G and B Mining, LLC v. Schemm

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NOT DESIGNATED FOR PUBLICATION

No. 114,970

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

G and B MINING, LLC, et al.,
Appellants,

v.
VERNON SCHEMM and DIXIE SCHEMM, et al.,
Appellees.


MEMORANDUM OPINION

Appeal from Wallace District Court; JACK L. BURR, judge. Opinion filed November 3, 2017.
Affirmed.

Caleb Boone, of Hays, for appellants.

Adam C. Dees and Jeffery A. Mason, of Vignery, Mason & Dees L.L.C., of Goodland, for
appellees.

Before ARNOLD-BURGER, C.J., BUSER and POWELL, JJ.

BUSER, J.: This is an appeal by G and B Mining, LLC; Michael Bertelsen; and
Tim Goodwin (collectively G and B Mining or appellants) from the district court's
September 28, 2015 order dismissing its 2015 lawsuit filed against Vernon Schemm,
Dixie Schemm, the Vernon D. Schemm Trust, the Dixie A. Schemm Trust, the Dale A.
Radiel Revocable Trust (Radiel Trust), the F. Ellen Pancake Revocable Inter Vivos Trust,
and the Bill E. Pancake Revocable Inter Vivos Trust (Pancake Trusts) (collectively the
Defendants) regarding a real estate dispute. Having considered the record on appeal, the
parties' briefs, and oral arguments, we conclude the district court's judgment dismissing
the lawsuit should be affirmed.
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FACTUAL AND PROCEDURAL BACKGROUND

In order to understand the basis for the district court's order of dismissal in this
2015 civil case, it is necessary to summarize earlier litigation involving the same parties
and the same real estate dispute that was filed in 2008.

1. The 2008 Petition

In February 2008, G and B Mining filed a lawsuit, 08-C-03 (2008 petition),
against the Defendants. This lawsuit asserted that in 1991 Dale and Joyce Radiel had
conveyed land in Wallace County to the Schemms while retaining a 50% mineral interest
"for a period of twenty (20) years [from and after October 21, 1991] or as long as there is
production." Sixteen years later, in 2007, the Radiel Trust conveyed half of its mineral
interest to G and B Mining by means of a mineral deed. In sum, as of 2008, the Schemms
owned all of the surface rights and one-half of the mineral rights to the land. Based on the
mineral deed, G and B Mining claimed ownership to one-fourth of the minerals on the
Schemms' land.

The lawsuit consisted of three counts. Count I sought to recover possession of the
mineral interest and/or ejectment of the Schemms to allow G and B Mining to "fully
possess, enjoy, mine, explore and produce minerals . . . with all lost rents and profits . . .
and/or damages and costs." Additionally, G and B Mining sought to "quiet title in
themselves of their interest as set forth hereinabove and to effect a partition of the
realty . . . pursuant to K.S.A. 60-1002 [and K.S.A. 60-1003]." (Emphasis added.)
Additionally included in Count I, G and B Mining sought an order granting a right-of-
way or easement to permit travel upon real property owned by the Pancake Trusts for the
purpose of accessing the Schemms' property.

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Count II of the lawsuit sought injunctive relief to immediately restrain and
permanently enjoin the Schemms from "acts of waste" on the real property. In particular,
G and B Mining alleged the Schemms had destroyed

"unique, rare, valuable minerals including crystallized rose quartz formations and geodes,
which are precious mineral formations of multiple delicate gypsum, quartz and/or
amethyst crystals, many of which are worth tens of thousands of dollars each, using
devices such as hammers or other similar tools, striking the outer stone/mineral shells or
surfaces of these geodes."

In order to prevent the claimed waste by the Schemms, G and B Mining sought a
permanent injunction and temporary restraining order.

Count III of the petition alleged defamation and tortious interference with
prospective contracts or business advantage. In particular, G and B Mining claimed the
Schemms had made false statements that G and B Mining was not fit "to explore for,
mine, extract and use minerals from real property" in Wallace County, the company had
"willfully destroyed geodes and other minerals" on the Schemms' real estate, and no one
in Wallace County should allow the company to engage in mining in the area.

