ACCEPTED 04-14-00527-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 5/7/2015 10:07:53 AM KEITH HOTTLE CLERK
No. 04-14-00527-CV In the Fourth Court of Appeals FILED IN 4th COURT OF APPEALS SAN ANTONIO, TEXAS
San Antonio, Texas 05/7/2015 10:07:53 AM KEITH E. HOTTLE Clerk
ANNA MARIA SALINAS SAENZ, ET AL. APPELLANT V.
THORP PETROLEUM CORP., ET AL. APPELLEES PLAINTIFF/APPELLEE
On Appeal from the 229th District Court Starr County, Texas No. DC-04-120
APPELLANTS’ REPLY BRIEF AND SUPPLEMENTAL APPENDIX
Roger S. Braugh, Jr. David George Texas Bar No. 00796244 Texas Bar No. 00793212 SICO, WHITE, HOELSCHER, CONNELLY•BAKER•WOTRING LLP HARRIS, & BRAUGH, LLP 700 JPMorgan Chase Tower 900 Frost Bank Plaza 600 Travis Street 802 N. Carancahua Houston, Texas 77002 Corpus Christi, Texas 78470 Phone: (713) 980-1700 Phone: (361) 653-3300 Fax: (713) 980-1701 Fax: (361) 653-3333 dgeorge@connellybaker.com rbraugh@swbtrial.com
Counsel for Appellants
ORAL ARGUMENT REQUESTED TABLE OF CONTENTS
Table of Contents ......................................................................................... ii Index of Authorities .................................................................................... iv Argument ...................................................................................................... 1 I. The Juana Salinas and Leoncio Salinas claimants have standing to bring this appeal. ....................................................... 1 A. The partition agreement purports to take away Juana Salinas’ interest in the mineral estate, so the Juana Salinas claimants have standing to bring this appeal. ........ 2 B. Leoncio Salinas continued to own an interest in part of the 1,134 acres, but the partition agreement purports to take away all of his interest in the 1,134 acres, so the Leoncio Salinas claimants have standing to bring this appeal. ..................................................................................... 5 1. Leoncio Salinas’ conveyance to Horacio Salinas was not an equitable partition of Leoncio Salinas’ interest in the entire 1,134 acres. ................................... 6 2. The Defendants have given up their claim of an oral partition. ........................................................................... 8 3. Fausto Salinas’ testimony that Leoncio Salinas supposedly told him that he no longer had any interest in the property is not conclusive evidence, so it could not support summary judgment in the Defendants’ favor. ............................................................ 9 II. The partition agreement is not binding because it was not signed by all of the affected property owners. ........................... 10 III. The Defendants were not entitled to summary judgment on their affirmative defenses of estoppel, ratification, and acquiescence because they did not conclusively establish that the Plaintiffs accepted the benefits of the partition. ......... 15
ii IV. The Defendants did not conclusively establish their adverse-possession affirmative defense because they did not show that they adversely possessed the mineral estate, as opposed to merely possessing the surface estate. ..... 18 V. The Plaintiffs did not waive their claim for past damages. ...... 21 A. Smith Production joined in Thorp’s summary-judgment motion, which raised lack of damages as a summary- judgment ground. .................................................................. 22 B. Thorp’s counsel agreed in writing that the damages issue was based on its argument that the partition agreement was valid, so it was not a separate issue. ........ 23 C. The Plaintiffs included the written agreement with Thorp in the summary-judgment record and stated that, based on the agreement, they understood that damages were not a separate issue. .................................... 25 D. Neither Thorp nor Smith Production objected to the Plaintiffs’ characterization of the agreement on the damages issue or claimed that the Plaintiffs had to provide damages evidence apart from showing that the partition agreement was invalid. .................................. 26 E. This Court should reject the Defendants’ attempt to ignore the Rule 11 agreement and obtain an advantage through trickery and gamesmanship. ................................. 26 Prayer ......................................................................................................... 28 Certificate of Service.................................................................................. 30 Certificate of Compliance .......................................................................... 31 Supplemental Appendix Email Between Plaintiffs’ Counsel and Thorp’s Counsel Regarding Scope of Summary-Judgment Motion (9 CR 3159-3161)...................................................................................A
iii INDEX OF AUTHORITIES
Cases Benson v. Fox, 589 S.W.2d 823 (Tex. Civ. App.—Tyler 1979, no writ) .......................... 6 Birdwell v. Am. Bonding Co., 337 S.W.2d 120 (Tex. Civ. App. Fort Worth 1960, writ ref’d n.r.e.) .... 20 Bruni v. Vidaurri, 166 S.W.2d 81 (Tex. 1942) ...................................................................... 14 City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) .................................................................... 10 Condra v. Grogan Mfg. Co., 233 S.W.2d 565 (Tex. 1950) .................................................................... 14 Dixon v. Henderson, 267 S.W.2d 869 (Tex. Civ. App.—Texarkana 1954, no writ) ............... 20 Draker v. Schreiber, 271 S.W.3d 318 (Tex. App.—San Antonio 2008, no pet.) ....................... 9 Gamboa v. Gamboa, 383 S.W.3d 263 (Tex. App.—San Antonio 2012, no pet.) ..................... 21 Garza v. DeMontalvo, 217 S.W.2d 988 (Tex. 1949) ............................................................... 11-13 Huckabee v. Time Warner Ent. Co., 19 S.W.3d 413 (Tex. 2000) ........................................................................ 9 In re Estate of Denman, 270 S.W.3d 639 (Tex. App.—San Antonio 2008, pet. denied) ................ 5 Joyner v. Christian, 113 S.W.2d 1229 (Tex. 1938) .................................................................. 15 King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) .................................................................... 14
