Vulcan Lands, Inc. v. Victoria Older Currier ( 2023 )

Filed 12/21/23
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
VULCAN LANDS, INC., et al., D082234
Plaintiffs, Cross-defendants and
Appellants,
(Super. Ct. No. CIVDS1913143)
v.
VICTORIA OLDER CURRIER et al.,
Defendants, Cross-complainants,
and Respondents.
APPEAL from a judgment of the Superior Court of San Bernardino
County, Lynn M. Poncin, Judge, and John Nho Trong Nguyen, retired judge
of the Orange County Superior Court (assigned by the Chief Justice pursuant
to art. VI, § 6 of the Cal. Const.). Affirmed.
Fennemore, J. Jackson Waste, Mark A. Ostoich; Thomas Vogele &
Associates, Thomas A. Vogele and Timothy M. Kowal for Plaintiffs, Cross-
defendants and Appellants.
Spach Capaldi & Waggaman, Madison S. Spach, Jr., Shaheen A.
Etemadi; Reich Radcliffe & Hoover, Marc Gene Reich and Adam T. Hoover
for Defendants, Cross-complainants and Respondents.
In the 1950’s and 1960’s, landowners in southwest San Bernardino
County transferred 19 parcels of land to various individuals by grant deed,
reserving a partial interest in “all oil, gas, and other hydrocarbons and
minerals” beneath the surface. Once severed, the surface and mineral estates
changed hands over the years. The current owners of the surface estate are
mining companies that wish to extract sand and gravel from the combined
196-acre tract called Area Q through open-pit excavation. Mineral rights
holders (descendants of the original grantors) claim a one-half interest in
their mining proceeds.
At issue in this appeal is whether “minerals” in the original
reservations include rights to mine sand and gravel. Concluding they do, the
trial court granted summary judgment and entered judgment in the mineral
rights holders’ favor. The mining companies appeal, claiming Bambauer v.
Menjoulet (1963) 214 Cal.App.2d 871 (Bambauer) establishes that sand and
gravel are not minerals as a matter of law. With open-pit mining rendering
the surface unusable for decades, they maintain the original parties could not
have intended otherwise in severing the mineral and surface estates.
As we explain, our aim is to uncover the intent of the original grantors
and grantees; neither a dictionary definition of “minerals” nor constructions
of that term in statutes or past cases are dispositive. While our record is
sparse, the mineral rights holders established through evidence that sand
and gravel had been mined in the region for decades before the grant deeds.
It is undisputed that sand and gravel possess commercial value. While open-
pit mining over the next 30 years will affect usability of the surface estate, it
does not render the conveyance a nullity where the surface estate retains and
can profit from a 50 percent interest in the extracted minerals. At most,
anticipated surface destruction through open-pit mining merely creates an
2
ambiguity that Civil Code section 1069 resolves in favor of the mineral rights
holders. Concluding Bambauer does not compel a different result, we affirm
the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Vulcan Lands, Inc. (Vulcan), CalMat Co. (CalMat), and Arundel
Company, LLC (Arundel) are the fee simple owners of 19 plots of real
property in San Bernadino County.1 Each parcel is burdened by reservations
contained in original grant deeds executed between 1953 and 1964. The
grantors severed the surface estate from the mineral estate, reserving for
themselves a one-half interest of “ ‘all oil, gas and other hydrocarbons and
minerals now or at any time hereafter situated therein and thereunder or
producible therefrom . . . together with the free and unlimited right to mine,
drill and bore . . . .’ ”2
Seeking to excavate sand and gravel through open-pit mining
operations on the combined tract, the mining companies filed suit to quiet
title and obtain declaratory relief. They claimed the mineral reservations did
not cover sand and gravel because those materials lacked a definite chemical
composition, and their removal would significantly impair the surface estate.
Current mineral rights holders Victoria Older Currie, Nancy Wood
Yarborough, Catherin Older Lapat, Robert M. Older, and Deena Rae Ortiz
1 We refer to the three companies collectively as the mining companies.
2 One grant deed differs from the rest. In parcel No. 0262-211-06 (the
sole property owned by plaintiff Arundel), a 1958 grant deed may have
reserved a 100 percent interest in “all oil, gas, and other hydrocarbons”
without any reference to minerals. While this appears in the recorded legal
description for the property, the original deed is illegible, and no claim is
made that it does not convey mineral rights or should be interpreted
differently from the others.
3
(collectively, the Olders) filed a cross-complaint for declaratory relief that
sand and gravel were covered by their mineral reservations. As they state on
appeal, “[T]here is no question that the Property will be used for mining sand
and gravel; the only question is whether the profits of the mining must be
shared with [the Olders].”
Each side filed motions for summary judgment. The mining companies
did not submit any evidence with their motion. The Olders filed two counsel
declarations in support of their motion and requested judicial notice of
certain exhibits.3 Attorney Marc Reich prepared a table summarizing the
mineral rights reservations in each of the grant deeds. Attorney Shaheen
Etamadi filed a declaration authenticating discovery evidence bearing on the
scope of the mineral reservation.
First, Etamadi attached the mining companies’ discovery responses,
in which they admitted lacking documentary or testimonial evidence of the
original parties’ intent as to sand or gravel mining rights. They further
admitted that the parcels were located near their existing Cajon Creek mine
and an ancient stream called Lytle Creek, and that sand and gravel were
extracted through mining.
