teri-road-partners-ltd-beinhorn-partners-limited-partnership-teri-road ( 2014 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-13-00221-CV
Teri Road Partners, Ltd.; Beinhorn Partners Limited Partnership; Teri Road Housing,
Ltd.; Blazer Realty, L.L.C.; Blazer Residential Inc.; and Blazer Land, L.L.C., Appellants
v.
4800 Freidrich Lane L.L.C., Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
NO. D-1-GN-08-003489, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING
MEMORANDUM OPINION
4800 Freidrich Lane, L.L.C. (“the Purchaser”) sued Teri Road Partners, Ltd.;
Beinhorn Partners Limited Partnership; Teri Road Housing, Ltd.; Blazer Realty, L.L.C.; Blazer
Residential Inc.; and Blazer Land, L.L.C. (collectively, “Teri Road”) for trespass and trespass to try
title, and also sought a declaration regarding ownership of a portion of a 2.72-acre tract of land.
After a bench trial, the trial court ruled that the Purchaser owned the property, that Teri Road had
no license or easement over the property, and that the Purchaser should recover attorneys’ fees. On
appeal, Teri Road asserts in three issues that: (1) the Purchaser’s deed did not convey to the
Purchaser the land in dispute, (2) the Purchaser failed to defeat a presumption, arising out of prior
possession, that Teri Road owned the disputed land, and (3) the form of the trial court’s judgment
was improper. We will affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In 2007 the Board of Regents of the University of Texas executed a Special Warranty
Deed conveying approximately 8.3 acres of land to the Purchaser. The deed included the following
description of the property conveyed: “Being 8.377 acres of land, more or less, out of the Santiago
Del Valle Grant, Austin, Travis County, Texas, being more particularly described on the attached
Exhibit A incorporated herein by reference.” Exhibit A to the deed contained a legal description
identifying the property by field notes followed by a metes and bounds description. The field notes
described the 8.3-acre tract as consisting of a “2.726 acre tract being all of Lot 2 Block A,
Woodway Square Subdivision” and “5.65 acres of land out of the Santiago Del Valle Grant,
Abstract No. 24.” The metes and bounds description identified the location of the southern border
of Lot 2, Block A of the Woodway Square Subdivision (hereafter “Lot 2”) by stating the bearings
and distances of a series of magnetic nails set between an iron rod marking the southeast corner of
the Lot 2 and a magnetic nail marking the southwest corner of Lot 2.
The deed also contained the following provision:
Reservations from and Exceptions to Conveyance and Warranty
There is reserved from this conveyance all the oil, gas and other minerals in and
under the Property owned by the Grantor, if any, which are expressly reserved to
Grantor. This conveyance is further subject to all easements, rights-of-way and
prescriptive rights, whether of record or not, all presently recorded matters that affect
the Property, and those items listed on the attached Exhibit B.
Exhibit B to the deed, the heading for which is “Permitted Exceptions,” is a list identifying the
following ten items:
2
1. Plat and Restrictive Covenants, as recorded in Document #20030081, Official
Public Records of Travis County, Texas.
2. Restrictive Covenant Regarding Unified Development, as recorded in
Document #2003035097, Official Public Records of Travis County, Texas.
3. Title to all the coal, lignite, oil, gas and other minerals in, under and that may
be produced from the land together with all rights, privileges and immunities
relating thereto.
4. One-sixteenth (1/16th) of all the oil, gas and other minerals, the royalties,
bonuses, rentals, and all other rights in connection with the same are excepted
herefrom, as set forth in instrument recorded in [the Official Public Records
of Travis County; Texas]; subject to 50% conveyance deed recorded in [the
Official Public Records of Travis County, Texas].
5. Pipeline easement granted to United Gas Pipeline as recorded in [the Travis
County Deed Records].
6. A 5’ wide electric and telephone easement granted to the City of Austin as
recorded in [the Travis County Deed Records].
7. Notice to Buyers, Lessees, and Occupants as recorded in [the Official
Records of Travis County].
