Grant Brothers Ranch, LLC v. Antero Resources Piceance Corp , 409 P.3d 637 ( 2016 )

COLORADO COURT OF APPEALS 2016COA178
Court of Appeals No. 15CA2063
Garfield County District Court No. 14CV30180
Honorable James B. Boyd, Judge
Grant Brothers Ranch, LLC,
Plaintiff-Appellant,
v.
Antero Resources Piceance Corporation, a withdrawn Colorado corporation,
and Ursa Operating Company, LLC, a Delaware corporation,
Defendants-Appellees.
JUDGMENT AFFIRMED IN PART, REVERSED IN PART,
AND CASE REMANDED WITH DIRECTIONS
Division VI
Opinion by JUDGE FOX
Bernard and Richman, JJ., concur
Announced December 1, 2016
Dufford, Waldeck, Milburn & Krohn, LLP, Nathan A. Keever, Grand Junction,
Colorado, for Plaintiff-Appellant
Beatty & Wozniak, P.C., Michael J. Wozniak, Karen L. Spaulding, Malinda
Morain, Denver, Colorado, for Defendants-Appellees
¶1 Plaintiff, Grant Brothers Ranch, LLC (Grant Brothers), sued
defendants, Antero Resources Piceance Corporation (Antero) and
Ursa Operating Company, LLC (Ursa) (collectively, Operators), to
recover its share of proceeds derived from the production and sale
of oil and gas. Concluding that Grant Brothers was required and
failed to exhaust its administrative remedies available under the Oil
and Gas Conservation Act, §§ 34-60-101 to -130, C.R.S. 2016 (the
Act), the district court held that it lacked subject matter jurisdiction
over the action and granted summary judgment in favor of
Operators. Grant Brothers appeals the judgment dismissing its
claims with prejudice. We affirm in part, reverse in part, and
remand with directions to correct the judgment.
I. Background
¶2 Antero, an oil and gas exploration and production company,
received approval from the Colorado Oil and Gas Conservation
Commission (the Commission) to establish a drilling and spacing
unit to produce oil and gas in Garfield County. Grant Brothers
owned property within this unit. Antero wished to produce the oil
and gas underlying Grant Brothers’ property, but Grant Brothers
1
refused Antero’s offer to lease the minerals or participate in their
production.
¶3 As a result, Antero requested that the Commission pool all
nonconsenting interests in the unit and allow Antero to produce
and sell the oil and gas of the nonconsenting owners. Grant
Brothers asked the Commission to deny Antero’s request. After a
hearing, the Commission issued an order pooling all of the
nonconsenting interests in the unit.
¶4 About a year and a half after issuing this pooling order, the
Commission approved Antero’s request to establish another drilling
and spacing unit within the same lands as the first unit in order to
produce oil and gas from a deeper formation. Again, Antero asked
Grant Brothers to lease the minerals or participate in their
production and, again, Grant Brothers refused. Antero requested
that the Commission pool all nonconsenting interests in the second
unit. After a hearing, the Commission issued an order pooling all
nonconsenting interests in the second unit.
¶5 As a result of the Commission’s pooling orders, Grant Brothers
became a nonconsenting owner pursuant to section 34-60-116(7),
C.R.S. 2016, of the Act. In pertinent part, this meant that Grant
2
Brothers was entitled to receive its interest in the proceeds derived
from the production and sale of oil and gas from wells in the units.
However, Grant Brothers would receive payment only after these
wells reached “payout,” in other words after Antero recovered the
costs allowed by section 34-60-116(7). The pooling orders required
Antero to furnish Grant Brothers with monthly statements
containing information about its costs and its proceeds.
¶6 Almost three years after the Commission issued its last
pooling order, Grant Brothers asked Antero for permission to audit
its books and records regarding the wells at issue. Antero refused,
noting that it had been sending Grant Brothers the required
monthly statements.
