23CA1532 Reistad v Burman 07-11-2024
COLORADO COURT OF APPEALS
Court of Appeals No. 23CA1532
Weld County District Court No. 23CV30277
Honorable Todd Taylor, Judge
Reistad Consult AS, a Norwegian Registered Company,
Plaintiff-Appellant,
v.
Dale N. Burman; Loretta M. Burman; Melanie Anne Martin f/k/a Melanie Anne
Luark; Ivan D. Ansel; Kim M. Ansel; and PDC Energy, Inc., a Delaware
corporation,
Defendants-Appellees.
JUDGMENT AFFIRMED
Division V
Opinion by JUDGE BROWN
Harris and Lum, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced July 11, 2024
Glade Voogt Lopez Smith Felser PC, Herbet A. Delap, Andrew J. Felser, Denver,
Colorado, for Plaintiff-Appellant
Coan, Payton & Payne, LCC, Brett Payton, Greeley, Colorado, for Defendants-
Appellees Dale N. Burman and Loretta M. Burman
Root Law, LLC, John D. Root, Fort Collins, Colorado, for Defendant-Appellee
Melanie Anne Martin f/k/a Melanie Anne Luark
Lawrence Custer Grasmick Jones & Donovan LLP, Jacklyn Patricia Gunn,
Richard LiPuma, Johnstown, Colorado, for Defendants-Appellees Ivan D. Ansel
and Kim M. Ansel
Davis Graham & Stubbs LLP, James R. Henderson, Denver, Colorado, for
Defendant-Appellee PDC Energy, Inc., a Delaware corporation
1
¶ 1 Plaintiff, Reistad Consult AS (Reistad), appeals the district
court’s judgment dismissing its complaint against defendants, Dale
N. Burman, Loretta M. Burman, Melanie Anne Martin f/k/a
Melanie Anne Luark, Ivan D. Ansel, Kim M. Ansel (collectively, the
landowners), and PDC Energy, Inc. (PDC). We affirm.
I. Factual Background
¶ 2 In 1980, Ole Reistad Jr. (Reistad Jr.) entered into an oil and
gas lease agreement with PDC’s predecessor, granting it exclusive
rights to explore and develop the minerals under Reistad Jr.’s
eighty-five-acre property in Weld County, Colorado.
¶ 3 On June 30, 1995, Reistad Jr. conveyed his property to Dale
and Loretta Burman. Although the Burmans and Reistad Jr.
initially signed contract documents that specified “NO oil, gas or
mineral rights are to be conveyed with the property,” the deed
Reistad Jr. ultimately executed (through an attorney-in-fact) and
recorded did not include a reservation of the mineral rights.
¶ 4 In 1999, the Burmans subdivided the property. The Burmans
then conveyed five separate lots to Luark,
1
the Ansels, and three
1
Like the parties, we refer to Melanie Anne Martin f/k/a Melanie
Anne Luark as Luark.
2
other grantees who are not parties to the appeal. None of the deeds
conveying property from the Burmans to any subsequent purchaser
reserved any mineral rights to Reistad Jr.
¶ 5 Even though the deed conveying the property to the Burmans
did not reserve any interest in the mineral estate, Reistad Jr.
received royalty payments from PDC and its predecessor until his
death in 2018. After Reistad Jr.’s death, his successor-in-interest
— Reistad — continued to receive royalty payments from PDC until
2020, when a dispute arose as to who owned the mineral rights and
PDC placed the royalties in suspense.
II. Procedural Background
¶ 6 In 2023, Reistad filed a complaint asserting claims for
declaratory judgment to reform the deed, breach of lease, and quiet
title under C.R.C.P. 105. To justify reformation, Reistad alleged
that the failure to reserve the mineral rights in the 1995 deed was
the result of a mutual mistake resulting in a scrivener’s error
because the contract evidenced the parties’ clear intent not to
convey the mineral estate.
¶ 7 The Burmans filed a motion to dismiss for failure to state a
claim under C.R.C.P. 12(b)(5). They argued that Reistad was bound
3
by the terms of the deed. The district court denied the Burmans’
motion because the “complaint ma[d]e plausible allegations here
that if proved to be true would support a finding of mutual mistake
based on a scrivener’s error.”
¶ 8 Luark also filed a motion to dismiss under C.R.C.P. 12(b)(5),
arguing that Reistad’s claims were time barred and that she and the
other landowners besides the Burmans were bona fide purchasers
for value without notice of any alleged defect in the original deed.
