This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Larry W. Blomster, et al.,
Andrew H. Hanson, et al.,
Clay County District Court
File No. C4011390
Zenas Baer, Zenas Baer and Associates, 331 Sixth Street, Box 249, Hawley, MN 56549 (for appellants)
Dale R. Shook, Robert H. Swenson, Gunhus, Grinnell, Klinger, Swenson & Guy, Ltd., 514 Gate City Building, P.O. Box 2783, Fargo, ND 58108-2783 (for respondents)
Considered and decided by Schumacher, Presiding Judge, Toussaint, Chief Judge, and Kalitowski, Judge.
U N P U B L I S H E D O P I N I O N
Appellants-buyers Larry W. Blomster and Diane K. Blomster purchased land from respondents-sellers Andrew H. Hanson, Shirley M. Hanson, Orville M. Hanson, and Gail Hanson, subject to a reservation of certain mineral rights to sellers. The contract for deed and subsequent warranty deed involved in the transaction inconsistently described the mineral rights reserved to sellers, and sellers filed a corrective deed ten years after the filing of the warranty deed. On appeal from a summary judgment determining sellers’ mineral rights, buyers argue that the district court (1) should have granted buyers summary judgment because the doctrine of merger precludes reference to the contract for deed to resolve the ambiguity in the warranty deed; and (2) erred in granting sellers summary judgment by improperly resolving fact questions and questions about the parties’ intent. We affirm.
On appeal from a summary judgment, this court determines whether any genuine issues of material fact exist and whether the district court erred in applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). This court must view the evidence in the light most favorable to the nonmoving party and resolve any doubts as to the existence of an issue of material fact against the moving party. Nord v. Herreid, 305 N.W.2d 337, 339 (Minn. 1981).
The mineral-rights reservation in the contract for deed states that the sale is
subject * * * to a reservation by [sellers of] a 60% interest in all minerals, mineral deposits, oil, natural gases, and any and all other hydrocarbons, sand, gravel, clay, limestone and shale together with the right to free ingress to and upon and egress from the surface of the land for the purposes of prospecting; mining, drilling wells and operating beneath the surface and extracting and removing minerals, oil, natural gases, hydrocarbons, sand, gravel, clay, limestone and shale from the land.
The warranty deed contains the following mineral-rights reservation:
Subject to a reservation by [sellers], a 60% interest in all minerals, mineral deposits, oil, natural gases, and any and all hydrocarbons
In granting summary judgment to sellers, the district court considered both the warranty deed and the contract for deed and concluded that as a matter of law the term “mineral” in the warranty deed included sand and gravel.
Buyers argue that considering the contract for deed in construing the reservation of mineral rights in the warranty deed is contrary to the doctrine of merger. Under the doctrine of merger,
if there is a departure from the terms of the contract, acceptance of a deed constitutes a merger of the two instruments and the deed is thereupon presumed to be the final agreement of the parties.
B-E Const., Inc. v. Hustad Development Corp., 415 N.W.2d 330, 331 (Minn. App. 1987). “The merger doctrine generally precludes parties from asserting their rights under a purchase agreement after the deed has been executed and delivered.” Bruggeman v. Jerry’s Enterprises, Inc., 591 N.W.2d 705, 708 (Minn. 1999). Any ambiguity in a deed shall be resolved in favor of the grantee. Resler v. Rogers, 272 Minn. 502, 507, 139 N.W.2d 379, 383 (1965).
But when construing exceptions and reservations, the general rule of resolving ambiguity in a deed in favor of the grantee is not applied. Vang v. Mount, 300 Minn. 393, 397, 220 N.W.2d 498, 500 (Minn. 1974). Rather,
the proper method is to determine the intention of the parties from the entire instrument and the facts and circumstances surrounding the making of the deed.
Id. at 396, 220 N.W.2d at 500 (quotation omitted).
The court in Vang went on to explain how to determine the intention of the parties. Specifically the court stated that:
The intention of the parties is to be ascertained from the entire instrument, including the reservation or exception. This includes the ordinary meaning of the words, recitals, context, subject-matter, the object or purpose of introducing the exception or reservation clause, the nature of the reservation or exception, and the attending facts and circumstances surrounding the parties at the time of the making of the deed. * * *
Id. at 397, 220 N.W.2d at 500-01 (quotation omitted). Whether sand and gravel are minerals within a reservation clause depends on the facts of the particular case. Id. at 400, 220 N.W.2d at 502.
We conclude that Vang is the controlling authority when construing a reservation of mineral rights, and under the analysis set forth in Vang, the district court did not err in considering the contract for deed. See id. at 400-01, 220 N.W.2d at 503 (when a reservation in a deed is ambiguous, extrinsic evidence may be considered); Resler at 507, 139 N.W.2d at 383 (noting that the only evidence presented at trial tending to indicate parties’ intent regarding reservation of mineral rights in deed was the contract for deed).
Buyers also contend that in construing the term “mineral” in the 1990 warranty deed, the district court engaged in impermissible fact-finding. We disagree. Both parties’ summary judgment motions specifically listed the issue of whether sand was a mineral as an issue to be determined by the district court on summary judgment, and the parties agree that all of the evidence relevant to the determination was presented to the district court. Moreover, neither party sought additional discovery on the issue.
When a reservation in a deed is ambiguous, construction of the reservation is a question of fact unless the evidence on intent is conclusive. Vang, 300 Minn. at 400-01, 220 N.W.2d at 503. In this case, all of the evidence in the record relevant to the parties’ intent indicates that the reservation of mineral rights was intended to include sand and gravel. Neither party read the reservation of mineral rights in the warranty deed before its execution, and there is no evidence that either party intended to modify the reservation contained in the contract for deed. And the evidence that buyers offered to purchase sellers’ mineral rights after testing the property for sand and gravel had been initiated suggests that the sand and gravel were valuable. See id. at 397, 220 N.W.2d at 501 (citing with approval authorities defining “‘mineral’ as any natural substance having sufficient value to be mined, quarried, or extracted for its own sake or its own specific use”).
Finally, as the district court noted, there is strong evidence that the omission from the warranty deed of the latter portion of the language from the contract for deed was a drafting error rather than a manifestation of the parties’ intent. The reservation in the warranty deed contains no punctuation and omits sellers’ right to ingress and egress to access and remove the minerals, which would render the mineral-rights reservation meaningless. We conclude the district court properly construed the term mineral in the warranty deed as a matter of law to include sand and gravel.