8. The following matter(s) disclosed by survey of subject property dated
July 12, 2007, updated August 29, 2007, prepared by All Star Surveying,
Survey Company Job No. A0700307: inset of metal fence along southerly
and easterly lot lines and asphalt parking area along the southerly portion of
Lot 2 of the Property.
9. Drainage easement granted to City of Austin as recorded in [the Official
Records of Travis County].
10. Restrictive Covenant Regarding Unified Development and Maintenance of
Drainage Facilities for Woodway Square Apartment dated April 14, 2003,
recorded in [the Official Public Records of Travis County].
Item number 8 on this list refers to a fenced-in parking area with improvements built on
approximately 0.653 acres located along and within the southern boundary of Lot 2 (the “Disputed
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Property”). The fence and parking area were built by Teri Road in connection with an apartment
complex it constructed on Lot 1, Block A, Woodway Square Subdivision, a 10.122-acre tract of land
lying directly south of and contiguous with Lot 2 that it had purchased from the University of Texas
in 2002.
In its suit, the Purchaser initially alleged causes of action for trespass and nuisance
and sought a declaration of the parties’ rights to the Disputed Property. The Purchaser alleged that
the fence, parking lot, and improvements thereon were built without consent on Lot 2, now owned
by the Purchaser, and constituted an unauthorized encroachment onto that property. Teri Road filed
a general denial and further responded that it had a right to maintain the fence and parking lot on the
Disputed Property by virtue of an easement or license to use the property granted by the University
of Texas, the parties’ common grantor. Teri Road also alleged that the issues before the court
presented a question of title to the Disputed Property that could not properly be the subject of a suit
for declaratory relief, but had to be brought in a trespass-to-try-title action.1 Thereafter, the
Purchaser amended its petition to add a trespass-to-try-title action to determine title to Lot 2.
The case was tried to the court, and the focus of the trial was whether the University
of Texas had granted Teri Road a license or easement permitting it to construct and maintain the
1
This Court has previously held that claims regarding the existence of an easement, a
nonpossessory right, can properly be brought under the Uniform Declaratory Judgments Act. See
Roberson v. City of Austin, 157 S.W.3d 130, 137 (Tex. App.—Austin 2005, pet. denied). On the
other hand, disputed claims of title to real property, unless the sole issue concerning the title is the
determination of the proper boundary line between adjoining properties, may only be adjudicated in
a trespass-to-try-title action. See Tex. Prop. Code § 22.001(a); Martin v. Amerman, 133 S.W.3d 262,
267 (Tex. 2004); State v. BP Am. Prod. Co., 290 S.W.3d 345, 360 (Tex. App.—Austin 2009,
pet. denied).
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improvements that encroached onto Lot 2, which was still owned by the University at the time the
improvements were constructed. Teri Road never asserted at trial that it owned the Disputed
Property, nor did it allege or argue that the Purchaser did not own the Disputed Property.2 At trial
both parties agreed that they were seeking a declaration as to whether or not Teri Road had a license,
easement, or other right to maintain the improvements on Lot 2 despite the fact that Teri Road did
not own the property on which the improvements were constructed. At the conclusion of the trial,
the court rendered judgment that: (1) the Purchaser owns Lot 2, and (2) Teri Road does not have a
license or easement on Lot 2. The court also ordered that the Purchaser recover from Teri Road
$80,000 in attorneys’ fees and, in addition, conditional attorneys’ fees in the event of unsuccessful
appeals to this Court and to the Texas Supreme Court. Teri Road perfected this appeal.
DISCUSSION
In its first issue on appeal, Teri Road asserts for the first time that, as a matter of law,
the Purchaser does not own the Disputed Property because the deed from the University of Texas
to the Purchaser did not actually convey it to the Purchaser. Teri Road contends that, as a
consequence, the Purchaser had no justiciable interest in the Disputed Property and the trial court
therefore lacked subject-matter jurisdiction to adjudicate any of the Purchaser’s claims. The trial
court’s judgment recites: “[The Purchaser] owns the real property known as 4800 Freidrich Lane,
Austin, Travis County, Texas and more particularly described as Lot 2, Block A, Woodway Square
2
In its brief on appeal, Teri Road concedes that the parking area improvements on the
Disputed Property are an encroachment on Lot 2. The issue, therefore, was whether the
encroachment was authorized.
