Federal court adopts report and recommendation to dismiss PGC’s action to quiet title.

On July 18, 2013, the District Court for the Middle District of Pennsylvania adopted the report and recommendation of a magistrate judge to grant a private trust’s motion to dismiss an action to quiet title brought by the Pennsylvania Game Commission. Pennsylvania Game Commission v. Proctor Heirs Trust, 2013 WL 3785253 (M.D. Pa July 18, 2013).

In 1895, Thomas Proctor recorded a deed in Sullivan County reserving the mineral, oil and gas rights of the property to himself and his heirs. In June 1908, the property was sold by Sullivan County Treasurer to a private purchaser at a tax auction, where the oil, gas and mineral estates were not separately assessed. In 1910, the purchaser recorded a deed with the Central Pennsylvania Lumber Company. Fifteen years later, in 1925, CPLC and PGC recorded a deed through which PGC obtained an interest in the mineral rights. PGC claims that in 1980 the Proctor Heir’s conveyed their interests to the Trust. PGC brought its action to quiet title in 2012.

The magistrate judge recommended the action to quiet title be dismissed because PGC failed to establish it was in possession or exercising dominion over the mineral estate. The magistrate judge explained that possession is a jurisdictional prerequisite for an action to quiet title. Further, PGC failed to demonstrate in its complaint the specific claim under Pennsylvania Rule of Civil Procedure 1061(b), and did not provide well-pleaded facts in its complaint to allege it was in possession of the mineral estate. Pennsylvania courts generally find possession when mineral are “in grasp” (the portion of the land has been tapped by the party). PGC, however, only referred to its right of possession through the deed with CPLC. Therefore, PGC did not state a claim for which relief could be granted, and the magistrate judge recommended the Proctor Trust’s motion to dismiss be granted.

For more information on legal developments in the Marcellus shale play, visit the Marcellus Shale Resource Area.

Written by: Garrett Lent, Research Assistant

Agricultural Law Resource and Reference Center

July 2013

Shychuck v. Chesapeake Appalachia, LLC., No. 13-375, 2013 WL 2558161 (W.D.Pa. June 11, 2013).

On June 11, 2013, the District Court for the Western District of Pennsylvania remanded an action to quiet title to the Court of Common Pleas for Beaver County. The dispute between the Plaintiff, William Shychuck, and the Defendant Chesapeake Appalachia, arose out an action to quiet title to the mineral and oil and gas rights on property owned by the Plaintiff. The complaint asserted that Defendants attained interest in the oil and gas rights through invalid assignments of an oil and gas lease.

The District Court remanded the case, despite the Defendant’s arguments to the contrary, holding that the Declaratory Judgment Act, 28 U.S.C. §2201 provided the court with discretionary jurisdiction over the case. The court explained that the issues involved in the case hinged solely on Pennsylvania law because the arguments drawn by both parties relied on state court opinions from the 19^th century. Further, the court said because the issues were to be resolved by Pennsylvania state laws, it would decline resolving the questions in federal court.

Written by: Garrett Lent, Research Center

Agricultural Law Resource and Reference Center

June 2013

Lincoln v. Magnum Land Services, LLC., No. 3:12-CV-576, 2013 WL 2443926 (M.D. Pa. June 5, 2013)

On June 5, 2013, the United States District Court for the Middle District of Pennsylvania ruled on a gas producer’s motion to dismiss a landowner’s claims to quiet title and for slander of title involving a leasing dispute in Wyoming County, PA. Plaintiff Robert Lincoln was approached by Defendant Magnum Land Services in February of 2008. Defendant offered to lease Plaintiff’s sub-surface oil and gas rights. Plaintiff altered the terms of the lease, signing and returning it to Defendant. In March, Plaintiff contacted the Defendant and stated he was withdrawing the lease, having not heard from Defendant. Two months later, Defendant sent Plaintiff a check for $71,362.50, which plaintiff voided and returned.

In August, 2008, Plaintiff leased their oil and gas rights to a third party, Chief Exploration, and recorded the lease with the county recorder. In August of 2009, Defendant recorded the altered February 2008 lease, and subsequently assigned the oil and gas rights to Belmont Resources, who assigned to Sinclair, and further Chesapeake and Statoil. In September of 2009, Plaintiff learned Defendant had recorded the altered agreement as a lease, and believing it would cast a cloud on his title and prevent participation in a Wyoming County Landowner’s Group deal, filed an Affidavit affecting title. In December, Plaintiff mailed the Affidavit and a quitclaim deed to Chesapeake. In September of 2011, Chesapeake and Statoil released the oil and gas rights via the quitclaim deed.

The court granted the motion to dismiss Plaintiff’s claim of quiet title, because Chesapeake and Statoil released and surrendered the oil and gas rights of the property. The court explained that because this release had occurred prior to the filing of the complaint there was no cloud of title on the property.

Further, the court granted the motion to dismiss Plaintiff’s claim of slander of title because the statute of limitations for slander of title had expired. A claim of slander of title has a statute of limitations of one year from when the cloud of title arises. Here, when Defendant filed the counteroffer as a lease, the period began. Plaintiff did not include the slander of title claim until amending his complaint three months after the statutory period elapsed, therefore, it was dismissed.

Written by: Garrett Lent, Research Assistant
Penn State Law, Agricultural Law Center
June 2013