## Facts

- Mineral interests in Mountrail County, North Dakota, were subject to an oil-and-gas lease executed in 2005.
- Oil and gas production began by November 2007 under the lease.
- In July 2008, Dennis Reese and Cheryl D. Reese conveyed their 12.5% mineral interest to Tia D. Reese-Young by quitclaim deed while reserving a life estate in the minerals for themselves.
- Dennis Reese died in September 2008, leaving Cheryl as the surviving life tenant; Tia held the remainder interest.
- In 2017, Cheryl sued to quiet title and sought a declaration that, as life tenant, she was entitled to all mineral proceeds during her lifetime.
- Tia counterclaimed, seeking a declaration that Cheryl was entitled to none of the royalties or bonus payments.

## Issues

1. Whether North Dakota recognizes the common-law open mines doctrine for a reserved life estate in minerals when an oil-and-gas lease and production predate the life estate.
2. Whether the surviving life tenant is entitled to receive royalties and bonus payments from preexisting production during the life tenancy, rather than holding them for the remainderman.

## Decision

- The North Dakota Supreme Court reversed the summary judgment for the remainderman and remanded.
- The Court recognized and applied the open mines doctrine as part of North Dakota common law.
- Because the lease was executed and production commenced before the life estate was created, the wells were “open” at the creation of the life estate.
- The life tenant was entitled to proceeds from oil-and-gas production during her lifetime, including royalties and bonus payments, and was not required to hold those proceeds in trust for the remainderman.

## Legal Principles

- Absent conflicting statute, North Dakota courts may apply relevant common-law property doctrines.
- Under the open mines doctrine, when mineral production is already underway at the creation of a life estate, the life tenant may continue receiving the income from that existing production even if depletion reduces the remainderman’s future interest.
- For oil and gas, “open” production includes circumstances where a lease was executed and production began before the life estate was created.
- A conveyance reserving a mineral life estate carries the usual incidents of that estate unless the instrument clearly excludes them.

## Conclusion

North Dakota adopted the open mines doctrine and held that a mineral life tenant may receive all royalties and bonus payments from oil-and-gas production that began before the life estate was created, without holding those proceeds for the remainderman, unless the creating instrument provides otherwise.


Reese v. Reese-Young, 2020 ND 35, 938 N.W.2d 405 (N.D. 2020)