Conocophillips Company, Rodolfo C. Ramirez, Individually and as Independent Administrator of the Estate of Ileana Ramirez, and El Milagro Minerals, Ltd. v. Leon Oscar Ramirez, Jr., Individually, and Jesus M. Dominguez, as Guardian of the Estate of Minerva Clementina Ramirez, an Incapacitated Person

• Court: Texas Supreme Court
• Decided: January 24, 2020
• Docket: 17-0822
• Status: Published

Opinion

IN THE SUPREME COURT OF TEXAS 444444444444 NO. 17-0822 444444444444

CONOCOPHILLIPS COMPANY, RODOLFO C. RAMIREZ, INDIVIDUALLY AND AS INDEPENDENT ADMINISTRATOR OF THE ESTATE OF ILEANA RAMIREZ, AND EL MILAGRO MINERALS, LTD., PETITIONERS,

v.

LEON OSCAR RAMIREZ, JR., INDIVIDUALLY, AND JESUS M. DOMINGUEZ, AS GUARDIAN OF THE ESTATE OF MINERVA CLEMENTINA RAMIREZ, AN INCAPACITATED PERSON, RESPONDENTS 4444444444444444444444444444444444444444444444444444 ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS 4444444444444444444444444444444444444444444444444444

Argued September 17, 2019

CHIEF JUSTICE HECHT delivered the opinion of the Court.

The issue we decide in this case is whether a devise of “all . . . right, title and interest in and

to Ranch ‘Las Piedras’” refers only to a surface estate by that name as understood by the testatrix

and beneficiaries at the time the will was made or also includes the mineral estate. We conclude that

only the surface estate was devised. We reverse the court of appeals’ judgment and render judgment

for petitioners. I

Conveyances over 80 years provide the context for the parties’ dispute. The factual

background is lengthy and complex but in all material respects undisputed. To assist the reader’s

understanding, we will both describe and chart the transactions. A complete chart is included in an

appendix. All fractions are undivided interests.

In 1941, Ildefonso Ramirez died, leaving to his children, Leon Juan and Felicidad, multiple

tracts totaling 7,016 acres in Zapata County. Not all of the tracts were contiguous. Months later,

Leon Juan and Felicidad partitioned the surface estate and severed the minerals, each taking 3,508

surface acres and an undivided 1/2 interest in the minerals under the entire 7,016 acres. As a result:

Ildefonso Ramirez’s 7,016 acres 1941: 1/2 Leon Juan & 1/2 Felicidad Ildefonso’s death Surface Minerals 1941: Partition 3,508 acres 3,508 acres 1/2 Felicidad 1/2 Leon Juan Leon Juan Felicidad

Leon Juan died in 1966, survived by his wife, Leonor, and three children, Leon Oscar Sr.,

Ileana, and Rodolfo. His will made identical dispositions of his limited surface estate and broader

mineral estate but in separate paragraphs: 1/2 of each to his wife Leonor and the rest to his children

in equal shares. After Leon Juan’s death, ownership of the Zapata County property stood as follows:

2 Ildefonso Ramirez’s 7,016 acres Surface Minerals 1941: Partition 3,508 acres 3,508 acres 1/2 Felicidad 1/2 Leon Juan 1966: Leon 1/2 Leonor Felicidad 1/2 Felicidad Juan’s death 1/6 Leon Oscar Sr. 1/4 Leonor 1/6 Ileana 1/6 Rodolfo 1/12 Leon Oscar Sr. 1/12 Ileana 1/12 Rodolfo

In 1975, Leonor and her children partitioned their interests in Leon Juan’s surface estate.

Their agreement states that the partition did “not . . . include oil, gas and other minerals which for

the [time being] [were] to remain undivided”. Leonor took an 800-acre tract of the surface estate

known as “West El Milagro Pasture”, which also included land and improvements that the parties

referred to as the “Headquarters Ranch”. Rodolfo took a 400-acre tract referred to as “East El

Milagro Pasture”. Leon Oscar Sr. and Ileana jointly took a 1,058-acre tract that, in the words of the

agreement, was “known as Las Piedras Pasture”. Las Piedras was a separate tract not contiguous

with the other property. Three years later, Leonor and Ileana swapped their surface tracts. Their

exchange agreement recites that Leon Oscar Sr. and Ileana had earlier been “partitioned the surface

to 1058 acres . . . known as ‘Las Piedras Ranch’”. Ileana agreed to convey to Leonor “all of her

right, title and interest in and to the surface to . . . 1,058 acres of land . . . known as LAS PIEDRAS

