Krieg, R. v. Hamlin Bank & Trust ( 2015 )

J-A01024-15
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37
ROBERT L. KRIEG AND JOHN J. : IN THE SUPERIOR COURT OF
SLINKOSKY, : PENNSYLVANIA
:
Appellants :
:
v. :
:
HAMLIN BANK & TRUST COMPANY, :
:
Appellee : No. 652 WDA 2014
Appeal from the Judgment entered April 16, 2014,
Court of Common Pleas, McKean County,
Civil Division at No. 1432 C.D. 2012
BEFORE: FORD ELLIOTT, P.J.E., DONOHUE and ALLEN, JJ.
MEMORANDUM BY DONOHUE, J.: FILED MARCH 04, 2015
Robert L. Krieg and John J. Slinkosky (collectively “Appellants”) appeal
from the April 16, 2014 judgment entered by the McKean County Court of
Common Pleas following its denial of Appellants’ request for a declaratory
judgment that they are the sole owners of a 60.5 acre tract of land in Otto
Township, McKean County, Pennsylvania (“the Property”).1 On appeal,
Appellants challenge the trial court’s determination that Hamlin Bank & Trust
Company (“Bank”) retained a 1/12 interest in the oil, gas and minerals in,
on, or under the Property and its finding that a tax sale did not extinguish
1
Appellants filed their notice of appeal “from the [o]rder dated March 25,
2014 and entered on March 26, 2014” denying their post-trial motion. It is
well-settled law, however, that “[a]n appeal to this Court can only lie from
judgments entered subsequent to the trial court’s disposition of post-verdict
motions, not from the order denying post-trial motions.” Fanning v.
Davne, 795 A.2d 388, 391 (Pa. Super. 2002) (citation omitted). We
therefore amended the caption accordingly.
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the 1/12 interest excepted and reserved by the trustees of the estate of
William Bingham (“the Bingham Estate”) in the oil, gas and minerals of the
Property. Upon review, we conclude that because Appellants failed to join
Kendall Refining Company, the current holders of the Bingham Estate’s 1/12
interest, the trial court was without jurisdiction to entertain the declaratory
judgment action. We therefore vacate the trial court’s decision.2
The trial court provided the following summary of the relevant facts
from the stipulated record:
By deed dated December 15, 1882, the Bingham
Estate conveyed [the Property] to Franklin S. Tarbell
et. al. …. The deed contained a provision
“[e]xcepting and reserving nevertheless out of this
grant one equal one twelfth part or share of all
Petroleum Coal Oil Rock or Carbon Oil and Gas or
other valuable mineral or volatile substance which
shall or may be discovered....” The deed also
stated[,] “This conveyance is made and accepted
subject to the foregoing reservation [meaning the
reservation described above].” Prior to the deed, on
August 31, 1877, Tarbell also signed a Release
concerning the mineral rights[,] which stated[,]
“...and by and which said Deed are reserved
withheld and retained unto the Trustees of said
Estate (Bingham) their successors and heirs
2
Although neither the trial court nor the parties raised this jurisdictional
question, “it is well established that questions of jurisdiction may be raised
sua sponte.” In re J.A., __ A.3d __, 2015 WL 63002 , *7 n.11 (Jan. 6,
2015) (quoting Commonwealth v. Weathers, 95 A.3d 908, 912 (Pa.
Super. 2014)); see also Pilchesky v. Doherty, 941 A.2d 95, 101 (Pa.
Commw. Ct. 2008) (“Failure to join or serve parties as required by the
[Declaratory Judgment Act] is a jurisdictional defect, and may be raised by a
court on its own motion at any time, even on appeal. Where the defect
exists, dismissal is appropriate.”) (internal citations omitted).
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and assigns to be delivered to them by the
grantees in the said Deed named their heirs
executors administrators or assigns the
following manner part or share of all petroleum
coal oil rock or carbon oil or other valuable
mineral of volatile substance which are shall nr
may be discovered excavated pumped or
raised in upon or from the tract Of land
mentioned...or any part thereof that is to Say
one equal one twelfth part or share of all
Petroleum...”
By deed dated November 30, 1885, Franklin
Tarbell conveyed to John Sullivan a portion, if not all,
of the 60.5 acres described in previously mentioned
deed. The deed made reference to the reservation in
the 1882 deed as follows:
“Also excepting and reserving unto said first
parties their heirs and assigns all the
Petroleum coal rock or carbon oil and gas and
other valuable minerals and volatile
substances...This conveyance being subject to
the conditions contained in the Deed from the
[unreadable word] of the Bingham Estate
above referred to.”
By Treasurer’s deed dated June 11, 1894, the
land owned by John Sullivan was conveyed to D.