iv Majeed v. Hussain, No. 02-08-00679-CV, 2010 WL 4137472 (Tex. App.—Austin Oct. 22, 2010, no pet.) ............................................................................. 28 Natural Gas Pipeline Co. v. Pool, 124 S.W.3d 188 (Tex. 2003) ............................................................... 18-20 Poenisch v. Quarnstrom, 361 S.W.2d 367 (Tex. 1962) .................................................................... 14 Potter v. Kaufman & Broad Home Sys. of Tex., Inc., 137 S.W.3d 701 (Tex. App.—San Antonio 2004, no pet.) ..................... 21 Republic Prod. Co. v. Lee, 121 S.W.2d 973, 977 (Tex. 1938)................................................. 11, 13-14 Stradt v. First United Methodist Church, 573 S.W.2d 186 (Tex. 1978) .................................................................... 11 Strong v. Garrett, 224 S.W.2d 471, 476 (Tex. 1949)............................................................ 14 Thomas v. Sw. Settlement & Dev. Co., 123 S.W.2d 290 (Tex. 1939) .................................................... 6, 10, 12, 14
Rules TEX. R. APP. P. 38.3 .................................................................................... 21 TEX. R. APP. P. 38.7 .................................................................................... 28 TEX. R. CIV. P. 11 ........................................................................................ 25
v ARGUMENT
This Court should reverse the summary judgment and remand
this case for trial.
I. The Juana Salinas and Leoncio Salinas claimants have standing to bring this appeal.
The Defendants argue that the Plaintiffs who claim their
ownership interests through Original Grantees Juana Salinas and
Leoncio Salinas do not have standing to bring this appeal because
supposedly they have not been harmed by the trial court’s judgment. 1
The Defendants are incorrect. Those Plaintiffs have been harmed
by the existence of the partition agreement that purports to convey
their interests in the property and by the trial court entering a
declaratory judgment stating that the partition agreement was valid
and enforceable. Therefore, they have standing to bring this appeal
1See Ind. Def. Br. at 38-39; Oil Co. Br. at 16-23. The brief filed by the individual defendants (Rosalinda Salinas Balderas, et al.) will be referred to as the “Ind. Def. Br.” The joint brief filed by the oil company defendants Smith Production, Inc. and Thorp Petroleum Corp., et al., will be referred to as the “Oil Co. Br.”.
1 A. The partition agreement purports to take away Juana Salinas’ interest in the mineral estate, so the Juana Salinas claimants have standing to bring this appeal.
The Defendants argue that the Plaintiffs claiming through
Original Grantee Juana Salinas do not have standing to bring this
appeal because (1) the Defendants agreed in the trial court that Juana
Salinas continued to own an undivided mineral interest in the 1,134
acres after the partition agreement, and (2) the trial court’s order
regarding payment of the interpleaded royalties reflected that Juana
Salinas continued to own that undivided interest. 2
Regardless the positions the Defendants took during the litigation,
or how interpleaded royalties were disbursed, the Juana Salinas
claimants have been harmed because the trial court entered a
declaratory judgment stating that the partition agreement was
enforceable.3
When Juana Salinas sold her interest in the 1,134 acres to her
brother Octavio, she expressly reserved the mineral interest.4 So Juana
2 Ind. Def. Br. at 38 (citing 12 CR 4181; 14 CR 5288); Oil Co. Br. at 16-19. 3 14 CR 5294 (App. A); 9 CR 3313 (App. C). 47 CR 2322-2325; 7 CR 2323 (“It is strictly understood and herein stipulated that this conveyance is a conveyance solely and alone of the surface to the land hereinabove described. Grantors do hereby reserve and retain unto themselves,
2 Salinas no longer owned any interest in the surface estate of the 1,134
acres, but still owned her interest in the mineral estate.5 Even though
Juana Salinas did not sign the partition agreement, the partition
agreement purports to convey her undivided interest in the mineral
estate.6
The partition agreement expressly states that it “is a partition not
only of the surface” of the property, but that it “shall cover and include
all of the minerals of every kind, character and description underlying
each of the tracts” included in the agreement.7 The partition agreement
states that “the allottees of a parcel or tract of land as hereinabove
described shall from henceforth be the owner of all of the minerals of
every kind and character in and under the respective parcel and tract of
land as allotted and set apart to the respective allottees.”8 So each
person received the mineral interests under the surface interest that
their heirs and assigns, all of the minerals of every kind, character and description, including, but not limited to oil and gas ….”). 5 7 CR 2300; 7 CR 2322-2325. Juana, therefore, had an undivided 1/12 of 15/32 interest in the 1,134 acres’ mineral estate. 6 See Plt. Br. at 16-17. 7 7 CR 2349 (App. F). 8 7 CR 2350 (App. F).