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Subdivision, Austin, Travis County, Texas (‘Lot 2’).” The court also filed findings of fact and
conclusions of law, which include the following:
FOF 1: [The Purchaser] owns the real property known as Freidrich Lane, Austin,
Travis County, Texas and more particularly described as Lot 2, Block A, Woodway
Square Subdivision, Austin, Travis County, Texas (“Lot 2”).
While Teri Road describes its first issue as a challenge to the trial court’s subject-matter jurisdiction,
which it could bring for the first time on appeal, the complaint effectively challenges the trial court’s
express finding regarding ownership of the Disputed Property.3 In a nonjury case, complaints
regarding the legal or factual sufficiency of the evidence supporting a finding may be made for the
first time on appeal. See Tex. R. App. P. 33.1(d).4
In the present case, whether the Purchaser owns the Disputed Property turns on
whether the deed conveyed the Disputed Property to the Purchaser or, as Teri Road maintains, the
Disputed Property was expressly reserved from the conveyance. Both parties agree the deed is
unambiguous. An unambiguous deed is one that can be given a definite or certain legal meaning.
Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 74 (Tex. 1997); see Columbia Gas Transmission
3
We express no opinion as to whether a successful challenge on appeal to the trial court’s
ruling that the Purchaser owned Lot 2 in its entirety would, as Teri Road urges, mean that the trial
court did not have subject-matter jurisdiction over any of the Purchaser’s claims and that
consequently its order should be vacated.
4
As we explain below, this ruling should have been labeled a conclusion of law rather than
a finding of fact. Conclusions of law are always reviewable, and when, as here, the record contains
specific findings of fact and conclusions of law as well as a reporter’s record, the reviewing court
may review the legal conclusions drawn from those facts in order to determine their correctness. See
Westech Eng’g, Inc. v. Clearwater Constructors, Inc., 835 S.W.2d 190, 196 & n.1 (Tex.
App.—Austin 1992, no writ).
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Co. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996) (“[A]mbiguity does not arise simply
because the parties advance conflicting interpretations of the contract.”). The construction of an
unambiguous deed presents a question of law. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991).
Although the trial court labeled its ruling regarding ownership a finding of fact, it is more properly
identified as a conclusion of law, and we will therefore treat the court’s ruling on ownership of Lot
2, including the Disputed Property, as a legal conclusion. See Seasha Pools, Inc. v. Hardister,
391 S.W.3d 635, 640 (Tex. App.—Austin 2012, no pet.) (trial court’s designation of items as findings
of fact or conclusions of law is not controlling on appeal, and appellate court may treat court’s ruling
as factual finding or legal conclusion regardless of label used).5 We review conclusions of law de
novo to determine whether they are legally correct. BMC Software Belgium, N.V. v. Marchand,
83 S.W.3d 789, 794 (Tex. 2002).
A deed is subject to the same general rules of interpretation and construction as a
contract. See Luckel, 819 S.W.3d at 461-62. Our primary duty when construing an unambiguous
deed is to ascertain the parties’ true intent as expressed within the deed’s four corners. Id. at 461-63;
Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994). We apply the “four corners” rule
and look not at isolated terms but consider the instrument as a whole, attempting to harmonize and
give effect to all its provisions. Luckel, 819 S.W.2d at 462; Plainsman Trading Co. v. Crews,
898 S.W.2d 786, 789 (Tex. 1995). A deed must not only be construed as a whole, harmonizing all
its parts if possible, but also to confer on the grantee the greatest estate that the terms of the deed will
5
We presume this ruling was characterized as a finding of fact because neither party
asserted at trial that the Purchaser did not hold fee title to the entirety of Lot 2, including the
Disputed Property.