Vaughn. The land was sold because taxes were
unpaid. The deed stated,
“...do grant, bargain and sell unto the said D.
Vaughn his heirs and assigns, all that aforesaid
tract of land together with all and singular the
profits, privileges and advantages, with the
appurtenances thereunto belonging, or
anywise appertaining; To have and hold said
land and premises with the appurtenances
unto said D. Vaughn...”
The deed makes no mention of oil, gas, or mineral
rights.
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By deed dated July 1, 1964, Sturgis Ingersoll and
Thomas Shipley, successor trustees of the Bingham
Estate, conveyed “ALL of Grantors [sic] right, title
and interest in and to the respective parts or shares
hereinafter set forth of all Petroleum, Coal Oil, Rock
or Carbon Oil, and Gas or other valuable mineral or
volatile substance...all being in the County of Mckean
[sic]...” to Kendall Refining Group. The conveyance
included a 1/12th [sic] interest in Warrant number
2089, Lot number 282, 60.5 acres situated in Otto
Township. This is the same lot number described in
the Tarbell and Sullivan deeds.
By deed dated December 8, 1966, Clifford and
Betty Burrows, together-doing-business-as, Burrows
Pipe and Steel Supply conveyed to the First National
Bank of Eldred, Pennsylvania, (hereinafter FNB)
approximately 68.5 acres, of which the [Property]
represented the majority. In addition to conveying
the surface estate, the conveyance recited[,]
“TOGETHER with all oil wells, machinery and
equipment situate thereon, useful in the production
of oil and gas from said property.” The First National
Bank of Eldred, which was [Bank’s] predecessor,
held title to the property until 1978.
FNB conveyed the property via two deeds on July
19, 1978, to Glenn and Robert Benson. By special
warranty deed, FNB conveyed “ALL those certain
pieces, parcels or lots of land situate...,” meaning
the 60.5 acres, to Glenn and Robert Benson, tenants
in common, “[e]xcepting and reserving unto the
grantor their heirs and assigns, all the oil, gas and
minerals in, under and upon the said land together
with the right of ingress, egress and regress.” On
the same date, FNB, by quitclaim deed, conveyed
“...ALL the oil, gas and other minerals in on or under
those certain parcels...” However, the FNB quitclaim
deed contained the following clause, “EXCEPTING
unto the grantor, their heirs and assigns, and
successors in interest a one-twelfth (1/12th [sic])
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interest in the oil, gas and other minerals, in on or
upon the above described premises.”
By deed dated December 18, 1978, Robert
Benson conveyed to Glen Benson, the 60.5 acres.
The deed contained the following, “UNDER AND
SUBJECT to exceptions, restrictions, reservations,
and easements contained in the chain of title...”
along with a reference to the two July 1978 deeds
mentioned above.
By deed dated December 7, 1987, Glenn Benson
conveyed the 60.5 acres to Forest Lands, Inc. The
deed contained the following clause, “EXCEPTING
and reserving unto the Grantor, their heirs and
assigns, and successors in interest one-twelfth
(1/12th [sic]) interest in the oil, gas and other
minerals, in, on or upon the above described
premises.”
By deed dated January 24, 1989, Forest Lands,
Inc. conveyed the 60.5 acres to Nicholas and Melva
Malyak. The deed contained the following clause,
“EXCEPTING and reserving unto Glenn R. Benson, his
heirs and assigns, and successors in interest a one
twelfth (1/12th [sic]) interest in the oil, gas and
other minerals, in, or upon the above described
premises.”
[Appellants] took title to the property from
Nicholas and Melva Malyak by deed dated November
26, 2007. The deed had the following clause,
“EXCEPTING AND RESERVING unto Glenn R. Benson,
his heirs and assigns, and successors in interest, a
one-twelfth (1/12th [sic]) interest in the oil, gas and
other minerals, in, on or upon the above described
premises.”
[Appellants] also took title to the Benson 1/12
interest in the oil, gas, and minerals by deed dated
February 25, 2009. The deed stating: “Grantor does
hereby release and quit claim to the said Grantees,
as tenants in partnership: A ONE-TWELFTH (1/12)
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INTEREST IN THE OIL, GAS AND OTHER
MINERALS IN, ON OR UPON THE LAND AS
DESCRIBED...”(emphasis included).
Trial Court Opinion and Order, 2/13/14, at 1-4 (footnotes containing record
citations omitted; emphasis supplied).
