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Dragon v. Trial

Court of Appeals of Texas, Fourth District, San Antonio

November 8, 2017

Jerome DRAGON, Jr. and Patricia G. Dragon, Appellants
v.
Joseph Russell TRIAL and Michael Leo Trial, Appellees

         From the 81st Judicial District Court, Karnes County, Texas Trial Court No. 14-07-00169-CVK Honorable Donna S. Rayes, Judge Presiding, REVERSE SUMMARY JUDGMENT IN FAVOR OF APPELLEES; RENDER SUMMARY JUDGMENT IN FAVOR OF APPELLANTS

          Sandee Bryan Marion, Chief Justice Karen Angelini, Justice Patricia O. Alvarez, Justice

          MEMORANDUM OPINION

          Sandee Bryan Marion, Chief Justice

         The underlying lawsuit involves a dispute over the ownership of a mineral interest in land. Appellants, Jerome Dragon Jr. and Patricia G. Dragon, appeal from two summary judgments rendered in favor of appellees, Joseph Russell Trial and Michael Leo Trial. We reverse summary judgment in favor of the appellees and render summary judgment in favor of appellants.

          FACTUAL BACKGROUND

         In 1932, the underlying property-237 acres in Karnes County-was conveyed in equal shares to eight siblings, one of whom was appellees' father Leo Trial. After one of the siblings died, each of the remaining seven siblings owned an undivided 1/7th interest in the property.

         On September 26, 1983, Leo Trial signed a deed (the "1983 Gift Deed") conveying "one-half (1/2) of all [his] right, title and interest in and to" the property to his wife, Anna Ruth Trial ("Ruth Trial"). The 1983 Gift Deed was recorded in Karnes County on September 28, 1983.

         In December 1992, the Dragons purchased the property from Leo Trial and his still-living siblings. The Dragons paid $104, 280 for the property, part of which was financed over a fifteen-year period. The sale was memorialized by more than one deed because Leo Trial and his still-living siblings signed separate, but identical, deeds (collectively, the "1992 Deed"). The Dragons did not obtain a title opinion or title insurance, and were not represented by counsel. Leo and Ruth's attorney, John Berry, prepared the closing documents. The Dragons were not aware of the 1983 Gift Deed.

         Leo died on February 26, 1996. Under Leo's will, his entire estate was devised to the Leo Trial Trust for the remainder of Ruth's life, and, upon her death the corpus went to the appellees, Leo and Ruth's two sons, Joseph and Michael. The will named Ruth as independent executrix of the estate and trustee of the Leo Trial Trust. After Leo's death, Ruth continued to accept and endorse payments made for the purchase of the property. The Dragons paid the balance of the note owed to Leo on December 26, 1997, and they continued payments to the other siblings. After the entirety of the debt was paid, all sellers signed a Release of Lien. Ruth signed on Leo's signature line as "Leo Trial by Ruth Trial." Ruth died on January 28, 2010. Although Ruth had a will, it was not probated. Under Leo's will, after Ruth's death, the corpus of the trust estate went to Joseph and Michael.

          The 1992 Deed contained a mineral reservation that expired after fifteen years, at which point the mineral estate vested in the Dragons. Oil and gas production on the property continues to this day. In January 2008, the Dragons informed BlackBrush Oil & Gas LP, the oil and gas lease operator, that the reservation expired; and, under a new division order, BlackBrush began distributing royalties to the Dragons.[1] On February 13, 2014, an Updated Mineral Ownership & Lease Status Report, prepared for BlackBrush, contained the following comment:[2]

Comment 2: Also, Anna Ruth Trial owned in her own right an undivided 1/2 of 1/7th interest, as conveyed to her in [the 1983] Gift Deed . . . . Anna Ruth Trial never conveyed to [the Dragons]. Anna Ruth Trial apparently died intestate on January 28, 2010 leaving two children, Michael Leo Trial and Joseph Russell Trial as her heirs.

         In March 2014, BlackBrush contacted the Dragons and the Trials about the above issue. Pursuant to a new division order, BlackBrush began paying a portion of the royalties to Joseph and Michael Trial (hereinafter, collectively, "the Trials"), which payments were paid into a suspense account.

         PROCEDURAL HISTORY

         On July 28, 2014, the Dragons filed suit against the Trials. The Dragons alleged breach of contract (the 1992 Deed), estoppel by deed, trespass to try title by limitations, suit to quiet title by limitations, and promissory estoppel.[3] The Dragons asserted the 1992 Deed conveyed to them a 14/14th interest in the property, and the Trials owned no interest in the property.

          In March 2015, the Dragons filed a motion for both a traditional and a no-evidence summary judgment. The Dragons asserted Ruth ratified the 1992 Deed, the Trials breached the 1992 Deed's general warranty clause, and the Trials were estopped from asserting any interest in the property.

         A few months later, the Trials filed a competing joint motion for traditional and no-evidence summary judgment. The Trials asserted the 1992 Deed conveyed to the Dragons only a 13/14th interest in the property, while they [the Trials] held the remaining 1/14th interest they inherited from their mother. The Trials moved for a traditional summary judgment on the following five claims asserted by the Dragons: (1) breach of contract, (2) estoppel by deed, (3) promissory estoppel, (4) declaratory relief, and (5) trespass to try title. The Trials moved for a ...


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