CHAPTER 5 COMMON AND COMPLEX ISSUES IN PREPARATION OF A TITLE OPINION - A CLOSER LOOK
| Jurisdiction | United States |
COMMON AND COMPLEX ISSUES IN PREPARATION OF A TITLE OPINION - A CLOSER LOOK
Uriah J. Price
Crowley Fleck PLLP
Bozeman, MT
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BRIAN R. BJELLA is of counsel in the Bozeman, Montana, office of Crowley Fleck PLLP. He worked for 38 years in the firm's Bismarck, North Dakota office. Brian received his law degree from the University of North Dakota in 1979. Prior to joining the firm, he served as an Assistant Attorney General for the State of North Dakota, representing the Board of University and School Lands. Brian is admitted to practice in the States of North Dakota and Montana. Brian's primary areas of practice are mineral law and public utilities law. He has extensive experience in preparation of mineral title opinions, and the siting of energy facilities before state regulatory agencies. Brian has been very active in the Rocky Mountain Mineral Law Foundation. He twice served on the Board of Directors, and several terms as a trustee. He was chair of the Long Range Planning Committee for nine years. He was on the program committee of the following special institutes: Mineral Title Examination III (1992); Oil & Natural Gas Pipelines (1995); The Electric Industry (1997); and Water Quality and Wetlands (2002). He served as co-chair of the landman's section for the 2006 Annual Institute and of the oil and gas section for the 2011 Annual Institute. Brian authored the following papers: "Removing the Operator Under the Joint Operating Agreement," (1999); "Management of Water and Water Quality in Coal Mining: A Legal Perspective" (2002); "Are Landmen Practicing Law? The Legal & Ethical Issues," (2003); and "Advanced Mineral Conveyancing and Title Issues," (2007). He co-authored "Common Issues in Preparation of a Title Opinion," (2012) and (2015); and "Riparian Rights: Ownership of Minerals Under Rivers and Lakes" (2014).
URIAH PRICE is a partner in Crowley Fleck's Energy, Environment and Natural Resources Department in Bozeman, Montana. Uriah is licensed in Montana, North Dakota, and Wyoming and his practice encompasses multiple areas of energy and natural resources law. Uriah represents clients in front of the Montana Board of Oil and Gas Conservation Commission, the Bureau of Land Management and the Bureau of Indian Affairs. Additionally, he handles oil and gas related litigation, title examination, due diligence and Indian law matters. Uriah is a former Trustee of the Rocky Mountain Mineral Law Foundation and currently serves on the Foundation's Special Institutes Committee and as faculty for the Federal Oil and Gas Leasing Short Course. Uriah obtained his Juris Doctorate, with honors, from Washburn University School of Law where he focused on oil, gas and natural resources law. Prior to law school, he obtained his Bachelor of Science degree from the University of Kansas.
I. TITLE STANDARDS
Title standards are standards and criteria, adopted by an organization of lawyers such as the real property section of the state bar association, upon which real estate title can be evaluated to determine whether it is marketable or defective. All real estate lawyers, including oil and gas lawyers, should be familiar with the title standards of any state where they practice.