¶7 About two years after Antero refused the request for an audit,
Grant Brothers sued Operators in district court.1 Grant Brothers’
complaint requested an equitable accounting and alleged that the
wells had reached payout, but Operators had yet to pay Grant
Brothers. Operators filed a motion for summary judgment,
asserting that Grant Brothers was required to exhaust its
1Antero drilled and operated the wells within the units until
December of 2012, when Ursa assumed operation of the wells.
3
administrative remedies available under the Act and had failed to
do so before filing its complaint. Operators argued that the district
court lacked subject matter jurisdiction over the action and should
dismiss it with prejudice. The court agreed and granted summary
judgment, dismissing the action with prejudice.
II. Summary Judgment
¶8 Grant Brothers first contends that the district court
improperly granted summary judgment because Grant Brothers
was not required to exhaust its administrative remedies, and, thus,
the court had subject matter jurisdiction over the action. We
disagree. Second, Grant Brothers argues that it was inappropriate
for the district court to dismiss the action with prejudice on the
basis that the court lacked subject matter jurisdiction over the
action. We agree that dismissal with prejudice was error.
A. Administrative Exhaustion
¶9 Grant Brothers argues that the Act does not contain a clear
manifestation of legislative intent requiring an involuntarily pooled
mineral rights owner to exhaust administrative remedies before
seeking an equitable accounting in district court regarding the
amount of proceeds owed after the wells at issue reach payout.
4
Grant Brothers asserts that the Act’s language and legislative
history — including the 1998 amendments to the Act and related
testimony from Senator Tilman Bishop, the sponsor of the
amendments2 — and the Commission’s rules support this position.
1. Preservation
¶ 10 The parties agree that Grant Brothers properly preserved this
argument, except to the extent that Grant Brothers uses Senator
Bishop’s testimony to support its contention.
¶ 11 We do not consider “arguments never presented to, considered
or ruled upon by” the district court. Core-Mark Midcontinent Inc.
v. Sonitrol Corp., 2016 COA 22, ¶ 24 (citation omitted). All that is
needed to preserve an issue for appeal is for the issue to be brought
to the district court’s attention so that the court has an opportunity
to rule on it. Berra v. Springer & Steinberg, P.C., 251 P.3d 567, 570
(Colo. App. 2010).
¶ 12 Responding to the motion for summary judgment, Grant
Brothers argued that the legislature did not intend for the
2 In 1998, Senator Bishop sponsored a bill, S.B. 98-159, that
amended several parts of the Act, including provisions in section
34-60-118.5, C.R.S. 2016, concerning the Commission’s
jurisdiction over certain disputes. See Ch. 186, sec. 1,
§ 34-60-118.5, 1998 Colo. Sess. Laws 636.
5
Commission’s jurisdiction over disputes like the one at issue to be
exclusive or, relatedly, to require administrative exhaustion. Grant
Brothers supported this argument by discussing the Act’s 1998
amendments. On appeal, Grant Brothers merely presents relevant
legal research — Senator Bishop’s testimony — to further support
the argument previously made to the district court.3 Therefore, we
conclude that Grant Brothers’ argument was properly preserved.
2. Review Standard
¶ 13 Although Operators moved for summary judgment, their
motion argued that the district court lacked subject matter
jurisdiction over the action. The district court granted Operators’
motion solely on this basis. The district court’s order left
unresolved significant factual disputes, such as whether payout
had occurred. Given these facts, Operators’ motion was effectively a
3 Although Senator Bishop’s testimony was not specifically
presented to the district court, the arguments regarding legislative
intent and related legislative history were brought to the court’s
attention such that it had an opportunity to rule on this issue. See
Berra v. Springer & Steinberg, P.C., 251 P.3d 567, 570 (Colo. App.
