Echols Minerals, LLC v. Mac Green

675 S.W.3d 344

ECHOLS MINERALS, LLC; TOC Holdings, LLC; Gulf Wind Resources, LLC; Asro Management, LLP ; David Weaver Echols; Roy Lee Todd; Nancy K. Carter ; Cathy L. Hutcheson; Douglas Kit Nelson; Lee Keith Tilton; Terra Shamari Cone; Daniel Eli Dennison; Joshua Martin Rudin; Ceilia Kaiser; and Kimberly LaCanne, Appellants

v.Donald Mac GREEN, TRUSTEE OF the DONALD AND BETTY LOU IRREVOCABLE TRUST, and Independent Executor of the Estate of Betty Lou Green; and Fortis Minerals II, LLC, Appellees

No. 11-21-00154-CV

Court of Appeals of Texas, Eastland.

Opinion filed August 17, 2023

Timothy A. Hootman, 2402 Pease Street, Houston, TX 77003, Joshua Stein, Fergus & Fergus, LLP, P.O. Box 89022, Houston, TX 77289, for appellant.

Derek L. Montgomery, William B. Burford, Anna E. Brandl, Kelly Hart & Hallman, LLP, 500 Illinois, Suite 800, Midland, TX 79701, C.E. (Mike) Thomas III, P.O. Drawer 2117, Big Spring, TX 79721, for appellee.

Panel consists of: Bailey, C.J., Trotter, J., and Williams, J.

OPINION

JOHN M. BAILEY, CHIEF JUSTICE

This appeal concerns a reservation of a 33.25/278.5 non-participating royalty interest (NPRI)¹ in a 1952 general warranty deed and an application of Duhig v. Peavy-Moore Lumber Co. , 135 Tex. 503, 144 S.W.2d 878 (1940). The trial court granted summary judgment in favor of Appellees wherein it declared that the reservation was ineffective under Duhig. Appellants² bring three issues challenging the trial court's grant of summary judgment. We reverse and remand.

Background Facts

Prior to 1942, J.W. Meek and his wife Media Meek owned all of the surface and minerals underlying the N/2 of Section 1, Block 35, T-2-N, Martin County, Texas, containing 320 acres of land. In 1942, the Meeks conveyed to F. Haynes, Robert Bruce Haynes, and D'Lorz Inez Haynes the north half of Section 1, Block 35, Township 2 North, in Martin County, save and except "all of the Oil, Gas, and other mineral in, on or under the North West 1/4 of the North East 1/4 of said Tract."

In 1944, Floyd Haynes and his wife Lola H. Haynes, Robert Bruce Haynes, and D'Lorz Inez Haynes conveyed the following property to K. M. Regan in a mineral deed:

an undivided One-Half (1/2) interest in and to all of the oil, gas and other minerals in and under and that may be produced from the following described lands situated in Martin County, State of Texas, to wit:

Being 280 acres of land, and being the Northwest Quarter (NW¼) and all of the South-half (S½) and the Northeast Quarter (NE ¼) of the Northeast Quarter (NE¼) of section one (1) Block Thirty-five (35) Township 2 North T & P Ry Co Survey

For reference, we will refer to this deed as the "1944 deed."

Also in 1944, Floyd Haynes, acting as Guardian for Roselyn Raye Haynes, a minor, executed a separate mineral deed conveying to K. M. Regan "an undivided One-Half (1/2) interest in and to all of the oil, gas and other minerals in and under and that may be produced" from the same property. For reference, we will refer to this second 1944 deed as the "1944 guardian deed." A declaration of interest executed in 1949 by Robert Bruce Haynes, Floyd Haynes, D'Lorz Inez Haynes, and Lola H. Haynes declared that at the time of the 1944 deed and the 1944 guardian deed, Floyd Haynes, Robert Bruce Haynes, D'Lorz Inez Haynes owned an undivided 5/6 interest in the tract and Roselyn Raye Haynes owned an undivided 1/6 interest in the tract.

In 1952, Floyd Haynes and his wife Lola Haynes, Robert Bruce Haynes and his wife Mary E. Haynes, and D'Lorz Inez Haynes conveyed to Lois Madison: "all that certain undivided 5/6 interest in and to the North 1/2 of Section I, Block 35, Tsp. 2N, T & P Ry. Co. Survey, Martin County, Texas." The 1952 general warranty deed provided that the Haynes grantors did not own the minerals in the northwest quarter of the northeast quarter of that half-section and that the deed did not convey the minerals under that portion of the tract. The 1952 deed further provided that the Haynes grantors reserved "unto themselves an undivided 33.25/278.5 non-participating royalty interest in all minerals in, on, under and that may be produced" from the 278.5-acre tract³ that they conveyed to Madison. This deed made no reference to the 1944 mineral conveyance to Regan. For reference, we will refer to this deed as the "1952 NPRI deed."

Also in 1952, Floyd Haynes, as guardian of the person and estate of Roselyn Ray Haynes, a minor, conveyed to Lois Madison "all of the right and title of" Roselyn Ray Haynes described as "[a]n undivided one-sixth (1/6th) interest" in the north half of section one "subject to all outstanding royalty and mineral conveyances." For reference, we will refer to this second 1952 deed as the "1952 guardian deed."