The court granted Luark’s motion on both grounds and dismissed
Reistad’s complaint with prejudice. The court also vacated its prior
order denying the Burmans’ motion to dismiss and granted that
motion for the same reasons. The court later confirmed that its
order on Luark’s motion dismissed the entire complaint and thus
resolved all claims against all remaining defendants.
III. C.R.C.P. 12(b)(5) Dismissal
¶ 9 Reistad contends that the district court erred by dismissing
the complaint because (1) the landowners could not raise
affirmative defenses in a motion to dismiss; (2) its claims were
timely asserted; (3) whether the landowners were considered bona
fide purchasers against whom the claims could not survive was a
4
factual dispute; and (4) the court did not address whether PDC
breached the lease. We reject Reistad’s first two contentions and,
consequently, need not address the third or fourth.
A. Standard of Review
¶ 10 A motion to dismiss under C.R.C.P. 12(b)(5) for failure to state
a claim upon which relief can be granted tests the formal
sufficiency of the claim. Lavarato v. Branney, 210 P.3d 485, 488
(Colo. App. 2009). To survive such a motion, “a plaintiff must state
a claim for relief that is plausible (not speculative) on its face.”
Hess v. Hobart, 2020 COA 139M2, ¶ 11; see also Warne v. Hall,
2016 CO 50, ¶ 9.
¶ 11 We review de novo a trial court’s ruling on a C.R.C.P. 12(b)(5)
motion to dismiss. Hess, ¶ 11. We apply the same standards as
the trial court, accepting the factual allegations in the complaint as
true and viewing those allegations in the light most favorable to the
accept as true legal conclusions couched as factual allegations.
Woodall v. Godfrey, 2024 COA 42, ¶ 8. And we may consider only
the facts that are alleged in the pleadings and any documents that
are attached as exhibits or incorporated by reference. Hess, ¶ 11.
5
B. C.R.C.P. 8(c)
¶ 12 Reistad first contends that the district court erred by granting
the landowners’ motions to dismiss because affirmative defenses
are governed by C.R.C.P. 8(c) and may not be raised in motions filed
pursuant to C.R.C.P. 12(b)(5). We disagree.
¶ 13 True, an affirmative defense ordinarily must be raised in an
answer to a complaint rather than in a motion to dismiss. Prospect
Dev. Co. v. Holland & Knight, LLP, 2018 COA 107, ¶ 13; see C.R.C.P.
8(c) (requiring affirmative defenses to be raised in a responsive
pleading); C.R.C.P. 12(b) (“Every defense, in law or in fact, to a
claim for relief in any pleading . . . shall be asserted in the
responsive pleading thereto if one is required,” except for the
defenses listed in C.R.C.P. 12(b)(1)-(6), which do not include
affirmative defenses.). This general rule exists because “a plaintiff
has no obligation to anticipate an affirmative defense in the
complaint and include allegations intended to negate it.” Bristol
Bay Prods., LLC v. Lampack, 2013 CO 60, ¶ 41.
¶ 14 However, there is an exception to the general rule: an
affirmative defense may be raised in a C.R.C.P. 12(b)(5) motion
when it is clear from the bare allegations of the complaint that the
6
affirmative defense applies. See id. at ¶¶ 44-45; Prospect Dev. Co.,
¶ 14. This exception is consistent with the general rule because it
does not require a plaintiff to anticipate an affirmative defense and
plead facts to negate it but instead “merely permits a plaintiff to
‘plead itself out of court by alleging (and thus admitting) the
ingredients of a defense.’” Prospect Dev. Co., ¶ 14 (quoting Bristol
Bay Prods., ¶ 44).
¶ 15 For the reasons discussed below, it is clear from the bare
allegations of the complaint that Reistad’s claims are barred by the
statute of limitations. As a result, it was proper for the landowners
to raise these affirmative defenses in their motions to dismiss.
C. Statute of Limitations
¶ 16 Reistad contends that the district court erred by granting the
landowners’ motions to dismiss because the statute of limitations
did not begin to run until PDC ceased making royalty payments in
2020, which is when Reistad discovered the error in the deed. We
disagree.
¶ 17 Equitable claims “are technically subject to an equitable
laches rather than a legal statute of limitations analysis.” Interbank
Invs., L.L.C. v. Vail Consol. Water Dist., 12 P.3d 1224, 1229-30
7
(Colo. App. 2000). But absent extraordinary circumstances not
present here, we apply the statute of limitations relating to similar
436-37 (Colo. App. 2011). A reformation claim, sounding in
contract, is governed by a three-year statute of limitations.
