Nancy Wigley v. Gregory Willems ( 2014 )

In The
Court of Appeals
Seventh District of Texas at Amarillo
________________________
No. 07-13-00028-CV
________________________
NANCY WIGLEY, APPELLANT
V.
GREGORY WILLEMS, APPELLEE
On Appeal from the 12th District Court
Madison County, Texas
Trial Court No. 10-12380-012-06; Honorable Donald L. Kraemer, Presiding
September 19, 2014
MEMORANDUM OPINION
Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.
Appellant, Nancy Wigley, sued Appellee, Gregory Willems, seeking to reform a
deed to accurately reflect what she alleges was their agreement concerning the
reservation of a mineral interest. Presenting a single issue, she challenges the trial
court’s order granting summary judgment in favor of Appellee, Gregory Willems, based
upon a limitations defense. We reverse and remand.
BACKGROUND
On July 29, 2005, Wigley and Willems entered into a Farm and Ranch Contract
for the sale of 48.46 acres of improved land located in Madison County. Each party
was represented by a realtor working for the same realty company. The signed contract
provides for reservations as follows: “seller to convey ½ interest in all mineral rights
owned and 100% of the surface rights.” According to Wigley, she only owned one-half
of the mineral interests and her intent was to reserve one-half of her half, i.e., one-
fourth, and convey the remaining one-fourth to Willems. Imogene Isaac Weatherford
owned the other one-half of the mineral interests. Willems paid $500 in earnest money
to a title company and the sale closed on September 19, 2005, with the parties signing
a warranty deed.1 Neither party reviewed the deed with assistance of counsel prior to
its execution.
Six months after executing the deed, on March 8, 2006, Willems entered into an
oil and gas lease with KCS Resources, later bought by PetroMax. A Lease Purchase
Report showed the term of the lease was for three years on 48.46 acres with a mineral
interest of fifty percent. The report also showed that Weatherford owned the remaining
mineral interest of fifty percent.
Notwithstanding the conveyance provisions of the sales contract, the warranty
deed executed by the parties failed to reserve to Wigley any portion of the minerals.
Wigley discovered the omission in December 2009, more than four years after
executing the deed, when former neighbors and friends who own property near the
1
According to the record, the title company involved in closing the sale went out of business.
2
property in question informed her they had leased their property for drilling operations.
Wigley contacted Gene Carpenter, a petroleum landman, and inquired about the leasing
status of her former property. He informed her that the warranty deed did not contain a
mineral reservation and advised her that a landman “goes strictly on what’s on the
deed” regarding royalty payments.
Wigley sought the services of an attorney and executed a “Correction Warranty
Deed with Vendor’s Lien.” When Willems refused to sign the corrected deed, on August
3, 2010, Wigley sued to reform the original deed to reflect the agreement of the parties
as reflected in the Farm and Ranch Contract. She alleged the omission of the mineral
reservation was a mutual mistake. She also alleged that if Willems was not mistaken
about the omission, he intentionally remained silent, thereby engaging in inequitable
conduct. Willems filed a general denial and also plead the statute of limitations as an
affirmative defense.2
Wigley filed a traditional motion for summary judgment alleging as the basis that
Willems’s untimely discovery answers were deemed admitted under the Texas Rules of
Civil Procedure. Willems responded by filing an amended traditional and no-evidence
motion for summary judgment asserting the affirmative defense of statute of limitations.
Willems’s position was that there was no evidence of any exceptions to defer
commencement of limitations. He also criticized Wigley’s failure to engage counsel to
review the documents involved in the sale and noted that limitations had run on any
causes of action against any entity involved with the sale.
2
TEX. CIV. PRAC & REM. CODE ANN. § 16.051 (West 2008). An action for reformation of a deed
must be brought not later than four years after the day the cause of action accrues.
3
Wigley filed a response challenging the hybrid motion. She alleged Willems had
not shown the lack of a genuine issue of material fact concerning the commencement of
limitations or entitlement to judgment as a matter of law. She further alleged Willems
had knowledge of the mistake when, just six months after executing the deed, he
entered into an oil and gas lease with KCS Resources. According to Wigley, a Lease
Purchase Report drafted in connection with that lease showed Willems’s share of the
minerals was fifty percent of the total mineral interest under the 48.46 acres sold. She
further asserted Willems negotiated a “no drill clause” in the lease for the purpose of
inhibiting her from gaining notice of oil and gas operations on the property she sold.
