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Pete Lien & Sons, Inc. v. Zellmer

Supreme Court of South Dakota

May 13, 2015

PETE LIEN & SONS, INC, a South Dakota Corporation, Plaintiff and Appellee,
v.
STEVE ZELLMER; CESAR CONDE; SUNSET PROPERTIES, LLC, a Colorado Corporation; GCC OF AMERICA, INC., a Delaware Corporation; and GCC DACOTAH, INC., a South Dakota Corporation, Defendants and Appellants

Argued October 8, 2014

APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT LAWRENCE COUNTY, SOUTH DAKOTA. THE HONORABLE RANDALL L. MACY, Judge.

LARRY M. VON WALD of Beardsley, Jensen & Von Wald, Prof., LLC, Rapid City, South Dakota, Attorneys for plaintiff and appellee.

KYLE L. WEISE, JAMES S. NELSON of Gunderson, Palmer, Nelson & Ashmore, LLP, Rapid City, South Dakota Attorneys for defendants and appellants.

ZINTER and SEVERSON, Justices. GILBERTSON, Chief Justice, concurs. ZINTER and WILBUR, Justices, and KONENKAMP, Retired Justice, concur in result on all claims except CHUCK NO. 2012-01, a.k.a. CM-5. KERN, Justice, not having been a member of the Court at the time this action was assigned to the Court, did not participate. ZINTER, Justice, writing the majority opinion regarding mining claim CHUCK NO. 2012-01, a.k.a. CM-5. WILBUR, Justice, and KONENKAMP, Retired Justice, concur. GILBERTSON, Chief Justice, and SEVERSON, Justice, dissent.

OPINION

Page 452

ZINTER and SEVERSON, Justices

[¶1] Justice Severson delivers the opinion of the Court, holding that title to mining claims CHUCK NO. 2012-02, CHUCK NO. 2012-03, CHUCK NO. 2012-04, CHUCK NO. 2012-05, CHUCK NO. 2012-06, CHUCK NO. 2012-07, CHUCK NO. 2012-08, CHUCK NO.2, CHUCK NO.3, CHUCK NO.4, CHUCK NO.5, CHUCK NO.6, and CHUCK NO.7 is quieted in Pete Lien & Sons, Inc. Chief Justice Gilbertson concurs. Justices Zinter and Wilbur and Retired Justice Konenkamp concur in result.

[¶2] Justice Zinter delivers the opinion of the Court, holding that title to mining claim CHUCK NO. 2012-01, a.k.a. CM-5, is quieted in GCC Dakota Inc. Justice Wilbur and Retired Justice Konenkamp concur. Chief Justice Gilbertson and Justice Severson dissent.

[¶3] SEVERSON, Justice, writing the opinion regarding mining claims CHUCK NO. 2012-02, CHUCK NO. 2012-03,

Page 453

CHUCK NO. 2012-04, CHUCK NO. 2012-05, CHUCK NO. 2012-06, CHUCK NO. 2012-07, CHUCK NO. 2012-08, CHUCK NO.2, CHUCK NO.3, CHUCK NO.4, CHUCK NO.5, CHUCK NO.6, and CHUCK NO.7.

[¶4] GCC Dacotah, Inc. and Pete Lien & Sons, Inc., claim mineral rights to the same 280 acres of U.S. Forest Service land in Lawrence County, South Dakota. Pete Lien & Sons, Inc. (PLS) filed a complaint to quiet title on September 14, 2012. Both parties subsequently moved for summary judgment on October 16, 2013, which the circuit court granted to PLS on January 2, 2014. The circuit court held that GCC Dacotah, Inc. (GCC) had failed to follow federal and state law regarding the proper location of placer mining claims. GCC appeals.

Background

[¶5] On April 6, 2007, Steve Zellmer, then president of GCC, signed and filed with the Lawrence County Register of Deeds fourteen placer mining claims. Throughout this opinion Appellants will be interchangeably referred to as GCC or Zellmer. Each claim covers twenty acres of U.S. Forest Service land in Lawrence County for a total of 280 acres. That same day, Gene Nelson, an employee of GCC, placed one discovery monument containing notices of the fourteen claims on the northeast corner of the 280 acres. Zellmer transferred the claims by quitclaim deed on June 6, 2007, to Sunset Properties, LLC, a company owned by GCC of America, Inc. Sunset Properties, LLC recorded the deed on September 11, 2007.

[¶6] On April 20, 2007, Sam Brannan, on behalf of PLS, posted notices of location certificates on six placer mining claims covering some of the same 280 acres claimed by Zellmer. PLS marked each twenty-acre section with corner and side-center posts.[1] Notices of location were attached to discovery monuments at each claim. On February 13, 2012, Sam Brannan made discovery of eight more placer mining claims and marked the boundaries in the same manner as in 2007. These eight claims were also previously claimed by Zellmer. As a result, both GCC and PLS now claim that they each have rights to the same 280 acres.

[¶7] PLS filed a complaint to quiet title on September 14, 2012, alleging that Zellmer did not follow federal or state law to properly locate his placer mineral claims and the property remained open for claims. GCC replied, alleging that only one monument is needed and that the notice of the fourteen claims in the monument gave actual notice of his rights. Furthermore, GCC argued that anyone trying to claim the same mineral rights had constructive notice of GCC's claim because the claims were filed with the county register of deeds. As a result, GCC argued, no future claimants could obtain an interest in the same minerals.

[¶8] PLS and GCC each moved for summary judgment. The circuit court granted summary judgment to PLS on January 2, 2014. The court found that federal regulations require the location of the placer mining claims to be staked and monumented at the corners of each twenty-acre claim. The court also found that federal regulations provide that the procedure to stake and monument surface mining claims must also meet any state requirements not inconsistent with federal law. Further, it found SDCL 45-4-3 requires

Page 454

additional posts to mark the centers of each claim's sides, for a total of eight posts on each claim. The court found that Zellmer did not follow federal or state law to claim the minerals; however, it found that PLS followed all applicable laws and was therefore entitled to the mining claim subject to the paramount title of the United States.

[¶9] GCC appeals, raising the following issues:

(1) Whether the court erred in deciding that GCC's fourteen placer mineral claims on 280 acres of U.S. Forest Service property in Lawrence County, South Dakota, were invalid.
(2) Whether GCC's placer mineral claims precluded PLS's subsequent claims.

Standard of Review

[¶10] The circuit court in this case interpreted federal and state statutes when it granted summary judgment.

Our standard of review on a grant or denial of summary judgment is well settled. Summary judgment is proper where[] the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. SDCL 15-6-56(c).

Luther v. City of Winner, 2004 S.D. 1, ¶ 6, 674 N.W.2d 339, 343. " We view all reasonable inferences drawn from the facts in the light most favorable to the [nonmoving] party." Roden v. Gen. Gas Co. of Wis., 2003 S.D. 130, ¶ 5, 671 N.W.2d 622, 624. Statutory interpretation is a question of law reviewed de novo. ...


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