Duvall v. Carr-Pool , 509 S.W.3d 661 ( 2016 )

Cite as 2016 Ark. App. 611ARKANSAS COURT OF APPEALS
DIVISION III
No. CV-16-267
JERRY D. DUVALL, WANDA Opinion Delivered DECEMBER 14, 2016
DUVALL, R.D. WILLIAMS &
COMPANY and XTO ENERGY INC. APPEAL FROM THE CONWAY
COUNTY CIRCUIT COURT
APPELLANTS [NO. 15CV-2013-057]
V.
HONORABLE DAVID H.
VICKI E. CARR-POOL AS TRUSTEE MCCORMICK, JUDGE
OF THE TRV IRREVOCABLE TRUST
AFFIRMED
APPELLEE
DAVID M. GLOVER, Judge
This is the second time this case is before us on appeal. In the first appeal, our court
dismissed for lack of a final order. Duvall v. Carr-Pool, 2016 Ark. App. 118. We now have
a final order; appellants Jerry and Wanda Duvall (Duvall) have again appealed the Conway
County Circuit Court’s decision to quiet title to mineral rights (the “mineral rights”) in
appellee Vicki Carr-Pool, as trustee of the TRV Irrevocable Trust (Carr-Pool), in the
following real property (the “real property”) in Conway County, Arkansas, to wit:
The Northeast Quarter of the Northwest Quarter (NE1/4NW1/4) of Section 33,
Township 8 North, Range 17 West, except 10 acres in the Southwest corner thereof,
conveying 30 acres, more or less.
We affirm the trial court’s decision to quiet title to the mineral rights in Carr-Pool, but we
do so on a different basis than determined by the trial court.
In April 2013, Carr-Pool filed a petition to quiet title in the mineral rights and for a
Cite as 2016 Ark. App. 611declaratory judgment that Duvall owns only the surface rights to the real property. Duvall
resisted her petition. Prior to trial, the parties jointly stipulated the following facts concerning
the chain of title and curative-title measures:
1. January 25, 1967, Warranty Deed, Mayne Hawkins and Matilda Hawkins
conveyed the surface rights to the property at issue to Dr. W.J. Cargile and reserved
all oil, gas, and other minerals for Mayne and Matilda Hawkins.
2. July 10, 1970, Warranty Deed, Dr. W.J. Cargile conveyed the surface rights
to the property at issue back to Mayne Hawkins, Conway County Circuit Clerk Page
26 of Record Book No. 104.
3. The July 10, 1970, Warranty Deed from Dr. W.J. Cargile to Mayne
Hawkins stated that all oil, gas, and other minerals were reserved by Cargile. Cargile
never obtained an interest or ownership in the oil, gas, and other minerals as all
interests in oil, gas, and other minerals were reserved by Mayne Hawkins and Matilda
Hawkins in the Warranty Deed dated January 25, 1967.
4. August 5, 1974, Warranty Deed, Mayne Hawkins and Matilda Hawkins
conveyed a Warranty Deed to Duvall involving the property at issue. Rights
conveyed by said Deed are at issue in this herein lawsuit. Conway County Circuit
Clerk Page 485 of Record Book No. 117.
5. The legal description in the August 5, 1974 Warranty Deed states:
“The Northeast Quarter of the Northwest Quarter (NE1/4NW1/4) of Section
33, Township 8 North, Range 17 West, except 10 acres in the Southwest
corner thereof, conveying 30 acres, more or less;
It being understood that all oil, gas, and other minerals in or under or that may
be produced from said land have been previously reserved or conveyed.”
6. December 12, 1980, Mineral Deed, Mayne Hawkins and Matilda Hawkins,
husband and wife, conveyed all of the oil, gas, and other minerals for the property at
issue to themselves and Ruby Hawkins as Joint Tenants with the Right of
Survivorship, Conway County Circuit Clerk Oil and Gas Record Book 37, Page 642.
7. January 2, 1981, Oil and Gas Lease entered into between Lessors, Mayne
Hawkins, Matilda Hawkins and Ruby Hawkins Cargile and Lessee, Munn Exploration
Company, Inc. For the property at issue, Conway County Circuit Clerk Book 37,
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Cite as 2016 Ark. App. 611Page 847.
8. February 11, 1988, Oil and Gas Lease entered into between Lessors, Matilda
Hawkins and Ruby Hawkins Cargile and Lessee, Nadel and Gussman for the property
at issue, Conway County Circuit Clerk Record Book 70, Page 491.
