A 118-year-old county clerk's record with a struck-through word was at the center of a mineral rights dispute, which on Thursday the Colorado Court of Appeals resolved in favor of Anadarko Petroleum Company.
During the 19th century the federal government granted the Union Pacific Railroad millions of acres of land in the western United States that the company could sell to fund its construction. Among the railroad’s holdings were 11 acres in Lincoln County that Union Pacific dispensed with between 1900 and 1902. In the agreements, the railroad would retain all “coal and other minerals” under the land.
The purchasers of the railroad land were responsible for taking the deeds to the Lincoln County Clerk and Recorder. However, the clerk at the time did not record the original agreements afresh — and the originals no longer exist. Instead, the clerk used standardized forms for Union Pacific and copied the deed’s details into the forms.
In 1901, oil was discovered in Boulder for the first time in the state. Consequently, the deed forms recorded in 1902 contained the phrase “all oil, coal and other minerals.” The original deeds from the Union Pacific excluded the word “oil,” so the Lincoln County clerk struck through it on the standardized form. Union Pacific’s records from the time similarly omitted “oil” or, in one case where the word appeared, blacked it out.
"On its face, there's no way to read a document, much less a deed that expressly strikes through a given term, as in fact not excluding that term. That's the very definition of a strike-through," argued Sean Connelly during oral argument to the appeals judges.
Connelly's clients, the present-day owners of the land, filed a lawsuit alleging they were the lawful owners of oil rights. Union Pacific had since turned over mineral rights to Anadarko, which is now part of Occidental Petroleum. Following a three-day trial in Lincoln County District Court, a judge found that because the original parties gave Union Pacific the right to coal and other minerals, oil was necessarily included. Consequently, the court deemed Anadarko the owner of oil rights.
The landowners appealed, arguing the recorded deed unambiguously excluded oil from “other minerals.”
“We agree with the trial court that the recorded deeds are ambiguous,” wrote Judge Christina F. Gomez for the three-member appeals panel. “The strikethroughs of ‘oil’ are fairly susceptible to more than one meaning. On the one hand, they could be intended to signify that oil was expressly excluded from the reservations; on the other hand, they could be intended to erase any specific reference to oil and just broadly reserve ‘all other minerals.’”
The fact that the recorded deeds were not the originals signed by the parties created additional uncertainty over the intent of the transaction. However, a 2000 Colorado Supreme Court decision involving a similar dispute over deeds from that era determined “other minerals” included oil.
The panel ultimately agreed with Anadarko's attorney, Jonathan W. Rauchway, who argued to the judges that this was "simply a ministerial act by the clerk to try to conform his updated, post-1902 forms to the pre-1902 form original deeds he was presented with. It was not intended to have any legal effect, and it certainly was not intended to remove anything from the mineral estate" of Union Pacific.
The appeals panel also rejected the landowners’ claim that the district judge mistakenly attempted to reconstruct the original deed rather than look at the actual language of the recorded deed. The panel maintained the judge was “endeavoring to interpret the ambiguous strikethroughs in the recorded deeds.”
The case is Craig et al. v. Anadarko.