Mary Ann Murray; Lige M. Murray, Plaintiffs-Counter-Defendants-Appellees,
BEJ Minerals, LLC; RTWF, LLC, Defendants-Counter-Claimants-Appellants.
and Submitted February 6, 2018 Seattle, Washington
from the United States District Court for the District of
Montana D.C. No. 1:14-cv-00106-SPW Susan P. Watters, District
D. Miller (argued), Perkins Coie LLP, Seattle, Washington;
Shane R. Swindle, Perkins Coie LLP, Phoenix, Arizona; for
B. Krogh (argued) and Eric Edward Nord, Crist Krogh &
Nord PLLC, Billings, Montana, for
Before: Milan D. Smith, Jr. and Mary H. Murguia, Circuit
Judges, and Eduardo C. Robreno, [*] District Judge.
panel reversed the district court's summary judgment in
favor of Lige and Mary Ann Murray, owners of a Montana ranch,
who brought the action seeking a declaratory judgment that
dinosaur fossils found on the ranch belonged to them as
owners of the surface estate.
2005, prior to the discovery of the fossils, Jerry and Robert
Severson, the previous owners of the ranch, sold their
surface and one-third of the mineral estate to the Murrays.
In the conveyance, the Seversons expressly reserved the
remaining two-thirds of the mineral estate.
panel held, as an initial matter, that definitions of
"mineral" found in Montana statutes, like
dictionary definitions, were contradictory and therefore
inconclusive. The panel further held that the Montana Supreme
Court has generally adopted the test in Heinatz v.
Allen, 217 S.W.2d 994 (Tex. 1940), for determining
whether a particular substance was a mineral in the context
of deeds and agreements regarding mineral rights to land. The
panel held that under this test, the dinosaur fossils, which
were rare and exceptional, were "minerals" pursuant
to the terms of the deed, and belonged to the owners of the
mineral estate. The panel rejected the Murrays'
policy-driven arguments to the Heinatz test. The
panel remanded for further proceedings.
Murguia dissented, and she would hold that the district court
correctly concluded that dinosaur fossils do not fall within
the ordinary and natural meaning of the terms
"minerals," as that term was used in the mineral
deed in this case. Judge Murguia would affirm the district
court's grant of summary judgment for the Murrays.
ROBRENO, DISTRICT JUDGE.
upon a time, in a place now known as Montana, dinosaurs
roamed the land. On a fateful day, some 66 million years ago,
two such creatures, a 22-foot-long theropod and a
28-foot-long ceratopsian, engaged in mortal combat. While
history has not recorded the circumstances surrounding this
encounter, the remnants of these Cretaceous species,
interlocked in combat, became entombed under a pile of
sandstone. That was then . . . this is now.
2006, an amateur paleontologist uncovered the well-preserved
fossils of the "Dueling Dinosaurs" on a Montana
ranch ("the Ranch") in an area known as Hell Creek.
Lige and Mary Ann Murray ("the Murrays"), the
plaintiffs in this action, own the surface estate of the
ranch where the fossils were found. In 2005, prior to the
discovery of the fossils, Jerry and Robert Severson
("the Seversons"), the defendants and previous
owners of the ranch, sold their surface estate and one-third
of the mineral estate to the Murrays. In the conveyance, the
Seversons expressly reserved the remaining two-thirds of the
mineral estate, giving them ownership, as tenants in common
with the Murrays, of all right, title, and interest in any
"minerals" found in, on, and under the conveyed
fossils are now quite valuable. After a dispute arose
regarding the true owner of the Dueling Dinosaurs and several
other valuable dinosaur fossils found on the Ranch (including
a nearly intact Tyrannosaurus rex skeleton, one of only
twelve ever found) (collectively, "the Montana
Fossils"), the Murrays filed this action seeking a
declaratory judgment that the Montana Fossils belonged to
them as owners of the surface estate. In turn, the Seversons
asserted a counterclaim seeking a declaratory judgment that
the Montana Fossils belong to the mineral estate. The answer
turns on whether the Montana Fossils are deemed
"minerals" within the meaning of the mineral deed
under Montana law. If the Montana Fossils are minerals, the
Seversons, as majority owners of the mineral estate, will own
two-thirds of the Montana Fossils. If the Montana Fossils are
not minerals, they will belong to the Murrays in their
the filing of cross-motions for summary judgment, the
district court granted summary judgment for the Murrays,
holding that, under Montana law, the Montana Fossils are not
"minerals" within the meaning of the mineral deed.
The Seversons now appeal. The district court had jurisdiction
over this diversity action pursuant to 28 U.S.C. §
1332(a)(1). We have jurisdiction pursuant to 28 U.S.C.
§ 1291, and for the reasons set forth below, we reverse
the district court's order granting summary judgment for
the Murrays, and remand for further proceedings consistent
with this opinion.
facts of this case are largely undisputed. George Severson
previously owned property used as a farm and ranch in
Garfield County, Montana ("the Ranch"). In 1983, he
began leasing the Ranch to Mary Ann and Lige Murray
("the Murrays"), who worked there as ranchers.