3 they received in the partition agreement.9 The partition agreement,
therefore, purported to convey all of the mineral interests to the 1,134
acres, which included Juana Salinas’ retained undivided 1/12 of 15/32
interest in the mineral estate.10
The trial court refused to enter a declaratory judgment stating
that the partition agreement was void as to Juana Salinas and the
Plaintiffs claiming through her. 11 Instead, the trial court’s final
judgment expressly states that the partition agreement is “valid and
enforceable for all purposes as to all parties to this suit.” 12 Therefore—
according to the final judgment that the trial court entered—the
partition agreement’s attempt to strip Juana Salinas of her undivided
interest in the mineral estate is valid and enforceable.
The Plaintiffs claiming through Juana Salinas, therefore, have
been harmed by the final judgment that upholds the validity of the
partition agreement that purports to extinguish their interest in the
9 Id. 10 7 CR 2322-2325; 7 CR 2338-2359 (App. F). 11 14 CR 5294 (App. A). 12 Id.; see also 9 CR 3313 (App. C) (Order Granting Individual Defendants’ Summary-Judgment Motion) (the partition agreement “is valid, binding and effective for all purposes”).
4 mineral estate. Because those Plaintiffs have been harmed by the trial
court’s final judgment, they have standing to bring this appeal. 13
B. Leoncio Salinas continued to own an interest in part of the 1,134 acres, but the partition agreement purports to take away all of his interest in the 1,134 acres, so the Leoncio Salinas claimants have standing to bring this appeal.
The Defendants base their argument that the Leoncio Salinas
claimants do not have standing on their argument that Leoncio Salinas
had no interest in the 1,134 acres at the time of the partition
agreement.14 But as the Plaintiffs explained in their opening brief,
Leoncio Salinas continued to own his undivided interest in 920 of the
1,134 acres after he conveyed his interest in 214 of the 1,134 acres to
his brother Horacio Salinas.15
Because Leoncio Salinas continued to own an interest in part of
the 1,134 acres at the time of the partition agreement, the Plaintiffs
claiming ownership through him have standing to challenge the
partition agreement.16
13See In re Estate of Denman, 270 S.W.3d 639, 642 (Tex. App.—San Antonio 2008, pet. denied). 14 Ind. Def. Br. at 39; Oil Co. Br. at 19-23. 15 Plt. Br. at 18-19. 16 Id.
5 1. Leoncio Salinas’ conveyance to Horacio Salinas was not an equitable partition of Leoncio Salinas’ interest in the entire 1,134 acres.
The Defendants claim that Leoncio Salinas and Horacio Salinas
equitably partitioned the 1,134 acres by granting Horacio Salinas total
ownership over 214 acres in exchange for Leoncio Salinas giving up his
entire interest in the entire 1,134 acres.17 But the equitable-partition
argument invalid for at least two reasons:
• An equitable partition requires a court-entered partition decree to be effective, and the Defendants neither sought nor obtained a decree; and
• An equitable partition requires ratification by all affected property owners, and Juana Salinas—who continued to own an undivided interest in the mineral estate of the entire 1,134 acres—did not ratify it.
In their opening brief, the Plaintiffs explained that while
equitable partition is a valid doctrine, it does not apply here.18 The
Plaintiffs explained that an equitable partition becomes effective only
when it is entered by a court as part of a partition decree. 19 The
Defendants never sought—or received—a partition decree in this case,
17 Oil Co. Br. at 20-23. 18 Plt. Br. at 15 n.70. 19Benson v. Fox, 589 S.W.2d 823, 827 (Tex. Civ. App.—Tyler 1979, no writ) (equitable partition “allows the court to make a partition”) (emphasis added); Thomas v. Sw. Settlement & Dev. Co., 123 S.W.2d 290, 299-300 (Tex. 1939).
6 so equitable partition is not at issue.20 The Defendants do not dispute
that equitable partition requires a court decree and that they do not
have one.21 That reason, by itself, justifies rejecting the Defendants’
argument that Leoncio Salinas’ conveyance to Horacio Salinas was an
equitable partition.
In addition to lacking a court equitable-partition decree, the
Defendants also have not shown that all of the affected parties ratified
the alleged Leoncio Salinas/Horacio Salinas partition. The Defendants
base their ratification claim on the fact that the other siblings
supposedly signed the partition agreement.22 But it is undisputed that
Juana Salinas did not sign the partition agreement and, as explained
above, Juana Salinas continued to have an interest in the 1,134 acres at
the time the partition agreement was signed.23 The fact that Juana
Salinas did not ratify the alleged Leoncio Salinas/Horacio Salinas
partition, by itself, justifies rejecting the Defendants’ argument that
14 CR 5291-5296 (App. A); 14 CR 5307-5309 (App. B); 9 CR 3312-3315 (App. C); 9 20
CR 3316-3317 (App. D). 21 Oil Co. Br. at 23. 22 Ind. Def. Br. at 40; Oil Co. Br. at 22-23. 23 See § I(A) above; 7 CR 2338-2359 (App. F).
7 Leoncio Salinas’ conveyance to Horacio Salinas was an equitable
partition.
Therefore, Leoncio Salinas’ conveyance to Horacio Salinas did not
convey all of his interest in the 1,134 acres. Instead, Leoncio Salinas
conveyed his undivided interest in 214 of the 1,134 acres, retaining an
undivided interest in 920 acres.
