I own a share of a mineral tract and I have been included in (or threatened with) a partition suit. What should I do? A West Virginia Supreme Court case stops mineral partition suits. Use it!

**Update to this page: April 2, 2020**

If you are sued for partition of your interest in a mineral tract, or if you are just threatened with such a lawsuit to try to get you to sign a lease or to sign a lease with terms that you do not want, do not be alarmed.  You should know that the West Virginia Supreme Court has made a decision which we believe says that minerals are not subject to partition. Read on.

Also see: WVSORO Sample Answer to a Partition Suit

BACKGROUND

It used to be that the typical partition suit happened when several siblings inherited a farm and could not decide how to divide it up or sell it.  So one heir would file a partition suit. West Virginia’s partition statutes are ancient, complicated and confusing. They need to be replaced and we are working on that, but it has not happened so far.  Under those current laws, in essence, if the farm acreage could be divided up “in kind” then each sibling would get some of the acreage. Or it could be that one sibling would end up with all the acreage allotted to them, but have to buy out the others.  Or a real possibility, if the acreage could not be divided up in kind, was that the farm could be sold on the courthouse steps and the money from the sale would be divided up — and no sibling would end up with any actual acreage.

More recently when the horizontal shale tsunami first hit West Virginia, oil and gas drillers were using partition suits in a different situation.  Why? If a tract of mineral land is owned by several family members who have not divided it up in kind, then every family member has to sign a lease before the driller can drill anywhere into the tract of mineral land.  Often the drillers could get leases from some family members who shared in the ownership, but not all. In order to squeeze the un-leased family members into signing a lease (or into signing a lease with drillers’ terms the holdouts did not like) the driller would threaten a partition suit.  If the holdout owner still would not sign, i.e. if the threat did not work, then the driller bought the interest of one willing family member and then the driller sued the rest for partition. Since it is everyone’s property, even those who still own an interest in the land but have signed leases also have to be included in the law suits.  

So when the horizontal shale tsunami first hit there were lots and lots of partition suits filed, or at least threatened to be filed.  But then in 2018 the Legislature passed a “cotenancy” statute. It said that if the driller was able to get the owners of 75% of the interests in a mineral tract to sign leases, then the driller could go ahead and drill — and the other 25% would be deemed to have signed leases with some of the best provisions in the signed 75% of leases.  (If you are in this situation you should read our pages on the cotenancy statute. 

It is a lot of reading but it is important.  If you have trouble understanding all of this you should hire a lawyer.  You may be able to pay the lawyer out of the bonus money you get at signing if you decide to do a lease.  We have a page listing lawyers who do this work. This is important stuff regarding lots of money.  What you do and do not do, and sign and do not sign, will affect you and your family, perhaps for generations.  The royalty from each acre of Marcellus is worth, over time, $12,000 an acre — and probably more. So slow down and take this seriously and we recommend getting a lawyer.

The passage of the cotenancy law reduced the driller’s needs to file, or threaten to file, partition suits.  If they got 75% signed up, they did not need to because they could go ahead and drill. However, partition threats are still being made if the driller cannot get to 75%  leased or if the driller thinks it would be cheaper to bring the suit than to pay the 25% holdouts the royalty rates etc. in the leases signed for the 75%. 

It is hard to put good advice on a website that will be the best for everyone to do in this situation 1) because people and what they want are so different, and 2) because the division of ownership is different in most cases, 3), because the location of the land is different and that is important, and 4) because different judges in different counties deal with partition suits differently.  For example, you could just give up and sign the lease they want — particularly if it is for a very small share it may not be worth further hassle. You can let them sue for partition and fight the suit to conclusion. You can settle, hopefully getting a better lease than they first offered, and you can do this at any point along the way before the suit is filed or after it is filed and before it reaches its end.  Some people who are opposed to any “fracking” have signed a lease and donated the money to a surface owner or environmental cause. Some of those folks have even just donated their interest to WVSORO and let us deal with it and keep the benefits.