2010). We will not address the remainder of the arguments that
Grant Brothers raised for the first time either on appeal or in its
reply brief. See Core-Mark Midcontinent Inc. v. Sonitrol Corp., 2016
COA 22, ¶ 24; see also People v. Czemerynski, 786 P.2d 1100, 1107
(Colo. 1990) (refusing to address issues not raised in an appellant’s
original brief but raised for the first time in the reply brief).
6
motion to dismiss for lack of subject matter jurisdiction more
properly brought under C.R.C.P. 12(b)(1) than C.R.C.P. 56. See
Trinity Broad. of Denver, Inc. v. City of Westminster, 848 P.2d 916,
925 (Colo. 1993) (reasoning that a court’s determination under Rule
12(b)(1) reveals whether it has power to hear the case, while its
determination under Rule 56 results in an adjudication on the
merits); cf. Winslow v. Walters, 815 F.2d 1114, 1116 (7th Cir. 1987)
(“Seeking summary judgment on a jurisdictional issue . . . is the
equivalent of asking a court to hold that because it has no
jurisdiction the plaintiff has lost on the merits. This is a
nonsequitur.”).
¶ 14 Because the record contains all necesary information, we
apply Rule 12(b)(1) to the record before us and resolve these issues
as a matter of law. See Trinity Broad. of Denver, Inc., 848 P.2d at
925; W.O. Brisben Cos. v. Krystkowiak, 66 P.3d 133, 137 (Colo.
App. 2002) (citing Norsby v. Jensen, 916 P.2d 555, 559 (Colo. App.
1995)), aff’d on other grounds, 90 P.3d 859 (Colo. 2004).
¶ 15 We employ a mixed standard of review to motions to dismiss
for lack of subject matter jurisdiction. Hanson v. Colo. Dep’t of
Revenue, 140 P.3d 256, 257-58 (Colo. App. 2006). We review
7
factual findings for clear error, and such findings will be upheld
unless they have no support in the record. Id. However, we review
legal conclusions de novo. Id. We also review a district court’s
interpretation of a statute de novo. Anderson v. Vail Corp., 251 P.3d
1125, 1127-28 (Colo. App. 2010). In construing legislation, we look
first to the plain language of the statute, reading it as a whole.
Young v. Brighton Sch. Dist. 27J, 2014 CO 32, ¶ 11. Then, if the
language is ambiguous, we “construe the statute in light of the
General Assembly’s objective,” presuming “that the legislature
intended a consistent, harmonious, and sensible effect.” Anderson,
251 P.3d at 1127-28.
3. Applicable Law
¶ 16 In the Act, the Colorado Legislature granted the Commission
“the authority to regulate: . . . the drilling, producing, and plugging
of wells and all other operations for the production of oil or
gas . . . .” § 34-60-106(2)(a), C.R.S. 2016.4 The Act’s declaration
4 The Commission also regulates “[t]he spacing of wells . . . and
. . . [l]imit[s] the production of oil or gas, or both, from any pool
or field for the prevention of waste, and [limits] and [allocates] the
production from such pool or field among or between tracts of
land having separate ownership therein, on a fair and equitable
basis so that each such tract will be permitted to produce no
8
gives the Commission a broad grant of jurisdiction. See
§ 34-60-105(1), C.R.S. 2016 (“The commission has jurisdiction over
all persons and property, public and private, necessary to enforce
the provisions of this article, and has the power to make and
enforce rules, regulations, and orders pursuant to this article, and
to do whatever may reasonably be necessary to carry out the
provisions of this article.”); see also Oborne v. Cty. Comm’rs, 764
P.2d 397, 401 (Colo. App. 1988) (stating that the Act is a
comprehensive statute intended to regulate development,
production, and utilization of gas and oil).
¶ 17 The Act further provides that “[a]bsent a bona fide dispute
over the interpretation of a contract for payment, the oil and gas
conservation commission shall have jurisdiction to determine . . .
[ t]he date on which payment of proceeds is due” and any “amount
of proceeds” or interest due. § 34-60-118.5(5)(a) and (c), C.R.S.