9. September 21, 1990, Ruby Hawkins heir and the sole remaining Joint
Tenant with Right of Survivorship for the property at issue. An Affidavit was filed
with the Conway County Circuit Clerk on September 19, 2009, Conway County
Circuit Clerk Book 188, Page 0056.
10. November 3, 1994, Oil and Gas Lease entered into between Lessor Ruby
Hawkins Cargile and Lessee, Gary A. Monroe for the property at issue, Conway
County Circuit Clerk Oil and Gas Record Book 85, Page 666.
11. March 10, 1998, Mineral Deed, Ruby Hawkins Cargile conveyed her
minerals interests in the property at issue to herself, Ruby Hawkins Cargile, as Trustee
of the Ruby Hawkins Cargile Living Trust dated February 27, 1998, Conway County
Circuit Clerk Oil and Gas Record Book 87, Page 349.
12. June 18, 2005, Oil and Gas Lease entered into between Lessor, Ruby
Hawkins Cargile, as Trustee for the Ruby Hawkins Cargile Living Trust dated
February 27, 1998, and Lessee, Griffith Land Services, Inc. for the property at issue,
Conway County Circuit Clerk Oil and Gas Record Book #186, pages 60-65.
13. October 6, 2006, Ruby Hawkins died intestate.
14. January 22, 2007, Mineral Deed, Bettye S. Carr, the successor Trustee of
Ruby Hawkins Cargile Living Trust dated February 27, 1998, conveyed and
quitclaimed via a Mineral Deed the mineral interests in the property at issue to herself
and said Mineral Deed was recorded with the Conway County Court Clerk on
January 24, 2007, Conway County Circuit Clerk Oil and Gas Record Book #141,
Pages 58-62.
15. February 12, 2007, Mineral Deed, Bettye S. Carr conveyed and quitclaimed
via a Mineral Deed the mineral interest in the property at issue to herself, Bettye S.
Carr, as Trustee of the Bettye S. Carr Revocable Trust dated the 3rd day of December,
1996, and said Mineral Deed was filed with the Conway County Circuit Clerk on or
about February 20, 2007, Conway County Circuit Clerk Oil and Gas Record Book
#142, Pages 339-343.
16. October 16, 2009, Warranty Deed, conveyed from Bettye S. Carr, both
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Cite as 2016 Ark. App. 611individually and as Trustee of the Bettye S. Carr Revocable Trust dated the 3rd day of
December, 1996, to Vicki Elizabeth Carr-Pool, as Trustee of the TRV Irrevocable
Trust, dated the 14th day of October, 2009, Conway County Circuit Clerk Book 252,
Page 0290.
....
25. August 2012, XTO Energy Inc. suspended royalty payments to the TRV
Irrevocable Trust for the property at issue based on alleged title defects.
26. XTO Energy Inc. and R.D. Williams and Company entered into an
independent contractor agreement with respect to the acquisition by R.D. Williams
and Company of oil and gas leases in an area which included the lands which are the
subject of this litigation.
At trial, Carr-Pool testified that the only issue to be litigated was who owned the
mineral rights; she acknowledged that Duvall owned the surface rights to the real property.
She explained that on December 12, 1980, Mayne and Matilda Hawkins conveyed the
mineral rights to themselves and Ruby Hawkins as joint tenants with right of survivorship;
Mayne died in January 1984; Matilda died in September 1990; Ruby, as sole survivor,
conveyed the mineral rights to the Ruby Hawkins Cargile Trust in March 1988; Ruby died
intestate in October 2006; and Carr-Pool’s mother, Bettye Carr, inherited Ruby’s estate.
Carr-Pool explained that her mother, as successor trustee of the trust, conveyed the mineral
interests to herself in a mineral deed dated January 22, 2007, and then, on February 12, 2007,
her mother conveyed the mineral rights by quitclaim deed to the Bettye S. Carr Revocable
Trust; then, a warranty deed transferred the mineral rights to the TRV Irrevocable Trust, of
which Carr-Pool is the trustee. Carr-Pool stated that since the 1974 deed from the
Hawkinses to Duvall, she and her predecessors in title had entered into oil-and-gas leases for
the mineral rights in 1981, 1988, 1994, and 2005, and there had never been any objection to
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Cite as 2016 Ark. App. 611any of the leases. Carr-Pool testified she contacted XTO in August 2012 because she knew
it had drilled on the real property, and she had not received any royalty payments; she learned
there was language in the 1974 deed that was being questioned by XTO, and she needed to
obtain a stipulation of interest from Duvall. It was Carr-Pool’s testimony that when she called
Duvall, he told her he was a greedy person and if he could get the minerals, he would do it.
Duvall never signed the stipulation Carr-Pool sent to him.