In their answer, the Defendants generally denied G and B Mining's claims and
counterclaimed for trespass and an injunction to preclude the company from doing
business in Kansas. During the litigation, the Defendants contested G and B Mining's
claim that the land contained geodes. Instead, the Defendants asserted the land contained
septarian nodules. As described by the Defendants, these nodules are ball-like structures,
often enclosing shell fragments or other nuclei and composed of sandstone or clay
cemented by calcite or silica.

The Defendants argued that the terms of the mineral deed should be interpreted
narrowly to not include the nodules as minerals. Moreover, they argued that in Kansas
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minerals are defined using the "community knowledge test" which "would exclude as
minerals any substances which were not known to exist in the general vicinity at the time
of the conveyance" of the deed. The Defendants submitted records they claimed showed
oil and gas recovery in the general area but "[n]o where are there any transactions
involving zinc, zinc sulfide or septarians." Finally, the Defendants asserted that courts
interpreting the meaning of mineral interests "have limited the conveyance to exclude any
minerals which, during the extraction process, will require significant destruction of the
surface." According to the Schemms: "In this case, the zinc, zinc sulfide and septarians
are a part of the soil and are on the surface and within a few feet of the surface. Thus,
their removal would require the destruction of the surface."

In summary, because the Defendants claimed the septarian nodules were not
minerals as contemplated by the mineral deed, the Defendants asserted that G and B
Mining's lawsuit did not state a claim upon which relief could be granted.

On January 22, 2009, G and B Mining filed a one-page document which sought
partition of the mineral interests while asking the district court to delay ruling on the
other counts of the petition until a later time. G and B Mining asserted that regardless of
whether the minerals were considered personalty or realty, they were subject to partition.

On April 30, 2009, the Defendants responded to G and B Mining's filing by
seeking dismissal of the petition. At the outset, the Defendants stated that "[b]etween
K.S.A. 60-1003 and Witt v. Sheffer, 6 Kan. App. 2d 868, [636 P.2d 195 (1981),] the law
appears well settled that partition is an available remedy in this type of case." However,
the Schemms contended "the Court still needs to determine what . . . the term 'minerals'
means before determining whether partition is an appropriate remedy."

One year later, on April 14, 2010, the Defendants set the matter for a hearing. On
that date, the parties conducted a hearing by telephone conference which resulted in the
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district court ordering mediation. The order appointing a mediator was filed on July 2,
2010. Mediation was unsuccessful.

Over a year later, on September 29, 2011, G and B Mining filed a motion for
default judgment. The pleading alleged that the "terrain has been changed due to
disruption, digging or other disturbance, which has caused damage to the terrain in the
very area where many of the very valuable geodes are to be found on this property." As a
result, G and B Mining sought a default judgment due to the "destruction of evidence."
Alternatively, G and B Mining sought sanctions against the Defendants.

Seven months later, on April 23, 2012, the Defendants filed a response in
opposition to the motion, denying they caused any damage to the property but asserting
that any change in the land was due to "the function of natural erosion or natural usage of
the surface." Moreover, the Defendants reiterated their contention that "there are no
geodes on the property. Septarian concretions exist on the property." The record on
appeal does not indicate the district court ever ruled on this motion.

A pretrial conference was held on August 10, 2012. Prior to the hearing, G and B
Mining added additional claims in its pretrial questionnaire seeking money damages for
conversion, damage and destruction to minerals on the property, and trespass.

The journal entry memorializing the pretrial conference states in relevant part that
"the court advises the parties that . . . partition is the appropriate remedy in this matter.
However, issues need to be determined prior to a partition. The issues include the
ownership interest of the parties, and the nature and extent of the 'mineral interests.'" The
district court sought additional written submissions from the parties and set a hearing for
September 17, 2012. The record on appeal does not indicate whether this hearing
occurred and, if so, what rulings, if any, were made by the district court.