2
See
§ 13-80-101(1)(a), C.R.S. 2023; see also Jackson v. Am. Fam. Mut.
Ins. Co., 258 P.3d 328, 332-33 (Colo. App. 2011).
¶ 18 Whether a claim is time barred generally presents a question
of fact, but we may decide the question as a matter of law when the
material facts are undisputed and clearly show that the plaintiff
had or should have had the requisite information as of a particular
date. Wagner v. Grange Ins. Ass’n, 166 P.3d 304, 307 (Colo. App.
2007); see also § 13-80-108(1), C.R.S. 2023 (“[A] cause of action . . .
shall be considered to accrue on the date both the injury and its
cause are known or should have been known by the exercise of
reasonable diligence.”).
¶ 19 The district court determined that Reistad’s claims are time
barred because Reistad Jr. was presumed to know the contents of
2
The parties do not dispute that the three-year statute of
limitations applies to Reistad’s claims.
8
the deed his attorney-in-fact signed, such that he knew or should
have known of the failure to reserve the mineral interests in 1995.
It also determined that Reistad had constructive notice of the
unrestricted conveyance when the deed was recorded in the Weld
County property records. See § 38-35-106(1), C.R.S. 2023 (“Any
written instrument required or permitted to be acknowledged
affecting title to real property, whether acknowledged,
unacknowledged, or defectively acknowledged, after being
recorded . . . shall be notice to all persons or classes of persons
claiming any interest in said property.”).
¶ 20 Reistad argues that the court erred because, even if parties do
not read a deed they signed, a court may reform the deed if it
contains a mutual mistake of fact that does not express the parties’
true intent. See Dennett v. Mt. Harvard Dev. Co., 43 Colo. App. 422,
425, 604 P.2d 699, 701 (1979) (“If the description in the deed does
not express the true intent of the parties, reformation is a proper
remedy.”). Reistad further argues that, because the error arose
from a mutual mistake and because Reistad continued to receive
royalties until 2020, it had no reason to know of the error until
royalty payments ceased.
9
¶ 21 Reistad is correct that a court may reform a deed to correct a
Co., 797 P.2d 11, 13 (Colo. 1990) (“Reformation of a written
instrument is appropriate only when the instrument does not
represent the true agreement of the parties and the purpose of
reformation is to give effect to the parties’ actual intentions.”). But
a claim for such relief is nonetheless subject to the statute of
limitations, which accrues when a party knew of the error or should
have known of the error by the exercise of reasonable diligence. See
§ 13-80-108(1); Skyland Metro. Dist. v. Mountain W. Enter., LLC, 184
P.3d 106, 127 (Colo. App. 2007) (a claim accrues when the claimant
should know, in the exercise of reasonable diligence, all material
facts relevant to the elements of a cause of action).
¶ 22 Parties are presumed to know the contents of the documents
they sign. Bell v. Land Title Guarantee Co., 2018 COA 70, ¶ 12;
People v. Madison, 176 P.3d 793, 805 (Colo. App. 2007). So if there
is an error in a signed document, a party is presumed to know of
the error upon execution. In other words, the party knew or — at a
minimum — should have known, in the exercise of reasonable
diligence, of the error at that time. See Skyland Metro Dist., 184
10
P.3d at 127. As a result, the statute of limitations on a claim for
reformation of a deed on the ground that it does not accurately
reflect the parties’ agreement accrues on the date the deed is
signed.
¶ 23 In Bell, ¶ 4, the Bells sold real property pursuant to a contract
that excluded “all oil, gas, and mineral rights in the property.” The
title company who prepared the deed, however, did not include
language reserving the mineral estate to the Bells. Id. at ¶ 3. For
over nine years, the Bells continued to receive royalty payments
under an oil and gas lease on the property. Id. at ¶ 4. But when
the lessee oil and gas company learned that the Bells no longer
owned the mineral rights to the property, it began sending the
royalty payments to the buyer. Id. The Bells sued the title
company for negligence and breach of contract. Id. at ¶ 5.
¶ 24 The district court dismissed the Bells’ complaint as time
barred, relying on the legal principle that one who signs a document
is presumed to know its contents to conclude that the Bells should
have known of the defect in the deed, in the exercise of reasonable
diligence, upon execution. Id. at ¶ 12. A division of this court
reversed, concluding that the presumed-to-know principle did not
11
conclusively establish the accrual date for negligence or breach of
contract claims. Id. at ¶¶ 16-18. In so doing, the division reiterated
the applicability of the presumed-to-know principle to claims
seeking to avoid the effect of the executed document “to preserve
the integrity and sanctity of written documents.” Id. at ¶ 15. The
division explained that “if this case involved simply the Bells’ failure
to read an easily understood deed and the Bells were asking to
rescind it to recover their mineral rights, the presumed-to-know
principle would undoubtedly apply.” Id. at ¶ 17.
