PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2273
CLIFTON G. VALENTINE,
Plaintiff – Appellant,
v.
SUGAR ROCK, INC.; GERALD D. HALL; TERESA D. HALL,
Defendants – Appellees.
Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg. Irene M. Keeley,
District Judge. (1:10-cv-00193-IMK)
Argued: December 10, 2013 Decided: April 2, 2015
Before KING, GREGORY, and FLOYD, Circuit Judges.
Affirmed in part, vacated in part, and remanded by published
opinion. Judge King wrote the opinion, in which Judge Gregory
and Judge Floyd joined.
ARGUED: James Scott Huggins, THEISEN BROCK, LPA, Marietta, Ohio,
for Appellant. W. Henry Lawrence, IV, STEPTOE & JOHNSON PLLC,
Bridgeport, West Virginia, for Appellees. ON BRIEF: Daniel
Patrick Corcoran, THEISEN BROCK, LPA, Marietta, Ohio, for
Appellant. Amy Marie Smith, William J. O'Brien, STEPTOE &
JOHNSON PLLC, Bridgeport, West Virginia, for Appellees.
KING, Circuit Judge:
Clifton G. Valentine filed this diversity action on
November 8, 2010, in the Northern District of West Virginia,
alleging that he owns fractional working interests in four
mining partnerships, which in turn own six oil and gas wells on
four separate leaseholds located in Ritchie County. Named as
defendants in Valentine’s lawsuit are Sugar Rock, Inc., and two
of its officers, Gerald D. Hall and Teresa D. Hall
(collectively, “Sugar Rock”). Valentine demands an accounting
of the four partnerships and seeks compensatory and punitive
damages, together with reimbursement of his attorney fees and
litigation costs. On January 13, 2011, Sugar Rock answered the
complaint and filed a counterclaim for the cumulative operating
expenses attributable to Valentine’s asserted working interests
in the partnerships.
By its Memorandum Opinion and Order of September 18, 2012,
the district court awarded summary judgment to Sugar Rock and
dismissed Valentine’s case with prejudice. See Valentine v.
Sugar Rock, Inc., No. 1:10-cv-00193 (N.D. W. Va. Sept. 18,
2012), ECF No. 79. The court determined that, under West
Virginia law, a mining partnership requires each partner to be a
co-owner of the property that is the subject of the partnership.
Consequently, the court concluded that Valentine’s assertion of
interests in the four mining partnerships failed because he
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could not produce a writing that evidenced, in conformance with
the Statute of Frauds, his co-ownership of the subject leases or
wells.
In tandem with its award of summary judgment to Sugar Rock,
the court denied Valentine’s motion to voluntarily dismiss his
complaint without prejudice so that he could join a putative
class action, styled Washburn v. Sugar Rock, Inc., brought and
pursued in the Circuit Court of Ritchie County by nine other
purported owners of working interests in the four mining
partnerships. Thereafter, during the pendency of this appeal,
by Order of July 19, 2013, the state circuit court granted the
Washburn plaintiffs’ motion for partial summary judgment. See
Washburn v. Sugar Rock, Inc., No. 11-C-61 (W. Va. Cir. Ct.
Ritchie Cnty. July 19, 2013). In so ruling, the court declared
that the plaintiffs were partners in the mining partnerships and
owned the claimed working interests, notwithstanding that such
assertions could not be corroborated with a deed, will, or other
written instrument.
By our Order of Certification to the Supreme Court of
Appeals of West Virginia, we authorized Valentine to supplement
the record with the Washburn Order and related materials. See
Valentine v. Sugar Rock, Inc., 745 F.3d 729, 733 (4th Cir.
2014). We also recognized, inter alia, that the summary
judgment decisions of the federal district court in this case
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and the state circuit court in Washburn “manifest irreconcilable
outcomes though both courts have sought to apply the same
precepts of West Virginia law to the identical Ritchie County
properties.” Id. at 735 n.3. Availing ourselves of the
privilege afforded by the State of West Virginia through the
Uniform Certification of Questions of Law Act, see W. Va. Code
§§ 51-1A-1 to -13, we requested that the Supreme Court of
Appeals of West Virginia exercise its discretion to decide the
following question of state law:
Whether the proponent of his own working interest in a
mineral lease may prove his entitlement thereto and
enforce his rights thereunder by demonstrating his
inclusion within a mining partnership or partnership
in mining, without resort to proof that the lease
interest has been conveyed to him by deed or will or
otherwise in strict conformance with the Statute of
Frauds.
Valentine, 745 F.3d at 730. Additionally, we acknowledged that
the state supreme court “may reformulate the question,” id. at
735, and we affirmed the federal district court’s denial of
Valentine’s motion to voluntarily dismiss his complaint to
ensure that we did not ask the state supreme court for an
advisory opinion, id. at 733 n.2.
In a November 14, 2014 Opinion delivered by Justice M.E.
Ketchum, the Supreme Court of Appeals of West Virginia exercised
its discretion to accept and rephrase our certified question of
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law. See Valentine v. Sugar Rock, Inc., 766 S.E.2d 785 (W. Va.
2014). Justice Ketchum explained:
The certified question from the federal court
essentially has two parts. First, if a person
contends he/she owns an interest in a common-law
“mining partnership,” then does the Statute of Frauds
require the person to prove he/she is a partner of the
mining partnership through a deed, will, or other
written conveyance? We answer this part of the
question “yes.” A person can only be a partner in a
mining partnership if he/she is a co-owner of the
mineral interest with the other partners. Hence,
proving a partnership interest in the mining
partnership requires first proving the person has a
deed, will, or other written instrument showing
partial ownership of the mineral interest in the land.
The second part of the question is this: if a
partnership is a general partnership (as defined in
and governed by the West Virginia Revised Uniform
Partnership Act), and the partnership owns leases to
extract oil and gas from real property, then does the
Statute of Frauds require a person to produce a
written instrument to prove he/she is a partner in the
general partnership? We answer this part of the
question “no.” Under the Revised Uniform Partnership
Act, W. Va. Code § 47B-2-3 (1995), general partnership
property belongs solely to the partnership and not to
the partners. A person does not need a deed, will or
other written instrument to establish a partnership
stake in the general partnership, even if the general
partnership owns an interest in real property.
Id. at 787-88. Significantly, the Opinion contains a series of
original syllabus points concerning, on the one hand, common law
mining partnerships and, on the other hand, general partnerships
as defined in and governed by the West Virginia Revised Uniform
Partnership Act. See id. at 787; see also Syl. Pt. 1, State v.
McKinley, 764 S.E.2d 303, 306 (W. Va. 2014) (“Signed opinions
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containing original syllabus points have the highest
precedential value because the Court uses original syllabus
points to announce new points of law or to change established
patterns of practice by the Court.”).
In view of, and having hereby adopted, the November 14,
2014 Opinion of the Supreme Court of Appeals of West Virginia
reformulating and answering our certified question of law, we
vacate the judgment of the district court and remand for such
other and further proceedings as may be appropriate. Although
we concomitantly affirm the district court’s denial of
Valentine’s motion to voluntarily dismiss his complaint without
prejudice, we express no view as to how the court should rule on
remand if Valentine renews his effort to join the Washburn
action in the Circuit Court of Ritchie County.
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED
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