2. The Defendants have given up their claim of an oral partition.
In the trial court, the Defendants argued that even if the written
partition agreement was not valid, the mineral interests had still been
partitioned because all of the owners orally agreed to partition the
1,134 acres’ mineral interests.24 In their opening brief, the Plaintiffs
explained why the Defendants’ “oral partition” argument was invalid. 25
When forced to defend their “oral partition” argument, the
Plaintiffs gave up. In their brief, the Defendants admit that they are no
longer relying on their claim of a supposed “oral partition” to support
the summary judgment.26
24 7 CR 2303; 8 CR 2843. 25 Plt. Br. at 19-20. 26Ind. Def. Br. at 45 (“The Salinas Defendants do not rely on the oral partition agreement to show the partition’s validity”).
8 3. Fausto Salinas’ testimony that Leoncio Salinas supposedly told him that he no longer had any interest in the property is not conclusive evidence, so it could not support summary judgment in the Defendants’ favor.
The Defendants claim that Leoncio Salinas told Defendant Fausto
Salinas that he did not have any interest in the 1,134 acres after his
conveyance to Horacio Salinas. 27 The Defendants claim that this
evidence negates the Plaintiffs’ argument that Leoncio Salinas had an
interest in part of the 1,134 acres at the time of the partition
agreement.28
Because they filed a traditional summary-judgment motion on this
issue, the Defendants had to conclusively negate the Plaintiffs’
argument that Leoncio Salinas continued to have an interest in part of
the 1,134 acres after his conveyance to Horacio Salinas. 29 To be
conclusive evidence, Fausto Salinas’ testimony about what Leoncio
Salinas supposedly told him years ago had to be “clear, positive, direct,
27 Id. 28 Id. 29Huckabee v. Time Warner Ent. Co., 19 S.W.3d 413, 420 (Tex. 2000) (“In Texas, under our traditional summary judgment procedure, defendants can obtain summary judgment only if they conclusively negate one of the elements of the plaintiff’s claim.”); Draker v. Schreiber, 271 S.W.3d 318, 321 (Tex. App.—San Antonio 2008, no pet.) (“A defendant moving for summary judgment must conclusively negate at least one essential element of each of the plaintiff’s causes of action or conclusively establish each element of an affirmative defense.”).
9 otherwise credible, free from contradictions and inconsistencies, and
could have been readily controverted.”30
The Defendants did not meet the requirement for conclusive
evidence because Fausto Salinas’ testimony about what Leoncio Salinas
supposedly told him could not “have been readily controverted” because
Leoncio Salinas was dead.31 With Leoncio Salinas dead, Fausto Salinas
could concoct any story he wished about what Leoncio Salinas had told
him in private, and there would be no one able to rebut that claim.
That fact alone means that Fausto Salinas’ testimony about what
Leoncio Salinas told him is not conclusive evidence and cannot support
the summary judgment in the Defendants’ favor.
II. The partition agreement is not binding because it was not signed by all of the affected property owners.
As the Plaintiffs explained in their opening brief, the Texas
Supreme Court has held that “a partition attempted to be made without
joinder of all of the cotenants is ineffective when made.”32 The Supreme
Court has held that a “voluntary partition of land must be based on the
30 City of Keller v. Wilson, 168 S.W.3d 802, 820 (Tex. 2005). 31 Oil Co. Br. at 2 n.15. 32 Thomas, 123 S.W.2d at 299.
10 agreement of all parties with a possessory interest.”33 Because neither
Juana Salinas nor Leoncio Salinas signed the partition agreement, it is
void and not enforceable against any party. 34
The Defendants argue that the partition agreement is binding on
the Plaintiffs who claim through the siblings who signed the
agreement.35 So—according to the Defendants’ argument—the
Plaintiffs who claim through the Original Grantees other than Juana
Salinas and Leoncio Salinas are bound by the partition agreement, even
if it is void as to the Plaintiffs claiming through Juana Salinas and
Leoncio Salinas.
The Defendants rely on two Texas Supreme Court cases to support
their argument that a partition agreement that was not signed by all of
the parties is valid against the signatories: Garza v. DeMontalvo36 and
Republic Production Co. v. Lee.37 A close analysis of these cases,
however, shows that they do not support the Defendants’ argument.
33Stradt v. First United Methodist Church, 573 S.W.2d 186, 190 (Tex. 1978) (“A voluntary partition of land must be based on the agreement of all parties with a possessory interest thereto and cannot be the result of a unilateral decision.”). 34 Plt. Br. at 14-15; 7 CR 2338-2359 (App. F). 35 Ind. Def. Br. at 49-52; Oil Co. Br. at 14-16, 23-26. 36 Garza v. DeMontalvo, 217 S.W.2d 988 (Tex. 1949). 37 Republic Prod. Co. v. Lee, 121 S.W.2d 973, 977 (Tex. 1938).
11 Instead, the proper rule is that, as the Texas Supreme Court held in
Thomas v. Southwestern Settlement & Development Co., “a partition
attempted to be made without joinder of all of the cotenants is
ineffective when made.”38
The Defendants argue that in Garza, the Texas Supreme Court
held that “[a] partition agreement does not have to be signed by all
parties who have a mineral interest under the partitioned acreage in
order to be valid and enforceable.”39 The Defendants misstate the
holding in Garza.
