AAA Valley Gravel, Inc. v. Totaro

April 26, 2014 by Justia

This appeal stemmed from a 1984 gravel lease, a later sublease, and overriding royalty payments under the sublease. The Supreme Court had vacated a judgment in favor of Alicia Totaro, the sublease’s overriding royalty interest holder, and remanded for a determination whether the original gravel lease between Herman Ramirez and Bill Nelson (d/b/a Cosmos Developers, Inc.), was an exclusive lease for purposes of gravel removal. The superior court conducted an evidentiary hearing and found that Ramirez and Nelson intended the original gravel lease to be an exclusive lease. That finding led to the conclusion that the sublease from Cosmos to AAA Valley Gravel, Inc. was exclusive and that AAA Valley Gravel’s gravel extraction under the sublease triggered continued overriding royalty obligations to Totaro. Because AAA Valley Gravel had discontinued the overriding royalty payments to Totaro in 1998 when it purchased the property from Ramirez, the superior court entered judgment in favor of Totaro for nearly $1 million in past royalty payments, interest, costs, and attorney’s fees. AAA Valley Gravel appealed, arguing that the superior court erred by: (1) failing to rule that the original gravel lease’s failure to mention exclusivity rendered the gravel lease non-exclusive as a matter of law; (2) implying exclusivity in the original gravel lease as a matter of law; (3) placing the burden of persuasion on the exclusivity issue on AAA Valley Gravel; (4) finding that the original gravel lease conveyed an exclusive right to extract gravel from Ramirez’s property; (5) failing to find that the original gravel lease expired 10 to 12 years after its inception; and (6) failing to specify in the final judgment when the original gravel lease would terminate. Ramirez, nominally an appellee in this appeal, also contended that the superior court erred; Ramirez essentially joined in most of AAA Valley Gravel’s arguments. The Supreme Court affirmed the superior court’s judgment. View "AAA Valley Gravel, Inc. v. Totaro" on Justia Law