Reed v. Maltsberger/Storey Ranch, LLC

534 S.W.3d 51
CourtCourt of Appeals of Texas
DecidedMay 3, 2017
DocketNo. 04-16-00231-CV
StatusPublished
Cited by7 cases

This text of 534 S.W.3d 51 (Reed v. Maltsberger/Storey Ranch, LLC) 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
Reed v. Maltsberger/Storey Ranch, LLC, 534 S.W.3d 51 (Tex. Ct. App. 2017).

Opinion

OPINION

Opinion by:

Karen Angelini, Justice

At issue in this appeal is the interpretation of a 1942 Deed that conveys to the grantees “an undivided one-fourth (1/4) interest in and to all of the oil, gas and other minerals in and under and that may be produced from the following described lands” but then proceeds to strip certain rights of mineral ownership from the grantees. Appellants (collectively “the Reed Plaintiffs”) argue the trial court erred in determining that the 1942 Deed conveys a fixed non-participating royalty interest to the grantees. According to the Reed Plaintiffs, the 1942 Deed conveys a 1/4 mineral interest and not a fixed royalty interest. Alternatively, they argue the 1942 Deed conveys a “floating” royalty interest. We agree with the Reed Plaintiffs that the 1942 Deed conveys a 1/4 mineral interest to the grantees.

Background

In 1942, through an instrument titled “Royalty Deed,” L.V. Chenoweth conveyed to W.B. Dossett and E.M. Benz “an undivided one-fourth (1/4) interest in and to all of the oil, gas and other minerals in and under and that may be produced from” described lands in La Salle County, Texas. The 1942 Deed acknowledges that, at the time, the deed was signed, the described lands were subject to an existing oil and gas lease: , ,

And said above, described lands being now under an oil and gas lease originally executed in favor of L.y, Chenoweth, Trustee and now held by said L.V. Che-noweth, Trustee, it is understood and agreed that this sale is made subject to said lease, but covers and includes one-[54]*54fourth (1/4) of all the oil royalty arid gas rental or royalty due and to be paid under the terms of said lease, insofar as it covers the above described property.

The deed then strips Grantees W.B. Dos-sett and E.M. Benz of certain rights normally given to mineral-interest owner,s:

In the event the above lease to L.V. Chenoweth, trustee, shall for any reason become cancelled or forfeited, it is agreed that the joinder or consent .of grantee, his heirs or assigns, shall not, be required to another or new lease upon said property by L.V. Chenoweth, his heirs or assigns, nor shall grantee, his heirs or assigns, be entitled to .share in any bonus consideration therefor or delay rentals thereunder, it being the purpose and intent hereof to grant and convey an undivided one-fourth (1/4) of the one-eighth (1/8) royalty (including any annual gas rentals) under said existing lease and an equivalent royalty interest under any future mineral leases thereon by, the said L.V. Chenoweth, his heirs, administrators or assigns.

The underlying dispute arose out of the amount of royalty payments owed to the Reed Plaintiffs, as successors in interest to Grantees W.B. Dossett and E.M.’ Benz, At the time the 1942 Deed was ■ signed, the lease referred to in-the deed provided for a 1/8 royalty. The current lease, “the Hanks Lease,” provides for a royalty of 22.5%.

Tom 0. Hanks and Linda R. Hanks are the current lessors of the mineral estate. Their' assignee is TK Hanks Royalties, L.P. Rosetta Resources Operating, L.P. (“Rosetta”) is the current lessee1 and has been conducting operations on the land described by the 1942 Deed. Rosetta- was thus responsible for distributing royalty payments and had been paying a fixed 1/32 royalty to the Reed Plaintiffs as W.B. Dos-sett’s and E.M. Benz’s successors in interest.

The Reed Plaintiffs, believing they owned a 1/4 mineral interest and thus were owed 1/4 of the 22.5% royalty, sued Rosetta, TK Hanks Royalties, L.P., Tom 0. Hanks, and Linda R. Hanks for declaratory judgment. The Reed Plaintiffs also brought a declaratory judgment: action against Maltsberger/Storey Ranch, LLC and Storey Minerals, Ltd. (collectively, “Storey”), the successors in interest to a claimed royalty reservation burdening the leased property. The Reed Plaintiffs alleged they were entitled to royalty payments calculated based on them ownership of 1/4 of the minerals as provided in the 1942 Deed. That is, the Reed Plaintiffs alleged they were entitled to 1/4 of the 22.5% royalty. Storey filed a counterclaim for declaratory relief, alleging that Rosetta had correctly construed the 1942 Deed and was properly paying the Reed Plaintiffs a 1/32 fixed royalty. Tom 0. Hanks, Linda R. Hanks and TK Hanks Royalties, L.P. (collectively “the Hanks”) filed a counterclaim for declaratory relief, also alleging the Reed Plaintiffs were entitled to only a 1/32 fixed royalty.

The Reed Plaintiffs moved for summary judgment, arguing that as a matter of law they were entitléd to 1/4 of the 22.5% royalty provided in the Hanks Lease. Sto-rey and the Hanks then, respectively, moved for their own summary' judgment, arguing that as a matter of law the 1942 Deed conveyed to the grantees a 1/32 fixed royalty in all future leases. The Reed Plaintiffs and Storey also requested attorney’s fees in théir respective motions- for summary judgment. The trial court denied the motion for summary judgment filed by the Reed Plaintiffs and granted the motions for summary judgment filed by Sto-[55]*55rey and the Hanks. In its order, the' trial court declared that- “the 1942 Royalty Deed ... conveyed a fixed non-participating royalty interest to W.B. Dossett and E.M. Benz.” The trial court ruled that the Reed Plaintiffs were “collectively entitled to a fixed 1/32 nonparticipating royalty, interest associated with production from the property described in the Royalty Deed.” It then awarded attorney’s fees to Storey.

The Reed Plaintiffs bring two issues on appeal: (1) whether the 1942 Deed conveyed a mineral ownership interest or a royalty interest; and (2) if the 1942 Deed conveyed a royalty ownership interest^ whether the deed conveyed a floating royalty interest or a fixed royalty interest.

Standard op Review

To obtain a traditional summary judgment, a party moving for summary judgment must show that no genuine issue of material fact exists and that the party is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(e); Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). In reviewing the grant of a summary judgment, we must indulge every reasonable inference and resolve any doubts in favor of the respondent. Johnson, 891 S.W.2d at 644; Nixon, 690 S.W.2d at 549. In addition, we must assume all evidence favorable to the respondent is true. Johnson, 891 S.W.2d at 644; Nixon, 690 S.W.2d at 548-49.

A trial court’s grant of summary judgment is reviewed de novo. Mid-Century Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007). When both parties move for partial summary judgment on the same issues and the trial court grants one motion and denies the other, we consider the summary judgment evidence presented by both sides, determine all questions presented, and if we determine that the trial court erred, render the judgment the trial court should have rendered. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

Interpretation op Deeds

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Bluebook (online)
534 S.W.3d 51, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reed-v-maltsbergerstorey-ranch-llc-texapp-2017.