It appears there are 32 states which have some form of title standards.1 Of these 32, it appears about 21 have updated their title standards within the last 15 years. The following table shows a summary of states with title standards.2
| STATE | COMMENTS |
| Arkansas | No specific mineral title standards |
| Colorado | No specific mineral title standards |
| Connecticut | |
| Florida | |
| Georgia | |
| Idaho | Have not been updated since 1946 |
| Illinois | Last updated in 1977 |
| Iowa | |
| Kansas | Cover general issues related to real property, including mineral title; have been referred to and adopted by the KS Supreme Court |
| Louisiana | No separate mineral title standards |
| Maine | |
| Massachusetts | |
| Michigan | Have been relied upon by MI appellate courts and regarded as authoritative; described as comprehensive and useful; specifically address mineral interests |
| Minnesota | |
| Missouri | Last updated in 1980 |
| Montana | Have not been updated since 1955 |
| Nebraska | |
| New Hampshire | |
| New Mexico | Last updated in 1950 |
| New York | Last updated in 1976 |
| North Dakota | Appears to be the only state with separate, specific, comprehensive mineral title standards (Mineral Title Standards last updated in 1989) |
| Ohio | Apply to surface |
| Oklahoma | No separate oil and gas title standards; many oil and gas issues not addressed |
| Pennsylvania | One or more counties have adopted standards (limited to assessing what majority of local bar considers marketable for real property transactions) |
| Rhode Island | |
| South Dakota | Codified in South Dakota code |
| Texas | Texas has 107+ up to date standards on real property issues, but none yet on mineral issues. |
| Utah | Have not been updated since 1964 |
| Vermont | |
| Washington | Last updated in 1942 |
| Wisconsin | Have not been updated since 1946 |
| Wyoming | Not complete; worked on from 1970's to 1980 |
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Title Standards generally represent the consensus of the lawyers drafting the standards and a majority of the lawyers who practice in the area of real property. They may be accepted as establishing a standard of care under which a title examiner should operate with a given fact situation. Although title standards generally do not have the force of law, courts have relied upon title standards when addressing matters involving title issues.3
In the past, various states have enacted title standards into law.4 "In 1947, title standards in Nebraska were enacted into law by adoption of the Nebraska Marketable Title Act which made the existing standards the legal standard of marketable title."5 "Subsequently, the title standards
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were repealed and no longer have the force of law."6 "Reasons cited for the repeal of the legislation were that as legislation it was difficult to amend and keep the standards current; new standards proposed by the bar were given no recognition until enacted into law; and as legislation the standards lacked sufficient flexibility."7 To our knowledge, only one state, South Dakota, currently codifies its title standards in its state statutes.8 However, the introduction to the South Dakota title standards, codified in the South Dakota Codified Laws, Appendix to Chapter 43-30, provides:
The State Bar of South Dakota Title Standards are the work of the Real Property, Probate and Trust Section's Title Standards Committee. The Standards themselves are not the authority. Rather, they are in some sense a restatement of the law designed to aid the practitioner in determining the current status of practice in a particular area.
The Standards are based on existing South Dakota statutes and case law from South Dakota's courts and other relevant jurisdictions. The committee members' experience with the relevant authorities is crucial to drafting Standards.
The 2002 Standards are in part based on the Model Title Standards, existing South Dakota Title Standards and various Title Standards from other jurisdictions, predominantly North Dakota and Nebraska. The Title Standards Committee has discovered that to be most useful the Title Standards must keep pace with the ever-evolving landscape of the law. The ideal way to achieve this goal is through a standing Title Standards Committee charged with an on-going review of statutory and case law whose members are familiar with the dynamics of practice, enabling them to draft and revise Standards as necessary.
Most title standards relate to general real property issues without specific regard to mineral title issues. Although the title standards of some states may address mineral title issues, North Dakota appears to be the only state that has adopted separate and specific mineral title standards.9 North Dakota's regular title standards contain a mineral section.10 However, North Dakota's separate mineral title standards deal exclusively and comprehensively with title issues relating specifically to mineral interests.11 The introduction to the North Dakota Mineral Title Standards provides:
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This volume of Mineral Title Standards of the State Bar Association of North Dakota has been prepared by the Mineral Title Standards Committee of the Section of Real Property, Probate and Trust Law. The Mineral Title Standards are based on the relevant statutes of the State of North Dakota, decisions of the North Dakota Supreme Court, courts of other jurisdictions deemed to be relevant to North Dakota and oil and gas treatises. The Mineral Title Standards continue to evolve as statutes change, cases are decided, and lawyers develop collective shared experience. The Mineral Title Standards should be considered realistically and not be accepted as the final authority for a particular point. This volume should be used in conjunction with the North Dakota Title Standards. 12
The North Dakota Mineral Title Standards are comprehensive and include but are not limited to, discussion of the following issues: the nature of minerals; sovereign and private creation of mineral estates; ownership of minerals beneath railroads and highways; the mineral versus royalty distinction; third party reservations and reservation conflicts; the duhig rule of construction; term interests; the execution right; royalty and non-executive mineral interests; mineral conveyances affected by rivers, streams, and lakes; successive ownership interests; allocation of royalty burdens; burdens on the mineral estate such as leases, mortgages, and judgments; multiple use of mineral estates; easements and rights of way; dominance of the mineral estate; pooling and unitization; and various statutes affecting the mineral estate such as the dormant mineral act.13
Title standards provide guidance to frequently encountered issues in the examination of title and the drafting of...
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