PASTURE”. The agreement states that the “Deed of Exchange [did] not . . . include oil, gas and other

minerals which [were] to remain undivided”. Thus, after the exchange, Leonor owned an undivided

3 1/2 interest in the surface acreage known as Las Piedras Ranch—her son Leon Oscar Sr. owned the

other 1/2 interest—and a 1/4 undivided mineral interest in the entire 7,016-acre family estate:

Ildefonso Ramirez’s 7,016 acres Surface Minerals 3,508 acres 3,508 acres Las Piedras Hq Ranch E El 1/2 Felicidad Ranch & W El Milagro 1975: Milagro Pasture 1/4 Leonor Partition Pasture 1/12 Leon Oscar Sr. 1/2 Ileana Leonor Rodolfo Felicidad 1/12 Ileana 1/2 Leon 1/12 Rodolfo Oscar Sr.

1978: 1/2 Leonor Ileana Rodolfo Felicidad 1/2 Felicidad Exchange 1/2 Leon Oscar Sr. 1/4 Leonor

1/12 Leon Oscar Sr. 1/12 Ileana 1/12 Rodolfo

The family ownership interests had not changed when Leonor executed her will in 1987. She

died the following year. She devised a life estate in “all of [her] right, title and interest in and to

Ranch ‘Las Piedras’” to her son Leon Oscar Sr. with the remainder to his living children in equal

shares. Leonor devised the residuary of her estate equally to her three children, Leon Oscar Sr.,

Ileana, and Rodolfo. They believed at the time that Leonor had devised her mineral interest in the

entire 7,016 acres, including Las Piedras Ranch, to them in equal shares as part of her residuary

estate. Leon Oscar Sr.’s children now contend that Leonor’s residuary estate did not include the

mineral interest in Las Piedras Ranch but that it passed to Leon Oscar Sr. as part of his life estate.

The dispute is shown in this chart:

4 Ildefonso Ramirez’s 7,016 acres Surface Minerals 3,508 acres 3,508 acres Las Piedras Hq Ranch E El Ranch & W El Milagro Milagro Pasture Pasture 1988: 1/2 fee + Ileana Rodolfo Felicidad 1/2 Felicidad Leonor’s 1/2 L/E death – per Leon Oscar 1/6 Leon Oscar Sr. petitioners Sr. 1/6 Ileana 1/6 Rodolfo 1988: Las Piedras Rest of 7,016 Leonor’s Ranch acres death – per respondents 1/2 fee + Ileana Rodolfo Felicidad 1/2 Felicidad 1/2 Felicidad 1/2 L/E Leon Oscar 1/12 fee + 1/4 1/6 Leon Sr. L/E Leon Oscar Oscar Sr. Sr. 1/6 Ileana 1/12 Ileana 1/6 Rodolfo 1/12 Rodolfo

Over the years, mineral leases had been executed on various portions of the family estate,

though the entire estate had never been subject to a single lease. After Leonor’s death, her children

signed several oil and gas leases on various portions of the family land. In 1990, the siblings,

together with their aunt Felicidad, signed an extension of a 1983 lease to Enron Oil and Gas

Company (EOG) of the minerals under Las Piedras Ranch. Consistent with their understanding of

Leonor’s will, the extension treated the siblings as equal fee owners of the minerals under the Ranch,

just as they were equal fee owners of the minerals under the rest of the estate. The 1990 lease was

later transferred to ConocoPhillips.

5 Until Leon Oscar Sr.’s death in 2006, his actions and those of his siblings, Ileana and

Rodolfo, were consistent with their understanding that Leonor’s will had given them a fee interest

in the minerals under the entire 7,016 acres, including Las Piedras Ranch, and inconsistent with a

contrary view. His death terminated his life estate, which passed, in accordance with Leonor’s will,

to his three children: Leon Oscar Jr., Rosalinda, and Minerva. Leon Oscar Sr. left his estate to Leon

Oscar Jr. and Rosalinda, who were named co-executors in his will. He left no property to his

daughter, Minerva, who was incapacitated.

