Kathy Roberts v. Unimin Corporation

United States Court of Appeals
For the Eighth Circuit
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No. 16-4172
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Kathy Roberts; Karen McShane
lllllllllllllllllllll Plaintiffs - Appellants
v.
Unimin Corporation
lllllllllllllllllllll Defendant - Appellee
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Appeal from United States District Court
for the Eastern District of Arkansas - Batesville
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Submitted: December 12, 2017
Filed: February 28, 2018
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Before SMITH, Chief Judge, ARNOLD and KELLY, Circuit Judges.
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ARNOLD, Circuit Judge.
For the past century, the Williamson family has leased out a plot of Arkansas
land for silica mining. The current lease, signed in 1961, provides for a term of years
until 2007 and continuing "as long thereafter as" certain activities occur on the
property. In 2015, Kathy Roberts and Karen McShane (both née Williamson), the
present lessors, sought a declaratory judgment against Unimin Corporation, the
present lessee, that the lease created a tenancy at will. The lessors claimed further that
the lease was unconscionable and that Unimin had unjustly enriched itself by refusing
to vacate the land when they demanded possession. After the close of discovery, the
lessors dismissed their unconscionability claim with prejudice. The district court1
granted summary judgment to Unimin on the remaining claims, ruling that the lease
had created a determinable leasehold, not a tenancy at will, and so Unimin did not
unjustly enrich itself by staying in possession. The lessors appeal from that judgment,
and we affirm.
We review the district court's grant of summary judgment de novo, keeping in
mind that summary judgment is appropriate if there is no genuine dispute of material
fact and, viewing the record in a light most favorable to the lessors, Unimin is entitled
to judgment as a matter of law. See Smith v. Arrington Oil & Gas, Inc., 664 F.3d
1208, 1212 (8th Cir. 2012). We also review the district court's construction of the
lease and its interpretation of state law de novo. Id. The parties to this diversity action
agree that Arkansas law governs. See id.
On appeal, the lessors challenge only the district court's ruling that the lease
created a determinable leasehold and not a tenancy at will. The lease provides that the
leasehold will endure as long as "siliceous materials" are "shipped" from the lessee's
mill and at least one of the following activities also takes place on the land: "mining,"
"mining operations," or "transport[ing]" siliceous materials. The lessors contend that
the term of the lease is indefinite and thus terminable at will since it may never end
of its own accord: Unimin could, in theory, ship siliceous materials from its mill and
conduct mining operations on the land forever. No one disputes that the lease did not
create a perpetual leasehold. See Pults v. City of Springdale, 745 S.W.2d 144, 146–47
(Ark. Ct. App. 1988). But if the lease is not perpetual and lacks a predetermined end
1
The Honorable J. Leon Holmes, United States District Judge for the Eastern
District of Arkansas.
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date, the lessors reason, then it must have created a mere tenancy at will. The
difficulty with that logic, as the district court pointed out, is that it misconstrues the
type of indefiniteness that creates a tenancy at will, while ignoring an entire category
of property interests under Arkansas law—determinable estates.
Arkansas law is clear that a tenancy at will exists when a lease "is silent as to
its duration," see Cottrell v. Cottrell, 965 S.W.2d 129, 130 (Ark. 1998), or does not
otherwise grant land to the lessee "for any definite time." See Ritter v. Thompson, 144
S.W. 910, 911 (Ark. 1912). The lease at issue here, by contrast, leases the property
for as long as certain activities occur on it. By specifying that the lessee may stay in
possession until those activities cease, the lease created a determinable estate, not a
tenancy at will. See Rostell v. Ark. & Ozarks Ry. Corp., 323 S.W.2d 539, 541 (Ark.
1959); Houston v. First Baptist Church, 242 S.W.2d 966, 967 (Ark. 1951). Under
Arkansas law, a determinable leasehold is a property "interest which may continue
forever, but . . . is liable to determine by some act or event circumscribing its
continuance or extent." See Moody v. Walker, 3 Ark. 147, 190 (Ark. 1840). Since it
has "a definite term," it is not subject to cancellation at the lessor's will. Flinn v.
Cullins, 220 S.W. 449, 449–50 (Ark. 1920); see also Cottrell, 965 S.W.2d at 130;
Bodcaw Oil Co. v. Atl. Ref. Co., 228 S.W.2d 626, 632, 635 (Ark. 1950).
