Fowler v. LAC Minerals (USA), LLC

Robert Fowler (plaintiff) was the organizer of a company named Viable. Viable entered a joint-venture agreement (the agreement) with LAC Minerals (LAC) (defendant) with the goal of developing mining prospects. As part of the joint venture, Viable deeded 944 acres to LAC, subject to key provisions in the agreement. The agreement gave LAC the right to identify any portion of the land that did not have potential for mineral development. The agreement stated that LAC “will reassign any such portions” to Viable. Further, the agreement contained a provision generally allowing the parties to assign their rights under the agreement. Fowler later obtained Viable’s rights in the property. Fowler formally requested the release of land not being used for mining purposes. LAC responded that it was in the process of determining which portions of the 944 acres could be released. However, LAC never actually made any determination. Fowler sued, asking the court to force LAC to reassign any property that was unneeded for mining operations. LAC argued that the agreement did not create a condition subsequent requiring reassignment, but rather a covenant for which damages would be the only remedy. LAC also argued that if Viable had any reversionary rights under the agreement, these rights were personal to Viable and could not be transferred to Fowler. The district court found LAC was required to reassign the property to Fowler when the mining deed’s purposes were exhausted. LAC appealed.