In 2010, Leon Oscar Jr., Rosalinda, and Minerva (through a guardian) brought this lawsuit

against their uncle Rodolfo and his business, El Milagro Minerals, Ltd.; their aunt Ileana’s estate;

and ConocoPhillips and EOG. They asserted that their father’s life estate under their grandmother’s

will included her interest in not only the surface of Las Piedras Ranch but also the minerals beneath

it and that the mineral interest their father, aunt, and uncle received under the will’s residuary

provision did not include those under the Ranch. As remaindermen under the will, they claimed to

own their father’s life-estate interest in 1/2 of the surface of the Ranch and 1/4 of the minerals, and

as his heirs, Leon Oscar Jr. and Rosalinda claimed to own his fee interest in the other 1/2 of the

surface. The competing views are as follows:

6 Ildefonso Ramirez’s 7,016 acres Surface Minerals 3,508 acres 3,508 acres Las Piedras Hq Ranch E El Ranch & W El Milagro Milagro Pasture Pasture 2006: Leon 5/12 Leon Ileana Rodolfo Felicidad 1/2 Felicidad Oscar Sr.’s Oscar Jr. death – per 5/12 1/6 Ileana petitioners Rosalinda 1/6 Rodolfo 1/6 Minerva 1/12 Leon Oscar Jr. 1/12 Rosalinda 2006: Leon Las Piedras Rest of 7,016 Oscar Sr.’s Ranch acres death – per respondents 5/12 Leon Ileana Rodolfo Felicidad 1/2 Felicidad 1/2 Felicidad Oscar Jr. 5/12 1/12 Ileana 1/6 Ileana Rosalinda 1/12 Rodolfo 1/6 Rodolfo 1/6 Minerva 1/8 Leon Oscar 1/12 Leon Jr. Oscar Jr. 1/8 Rosalinda 1/12 Rosalinda 1/12 Minerva

The children, who are respondents in this Court, sought declarations of the parties’

ownership interests. They also claimed that the leases that their father, aunt, and uncle executed were

not effective as to them and sought an accounting from EOG and ConocoPhillips. Rosalinda

eventually dismissed her claims. Based on its rulings on several motions for summary judgment, and

following a bench trial on attorney fees, the trial court signed a final judgment in favor of Leon

Oscar Jr. and Minerva, awarding them each $3,764,489 in damages, $951,546 in prejudgment

interest, a per diem of $283.63 for a span of about 80 days preceding the trial court’s signing of the

7 final judgment, and $1,125,000 in attorney fees—for a total judgment of almost $12 million against

ConocoPhillips.1 The court of appeals affirmed.2 We granted ConocoPhillips’ and Rodolfo’s

petitions for review.3

II

“In construing a will, the court’s focus is on the testatrix’s intent”,4 which “must be

ascertained from the language found within the four corners of the will”, if possible,5 and

“determined as of the time the will is executed”.6 “[W]hen a term in a will ‘is open to more than one

construction,’ a court can consider ‘the circumstances existing when the will was executed.’”7

Leonor’s bequest of a life estate to Leon Oscar Sr. capitalizes “Ranch ‘Las Piedras’” and

places the name in quotation marks, indicating that the term has a specific meaning to Leonor and

her family.8 That meaning is shown by the circumstances that existed when the will was executed.

The 1975 partition agreement names the tracts covered and refers to a 1,058-acre tract as “Las

1 Respondents settled with EOG for $50,000 prior to the trial court’s signing of a final judgment. 2 534 S.W.3d 490 (Tex. App.—San Antonio 2017). The court corrected a clerical error in the judgment awarding relief to respondent Minerva directly rather than through her guardian. Id. at 515. 3 62 TEX. SUP. CT. J. 1310–1311 (June 28, 2019). 4 San Antonio Area Found. v. Lang, 35 S.W.3d 636, 639 (Tex. 2000) (citing Huffman v. Huffman, 339 S.W.2d 885, 888 (Tex. 1960)). 5 Id. (citing Shriner’s Hosp. for Crippled Children of Tex. v. Stahl, 610 S.W.2d 147, 151 (Tex. 1980)). 6 Henderson v. Parker, 728 S.W.2d 768, 770 (Tex. 1987). 7 Hysaw v. Dawkins, 483 S.W.3d 1, 8 (Tex. 2016) (quoting Lang, 35 S.W.3d at 639). 8 See Stagg v. Richardson, No. 01-17-00543-CV, 2018 WL 1320834, at *2 (Tex. App.—Houston [1st Dist.] Mar. 15, 2018, no pet.) (mem. op.) (“The capitalization of the words, the enclosure of the phrase in quotation marks, and the use of brackets all indicate that the phrase ‘Net Amount Due to Stagg’ is terminology borrowed directly from [a document referenced in the mediated settlement agreement being construed].”) (cleaned up).

