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Peters v. Young

Court of Appeals of Texas, Eleventh District

December 31, 2019

ALICE RUTH PETERS, INDEPENDENT EXECUTRIX OF THE ESTATE OF JO ALICE STOUT, DECEASED, Appellant
v.
JERRY BOB YOUNG AND WIFE, KAREN ELAINE YOUNG, Appellees

          On Appeal from the 50th District Court Baylor County, Texas Trial Court Cause No. 11229

          Panel consists of: Bailey, C.J., Stretcher, J., and Wright, S.C.J. [1]

          MEMORANDUM OPINION

          JIM R. WRIGHT SENIOR CHIEF JUSTICE.

         After a bench trial in a declaratory judgment action, the trial court held that Jerry Bob Young and his wife, Karen Elaine Young, as optionees, had duly exercised an option to purchase certain property described in the option contract and in a real estate contract that was attached to and incorporated into the option contract. The trial court ordered the Estate of Jo Alice Stout, the successor to one of the original optionors, to sell the property to the Youngs. The trial court also held that there was no consideration for the transfer of a royalty interest referred to in the option contract and in the real estate contract. We affirm.

         The property that is the subject of this lawsuit is a portion of what was known as the Stout Ranch. The Stout Ranch is in Baylor and Throckmorton Counties. Before their deaths, Lowe L. and Mary Alice Stout were the owners of the ranch. After Lowe and Mary Alice died, their six children inherited equal undivided interests in the ranch.

         In 1986, after the six children had inherited the ranch, 728.2 acres of the ranch were partitioned to Betty Lynn Stout, one of Lowe and Mary Alice's six children. The other five children retained undivided interests in the remainder of the ranch. The partition arrangement covered the surface as well as the mineral estate except for certain royalty interests. As far as those royalty interests relate to this case, suffice it to say that Jo Alice retained a nonparticipating royalty interest in the property partitioned to Betty Lynn.

         Jo Alice Stout and Jack L. Stout were two of Lowe and Mary Alice's six children. In 2001, Jo Alice and Jack, through their respective attorneys-in-fact, entered into an option contract with the Youngs. Under the terms of the option contract, Jack and Jo Alice sold the Youngs an option to purchase "the property . . . described for purposes of this contract as the Sosolik/Tucker Place and the Miller Creek Place, and being more particularly described in Exhibit 'A' which is attached to and by this reference made a part of this Option Contract." The Sosolik/Tucker Place was described as the first tract in Exhibit A; the Miller Creek Place was described as the second tract. Thirteen different metes and bounds descriptions that comprise those two tracts were also attached to the option contract. Exhibit A also contained a third description: "All of Seller's right, title, and interest in the oil, gas, and other minerals in and under and that may be produced from" Betty Lynn's 728.2 acres; the attachment did not contain a metes and bounds description of the third tract.

         The option contract was conditioned on the partition of that part of the Stout Ranch that remained after the partition of Betty Lynn's 728.2 acres. The purpose was to partition the remainder of the ranch into specific acreage so that each undivided interest owner would own specific acreage rather than an undivided interest. Further, the option contract contained a provision that the Youngs could waive the partition condition. In 2009, the Youngs waived that condition and executed and tendered to Jack and Jo Alice the real estate contract that the parties had attached to the option contract. Jack, Jo Alice, and the Youngs had agreed in the option contract that the Youngs could exercise the option "by execution and tender . . . of the real estate sales contract" that was attached to the option contract.

         When Jack and Jo Alice chose not to proceed under the option contract, the Youngs sued them for specific performance. During that litigation, both Jack and Jo Alice died, and the independent executrixes of the respective estates, Anne F. Stout and Alice Ruth Peters, continued to participate in the litigation as representatives of the estates. At the conclusion of that litigation, the trial court entered a judgment in favor of the Youngs and ordered specific performance of the option contract. That judgment was the subject of a prior appeal to this court. Because the appellants in that appeal waived each of the issues that they presented on appeal, we affirmed the judgment of the trial court. Peters v. Young, No. 11-14-00120-CV, 2015 WL 6121351, at *3 (Tex. App.-Eastland Oct. 8, 2015, no pet.) (mem. op.).

         After we issued our prior opinion, Anne F. Stout and Alice Ruth Peters, as representatives of Jack and Jo Alice's estates, signed the real estate contract. However, the parties continued to disagree on the purchase price that was provided for in the contract. The Youngs and Jack Stout's estate settled the dispute as to the interest held by Jack's estate and closed the sale of that interest. The Youngs and Jo Alice's estate were never able to agree on the proper computation of the purchase price under the real estate contract, and the Youngs filed this suit for declaratory judgment as a result of that failure. For ease of reference, we will refer to Jo Alice's estate as "the Estate."

         In their suit for declaratory judgment, the Youngs asked the trial court to declare that the Estate sell "the interest in the property owned by [the Estate], in the amount set forth in the agreement which was negotiated in the Option Agreement." Additionally, the Youngs sought damages and attorney's fees. The Estate answered, sought a declaratory judgment based upon the Estate's interpretation of the instruments, and asked the trial court to award attorney's fees.

         As we have indicated, after a bench trial, except for the royalty interest in the 728.2 acres partitioned to Betty Lynn, the trial court adopted the construction championed by the Youngs. As to the royalty interest of the Estate in the Betty Lynn property, the trial court held, in its judgment, that there was "never a meeting of the minds between the parties as to the consideration for the inclusion in the Option and the Contract for the undivided 1/6 nonparticipating royalty interest . . . in the Betty Lynn [Stout] property." Therefore, the trial court did not order a sale of that nonparticipating royalty interest.

         The Estate brings four issues on appeal. First, the Estate contends that the trial court misconstrued the unambiguous language of the real estate contract and the option contract into which it was incorporated and that, in doing so, the trial court rewrote the real estate contract "to say that the purchase price would be reduced based on the [Estate's] percentage of ownership in the property." Next, in its second issue on appeal, the Estate maintains that the trial court made a fact finding based on lack of consideration when that theory was not pleaded by any party. In its third issue on appeal, the Estate takes the position that the trial court's findings "that there was no consideration for and no meeting of the minds on the purchase price for the mineral interest [are] erroneous as a matter of law because they are contrary to the undisputed facts and unambiguous contract language." In the alternative, the Estate asks: "[I]s there any legally or factually sufficient evidence supporting those findings?" In the Estate's fourth issue, it alleges that "the trial court's findings that the Youngs duly exercised their option contract to purchase the real estate and have always been ready, willing and able to purchase the property [are] erroneous as a matter of law because they are contrary to the undisputed facts and the unambiguous contract language." Again, in the alternative, the Estate poses the question: "[I]s there any legally or factually sufficient evidence supporting those findings?"

         We will first address the Estate's argument, in its first issue on appeal, that the trial court erred when it construed the contracts to conclude that the Youngs were obligated to pay the Estate only for the interest that the Estate owned in the property. In ...


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