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Two years after the pretrial conference hearing, on August 4, 2014, the Defendants
filed a motion to dismiss the petition with prejudice. In particular, the Defendants cited
K.S.A. 60-241(b)(1) and alleged that G and B Mining had failed to prosecute its claims.
In support, the Defendants noted that the lawsuit was filed in February 2008, and the last
pleading filed in the case occurred in December 2012.

A hearing on the motion to dismiss took place on October 13, 2014. The record on
appeal does not contain a transcript of the hearing, but the district court filed an order of
dismissal after the hearing. The district court found: "The most recent Journal Entry from
August 10, 2012, indicates there is a mineral interest in the plaintiff'[s] of 25%. From that
Journal Entry it also appears than any appropriate remedy would be partition." The
district court concluded that "all claims of the plaintiff in this matter, except those for
partition are hereby dismissed with prejudice to the refiling thereof pursuant to K.S.A.
60-241(b)(1)." Of note, the district court dismissed G and B Mining's partition claim
without prejudice. The Defendants' counterclaims were dismissed with prejudice.

2. 2015 Petition

On April 13, 2015—within six months of the dismissal of the 2008 lawsuit—G
and B Mining filed a new lawsuit, 15-CV-01 (the 2015 lawsuit), against the same
defendants sued in 2008. The first 10 paragraphs of the 2015 petition substantially
mirrored the names and addresses of the parties listed in the 2008 petition. Count I of the
2015 petition (containing paragraphs 11 through 29) was nearly identical to the
paragraphs contained in Count I of the 2008 petition. Similarly, the 2015 petition sought
to quiet title, possession, ejectment and/or partition of realty, and recovery of lost rents,
profits, damages, and costs. Additionally, as before, G and B Mining sought an order
granting a right-of-way or easement to permit travel upon real property owned by the
Pancake Trusts for the purpose of accessing the Schemms' property.

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Count II of the 2015 petition (containing paragraphs 30 through 38) was a mirror
image of Count II in the 2008 petition in seeking a permanent injunction and temporary
restraining order to stop the Defendants from "acts of waste" on the real property
including destruction of geodes.

The 2015 petition invoked the so-called savings statute, K.S.A. 60-518, which G
and B Mining alleged permitted the refiling of Counts I and II within six months of the
dismissal of the 2008 petition. The 2015 petition did not replicate Count III of the 2008
petition alleging defamation and tortious interference with prospective contracts or
business advantage.

On August 14, 2015, the Defendants filed a motion to dismiss the 2015 petition for
failure to state a claim or, alternatively, for judgment on the pleadings. The Defendants
argued that the savings statute, K.S.A. 60-518, applied only to the claim for partition
since the other claims were dismissed with prejudice and the dismissal of those claims
was not appealed. In other words, the Defendants argued that all of the claims made in
Counts I and II in the 2015 petition, except the partition claim, were dismissed on the
merits in the 2008 petition and could not be refiled.

With regard to G and B Mining's partition claim, the Defendants contended that
any mineral rights claimed by G and B Mining were created pursuant to a mineral deed
dated October 21, 1991, which reserved an undivided one-half interest in all mineral
rights for a period of 20 years or as long as there was production. The Defendants argued
that G and B Mining's mineral interest expired on October 21, 2011, and it had made no
claim of any mineral production or operations during or after the expiration of the 20-
year mineral interest term.

In response to the motion to dismiss, G and B Mining filed a two-page pleading
which argued that it had a right to "receive [its] proper partitioned share of the
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personalty" of destroyed, damaged, or removed geodes. G and B Mining also asked the
district court to inventory the geodes severed from the land and partition them and award
damages for the "destruction of those portions of such personal property which the
Plaintiffs did have an ownership interest in at the time of the acts committed by the
Defendants of damage or destruction or carrying-away of such property." Finally, G and
B Mining asserted it was "frustrated in [its] attempt to obtain production from the
property, by actions of the Defendants." As a consequence, the Defendants were estopped
from claiming a "failure to fulfill the condition precedent" in the mineral deed.