8 Piedras Pasture”, expressly stating that only the surface of the tracts was covered and “not . . . [the]

oil, gas and other minerals which for the [time being] [were] to remain undivided”. Likewise, the

1978 exchange agreement recites that Leon Oscar Sr. and Ileana were “partitioned the surface to

1058 acres . . . known as ‘Las Piedras Ranch’” and effects the conveyance from Ileana to Leonor

of “all of her right, title, and interest in and to the surface to . . . 1,058 acres of land . . . known as

LAS PIEDRAS PASTURE”. The agreement elsewhere describes the tract as “Las Piedras Ranch”, and

like the partition agreement, makes clear that the “Deed of Exchange [did] not . . . include oil, gas

and other minerals which . . . remain[ed] undivided”. These documents clearly designate the 1,058-

acre tract of land known as Las Piedras Ranch and Las Piedras Pasture as a surface estate only.

Further, the history of conveyances since 1941 demonstrates the Ramirez family’s intent that each

member’s mineral interest in the larger 7,016-acre tract remain undivided.

Respondents argue that the fact that Las Piedras Ranch was not contiguous with the rest of

the estate shows that the family meant to treat the minerals separately as well as the surface. But

when the family separated Leon Juan’s surface estate into Las Piedras Ranch and two other parcels,

they expressly declined to separate the minerals. This is strong evidence that the family intended that

their ownership of all the estate minerals be joint. Respondents argue that the leasing of various

portions of the minerals from time to time is inconsistent with joint ownership, but execution of the

leases was always consistent with the family’s understanding of joint ownership.

Had there been any doubt about the meaning of his mother’s will, it surely was in Leon

Oscar Sr.’s interest to raise it rather than share the mineral interest with his siblings and join with

them and his aunt in leasing the property. The evidence establishes that Leonor, who shared

9 ownership of the Las Piedras Ranch surface with her son, gave him her interest in the surface for

life, but gave her interest in the minerals in the 7,016-acre family estate equally to her three children,

who already had equal interests.

* * * * *

Because all of respondents’ claims are premised on an erroneous interpretation of Leonor’s

will, petitioners are entitled to judgment as a matter of law. We reverse the court of appeals’

judgment and render judgment for petitioners.

Nathan L. Hecht Chief Justice

Opinion delivered: January 24, 2020

10 Ildefonso Ramirez’s 7,016 acres 1941: 1/2 Leon Juan & 1/2 Felicidad Ildefonso’s death Surface Minerals 1941: Partition 3,508 acres 3,508 acres 1/2 Felicidad 1/2 Leon Juan Leon Juan Felicidad 1966: Leon 1/2 Leonor 1/2 Felicidad Juan’s death Felicidad 1/6 Leon Oscar Sr. 1/4 Leonor 1/6 Ileana 1/6 Rodolfo 1/12 Leon Oscar Sr. 1/12 Ileana 1/12 Rodolfo Las Piedras Hq Ranch E El 1/2 Felicidad Ranch & W El Milagro 1975: Milagro Pasture 1/4 Leonor Partition Pasture Felicidad 1/12 Leon Oscar Sr. 1/2 Ileana Leonor Rodolfo 1/12 Ileana 1/2 Leon 1/12 Rodolfo Oscar Sr.

1978: 1/2 Leonor Ileana Rodolfo Felicidad 1/2 Felicidad Exchange 1/2 Leon Oscar Sr. 1/4 Leonor

1/12 Leon Oscar Sr. 1/12 Ileana 1/12 Rodolfo 1988: 1/2 fee + Ileana Rodolfo Felicidad 1/2 Felicidad Leonor’s 1/2 L/E death – per Leon Oscar 1/6 Leon Oscar Sr. petitioners Sr. 1/6 Ileana 1/6 Rodolfo

11 2006: Leon 5/12 Leon Ileana Rodolfo Felicidad 1/2 Felicidad Oscar Sr.’s Oscar Jr. death – per 5/12 1/6 Ileana petitioners Rosalinda 1/6 Rodolfo 1/6 Minerva 1/12 Leon Oscar Jr. 1/12 Rosalinda 1988: Las Piedras Rest of 7,016 Leonor’s Ranch acres death – per respondents 1/2 fee + Ileana Rodolfo Felicidad 1/2 Felicidad 1/2 Felicidad 1/2 L/E Leon Oscar 1/12 fee + 1/4 1/6 Leon Oscar Sr. L/E Leon Sr. Oscar Sr. 1/6 Ileana 1/12 Ileana 1/6 Rodolfo 1/12 Rodolfo 2006: Leon 5/12 Leon Ileana Rodolfo Felicidad 1/2 Felicidad 1/2 Felicidad Oscar Sr.’s Oscar Jr. death – per 5/12 1/12 Ileana 1/6 Ileana respondents Rosalinda 1/12 Rodolfo 1/6 Rodolfo 1/6 Minerva 1/8 Leon Oscar 1/12 Leon Jr. Oscar Jr. 1/8 Rosalinda 1/12 Rosalinda 1/12 Minerva