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permit. Lott v. Lott, 370 S.W.2d 463, 465 (Tex. 1963); Thomason v. Badgett, No. 02-12-00303-CV,
2013 WL 3488254, at *3 (Tex. App.—Fort Worth July 11, 2013, pet. denied) (mem. op.).
Teri Road argues that the deed conveys “no fee or other estate in the parking area
improvements.” We understand Teri Road to mean that the University of Texas intended to carve
the Disputed Property out of the conveyance of Lot 2 and retain ownership of it. In support of this
argument, Teri Road points to the second sentence of the two-sentence paragraph in the deed, quoted
above, entitled “Reservations from and Exceptions to Conveyance and Warranty”:
There is reserved from this conveyance all the oil, gas and other minerals in and under
the Property owned by Grantor, if any, which are expressly reserved to Grantor. This
conveyance is further subject to all easements, rights-of-way and prescriptive rights,
whether of record or not, all presently recorded matters that affect the Property, and
those items listed on the attached Exhibit B.
(Emphasis added.) According to Teri Road, the second sentence of the paragraph reflects the
University of Texas’s intent to reserve from the conveyance each of the items listed on Exhibit B.
We disagree. As an initial matter, the paragraph is within a section of the deed titled “Reservations
from and Exceptions to Conveyance and Warranty.” Thus, the paragraph describes not only what the
University of Texas intended to reserve from the conveyance but also what it was excepting from its
warranty of title. The first sentence in the paragraph is a specific reservation from the conveyance
of all oil, gas, and mineral rights in and under the property conveyed. The second sentence, however,
does not purport to reserve anything further from the conveyance, but merely states that the
conveyance is “subject to” certain matters, including those items listed on Exhibit B. It is apparent
from reading that list of items that, as the exhibit’s heading (“Permitted Exceptions”) suggests, they
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primarily identify the exceptions to warranty referred to in the deed. These include certain easements
and restrictive covenants, as well as the encroaching improvements located on the Disputed Property.
The fact that the list also includes a reference to the oil, gas, and mineral rights, which the language
of the deed itself expressly reserved from the conveyance, does not transform the remaining items on
the list into additional reservations from the conveyance. The deed’s description of the property
conveyed includes the entirety of Lot 2, and nowhere does the deed purport to reserve from the
conveyance any portion of the surface thereof.
Teri Road relies on Fricks v. Hancock, in which the court of appeals construed a deed
that recited:
This grant and conveyance is expressly made subject to the following:
....
3. Title to any portion of the property within the bounds of Bayside Colony, as
such subdivision is shown on the map and plat thereof in Volume 1, Page 5,
of the Map and Plat Records of Refugio County, Texas.
45 S.W.3d 322, 327-28 (Tex. App.—Corpus Christi 2001, no pet.). There, the court of appeals held
that this language expressed the grantor’s intent to limit the property granted and exclude from the
conveyance any property located within the bounds of the Bayside Colony. Id. at 328. Our holding
is not inconsistent with Fricks. The paragraph of the deed construed by the court in Fricks made no
reference to exceptions to the warranty but did expressly refer to “title” to a portion of the property.
Id. at 327. Here, in contrast, there is nothing in the deed or the Exhibit B list that purports to exclude
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title to the Disputed Property. Unlike the Fricks deed, item number 8 on Exhibit B in the present case
merely states:
The following matter(s) disclosed by survey of subject property dated July 12, 2007,
updated August 29, 2007, prepared by All Star Surveying, Survey Company Job No.
A0700307: inset of metal fence along southerly and easterly lot lines and asphalt
parking area along the southerly portion of Lot 2 of the Property.
Teri Road argues that this language expresses the grantor’s intent to reserve for itself fee-simple title
to the Disputed Property. But this description of an encroachment revealed by a survey done in
connection with the sale of Lot 2 cannot reasonably be construed as a reservation of part of the tract
described in the deed. There is no reference to “title” to any part of Lot 2.