2016. Relatedly, the very next provision, subsection 5.5, provides:
Before hearing the merits of any proceeding
regarding payment of proceeds pursuant to
this section, the oil and gas conservation
commission shall determine whether a bona
more than its just and equitable share from the pool . . . .”
§ 34-60-106(2)(c) and (3)(a), C.R.S. 2016.
9
fide dispute exists regarding the interpretation
of a contract defining the rights and
obligations of the payer and payee. If the
commission finds that such a dispute exists,
the commission shall decline jurisdiction over
the dispute and the parties may seek
resolution of the matter in district court.
§ 34-60-118.5(5.5).
¶ 18 In relation to whether payout has occurred, the Act states
that, “[i]n the event of any dispute” as to the costs allowed to be
recovered before having to pay the nonconsenting owners, “the
[C]ommission shall determine the proper costs[.]” § 34-60-116(7)(a).
It also states that, during the period of cost recovery occurring
before the wells reach payout, “the [C]ommission shall retain
jurisdiction to determine the reasonableness” of such costs.
§ 34-60-116(7)(d).
¶ 19 An exception to the Commission’s jurisdiction concerns
disputes over the interpretation of a payment contract. The
Commission shall “decline jurisdiction over the dispute,” and the
parties can “seek resolution of the matter in district court,” if the
10
dispute involves a contract. § 34-60-118.5(5.5) (emphasis
added).5
¶ 20 If “complete, adequate, and speedy” administrative remedies
are available, a party generally must exhaust these remedies before
filing suit in district court.6 City & Cty. of Denver v. United Air
Lines, Inc., 8 P.3d 1206, 1212 (Colo. 2000). The administrative
exhaustion doctrine “enables the agency to make initial
determinations on matters within its expertise and to compile a
record that is adequate for judicial review” so as to “prevent
piecemeal application of judicial relief and to conserve judicial
resources.” State v. Golden’s Concrete Co., 962 P.2d 919, 923 (Colo.
1998); accord Great W. Sugar Co. v. N. Nat. Gas Co., 661 P.2d 684,
690 (Colo. App. 1982) (explaining that primary jurisdiction allows
an agency to decide “in the first instance . . . technical questions of
fact uniquely within the agency’s expertise and experience”)
(citation omitted).
5 The legislature limited the Commission’s jurisdiction over lawsuits
for damages or injunctive relief, but this is not at issue in this case.
See § 34-60-114, C.R.S. 2016.
6 There are exceptions to administrative exhaustion, but none was
invoked here.
11
¶ 21 However, when the administrative agency does not have the
authority to grant the relief requested by the party seeking judicial
action, and the available administrative remedies are “ill-suited” for
providing the relief requested, administrative exhaustion is not
required. Brooke v. Rest. Servs., Inc., 906 P.2d 66, 71 (Colo. 1995)
(citation omitted). In determining whether a court has subject
matter jurisdiction over a claim where a party did not exhaust
administrative remedies available to it, courts examine whether: (1)
the claim was filed pursuant to the relevant statute; (2) this statute
provides a remedy for the claim asserted; and (3) the legislature
intended this statute to provide a “comprehensive scheme”
addressing the issues underlying the claim. Id. at 68-71; see
Pfenninger v. Exempla, Inc., 17 P.3d 841, 843-44 (Colo. App. 2000).
4. Analysis
¶ 22 We conclude that the district court was right to dismiss the
action for the reasons stated below.
¶ 23 First, in determining whether the claim at issue was filed
pursuant to the relevant statute, Brooke, 906 P.2d at 68-71, we
understand Grant Brothers’ claim as one for payment of proceeds
arising under sections 34-60-116 and -118.5 of the Act. At issue is:
12
(1) whether payout has been reached; (2) if so, the date on which
payment proceeds became due; and (3) the amount owed (plus
interest) to Grant Brothers. § 34-60-118.5(5) and (5.5). It is
undisputed that Grant Brothers is a nonconsenting owner seeking
payment of funds acquired by Operators by extracting and selling
natural gas from the wells at issue. Consequently, Grant Brothers
qualifies as a “payee” entitled to payment of proceeds from
Operators, the “payers.” See §§ 34-60-116(7), -118.5(1)(a) and (b).