On September 28, 2015, the district court heard arguments on the Defendants'
motion to dismiss. The motion was granted at the conclusion of the hearing with a journal
entry filed later.

On November 25, 2015, G and B Mining moved to alter or amend the district
court's judgment of dismissal, contending the district court "did not take into account that
the claim of the Plaintiffs' for damages involved personalty, which is governed by
different rules than realty." On March 28, 2016, the district court denied G and B
Mining's motion "for the reasons previously set forth in the record of the original hearing
on the Motion to Dismiss and in the Journal Entry thereof."

G and B Mining appeals.

ANALYSIS

G and B Mining appeals the district court's granting of the Defendants' motion to
dismiss the 2015 petition for failure to state a claim. Whether a district court erred by
granting a motion to dismiss for failure to state a claim is a question of law subject to
unlimited review. An appellate court views the well-pleaded facts in a light most
favorable to the plaintiff and assumes as true those facts and any inferences reasonably
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drawn from them. If those facts and inferences state any claim upon which relief can be
granted, then dismissal is improper. Cohen v. Battaglia, 296 Kan. 542, 545-46, 293 P.3d
752 (2013).

3. The District Court's Order of Dismissal of the 2015 Petition

At the hearing on the motion to dismiss, the district judge clearly stated the
reasons for his order of dismissal:

"Well, this case has been a little out of the ordinary from the start. And by this
case I am basically including it with the prior case, because I think it is the same case. I
just don't see any difference. We are filing the same thing, making the same arguments,
while we are trying to connect them to partition now, the arguments are essentially the
same.
"I don't know, some years ago I think there would be a record somewhere of me
indicating to counsel that this appeared to me if anything to be a partition case. That was
a long time ago. We proceeded on with all the other arguments about whether the geodes
were in the same condition, whether they were still there, whether they weren't still there,
what they were worth if they were still there, all that kind of thing. In any event, to make
a long story short, I agree with the defendant's motion to dismiss.
. . . .
"I just don't see there is anything new in this case. This is the same case. And the
fact that we are now trying to bring in these allegations under the guise of partition, that
just doesn't impress me, I guess. The 20-year statute or the 20-year period for the mineral
interest in this case, which was the basis for the entire case to begin with, that 20 years
has expired. The only thing which could save it would be if this case was considered still
pending, because the previous case the earlier case was dismissed. There is no question
about that and that wasn't appealed. So, as far as I am concerned, there is nothing left. I'm
going to grant the Motion to Dismiss of the defendants." (Emphases added.)


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Subsequently, the district court signed a journal entry of dismissal. In relevant part
it stated:

"1. Wallace County Case 15 CV 01 and Wallace County Case No 2008 CV 03
are the same case. They are the same arguments.
"2. All claims of the plaintiffs were determined on the merits in the prior case,
except as to that partition were determined in 2008 CV 03 against the plaintiffs.
"3. No appeal was taken from those determinations in 2008 CV 03.
"4. Because the determination of those claims was on the merits, K.S.A. 60-518
does not apply.
"5. As to the claims on partition, the court finds that the 20 year term of the
mineral interest contained in the deed set forth in the petition expired in October of 2011.
"6. The plaintiffs have not set forth any facts in either the petition in 2015 CV 01
nor the Response to the Motion to Dismiss or Motion for Judgment on the pleadings
which would indicate any defense against the expiration of that 20 year mineral term."
(Emphasis added.)

Based on the district court's findings that it articulated at the hearing and later
memorialized in the journal entry of dismissal, we understand the district court's order of
dismissal to address two separate aspects of the 2015 petition.

