Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Rahlek, Ltd. v. Wells

Court of Appeals of Texas, Eleventh District

May 23, 2019

RAHLEK, LTD. ET AL., Appellants/Cross-Appellees
v.
ROBERT G. WELLS ET AL., Appellees/Cross-Appellants

          On Appeal from the 42nd District Court Coleman County, Texas, Trial Court Cause No. 5951

          Panel consists of: Bailey, C.J., Stretcher, J., and Wright, S.C.J. [6]

          OPINION

          KEITH STRETCHER JUSTICE.

         This appeal primarily involves a dispute regarding the interpretation of a warranty deed dated July 6, 2006 (the 2006 Deed). The parties' dispute centers on whether the grantors, Rahlek, Ltd. and Eugenia Harris Campbell, conveyed to the grantee, Lake Phantom Acres, L.P., only a fraction of the grantors mineral and royalty interests on all new production or whether the grantors conveyed the entirety of their mineral and royalty interests on all new production. After considering competing summary judgment motions, the trial court ruled that the deed was unambiguous and construed it to convey the entirety of the grantors' mineral and royalty interests on all new production. The trial court then held a bench trial on damages, affirmative defenses, and attorney's fees and rendered a final judgment.

         In five issues, Appellants-Rahlek, Ltd., Eugenia Harris Campbell, and her four children (the successors of Campbell's interest)-challenge the trial court's final judgment in favor of Appellees-Lake Phantom Acres, L.P. and the successors of Lake Phantom's interest, which includes Ricky Grubbs. Specifically, Appellants contend that the trial court erred when it (1) incorrectly construed the 2006 Deed; (2) denied Rahlek's counterclaim for unjust enrichment against Grubbs; (3)permitted Grubbs to bring an unjust-enrichment counterclaim against Campbell's four children (the Campbell Children); and (4) denied the Campbell Children's affirmative defenses of waiver and estoppel. In Appellants' fifth issue, they request us to remand the issue of attorney's fees if the trial court incorrectly construed the 2006 Deed.

         Appellee Grubbs also cross-appealed. In his sole cross-issue, Grubbs contends that the trial court erred when it held that Section 16.069 of the Texas Civil Practice and Remedies Code did not apply to save Grubbs's otherwise time-barred counterclaim.

         We overrule Appellants' first and fourth issues, and we do not reach Issues Two, Three, and Five. We also sustain Appellee/Cross-Appellant Grubbs's sole cross-issue. Accordingly, we affirm in part and reverse and remand in part.

         Background Facts

         On July 6, 2006, Rahlek, Ltd. and Eugenia Harris Campbell conveyed the property and certain mineral and royalty interests they owned in and under the property to Lake Phantom Acres, L.P. by a warranty deed with a vendor's lien. At the time of this conveyance, Rahlek and Campbell collectively owned the surface and one-quarter (1/4) of the minerals and royalties in and under the property. The other three-quarters (3/4) of the mineral and royalty interest under the property is not relevant to this case.

         After the execution of the 2006 Deed, Lake Phantom subdivided the property into multiple tracts and conveyed its interest to multiple parties, who in turn, made similar conveyances to others. On September 30, 2014, some of these subsequent property owners, including Robert G. Wells and his wife (collectively, the original Plaintiffs), filed a declaratory judgment action against Rahlek and Campbell, seeking a declaration as to what interests the grantors actually conveyed in the 2006 Deed.

         Campbell, like Lake Phantom, had also conveyed her interests in the property after the execution of the 2006 Deed. She conveyed all the mineral and royalty interests she owned in the property to her four children-Archibald R. Campbell III, Douglas M. Campbell, Eugenia H. Campbell, and John H. Campbell-in equal shares. On March 9, 2015, the Campbell Children joined the lawsuit by filing a plea in intervention. The Campbell Children countersued for declaratory judgment, similarly asking the trial court to interpret the deed, but in their favor.

         As part of their plea in intervention, the Campbell Children also joined several other parties who likewise had an interest in the property as a result of subsequent conveyances by Lake Phantom (collectively, Defendants in Intervention). Grubbs is one of the Defendants in Intervention. In 2008, Lake Phantom sold the property and all of the mineral interests it owned under the property to Grubbs. Grubbs subdivided the property into two tracts: the Grubbs "A" Lease Tract and the Grubbs "D" Lease Tract (collectively, the Grubbs Lease Tracts). Both of these tracts were originally part of the property conveyed in the 2006 Deed.

