Hughes v. CJM Resources, LP

640 S.W.3d 623

Rudolfo B. HUGHES, Appellant

v.CJM RESOURCES, LP and CJM Oil & Gas, Inc., Appellees

No. 11-20-00046-CV

Court of Appeals of Texas, Eastland.

Opinion filed January 27, 2022

Conrad D. Hester, Robert Vartabedian, Fort Worth, Connor Bourland, Richard B. Phillips, Jr., Dallas, for Appellee.

Joel Amos Gordon, for Appellant.

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

JOHN M. BAILEY, CHIEF JUSTICE

This is an appeal from an order granting a plea to the jurisdiction. It involves a dispute over who owns the causes of action for fraud and negligent misrepresentation that arise from the leasing of mineral interests for oil and gas operations. The trial court determined that the plaintiff no longer owned the causes of action after he conveyed his mineral and royalty interests to a third party. The plaintiff challenges this determination in a single issue. We affirm.

Background Facts

On September 19, 2017, Rudolfo B. Hughes and Appellee CJM Resources, LP entered into a paid-up oil and gas lease. This lease covered Hughes's 12.50 net mineral acres in the following properties: "N/2 and SW/4 of Section 31, Block 34, Township 3 North, of Martin County, Texas." CJM offered Hughes $2,500 per net mineral acre for a total bonus of $31,250.

Hughes filed the underlying lawsuit against CJM Recourses, LP and CJM Oil & Gas, Inc. (collectively CJM) in August 2019. Hughes asserted that CJM made representations to him during the lease negotiations to the effect that CJM was paying him "top dollar bonus money" that was the same amount being paid to his siblings and that he would be receiving royalty payments within three months. Hughes asserted that these representations were false, and he asserted claims against CJM for fraud and negligent misrepresentation.

CJM filed a plea to the jurisdiction asserting that Hughes did not have standing because he had conveyed his claims to Decatur Mineral Partners, Ltd. In the plea to the jurisdiction, CJM asserted that in September 2018, Hughes had filed a "virtually identical" lawsuit against CJM that the trial court dismissed for lack of standing.

In the prior lawsuit, the trial court determined that Hughes lacked standing because Hughes had conveyed any cause of action he had regarding the lease to Decatur Mineral Partners, Ltd. Hughes's assignment to Decatur provided that Hughes conveyed all his "claims and interests in and to the following described well(s), land(s) and/or unit(s)" to Decatur. Hughes signed the assignment to Decatur on February 15, 2018.

In this proceeding, there is no dispute that Hughes conveyed the claims to Decatur in 2018. Hughes now asserts that Decatur reconveyed the claims back to him in a 2019 assignment that was made effective January 1, 2018. The resolution of this appeal hinges on whether Decatur continued to possess the claims when it reconveyed them back to Hughes. In this regard, there was an intervening conveyance—on November 21, 2018, Decatur executed a mineral deed in favor of Universal Royalty & Mineral Fund I, LP. This deed purported to convey to Universal all of Decatur's interest that it received from Hughes. Hughes asserts that Decatur did not convey the causes of action associated with the property to Universal. Rather, Hughes contends that Decatur's deed to Universal excepted or reserved the causes of action that Hughes now asserts. The trial court granted CJM's plea to the jurisdiction based upon its determination that Decatur's deed to Universal conveyed everything that Decatur received from Hughes in the original conveyance, including any causes of action.

Analysis

In his sole issue, Hughes asserts that the trial court erred in deciding that it lacked subject-matter jurisdiction over his claims. Specifically, Hughes asks that we find that Decatur retained all of the causes of action irrespective of the mineral deed to Universal. A plea to the jurisdiction is a dilatory plea that seeks dismissal of a cause of action without regard to whether the claim has merit. Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000). An assertion that the trial court lacks subject-matter jurisdiction over a claim is properly asserted in a plea to the jurisdiction. Tex. Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004). Because the existence of subject-matter jurisdiction is a question of law, we review de novo the trial court's ruling on a plea to the jurisdiction. In re Lubbock , 624 S.W.3d 506, 512 (Tex. 2021) (orig. proceeding). "A plea to the jurisdiction ‘may challenge the pleadings, the existence of jurisdictional facts, or both.’ " Tex. Dep't of Criminal Justice v. Rangel , 595 S.W.3d 198, 205 (Tex. 2020) (quoting Alamo Heights Indep. Sch. Dist. v. Clark , 544 S.W.3d 755, 770 (Tex. 2018) ).

