                                                                                             June 23 2015


                                          DA 14-0752
                                                                                           Case Number: DA 14-0752

                 IN THE SUPREME COURT OF THE STATE OF MONTANA

                                         2015 MT 166




TAGS REALTY, LLC,

              Plaintiff and Appellant,

         v.

MARK RUNKLE,

              Defendant and Appellee.




APPEAL FROM:           District Court of the First Judicial District,
                       In and For the County of Broadwater, Cause No. DV-2012-27
                       Honorable James P. Reynolds, Presiding Judge


COUNSEL OF RECORD:

               For Appellant:

                       Erik Coate, Karl Knuchel, Karl Knuchel, P.C.; Livingston, Montana

               For Appellee:

                       KD Feeback, Gough, Shanahan, Johnson & Waterman, PLLP;
                       Helena, Montana



                                                   Submitted on Briefs: May 20, 2015
                                                              Decided: June 23, 2015


Filed:

                       __________________________________________
                                         Clerk
Justice Michael E Wheat delivered the Opinion of the Court.

¶1     TAGS Realty, LLC (TAGS) appeals from the order of the Montana First Judicial

District Court, Broadwater County, resolving cross-motions for summary judgment in

favor of Mark Runkle (Runkle). We reverse.

                                         ISSUE

¶2     We review the following issue: Did the District Court err by granting summary

judgment in favor of Runkle?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶3     Runkle and TAGS are the locators of several adjacent and overlapping mining

claims in Broadwater County. Runkle purchased a patented lode claim called the “Black

Friday” claim in 2009. TAGS located an unpatented lode claim adjacent to the Black

Friday claim in 2010.      In 2011, Runkle located an unpatented placer claim that

overlapped both TAGS’s claim and the Black Friday claim.

¶4     This case concerns a pile of mining waste that was located on both Runkle’s and

TAGS’s claims. The waste pile overlapped the common border of TAGS’s claim and the

Black Friday claim and was located entirely within Runkle’s placer claim. According to

each of the parties, the origin of the mining waste is a disputed fact. Both parties agree,

however, that the mining waste contained gold deposits that were not economically

viable at the time they were removed from an historic mine. They also agree that the

deposits became viable by 2011. During 2011, Runkle removed and sold all of the waste.

It is undisputed that Runkle entered TAGS’s claim and removed the waste located within

TAGS’s claim to do so.

                                            2
¶5    TAGS initiated the present suit in response, claiming that Runkle was not entitled

to remove the waste material that was located on TAGS’s claim. TAGS filed a complaint

on May 7, 2012, asserting trespass and conversion causes of action.          Following

discovery, the parties stipulated that the case could be decided by summary judgment.

After considering cross-motions for summary judgment, considering briefs from each

party, and holding a hearing, the District Court granted summary judgment in favor of

Runkle and dismissed all of TAGS’s claims. TAGS appeals.

                              STANDARD OF REVIEW

¶6    We review a district court’s summary judgment ruling de novo, applying the same

rule, M. R. Civ. P. 56(c)(3), that a district court does when making a summary judgment

ruling. Beaverhead Cnty. v. Mont. Ass’n of Cntys. Joint Powers Ins. Auth., 2014 MT 267,

¶ 11, 376 Mont. 413, 335 P.3d 721. Summary judgment “should be rendered if the

pleadings, the discovery and disclosure materials on file, and any affidavits show that

there is no genuine issue as to any material fact and that the movant is entitled

to judgment as a matter of law.” M. R. Civ. P. 56(c)(3).

                                     DISCUSSION

¶7    Did the District Court err by granting summary judgment in favor of Runkle?

¶8    TAGS argues that the District Court’s order was unsupported by either the parties’

arguments or the evidence before the court. For this reason, TAGS contends that the

District Court should not have granted summary judgment and that this Court should

reverse the District Court’s order. We agree.



                                            3
¶9     The District Court granted summary judgment after deciding that TAGS had no

property interests upon which it could maintain its trespass or conversion claims. It

provided two reasons for this decision. First, it decided that TAGS had failed to discover

any valuable lode materials on its claim site and that TAGS’s claim was invalid as a

result. Second, it decided that TAGS’s lode claim, even if it was valid, did not give

TAGS any rights to the waste materials, which were placer deposits. We cannot affirm

the District Court decision based on either reason.

¶10    First, the District Court incorrectly decided on summary judgment that TAGS’s

lode claim was not supported by a lode discovery. It is well-established that a lode claim

is only valid if it is supported by the discovery of lode materials on the claim. 30 U.S.C.