A planning commission report attached to Etamadi’s declaration
described the proposed project. The mining companies wished to develop a
196-acre combined tract called Area Q into an open pit quarry to mine sand
and gravel over a 30-year period. A map situates Area Q in the southwest
corner of San Bernardino County (outlined below in blue):
3 The mining companies’ objections to the Olders’ documentary evidence
and request for judicial notice were overruled, and the court’s ruling in that
regard is not challenged on appeal.
4
A zoomed in map depicts the site near Cajon Wash and Lytle Creek Wash:
As will be discussed, the mining companies proposed removing a two-foot
layer of topsoil and subsoil before commencing open-pit mining to a depth of
120 feet.
Other documents attached to Etamadi’s declaration described the
history of mining operations in San Bernardino County. A 1995 Department
of Conservation, Division of Mines and Geology report authored by Dinah
Shumway (Shumway report) explained that “[s]and and gravel has been
5
produced from various locations in Southwestern San Bernardino County
since the early 1900s.” Specifically, the Lytle Creek area had been mined
since 1922 for aggregate material. Shumway noted that nearby Cajon Creek
“has been noted as an alternative source of aggregate.” Along similar lines, a
1999 conservation study coauthored by Vulcan employee Douglas Sprague
(Sprague report) stated that before CalMat acquired its property near Cajon
and Lytle Creeks in the mid-1980s, that site “had been mined by several
companies since the 1920s” and had historically supplied “construction
aggregate materials.”4
The two sides disagreed on the law. Citing Bambauer, supra, 214
Cal.App.2d 871 and Geothermal Kinetics, Inc. v. Union Oil Co. (1977) 75
Cal.App.3d 56 (Geothermal Kinetics), the mining companies urged the court
to consider three factors: (1) whether the substance had a distinct chemical
composition apart from the earth; (2) whether its removal would destroy the
surface estate and render the land conveyed useless; and (3) whether the
substance had commercial value. They maintained Bambauer established a
categorical rule that sand and gravel are not minerals based on the first two
factors, and that out-of-state cases were in accord.
By contrast, the Olders argued Civil Code section 1069 required that
reservations in deeds be construed in favor of the grantor and faulted
4 Other materials proffered by the Olders are less probative of the
original parties’ intent and do not factor into our analysis. For instance,
Etamadi’s declaration authenticated inspection reports in which the mining
companies themselves described sand and gravel on preprinted forms as
minerals. Several attachments suggested that sand and gravel had
commercial value, but this was not in dispute. Other exhibits provided
dictionary definitions of the word “mineral” or construed that term as it
pertained to later provisions in the San Bernardino 2007 Development Code
or Surface Mining and Reclamation Act of 1975 (SMARA; Pub. Res. Code,
§§ 2710–2795).
6
Bambauer for not citing that statute.5 They maintained Bambauer’s
chemical composition test had been “expressly rejected” in Pariani v. State of
California (1980) 105 Cal.App.3d 923 (Pariani). In addition, they offered
dictionary and statutory definitions of the word “mineral” and its common
usage to claim sand and gravel were included. As to the mining companies’
argument that open-pit mining would destroy the surface, the Olders argued
that subsequent legislation required eventual surface reclamation.6
The parties appeared before Judge Lynn Poncin in August 2021. They
agreed there was no direct evidence of the original parties’ intent and that
sand and gravel had commercial value. But the mining companies believed
the deeds unambiguously did not reserve mineral rights in sand and gravel
where these substances were indistinguishable from the earth and could not
be removed without destroying the surface estate. In the companies’ view,
section 1069 “only comes into play if there’s an ambiguity,” and none existed
here. Later legislation requiring surface restoration could not, in their view,
affect the analysis. By contrast, the Olders argued sand and gravel were
substances that could be mined, and surface destruction was implied in the
reservation of the right to not only extract but also explore for minerals.
Following the hearing, Judge Poncin granted the Olders’ motion for
summary judgment and entered judgment in their favor on the complaint
and cross-complaint. In a detailed decision, she explained that dictionary
5 Civil Code section 1069 states in relevant part: “A grant is to be
interpreted in favor of the grantee, except that a reservation in any grant
. . . is to be interpreted in favor of the grantor.” Further statutory references
are to the Civil Code.
6 Passed in 1975, SMARA requires mining companies to submit
reclamation plans to obtain permit approval. (Pub. Res. Code, §§ 2770−
2774.)
7
and statutory definitions only went so far because the word “mineral” had to
be construed based on the intent of the parties to a particular deed. Drawing
from Bambauer, Geothermal Kinetics, and Pariani, the court reasoned that
“for sand and gravel to be a mineral [sic], they would need to (i) be
commercially valuable, (ii) involve a substance or resource distinct from the
surface soil, and (iii) be able to be extracted without rendering the land
useless or destroying the surface.” On balance, the court believed the Olders’
evidence addressed these factors. To the extent their proffer was lacking,
section 1069 would compel construing the mineral reservations broadly to
encompass sand and gravel. The court observed that Bambauer did not apply
section 1069, and further reasoned that Geothermal Kinetics supported a
functional approach that granted to the mineral estate the right to extract
valuable resources from the earth. Based on the foregoing, the court: (1)
denied the mining company’s motion for summary judgment on the ground
that it lacked evidentiary support; and (2) granted the Olders’ motion for
summary judgment.
