United States District Court, D. Arizona
Northern Improvement Company, et al., Plaintiffs/Counterdefendants,
United States of America, Defendant/Counterclaimant.
G. Campbell Senior United States District Judge.
Northern Improvement Company (“NIC”), Alfred Jay
Schritter, and Tomma Schritter filed this action against the
United States to quiet title to the sand and gravel in two
Arizona parcels of land pursuant to the Quiet Title Act, 28
U.S.C. § 2409a (“the QTA”). Doc. 12. The
government has filed motions to dismiss for lack of subject
matter jurisdiction and for summary judgment, and Plaintiffs
have cross-moved for summary judgment. Docs. 127, 134. The
motions are fully briefed, and no party has requested oral
argument. Docs. 128, 135, 136, 138, 140-43. The parties
submitted supplemental briefing at the Court's request.
Docs. 142, 143. For the following reasons, the Court finds
that subject matter jurisdiction exists and will grant
summary judgment for NIC as to the NIC Parcel and against the
Schritters as to the Schritter Parcel.
parties dispute the right of Plaintiffs NIC and the
Schritters to mine for and remove sand, gravel, and
decorative rock from two properties in Mohave County,
Arizona. Both properties were once owned in their entirety by
Santa Fe Pacific Railroad Company (“Santa Fe”).
Santa Fe obtained title to the properties through patents
issued by the United States in 1923 for the Schritter parcel
and 1924 for the NIC parcel. The patents issued to Santa Fe
did not contain a mineral reservation in the United States,
but the properties have since been severed into separately
owned surface and mineral estates. The government has
reacquired the surface estate in both properties, and NIC and
the Schritters have acquired the mineral estate.
dispute arose when Plaintiffs applied to the Bureau of Land
Management (“BLM”) for a permit to use the
surface of the properties to remove sand, gravel, and
decorative rock. The BLM refused to grant the permit based on
its determination that NIC and the Schritters did not own the
sand and gravel. Doc. 12 at 5-6. The Interior Board of Land
Appeals (“IBLA”) affirmed the BLM's decision,
but declined to decide ownership of the sand and gravel.
Id. Plaintiffs then filed this action to quiet title
in the sand and gravel on the two parcels.
case was assigned to another judge of this Court when it was
filed in 2012. It remained there, with the parties conducting
some discovery and seeking stays to complete an attempted
settlement, until it was reassigned to the undersigned judge
in 2018. Doc. 90. The parties have now completed additional
discovery and summary judgement briefing.
The Schritter Parcel.
1923, the government patented the surface and mineral estates
of certain federal lands, including the Schritter Parcel, to
Santa Fe. Id. at 1. In a 1950 warranty
deed, Santa Fe conveyed the surface estate in some of these
lands, including the Schritter Parcel, to George F. Getz Jr.
Id. at 2. This order will refer to this as the Getz
Deed. The Getz Deed included two provisions by which Santa Fe
reserved the mineral estate and other rights. The parties
refer to the first provision as the Schritter Mineral
Reservation and to the second as the Schritter Railroad
Reservation. See Id. at 2-3.
1988, as part of a land exchange, the government reacquired
various lands from a successor in interest to Getz, including
the same interest in the Schritter Parcel that Getz had
received from Santa Fe in the Getz Deed. Id. at 3.
This order will refer to the deed in this 1988 transaction as
the West Wing Deed. The West Wing Deed excepted “all
oil, gas, coal and minerals, as reserved” in the Getz
Deed. Id. Thus, the 1988 conveyance of the Schritter
Parcel to the government was subject to Santa Fe's
reservations in the Schritter Mineral Reservation and the
Schritter Railroad Reservation.
October 2003 quitclaim deed, Santa Fe conveyed to the
Schritters its “right, title and interest, if any, in
and to decorative rock, sand, and gravel” in the
Schritter Parcel. Id. In a March 2004 quitclaim
deed, Santa Fe conveyed to the Schritters “all Santa
Fe's right, title and interest, if any” in the
Schritter Parcel. Id.
The NIC Parcel.
1924, the government patented its interest in certain federal
lands, including the NIC Parcel, to Santa Fe. Id. In
a 1938 Indenture, Santa Fe conveyed the surface estate in
these lands, including the NIC Parcel, to Willie Wall.
Id. at 4. This order will refer to this deed as the
Wall Deed. The Wall Deed also included two provisions by
which Santa Fe reserved the mineral estate and other rights.
The parties refer to these provisions as the NIC Mineral
Reservation and the NIC Railroad Reservation.
parcel was also part of the 1988 West Wing Deed. In that
deed, the government reacquired from a successor in interest
to Wall the surface estate in the NIC Parcel that had been
conveyed to Wall. Id. at 5. The West Wing Deed
excepted “all oil, gas, coal and minerals, as reserved
in” the Wall Deed with respect to the NIC Parcel.
