Ramsey v. Grizzle

313 S.W.3d 498, 2010 WL 1980247
CourtCourt of Appeals of Texas
DecidedMay 19, 2010
Docket06-09-00026-CV
StatusPublished
Cited by44 cases

This text of 313 S.W.3d 498 (Ramsey v. Grizzle) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ramsey v. Grizzle, 313 S.W.3d 498, 2010 WL 1980247 (Tex. Ct. App. 2010).

Opinion

OPINION

Opinion by

Justice CARTER.

Very often determining which party has the burden of proof is perfunctory and does not have a great effect. In this case, we believe the burden of proof is crucial.

Buck Bryan Ramsey and his wife, Edith Elizabeth Ramsey, 1 became the owners of real property in Lamar County upon which an oil well was located, the well having been drilled pursuant to a pre-existing oil and gas lease (the Hancock lease). Joe Grizzle became the holder of the leasehold estate. The operators of the well experienced problems with it, and its production was intermittent for several years. Thinking that he had been excluded from operating the well, Grizzle filed suit to enjoin Ramsey from excluding him and to declare his lease valid; Ramsey countered -with an allegation that the lease had terminated by its own terms because for more than ninety consecutive days Grizzle had no production or other operations at the well site. Thinking the lease had expired, Ramsey entered into another oil and gas lease on the same property with Optimal Utilities, Inc., who intervened in the suit and likewise alleged Grizzle’s lease had terminated for lack of operations. Grizzle sold a ten percent interest in the lease to Charles and Donna Kay Calhoun. Optimal brought in the Calhouns as defendants.

All parties filed what were designated as declaratory judgment actions. The purchaser of the oil, Eastex Oil, filed an inter-pleader action; not knowing who to pay, Eastex deposited the money into the registry of the court. The two cases were consolidated for trial.

Trial was to a jury who found that Ramsey and Optimal had not shown a cessation of operations for more than ninety consecutive days. Based on that verdict, the trial court entered a declaratory judgment that the Grizzle lease was valid and awarded Grizzle attorney’s fees of over $49,000.00 plus additional amounts on ap *502 peal. Ramsey and Optimal’s appeals raise several issues: (1) lack of standing by Grizzle; (2) default in proof of title; (3) insufficiency of evidence to uphold the jury verdict; (4) improper attorney’s fees; and (5) incurable jury argument. We affirm the judgment of the trial court in some respects, but reverse the attorney’s fee award.

I. FACTUAL AND PROCEDURAL HISTORY

A. History of Leases

Pauline Hancock, G.T. Hancock, Ollie Gill, and W.E. Gill first leased the Hancock well in 1975 to Oil Development Company of Texas. A series of assignments throughout the years led to a 1999 lease to Dale Glass, who would later assign his interest to Grizzle.

When the Ramseys purchased the real estate in 2002, the ownership they acquired was subject to the existing Hancock lease.

B. Acquisition of Lessees Rights by Grizzle; Assignment(s) by Grizzle

Grizzle claims, and it appears to be generally accepted, that he got the interest in the Hancock lease by assignment from Glass in June 2003, to be effective July 1, 2003. Glass was the lessee from the 1999 lease and the man working for Grizzle as pumper. Grizzle later fired Glass in January 2005 and hired Michael Brooks as “pumper” somewhere around February 2005.

Glass explained the confusing set of circumstances leading up to the assignment to Grizzle. He had an interest in the well and was involved in some litigation -with Jack Atkins. Grizzle got part of the interest from Atkins, but required that Glass release Atkins. Glass would sell his claims against Atkins, then Grizzle was to furnish the money to keep the well pumping and would serve as the operator. A man named Sparkman was the operator when Grizzle first got his interest. Then Grizzle became operator and, according to Glass, that was “when it went to hell.”

II. DISCUSSION

A. Standing: Trespass to Try Title or Declaratory Judgment Action

1. Title was at issue in this case

Ramsey and Optimal argue that Grizzle lacks standing to assert this claim because this case was in reality a trespass to try title case and Grizzle failed to prove a title interest in the Hancock lease. So we must first decide whether we must review this case as a declaratory judgment or based on requirements of a trespass to try title case.

The Texas Supreme Court has explained that oil and gas leases are unique: In Texas it has long been recognized that an oil and gas lease is not a “lease” in the traditional sense of a lease of the surface of real property. In a typical oil or gas lease, the lessor is a grantor and grants a fee simple determinable interest to the lessee, who is actually a grantee. Consequently, the lessee/grantee acquires ownership of all the minerals in place that the lessor/grantor owned and purported to lease, subject to the possibility of reverter in the lessor/grantor. The lessee’s/grantee’s interest is “determinable” because it may terminate and revert entirely to the lessor/grantor upon the occurrence of events that the lease specifies will cause termination of the estate. In the cases before us today, the lessors retained only a royalty interest. When an oil and gas lease reserves only a royalty interest, the lessee acquires title to all of the oil and gas in place, and the lessor owns only a possibility of reverter and has the right to receive royalties. A royalty interest, as *503 distinguished from a mineral interest, is a nonpossessory interest. 2 Natural Gas Pipeline Co. of Am. v. Pool, 124 S.W.3d 188,192 (Tex.2003). 3

This recitation of Texas law by the Texas Supreme Court illustrates that title to the mineral estate is at issue here. Grizzle takes the position that he still holds the fee simple determinable, that cessation of operations did not exceed ninety days and, therefore, did not terminate the lease. The Ramseys and Optimal maintain that the possibility of reverter automatically vested in the Ramseys’ title to the mineral estate, after which they entered into a lease with Optimal.

2. The impact of title as issue

With an exception not applicable here, a trespass to try title claim is the exclusive method in Texas for adjudicating disputed claims of title to real property. See Tex. PROp.Code Ann. § 22.001(a) (Vernon 2000); Martin v. Amerman, 133 S.W.3d 262, 267 (Tex.2004); 4 Koch v. Gen. Land Office, 273 S.W.3d 451, 455 (Tex.App.-Austin 2008, pet. filed); Glover v. Union Pac. R.R. Co., 187 S.W.3d 201, 211 (Tex.App.-Texarkana 2006, pet. denied). When the suit does not involve the construction or validity of deeds or other documents of title, the suit is not one for declaratory judgment. McRae Exploration & Prod. Inc. v. Reserve Petro. Co., 962 S.W.2d 676, 685 (Tex.App.-Waco 1998, pet. denied).

In a cessation of operations case, the San Antonio court pointed out that construction of the lease was not at issue in a ease. See BP Am. Prod. Co. v.

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Cite This Page — Counsel Stack

Bluebook (online)
313 S.W.3d 498, 2010 WL 1980247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ramsey-v-grizzle-texapp-2010.