The lessors maintain that they may terminate this leasehold at will because no
one knows when or whether it will determine. But the fact that it could last forever
if its determining event does not occur is irrelevant. See Union Cty. v. Union Cty.
Fair Ass'n, 633 S.W.2d 17, 19 (Ark. 1982); Coffelt v. Decatur Sch. Dist., 217 S.W.2d
347, 348 (Ark. 1949) (Coffelt II); Coffelt v. Decatur Sch. Dist., 208 S.W.2d 1, 2 (Ark.
1948). It is characteristic of all determinable estates that "the reverter may not take
place for an indefinite period in the future," if at all. See Fletcher v. Ferrill, 227
S.W.2d 448, 451 (Ark. 1950). Uncertainty over when or whether the estate will
determine does not deprive its term of definiteness, nor covert it into a tenancy at will
as long as the term is "capable of being made certain." See Flinn, 220 S.W. at 450. As
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we already noted, the lease provides that it will expire when "siliceous materials" are
no longer "shipped" from the lessee's mill or when "mining," "mining operations,"
and "transport[ing]" siliceous materials no longer occur on the land.
The lessors maintain nonetheless that the leasehold here is not determinable
since some of its determining events are so vague that no one could ascertain if they
had occurred. The lessors argue that the term "mining operations" encompasses so
many activities—like stockpiling siliceous materials and maintaining a right-of-way
—that it may be impossible to tell when they cease. But Arkansas courts have long
enforced leases that provide they will remain in effect for as long as mining or drilling
"operations" persist, without the slightest indication that the term was problematically
vague. See, e.g., Gray v. Cameron, 234 S.W.2d 769, 770 (Ark. 1950); Winn v.
Collins, 183 S.W.2d 593, 596–99 (Ark. 1944); cf. Graham v. Jonesboro, Lake City
& E. R.R. Co., 164 S.W. 729, 731 (Ark. 1914). Leases that provide "the lessee may
continue holding the lease until operations cease" have become the dominant type of
lease used in the nation's mining industry, see 4 American Law of Mining § 131.05(2)
(2d ed. 2017), and the lessors do not direct us to a single Arkansas case holding that
the term was vague. We detect nothing unique about the use of the term "mining
operations" in this case, cf. Snowden v. JRE Invs., Inc., 370 S.W.3d 215, 217 (Ark.
2010), and therefore conclude that it is not vague.
The lessors question, moreover, how someone can tell whether transporting
siliceous materials across the property has ceased or was only in a lull. In construing
determinable estates, however, courts must routinely decide whether and when a party
has abandoned the purpose for which the land has been granted. See Coffelt II, 217
S.W.2d at 348. We do not see any vagueness here, either.
The lessors maintain as well that the term "mining operations" is ambiguous,
but they do not develop the argument. Their overriding concern seems to be that they
may find it difficult to tell whether operations are still ongoing and that Unimin might
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take advantage of the term's breadth by asserting that operations are ongoing when
they in fact are not. That simply means, however, that the proper scope of the term is
subject to conflicting interpretations, which is true in every instance where parties do
not see eye to eye: It does not necessarily mean the term is vague or ambiguous. See
Elam v. First Unum Life Ins. Co., 57 S.W.3d 165, 169–70 (Ark. 2001); Garner v.
XTO Energy, Inc., 2011 Ark. App. 606, at *1–2 (Ark. Ct. App. 2011); see generally
Schnuck Mkts., Inc. v. First Data Merch. Servs. Corp., 852 F.3d 732, 738 (8th Cir.
2017). The lessors find it significant that Unimin's corporate representative was either
unwilling or unable to devise a comprehensive list of all the activities that might
qualify as "operations." But it is a well-known truth about language that the meaning
of a term may be certain and clear when applied to a concrete situation, yet "resist
precise definition" in the abstract. See United States v. Strohm, 671 F.3d 1173, 1180
(10th Cir. 2011). So we see no reason to hold that the challenged determining events
are fatally ambiguous.
In addition to their possibility of reverter on the determination of the leasehold,
the lessors have a separate right of reentry if Unimin does not timely and properly pay
them royalties, ceases to operate its mill and ship siliceous materials for twelve
consecutive months (unless one of four specified events has prevented Unimin from
such activities), or violates any other obligation it has under the lease's "terms,
conditions or covenants." We express no view, however, on the meaning and effect
of that provision since the lessors do not argue that it supports their claim that the
lease created a tenancy at will, and Unimin does not ask us to construe the leasehold's
determining events in light of it.
Affirmed.
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