The resolution of this appeal requires us to interpret the mineral deed from Decatur to Universal to determine if Decatur retained the causes of action after the conveyance—because Decatur purportedly conveyed the claims back to Hughes after the conveyance to Universal. In this regard, Hughes is not relying on the retroactive effective date of the assignment of claims from Decatur back to him. See In re Estate of Abraham , 583 S.W.3d 374, 379 (Tex. App.—El Paso 2019, pet. denied)¹ ("[T]raditionally, a ‘deed takes effect only from the date of its delivery[.]’ " (quoting Tuttle v. Turner, Wilson & Co. , 28 Tex. 759, 773 (1866) )). To the contrary, Hughes asserts that Decatur never conveyed to Universal the causes of action that he now asserts. Thus, Hughes contends that Decatur continued to possess the causes of action when it attempted to reconvey them back to Hughes.

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. Additionally, we must strive to "harmonize all parts of the deed" and construe it "to give effect to all of its provisions." Id. When different parts of a deed appear to be contradictory or inconsistent, we must attempt to construe the instrument so that no provision is rendered meaningless. Id.

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). Neither party contends the that deed to Universal is ambiguous, nor do we find it to be ambiguous.

Generally, deeds are construed to confer upon the grantee the greatest estate that the terms of the instrument will allow. Lott v. Lott , 370 S.W.2d 463, 465 (Tex. 1963) ; Rahlek, Ltd. v. Wells , 587 S.W.3d 57, 64 (Tex. App.—Eastland 2019, pet. denied). In other words, a deed will pass whatever interest the grantor has in the land, unless it contains language showing a clear intention to grant a lesser estate. Rahlek, Ltd. , 587 S.W.3d at 64 ; see Sharp v. Fowler , 151 Tex. 490, 252 S.W.2d 153, 154 (1952). Thus, unless the deed contains reservations or exceptions that reduce the estate conveyed, a warranty deed will pass all of the estate owned by the grantor at the time of the conveyance. Cockrell v. Tex. Gulf Sulphur Co. , 157 Tex. 10, 299 S.W.2d 672, 675 (1956) ; Rahlek, Ltd. , 587 S.W.3d at 65.

Hughes first contends that Decatur did not convey to Universal the causes of action Decatur obtained from Hughes. Generally, causes of action are freely alienable. See State Farm Fire & Cas. Co. v. Gandy , 925 S.W.2d 696, 705–07 (Tex. 1996) (absent specific circumstances, causes of action in Texas are freely assignable). And as previously noted, there is no dispute that Hughes conveyed his causes of action to Decatur as a result of his conveyance to Decatur.

Decatur's deed to Universal provided in relevant portion as follows:

[Decatur] does hereby grant, bargain, sell, convey, and transfer to [Universal] all of [Decatur's] interest in the Section 31, Block 34, Township 3 North, T&P RR Co. Survey, Abstract 28, Martin County, Texas (hereinafter the "Subject Lands"), being 100% of the oil, gas and other minerals conveyed to [Decatur] by the certain Sale, Conveyance and Assignment of Mineral and Royalty Interests dated February 15, 2018, recorded on February 20, 2018, in Volume 599, Page 730 of the Official Public Records of Martin County, Texas[.]

Thus, the deed states that it is conveying all of Decatur's interest in the property to Universal. Additionally, the conveyance identifies that the interest that Decatur is conveying to Universal is the interest that Decatur received from Hughes. Accordingly, we conclude that the parties’ objective intent in the conveyance from Decatur to Universal was for Decatur to convey all interests it obtained from Hughes and that these interests included the causes of action that Hughes conveyed to Decatur.

Hughes cites to the language in the deed from Hughes to Decatur in comparison with the language in the deed from Decatur to Universal as evidence that Decatur and Universal did not intend to convey any causes of action from Decatur to Universal.² Hughes's reliance on the language of the deed from him to Decatur is misplaced.

In general, absent ambiguity, fraud, accident, or mistake, courts will not consider extrinsic evidence in construing the intentions of the parties to the deed. CenterPoint Energy Houston Elec., L.L.P. v. Old...