The good news is that the West Virginia Supreme Court has decided a case that holds, we say, that mineral tracts cannot be partitioned at all — that the partition suits have to be dismissed!  The driller may disagree with our interpretation and it could be a court fight, but we think it is one that you could win easier than most court fights. That gives you a tremendous weapon to oppose the partition suit totally and stop the drilling, or to use the threat of this case being used to dismiss any partition suit to get an even better deal before you sign.

SUPREME COURT CASE BLOCKING MINERAL PARTITION

The Supreme Court case is Bowyer v. Wyckoff, Supreme Court of Appeals of West Virginia, January 26, 2017, 238 W.Va. 446, 796 S.E.2d 233.

This is the Court’s summary of the relevant parts of the argument for the partial owners (these would be the drillers in a suit against you) who wanted the partition to proceed:

Mr. Bowyer first argues that the circuit court erred by adopting an extra prerequisite factor for ordering a partition by sale that is not included in the list of three statutory elements therefore set forth in W. Va. Code § 37–4–3, and reiterated by this Court in Syllabus point 3 of Consolidated Gas Supply Corp. v. Riley, 161 W.Va. 782, 247 S.E.2d 712, which extra factor required there to be “an inability of the mineral owners to agree on how to develop the mineral estate.”

The Supreme court agreed that this extra factor the Circuit Court judge cited was not the law and was not a proper ground to deny partition.

However, the Supreme Court did not overturn the judge’s decision to deny partition, saying  

Because the Circuit Court, in addition to applying the improper fourth factor, also properly considered and applied the statutory elements for partition by allotment or by sale to deny [the party that would be the driller in a suit against you] relief, the circuit court’s order [dismissing the partition action] should be affirmed insofar as it did not solely base its decision on the improper fourth factor.

The circuit court’s second finding it relied upon in dismissing the partition suit, the one the Supreme Court ended up saying was justification for dismissing the suit, said, according to the Supreme Court:

The forced sale of oil and gas minerals precludes the owner the benefit of lease consideration [the signing bonus] and the prospect of production proceeds [royalties for gas and natural gas liquids], which represent the primary and perhaps the exclusive value which such ownership vests.

This finding was based on statutory language referred to by the Supreme Court that says:

[I]f the interests of one or more of those who are entitled to the subject, or its proceeds, will be promoted by a sale of the entire subject, or allotment of part and sale of the residue, and the interest of the other person or persons so entitled will not be prejudiced thereby, the court, . . . may order such sale, or such sale and allotment [emphasis added]. . .

So it seems that partition can be denied because the other parties, the ones being sued, would be prejudiced because it would turn their mineral interest that would have included not only a signing bonus but additional future royalty into only one-time money.  While earlier language in the decision talks about specific facts in a case, the holding of the court is that partition of mineral interest can be denied on the basis that it is a mineral interest that will yield future royalties in addition to signing bonus.

The following sentence follows what the court said above, and this language at first glance is a little confusing:

Therefore, the public interest will not be promoted by sale. 

It is not clear why the court said “public interest”.  The statutory language in W.Va. Code §37-4-3 cited above refers not to “public interest” but to other “person or persons”.  But WVSORO takes that position that “person or persons” is what the Supreme Court meant. “Persons” is plural what the court was getting at when it said “pubic”.  The term “public” does not appear anywhere else in the decision nor can it be found in the partition statutes. So “public” seems to mean “other person or persons”. 

So it is the position WVSORO that if a partition suit is brought, an answer can be filed by a person who does not want to sign a lease and the partition suit will have to be dismissed.  A partial mineral owner who does not want to sign a lease at all can just say “no”. Or they can just say “no” and use that as bargaining leverage to get a better lease. And they can represent themselves in doing that if they want to, but having a lawyer would be better.  

Whatever you do it really is a good idea to see a knowledgeable lawyer about this complicated situation.  We have some listed on our website.   If you are a member of West Virginia Surface Owners Rights organization (you can join right now — we will trust the check is in the mail), a lawyer for us can give you 5 or 10 minutes of advice for free to get you started.