J. JONES, Justice.
Ida-Therm, LLC, appeals a summary judgment in favor of Bedrock Geothermal, LLC, holding that a reservation of "all the oil, gas, and minerals, in, on, or under the surface of [deeded] lands," in a 1946 warranty deed included the geothermal resources underlying the property. We reverse.
On March 19, 1946, Arthur J. Bell and his wife, Vinnie O. Bell, conveyed land in Bonneville County, Idaho (the Bell Property) via warranty deed (the Bell Deed) to C.C. Mann. The Bell Deed reserved to Arthur and Vinnie "all the oil, gas, and minerals, in, on, or under the surface" of the Bell Property. The individual Defendants in this suit are the successors of Arthur and Vinnie and the owners of the reserved oil, gas, and mineral rights. They allege that the reservation includes the rights to geothermal resources and, based on this contention, they have leased rights to the geothermal resources to Bedrock.
Plaintiffs Garry and Kalee Mann, Alan and Matilda Kolbet, and Matt Mann are C.C.
On August 4, 2010, the Plaintiffs brought this action in an attempt to clarify the scope of the oil, gas, and mineral reservation, and settle the ownership of the geothermal resources. Bedrock filed an answer and counterclaim on September 9, 2010, alleging that the Bell Deed reservation does include geothermal resources. It thus sought a declaratory judgment that Ida-Therm's lease was void and quieting title in favor of Bedrock.
On February 17, 2011, Bedrock moved for summary judgment and "ask[ed] the [district court] to rule on the dispositive issue of whether the mineral reservation in the Bell Deed includes geothermal resources." The district court did so in a May 26, 2011, Memorandum Decision and Order, where it held that the Bell Deed's mineral reservation had severed the mineral and surface estates, and that "the scope of [Bedrock's] mineral estate includes geothermal resources." Based on this, the court granted Bedrock's motion for summary judgment, and entered judgment for Bedrock on July 11, 2011. Ida-Therm timely appealed to this Court.
In reviewing grants of summary judgment, this Court uses the same standard as the district court. Cnty. Of Boise v. Idaho Cntys. Risk Mgmt. Program, Underwriters, 151 Idaho 901, 904, 265 P.3d 514, 517 (2011). Summary judgment must be granted "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). In determining whether a genuine issue of material fact exists and whether the prevailing party was entitled to judgment as a matter of law, this Court exercises free review. Doe v. City of Elk River, 144 Idaho 337, 338, 160 P.3d 1272, 1273 (2007).
When reviewing a district court's interpretation of a deed, the standard of review "depends on whether the instrument is ambiguous." C & G, Inc. v. Rule, 135 Idaho 763, 765, 25 P.3d 76, 78 (2001). Whether a deed is ambiguous is a question of law, over which we exercise free review. Id. "Interpretation of an ambiguous document presents a question of fact, and we will defer to the findings of the trial court so long as those findings are supported by substantial and competent evidence." Id. However, interpretation of an unambiguous document is a question of law, and a matter of free review. Id.
The district court determined that the Bell Deed's mineral reservation severed the mineral estate from the surface estate, and that geothermal resources were included in the scope of the mineral estate. It began by noting that, "[n]o party to this action asserts the Bell Deed is ambiguous. The Bell Deed was executed in 1946, and the parties agree there is no extrinsic evidence of the grantor's intent." The district court then reiterated that "[t]he parties agree it would be almost impossible to determine, based on extrinsic evidence, whether the grantor specifically intended to reserve geothermal resources." Accordingly, the district court concluded that it would be injudicious to conclude that "mineral" was ambiguous, and held that the term is unambiguous, and that its meaning and "the intent of the parties should be ascertained as a matter of law." The district
On appeal, Ida-Therm brought several challenges to the district court's grant of summary judgment. It first argued — though it cited no authority for the proposition — that the plain meaning of "mineral" does not include geothermal resources. It then contended, based on principles set forth in Stucki v. Parker, 108 Idaho 929, 703 P.2d 693 (1985), and other cases, that the Bells never intended to sever the mineral and surface estates. Ida-Therm further argued that the Geothermal Resources Act, I.C. § 42-4001, et seq., does not define geothermal resources as a mineral, and that this definition should control in the instant case.
Bedrock argues in response that Ida-Therm's plain meaning argument is unsubstantiated and begs the question. It further contends that the language in the Bell Deed evinced a general intent of the parties to sever the mineral and surface estates, and agreed with the district court that "mineral" should include geothermal resources "because such resources are functionally similar to other minerals[,] are not necessary to the use and enjoyment of the surface estate, and because a broad reading of `minerals' encourages title certainty." Bedrock asserts that the cases and statutes cited by Ida-Therm, though perhaps relevant to interpreting "geothermal" in other contexts, are simply inapplicable to this particular conveyance.
The sole issue for this Court is whether the district court, in finding that the reservation of minerals includes geothermal resources, correctly granted Bedrock's Motion for Summary Judgment. Because we find that "mineral" is ambiguous, and because ambiguous grants in deeds are construed against the grantor, we construe the grant in favor of Ida-Therm and reverse the district court.