First, the district court confirmed that it had previously dismissed with prejudice
all of G and B Mining's claims in the 2008 petition, except the claim seeking partition of
real property, which was dismissed without prejudice. Of particular importance, the
dismissed claims would have included those relating to lost rents and profits and damages
for damage, destruction, or conversion of the geodes. In addition, the dismissal would
have included G and B Mining's request for injunctive relief to immediately restrain and
permanently enjoin the Schemms from "acts of waste" on the real property which G and
B Mining alleged involved damaging or destroying geodes. Finally, the dismissal with
prejudice included claims for defamation and tortious interference with prospective
contracts or business advantage—claims which were not refiled in the 2015 petition.
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As to these nonpartition claims, the district court had previously ruled that because
the dismissal of the 2008 petition was on the merits and with prejudice, the district court's
judgment in the 2008 case was final. This ruling is consistent with K.S.A. 2016 Supp. 60-
241(b)(1), which provides:

"If the plaintiff fails to prosecute or to comply with this chapter or a court order,
a defendant may move to dismiss the action or any claim against it. Unless the dismissal
order states otherwise, a dismissal under this paragraph and any dismissal not under this
section, except one for lack of jurisdiction, improper venue or failure to join a party under
K.S.A. 60-219, and amendments thereto, operates as an adjudication on the merits."

Additionally, in dismissing the 2015 petition, the district court held that these
claims could not be refiled under the Kansas savings statute, K.S.A. 60-518. That statute
provides that "[i]f any action be commenced within due time, and the plaintiff fail[s] in
such action otherwise than upon the merits, and the time limited for the same shall have
expired, the plaintiff . . . may commence a new action within six (6) months after such
failure." (Emphasis added.) K.S.A. 60-518. Given the plain language of K.S.A. 2016
Supp. 60-241(b)(1) and K.S.A. 60-518, we find no error in the district court's legal
conclusion.

Moreover, the doctrine of res judicata also precluded the refiling of the non-
partition claims in the 2015 petition. Res judicata prevents relitigation when the
following conditions occur: "'(1) identity in the thing sued for, (2) identity of the cause of
action, (3) identity of persons and parties to the action, and (4) identity in the quality of
persons for or against whom claim is made.' [Citations omitted.]" Waterview Resolution
Corp. v. Allen, 274 Kan. 1016, 1023, 58 P.3d 1284 (2002). With regard to the non-
partition claims refiled in 2015, all four conditions were present in both the 2008 and
2015 litigation. Consequently, we find no error in the district court's conclusion that the
nonpartition claims refiled in 2015 should be dismissed.

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Second, as to the partition of real estate claim first sought in the 2008 petition
which was dismissed without prejudice and later refiled in the 2015 petition, the district
court ruled that the 20-year mineral interest term contained in the deed expired in October
2011 prior to the filing of the 2015 petition. Additionally, the district court noted that G
and B Mining did not set forth any facts in the 2015 petition or related pleadings to show
a defense to the expiration of the 20-year mineral interest term.

Once again, the district court's conclusion is on firm legal ground. Kansas law
provides that courts will not extend the term of a mineral deed or revive rights which the
parties themselves have definitely fixed by their contract. Wagner v. Sunray Mid-
Continent Oil Co., 182 Kan. 81, Syl. ¶ 1, 318 P.2d 1039 (1957).

Having summarized the key legal and factual findings made by the district court in
dismissing the 2015 petition, we next consider G and B Mining's appeal of the adverse
judgment. Preliminarily, we review whether the appellants are procedurally barred from
appealing this matter due to noncompliance with our appellate rules.

4. Appellants' Noncompliance with Rules of Appellate Procedure

We conclude the appellants' brief is in substantial noncompliance with our Rules
of Appellate Procedure. Supreme Court Rule 6.02(a)(5) (2017 Kan. S. Ct. R. 34-35)
provides:

"An appellant's brief must contain the following:
. . . .
"(5) The arguments and authorities relied on, separated by issue if there is more
than one. Each issue must begin with citation to the appropriate standard of appellate
review and a pinpoint reference to the location in the record on appeal where the issue
was raised and ruled on."