Sharon Kindy, a petroleum landman who worked for R.D. Williams and Company,
testified she was familiar with the real property because XTO sent her a title opinion on the
property and asked her to do curative work on any title defects; specifically, she was asked to
obtain a stipulation of interest because, according to the title opinion, the deed in Duvall’s
name stated that all of the minerals had been previously reserved or conveyed, and XTO
wanted to know exactly what that meant, how it was being taken, and who was claiming the
property. Kindy said she contacted Duvall to see if he was claiming the mineral rights; when
she explained why she was calling, he told her he “guessed” he would sign it because the
Hawkinses had been good to him and had financed the real property for him when he did not
have the money to pay for the real property. Kindy said Duvall did not say he claimed the
mineral rights, but he also did not say he didn’t claim them. Kindy said after she spoke with
Duvall, he informed her he would be filing a quiet-title suit and would not sign a disclaimer
of interest.
Jerry Duvall testified that the language “it being understood that all oil, gas, and other
minerals in and under or that may be produced from said land have been previously reserved
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Cite as 2016 Ark. App. 611or conveyed” was in his 1974 deed from the Hawkinses, and he made no objection at that
time; he said there was not much he could say when he bought a piece of property that was
subject to previous reservations. He stated he did not do a title search until after Sharon
Kindy had contacted him, and he saw where Cargile had reserved the mineral rights, but he
also said he saw that when Cargile sold the real property back to Mayne Hawkins, he had tied
the mineral rights and surface rights back together. Duvall testified he never attempted to
lease the mineral rights on the real property because he did not think he owned the mineral
rights. He agreed he took no action on the mineral rights from 1974 to 2012. He admitted
he knew about the oil-and-gas lease entered into by Ruby Hawkins in 2005 on the real
property, but he was not concerned because she was Cargile’s widow, and he assumed she had
inherited all of Cargile’s property. He stated he did not realize the Hawkinses had reserved
the mineral rights until 2012.
The trial court issued a letter opinion on February 9, 2015, and then filed an order of
judgment on March 16, 2015. In its order, the trial court found that the 1974 warranty deed
from Mayne and Matilda Hawkins to Jerry Duvall did not indicate whether Matilda Hawkins
held only an inchoate dower interest in the real property and mineral rights or if M. Hawkins
and Matilda Hawkins held title as husband and wife as tenants by the entirety; that the 1970
deed from Dr. Cargile to M. Hawkins did not merge the interest held by Matilda Hawkins,
and Matilda Hawkins still held her prior mineral-rights reservation and inchoate dower
interest in the surface rights to the real property; that the mineral-rights language in the 1974
deed was not a valid mineral-rights reservation; and that there was clear title from M.
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Cite as 2016 Ark. App. 611Hawkins and Matilda Hawkins to Carr-Pool as trustee, and she is the owner of Matilda
Hawkins’s interest in the mineral rights. The trial court further found that Duvall had
purchased the surface rights to the real property from M. Hawkins and Matilda Hawkins and
received a warranty deed containing the mineral-rights-reservation language; that he never
attempted to exercise control over the mineral rights for the real property and has not
challenged the exercise of control over the mineral rights by Hawkins or subsequent owners
since conveyance of the surface rights to the real property to Duvall in 1974; that it was
Duvall’s testimony he did not think he owned the mineral rights in the real property due to
the language in the 1974 deed; that Mayne Hawkins and subsequent owners had openly
exercised control over the mineral rights by executing oil-and-gas leases in 1981, 1988, 1994,
and 2005, and had accepted payments under these leases; that Duvall testified he was aware
of the 2005 lease; and that Duvall never questioned the mineral-rights reservation until 2012.
The trial court found that Carr-Pool had established title to the mineral rights by adverse
possession and quieted title to the mineral rights in her as trustee of the TRV Irrevocable
Trust.
Duvall appeals, arguing that the trial court incorrectly found (1) Carr-Pool had
acquired ownership of the mineral rights through adverse possession, and (2) the dower rights
of the predecessor in title affected the ownership of the mineral rights.
Standard of Review
Quiet-title actions have traditionally been reviewed de novo as equity actions.
SEECO, Inc. v. Holden, 2015 Ark. App. 555, at 4, 473 S.W.3d 36, 38. Our standard of
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Cite as 2016 Ark. App. 611review on appeal from a bench trial is not whether there was substantial evidence to support
the finding of the circuit court, but whether the circuit court’s findings were clearly erroneous
or clearly against the preponderance of the evidence. Mauldin v. Snowden, 2011 Ark. App.