Id. Thus, the 1988 conveyance of the NIC Parcel to
the government was subject to Santa Fe's reservations in
the NIC Mineral Reservation and the NIC Railroad Reservation.
2002, Santa Fe quitclaimed to Tri-R Construction, Inc.
(“Tri-R”) “all of Santa Fe Pacific Railroad
Company's right, title and interest, if any, in and to
sand, gravel and decorative rock located within 100 feet of
the surface” of land, including the NIC Parcel.
Id. at 5. Tri-R quitclaimed that same interest in
the NIC Parcel to NIC in 2004. Id.
parties agree that no relevant differences exist between the
NIC and Schritter Mineral Reservations, which this order will
refer to collectively as the Mineral Reservations.
Id. at 4. The parties also agree that no relevant
differences exist between the NIC and Schritter Railroad
Reservations, which this order will refer to collectively as
the Railroad Reservations. Id. at 5. Because the
reservations are substantially the same, the Court will refer
only to the Getz Deed language for purposes of this order.
Getz Deed, Santa Fe was the grantor, Getz was the grantee.
The deed included the following Mineral Reservation:
Grantor expressly reserves and excepts all oil, gas, coal
and minerals whatsoever, already found or which may hereafter
be found, upon or under said lands, with the right to
prospect for, mine, and remove the same and to use so
much of the surface of said lands, as shall be necessary and
convenient for shafts, wells, tanks, pipe lines, rights of
way, railroad tracks, storage purposes and other and
different structures and purposes necessary and convenient
for the digging, drilling, and working of any mines or wells
which may be operated on said lands. Grantor or its
successors and assigns, will pay to Grantee, or [the]
successors or assigns of grantee, a fixed price per acre for
the surface of all lands appropriated under this exception
and reservation, which price shall be equal to the average
price per acre paid for all the lands above described,
together with the fair market value of the buildings and
permanent improvements, if any, on the land the surface of
which is so appropriated. If the parties cannot agree on such
fair value it shall be fixed by three appraisers, of whom
each party shall appoint one and the two so appointed shall
appoint the third.
Doc. 126 at 2 (emphasis added). The Getz Deed also included
the following Railroad Reservation:
This conveyance is made subject to and upon the condition
that in the event that Grantor, or its successors or assigns,
or The Atchison, Topeka and Santa Fe Railway Company, or its
successors or assigns, or any railway company at least a
majority of whose stock it owns, may at any time hereafter
desire to construct across the premises hereinabove
described, any railroad tracks, telegraph and telephone
lines, or other electric wire lines, oil or water pipe lines,
roadways, ditches, flumes or aqueducts, or to operate on
said premises gravel and ballast pits and quarries and take
material therefrom for railroad purposes, the right of
way for any such tracks, telegraph, telephone or other
electric wire lines, pipelines, roadways, ditches, flumes and
aqueducts, of sufficient width for the proper protection,
maintenance and operation thereof, and the land necessary
and convenient for the operation of such gravel and ballast
pits and quarries and the taking of material therefrom for
railroad purposes, may be appropriated by any such
Company desiring to construct such tracks, wire lines,
pipelines, roadways, ditches, flumes or aqueducts, or to
operate such gravel and ballast pits and quarries, upon
such Company paying or offering to pay Grantee, or the legal
representatives, heirs, successors or assigns of Grantee, a
fixed price per acre for all the land above described,
together with the fair value of all buildings and permanent
improvements constructed upon the land so appropriated; and
Grantee, or their legal representatives, heirs, successors or
assigns or Grantee, will convey to such Company such
appropriated right of way upon demand and tender of payment
Id. at 2-3 (emphasis added).
Subject Matter Jurisdiction.
sued to quiet title in the Schritter and NIC Parcels on
January 18, 2012. Doc. 1. The government argues that this
action is untimely under the QTA's 12-year statute of
limitations because Plaintiffs' predecessors in interest
knew or should have known before January 18, 2000, that the
government claimed an interest in the sand and gravel on the
two parcels. Doc. 127 at 2-8. The government does not
substantially challenge the truth of facts alleged in
Plaintiffs' complaint. The Court therefore will treat
this as a facial attack under Rule 12(b)(1) and accept the
alleged facts as true. Safe Air for Everyone v.
Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).
The Quiet Title Act.
Waiver of Sovereign Immunity Under §2409a(a).
2409a(a) of the QTA “waives the federal
government's sovereign immunity to certain civil actions
by plaintiffs seeking to quiet title to [real] property in
which the United States claims an interest.”