¶ 25 Reistad did not assert claims for negligence or breach of
contract against any third party involved in preparing the deed.
Instead, Reistad seeks to avoid the effect of the deed itself. Thus,
the presumed-to-know principle applies to determine when its
cause of action accrued. See id. at ¶17.
¶ 26 “It is well established that a conveyance of land by general
description, without any reservation of a mineral interest, passes
title to both the land and the underlying mineral deposits.” O’Brien
v. Vill. Land Co., 794 P.2d 246, 249 (Colo. 1990). And it is
undisputed that the 1995 deed did not reserve any mineral
interests to Reistad Jr.
12
¶ 27 Reistad Jr.’s attorney-in-fact signed the deed on his behalf.
The attorney-in-fact is presumed to have read the deed and to have
known, in the exercise of reasonable diligence, that it did not
reserve the mineral estate to Reistad Jr. The attorney-in-fact’s
knowledge was imputed to Reistad Jr. See Moffett v. Life Care Ctrs.
of Am., 187 P.3d 1140, 1144 (Colo. App. 2008) (“[E]xecution of a
power of attorney creates a principal-agent relationship.”), aff’d,
219 P.3d 1068 (Colo. 2009); Stortroen v. Beneficial Fin. Co. of Colo.,
736 P.2d 391, 396 (Colo. 1987) (“Notice to an agent given in the
course of a transaction which is within the scope of the agency is
notice to the principal.”).
3
And as Reistad Jr.’s successor, Reistad
can assert no greater rights than Reistad Jr. Cf. Tivoli Ventures,
Inc. v. Bumann, 870 P.2d 1244, 1248 (Colo. 1994) (“[A]n assignee
stands in the shoes of the assignor” and “has the same rights as the
assignor in determining whether a claim is barred by the statute of
limitations.”).
¶ 28 Consequently, the statute of limitations on Reistad’s cause of
action for reformation began to run in 1995 when the deed was
3
Reistad has not argued that Reistad Jr.’s attorney-in-fact acted
outside the scope of the principal-agent relationship.
13
executed.
4
Reistad filed its complaint in April 2023 — almost
twenty-eight years later. Therefore, Reistad’s claim for reformation
of the deed is untimely. See § 13-80-101(1)(a).
¶ 29 Still, relying on In re Estate of Scott, 735 P.2d 924, 925-27
(Colo. App. 1986), Reistad argues that it had no reason to question
the language of the deed until it stopped receiving royalty
payments. In Scott, a deed conveying property from the decedent’s
estate contained a mistake in the legal description. Id. at 925. The
grantees filed claims against the estate, seeking to reform the
deeds, but the estate argued that section 15-12-803(2)(a), C.R.S.
2023, a nonclaim statute that bars any claim against a decedent’s
estate if not brought within four months after it arises, barred the
action. Id. at 925-26.
¶ 30 The division did not identify an applicable statute of
limitations, resting its analysis on laches alone. Id. at 926. It
4
At oral argument, Reistad’s counsel argued for the first time that
Reistad should have had an opportunity to explore facts regarding
equitable tolling of the statute of limitations. But because Reistad
did not raise this argument below, we do not address it. See
Giguere v. SJS Fam. Enters., Ltd., 155 P.3d 462, 470 (Colo. App.
2006) (we do not address arguments raised for the first time on
appeal).
14
explained that laches typically “cannot be imputed to one who has
the right to the relief, until he discovers the fraud or mistake upon
which his claim is based, and has a reasonable time thereafter
within which to seek relief.” Id. It noted that in “certain situations”
a party to an instrument is not required to assert their right to
reformation until such time as the assertion of an adverse claim
¶ 31 Because the nonclaim statute’s “time is so short and the bar of
the statute absolute,” the division reasoned that it “must be strictly
construed in favor of permitting consideration of all legitimate
claims.” Id. Under the circumstances presented, the division held
that “the performance due by the personal representative was not
the original issuance of the deeds, but rather, it was the duty to
reform the deeds, or otherwise correct the error, upon discovery of
the mutual mistake” and that the claim did not arise until the
mistake was discovered, less than four months before the claim was
filed. Id. at 927.