DISCUSSION
The purpose of summary judgment is to “cut through the parties’
pleadings in order to determine whether, despite their allegations, trial is in
fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal.4th 826, 843 (Aguilar).) Summary judgment is proper if there
is no triable issue of material fact and the moving party is entitled to
judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) We review
the grant of summary judgment de novo, “considering all of the evidence the
parties offered in connection with the motion (except that which the trial
court properly excluded) and the uncontradicted inferences the evidence
reasonably supports.” (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.)
8
Because we review “the ruling, not the rationale,” we may affirm summary
judgment on a different basis than the trial court. (Salazar v. Southern Cal.
Gas Co. (1997) 54 Cal.App.4th 1370, 1376.)
As we explain, the mining companies admitted they lacked
documentary or testimonial evidence as to the original parties’ intent in
creating the mineral reservations. The undisputed evidence reflects that
sand and gravel have commercial value, can be mined, and in fact have been
mined in the area since the 1920’s. While the mining companies place great
weight on the fact that open-pit mining would render the surface estate
unusable, the mineral reservations here are only partial, such that the
surface estate is not left holding nothing. Moreover, this factor at most
creates an ambiguity that section 1069 resolves in the Olders’ favor. For
these reasons, the court properly granted summary judgment in favor of the
Olders.
A. General Framework for Construing Mineral Reservations
Before turning to the record, we start with the legal framework. Courts
use a variety of tests and interpretive aids to define the scope of a general
mineral reservation in a deed. Dictionary, statutory, or case law definitions
are unhelpful because the word “mineral” has no fixed meaning, and our aim
is to determine the intent of the original parties. Extrinsic evidence may
bear on that question by speaking to the history of local mining or the
intended use of the conveyed property. Absent evidence of specific intent,
mineral reservations must be construed to effectuate the most reasonable
intent of the grantor in severing the mineral estate from the surface estate.
As the trial court suggested, relevant factors include whether the substance
in question has some distinct chemical composition or commercial value, and
whether its extraction would harm the surface estate. Section 1069 creates a
9
rule of construction where ambiguity persists, requiring reservations to be
construed in favor of the grantor. No single factor is determinative, and our
overriding objective remains to effectuate the contracting parties’ intent.
1. The overarching goal is to discern the original parties’ mutual
intent, first by resort to the plain language and by considering
extrinsic evidence where the plain language is ambiguous.
“The owner of real property may divide his lands horizontally as well as
vertically, and when he conveys the subsurface mineral deposits separately
from the surface rights, or reserves them from a conveyance of such surface
rights, he creates two separate fee simple estates in the land, each of which
has the same status and rank.” (Nevada Irrigation Dist. v. Keystone Copper
Corp. (1964) 224 Cal.App.2d 523, 527.) Where the surface and mineral
estates have been severed, a conveyance of one does not transfer title to the
other. (Ibid.)
The grant deeds to the parcels in question include a reservation
covering a partial interest “of all oil, gas and other hydrocarbons and
minerals now or at any time hereafter situated therein or thereunder or
producible therefrom, together with the free and unlimited right to mine,
drill and bore on and beneath the surface of said land” for purposes of
development or removal of such substances. The crucial question is whether
“minerals” was meant to include sand and gravel.
Land grants are subject to the usual rules of contract interpretation,
unless otherwise specified. (§ 1066.) The goal is to determine the mutual
intent of the parties to the original deeds at the time of conveyance. (§ 1636.)
As with any contract, we start with the express language in the deeds.
(§§ 1638, 1639.) Terms in a contract may be construed in relation to the
circumstances under which the contract was made. (§ 1647.) We aim to
determine the parties’ expressed intent under an objective standard—i.e.,
10
what the reservation would mean to a reasonably intelligent person aware of
the circumstances. (Mission Valley East, Inc. v. County of Kern (1981) 120
Cal.App.3d 89, 97−98.)
As the trial court noted, the term “mineral” is a general one that “is not
capable of a definition of universal application” but instead must be
interpreted according to its context and usage. (Pariani, supra, 105
Cal.App.3d at p. 934.) Dictionary definitions are generally unhelpful for this
purpose. (See Northern P. R. Co. v. Soderberg (1903) 188 U.S. 526, 530 [“The
word ‘mineral’ is used in so many senses, depending on the context, that the
ordinary definitions of the dictionary throw but little light upon its
signification in a given case.”].) Ambiguity permits resort to extrinsic
evidence to prove a meaning to which contractual language is reasonably
susceptible. (Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69
Cal.2d 33, 37.)
2. We first attempt to discern the parties’ specific intent.
In construing the scope of a deed reservation, courts give preference to
a particular intent over a general one. (Geothermal Kinetics, supra, 75
Cal.App.3d at p. 60.) Where a deed is ambiguous as to the parties’ intent,
extrinsic evidence might clarify the parties’ unstated specific intent. For
example, courts may consider evidence of contemporaneous community
knowledge—“whether the substance was known to exist within the area,
whether it had value upon extraction at that time in that locale, and whether
it had been developed or used in the region.” (Fiske & Linford, 3 Am. Law of
Mining (2d ed.) § 84.02[2][a] (hereafter American Law of Mining) [cautioning,
however, that a search for contemporaneous community knowledge can turn
into “a chartless voyage”].)
