 27-35-131 - Tax sale - Due process - Notice by publication
Judge(s) Concurring: Carlson and Graves, P.JJ., Dickinson, Randolph, Lamar, Chandler and Pierce, JJ.
Non Participating Judge(s): Waller, C.J.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - REAL PROPERTY
Trial Court: Date of Trial Judgment: 06-26-2008
Appealed from: Covington County Chancery Court
Judge: Joe Dale Walker
Disposition: The Chancellor granted summary judgment in favor of the defendants.
Case Number: 07-184
Note: The video provided by the Court begins with the oral argument in process.
  Party Name: Attorney Name:   Brief(s) Available:
Appellant: AARCO OIL AND GAS COMPANY, HARRELL ENERGY CORPORATION, GLENN G. MORTIMER, III, ANNE MORTIMER BALLANTYNE; DORCHESTER ROYALTY; WHELESS INVESTMENT COMPANY; J.T. TROTTER TRUSTEE OF THE JOSEPH SYDNEY WHELESS, JR. 1974 TRUST, J.T. TROTTER, EXECUTOR OF THE ESTATE OF ADA NANCE WHELESS, PAIGE HOLLOWAY, SUCCESSOR TRUSTEE OF THE PAIGE HOLLOWAY TROTTER GST EXEMPTION, COMPASS BANK, TRUSTEE OF THE BARBARA TROTTER COLLINS GST EXEMPTION TRUST, FIELDING L. COCKE, CAMILLE COCKE PATTON, AND TAMARA C. JENKINS




 CAREY R. VARNADO, JEFFERSON D. STEWART, HOLMES S. ADAMS, BERNARD HESS BOOTH, IV, E. STEPHEN WILLIAMS, LINDSAY GREEN WATTS, JOHN SANFORD McDAVID



  
  • Appellant #1 Brief
  • Appellant #2 Brief
  • Appellant #1 Reply Brief
  • Appellant #2 Reply Brief
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    Appellee: EOG RESOURCES, INC., WILLIAM WALLACE ALLRED, BARBER MINERALS, INC., WILEY FAIRCHILD FAMILY TRUST, JOHN M. FAIRCHILD, MICHAEL B. MOORE AND LYNN S. JONES IN THEIR CAPACITIES AS TRUSTEES OF THE WILEY FAIRCHILD FAMILY TRUST; AND FAIRCHILD-WINDHAM EXPLORATION COMPANY, LLC C. GLEN BUSH, JOHN HART GEARY, JR., GLENN GATES TAYLOR, LINDSEY McGEE TURK, JAMES L. QUINN, WATTS CASPER UELTSCHEY, JOSEPH ANTHONY SHERMAN, JR., LAWRENCE CARY GUNN, JR.  
    Appellee #2:  
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    Topic: Real property - Mineral rights - Constitutional issues - M.R.C.P. 24(d)(2) - Validity of supplemental assessment - Section 27-35-131 - Tax sale - Due process - Notice by publication
    Summary of the Facts: Both the plaintiffs and the defendants claim ownership to the mineral rights of two tracts of land situated in Covington County. The plaintiffs brought suit, alleging that the defendants’ interest in the property was derived from an invalid tax sale in 1942. The plaintiffs sought to confirm and quiet title and also a declaratory judgment that they were the rightful owners. The complaint alleged that one of the defendants, EOG Resources, Inc., had drilled a gas well on the property and was in the process of drilling a second well. The plaintiffs also sought damages for trespass, establishment of a constructive trust for any proceeds from the property, an accounting, and injunctive relief to prevent the defendants from distributing any proceeds or taking any action to interfere with their alleged interest in the property. The chancellor granted summary judgment in favor of the defendants, finding that the tax sale was valid, and the plaintiffs appeal.
    Summary of Opinion Analysis: Issue 1: Constitutional issues The defendants argue that any and all constitutional issues raised by the plaintiffs are procedurally barred because these issues were not adequately raised at the trial level and because the attorney general was not notified pursuant to M.R.C.P. 24(d)(2). The plaintiffs argue that they are not seeking to have any statute declared unconstitutional, rather, they are claiming that the statutes were applied in an unconstitutional manner. Because the plaintiffs are not seeking to invalidate a statute, Rule 24(d)(2) notification does not apply. Issue 2: Supplemental assessment Under section 27-35-131, the legislature imposed upon boards of supervisors the duty to equalize tax assessments. The code required the boards of supervisors to provide notice by publication to taxpayers of the right to inspect and examine the rolls once they had been equalized. The board was required to hear taxpayer objections, if any, to the assessments on the first Monday of August and make any necessary corrections. At the time of the 1941 assessment, real property rolls were examined and equalized every two years, and the next equalization was not to occur until 1942. Thus, no equalization of the county’s land assessment roll was authorized or required for 1941; this was accomplished when the roll was duly equalized for the 1940-1941 biennial period. The 1940 assessment did not assign a value to the land at issue because at the time it was owned by the state. However, after the land became privately owned in November 1940, the tax collector was required to assess the land and add it to the land roll. The defendants argue that the land was taxed at a value consistent with the equalized and duly approved 1940-1941 assessment. The supplemental land assessment roll shows the assessed value at $4.00 per acre, the same value given all other lands in the Williamsburg school district, where the subject lands are situated. The plaintiffs do not argue that the assessed value was excessive or that it was incompatible with the 1940-1941 assessment. Instead, they argue that the 1941 supplemental assessment was invalid merely because the roll was not equalized that year. They argue that, without an equalization of the roll following the 1941 supplemental assessment, the procedure was violative of the constitutional requirement of “uniform and equal” taxation. However, a duly authorized local county official (the tax collector) performed his duty in accordance with the law and assessed the lands at a value consistent with the 1940-1941 assessment that had been approved by the board of supervisors. His power was not unchecked and he did not go behind the properly approved assessment roll. Issue 3: Tax sale The plaintiffs argue that the 1942 tax sale was invalid because the county did not provide notice to the mineral owners, either by mail or by personal service, in violation of federal and state due process requirements. The statutes in effect at the time required that the tax collector advertise all lands to be sold for delinquent taxes in a county newspaper for three weeks. Before the two-year redemption period expired, the statutes required that the owners be personally served with notice, but only if they resided within the state. Out-of-state residents were to receive notice by mail, but only if their addresses were known or could be ascertained after diligent inquiry. Because the owners of the property were residents of Mississippi, the law required that they be served personally before the expiration of the redemption period, but the county was not required to notify the owners of the severed mineral interests. There is no evidence in the record that the tax sale was advertised as required by statute. In addition, while the land roll indicates that the owners were given some form of notice before the expiration of the redemption period on January 15, 1944, the roll does not specify that they were personally served. However, given the presumption that public officials perform their lawful duties, in absence of evidence to the contrary, the Court may presume that the tax sale was properly advertised and that the owners were given personal service prior to the expiration of the redemption period. The plaintiffs argue that, even if the county followed statutory requirements, publication of the sale and notice to the surface owners was insufficient to satisfy the due process rights of the mineral owners. The Due Process Clause of the Fourteenth Amendment requires notice reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Publication may suffice to notify those individuals whose identity or whereabouts cannot with due diligence be ascertained. Whether a particular method of notice is reasonable depends on the particular circumstances. In this case, the tax assessor was under no obligation to comb the land records to identify individuals who might appear to have an interest in the land’s minerals. Therefore, publication and notice to the surface owners only, under the circumstances, did not violate the mineral owners’ due process rights.


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