630, at 2, 386 S.W.3d 560, 562. A finding is clearly erroneous when, although there is
evidence to support it, the reviewing court on the entire evidence is left with a firm
conviction that an error has been committed. Id. Facts in dispute and determinations of
credibility are within the province of the fact-finder. Id.Adverse Possession
The trial court determined Carr-Pool was entitled to have the title to the mineral
rights vested in her under the theory of adverse possession, a theory never pled by Carr-Pool.
The trial court’s decision cannot be affirmed based on the theory of adverse possession. Our
supreme court has recognized the settled rule that when the mineral-rights ownership has
been severed by deed from the surface ownership, adverse possession of the surface is
ineffective against the owner of the mineral rights unless the possessor actually invades the
minerals by opening mines or drilling wells and continues that action for the necessary period.
Taylor v. Scott, 285 Ark. 102, 103–04, 685 S.W.2d 160, 161 (1985). Even if the mineral
ownership has not been severed by deed from the surface ownership, title to the minerals
cannot be acquired by adverse possession unless the minerals are actually invaded by opening
mines or drilling wells and continues for the necessary statutory period. Peterson v. Simpson,
286 Ark. 177, 182, 690 S.W.2d 720, 724 (1985) (citing Taylor v. Scott, 285 Ark. 102, 685
S.W.2d 160 (1985)). Here, while there was evidence of several oil-and-gas leases having been
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Cite as 2016 Ark. App. 611entered into by Carr-Pool’s predecessors, there was no evidence presented that the leases were
active mines or wells until XTO suspended royalty payments in 2012, and there was no
evidence as to how long royalty payments had been made.
Validity of Reservation in 1974 Deed
Although the trial court’s decision cannot be affirmed on the basis of adverse
possession, we still affirm its decision to quiet title to the minerals in Carr-Pool, but on a
different basis. We conclude, based on our de novo review, that the language in the 1974
deed from the Hawkinses to Duvall contained a valid reservation of the mineral rights in the
Hawkinses, who are Carr-Pool’s predecessors.
The basic rule in the construction of deeds, as with other contracts, is to ascertain and
give effect to the real intention of the parties, particularly of the grantor, as expressed by the
language of the deed, when not contrary to settled principles of law and rules of property.
Barton Land Svsc, Inc. v. SEECO, Inc., 2013 Ark. 231, 428 S.W.3d 430; Gibson v. Pickett, 256
Ark. 1035, 512 S.W.2d 532 (1974). The intention of the parties must be gathered from the
four corners of the instrument itself, if that can be done, and when so done, it will control;
the intention of the parties is to be gathered not from some particular clause, but from the
whole context of the agreement. Gibson, supra. Every part of the deed should be harmonized
and reconciled so that all may stand together and none be rejected; we will not resort to rules
of construction when a deed is clear and contains no ambiguities, but only when the language
of the deed is ambiguous, uncertain, or doubtful. Barton Land Svcs, supra. In Arkansas, we
recognize a presumption that a grantor intends to convey his entire interest by his deed, and
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Cite as 2016 Ark. App. 611such is the effect of a deed which does not limit the interest conveyed; however, a grantor
may convey a particular interest, and, when this is done, only that interest is conveyed, and
the grantor reserves to himself all he has not conveyed. Id.There are no “magic words” required to reserve mineral rights. Clearly, the language
in the 1974 deed evidences the grantors’ intentions to reserve the mineral rights, and not
convey them to Duvall. Furthermore, Duvall did not think he owned the mineral rights due
to the language in the deed, and he never questioned ownership of the mineral rights from
1974 until 2012. He acknowledged he knew of the 2005 oil-and-gas lease, which caused him
no concern. It is clear from the language in the 1974 deed that the parties’ intentions were
to continue the reservation of mineral rights in the Hawkinses.
Although the circuit court found to the contrary on this point, the court ultimately
reached the right result in favor of Carr-Pool. We may affirm if the circuit court reaches the
correct result, regardless of the reasoning the court employed. Hawks Enters., Inc. v. Andrews,
75 Ark. App. 372, 57 S.W.3d 778 (2001). We therefore affirm the court’s decision to quiet
title to the minerals in Carr-Pool.
Due to our above disposition, the issue of dower is moot. Also, because the parties’
intentions were clear to reserve the mineral rights in the 1974 deed, we affirm the trial court’s
decision to quiet title to the mineral rights in Carr-Pool.
Affirmed.
WHITEAKER and BROWN, JJ., agree.
Gordon & Caruth, PLC, by: Ben Caruth and Jeannie L. Denniston, for appellants.
Cullen & Co., PLLC, by: Tim Cullen, for appellee.
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