11
Previous mining on the property may likewise bear on the parties’
specific intent. “If a particular substance, or one similar to it, has been
extracted from the land, a court may conclude that the parties must have had
it in mind and, consequently, intended that it be included within the mineral
severance.” (Am. Law of Mining, supra, § 84.02[2][c]; see, e.g., Cole v. Berry
(Miss. 1962) 147 So.2d 306, 309 [bentonite was a “mineral” where it had been
mined and processed in that county “long prior” to execution of the deed and
was considered a mineral at the time].)
The parties’ contemporaneous actions and use of the property might
also clarify the parties’ intent. (McCurdy, 13 Agricultural Law,
§ 126.03[7][g][iv] (hereafter Agricultural Law).) In determining the meaning
of a general mineral reservation, “regard may be had not only of the language
of the deed, but also to the situation of the parties, the business in which they
were engaged and the substance of the transaction.” (Witherspoon v.
Campbell (Miss. 1954) 69 So.2d 384, 386 (Witherspoon) [grantee engaged in
farming, and grantor was not involved in construction work for which a
mineral reservation covering sand and gravel might be useful]; see West Va.
Dep’t. of Highways v. Farmer (W.Va. App. 1976) 226 S.E.2d 717, 719, 720
(West Virginia) [where surface estate’s predecessor was unaware of any sale
of sand or gravel and purchased and used the land for farming, it seemed
remote that a general mineral reservation would include sand or gravel].)
Finally, specific intent may be discerned using relevant interpretive
aids. Although grants are generally construed in favor of the grantee, in this
state, “[A] reservation in any grant . . . is to be interpretated in favor of the
grantor.” (§ 1069, italics added.) This rule is applied not in a vacuum but
12
consistent with the overriding objective to ascertain the parties’ true intent.
(Main v. Legnitto (1964) 230 Cal.App.2d 667, 677−678.)7
3. If evidence of the parties’ specific intent does not resolve the issue,
we turn to general intent, utilizing tests from key cases.
Where a mineral reservation in a deed does not express any specific
intent, “the general intent of the reservation controls.” (Pariani, supra, 105
Cal.App.3d at p. 931.) Both sides rely on Bambauer, Geothermal Kinetics,
and Pariani to offer competing interpretations of the general intent
underlying the mineral reservations here. As the trial court noted, those
cases direct courts to evaluate the chemical composition of the material (as
distinct from the surface soil) and its commercial value, as well as whether
extraction would destroy the surface. Because the parties read these cases
differently, we explore them in detail.
i. Bambauer considered whether the substance has a distinct
chemical composition.
In Bambauer, a grantor conveyed her 640-acre parcel in Merced
through a 1919 deed that reserved “an undivided one-half interest . . . in and
7 Another common rule of construction, ejusdem generis, directs courts
to construe general words in a deed in conjunction with specific ones.
“[I]f general words follow an enumeration of specific substances, the general
words will not be construed to their widest extent, but will be limited in
application to only substances of the same general kind or class as those
specifically mentioned.” (Am. Law of Mining, supra, § 84.02[1][a].) An
argument could be made that a reservation of “oil, gas, and other
hydrocarbons and minerals” limits “minerals” to the types of energy-
producing sources specifically mentioned (oil, gas, hydrocarbons). (See, e.g.,
West Virginia, supra, 226 S.E.2d at pp. 719−720; Holloway Gravel Co. v.
McKowen (La. 1942) 9 So.2d 228, 232−233.) But the mining companies never
made such an argument, nor could they given their position that gold would
be covered under the mineral reservations.
13
to all mineral, and oil rights.” (214 Cal.App.2d at p. 872.) The land had been
used for agricultural purposes (cattle and sheep rearing) and contained
substantial gravel deposits with commercial value. (Ibid.) The surface estate
holder signed a contract with a third party granting it the exclusive rights to
mine gravel deposits in a portion of the land, and the mineral estate owner
(the original grantor) sued for declaratory relief. (Ibid.) At trial, the mineral
estate owner presented no evidence. The surface estate owner examined an
engineering geologist who opined that gravel deposits could be found to a
depth of 12 feet in at least a 200-acre area. (Ibid.) In concluding the
reservation did not encompass sand and gravel, the trial court was swayed by
the fact that excavating a 12-foot-deep hole over this expanse “would render
the land useless for agricultural purposes.” (Ibid.)
On appeal, the court noted that other jurisdictions had applied a
surface destruction test to conclude that mineral rights to agricultural land
could not include gravel. (Bambauer, supra, 214 Cal.App.2d at pp. 872−873.)
But that test had not been applied by California courts, and cases involving
gold (which indisputably was a mineral) held that “the right to remove
minerals reserved by a grantor will not be enjoined solely because it may
result in destruction of topsoil.” (Id. at p. 873; Yuba Inv. Co. v. Yuba Consol.