Kingman Reef Atoll Invs., LLC v. United States, 541
F.3d 1189, 1195 (9th Cir. 2008) (citing 28 U.S.C. §
2409a). “[T]wo conditions must exist before a district
court can exercise jurisdiction over an action under the
Quiet Title Act: 1) the United States must claim an interest
in the property at issue; and 2) there must be a disputed
title to real property.” Leisnoi, Inc. v. United
States, 267 F.3d 1019, 1022 (9th Cir. 2001); see
also Robinson v. United States, 586 F.3d 683, 686 (9th
Cir. 2009) (same).
government claims an interest in the surface estates of the
Schritter and NIC Parcels, and the parties dispute whether
the surface estates include title to the sand and gravel. The
QTA's two jurisdictional requirements are satisfied, and
the government does not argue otherwise. See Doc.
127 at 1-3.
Statute of Limitations under § 2409a(g).
with these two conditions satisfied, the Court lacks subject
matter jurisdiction if Plaintiffs' claims are untimely
under § 2409a(g). Kingman Reef, 541 F.3d at
1196. That section bars a civil action under § 2409a(a)
unless “it is commenced within twelve years of the date
upon which it accrued.” 28 U.S.C. § 2409a(g).
government argues that because the statute of limitations is
jurisdictional, Plaintiffs bear the burden of proving that
their claims are timely. Doc. 138 at 2. The Ninth Circuit law
on this issue is not clear. The Court of Appeals did hold in
Kingman Reef that the QTA statute of limitations is
jurisdictional, and a plaintiff typically has the burden of
establishing subject matter jurisdiction. 541 F.3d at
1195-96. But Kingman Reef expressly declined to
decide “who bears the burden of proving timeliness for
purposes of the QTA.” Id. at
1197. Another the Ninth Circuit case has
suggested that the QTA statute of limitations is not
jurisdictional and that plaintiffs need not show timely
filing. See Leisnoi, 267 F.3d at 1025 n.3. The Court
need not attempt to resolve this confusion because this case
is not time barred regardless of who bears the burden of
12-year limitations period begins running “on the date
the plaintiff or his predecessor in interest knew or
should have known of the claim of the United
States.” 28 U.S.C. § 2409a(g) (emphasis
added). “The statutory term ‘should have
known' imparts a test of reasonableness. The question is
whether the United States' actions would have
alerted a reasonable landowner that the government claimed an
interest in the land.” Shultz v. Dep't of Army,
U.S., 886 F.2d 1157, 1160 (9th Cir. 1989) (emphasis
Circuit cases have announced inconsistent standards for
determining when a claim has accrued. Rather than attempt to sort
through and reconcile these inconsistencies, the Court will
rely on the language of the statute and the basic test
articulated in Schultz: “whether the United
States' actions would have alerted a reasonable landowner
that the government claimed an interest in the land.”
Shultz, 886 F.2d at 1160. This statement comports
with the issue posed by the government in this case:
“whether Plaintiffs, or their predecessor in interest,
Santa Fe, knew or should have known that the United States
claimed an interest in the sand and gravel on or in the NIC
and Schritter Parcels prior to January 18, 2000.” Doc.
127 at 4. Applying this standard, the Court concludes that
Plaintiffs' cause of action did not accrue more than 12
years before this case was filed.
Accrual of Plaintiffs' Claims. 1. West Wing
government first argues that Plaintiffs' successor in
interest, Santa Fe, had notice of the government's claim
from the recording of the West Wing Deed in 1988. The
government asserts that the deed specifically referred to the
Getz and Wall Deeds, which in turn contain the Mineral and
Railroad Reservations that determine title to the sand and
gravel. Doc. 127 at 4-5. Although it is true that recording
of the West Wing Deed would give constructive notice of the
deed to Santa Fe, the Court cannot conclude that knowledge of
the deed would provide actual or constructive notice that the
government claimed an interest in the sand and gravel on the
Schritter and NIC parcels. Santa Fe expressly reserved a
mineral estate in both parcels, which eventually was
transferred to Plaintiffs. Whether the Railroad Reservation
in the Getz and Wall Deeds reserved the right to sand and
gravel is the very issue disputed in this case. The parties
read the Railroad Reservation quite differently. The Court
sees no basis for finding that Santa Fe - from mere recording
of the West Wing Deed - knew or should have known that the
government read the Railroad Reservation in the Getz and Wall
deeds as giving it the right to sand and gravel.
recording of the West Wing Deed clearly provided notice that
the government had acquired the surface interest in the
Schritter and NIC parcels, that is not the issue in this
case. The issue is whether Santa Fe reasonably knew that the
government claimed an interest in the subsurface sand and
gravel. Recording of the deed did not reveal such a claim
because a reserved mineral interest like Santa Fe's can
coexist with a surface interest like the government's.
The government's general acquisition of the surface