According to the petroleum landman’s deposition, a rig adjacent to Wigley’s
former property was visible for approximately one month before being taken down, and
the remaining well was not visible from the roadway. Thus, Wigley was unable to view
any oil and gas activity in the area and had no notice of oil and gas operations on the
property in question. She concluded in her response that Willems either knew of the
mistake at the time the deed was executed and remained silent or remained silent after
discovering the mistake. After considering the competing motions, the trial court
granted Willems’s hybrid motion.
STANDARD OF REVIEW
We review the granting of a motion for summary judgment de novo. Neely v.
Wilson, 418 S.W.3d 52, 59 (Tex. 2013) (citing Valence Operating Co. v. Dorsett, 164
S.W.3d 656, 661 (Tex. 2005)). “In reviewing a summary judgment, we consider all
grounds presented to the trial court and preserved on appeal in the interest of judicial
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economy.” Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005).
That said, issues not expressly presented to the trial court by written motion, answer or
other response are not considered on appeal as grounds for reversal. TEX. R. CIV. P.
166a(c). When the trial court does not specify the grounds for its ruling, a summary
judgment will be affirmed if any of the grounds presented in the motion are meritorious.
Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013).
The party moving for a traditional summary judgment bears the burden of proving
his entitlement thereto as a matter of law. Roskey v. Texas Health Facilities Com., 639
S.W.2d 302, 303 (Tex. 1982). Summary judgment is appropriate when there is no
genuine issue as to any material fact and judgment should be granted in favor of the
movant as a matter of law. Diversicare Gen. Partner, Inc., 185 S.W.3d at 846. A fact
issue exists if there is more than a scintilla of probative evidence. TEX. R. CIV. P.
166a(c), (i). More than a scintilla of evidence exists when the evidence Arises to a level
that would enable reasonable and fair-minded people to differ in their conclusions.” See
City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Merrell Dow Pharmaceuticals
v. Havner, 953 S.W.2d 706, 711 (Tex. 1997), cert. denied, 523 U.S. 1119, 118 S. Ct.
1799, 140 L. Ed. 2d 939 (1998). In conducting our review, we are required to review the
summary judgment record in the light most favorable to the nonmovant, indulging every
reasonable inference, and all doubts are resolved against the movant. Sudan v. Sudan,
199 S.W.3d 291, 292 (Tex. 2006) (citing City of Keller, 168 S.W.3d at 823).
When both parties move for summary judgment, each party must conclusively
establish it is entitled to judgment as a matter of law. Guynes v. Galveston, 861 S.W.2d
861, 862 (Tex. 1993). Neither party can prevail because of the failure of the other to
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discharge its burden. Tigner v. First National Bank of Angleton, 153 Tex. 69, 264
S.W.2d 85, 87 (Tex. 1954). If the trial court grants one summary judgment and denies
the other, the reviewing court should review both parties= summary judgment evidence
and determine all questions presented. Mann Frankfort Stein & Lipp Advisors, Inc. v.
Fielding, 289 S.W.3d 844, 848 (Tex. 2009). The reviewing court should render the
judgment the trial court should have rendered. Id.
ANALYSIS
By a sole issue, Wigley contends the trial court erred in granting Willems’s
motion for summary judgment. We agree.
Generally, a grantor is charged with knowledge of the provisions of his deed
upon executing it and, for purposes of reformation of that deed, limitations begins to run
from the date of execution. Sullivan v. Barnett, 471 S.W.2d 39, 45 (Tex. 1971); Givens
v. Ward, 272 S.W.3d 63, 72 (Tex. App.—Waco 2008, no pet.); Kennedy v. Brown, 113
S.W.2d 1018, 1020 (Tex. Civ. App.—Amarillo 1938, writ dism’d w.o.j.). Equity and
justice being the ultimate aims of all rules of law, courts have not always been rigid in
application of this general rule. Sullivan, 471 S.W.2d at 45. For example, the general
rule is riddled with exceptions under various circumstances which makes it rebuttable.
Id. at 45.
One such exception was recognized in Brown v. Havard, 593 S.W.2d 939 (Tex.
1980). Brown involved a suit for declaratory judgment to determine the extent of royalty
reserved to the grantors of a deed. The trial court determined that reformation of the
deed was barred by limitations as a matter of law and granted judgment non obstante
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veredicto in favor of the grantors. The appellate court reversed the trial court’s
judgment, 577 S.W.2d 757 (Tex. Civ. App.—San Antonio 1979), and the Supreme Court
affirmed that reversal citing Sullivan. Brown, 593 S.W.2d at 944. The Court held that
“the statute of limitations commenced to run . . . for reformation when the mistake was
or, in the exercise of reasonable diligence, should have been discovered.” Id. As such,
the question of when the mistake should have been discovered was held to be a
question of fact to be determined on a case by case basis. Id. at 943-44.