¶ 24 Grant Brothers’ entitlement, however, is subject to a condition
precedent. Where, as here, an operator and a nonconsenting owner
have no contract addressing the issue, “[t]he date on which
payment of proceeds is due” is the date the wells reach payout. §
34-60-118.5(5). Grant Brothers receives payment only if and when
payout occurs.
¶ 25 Reading subsections -118.5(5) and -118.5(5.5) together, as we
must, and applying the statutory language, Young, ¶ 11, we
conclude that the Act’s comprehensive scheme means that primary
jurisdiction for the present dispute remains with the Commission.
See Great W. Sugar Co., 661 P.2d at 690. If one party is dissatisfied
with the results of the administrative process, that party can then
13
seek judicial review. See § 34-60-111, C.R.S. 2016 (providing that
any final order of the “[C]ommission shall be subject to judicial
review”); see also Dep’t of Nat. Res. Reg. 501(c), 2 Code Colo.
Regs. 404-1 (adopting the State Administrative Procedure Act
(APA), sections 24-4-101 to -108, C.R.S. 2016); Dep’t of Nat. Res.
Reg. 503(b)(8), 2 Code Colo. Regs. 404-1 (allowing a mineral interest
owner to file an application to the Commission for the purpose of
seeking a hearing on provisions related to measurement); Dep’t of
Nat. Res. Reg. 503(b)(10), 2 Code Colo. Regs. 404-1 (allowing an
aggrieved interest owner to file an application for relief for any
other matter not described in the regulation); Dep’t of Nat. Res.
Reg. 522, 2 Code Colo. Regs. 404-1 (allowing a mineral owner to
file a complaint requesting the issuance of a violation notice
directing an operator to voluntarily remedy the violation).
¶ 26 Second, as to whether the relevant statute provides a remedy
for the claim asserted, Brooke, 906 P.2d at 68-71, the Act provides
a remedy for claims for the payment of proceeds where the parties
have no contract addressing the issue.
¶ 27 Here, there is no contract; thus, there is no contract dispute.
See, e.g., Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d
141138, 1157 (10th Cir. 2000) (applying Colorado law); Anderson
Living Trust v. ConocoPhillips Co., LLC, 952 F. Supp. 2d 979, 1054
(D.N.M. 2013) (applying Colorado law); Grynberg v. Colo. Oil & Gas
Conservation Comm’n, 7 P.3d 1060, 1062-63 (Colo. App. 1999)
(finding the Commission had jurisdiction to calculate the amount of
proceeds due to a payee and to enforce timely payment, but lacked
jurisdiction to resolve a contractual dispute over whether operators
were entitled under a lease to deduct post-production expenses in
computing royalties due to owners).
¶ 28 A payee contesting the payment (or nonpayment) of proceeds
must first submit a written request, such as Commission Form 37,
to the payer(s) requesting certain information regarding the costs of
installing and operating the well. § 34-60-118.5(2.5); Dep’t of Nat.
Res. Reg. 329, 2 Code Colo. Regs. 404-1. After submitting Form 37,
if the dispute remains unresolved, the payee may then submit Form
38 to request a hearing before the Commission. Any final order
resulting from such a hearing is subject to judicial review pursuant
to the APA, sections 24-4-101 to -108. See § 34-60-111; see also
Dep’t of Nat. Res. Reg. 501, 2 Code Colo. Regs. 404-1.