Moreover, the Fricks court relied for its holding on Bass v. Harper, in which the Texas
Supreme Court concluded that language in a deed stating that the “grant is subject to the Mineral
Reservation contained in” nine other deeds unambiguously excluded from the grant the mineral rights
described and was not simply an exception to warranty of title. 441 S.W.2d 825, 827 (Tex. 1985).
The supreme court held that “[i]t is also clear that the grant itself ‘is subject to the mineral
reservations’” contained in the referenced deeds. Id. Unlike the Bass deed, none of the items that
the conveyance in the present case was “subject to”—the items listed on Exhibit B—are actual
reservations except for the mineral rights, which are expressly reserved elsewhere in the deed. There
is no reservation language indicating the grantor’s intent to exclude the Disputed Property from the
conveyance or to retain fee title to the Disputed Property. See State v. Dunn, 574 S.W.2d 821, 824
(Tex. Civ. App.—Amarillo 1978, writ ref’d n.r.e.) (as general rule, exceptions are strictly construed
against grantor).
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Our holding is consistent with cases interpreting the effect of a deed that excepts from
a conveyance a right of way, road, or easement. In Lewis v. East Texas Finance Co., the Texas
Supreme Court considered the effect of such exceptions to conveyances and held:
An instrument of conveyance which conveys land definitely described in such
instrument, and then excepts from such conveyance a road, railroad right of way, canal
right of way, etc., as such, occupying a mere easement on, over, or across the land
conveyed, conveys the fee to the entire tract, and the exception only operates to render
the conveyance or grant subject to the easement.
146 S.W.2d 977, 980 (Tex. 1941) (citations omitted); see also Moore v. Rotello, 719 S.W.2d 372,
375-76 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.). Similarly, an exception that merely
refers to an encroachment on the property, as opposed to specifically reserving the conveyance of title
to the property underlying the encroachment, does no more than say that the property conveyed is
burdened by the encroachment. Just as the Purchaser here obtained fee simple title to the land under
the pipeline easement (item number 5 on Exhibit B) and the drainage easement (item number 9 on
Exhibit B), it also obtained fee simple title to the land under the encroachment.
For the foregoing reasons, we conclude that the conveyance from the University of
Texas to the Purchaser included the Disputed Property; the trial court’s ruling was therefore not
erroneous. We overrule Teri Road’s first appellate issue.
In its second appellate issue, Teri Road claims that it was entitled to a presumption of
title arising out of its “prior possession” of the Disputed Property. Teri Road also correctly states in
its brief, however, that a deed unambiguously granting title to the Disputed Property would “surely
overcome a presumption of title.” See Reiter v. Coastal States Gas Producing Co., 382 SW.2d 243,
11
250 (Tex. 1964) (“Assuming that the plaintiff is relying upon prior possession, proof of title in the
defendant unquestionably operates to rebut the inference of ownership arising from plaintiff’s
possession.”). Because we have concluded that the deed conveyed the entirety of Lot 2 to the
Purchaser, any presumption that Teri Road has title to the Disputed Property by virtue of its prior
possession has been rebutted. We overrule the second appellate issue.
In its third appellate issue, Teri Road raises for the first time complaints about the form
of the trial court’s judgment, specifically the recitation that the Purchaser “owns” Lot 2. This
complaint was not preserved in the trial court by timely request, objection, or motion and may not,
therefore, be raised for the first time on appeal. See Tex. R. App. P. 33.1 (as prerequisite to
presenting complaint for appellate review, record must show that complaint was made to trial court
by timely request, objection, or motion). Accordingly, any complaints about the form of the judgment
have been waived. In any event, we do not read the trial court’s judgment as adjudicating anything
other than the issue of disputed ownership as between the Purchaser and Teri Road. We overrule
Teri Road’s third issue.
CONCLUSION
Having overruled Teri Road’s three appellate issues, we affirm the trial
court’s judgment.
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_____________________________________________
J. Woodfin Jones, Chief Justice
Before Chief Justice Jones, Justices Pemberton and Rose
Affirmed
Filed: June 4, 2014
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