Before this Court can review the district court's interpretation of the Bell Deed, we must first determine whether the deed's mineral reservation is ambiguous. In doing so, we ask whether the reservation is "reasonably subject to conflicting interpretation." C & G, 135 Idaho at 766, 25 P.3d at 76. If a deed contains inconsistencies that "throw [] a `shadow of ambiguity' over the instrument," it will "warrant the introduction of parol evidence as an aid to discovering the intention of the parties." Gardner v. Fliegel, 92 Idaho 767, 771, 450 P.2d 990, 994 (1969). For example, in Gardner, this Court examined a deed that conveyed a parcel of property, "[l]ess a strip of land 30 feet wide off the East side for roadway." Id. There, we found that the reservation was ambiguous, because "[o]n the one hand it expresses the intent to retain the fee to the strip in the grantor," but "[o]n the other hand it expresses the intent to create an easement for roadway over the strip in favor of the grantor." Id. Because these two reasonable interpretations were irreconcilable, this Court resorted to parol evidence to discern the intent of the parties. Id. Similarly, in Latham v. Garner, 105 Idaho 854, 855, 673 P.2d 1048, 1049 (1983), this court examined two grants of "easements and rights-of-way" to the defendants that were "exclusively for their use, and unto
Id. We thus held that the deed was "reasonably subject to conflicting interpretations and as such is ambiguous." Id.
As noted by both parties, and the district court, whether a mineral reservation is ambiguous is an issue that has divided courts. Compare Kinney v. Keith, 128 P.3d 297, 303 (Colo.App.2005) (holding that "`[m]inerals' is not capable of a definition of universal application; it is a general word susceptible of different meanings, and therefore, courts look to extraneous evidence to reveal the parties' intent, including the circumstances surrounding the reservation at issue."), with Spurlock v. Santa Fe Pac. R. Co., 143 Ariz. 469, 694 P.2d 299 (Ariz.App.1984) (finding the opposite, due predominantly to policy concerns). The rationale behind treating "mineral" as ambiguous was explained by the court in Spurlock:
694 P.2d at 307. The Spurlock court cited policy reasons for holding the term minerals to be unambiguous:
Id. at 307-308.
The district court decided to adopt the Spurlock approach and treated the mineral reservation here as unambiguous. This is because "[n]o party to this action asserts the Bell Deed is ambiguous," and that "[t]he Bell Deed was executed in 1946, and the parties agree there is no extrinsic evidence of the grantor's intent." Thus, the district court concluded:
While we recognize the concerns raised by the district court, we hold that "mineral," as used in the Bell Deed, is ambiguous. At the outset, we note that "mineral" has not been defined by Idaho case law. Moreover, it has no uniformly recognized legal meaning. Indeed, other courts making this determination have arrived at a variety of definitions of "mineral":
53A AM.JUR.2D Mines and Minerals § 2; see also Dyegard Land P'ship v. Hoover, 39 S.W.3d 300, 311 (Tex.App.2001) (holding that water is not a mineral because it is "not `rare' and `exceptional' in character," and is too closely related to the surface itself); Bambauer v. Menjoulet, 214 Cal.App.2d 871, 29 Cal.Rptr. 874, 876 (1963) (concluding that though gravel "belongs to the mineral kingdom," it was not a part of a mineral reservation because it lacked "a definite chemical composition by which it can be easily recognized"); N.M. & Ariz. Land Co. v. Elkins, 137 F.Supp. 767, 771 (D.N.M.1956) (holding that uranium and thorium, "being minerals within the scientific, geological and practical meanings, would certainly constitute minerals" in a reservation clause). Neither party here cited to a dictionary in making their case, but these definitions are just as varied:
BLACK'S LAW DICTIONARY 1015 (8th ed. 2004).
Applying the various definitions of "mineral" above leads to widely divergent results: geothermal resources have value separable from the soil, but it is unclear if they have an easily recognizable, definite chemical composition; they are not crystalline solids, yet are exploited for commercial value; and while some Idaho statutes recognize geothermal resources as minerals, others do not.
Despite the concerns raised by the Spurlock court, treating "mineral" as ambiguous here would not "unnecessarily encourage litigation." As Ida-Therm noted, as a practical matter, the lack of Idaho case law regarding mineral reservations suggests that these issues are rarely brought before our courts.
Having held that the mineral reservation in the Bell Deed is ambiguous, we turn now to interpreting its meaning. This Court interprets a deed's language as follows:
C & G, 135 Idaho at 766, 25 P.3d at 79 (citations omitted). We start with the face of the deed. The Bell Deed is a warranty deed conveying the described real property, together with all appurtenances, to C.C. Mann and his heirs and assigns. The deed specifically reserves "oil, gas, and minerals." Real property consists of lands and that which is affixed or appurtenant to lands. I.C. § 55-101. "Lands are the material of the earth, whatever may be the ingredients of which it is composed, whether soil, rock or other substance." I.C. § 55-101A. "A fee simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended." I.C. § 55-604. A deed reservation "should be not indefinite or uncertain.... [F]ailure of a grantor to clearly express the kind of rights retained on a conveyance may result in the entire fee title passing to the grantee, without reservation." C.J.S., Deeds, § 357. Further:
C.J.S., Deeds, § 360.
This Court defers to the district court's findings of fact when interpreting ambiguous documents. Here, the district court found that there were virtually no extrinsic facts that could illuminate the intent of the Bell Deed. It was executed in 1946, and "the parties agree there is no extrinsic evidence of the grantor's intent" — which would include whether the Bells intended to reserve geothermal resources for themselves, or grant them to C.C. Mann. Based on our review of the record, we accept these findings. Without any extrinsic evidence reflecting on the intent of the grantors, we turn to the rules of construction outlined above. That is, we construe the reservation narrowly and the grant broadly. In other words, we construe the grant in favor of C.C. Mann and his successors, and hold as a matter of law that the geothermal resources are appurtenant to the Bell Property. Thus, Ida-Therm is the
We reverse the district court's grant of summary judgment in favor of Bedrock, and hold as a matter of law that: 1) the Bell Deed's mineral reservation does not include geothermal resources; and 2) that C.C. Mann's successors are the owners of the geothermal resources. Costs on appeal are awarded to Ida-Therm.
Chief Justice BURDICK, and Justices EISMANN, W. JONES and HORTON concur.