In Garza, ten family members signed a partition agreement that
attempted to partition the mineral interests.40 But an oil company
owned a working interest in the mineral estate, so not all of the affected
parties had joined in the partition agreement, making it invalid.41 The
oil company, however, did not object to the partition agreement that it
had not signed—instead, it wanted the partition agreement upheld. 42
38 Thomas, 123 S.W.2d at 299. 39 Oil Co. Br. at 14 (citing Garza, 217 S.W.2d at 992). 40 Garza, 217 S.W.2d at 989-92. 41 Id. 42 Id.
12 The Supreme Court held that “under these facts,” the people who signed
the partition agreement were bound by it.43
In Garza, the Supreme Court expressly held that it was not
addressing the effect on the parties’ rights if the oil company had
objected to the partition agreement.44 Garza, therefore, stands for the
proposition that a partition agreement that is not signed by all parties
is still effective if the parties who did not sign do not object to the
partition.45 That is certainly not the case here, where the Plaintiffs
claiming through non-signatories Juana Salinas and Leoncio Salinas
are objecting to the partition agreement. The Supreme Court expressly
held that Garza does not apply in this circumstance. 46
Similarly, Republic Production Co. v. Lee does not support the
Defendants argument. The Defendants base their argument on a
statement in Lee taken out of context.47 The Supreme Court stated that
“[e]ven if the instruments of conveyance were void, the partition was
43 Id. at 992. 44Id. (“The question of what rights, if any, the lessee or his assignee would have to object to a partition by the lessors of their interests, or what would be the effect of such objection, is therefore not presented in this case.”). 45 Id. 46 Id. 47 See Ind. Def. Br. at 50-51.
13 nevertheless valid as to those who participated therein.”48 But in that
case, the Supreme Court was addressing issues related to adverse
possession and whether co-tenants had notice of ouster.49 That is a
wholly separate issue from whether the Plaintiffs claiming through the
parties who signed the partition agreement are bound by the
agreement, which is the issue here.
It appears that in the over seventy-five years since it was issued,
Lee has never been cited for the proposition that the Defendants are
claiming. Instead, it has been cited on the issue of whether one co-
tenant has ousted another for purposes of adverse possession.50 So
Texas courts have not interpreted it as applying beyond the adverse-
possession realm.
This Court, therefore, should follow the Texas Supreme Court’s
rule that “a partition attempted to be made without joinder of all of the
cotenants is ineffective when made.”51 This Court should hold that
48 Lee, 121 S.W.2d at 266. 49 Id. 50 See, e.g., King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 756 (Tex. 2003); Poenisch v. Quarnstrom, 361 S.W.2d 367, 370 (Tex. 1962); Condra v. Grogan Mfg. Co., 233 S.W.2d 565, 569 (Tex. 1950); Strong v. Garrett, 224 S.W.2d 471, 476 (Tex. 1949); Bruni v. Vidaurri, 166 S.W.2d 81, 87 (Tex. 1942). 51 Thomas, 123 S.W.2d at 299.
14 because neither Juana Salinas nor Leoncio Salinas signed the partition
agreement, it is void and not enforceable against any party.52
III. The Defendants were not entitled to summary judgment on their affirmative defenses of estoppel, ratification, and acquiescence because they did not conclusively establish that the Plaintiffs accepted the benefits of the partition.
The Defendants did not conclusively established their affirmative
defenses of estoppel, ratification, or acquiescence, so they trial court
erred when it granted summary judgment against the Plaintiffs on
those defenses.53
To establish their equitable affirmative defenses, the Defendants
had to conclusively establish that the Plaintiffs accepted the benefits of
the alleged partition of the mineral interests—not the partition of the
surface estate.54 The Defendants did not do that because they did not
provide any evidence—let alone conclusively establish—that the
Plaintiffs accepted payments based on the mineral estate being
partitioned.55
52 Plt. Br. at 14-15. 53 See Plt. Br. at 29-31; Ind. Def. Br. at 53-59; Oil Co. Br. at 26-31. 54 Plt. Br. at 29-31; Joyner v. Christian, 113 S.W.2d 1229, 1232-33 (Tex. 1938). 55 Oil Co. Br. at 29-31.
15 The Plaintiffs provided evidence that before 2002, the property
owners were treated as tenants in common with undivided interests in
the mineral estate.56 Before 2002, they were “paid bonus money and
royalties consistent with [their] ownership of an undivided interest in
the mineral estate of the entire property.”57 In was only in 2002—after
Thorp began paying royalties—that the property owners learned that
they “would be treated as partitioned interest owners having no mineral
interest under certain tracts of land within the property.” 58
Rather than ratifying the partition of the mineral estate and
acquiescing to being treated as owners under a partition, the Plaintiffs
filed this lawsuit in 2004 seeking a declaration that the partition
agreement was void and that they still owned undivided interests in the
mineral estate.59 Because the Plaintiffs provided evidence that they
challenged the attempt to partition the mineral estate soon after they
first learned they were being paid as if there were a partition, the
56 9 CR 2931-2932; 9 CR 2935-2936. 57 9 CR 2931; 9 CR 2935. 58 9 CR 2932; 9 CR 2936. 59 1 CR 41.