15
¶ 29 Third, with regard to whether the legislature intended the
statutory remedy to be the primary remedy for the claim asserted,
Brooke, 906 P.2d at 68-71, the legislature has said, by the Act’s
language and structure, that a proceeding before the Commission,
as described above, is the primary remedy for nonconsenting
owners’s claims for the payment of proceeds where there is no
germane contract between the parties. See §§ 34-60-
118.5(5), -118.5(5.5), and -116(7). The comprehensive statutory
scheme detailed above — addressing when payout has occurred,
the date when payment of proceeds is due, and the amount of
proceeds due where the parties have no contract regarding the
payment of proceeds — evidences this intent. See Brooke, 906 P.2d
at 68-71; Egle v. City & Cty. of Denver, 93 P.3d 609, 612 (Colo. App.
2004). The scheme establishes a typical administrative process
allowing for rulemaking, hearings, and eventual judicial review of
disputes within the Commission’s area of expertise.
¶ 30 Contrary to Grant Brothers’ suggestion, the 1998 amendments
do not evidence a change in the legislature’s intent regarding the
primacy of the Commission’s jurisdiction over disputes like this
one. Before the amendments, the Act stated that the Commission
16
“shall have exclusive jurisdiction to determine . . . [t]he date on
which payment of proceeds is due a payee[;] . . . [t]he existence or
nonexistence of an occurrence . . . [justifying] a delay in payment;
and . . . [t]he amount of proceeds plus interest, if any, due a payee
by a payor.” § 34-60-118.5(5), C.R.S. 1997 (emphasis added). After
the amendments, the Act states that, “[a]bsent a bona fide dispute
over the interpretation of a contract for payment, [the Commission]
shall have jurisdiction to determine” the same three issues outlined
in the older version of the Act. § 34-60-118.5(5), C.R.S. 2016. The
1998 amendments did not change the Commission’s primary
jurisdiction over disputes for the payment of proceeds such as the
one before us. Rather, they clarified that disputes involving a “bona
fide dispute over the interpretation of a contract for payment”
should be brought in the district court. See §§ 34-60-118.5(5)
and -118.5(5.5). The history of the 1998 amendments to the Act,
implemented through Senate Bill 98-159,7 reveals the following:
7 Although we conclude that the Act’s language evidences its
underlying legislative purpose, we examine the legislative history of
the 1998 amendments in order to fully address the issues Grant
Brothers raises on appeal. See Kisselman v. Am. Family Mut. Ins.
Co., 292 P.3d 964, 969 (Colo. App. 2011) (“[W]e may consider
legislative history when there is substantial legislative discussion
17
 Senator Bishop repeatedly stated that the thrust of the bill
was to ensure that royalty owners received more information
regarding the payments from operators so that they could
ensure the sufficiency of the payments of proceeds. See
Hearings on S.B. 98-159 before the Conf. Comm., 61st Gen.
Assemb., 2nd Sess. (Apr. 16, 1998) (comments of Senator
Bishop); Hearings on S.B. 98-159 before the S. Agricultural
Comm., 61st Gen. Assemb., 2nd Sess. (Feb. 4, 1998)
(comments of Senator Bishop). Bishop, along with the
Member of the House who worked with him on the bill, also
stressed multiple times that the bill was not meant to change
any substantive contractual rights established by oil and gas
leases, but it would change some procedural rights (such as
how payments should be made and what information should
be disclosed regarding such payments). Hearings on S.B.
98-159 before the Conf. Comm., 61st Gen. Assemb., 2nd Sess.
(Apr. 16, 1998) (comments of Senator Bishop). Bishop also
emphasized that the Commission should not be asked to
surrounding the passage of a statute, and the plain language
interpretation of a statute is consistent with legislative intent.”).
18
resolve disputes that are better addressed by courts (e.g.,
interpretation of contract provisions). Id. Walter Fees, who worked with Bishop on the bill, authored a
letter discussing changes to section 34-60-118.5, which
states, “[a]fter my talk with [Senator] Bishop[,] he feels the
[Commission] should have exclusive jurisdiction over the
payment of proceeds.” See Hearings on S.B. 98-159 before the
S. Agricultural Comm., 61st Gen. Assemb., 2nd Sess. (Feb. 4,
1998) (letter to Richard Griebling, referenced at the hearing).
