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Gonzalez v. Janssen

Court of Appeals of Texas, Fourth District, San Antonio

May 30, 2018

Rita GONZALEZ as Trustee of RG Family Trust and Ramon Gonzalez, Appellants
v.
Don A. JANSSEN and Debra Janssen, Appellees

          From the 81st Judicial District Court, Karnes County, Texas Trial Court No. 15-09-00215-A-CVK Honorable Russell Wilson, Judge Presiding

          Sitting: Karen Angelini, Justice Marialyn Barnard, Justice Rebeca C. Martinez, Justice

          OPINION

          Karen Angelini, Justice

         REVERSED AND RENDERED

         This appeal arises from a declaratory judgment suit involving the ownership of a reversionary royalty interest. The appellants, Rita Gonzalez, as Trustee of the R.G. Family Irrevocable Trust No. 1, and Ramon Gonzalez ("the Gonzalezes"), argued that the appellees, Don A. and Debra Janssen ("the Janssens, ") conveyed all their interests in two tracts of land, including Don's undivided share of a reversionary royalty interest, to Ramon Gonzalez Jr. ("Gonzalez") and Ramon Gonzalez, M.D., P.A. Employees Pension Plan and Trust ("the Pension Trust") in two deeds. The Janssens argued Don's undivided share of the reversionary royalty interest was excluded from the conveyances. After considering competing summary judgment motions, the trial court rendered judgment in favor of the Janssens. Because we conclude that the deeds do not exclude the reversionary royalty interest from the conveyances, we reverse the trial court's judgment and render judgment in favor of the Gonzalezes.

         Background

         The Creation of the Reversionary Royalty Interest, Its Conveyance History, & the Underlying Controversy

         The background facts are undisputed. In 1984, Don's father, C.J. Janssen, acquired a 101.43-acre and a 209.97-acre tract of land and a reversionary royalty interest from Lamar and Rudolph Blaschke. The reversionary royalty interest was created on October 1, 1977, when C.M. Griffin executed a deed conveying the 101.43-acre and the 209.97-acre tract of land to the Blaschkes. In this deed, Griffin reserved to himself an "undivided 1/16th royalty interest;" however, Griffin further stated that the reserved royalty interest would expire in twenty years in the absence of oil and gas production. On December 13, 1985, C.J. conveyed the reversionary royalty interest, in undivided shares, to his four children, Don, David, James, and Michael.[1]

         On August 24, 1988, C.J. conveyed to Don and his wife, Debra, a 186.10/209.97 interest in the 209.97-acre tract. C.J. retained ownership of the remainder of the 209.97-acre tract and the 101.43-acre tract, and Don and his siblings continued to own undivided shares of the reversionary royalty interest associated with both tracts.

         On September 15, 1988, Don, Debra, C.J., and C.J.'s wife, Olivia, executed two deeds. The first deed ("the 101 deed") conveyed the 101.43-acre tract to Ramon Gonzalez Jr. The 101 deed conveyed "all of the following described real property" "SUBJECT TO" the deed in which Griffin created the reversionary royalty interest; and "SUBJECT TO" the deed in which Don's father, C.J., conveyed the reversionary royalty interest to Don and his siblings.

         The second deed ("the 209 deed") conveyed 209.97 acres to Ramon Gonzalez Jr., M.D., P.A., Employees Pension Plan and Trust. The 209 deed conveyed "all of the following described real property" "SUBJECT TO" the deed in which Griffin created the reversionary royalty interest; "SUBJECT TO" the deed in which Don's father, C.J., conveyed the reversionary royalty interest to Don and his siblings; and "SUBJECT TO" another mineral deed "dated September 3, 1947 from W.F. Krause to William Meyer."

         In 1997, the royalty interest that Griffin had reserved to himself in the October 1, 1977 deed expired.

         In 2011, Gonzalez entered into an oil and gas lease with EOG. Thereafter, Don made a demand to EOG for payment of his share of the royalties. Don claimed that he did not convey his share of the reversionary royalty interest to Gonzalez in the 1988 deeds and, therefore, this interest reverted to him in 1997. EOG responded to Don's demand by holding the royalty payments in suspense.

         The Declaratory Judgment Suit

         In 2015, the Gonzalezes filed a declaratory judgment suit, asking the trial court to determine the ownership of the reversionary royalty interest and to resolve the dispute concerning the payment of royalties. The Janssens answered the suit by entering a general denial, asserting the affirmative defense of mutual mistake, and counterclaiming for declaratory relief and reformation of the deeds.

         Both sides moved for summary judgment. The Gonzalezes' amended summary judgment motion argued that because the deeds did not explicitly exclude Don's share of the reversionary royalty interest from the grant, it passed to Gonzalez and the Pension Trust in the deeds. The Gonzalezes took the position that the purpose of the "subject to" clauses in the deeds was not to except or reserve anything from the conveyances, but to place Gonzalez and the Pension Trust on notice of outstanding interests in the chain of title that may affect the interests transferred.

         The Janssens' amended summary judgment motion argued, among other things, that the "subject to" clauses in the deeds acted as an exception or a reservation because of the placement of the clauses "before the habendum clause, as part of the section defining the estate conveyed." The Janssens further argued that the deeds were "plainly drafted to limit the estate conveyed, not just the warranty." Alternatively, the Janssens argued that the deeds were ambiguous.

         The trial court denied the Gonzalezes' amended summary judgment motion and granted the Janssens' summary judgment motion.[2] Specifically, the trial court found that the 101 deed and the 209 deed "excluded the December 13, 1985, Gift Deed, of the Reversionary Royalty Interest, from both the grant of rights and the warranty." The trial court rendered judgment in favor of the Janssens. The Gonzalezes appealed.

         Arguments ...


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