Gold Fields (1920) 184 Cal. 469, 480−481 [mineral estate was “entitled to
extract the precious metals therefrom, even though the effect thereof is to
wholly destroy the surface”]; Trklja v. Keys (1942) 49 Cal.App.2d 211, 213
[placer mining operations that used hydraulic mining to extract gold from
gravel deposits were permitted even if they necessarily destroyed the surface
ground].)
The court observed that resort to general classifications of matter as
animal, vegetable, or mineral “leads to the absurd conclusion that the soil
14
itself would be reserved, and the conveyance nullified.” (Bambauer, supra,
214 Cal.App.2d at p. 873.) Left searching for some test to rationally construe
the mineral reservation, the court credited the testimony of the surface estate
owner’s expert witness. (Ibid.) Because gravel deposits had no definite or
uniform chemical composition by which they could be easily distinguished
from the earth itself, the court concluded they were not reserved “minerals.”
(Id. at pp. 873−874; see Psencik v. Wessels (Tex. App. 1947) 205 S.W.2d 658,
661 [“ ‘There is nothing constant in the character of commercial gravel by
which to identify it as a mineral, except that it consists of broken fragments
of rock mingled with finer material, such as sand and clay. Nothing can be
said of its chemical composition as can be said of the minerals.’ ”]; see also
W.S. Newell, Inc. v. Randall (Ala. 1979) 373 So.2d 1068, 1070 [“Although
there is no precise definition of the term ‘mineral,’ it necessarily implies a
substance rare and exceptional in character possessing special value[,]
something other than the soil itself.”].)
ii. Geothermal Kinetics evaluated whether the substance had
commercial value and whether extraction would cause
surface destruction.
A 1951 deed in Geothermal Kinetics conveyed real property in Santa
Rosa but reserved to the grantor the right to mine “all minerals in, on or
under” the property. (75 Cal.App.3d at p. 58.) After the mineral rights
holder’s lessee drilled a well, a dispute emerged as to whether geothermal
energy was a “mineral.” (Ibid.) Ultimately, the court adopted a “ ‘functional’
approach which focuses upon the purposes and expectations generally
attendant to mineral estates and surface estates,” eschewing a “mechanistic
approach based upon textbook definitions of the term mineral.” (Id. at p. 59.)
Applying this test, it concluded geothermal resources belonged to the mineral
estate. (Id. at pp. 59, 62, 64.)
15
Commercial geothermal exploration did not start in the region until
1955, after the deed was executed. (Geothermal Kinetics, supra, 75
Cal.App.3d at p. 59.) It did not matter that the original parties did not know
about the presence or use of the geothermal resources. (Id. at p. 61.)
Examining “both the broad purpose of the 1951 conveyance of the mineral
estate and the expected manner of enjoyment of this property interest,” the
court concluded that geothermal resources belonged to the mineral estate.
(Id. at p. 64.) “A principal purpose of this conveyance was to transfer those
underground physical resources which have commercial value and are not
necessary for the enjoyment of the surface estate.” (Ibid.) “The parties to the
1951 grant had a general intention to convey those commercially valuable,
underground, physical resources of the property. They expected that the
enjoyment of this interest would not destroy the surface estate and would
involve resources distinct from the surface soil.” (Id. at p. 62.) There was no
expressed specific intent to the contrary, geothermal resources therefore
belonged to the mineral estate. (Id. at pp. 62, 64.)
Geothermal Kinetics holds that where the specific intent of a mineral
reservation cannot be discerned, courts should take a functional approach
that considers the general objective of the conveyance. In Geothermal
Kinetics, that general purpose was to transfer commercially valuable
underground resources whose extraction would not destroy the surface
estate.8
8 Several out-of-state cases likewise look to a material’s commercial
value and the potential surface destruction caused by its removal in
construing mineral reservations. (See, e.g., Farrell v. Sayre (Colo. 1954) 270
P.2d 190, 192−193 (Farrell) [mineral reservation excluded sand and gravel
because they had no special value and formed part of the surface]; West
Virginia, supra, 226 S.E.2d at p. 720 [where sand and gravel lay on the
surface, including them in a mineral reservation would deprive surface owner
16
iii. Pariani applied Geothermal Kinetics and used section 1069
as an interpretive aid.
Pariani expanded on Geothermal Kinetics to address a similar question,
whether geothermal resources constituted “mineral deposits” reserved to the
State of California under land pate nts it issued between 1949 and 1956.
Each patent conveyed the surface estate but reserved to the state “all oil, gas,
oil shale, coal, phosphate, sodium, gold, silver, and all other mineral deposits
contained in said land.” (Pariani, supra, 105 Cal.App.3d at p. 926 & fn. 2,
italics omitted.) The surface estate consisted of “a remote, sandy, rocky, and
steep mountainous area,” and its beneficial use was not significantly
impacted by the wells, gathering lines, and power plants needed to produce
electricity from the geothermal steam. (Id. at p. 929.)
At the time the state issued the patents, the parties were unaware of
subsurface geothermal resources or the possibility of power generation using
geothermal steam. (Pariani, supra, 105 Cal.App.3d at pp. 930, 936.) Unable
to discern the parties’ specific intent in crafting the reservation, the court
instead focused on their general intent, examining what they reasonably
intended to be conveyed. (Id. at p. 931.) In addition, section 1069 required
construing an ambiguous reservation in favor of the grantor. (Id. at p. 931.)