§ 23; 43 C.F.R. § 3832.21; Silver Jet Mines v. Schwark, 210 Mont. 81, 86, 682 P.2d 708,

711-12 (1984); Boscarino v. Gibson, 207 Mont. 112, 114, 117, 672 P.2d 1119, 1121-22

(1983); Cole v. Ralph, 252 U.S. 286, 294-96, 40 S. Ct. 321, 325-26 (1920). And, we

have stated that “[w]hen a subsequent locator questions the existence of such a discovery,

it is incumbent on the original locator to prove that he has discovered sufficient

minerals.” Silver Jet Mines, 210 Mont. at 86, 682 P.2d at 711. Here, however, the

existence of a lode discovery on TAGS’s claim was never questioned.            Each party

implicitly presumed in their arguments to the District Court that TAGS’s lode claim was

valid, and no evidence or argument regarding discovery of a lode deposit on TAGS’s

claim was ever made part of the record. Without warning to either party the District

Court raised the issue and decided the case based on TAGS’s failure to discover lode

deposits on its claim. TAGS had no opportunity to prove that it had discovered sufficient
                                             4
materials, and the District Court should not have granted summary judgment without

allowing TAGS the opportunity to prove that there was a genuine issue of fact that it

discovered lode materials on the claim. Mill Creek Ltd. v. Lodge, 2010 MT 65, ¶ 18, 355

Mont. 478, 228 P.3d 1144; In re Estate of Marson, 2005 MT 222, ¶ 11, 328 Mont. 348,

120 P.3d 382 (reversing summary judgment where a party had no notice of or

opportunity to refute the District Court’s reasons for granting summary judgment against

it).

¶11    Runkle disagrees. He argues that TAGS admitted in its arguments to the District

Court that it had never discovered lode materials on its claim. To support this argument,

Runkle cites the following language from TAGS’s summary judgment motion: “TAGS

representatives used spray paint to mark a line on the ground clearly delineating the

location of the TAGS Lode boundary lines. . . . The purpose of the line was to indicate

TAGS’ ownership of the materials on the surface of the TAGS Lode.” Runkle also

quotes statements TAGS’s counsel made at a summary judgment hearing: “My client

came in years later, created an unpatented lode claim. And, therefore, when he made that

unpatented lode claim, he received ownership -- or exercised ownership over the

abandoned materials.” Based on these statements, Runkle argues that by attempting to

control the placer waste materials on its lode claim, TAGS implicitly admitted that no

lode materials existed on its claim. This is incorrect.

¶12    TAGS never stated or admitted that no lode materials existed or that it located its

lode claim on the basis of the placer waste materials. Instead, it stated that it located a

lode claim, that the mining waste was within the boundaries of that claim, and that it
                                              5
could exercise control over the mining waste by virtue of its valid lode claim. We do not

consider or rule on whether this reasoning is a correct interpretation of the law, but it is

apparent that it was not an admission that TAGS failed to discover lode materials on its

claim.

¶13      Additionally, Runkle suggests in this same argument that TAGS admitted the

invalidity of its claim when it admitted that the waste materials, which Runkle claims are

placer deposits, were within the boundaries of the lode claim. This is incorrect; the

existence of placer deposits within claim boundaries will not preclude location of the

claim as a lode claim. It is true that if they are not personalty, mine tailings are usually

treated as placer deposits. Foreman v. Beaverhead Cnty., 117 Mont. 557, 561, 161 P.2d

524, 525 (1945); Conway v. Fabian, 108 Mont. 287, 308, 89 P.2d 1022, 1030 (1939). It

is also true that discovery of a placer deposit will not support a lode claim and discovery

of a lode deposit will not support a placer claim. Cole, 252 U.S. at 295, 40 S. Ct. at

325-26. However, as long as a claim is supported by discovery of a proper deposit, the

existence of another type of deposit within the claim boundaries will not preclude

location of the claim. Clipper Mining Co. v. Eli Mining & Land Co., 194 U.S. 220,

230-32, 24 S. Ct. 632, 636-37 (1904); Reynolds v. Iron Silver Mining Co., 116 U.S. 687,

695-96, 6 S. Ct. 601, 606 (1886); see 30 U.S.C. § 37 (providing procedures by which the

locator of an unpatented placer claim can acquire title to lode deposits within the

boundaries of the placer claim).     Runkle is incorrect when he argues that TAGS’s

statements regarding location of the mining waste within its claim are admissions of the



                                             6
claim’s invalidity.     For the foregoing reasons, the District Court erred by granting

summary judgment on an issue never raised, addressed, or conceded by the parties.

¶14      Second, the District Court incorrectly decided that regardless of whether TAGS’s

claim was valid, TAGS did not have a property interest sufficient to support its trespass

claim.    The District Court reasoned that TAGS’s claim is a lode claim, the waste

materials were a placer deposit, and as such TAGS had no interest in the waste materials.