Appellants filed a complaint for declaratory judgment on November 2,
2012, naming Bank as the only defendant. Therein, Appellants averred, in
relevant part, as follows:
14. [Appellants] believe, and therefore aver, that the
specific use of only the word “excepting” in the
[1978] quit claim deed, while using the phrase
“excepting and reserving” in the [1978] special
warranty deed was a deliberate and specific use of
language by [FNB] to put the grantees on notice of
the previous Bingham reservation.
15. [Appellants] believe, and therefore aver, that
this “exception” was an exception of the prior one-
twelfth (1/12) reservation of the Bingham Estate,
and not to be interpreted as a new “reservation”
unto [FNB].
16. [Appellants] believe, and therefore aver, that the
one-twelfth (1/12) reservation by the Bingham
Estate of the oil, gas and mineral rights contained in
the [1882 conveyance to Frank S. Tarbell] is a
reservation of a non-participating royalty interest,
which was divested as a result of the 1984
Treasurer’s sale of [the Property].
Complaint, 11/2/12, ¶¶ 14-16. Appellants requested that the trial court
enter a declaration barring Bank “from asserting any right, title, lien, or
interest in the oil, gas, or other minerals in, on or under [the Property]
based on the ‘exception’ contained in the 1978 oil, gas, and mineral deed”
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and “such further relief as may be appropriate under these circumstances.”
Complaint, 11/2/12, at 3.
Bank filed an answer on November 21, 2012. Appellants filed a
motion for judgment on the pleadings on April 22, 2013, and Bank filed a
response on May 13, 2013. The trial court denied the motion on May 23,
2013, based in part on the uncertainty surrounding “whether the 1894
treasurer’s sale impacted the 1/12th [sic] Bingham Estate interest.” Trial
Court Opinion and Order, 5/23/13, at 4. Thereafter, Appellants and Bank
filed multiple briefs before the trial court, along with stipulated exhibits and
facts.
By order filed on February 13, 2014, the trial court found that Bank
“does have an interest in the oil, gas, and minerals in, on, or under [the
Property]” and dismissed Appellants’ complaint. Trial Court Order, 2/13/14.
In its opinion that accompanied the order, the trial court found “that the tax
sale would not have an effect on the Bingham’s 1/12 interest.” Trial Court
Opinion & Order, 2/13/14, at 9. The trial court left open the option for oral
argument in the matter, instructing the parties to file a motion for
reconsideration if either wished to exercise that option.
On February 21, 2014, Appellants filed a timely motion for
reconsideration, raising as error the trial court’s determinations with respect
to the existence of the 1/12 interests held by Bank and the successor to the
Bingham Estate, respectively. The trial court granted reconsideration on
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February 27, 2014, scheduling the matter for oral argument in accordance
with its February 13 order.
On March 14, 2014, the trial court denied reconsideration. Appellants
filed a motion for post-trial relief on March 24, 2014, which the trial court
denied on March 26, 2014. Appellants filed a praecipe for the entry of
judgment on April 16, 2014, and a notice of appeal on April 22, 2014.
Appellants timely complied with the trial court’s order for the filing of a
concise statement of errors complained of on appeal pursuant to Rule of
Appellate Procedure 1925(b). On May 29, 2014, the trial court entered a
statement in lieu of an opinion pursuant to Rule of Appellate Procedure
1925(a), referring this Court to its opinions filed on February 13 and March
14, 2014 for the “rationale for [its] decision.” Rule 1925(a) Statement,
5/29/14, at 2.
Appellants raise the following issues on appeal for our review:
1. Whether the trial court erred in finding that
[]Appellants do not own the complete interest in all
of the oil, gas and minerals in, on, or under [the
Property]?
2. Whether the trial court erred in finding that [Bank]
has an interest in the oil, gas and minerals in, on, or
under [the Property]?
3. Whether the trial court erred in finding that [FNB],
predecessor to [Bank], retained a 1/12 oil, gas and
mineral interest in [the Property] for itself?
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4. Whether the trial court erred in failing to construe
the ambiguity in the deed documents related to [the
Property] in favor of []Appellants?
Appellants’ Brief at 4.
We review a declaratory judgment action for a clear abuse of
discretion or error of law. Erie Ins. Grp. v. Catania, 95 A.3d 320, 322 (Pa.
Super. 2014), appeal denied, 104 A.3d 4 (Pa. 2014). “We may not
substitute our judgment for that of the trial court if the trial court’s
determination is supported by the evidence. … The application of the law,
however, is always subject to our review.” Id. (citations omitted).