Thus, Pariani focused on “the purpose of the grant or reservation in
terms of the manner of enjoyment of the respective interests involved.”
of beneficial use]; Southern Title Ins. Co. v. Oller (Ark. 1980) 595 S.W.2d 681,
683 [limestone had commercial value, but its excavation near the surface
through open-pit mining would destroy the surface soil for agricultural or
grazing purposes].) As a leading treatise explains, the surface destruction
test is motivated by the rationale “that parties would not intend to sever the
surface and mineral estates in a manner that would allow the destruction of
the surface estate without express mention. Otherwise a reservation or grant
of one estate would destroy the other.” (Agricultural Law, supra,
§ 126.03[7][g][vi], fns. omitted.)
17
(Pariani, supra, 105 Cal.App.3d at p. 932.) As the court explained, the
mineral estate could be enjoyed by extracting valuable substances, while the
surface estate could be enjoyed by retaining those substances necessary for
enjoyment of the surface estate. (Ibid., citing Kuntz, The Law Relating to Oil
and Gas in Wyoming (1949) 3 Wyo. L.J. 107, 112–113, reprinted (1981) 34
Okla. L.Rev. 28, 34.) It was also relevant whether mining would destroy the
surface estate. (Pariani, at pp. 932−933.)9
Applying those factors to the record, the court concluded that the state
had severed from the surface “ ‘all substances presently valuable in
themselves, apart from the soil, whether their presence is known or not, and
all substances which become valuable through development of the arts and
sciences, and that nothing presently or prospectively valuable as extracted
substances would be intended to be excluded from the mineral estate.’ ”
(Pariani, supra, 105 Cal.App.3d at pp. 932, 936, citing Kuntz, supra, 34 Okla.
L.Rev. at p. 34.) In reaching this result, the court noted that extraction of
9 While citing the influential law review article by Professor Kuntz, the
Pariani court nonetheless departed from strict application of its “manner of
enjoyment” test. Kuntz suggested that the only limit on a mineral estate’s
extraction rights was its duty to compensate the surface estate where
mineral extraction would destroy the surface. (Kuntz, supra, 34 Okla. L.Rev.
at p. 34.) “Such damages would not be measured by the value of the
substance in its new use, but would be measured by the reduction in value of
the land for its surface use.” (Id. at p. 37.) Few courts have adopted this
“manner of enjoyment” test wholesale, instead using it in conjunction with
other tests such as the surface destruction test to determine the original
parties’ intent. (Am. Law of Mining, supra, § 84.03[2]; McCurdy, 13
Agricultural Law (2023) § 126.03[7][d].)
18
geothermal resources through wells would not affect beneficial use of the
surface estate. (Pariani, at pp. 932–933.)10
With this framework, we turn to the record in our case.
B. Although the record is sparse, the Olders met their moving burden on
summary judgment, which the mining companies failed to overcome.
A defendant may meet its moving burden on summary judgment by
presenting evidence that would preclude a reasonable finding in the
plaintiff’s favor, or by showing that the plaintiff neither possesses nor can
obtain evidence necessary to meet its burden of proof. (Kahn v. East Side
Union High School Dist. (2003) 31 Cal.4th 990, 1002−1003 (Kahn).) As we
explain, the Olders did both. With the burden shifted (ibid.; Code Civ. Proc.,
§ 437c, subd. (p)(2)), the mining companies failed to demonstrate any triable
issue of material fact.
First, the Olders submitted evidence of historic mining operations in
San Bernardino County. As the Shumway report explained, there was placer
mining for gold and silver in the 1860’s around nearby Lytle Creek. Portland
Cement began mining limestone for cement manufacturing in the late 1890’s.
Sand and gravel mining operations started in southwestern San Bernardino
County in the early 1900’s, with “the most active production” occurring after
World War I. The Lytle Creek area was one of the “principal sources” for
aggregate material. Sand and gravel mining commenced in that area in
10 The surface estate holders relied on Bambauer’s chemical composition
test to claim geysers were not mineral deposits because they consisted of
heat. (Pariani, supra, 105 Cal.App.3d at p. 934.) Without rejecting that test,
the court explained that the geothermal resources at issue were comprised of
steam, heated fluids, gases, and brines that made up a separate, depletable
deposit, as distinguished from ordinary heat, energy, or water. (Id. at
pp. 929, 935−936.) Pariani did not, as the Olders suggest, reject Bambauer’s
chemical composition test.
19
1922, and nearby Cajon Creek area had been “noted as an alternative source
of aggregate.” Many mining operations in the region were historically
“family-owned and locally operated.”
The Sprague report likewise observed that the site acquired by CalMat
in the mid-1980’s near Cajon and Lytle Creeks “had been mined by several
companies since the 1920s” for “construction aggregate materials.” As
indicated by the planning commission report submitted by the Olders, the
mining companies’ proposed Area Q quarry is situated near the junction of
Cajon and Lytle Creeks. Together, this evidence indicates that when the
deeds were drafted in the 1950’s and 1960’s, sand and gravel mining
operations in the region were longstanding and of common knowledge.