Willems’s argument is based on the four year statute of limitations and the
presumption that limitations commenced upon execution of the deed. He maintains he
was rightfully entitled to summary judgment as a matter of law because Wigley failed to
file suit to reform the deed within four years of that date. However, as noted above,
commencement of limitations on the date of execution is not a bright-line rule. Cade v.
Cosgrove, 430 S.W.3d 488, 496 (Tex. App.—Fort Worth 2014, pet. filed). It is, instead,
merely a rebuttable presumption. Sullivan, 471 S.W.2d at 45.
In Luginbyhl v. Thompson, 11 S.W.2d 380 (Tex. Civ. App.—Amarillo 1928, writ
dism’d w.o.j.), this Court upheld a trial court’s judgment reforming a deed to reflect the
agreement of the parties in a suit filed six years after the date of execution. There, the
contract called for the grantor to reserve one-half of the mineral rights and, before
executing the deed, the grantor leased the mineral rights he intended to reserve. After
executing the deed, the grantor continued to receive royalty payments under the lease.
The deed omitted the grantor’s intended mineral reservation and suit to reform the deed
was not filed until six years after its execution. Id. at 382. This Court noted there were
no circumstances to arouse the grantor’s suspicion relative to the omission from the
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deed and that in order to trigger the statute of limitations, “there must be some fact or
circumstance to put him on inquiry.” Id. at 382. In other words, Luginbyhl held that the
limitations period for the grantor’s claim for reformation commenced when the grantor
discovered the mistake or when the grantor should have discovered it by the exercise of
reasonable diligence, not from the date the grantor executed the deed. Id.
In Kennedy, this Court acknowledged the rule announced in Luginbyhl. Similar
to the facts of the case before us, the sales contract in Kennedy provided for a mineral
reservation which was omitted from the deed. 113 S.W.2d at 1020. The omission was
not discovered for more than nine years and suit was filed alleging mutual mistake or
error on the part of the scrivener who prepared the deed. Id. at 1019. This Court
concluded the omission was due to mutual mistake when the deed was executed. Id. at
1020. However, in holding the aggrieved party to the presumption that he was charged
with knowledge of the contents of his deed, this Court concluded “nine years extend[ed]
far beyond the time that would be considered reasonable for a man of ordinary
prudence to have discovered he had been deprived of valuable property rights . . . .”
Here, Wigley discovered the lack of a mineral reservation in December 2009, just
four years and three months after execution of the deed in question.3 She then pursued
corrective measures which Willems rejected, forcing her to file suit in August 2010, eight
months after discovery of the mistake. Considering Willems’s negotiation of a no-drilling
clause concerning the surface of the transferred property, the petroleum landman’s
testimony that Wigley could not have seen drilling rigs on the adjacent property from the
roadway and Willems’s sworn testimony that the earliest opportunity to discover the
3
The sale closed on September 19, 2005.
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mistake was in December 2009, when she spoke with her former neighbors and learned
they had leased their land for drilling operations, we find there to be fact issues relevant
to when Wigley knew or should have known by the exercise of reasonable diligence that
the deed contained a mistake, thereby precluding summary judgment in favor of
Willems. Brown, 593 S.W.2d at 944. Wigley’s issue is sustained.
CONCLUSION
When faced with competing summary judgments, the general rule is that an
appellate court should determine all questions presented and render the judgment the
trial court should have rendered. Texas Workers’ Compensation Commission v. Patient
Advocates of Texas, 136 S.W.3d 643, 648 (Tex. 2004). However, because fact issues
exist precluding summary judgment and neither Wigley nor Willems established
entitlement to summary judgment as a matter of law, we remand the cause to the trial
court for a determination of pertinent issues that rest in the disputed facts. Sarandos v.
Blanton, 25 S.W.3d 811, 814 & n.5 (Tex. App.—Waco 2000, pet. denied). Accordingly,
the trial court’s order granting Willems’s motion for summary judgment is reversed and
the cause is remanded for further proceedings consistent with this opinion. Tigner, 264
S.W.2d at 87.
Patrick A. Pirtle
Justice
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