Supreme Court Rules on Surface Ownership

Supreme Court Rules on Surface Ownership

Recently, the West Virginia Supreme Court of Appeals clarified what it means to convey the “surface” of a piece of real property after nearly 100 years of developments in this area of West Virginia law. In its June 13, 2013 opinion, Faith United Methodist Church and Cemetery of Terra Alta, West Virginia v. Marvin D. Morgan, 2013 WL 2920012, the Supreme Court expressly overruled prior law and defined the word “surface,” when used in a deed or other instrument of conveyance, to mean, generally, “the exposed area of land, improvements on the land, and any part of the underground actually used by a surface owner as an adjunct to surface use (for example, medium for the roots of growing plants, groundwater, water wells, roads, basements, or construction footings).” 
In doing so, the Court approaches interpretation of many West Virginia deeds that convey the “surface” of a tract or parcel of real property in such a way that may reduce confusion for many in West Virginia, including parties to oil and gas leases or owners of various mineral interests across the State.

Under the Court’s prior 1923 decision in Ramage v. South Penn Oil Co., 94 W.Va. 81, 118 S.E. 162 (1923), a 3 to 2 majority decision, West Virginia common law viewed the word “surface” in language of conveyance to be ambiguous and to carry no well-defined legal meaning. Accordingly, under the rubric of Ramage, a court was to look outside the four corners of the deed and other extrinsic evidence of the parties’ intent (sometimes many years after the parties had died) to determine whether a conveyance of the “surface of the land” included only that upper portion of the land in the common understanding of the word, such as, that part of the land to the depth of the ploughshare (see Williams v. South Penn Oil Co., 52 W.Va. 181, 43 S.E. 214 (1902)), or something more, such as in Ramage, where a conveyance of the “surface” was determined to include not only that upper portion of the land, but also all the coal and other minerals except for oil and gas which had previously been conveyed away.

In Faith United v. Morgan, the Supreme Court of Appeals of West Virginia examined Ramage head on and overruled it. Citing cases from other jurisdictions that have rejected the Ramage analysis, law review criticism, and its own reluctance to follow the Ramage holding in the past, the Court in Faith United concluded:
Ramage is not sound law because it violates two fundamental public policies. First, in drafting deeds or other instruments of conveyance, courts and practitioners want terms with definite meanings . . . . By assuming that the term “surface” has no concrete meaning, Ramage has made the drafting of deeds, wills and other instruments of conveyance much more complex. Second, courts want to reach a result which the parties intended, and therefore attempt to confine themselves to the four corners of the document to divine the parties’ intent. Ramage violates this fundamental policy by requiring a court to turn back the clock and go beyond the document to discern the parties’ intent from parol and other extrinsic evidence.

Accordingly, the Faith United court expressly overruled certain holdings of Ramage before addressing the question before it: Did a 1907 deed conveying a 1/7 interest in the “surface only” of a 225 acre parcel of land in Preston County, West Virginia, convey any oil and gas or other mineral interests in said parcel? Under Ramage, the Circuit Court of Preston County found that said conveyance was ambiguous and that, based on modern review of extrinsic evidence, the grantor of said deed conveyed all her interests in the land to the grantee. In applying its new definition of the word “surface” in language of conveyance, the Supreme Court reversed that ruling and remanded the case, and, in doing so, settled West Virginia law as to what it means to conveyance the “surface” of the land.

With the current boom in natural gas exploration and production in West Virginia, and continued coal production in the State, this decision will reach far beyond interpretation of the deed at issue in Faith United v. Morgan, and could made deed interpretation more predictable.