 Jack Rigg, associated with Amoco and the Rocky Mountain Oil
and Gas Association, also testified that the Commission
should not be involved in private contract disputes and that
one of the main purposes of the amendment was to clarify that
the Commission was not to interpret contract terms in place of
a court. See id. (comments of Jack Rigg). He never suggested
that the Commission should not continue to have primary
jurisdiction over noncontractual disputes over the payment of
proceeds. Id.We are thus unpersuaded by Grant Brothers’ arguments to the
contrary.
19
¶ 31 While section 34-60-118.5 alone does not create an
entitlement to proceeds, Grynberg, 7 P.3d at 1063, a final order
from the Commission recognizing one’s status as a nonconsenting
owner pursuant to section 34-60-116 does. Grant Brothers’
entitlement to payment is not at issue; the issues are if and when
Grant Brothers is to receive payment and in what amount.
¶ 32 To allow parallel judicial proceedings on these same issues,
rather than giving the Commission the first opportunity to decide
them, see Great W. Sugar Co., 661 P.2d at 690, would go against
the legislative intent revealed by the Act’s declaration (§ 34-60-
105(1)), language (§ 34-60-118.5), and administrative processes (see
Dep’t of Nat. Res. Regs. 501, 503(b)(8), 503(b)(10), 522, 2 Code
Colo. Regs. 404-1). And, requiring Grant Brothers and similarly
situated claimants to exhaust administrative remedies promotes the
policy objectives at the heart of the doctrine of administrative
exhaustion. See Golden’s Concrete Co., 962 P.2d at 923
(expounding on the doctrine’s policy objectives, including the
conservation of judicial resources). The determination Grant
Brothers seeks concerning key details of the oil and gas production
process is well within the expertise of the Commission, and allowing
20
the Commission to develop a record in resolving this dispute will
conserve judicial resources and result in a more optimal application
of judicial relief, should the claim undergo later judicial review. See
id.
¶ 33 We therefore conclude that Grant Brothers was required to
exhaust its administrative remedies and did not do so before filing
suit in the district court. As a result, we conclude that the district
court properly dismissed the action.
B. Dismissal With Prejudice
¶ 34 Grant Brothers contends that the district court erred in
dismissing its claim with prejudice solely on the basis that the court
lacked subject matter jurisdiction. We agree.
¶ 35 A dismissal under C.R.C.P. 12(b)(1) is not an adjudication on
the merits, but rather is the result of a court lacking the power to
hear the claims asserted. See Trinity Broad. of Denver, Inc., 848
P.2d at 925. Because we have determined that the issue of subject
matter jurisdiction raised by Operators’ motion should have been
addressed pursuant to Rule 12(b)(1), the dismissal we affirm is
necessarily without prejudice, which the district court shall correct
upon remand. Grant Brothers therefore retains the ability to seek
21
further relief from the Commission, whose orders are then subject
to judicial review. See Dep’t of Nat. Res. Reg. 501, 2 Code Colo.
Regs. 404-1.
III. Operators’ Request for Costs
¶ 36 Operators requested their costs pursuant to C.A.R. 39.
Because we affirm in part and reverse in part, we conclude that the
trial court should determine what amount of appellate costs, if any,
to award upon remand. See C.A.R. 39(a)(4) (“[I]f a judgment is
affirmed in part, . . . costs are taxed only as ordered by the trial
court.”) (emphasis added).
IV. Conclusion
¶ 37 The judgment is affirmed in part and reversed in part, and the
case is remanded to the district court with directions to correct the
judgment to clarify that the dismissal is without prejudice and to
make a determination regarding Operators’ request for costs
pursuant to C.A.R. 39.
JUDGE BERNARD and JUDGE RICHMAN concur.
22