16 Defendants did not conclusively establish their equitable affirmative
defenses of ratification, estoppel, and acquiescence.
The Defendants argue that how the Plaintiffs were paid royalties
regarding the mineral estate is not relevant because it is the actions of
the Plaintiffs, not the other parties, that determines estoppel,
ratification, and acquiescence. 60 The Defendants miss the point. The
Plaintiffs are not arguing that the conduct of the companies paying the
royalties is the focus of the equitable defenses. Instead, the Plaintiffs
are pointing out that if the companies never paid royalties based on the
partition agreement, then the Plaintiffs did not ratify the partition or
acquiesce in it by accepting the royalty payments that were based on an
undivided interest, as opposed to a partitioned interest, so there is no
estoppel.
The trial court, therefore, erred when it granted summary
judgment against the Plaintiffs on those affirmative defenses.
60 Oil Co. Br. at 31; Ind. Def. Br. at 56-57.
17 IV. The Defendants did not conclusively establish their adverse- possession affirmative defense because they did not show that they adversely possessed the mineral estate, as opposed to merely possessing the surface estate.
As the Plaintiffs explained in their opening brief, the Defendants
base their adverse possession claim solely on allegations that they
occupied and used the surface estate.61 They make no allegation that
they took any actions to specifically adversely possess the mineral
estate.62
The Plaintiffs explained that when a land owner grants an
interest in the mineral estate, while reserving the surface estate, he has
severed the property and created “two separate and distinct estates: an
estate in the surface and an estate in the minerals.”63 Where the
mineral estate has been severed, possession of the surface estate is not
sufficient to adversely possess the mineral estate.64 Instead, “actual
61 8 CR 2562; 7 CR 2770-2772; 8 CR 2843. 62 8 CR 2562; 7 CR 2770-2772; 8 CR 2843. 63Acker v. Guinn, 464 S.W.2d 348, 352 (Tex. 1971); see also Sutton v. Green, No. 14- 01-01043-CV, 2002 WL 1489347, at *3 (Tex. App.—Houston [14th Dist.] July 11, 2002, no pet.) (“It is well settled in Texas that once mineral rights are severed, two separate and distinct estates (the mineral estate and the surface estate) are created, each of which is capable of separate ownership and sale.”). 64Natural Gas Pipeline Co. v. Pool, 124 S.W.3d 188, 193 (Tex. 2003) (“Once severance occurs, possession of the surface alone will not constitute adverse possession of minerals.”).
18 possession of the minerals must occur.”65 The Texas Supreme Court
has held that “[i]n the case of oil and gas, that means drilling and
production of oil and gas.” 66
The 1,134 acres’ surface and mineral estates were severed in 1932
when Juan and Ynez Salinas conveyed a 1/32 mineral interest, while
reserving the entire surface estate. 67 At that point, separate surface
and mineral estates were created, and the mineral estate had to be
adversely possessed on its own and not through adverse possession of
the surface estate.68
The Defendants do not argue that they took any steps to adversely
possess the mineral estate.69 They certainly do not claim that they
conclusively established that they adversely possessed the mineral
estate.70 Instead, the Defendants claim that they can adversely possess
against the mineral estate even when there has been a severance of the
65 Id. 66 Id. 678 CR 2582. They made a second conveyance of ½ (or 16/32) of the mineral interest in 1940. 8 CR 2584-2585. The two conveyances in 1932 and 1940 resulted in a conveyance of 17/32 of the mineral estate and a reservation of 15/32 of the mineral estate. 7 CR 2299; 8 CR 2536; 8 CR 2582-2585; 8 CR 2839. 68 Natural Gas Pipeline, 124 S.W.3d at 193; Acker, 464 S.W.2d at 352. 69 Oil Co. Def. Br. at 32-37. 70 Id.
19 surface and mineral estate, as long as some of the mineral estate is still
attached to the surface estate. 71 The Defendants argue that even
though a majority of the mineral estate had been severed, “a portion
(11/12 of 15/32) of minerals remained unsevered from the surface
estate,” so they could adversely possess the mineral estate by adversely
possessing the surface estate.72
The Defendants base their argument on two over-half-century-old
cases from other appellate courts, neither of which has ever even been
cited by this Court or the Texas Supreme Court. 73 This Court should
reject those outlier decisions and follow the established Texas rule that
where the mineral estate has been severed—which unquestionably had
happened here—possession of the surface estate is not sufficient to
adversely possess the mineral estate.74 As the Texas Supreme Court
held in 2003, “[o]nce severance occurs, possession of the surface alone
will not constitute adverse possession of minerals.” 75
71 Id. at 32-33. 72 Id. at 33. 73Id. at 33 (citing Birdwell v. Am. Bonding Co., 337 S.W.2d 120, 31 (Tex. Civ. App. Fort Worth 1960, writ ref’d n.r.e.); Dixon v. Henderson, 267 S.W.2d 869, 873 (Tex. Civ. App.—Texarkana 1954, no writ)). 74 Natural Gas Pipeline, 124 S.W.3d at 193. 75 Id.
20 Because the Defendants do not even attempt to claim that they
specifically adversely possessed the minerals, this Court should reverse
the summary judgment based on adverse possession.
