Tregellas v. Archer

507 S.W.3d 423, 2016 Tex. App. LEXIS 13535, 2016 WL 7439191
CourtCourt of Appeals of Texas
DecidedDecember 20, 2016
DocketNos. 07-14-00421-CV 07-16-00461-CV
StatusPublished
Cited by1 cases

This text of 507 S.W.3d 423 (Tregellas v. Archer) 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
Tregellas v. Archer, 507 S.W.3d 423, 2016 Tex. App. LEXIS 13535, 2016 WL 7439191 (Tex. Ct. App. 2016).

Opinion

OPINION ON REHEARING

James T. Campbell, Justice

The motion for rehearing filed by appellants Ronald Ralph Tregellas and wife Donnita Tregellas (hereafter, “Tregellas”) is overruled in part and granted in part. The motion for rehearing filed by appel-lees Mary Archer Dixon and Carla Archer Johnson as trustees of the Carl M. Archer Trust No. Three and the Mary Frances G. Archer Trust No. Three1 is overruled. We withdraw our opinion and judgment of August 26, 2016, and substitute the following opinion and corresponding judgment in their place.

The Archer trustees brought suit against Tregellas, seeking specific performance of a right of first refusal of a mineral interest. After a bench trial the court rendered judgment in favor of the trustees. We will reverse and render in part, reverse and remand in part, and otherwise affirm the judgment of the trial court.

Background

By a warranty deed of June 16, 2003, members of the Cook family2 conveyed the surface only of the west half of Section 85, Block 4-T, T & NO Ry. Co. Survey in Hansford County, Texas, to the trustees of the Archer trusts. The Cooks also owned the minerals under that half section. As part of the same transaction but by a separate document entitled “Right of First Refusal” (the “ROFR”), the Cooks granted the trustees a right of first refusal to purchase the minerals. The ROFR stated in part:

[The Cooks] ... have sold and granted, and by these presence (sic) do hereby SELL and GRANT unto [the Archer trustees] the Right of First Refusal to purchase the following land described as follows, to-wit:
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Tract 4: All of the oil, gas, and other minerals in, on or under W/2 of Section 85, Block 4-T, T & NO Ry. Co. Survey, Ochiltree County, Texas.
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[427]*427This right of first refusal shall be construed to mean that in the event that [the Cooks], and/or their successors and/or assigns, desire to sell any or all of the above described property, [the trustees], their heirs and assigns, shall have the right to purchase the property, at the same price and on the same terms and conditions as offered by any other bona fide buyer.
[The trustees] shall have sixty (60) days after receipt of said offer to either accept or reject said offer. In the event [the trustees do] not elect to accept said offer, and the property is purchased by the bona fide buyer, set forth above, at the offered price, then this agreement shall be null and void and of no further force and effect, only as to the property so purchased ....
This Right of First Refusal shall be subordinate to and [the Cooks] or their successors or assigns ... shall have the right to execute, to mortgage or otherwise encumber the above described land .... (underlining in original).

Later in 2003 the Archer trustees’ attorney discovered that the property description of Tract 4 in the ROFR, while otherwise correct, erroneously listed the county of its location as Ochiltree County rather than Hansford County.3 He prepared a correction right of first refusal and sent it to the Cook grantors. Two of the grantors, Lacie Tidwell and Trent Tidwell, signed the correction instrument in February 2004 and returned it for filing. None of the other grantors responded. The instrument signed by the Tidwells was recorded in Hansford County in September 2004.

By mineral deed executed on March 28, 2007, and recorded on March 30, 2007, Sharon Sue Farber and Rodney Farber sold their undivided interest in the minerals underlying the west half of Section 85 to Tregellas. It is undisputed the Farbers did not notify the Archer trustees of their intended sale or give them opportunity to purchase the undivided mineral .interest under the terms of the ROFR.

On May 4, 2011, a prospective oil and gas lessee reported the Farber sale to the Archer trustees. The next day the trustees filed suit against the Farbers,4 Tregellas, and others. They stated in their original petition that they “desire to exercise their right to purchase the mineral interest” the Farbers conveyed to Tregellas. They sought specific performance requiring Tre-geílas to convey the mineral interest to the trustees on their payment of the price Tregellas paid the Farbers.

Brenda Cook Smith died in 2008. Tre-gellas negotiated with her husband Ed Smith and son Dalton Smith to buy Brenda Smith’s undivided mineral interest in the property for $20,000. The Archer trustees again were not notified of the proposed sale. After the trustees filed suit Tregellas, relying on the ROFR’s subordination of the first-refusal right to the grantors’ right to mortgage the property, proposed to the Smiths that they structure then.- transaction as a loan secured by a deed of trust. The Smiths agreed, received the $20,000 and signed a promissory note to Tregellas in that amount, bearing interest at ten percent and secured by a deed of trust lien on the mineral interest. The note was payable in ninety days but the Smiths made no attempt to pay it. In August 2012, Tregellas purchased the [428]*428Smith mineral interest at ■ a nonjudicial foreclosure sale. In November, the Archer trustees learned that Tregellas had acquired the Smith interest. In an amended petition they alleged Tregellas obtained the Smith minerals by subterfuge, artifice, or device used to make a voluntary sale appear involuntary and remove it from the right of first refusal.

The trial court’s September 2014 judgment granted specific performance for the Archer trustees as to both the Farber interest and the Smith interest.

Analysis

The Statute of Frauds

We initially address Tregellas’s third issue, which asserts the legal description of the property in the ROFR violates the statute of frauds and is therefore ineffective because it misidentified Section 85’s location as Ochiltree County rather than Hansford County. Among Tregellas’s arguments is that the correction instrument signed by the Tidwells and recorded in Hansford County on September 14, 2004, was ineffective because it did not comply with the requirements of Texas Property Code section 5.031. Tex. Prop. Code Ann. § 5.031 (West 2014). The trial court found the correction instrument substantially complied with the pertinent statutory section, and effectively corrected the erroneous county name in the ROFR.

Section 5.031 makes a correction instrument recorded before September 1, 2011, that substantially complies with Property Code section 5.028 or 5.029 and that purports to correct a recorded original instrument of conveyance effective to the same extent as provided in section 5,030 unless a court “renders a final judgment determining that the correction instrument does not substantially comply” with section 5.028 or 5.029. Tex. Prop. Code Ann. § 5.031. The trial court’s judgment makes no determination that the 2004 correction instrument lacks substantial compliance with section 5.028 or 5.029, and we agree with the Archer trustees that sufficient evidence supports the court’s finding of substantial compliance.

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Bluebook (online)
507 S.W.3d 423, 2016 Tex. App. LEXIS 13535, 2016 WL 7439191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tregellas-v-archer-texapp-2016.