Were this the only showing, there might remain a triable issue because
the mining companies could produce additional documentary or testimonial
evidence of the original parties’ specific intent at trial. (Kahn, supra, 31
Cal.4th at pp. 1002−1003.) For example, there might be evidence of the
original or intended use of the properties around the time of the original
conveyances. (See, e.g., Witherspoon, supra, 69 So.2d at p. 386; West
Virginia, supra, 226 S.E.2d at pp. 719−720.) But such evidence concededly
did not exist. The Olders submitted the mining companies’ discovery
responses in which they admitted they lacked direct evidence bearing on the
original parties’ intent regarding sand and gravel mining. (See, e.g., Aguilar,
supra, 25 Cal.4th at p. 855 [a defendant may present “evidence that the
plaintiff does not possess, and cannot reasonably obtain needed evidence” by
way of “admissions by the plaintiff following extensive discovery to the effect
that he has discovered nothing”].)
Because the evidence of specific intent is not dispositive, we turn to the
general intent factors identified by relevant cases. The Olders furnished
20
evidence that sand and gravel were distinct from the topsoil. (See Bambauer,
supra, 214 Cal.App.2d at p. 873.) In describing proposed mining operations,
the planning commission report notes that “[a]pproximately 100,000 tons of
topsoil and subsoil would be removed as a separated layer, approximately 2-
feet thick, from the Project site.” This topsoil and subsoil layer would be
relocated to build a southern berm that would be landscaped to visually
screen mining operations from public view, create a noise barrier, and
prevent soil and wind erosion. Only after this site preparation would mining
commence on the northeast corner of the site, with the companies eventually
digging a 120-foot open-pit below the surface. The topsoil and subsoil would
later be used to reclaim the surface after mining operations concluded.11
The mining companies respond that “anyone with a backyard and a
shovel” would know that sand and gravel are mixed with the earth. But this
truism is not evidence that compels a conclusion in their favor or even creates
a triable issue of fact. The mining companies’ reclamation plan itself
suggests variability, not uniformity, of subsurface layers. Exploratory
boreholes drilled across the Area Q site in 2004 revealed that the upper 30
feet consist of “clean sand with silt with some gravels and clay.” Below 40
feet, “the sands appear cleaner with an increase in gravel and clean sand
layers.” From 120 to 150 feet below the surface is “predominantly gravel and
sand; and silt with coarse gravel comprising 50% to 60% of the material.”
In other words, once the topsoil and subsoil were removed, the mining
11 As an alternative, the mining companies proposed eliminating the
southern berm. “Topsoil and subsoil would still be removed from the site
prior to mining; however, it would be managed offsite if not used in berm
construction. Specifically, the soils would be removed separately, and
transported and stockpiled offsite for later use during reclamation/
revegetation.”
21
companies would first mainly excavate sand and increasingly remove gravel
the lower they mined. Although the upper topsoil and subsoil likely
contained sand (and perhaps some gravel), this evidence negates a triable
issue as to whether the sand and gravel to be extracted includes the surface
itself.
Turning to the next factor defined by the cases, the parties do not
dispute that sand and gravel possess commercial value. (Geothermal
Kinetics, supra, 75 Cal.App.3d at p. 64.) After all, the mining companies
were in the business of excavating sand and gravel for construction
materials. Vulcan had mined high quality aggregate (sand and gravel) from
adjacent lands in Cajon Creek and sought to shift its mining operations to the
196-acre site called Area Q when those earlier operations concluded.
As to surface destruction, the Olders presented evidence that the
surface would be reclaimed after 30 years of open-pit mining was completed.
The mining companies respond that legally mandated reclamation under
SMARA does not bear on the original intent of the parties. We agree—not
only was SMARA enacted long after the conveyances, its statutory definition
“has no bearing whatever on the interpretation of deeds between private
parties.” (See Bambauer, supra, 214 Cal.App.2d at pp. 874−875.) As the
mining companies suggest, open-pit mining would undoubtedly hamper use
of the surface estate for agricultural or residential purposes, unlike the
geothermal wells discussed in Geothermal Kinetics and Pariani. (Geothermal
Kinetics, supra, 75 Cal.App.3d at p. 61; Pariani, supra, 105 Cal.App.3d at
p. 933.) Were there evidence that the land was used for such purposes, that
might provide a strong indication of the parties’ contrary intent. Here,
however, the parties agree that the subject property is vacant land.
22
One point the mining companies fail to note is that the mineral estate
only retained partial mining rights, not complete rights to the mineral estate.
This greatly lessens the mining companies’ concern that interpreting the
mineral reservations broadly to include sand and gravel “would destroy the
value of a fee simple conveyance” or “vitiate the surface estate,” rendering the
conveyance “a mere nullity.” (Compare Farrell, supra, 270 P.2d at
pp. 192−193 [reservation of 100 percent of mineral rights did not include
sand and gravel comprising the surface].) Construing the mineral
reservation to include mined sand and gravel does not deprive the surface
estate owners of any economically viable use of their property. Rather, it
simply means that the owners of both estates—surface and mineral—will
share in what appears to be the most and perhaps only economically viable
use.
