Roberts v. Unimin

United States District Court for the Eastern District of Arkansas · 2016 · Property

Propertymineral leaseshabendum clausesmineral leasehabendum clausethereafter clausetenancy at willestate for years determinable

Facts

The parties' dispute concerned a 1961 mineral lease covering land now owned by Kathy Roberts and Karen McShane, with Unimin as successor lessee. The lease ran from March 1, 1961, through January 31, 2007, and then continued 'as long thereafter as' mining or mining operations were prosecuted on the property and/or siliceous materials were hauled, transported over, across, or under the property. The lessors argued that after January 31, 2007, the lease term became indefinite and therefore terminable at will under Arkansas law. Unimin contended that the lease remained in effect until the specified operations ceased.

Issue

Whether a mineral lease that provides for a fixed initial term and then continues 'as long thereafter as' mining operations or hauling continue creates an indefinite term terminable at will under Arkansas law. Also, whether the lessors' unjust enrichment claim could survive if the lease was not terminable at will.

Rule

Under the rule this court predicted Arkansas would adopt, a lease that begins with a fixed term and then continues until the occurrence of a specified event creates a lease term terminable on that event, not a tenancy at will. When the terminating event is fully within the control of one party only, the lease is not a tenancy at will but an estate for years determinable.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Hot Springs, Arkansas, Lena Porter leased 200 acres to Red Bluff Minerals, LLC. The written lease stated that it would run from February 1, 2005, through January 31, 2020, and "as long thereafter as" the company continued quarrying quartz on the land or hauling quarried material across it.

After January 31, 2020, Porter argues the lease became terminable at will because no one can know when quarrying or hauling will stop. Which result is most consistent with the governing rule?

Explanation. A written mineral lease with a fixed primary term followed by a clause continuing the lease "as long thereafter as" specified mining-related operations continue does not become terminable at will merely because the ending date is unknown. Under the majority-rule approach adopted by the court, that structure creates an estate for years determinable, ending upon the specified event—cessation of the listed operations.