         In response to the Campbell Children's plea in intervention, Grubbs filed a counterclaim in his original answer against the Campbell Children alleging, among other claims, unjust enrichment.[1] According to Grubbs, the Campbell Children were wrongfully paid royalties from production on the Grubbs "A" Lease Tract because he owned the entirety of the one-quarter (1/4) royalty interest under the tract.[2] The record reflects that the statute of limitations barred this counterclaim. However, Grubbs argued that the counterclaim was nonetheless authorized under Section 16.069 of the Texas Civil Practice and Remedies Code.

         Rahlek later filed its own unjust-enrichment counterclaim against Grubbs. Rahlek argued that Grubbs wrongfully received royalties that Rahlek was entitled to.

         After the parties filed competing traditional motions for summary judgment, the trial court granted partial summary judgment in favor of Appellees (the original Plaintiffs and Defendants in Intervention). The trial court concluded that the deed was unambiguous and construed it to convey the entirety of the grantors' mineral and royalty interests on all new production and to reserve "all current oil and gas production." The trial court also denied Rahlek's unjust-enrichment counterclaim and held that Section 16.069 did not revive Grubbs's time-barred counterclaim. The trial court then held a bench trial on damages, affirmative defenses, and attorney's fees. It ultimately rendered final judgment in favor of Appellees, awarding damages in accordance with its findings, and declined to award attorney's fees to either party on appeal. This appeal followed.

         Analysis

         In Appellants' first issue, they contend that the trial court erred when it granted Appellees' traditional motion for summary judgment because the trial court erroneously interpreted the 2006 Deed. Specifically, Appellants assert that the trial court erred when it held that the deed was unambiguous and construed it to convey the entirety of the grantors' mineral and royalty interests in and under the property to Lake Phantom.

         We review a summary judgment de novo. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In doing so, we consider all the evidence in the light most favorable to the nonmovant, indulge all reasonable inferences in favor of the nonmovant, and determine whether the movant proved that there were no genuine issues of material fact and that it was entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When competing traditional motions for summary judgment are filed, and one is granted and the other denied, we must review all issues presented and render the judgment the trial court should have rendered. Comm'rs Court of Titus Cty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997).

         To determine whether the trial court erred in its interpretation of the 2006 Deed, the first issue we must address is whether the deed is ambiguous. The question of whether a deed is ambiguous is a question of law for the court. See ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 874 (Tex. 2018). Our primary goal when construing a deed is to ascertain the true intention of the parties as expressed within the "four corners" of the instrument. See 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 ambiguity does not arise simply because the parties advance conflicting interpretations. Endeavor Energy Res., L.P. v. Discovery Operating, Inc., 554 S.W.3d 586, 601 (Tex. 2018). Rather, only when a deed remains susceptible to two or more reasonable interpretations, after the court applies the applicable rules of interpretation, is the deed ambiguous. See ConocoPhillips, 547 S.W.3d at 874. 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. See Endeavor, 554 S.W.3d at 601.

         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). 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. See Sharp v. Fowler, 252 S.W.2d 153, 154 (Tex. 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., 299 S.W.2d 672, 675 (Tex. 1956).

         Both reservations and exceptions in deeds must be clear and specific. We will not find "reservations by implication." Perryman v. Spartan Tex. Six Capital Partners, Ltd., 546 S.W.3d 110, 119 (Tex. 2018) (quoting Sharp, 252 S.W.2d at 154). "A reservation of minerals to be effective must be by clear language." Id. (quoting Sharp, 252 S.W.2d at 154). Similarly, exceptions, which generally are strictly construed against the grantor, must identify, with reasonable certainty, the property to be excepted from the larger conveyance. Combest v. Mustang Minerals, LLC, 502 S.W.3d 173, 179-180 (Tex. App.-San Antonio 2016, pet. denied).

         The 2006 Deed

         The 2006 deed lists Rahlek and Campbell as the "Grantor" and Lake Phantom as the "Grantee." It is undisputed that together Rahlek and Campbell owned all of the surface estate and that each owned an undivided one-eighth (1/8) interest in the mineral and royalties under the property (i.e., they each owned one-half (1/2) of the collective one-fourth (1/4) interest in minerals and royalties). The deed is fairly short and contains the following provisions in the order they appear:

Property:
1680.21 acres of land in Coleman County, Texas being out of the John Sanders Survey 162, Abstract 594, said 1680.21 acres being that tract of land described in deed from John W. Harris to Eugenia Harris Campbell and Joan Harris Kelso dated August 4, 2000, and recorded in Volume 698, Page 94, Coleman County Deed ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.