Finally, to the extent the extrinsic evidence bearing on specific and
general intent leave ambiguity, section 1069 requires us to construe the
mineral reservations broadly in favor of the grantors. Absent contrary
indication, reservations in a grant are “to be interpreted in favor of the
grantor.” (§ 1069.) Pariani used this provision to conclude that state land
patents reserving mineral rights encompassed a right to extract geothermal
resources. (Pariani, supra, 105 Cal.App.3d at p. 931.) Likewise, we construe
the mineral reservations broadly to encompass sand and gravel.12
12 We reject the Olders’ invitation to overrule Bambauer for its failure to
mention section 1069. Bambauer involved a deed of agricultural land “used
for cattle and sheep raising.” (Bambauer, supra, 214 Cal.App.2d at p. 872.)
The mineral rights holder presented no evidence at trial as to the parties’
intent. (Ibid.) Eschewing generic definitions that would lead “to the absurd
conclusion that the soil itself would be reserved,” the court credited the
surface owner’s evidence that gravel had limited commercial value and was
23
The mineral companies respond that North Dakota and Oklahoma
have a similar rule of construction yet do not recognize sand and gravel as
minerals. North Dakota indeed requires reservations in a grant to be
construed in favor of the grantor (N.D. Cent. Code § 47-09-13), and the high
court there excluded sand and gravel from a statutory mineral reservation.
(Salzseizer v. Burnsdale (N.D. 1959) 94 N.W.2d 502, 504 (Salzseizer).) In
Oklahoma, reservations similarly “operate in favor of the grantor” (Hinkle v.
Gauntt (1949) 206 P.2d 1001, 1003), yet a mineral reservation was held to
exclude sand and gravel. (Beck v. Harvey (Okla. 1944) 164 P.2d 399, 401
(Beck).)
But neither of these out-of-state authorities compel a different result.
Salzseizer was a statutory interpretation case that did not apply section 47-
09-13 of the North Dakota Century Code. It evaluated the reasonable
meaning of “minerals” in a North Dakota statute that reserved to the state a
partial share in mineral rights to agricultural lands. To construe its reach,
the court relied on out-of-state cases to restrict minerals beneath agricultural
lands to those substances that could be distinguished from ordinary soil.
(Salzseizer, supra, 94 N.W.2d at p. 504.) Likewise, the Oklahoma Supreme
Court in Beck cited out-of-state cases with little analysis to conclude a
mineral reservation did not include sand and gravel. (Beck, supra, 164 P.2d
at p. 401.) Neither case discussed, much less cast doubt on, a rule requiring
reservations to be construed in favor of the grantor. Both relied on out-of-
state cases to derive a settled meaning of “minerals” rather than focusing on
the intent of the original parties. At most, these cases apply the chemical
composition test in Bambauer and refuse to recognize as minerals substances
commingled with the earth. (Id. at pp. 873−874.) It is not clear that
Bambauer involved any factual ambiguity requiring resort to section 1069.
24
that are indistinguishable from the surface dirt. As discussed, the Olders
produced uncontroverted evidence that the sand and gravel being mined are
distinguishable from the topsoil.13
Ultimately, the inquiry is not whether a survey of out-of-state cases
reveals a general rule as to whether sand and gravel are reserved minerals.
Nor is our job simply to apply Bambauer because that case also involved a
claim that gravel was a reserved “mineral” right. Instead, we must examine
whether the deeds in question partially assign sand and gravel mining rights
to the mineral estate.
Because the plain language of the deeds is ambiguous, we consider
extrinsic evidence. That evidence reveals that sand and gravel were locally
mined (mainly in family-owned operations) for three decades before the grant
deeds were executed. Sand and gravel are distinguishable from the topsoil
and subsoil; the composition of the earth contains sand in the upper layers
and increasing amounts of gravel at lower depths. The parties agree that
sand and gravel are commercially valuable resources that can be mined, and
this was known to property owners in the area at the time the deeds were
drafted. While excavation would undoubtedly hamper the surface estate, the
surface owner’s 50 percent share of proceeds means it would receive
compensation even if the owner of the mineral estate was the one who was
conducting the mining operation. Here, of course, it is the surface owners—
13 The mining companies caution that “overruling Bambauer would create
a policy disaster,” but we do no such thing. Bambauer does not create a
blanket rule, and we apply its standard and other interpretive aids to
reasonably ascertain the intent of the parties as to the deeds at issue here.
Each case will turn on its unique facts. The history of sand and gravel
mining in southwest San Bernardino County and the lack of evidence that
the land conveyed here was used for agricultural purposes are two key factors
distinguishing Bambauer from this case.
25
the mining companies—who have chosen to conduct the mining operations
that will disturb the surface estate.
Finally, the mining companies concede this is the full extent of the
record and they have no additional evidence bearing on the original parties’
intent. If that leaves us with any residual ambiguity, section 1069 guides us
to construe any remaining ambiguity in favor of the grantor.
On this record, there is no triable issue of material fact as to whether
the mineral reservations in the grant deeds include sand and gravel.
Properly finding they did, the trial court appropriately granted the Olders’
motion for summary judgment and entered judgment in their favor.
DISPOSITION
The judgment is affirmed. Respondents are entitled to their costs on
appeal.
DATO, J.
WE CONCUR:
McCONNELL, P. J.
BUCHANAN, J.
26