¶15      Regardless of whether TAGS could assert any interest in the waste materials,

TAGS may have had the right to exclude Runkle from its claim. Trespass is an intrusion

on a party’s right to exclusive possession of his property. Burley v. Burlington N. &

Santa Fey Ry. Co., 2012 MT 28, ¶ 13, 364 Mont. 77, 273 P.3d 825. A validly located

mining claim is property, and the locator of the claim has the right to exclusive

possession of the property within the boundaries of the claim. 30 U.S.C. § 26; Our Lady

of the Rockies, Inc. v. Peterson, 2008 MT 110, ¶ 3, 342 Mont. 393, 181 P.3d 631;

Boscarino, 207 Mont. at 120, 672 P.2d at 1124; Cole, 252 U.S. at 295, 40 S. Ct. at 325;

Belk v. Meagher, 104 U.S. 279, 283-85 (1881). This right to exclusive possession is

subject only to a superior right of the United States:

         to manage and dispose of the vegetative surface resources thereof and to
         manage other surface resources thereof (except mineral deposits subject to
         location under the mining laws of the United States). Any such mining
         claim shall also be subject, prior to issuance of patent therefor, to the right
         of the United States, its permittees, and licensees, to use so much of the
         surface thereof as may be necessary for such purposes or for access to
         adjacent land: Provided, however, That any use of the surface of any such
         mining claim . . . shall be such as not to endanger or materially interfere
         with prospecting, mining or processing operations or uses reasonably
         incident thereto.

                                               7
30 U.S.C. § 612(b) (emphasis in original). Thus, were it established that TAGS had

actually discovered a lode vein, TAGS would have the right to prevent entries on his

claim made for the purposes of securing or disposing of mineral deposits on that claim.

Again, this is a question of fact that the District Court inappropriately resolved against

TAGS. 30 U.S.C. §§ 26, 612(b); see United States v. Curtis-Nevada Mines, Inc., 611

F.2d 1277, 1285-86 (9th Cir. 1980). This right would be sufficient to maintain a trespass

action against anyone seeking to make such an entry. See Bixby v. Reynolds Mining

Corp., 826 P.2d 968, 971 (N.M. 1992); Boscarino, 207 Mont. at 120, 672 P.2d at 1124;

Clipper Mining Co., 194 U.S. at 230-32, 24 S. Ct. at 636-37. Whether Runkle trespassed

by making such an entry depends on whether he is a licensee or permittee of the United

States, whether the mining waste material was a mineral deposit subject to location, and

whether removal of the mineral deposit interfered with mining or processing operations.

See 30 U.S.C. § 612(b). These are questions of fact. The District Court did not address

these questions in its summary judgment order, and we will not address them here.

Based on the foregoing, however, the District Court erred when it decided that, as a

matter of law, TAGS’s lode claim did not give it a sufficient interest to maintain its

trespass action.

¶16    Regardless, Runkle urges us to affirm the District Court’s decision as correct

despite its incorrect reasoning. Specifically, he argues that he owned the waste materials

as a successor in interest to the Black Friday claim’s former owner, that the waste became

his personalty before TAGS located its claim, and that TAGS’s claim was subject to his

interest in the waste material. These arguments, however, are fact-dependent inquiries
                                            8
that may turn on, for example, the origin of the mining materials, whether the mining

materials were abandoned, the validity of TAGS’s claim, the validity of Runkle’s placer

claim, ownership of the land at the time the materials were dumped, or classification of

the property interest conveyed to Runkle when he purchased the Black Friday claim.

Boscarino, 207 Mont. at 120, 672 P.2d at 1124; Conway, 108 Mont. at 305-09, 89 P.2d at

1028-31; 6 Rocky Mountain Mineral Law Foundation, American Law of Mining

§ 205.07[3], 205-21 to -23 (Cheryl Outerbridge & Margo MacDonnell, eds., 2d ed.

2013). Given the variety of facts that may be relevant, and the limited bases upon which

the District Court made its summary judgment order, we will not address these

arguments.

                                   CONCLUSION

¶17   The District Court erred when it granted summary judgment in Runkle’s favor. Its

conclusion that TAGS’s lode claim was not a property interest sufficient to support

TAGS’s causes of action was incorrect, and its decision that TAGS’s lode claim was

invalid was erroneously made on an issue of which neither party had notice and to which

neither party had the opportunity to respond. For these reasons, the judgment of the

District Court is reversed and remanded for further proceedings in conformity with this

Opinion.

                                               /S/ MICHAEL E WHEAT
We Concur:

/S/ MIKE McGRATH
/S/ BETH BAKER
/S/ PATRICIA COTTER
/S/ JAMES JEREMIAH SHEA
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