Appellant Echols Minerals filed the underlying suit against Appellee, Donald Mac Green, as trustee of the Donald and Betty Lou Green Trust. Echols Minerals claims an interest as a successor-in-interest through the Haynes grantors. Specifically, Echols Minerals asserts that it owns one-half of the 33.25/278.5 NPRI retained by the Haynes grantors in the 1952 deed.

Appellee Green filed a counterclaim wherein he asserted that the Green Trust is a successor-in-interest to Madison, and that the reservation of the NPRI in the 1952 NPRI deed was ineffective under Duhig because the Haynes grantors "failed to except the previously conveyed mineral interest" that they conveyed to Regan in 1944. Green also joined as parties the Rule 39 Defendants that are Appellants, asserting that they are "purported successors" to the Haynes grantors. Green also added Fortis Minerals II, LLC as a Rule 39 Defendant on the basis that it was a successor-in-interest to Madison. Fortis Minerals filed a pleading wherein it joined in Green's counterclaims. For the sake of clarity, our references to the Rule 39 Defendants excludes Fortis Minerals.

Green filed a motion for partial summary judgment wherein he asserted that, under Duhig , the reservation by the Haynes grantors of a 33.25/278.5 NPRI in the 1952 NPRI deed was ineffective because the grantors did not expressly except the outstanding undivided one-half mineral interest that they had previously conveyed to Regan. Green sought a declaratory judgment that the reservation of the NPRI in the 1952 NPRI deed was ineffective. Fortis Minerals joined in Green's motion for partial summary judgment, seeking the same declaratory relief.

Echols Minerals and the Rule 39 Defendants responded to Green's and Fortis Minerals's motion for partial summary judgment by asserting that the 1952 NPRI deed must be read together with the 1952 guardian deed. Specifically, Echols Minerals and the Rule 39 Defendants assert that the "subject to" clause in the 1952 guardian deed must be read as also applying to the 1952 NPRI deed.

As noted previously, the trial court granted summary judgment in favor of Echols Minerals and Fortis Minerals. Because the parties resolved the issue of attorney's fees in a Rule 11 Agreement, the trial court's summary judgment was a final judgment.

Analysis

Appellants bring three issues challenging the trial court's grant of summary judgment in favor of Appellees. Appellants’ first issue generally challenges the summary judgment. They assert in their second issue that Duhig does not support the summary judgment with respect to Green, and they contend in their third issue that Duhig does not support the summary judgment with respect to Fortis Minerals.

We review the trial court's grant of summary judgment de novo. Lujan v. Navistar, Inc. , 555 S.W.3d 79, 84 (Tex. 2018) (citing Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 215 (Tex. 2003) ). A party moving for traditional summary judgment bears the burden of proving that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c) ; Nassar v. Liberty Mut. Fire Ins. Co. , 508 S.W.3d 254, 257 (Tex. 2017).

The resolution of this appeal turns on an interpretation of the 1952 NPRI deed, and if applicable, the 1952 guardian deed. An appellate court may only construe a deed as a matter of law if it is unambiguous. ConocoPhillips Co. v. Koopmann , 547 S.W.3d 858, 874 (Tex. 2018) (citing J. Hiram Moore, Ltd. v. Greer , 172 S.W.3d 609, 613 (Tex. 2005) ). If a deed is worded in such a way that it can be given a certain or definite legal meaning, then the deed is not ambiguous. Endeavor Energy Res., L.P. v. Discovery Operating, Inc. , 554 S.W.3d 586, 601 (Tex. 2018). Here, the parties do not contend that the deeds are ambiguous, nor do we find them to be ambiguous.

Our task when construing an unambiguous deed is to "ascertain the intent of the parties from the language in the deed" as expressed within the "four corners" of the instrument. Luckel v. White , 819 S.W.2d 459, 461 (Tex. 1991). The four-corners rule requires the court to ascertain the intent of the parties solely from all of the language in the deed. Wenske v. Ealy , 521 S.W.3d 791, 794 (Tex. 2017) (citing Luckel , 819 S.W.2d at 461 ). The intent that governs is not the intent that the parties meant but failed to express but, rather, the intent that is expressed. Luckel , 819 S.W.2d at 462.

Should we read the two 1952 deeds together?

A preliminary question that we must address is Appellants’ contention that the 1952 guardian deed must be read together with the 1952 NPRI deed. Appellants contend that the "deeds ... were signed together and are therefore treated as one."

In Rieder v. Woods , the Texas Supreme Court addressed the circumstances under which contracts are to be construed together. 603 S.W.3d 86, 94 (Tex. 2020). "[U]nder appropriate circumstances, ‘instruments pertaining to the same transaction may be read together to ascertain the parties’ intent, even if the parties executed the instruments at different times and the instruments do not expressly refer to each other.’ " Id. (quoting Fort Worth Indep. Sch. Dist. v. City of Fort Worth , 22 S.W.3d 831, 840 (Tex. 2000) ). "Where appropriate, ...