V. The Plaintiffs did not waive their claim for past damages.
The Defendants argue that the Plaintiffs waived any claim for
past damages by not addressing the issue in their opening brief. 76 They
argue that the Plaintiffs sought damages under their trespass to try
title claim and Defendant Smith Production alleged in its summary-
judgment motion that there was no evidence of damages.77 Because the
trial court granted summary judgment without specifying a ground, the
Defendants argue that means that the trial court granted summary
judgment on the alleged lack of damages, so the Plaintiffs had to
address the issue in their opening brief.78
The Defendants fail to inform this Court that there was an
agreement under Texas Rule of Civil Procedure 11 filed with the trial
court that removed the damages issue from consideration in the
76 Ind. Def. Br. at 60-62; Oil Co. Br. at 41-42. 77 Ind. Def. Br. at 60-62; Oil Co. Br. at 41-42. 78 Ind. Def. Br. at 60-62; Oil Co. Br. at 41-42; Potter v. Kaufman & Broad Home Sys. of Tex., Inc., 137 S.W.3d 701, 706 (Tex. App.—San Antonio 2004, no pet.); Gamboa v. Gamboa, 383 S.W.3d 263, 274 (Tex. App.—San Antonio 2012, no pet.); TEX. R. APP. P. 38.3.
21 summary-judgment motion.79 The Plaintiffs’ summary-judgment
response expressly addressed that agreement and stated that damages
were not part of the summary-judgment motion.80 The Defendants did
not object to that characterization in their summary-judgment replies.81
Because damages were not before the trial court, it did not grant
summary judgment based on supposed lack of damages. The Plaintiffs,
therefore, did not need to raise the damages issue in their opening brief.
A. Smith Production joined in Thorp’s summary-judgment motion, which raised lack of damages as a summary- judgment ground.
In its summary-judgment motion, Defendant Thorp contended
that the Plaintiffs had no damages because all royalties had been paid
based on proper ownership interest.82 Defendant Smith Production
filed a summary-judgment motion that joined in Thorp’s summary-
judgment motion and “incorporate[d] the grounds, argument and
79 See § V(B) below. 80 See § V(C) below. 81 See § V(D) below. 828 CR 2534 (“Plaintiffs have been paid all royalties due based upon their ownership interest determined as a matter of law.”).
22 evidence in support of summary judgment set out in, referenced by and
attached to” Thorp’s summary-judgment motion.83
B. Thorp’s counsel agreed in writing that the damages issue was based on its argument that the partition agreement was valid, so it was not a separate issue.
The Plaintiffs’ counsel obtained an agreement from Thorp’s
counsel regarding the scope of the summary-judgment claim that the
Plaintiffs had no damages. The Plaintiffs’ counsel emailed Thorp’s
counsel and stated that he was “unsure as to the scope of the following
Thorp summary judgment contention: ‘Plaintiffs have been paid all
royalties due based upon their ownership interest determined as a
matter of law.’”84 The Plaintiffs’ counsel stated that—based on a
conversation that the lawyers had just had—it was his understanding
that “Thorp’s intention was to merely assert that as a result of Thorp
being correct about the title issues pertaining to the validity of the
partition, the Plaintiffs … would have no right to any royalties from
838 CR 2838; see also 8 CR 2843 (Smith Production hereby incorporates the grounds, arguments and evidence set out in, referenced by and attached to Thorp et al. and Faust et al.’s Motions for Summary Judgment as if sully set out herein.”). Smith Production also joined in the Individual Defendants’ summary-judgment motion. 8 CR 2838; 8 CR 2843. 84 9 CR 3160 (Supp. App. A).
23 production of the wells and therefore would have no claims to royalty
from such wells.”85
Thorp’s counsel emailed back.86 He quoted the statement that the
Plaintiffs’ counsel made regarding his understanding of Thorp’s
motion.87 Thorp’s counsel then told the Plaintiffs’ counsel that “[y]our
understanding is correct.”88
The Plaintiffs’ counsel emailed Thorp’s counsel back and thanked
him “for the clarification.”89 The Plaintiffs’ counsel stated that he would
“focus” his summary-judgment response “to that narrow issue, which, I
understand we both agree would be determined by the court’s ruling as
to the legal effect, if any, of the 1968 partition agreement.”90 In other
words, the only damages argument at issue was that the Plaintiffs were
not entitled to damages because the royalties had been properly paid
under the partition agreement, so the only issue on damages in the
85 Id. 86 9 CR 3159 (Supp. App. A). 87 9 CR 3160 (Supp. App. A). 88 Id. 89 9 CR 3159 (Supp. App. A). 90 Id.
24 summary-judgment motion was whether the partition agreement was
valid.
The Plaintiffs’ counsel told Thorp’s counsel, “[i]f I am
misunderstanding where you are coming from, please correct me.” 91
Thorp’s counsel emailed back, saying “I think we understand each
other.”92
C. The Plaintiffs included the written agreement with Thorp in the summary-judgment record and stated that, based on the agreement, they understood that damages were not a separate issue.