The Declaratory Judgment Act provides courts with the “power to
declare rights, status, and other legal relations whether or not further relief
is or could be claimed. … [S]uch declarations shall have the force and effect
of a final judgment or decree.” 42 Pa.C.S.A. § 7532. The petitioner in a
declaratory judgment action must join all parties having any claim or
interest that would be affected by the declaration sought. 42 Pa.C.S.A. §
7540(a); see also Pa.R.C.P. 2227(a) (“Persons having only a joint interest
in the subject matter of an action must be joined on the same side as
plaintiffs or defendants.”). The absence of an indispensable party to a
declaratory judgment action renders the court “powerless to grant relief.”
Sprague v. Casey, 550 A.2d 184, 189 (Pa. 1988); see also Mains v.
Futon, 224 A.2d 195, 196 (Pa. 1966) (“declaratory judgment proceedings
will not lie unless all the parties having an interest in the issue are joined”).
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“In Pennsylvania, an indispensable party is one whose rights are so directly
connected with and affected by litigation that he must be a party of record
to protect such rights, and his absence renders any order or decree of court
null and void for want of jurisdiction.” Columbia Gas Transmission Corp.
v. Diamond Fuel Co., 346 A.2d 788, 789 (Pa. 1975).
Before the trial court and now on appeal, Appellants claim that they
own the complete interest in the oil, gas and minerals in, on and under the
Property. They challenge not only the interest allegedly held by Bank, the
named defendant in the declaratory judgment action, but also that of
Kendall Refining Company, which obtained in 1964 the 1/12 interest
originally excepted and reserved by the Bingham Estate. See Complaint,
11/2/12, ¶ 16; Appellants’ Brief at 16-19.3 On appeal, they seek to have
3
Although Appellants stated in their trial brief that “[t]he resolution of the
validity of the Bingham Estate’s 1/12 interest is immaterial to this case,”
Plaintiffs’ Trial Brief, 10/18/13, at 10, our review of the record proves that
statement to be disingenuous. Indeed, in their motion for reconsideration
and post-trial motion, Appellants assail the trial court’s conclusion that the
1/12 interest excepted and reserved by the Bingham Estate continued to
exist following the 1894 treasurer’s sale. See Plaintiffs’ Motion for
Reconsideration, 2/21/14, ¶ 5 (“The [trial c]ourt erred and misapplied the
law in finding that the 1/12 interest excepted and excepted and reserved by
the Bingham Estate was a fractional interest, but then determined that the
1894 Treasurer’s sale did not divest the Bingham Estate’s 1/12 interest.
(Hutchinson v. Kline, 199 Pa. 564, 49 A. 312 (1901)[)]”); Plaintiffs’ Motion
for Post-Trial Relief, 3/24/14, ¶ 5 (“In finding that the 1/12 interest
excepted and excepted and reserved by the Bingham Estate was a fractional
interest, the [trial c]ourt erred and misapplied the law when the [trial c]ourt
found that the 1894 Treasurer’s sale did not divest the Bingham Estate’s
1/12 interest. The evidence presented to the [trial c]ourt includes the 1894
Unseated Treasurer’s sale and the absence of any separately assessed oil,
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this Court reverse the decision of the trial court and find that the 1894
treasurer’s sale extinguished the 1/12 interest in the oil, gas and minerals of
the Property excepted and reserved by the Bingham Estate. Appellants’
Brief at 32.
On this record, it is clear that Kendall Refining Company is an
indispensable party, as its rights with respect to its 1/12 interest in the
Property’s oil, gas and minerals is so directly connected with and affected by
the instant litigation that it must have been made a party to protect those
rights. Columbia Gas, 346 A.2d at 789. Appellants’ failure to join Kendall
Refining Company as a party to the underlying declaratory judgment action
renders both the trial court and this Court without jurisdiction to grant the
relief requested. See 42 Pa.C.S.A. § 7540(a); Pa.R.C.P. 2227(a); Sprague,
550 A.2d at 189; Mains, 224 A.2d at 196. As the trial court was without
jurisdiction to decide the declaratory judgment action before it, we vacate its
decision.
Judgment vacated. Jurisdiction relinquished.
gas or mineral interests that were not under separate tax assessment under
the holding of Hutchinson v. Kline, 199 Pa. 564, 49 A. 312 (1901); see
also Proctor v. Sagamore Big Gam Hunting Club, 265 F.2d 196 (3d
Cir. 1959).”). On appeal, Appellants present extensive argument regarding
the trial court’s alleged error in failing to find that the 1894 treasurer’s sale
extinguished the 1/12 interest in oil, gas and minerals of the Property
originally excepted and reserved by the Bingham Estate. See Appellants’
Brief at 16-19. Moreover, in their prayer for relief on appeal, “Appellants
respectfully request[, inter alia,] that this Court hold that transfer of the
1894 treasurer’s deed acted as a ‘title wash,’ extinguishing any previously
severed subsurface interests.” Id. at 32.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/4/2015
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