Wolfe v. Devon Energy Production Co.

382 S.W.3d 434, 2012 WL 851678, 2012 Tex. App. LEXIS 2024
CourtCourt of Appeals of Texas
DecidedMarch 14, 2012
DocketNo. 10-09-00223-CV
StatusPublished
Cited by27 cases

This text of 382 S.W.3d 434 (Wolfe v. Devon Energy Production Co.) 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
Wolfe v. Devon Energy Production Co., 382 S.W.3d 434, 2012 WL 851678, 2012 Tex. App. LEXIS 2024 (Tex. Ct. App. 2012).

Opinions

OPINION

REX D. DAVIS, Justice.

This case involves a dispute over ownership of an undivided one-half mineral interest in approximately seventy acres in Johnson County. On cross-motions for summary judgment, the trial court ruled in favor of Devon Energy Production Company, L.P. (Devon) and Barbara Jean Gieser Poynter, individually and as trustee of the Barbara Gieser Poynter 2004 Revocable Management Trust, Grayson Matthew Gieser, and Laura Leigh Gieser (collectively the Giesers). Frank Wolfe, Jr. (Wolfe) and Llano Royalty, Ltd. (Llano) appeal in seventeen and seven issues, respectively.

I. BACKGROUND

F.W. Smith and his wife, Eva Mae Smith, conveyed 155.115 acres of land (the Property) to Martin Hedrick and John Little by deed dated March 1, 1978. As part of the consideration for the conveyance, Hedrick and Little executed a promissory note for $209,250, payable to the Smiths (the Original Note). The Original Note was secured by a vendor’s lien retained in the deed and a deed of trust to Charles H. Newman, III, trustee (the Newman Deed of Trust). The Newman Deed of Trust expressly allowed the trustee or substitute trustee to sell the property in the event of default.

While the Original Note remained unpaid, Hedrick and Little conveyed the [439]*439Property to “LEONARD R. MORFELD, TRUSTEE” by deed dated July 2, 1982. In the deed, Hedrick and Little reserved an undivided one-half interest in the minerals of the Property. “LEONARD R. MORFELD, TRUSTEE” assumed the Original Note, secured by the Newman Deed of Trust and the Vendor’s Lien. Wolfe alleges that Morfeld acquired the Property on his behalf and in trust for him.

“LEONARD R. MORFELD, TRUSTEE” then executed a deed conveying the Property to ABC Utilities Services, Inc. (ABC Utilities) in 1984. Wolfe was the president and chief operating officer of ABC Utilities. In the deed, “LEONARD R. MORFELD, TRUSTEE” reserved an undivided one-half interest in the minerals of the Property. ABC Utilities assumed the Original Note, secured by the Newman Deed of Trust and the Vendor’s Lien. Wolfe again alleges that Morfeld was acting on his behalf in conducting this transaction.

ABC Utilities obtained a $500,000 loan from Texas American Bank/West Side (TAB) on June 19, 1986. The loan was secured by a deed of trust to W. Barry Smith and/or Paul Goolsby, trustees (the TAB Deed of Trust). The interpretation of this instrument’s language is in dispute and will be discussed more fully below. Shortly thereafter, the Smiths sold, transferred, and conveyed the Original Note and “said lien and all liens and titles held by [them] in and to said land” to TAB.

ABC Utilities then obtained a second loan from Summit National Bank (Summit) in 1988 for $1,549,770.13. The loan was secured by a deed of trust to James L. Murray, trustee (the Summit Deed of Trust). The Summit Deed of Trust stated, “The note hereby secured is given in renewal and extension of the present existing indebtednesses described as follows:

SEE EXHIBIT ‘B’ ATTACHED HERETO AND MADE A PART HEREOF.” The attached Exhibit “B” provided:

The Note hereby secured is given in renewal and extension of that present existing indebtedness described as follows:
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The balance remaining due and unpaid on the hereinabove described property described in that one certain promissory note dated June 19, 1986, in the original principal sum of $500,000.00, executed by ABC UTILITIES SERVICE, INC., payable to the order of TEXAS AMERICAN BANK/WEST SIDE, described in and secured by Deed of Trust, Security Agreement and Financing Statement of even date therewith to W. Barry Smith, et al., Trustee’s, recorded in Volume 1203, Page 589, Real Records, Johnson County, Texas. Said lien assigned to SUMMIT NATIONAL BANK/FORT WORTH in Assignment of Lien dated October 8, 1986, recorded in Volume 1349, Page 244, Real Records, Johnson County, Texas; and
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WHEREAS, said note and liens are now held by Beneficiary herein, said Beneficiary is hereby subrogated to all rights, liens and equities, interest and remedies created or preserved in said note or liens, all of which are hereby continued in full force and effect in favor of said Beneficiary whether the owners of said lien or liens executed an assignment or a release of said lien or liens.

TAB had previously sold, transferred, and conveyed the TAB note and “said lien and all liens and titles held by it in and to said land” to Summit.

ABC Utilities subsequently defaulted, and Summit foreclosed on the Property under the Summit Deed of Trust. Summit [440]*440purchased the Property at the foreclosure sale and received a substitute trustee's deed dated June 4, 1991. Summit then conveyed the Property to James A. Burns and his wife, Barbara J. Burns, by deed dated August 15, 1991. Thereafter, as part of their apparent divorce, James Burns conveyed the Property to his former wife, who was then known as Barbara Jean Gieser, by two deeds both dated November 19,1993.

Over the next few years, Barbara Gieser conveyed several parcels of the Property. First, by deed dated September 2, 1994, she conveyed part of the Property to Jeffry Bednarz and his wife, Tammie Bed-narz. The deed stated, “This conveyance is SUBJECT TO all the permitted exceptions described in EXHIBIT ‘B’, attached hereto and made a part hereof.” The attached Exhibit B, entitled “PERMITTED EXCEPTIONS,” stated:

2. An undivided one-half interest in and to all oil, gas and other minerals, caliche, coal and lignite, etc. and the like, in, on, and under, or that which may be produced from the above described property together with rights of ingress and egress with purpose of exploring, drilling, mining or production of the same, contained in the Warranty Deed executed by Leonard Morfeld, Trustee to ABC Utilities, Inc., and recorded in Volume 994, Page 568, Real Records, Johnson County, Texas.
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4. Reservation of undivided one-half interest of all oil, gas and other minerals contained in instrument dated July 2,1982, and recorded in Volume 904, Page 602, Deed Records, Johnson County, Texas, together with all rights incident thereto, express or implied.

Later, Barbara conveyed seven acres of the Property to her son, Grayson Matthew Gieser, and his wife, Laura Leigh Gieser, by deed dated March 29, 1996. This deed, unlike the conveyance to the Bednarzes, made no mention of the prior mineral reservations. Finally, Barbara conveyed another portion of the Property to Jeffry Bednarz by deed dated July 11, 1996. By almost identical language to that in the first Bednarz deed, this deed similarly stated that the conveyance was made subject to the prior mineral reservations.

On May 31, 2001, Barbara executed an Oil, Gas and Mineral Lease in favor of Mitchell Energy Company, L.P. with regard to her remaining 62.918 acres of the Property. That same day, Grayson and Laura Gieser also executed an Oil, Gas and Mineral Lease in favor of Mitchell Energy with regard to their seven acres of the Property. Mitchell Energy Company, L.P. is now known as Devon. See Tex. R.App. P. 38.1(g).

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Cite This Page — Counsel Stack

Bluebook (online)
382 S.W.3d 434, 2012 WL 851678, 2012 Tex. App. LEXIS 2024, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wolfe-v-devon-energy-production-co-texapp-2012.