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First, G and B Mining raises five issues on appeal. In each issue, the appellants
reference various paragraphs from the 2015 petition and then state that the district court's
ruling on the issue was made at volume 1, page 30 of the record on appeal with
references to several numbered paragraphs. Yet, this record citation is obviously incorrect
because at volume 1, page 30 is found several numbered paragraphs relating to the
defendants' motion to dismiss, not any ruling made by the district court. Inexplicably, no
correct record reference is provided by the appellants where the district court ruled on the
five issues G and B Mining raises on appeal. Moreover, upon our review of the record on
appeal, we are unsure regarding whether the district court ever ruled on the five issues the
appellants ask us to consider. This is a significant deviation from our appellate rules
because it frustrates our appellate review.

Second, it is fundamental that an appellants' brief must contain arguments and
authorities which the appellants are relying on to show the district court's error. G and B
Mining's brief consists of only six pages of argument and authorities. Apart from
citations relating to the standard of review for a motion to dismiss, there are few legal
authorities cited with scant argument. For example, the legal argument in Issue II relating
to "[t]he destruction of personal property subject to partition gives rise to a claim for
money damages" consists of two sentences. The third issue relating to "[t]he destruction
of personal property subject to partition may be remedied by the court's exercise of its
equitable power to apportion the property via partition and its legal power to grant money
damages via a tort jury trial" consist of two sentences. The arguments presented in the
fourth and fifth issues consist of one and three sentences respectively. In short, the
appellants' brief is wholly inadequate to inform us of G and B Mining's legal arguments
and supporting authority.

G and B Mining's failure to comply with our appellate rules is fatal to its appeal. It
is well known that an issue not briefed by the appellant is deemed waived or abandoned.
Superior Boiler Works, Inc. v. Kimball, 292 Kan. 885, 889, 259 P.3d 676 (2011).
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Similarly, a point raised incidentally in a brief and not argued therein is also deemed
abandoned. Friedman v. Kansas State Bd. of Healing Arts, 296 Kan. 636, 645, 294 P.3d
287 (2013). The appellants have wholly failed to comply with our essential appellate
rules. For this reason, we hold the issues on appeal have been waived or abandoned.

5. Appellants' Failure to Appeal the Adverse District Court Judgment

Having previously summarized the key legal and factual findings made by the
district court in its dismissal order, we next consider another fatal flaw in G and B
Mining's appeal. The appeal is noteworthy for its failure to address the two grounds upon
which the district court ruled that dismissal of the 2015 petition was proper. With regard
to the nonpartition claims, the appellants do not contest or present legal authority
showing error in the district court's conclusion that G and B Mining was precluded under
the savings statute from refiling in 2015 those claims in the 2008 petition that were
dismissed with prejudice on the merits and then not appealed.

Moreover, with regard to the partition claim, G and B Mining does not mention or
contest the district court's determination that the 20-year mineral interest term in the deed
expired prior to the filing of the 2015 petition. In sum, on appeal the appellants do not
provide legal authority or argument showing how the district court erred in dismissing the
2015 petition.

This omission is consequential:

"It always has been the rule that a presumption of validity attaches to a judgment
of the district court until the contrary is shown. Error is never presumed, and when an
appellant brings a case to this court the burden is upon him to make it affirmatively
appear that the judgment below is erroneous and that his substantial rights have been
prejudicially affected thereby. If he fails in sustaining such burden the judgment must be
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affirmed." Phillips v. Fisher, 205 Kan. 559, 560, 470 P.2d 761 (1970) (citing McClelland
v. Barrett, 193 Kan. 203, 392 P.2d 951 [1964]).

Since G and B Mining has not even addressed the grounds for the district court's
order of dismissal—let alone shown error—the judgment is presumed valid and should be
affirmed. See National Bank of Andover v. Kansas Bankers Surety Co., 290 Kan. 247,
280, 225 P.3d 707 (2010). Upon our reading of the appellants' brief we are persuaded that
the issues raised therein fail to challenge the validity of either of the district court's
grounds for dismissal. Accordingly, on this basis alone the appeal fails.

Affirmed.