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Crawford v. XTO Energy, Inc.

Court of Appeals of Texas, Second District, Fort Worth

December 19, 2019

Richard D. Crawford, Appellant
v.
XTO Energy, Inc., Appellee

          On Appeal from the 96th District Court Tarrant County, Texas Trial Court No. 096-262638-12

          Before Kerr, Birdwell, and Bassel, JJ.

          MEMORANDUM OPINION

          WADE BIRDWELL, JUSTICE

         Introduction

         This appeal involves another title and contract dispute that appears to have resulted from the "frenzy to lease as many mineral rights as possible"[1] in the Barnett Shale. See, e.g., Green v. Chesapeake Expl., L.L.C., No. 02-17-00405-CV, 2018 WL 6565790, at *1-2 (Tex. App.-Fort Worth Dec. 13, 2018, no pet.) (mem. op.). Richard D. Crawford, the lessor under an oil-and-gas lease with XTO Energy, Inc., sued XTO after it determined he was not the owner of the oil and gas it had leased and refused to pay him royalties. The trial court granted summary judgment for XTO on all of Crawford's claims after determining that under the strip-and-gore doctrine, Crawford's predecessor had divested her ownership of the oil and gas in 1984; thus, neither Crawford nor his predecessor could have validly leased the oil and gas, and Crawford was not entitled to royalties. The trial court also denied a competing motion for partial summary judgment filed by Crawford. Because we agree with the trial court that the strip-and-gore presumption applies as a matter of law, and that Crawford's predecessor thus did not retain her interest in the oil and gas when conveying the surrounding property in 1984, we affirm.

         Background

         The parties relied on the following stipulated facts in their competing motions for summary judgment. In 1963, Mary Ruth Crawford became the owner of 145.99 acres in Tarrant County, Texas, through a partition deed. In 1964, Mary Ruth conveyed to Texas Electric Service Company (TESCO) the surface of 8.235 acres (the TESCO Tract) of her larger tract. The deed acknowledged that .093 of an acre of the TESCO Tract was located in a county road. The deed also contained two reservations of rights to Mary Ruth and one covenant by TESCO[2]:

Grantors reserve unto themselves, [and] their heirs and assigns, the right to open streets over and across the [TESCO Tract] to construct, or cause to be constructed, water lines, sewer lines, gas lines[, ] and telephone lines thereon; provided (1) that such streets shall not be closer than 300 feet apart, and shall be located so that the outer boundary thereof will not be less than 25 feet from any then-existing steel tower supporting any electric line thereon, (2) that such streets and utility lines shall not cross the lands herein conveyed at an angle of less than 45 degrees to the near side, (3) that such utility lines shall not interfere with Grantee's installations on such property at the time such utility lines are constructed, and (4) that such streets shall be constructed and maintained, including grading, surfacing, curbs[, ] and gutters, at no cost or expense to Grantee.
Grantors reserve unto themselves, [and] their heirs and assigns, the right to all oil and gas in and under the lands herein conveyed [(the Disputed Tract)] but expressly waive all rights of ingress and egress for the purpose of drilling for or producing oil and/or gas from the surface of the [TESCO Tract] provided that wells opened on other lands may be bottomed on [the TESCO Tract].
Grantee agrees that as long as Grantors' adjoining property is used for grazing or farming purposes, Grantee will erect no fences or other barriers along the lines dividing Grantors' property and the property herein conveyed; provided, however, that this agreement shall terminate should Grantors' adjoining property be subdivided for residential purposes. [Emphasis added.]

         This picture shows the boundaries of the TESCO Tract and Disputed Tract in relation to the surrounding land:

         (Image Omitted)

         After acquiring the TESCO Tract, TESCO placed steel electric towers along its entire length.

         In 1984, Mary Ruth conveyed 76 acres of her adjoining land to the north and south of the TESCO Tract and Disputed Tract to a third party without reserving any of the oil and gas thereunder or mentioning her previously reserved right to the Disputed Tract.[3] Over twenty years later, in 2007, Hollis R. Sullivan, Inc. leased the Disputed Tract from Mary Ruth. The lease allows the lessee to pool the Disputed Tract with other leased lands and generally prohibits surface operations, restricting development of the oil and gas to pooling "and/or . . . directional or horizontal drilling commenced from a surface location on other lands in such manner that the path of the wellbore is under and through the leased premises and the bottom-hole or terminus is on the leased premises or lands pooled therewith."

         Mary Ruth died later in 2007, and Crawford inherited her estate. Crawford ratified the Sullivan lease in April 2009; by that time, XTO had acquired the lessee's interest. XTO or its predecessor had also acquired oil and gas leases from all of the mineral estate owners on both sides of the Disputed Tract. In May 2009, XTO pooled almost 800 leases, including Crawford's, into the Eden Southwest Unit.

         Since 2009 XTO has completed and sold production from four wells in the Eden Southwest Unit. But XTO has never paid Crawford any royalties under the Sullivan lease because in 2011, after receiving a title opinion on the Disputed Tract, [4] XTO determined that Mary Ruth's 1984 conveyance of the adjoining lands also divested her title to the Disputed Tract under the strip-and-gore doctrine.[5]

         Crawford sued XTO for breach of the lease, conversion, removal of a cloud on title, "money had and received," and for declaratory relief. XTO filed its own countersuit, which it later nonsuited.

         After appeals on unrelated procedural grounds and a remand to the trial court, [6]XTO sought traditional summary judgment on all of Crawford's claims, arguing that the strip-and-gore doctrine applies as a matter of law; therefore, Crawford's claims, which are all based on his alleged property ownership, fail. Crawford filed a response to XTO's motion for summary judgment but also filed a traditional and no-evidence motion for partial summary judgment contending the strip-and-gore doctrine does ...


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