George Severson later transferred a portion of his property
interest in the Ranch to his sons, Jerry and Robert Severson
("the Seversons"), and sold the remainder of his
interest to the Murrays.
Seversons and the Murrays jointly owned and operated the
Ranch until 2005, when the Seversons sold their surface
ownership rights and a portion of their mineral rights to the
Murrays. The mineral deed that the parties executed
and recorded in connection with the 2005 transaction
("the Deed") stated that the Seversons and Murrays
would own, as tenants in common, "all right title and
interest in and to all of the oil, gas, hydrocarbons, and
minerals in, on and under, and that may be produced from the
[Ranch]." The purchase agreement for the 2005
transaction required the parties "to inform all of the
other parties of any material event which may [affect] the
mineral interests and [to] share all communications and
contracts with all other Parties."
Seversons and the Murrays have represented that, at the time
of the sale, they did not suspect that there were any
valuable dinosaur fossils buried beneath the surface of the
Ranch. However, beginning a few months after the sale, the
Murrays discovered several rare dinosaur fossils on the
property, including: (1) the fossils of two separate
dinosaurs locked in battle when they died, nicknamed
"the Dueling Dinosaurs," discovered in 2006; (2) a
fossilized Triceratops foot and skull, discovered in 2007 and
2011, respectively; and (3) a nearly complete fossilized
Tyrannosaurus rex skeleton, nicknamed the "Murray T.
Rex," discovered in 2013. The ownership of all of these
fossils (previously defined as "the Montana
Fossils") is implicated in this litigation.
parties agree that the Montana Fossils are rare and extremely
valuable. The Murrays' experts testified that, because
fossils of dinosaurs interacting are rare, the Dueling
Dinosaurs are a "one-of-a-kind find" with
"huge scientific value." Although the Dueling
Dinosaurs have not yet been sold, they were appraised at
between seven million and nine million dollars, and the
parties have stipulated that the set is worth several million
dollars. The Murrays sold the Triceratops foot for $20, 000
and have offered to sell the skull for $200, 000 to $250,
000. Their expert, in an email attempting to sell the skull,
described it as "one of the best if not the best
Triceratops skull ever found." Finally, the Murray T.
Rex is one of only a dozen intact Tyrannosaurus rex skeletons
ever found. The Murrays sold it to a Dutch museum in 2014 for
several million dollars. The proceeds are being held in
escrow pending the outcome of the instant litigation.
Murrays first informed the Seversons about the Montana
Fossils in 2008. After the Seversons asserted an ownership
interest, the Murrays filed this action in Montana state
court seeking a declaratory judgment that, as owners of the
surface estate (i.e., all of the Ranch's
property other than the mineral estate, see supra
note 1), they are the sole owners of the Montana Fossils. The
Seversons removed the action to federal court and asserted a
counterclaim seeking a declaratory judgment that the Montana
Fossils are part of the mineral estate.
discovery, both parties produced experts who testified
regarding the composition of the Montana Fossils. The
Seversons' expert, Raymond Rogers, testified that bones
and teeth, including in living vertebrates, naturally contain
the mineral hydroxylapatite. Rogers performed an x-ray
diffraction test on the Montana Fossils and determined that
they had recrystallized from hydroxylapatite into the mineral
francolite during the fossilization process that occurred
over millions of years. The Murrays' expert, Peter
Larson, agreed with Rogers regarding the fossilization
process in general. However, Larson concluded that the
Montana Fossils had not been replaced by francolite, and
instead contained the same patterns of the mineral
hydroxylapatite as a modern bison bone, "just as when
[the dinosaurs were] alive."
discovery, the parties filed cross-motions for summary
judgment. In an opinion dated May 20, 2016, the district
court found that the Montana Fossils are not included in the
ordinary and natural meaning of "mineral" under
Montana law and therefore are not part of the mineral estate.
Accordingly, the court granted summary judgment for the
Murrays. The Seversons now appeal.
review a district court's ruling on motions for summary
judgment de novo. Guatay Christian Fellowship v.
County of San Diego, 670 F.3d 957, 970 (9th Cir. 2011).
Summary judgment is appropriate when "there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a). We review a district court's interpretation of
state contract law de novo as well.
AmerisourceBergen Corp. v. Dialysist West, Inc., 465
F.3d 946, 949 (9th Cir. 2006). The parties agree that Montana
Montana law, the interpretation of a deed conveying an
interest in real property is governed by the rules of
contract interpretation. Mary J. Baker Revocable Tr. v.
Cenex Harvest States, Coops., Inc., 164 P.3d 851, 857
(Mont. 2007) (citing Mont. Code Ann. § 70-1-513). The
interpretation of a contract is a question of law.
Id. Words in a contract are interpreted "in
their ordinary and popular sense unless the parties use the
words in a technical sense or unless the parties give a
special meaning to them by usage." Dollar Plus
Stores, Inc. v. R-Montana Assocs., L.P., 209 P.3d 216,
219 (Mont. 2009). If the language in a contract is ambiguous,
i.e., subject to at least two reasonable but