In their summary-judgment response—which responded to the
summary-judgment motions filed by Thorp, Smith Production, and the
Individual Defendants—the Plaintiffs specifically addressed the issue of
royalty payments and included the email correspondence with Thorp’s
counsel as an exhibit.93 The Plaintiffs stated that, as they “understand
the scope of the motion, no response, beyond its response to the
underlying title issue, is required.” 94
91 Id. 92 Id. 93 9 CR 2926-2927; 9 CR 3159-3160 (Supp. App. A). Because the correspondence between the Plaintiffs’ counsel and Thorp’s counsel was filed with the trial court, it is a binding agreement under Texas Rule of Civil Procedure 11. . 94 9 CR 2927.
25 D. Neither Thorp nor Smith Production objected to the Plaintiffs’ characterization of the agreement on the damages issue or claimed that the Plaintiffs had to provide damages evidence apart from showing that the partition agreement was invalid.
Both Thorp and Smith Production filed replies to the Plaintiffs’
response to their summary-judgment motions.95 Neither Thorp nor
Smith Production objected to the Plaintiffs’ understanding of the scope
of the summary-judgment motion regarding damages from unpaid
royalties.96
Smith Production certainly did not claim that it was not bound by
Thorp’s agreement regarding the scope of the Thorp summary-judgment
motion that it had joined.97
E. This Court should reject the Defendants’ attempt to ignore the Rule 11 agreement and obtain an advantage through trickery and gamesmanship.
The Defendants have been less than forthright regarding this
issue. They did not even tell this Court about the agreement between
95 9 CR 3230-3235; 9 CR 3263-3282. 96 9 CR 3230-3235; 9 CR 3263-3282. 97 9 CR 3230-3235.
26 Thorp and the Plaintiffs regarding this issue.98 Instead, they acted as if
the agreement did not exist.
The Defendants’ behavior was no better in the trial court. Instead
of raising the issue in their replies to the Plaintiffs’ summary-judgment
response, the Defendants lay behind the log. Rather than telling the
Plaintiffs and the trial court that their damages issue was, somehow,
separate from the validity of the partition agreement, the Defendants
chose to remain silent and not raise the issue until their brief on appeal.
This Court should reject the Defendants’ attempt to play games
with the judicial process and avoid the Rule 11 agreement. It should
hold that the damages issue in the summary-judgment motions was
limited to whether the partition agreement was valid. The Plaintiffs
addressed the validity of the partition agreement in great detail in their
opening brief. This Court, therefore, should hold that the Plaintiffs did
not waive their damages argument. So if this case is reversed and
remanded, the Plaintiffs can attempt to recover the royalties that they
were not paid because the royalty payments were made based on the
invalid partition agreement.
98 Ind. Def. Br. at 60-62; Oil Co. Br. at 41-42.
27 To the extent this Court believes that damages were still before
the trial court on summary judgment, the Plaintiffs request leave to
amend their opening brief to address the damages issue.99
PRAYER
This Court should reverse the summary judgment against the
Plaintiffs and remand this case for trial.
99TEX. R. APP. P. 38.7 (“A brief may be amended or supplemented whenever justice requires, on whatever reasonable terms the court may prescribe.”); see Majeed v. Hussain, No. 02-08-00679-CV, 2010 WL 4137472, at *8 (Tex. App.—Austin Oct. 22, 2010, no pet.) (allowing appellant’s opening brief to be amended after oral argument).
28 Respectfully submitted,
/s/ David George Roger S. Braugh, Jr. David George Texas Bar No. 00796244 Texas Bar No. 00793212 SICO, WHITE, HOELSCHER, CONNELLY•BAKER•WOTRING LLP HARRIS, & BRAUGH, LLP 700 JPMorgan Chase Tower 900 Frost Bank Plaza 600 Travis Street 802 N. Carancahua Houston, Texas 77002 Corpus Christi, Texas 78470 Phone: (713) 980-1700 Phone: (361) 653-3300 Fax: (713) 980-1701 Fax: (361) 653-3333 dgeorge@connellybaker.com rbraugh@swbtrial.com
May 7, 2015
29 CERTIFICATE OF SERVICE
I certify that on May 7, 2015, I served a copy of this document upon the following individuals by certified mail:
Lee S. Gill JONES, GILL LLP 6363 Woodway, Suite 1100 Houston, Texas 77057 Attorney for Thorp Petroleum Corporation; El Paso Production Company; El Paso E&P Company, LP; El Paso Exploration & Production Management, Inc.; El Paso Exploration & Production; Stanco Land Management, LLC and Meredith Land & Minerals Co.
Mark Hanna SCOTT, DOUGLASS & MCCONNICO, L.L.P. 600 Congress Avenue, Suite 1500 Austin, Texas 78701-3589 Attorney for Smith Production Inc.
O.C. Hamilton, Jr. ATLAS & HALL, L.L.P. P.O. Drawer 3725 McAllen, Texas 78502 Attorney for Fausto Salinas; Rosalinda Salinas Balderas; Linda Mandes; Veronica Casas Campbell; Elda Salinas Ponce; Cindy Casas Reyna; Eloida Salinas; and D-FOX, Ltd.
/S/ David George David George
30 CERTIFICATE OF COMPLIANCE
This brief contains 5,455 words, excluding the caption, signature blocks, and certificates. This motion was prepared using Microsoft Word 2013 in 14 point (12 point in footnotes) Century Schoolbook (Arial headings) font.