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Mustang Minerals, LLC v. Houston Trust Co.

Court of Appeals of Texas, Third District, Austin

January 11, 2018

Mustang Minerals, LLC, Appellant
v.
Houston Trust Company, as Trustee of the Fredricka H. Crain Trust Amended and Restated, Appellee

         FROM THE DISTRICT COURT OF STERLING COUNTY, 51ST JUDICIAL DISTRICT NO. 2526, HONORABLE BARBARA WALTHER, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Pemberton and Goodwin Reversed and Rendered

          MEMORANDUM OPINION

          Jeff Rose, Chief Justice

         Mustang Minerals, LLC, appeals from the district court's summary judgment in favor of appellee Houston Trust Company, as Trustee of the Fredricka H. Crain Trust (HTC). HTC sued Mustang Minerals to quiet title on ownership of certain mineral royalty interests held in community. On appeal, Mustang complains the district court erred because the mineral interest at issue had been validly conveyed in 1982 and, thus, HTC has no claim of ownership. For the reasons explained below, we will reverse the district court's summary judgment and render judgment that HTC take nothing.

         Background

         The underlying facts of this case are undisputed. Flavy Davis was married to Willie Fred Davis from 1940 until their divorce in 1985. They had two daughters together. Flavy owned the mineral estate of a ranch in Sterling County. The parties do not dispute that the property was community in character, or that it was held in Flavy's name and subject to Flavy's sole management and control. In 1963, Flavy conveyed the mineral estate to an oil company, but reserved for himself a nonparticipating royalty interest (the NPRI), which is the mineral interest at issue here.

         In 1982, Flavy executed a deed conveying the NPRI to Dianne and Carolyn Davis, his and Willie's two daughters. The deed reads in relevant part:

"I, Flavy E. Davis, . . . do bargain, grant, sell, convey, assign, set over and deliver unto Dianne Davis . . . and Carolyn Davis . . . all of those properties described in Exhibit 'A' attached hereto . . . being intended to cover and include all of my undivided interest in each of said properties and title thereto . . . ."

(Emphasis added.).

         Flavy died in 1993. Willie, who had changed her name to Fredricka Hodges Crain in 1991, died in 2009. Willie's/Fredricka's validly probated will left all of her propertyto HTC, as trustee of the Fredricka H. Crain Trust. Mustang Minerals, LLC, claims ownership of the NPRI through a series of transactions traceable back to Dianne Davis.

         Sometime in 2013, HTC asserted a claim to the royalty payments being made to Mustang. In response, the operating entity suspended the royalty payments pending resolution. In November 2013, Mustang wrote to HTC demanding it retract its claim of ownership.

         In June 2014, HTC filed the underlying suit to quiet title against Mustang. Both parties moved for summary judgment. After a hearing on the parties' cross-motions, the trial court granted HTC's motion, impliedly denying Mustang's motion. The trial court subsequently granted Mustang's motion for new trial, but when both parties again moved for summary judgment, the trial court again granted HTC's motion, this time expressly denying Mustang's motion. The trial court gave no basis for its decision. It is from this summary judgment that Mustang appeals.[1]

         Discussion

         In its sole issue on appeal, Mustang asserts that the trial court erred in granting summary judgment in HTC's flavor because, as a matter of law, Flavy's 1982 deed conveyed the entire community interest in the mineral estate to Dianne and Carolyn Davis-Mustang's predecessor in title-leaving no interest to ...


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