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Holder of Subsurface Mineral Rights
Denied Access to Surface
Reversing the ruling of the Court of Special Appeals, the
Court of Appeals has held that the holder of subsurface mineral rights
does not have the right to utilize the surface of the land to prospect
for or to extract subsurface minerals where it would unreasonably
interfere with the known intended uses of the surface.
In 1987, Calvert Joint Venture #140 (“Calvert”) entered into a land
installment contract with Ross and Nancy Snider (“Snider”) to purchase
from them approximately 145 acres in Calvert County, Maryland
(consisting of tracts 1, 2 and 3). The contract included language
that the property was being purchased by Calvert to develop into a
residential subdivision. The contract also provided that Snider
reserved the property’s mineral rights.
In
August 1995, it was determined by a declaratory judgment action that
Snider was unable to deliver marketable title to tract 3,
approximately 28 acres of the property. As a result, Snider conveyed
tracts 1 and 2 containing approximately 115 acres to Calvert by
special warranty deed. The deed contained the reservation of mineral
rights but did not make any reference to the residential development
purpose that was mentioned in the land installment contract. No
express easement over the surface of tracts 1 and 2 was reserved with
respect to the mineral rights. Snider retained title to tract 3 which
abutted tracts 1 and 2.
In the contract, Snider agreed that Calvert could
immediately begin the subdivision process for 106 acres, and agreed to
sign subdivision applications. In 1990 Snider agreed to sign papers to
begin the subdivision process and agreed to cooperate with Calvert in
its efforts to subdivide the entire property into residential building
lots.
In 1999, Calvert submitted five final subdivision plats
subdividing the property into 29 building lots to Snider for
signature. Snider refused to sign because the plats contained
language limiting the mineral rights to Snider’s lifetime, and
requiring Snider to acknowledge, “. . . .that said rights are
subordinate to the use of the property as a residential subdivision
and that they reserved no right of ingress to and on and ingress from
the surface of the land for prospecting , mining, drilling wells and
operating beneath the surface and extracting and removing oil, gas or
other minerals from below the surface of the land. . . .”
The law relating to subdivisions did not require Snider
to sign the subdivision plats and accordingly, Calvert recorded the
plats among the plat records of Calvert County.
As a result of Snider’s refusal to sign the subdivision
plat containing the subordination language, Calvert filed suit against Snider in the Circuit Court
for Montgomery County (where Snider then lived) for a declaratory
judgment, asking the court to declare “
the
extent to which respondents [Snider] could use the surface of the
Calvert Property it now owned in exercising their rights under the
reservation of mineral rights in the deed, the effect of statutes on
mining within a residential subdivision and the duration of the
mineral rights reservation.” The suit also sought reformation and
specific performance.
The
Circuit Court refused to reform the contract or order specific
performance, and failed to make any declaration regarding the extent
to which Snider could use the surface of the property. Calvert
appealed to the Court of Special Appeals. The Court of Special
Appeals affirmed the decision of the Circuit Court, and Calvert
filed a
Petition for Writ of Certiorari to the Court of Appeals.
The Court of Appeals held that while,
under appropriate
circumstances, the owner of subsurface mineral rights may be entitled
to an implied reservation of an easement to access those minerals
through the surface of the land, this case did not present such
circumstances. The Court stated:
“We
hold that, under the circumstances of this case, respondents are
precluded from using the surface of the Calvert Property under the
reservation clause in the October 1996 special warranty deed. Had
respondents desired to retain the right to prospect for and/or mine
minerals from the surface of the subject property in spite of its
intended use for a residential subdivision, they could have, at the
time of the conveyance, easily expressly reserved an easement to
utilize the surface land. They did not do so. Although an owner of
mineral rights under a property may, under appropriate
circumstances, be entitled to an implied reservation of an easement
to access those minerals from the surface even where the deed’s
language makes no mention of such a right, that use must be both
reasonable and necessary at the time of the conveyance in
which the minerals are excepted, reserved or granted. We hold that,
under the special circumstances here present, any access to the
surface of the residential subdivision for mining would be
unreasonable and in conflict with the intended purpose of using the
property as a residential subdivision. This is especially true
where, as in this case, respondents were well aware of the fact that
petitioner planned to use the property for residential subdivision
purposes. Under these circumstances, we hold that respondents
failed to meet their burden of proof as to the elements required to
establish the implied reservation at issue.
* *
*
"In addition, an implied easement to use the surface of
the property was unnecessary under these facts as, at the time of
the conveyance, respondents in this case owned a tract of land
adjacent to the subject property. Thus, we reverse the Court of
Special Appeals as to this issue. Respondents have no right to use
the surface of the Calvert Property in the exercise of their mineral
rights.”
The
Court also held that Snider’s reservation of mineral rights was a
perpetual interest pursuant to
§ 4-105 of the Real Estate Article of the Maryland Code.
Calvert Joint Venture #140 v. Ross R. Snider, et ux,
No.
52, September Term, 2002, in the Court of Appeals of Maryland, filed
February 13, 2003.
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