¶ 32 We are not bound by Scott, see Chavez v. Chavez, 2020 COA
70, ¶ 13 (“[D]ivisions are not bound by the decisions of other
divisions . . . .”), and we are not persuaded that it controls our
15
disposition. Reistad’s claim is not governed by a four-month
nonclaim statute; we have identified an applicable three-year
statute of limitations. We are not concerned with the same brevity
and absoluteness the Scott division was. And Scott did not tackle
the presumed-to-know principle or whether under that principle a
party should know, in the exercise of reasonable diligence, of a
patent error in a deed.
5
¶ 33 In the end, we conclude that Reistad’s claim for reformation of
the deed is time barred. Because Reistad’s remaining claims — for
PDC’s breach of lease for failing to pay it royalties as the owner of
the mineral interest and to quiet title to the mineral estate in itself
6
— only succeed if the deed is reformed to reserve the mineral estate
to Reistad Jr., they necessarily fail. And because of our disposition,
5
It is worth noting that the grantees in Scott made the claim
against the estate within three years of deed execution. See In re
Estate of Scott, 735 P.2d 924, 927 (Colo. App. 1986) (the deeds were
executed February 17 and June 9, 1982, and the claim was brought
September 11, 1984).
6
At oral arguments, Reistad’s counsel argued that its quiet title
claim required the district court to adjudicate every party’s relative
interest in the mineral estate, even if Reistad was determined to
have no interest, and that the court failed to do so. But because
Reistad did not raise this argument below, we do not address it.
See Giguere, 155 P.3d at 470.
16
we need not decide whether the district court also properly
dismissed Reistad’s complaint against the landowners other than
the Burmans because they were bona fide purchasers for value.
IV. Remaining Contentions
A. District Court’s Discretion to Revisit Prior Rulings
¶ 34 Reistad contends that the district court erred by reinstating
the Burmans’ motion to dismiss and then granting it. We disagree.
¶ 35 “In general, ‘[e]very ruling or order made in the progress of an
on-going proceeding may be rescinded or modified during that
proceeding upon proper grounds.’” S. Cross Ranches, LLC v. JBC
Agric. Mgmt., LLC, 2019 COA 58, ¶ 43 (quoting Broyles v. Fort Lyon
Canal Co., 695 P.2d 1136, 1144 (Colo. 1985)); see C.R.C.P. 54(b)
(Any order not made final “is subject to revision at any time before
the entry of judgment adjudicating all the claims . . . .”). A trial
court’s action in doing so must “be within the bounds of discretion.”
S. Cross Ranches, LLC, ¶ 44. A court abuses its discretion when its
decision is manifestly arbitrary, unreasonable, or unfair, or when it
misapplies the law. People v. Johnson, 2021 CO 35, ¶ 16.
¶ 36 Here, the district court explained that it vacated its prior order
denying the Burmans’ motion to dismiss for the reasons set forth in
17
the order granting Luark’s motion to dismiss, which included that
Reistad’s claims were barred by the statute of limitations.
Cf. S. Cross Ranches, LLC, ¶¶ 46-48 (trial court abused its
discretion when it gave an inconsistent ruling without explanation
and its second order did not mention the first order). We perceive
no abuse of discretion.
B. C.R.C.P. 54(b) Certification
¶ 37 Finally, Reistad claims that the district court erred by denying
its motion for certification of final judgment pursuant to C.R.C.P.
54(b) because its claim against PDC to recover royalties was not
addressed in the court’s order granting Luark’s motion to dismiss.
We disagree.
¶ 38 C.R.C.P. 54(b) creates an exception to the general requirement
that an entire case must be resolved by a final judgment before an
appeal may be brought. Colo. Cmty. Bank v. Hoffman, 2013 COA
146, ¶ 18. Certification of a final judgment under C.R.C.P. 54(b) is
only necessary when more than one claim for relief is presented in
an action, or when multiple parties are involved and claims or
counterclaims remain unresolved. Bd. of Cnty. Comm’rs v. Roberts,
159 P.3d 800, 810 (Colo. App. 2006). When a judgment resolves all
18
claims and counterclaims, the judgment is final and there is no
need for certification under C.R.C.P. 54(b). Id.
¶ 39 Because the court expressly dismissed Reistad’s entire
complaint with prejudice when it ruled on Luark’s motion to
dismiss, no claims remained unresolved and C.R.C.P. 54(b)
certification was not necessary.
V. Disposition
¶ 40 We affirm the district court’s judgment.
JUDGE HARRIS and JUDGE LUM concur.
