Escondido Services, LLC v. VKM Holdings, LP Chesapeake Operating, Inc. And Chesapeake Exploration, L.L.C. ( 2010 )

Opinion filed June 3, 2010
In The
Eleventh Court of Appeals
__________
No. 11-09-00034-CV
__________
ESCONDIDO SERVICES, LLC, Appellant
V.
VKM HOLDINGS, LP; CHESAPEAKE OPERATING, INC.;
AND CHESAPEAKE EXPLORATION, L.L.C., Appellees
On Appeal from the 236th District Court
Tarrant County, Texas
Trial Court Cause No. 236-228431-08
OPINION
This appeal involves an application of the strip and gore doctrine in the context of a
mineral estate lying underneath a strip of land conveyed to the State for the construction of a
highway. The trial court concluded that the mineral estate underneath the highway strip was
conveyed under the strip and gore doctrine when its owners conveyed tracts of land adjacent to
the strip. We affirm.
Background Facts
Joe W. Crouch Jr. is the common source of title to all of the tracts at issue in this appeal.
He obtained title to a 319-acre tract of property by virtue of a partition deed executed in 1983.
Joe W. Crouch Jr., joined by his wife, Norma Sue Crouch, subsequently conveyed a 14.808-acre
tract out of the original 319-acre tract to the State of Texas in a deed executed in 1997. The deed
from the Crouches to the State stated that the conveyance was “for the purposes of facilitating
the construction, maintenance and operation of a Controlled Access Highway facility.” The
Crouches expressly reserved “all of the oil, gas and sulphur in and under the land herein
conveyed” but “waiv[ed] all rights of ingress and egress to the surface thereof for the purpose of
exploring, developing, mining or drilling for same.”
The Crouches subsequently conveyed the tracts that were adjacent to the highway strip to
Crowley Farmland Partners, L.P. in a deed executed on November 21, 2000, with an effective
date of January 9, 2001. The conveyance from the Crouches to Crowley Farmland Partners
included four tracts. The field notes for “Tract II” of the conveyance indicated that it is located
along the north and west sides of the highway strip. The description for Tract II set out in the
field notes included the north and west boundary lines of the highway strip as part of the
boundary line of Tract II. The field notes for “Tract III” of the conveyance indicated that it is
located along the south side of the highway strip. The description for Tract III set out in the field
notes included the south boundary line of the highway strip as part of the boundary line of
Tract III. The Crouches did not reserve any minerals in this conveyance to Crowley Farmland
Partners.
Appellees, VKM Holdings, LP; Chesapeake Operating, Inc.; and Chesapeake
Exploration, L.L.C., are successors-in-interest of the tracts of land conveyed by the Crouches to
Crowley Farmland Partners. They assert that the Crouches conveyed their mineral estate lying
underneath the highway strip to Crowley Farmland Partners under the strip and gore doctrine
when they conveyed the tracts that are adjacent to the highway strip.
In 2001, Crowley Farmland granted by special warranty deed (without reservation) the
tracts to Crowley 100, L.P. That deed also expressly described the tracts as bounding the “right-
of-way of said Farm to Market Highway No. 1187” and the “right-of-way of proposed Highway
No. 1187 bypass.” In December 2004, Crowley 100 granted to VKM by mineral deed without
reservation all of the oil, gas, and other minerals under the tracts of the Crowley 100 deed. In
2005, VKM executed a lease to FSOC Gas Co. Ltd.; that lease was assigned to Chesapeake
Exploration, L.L.C. effective June 1, 2006. Chesapeake pooled that acreage in the VKM lease
and began drilling operations in March 2007.
2
Appellant, Escondido Services, LLC, also claims title to the mineral estate underneath the
highway strip through the Crouches. In 2008, Norma Sue Crouch conveyed the mineral estate
underneath the highway strip to appellant in a quitclaim deed. The quitclaim deed was
1
backdated to be “effective for all purposes as of January 10, 2007.” Appellant contends that
Mrs. Crouch continued to own the mineral estate in 2007 at the time she executed the quitclaim
deed. Appellant reasons that the mineral estate underneath the highway strip was not conveyed
under the strip and gore doctrine to Crowley Farmland Partners when the Crouches conveyed the
tracts adjacent to the highway strip.
Procedural Facts
Appellant filed a trespass to try title action against appellees alleging trespass,
conversion, and theft arising from the extraction of minerals underneath the highway strip.
Appellant subsequently filed a motion for partial summary judgment seeking to establish that it
possesses superior title to the mineral estate underneath the highway strip. Appellant also sought
partial summary judgment on no-evidence grounds with respect to appellees’ defense to the
trespass-to-try-title claim. By its motion for a no-evidence summary judgment, appellant sought
on various legal grounds to preemptively negate appellees’ reliance on the strip and gore
doctrine. Appellees filed written responses to appellant’s motion for partial summary judgment
in which they asserted an application of the strip and gore doctrine to defeat appellant’s motion
for partial summary judgment. Appellees subsequently filed their own motion for summary
judgment seeking to establish their superior title in the mineral estate underneath the highway
strip under the strip and gore doctrine.
The trial court considered the competing motions for summary judgment at a hearing on
November 14, 2008. The trial court granted appellees’ motion for summary judgment and
denied appellant’s motion for partial summary judgment. Accordingly, the trial court entered a
“take-nothing” judgment against appellant based upon its determination that appellees have
superior title as a matter of law under the strip and gore doctrine. Appellant challenges the trial
court’s judgment in four issues. The first three issues raise legal grounds that appellant raised in
its motion for partial summary judgment that would preclude an application of the strip and gore
doctrine to the conveyance to Crowley Farmland Partners. In its fourth issue, appellant contends
1
The record reflects that Joe W. Crouch Jr. died on August 31, 2002. Mrs. Crouch executed the quitclaim deed to
appellant in her individual capacity and in her capacity as trustee of the Crouch Family Trust.
3
that appellees failed to meet their evidentiary burden to conclusively establish the applicability of
the strip and gore doctrine.
Scope and Standard of Review
When both parties move for summary judgment and the trial court grants one motion and
denies the other, the appellate court considers the summary judgment evidence presented by both
sides and determines all questions presented. Valence Operating Co. v. Dorsett, 164 S.W.3d
656, 661 (Tex. 2005); FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.
2000). If the appellate court determines the trial court erred, it must render the judgment the
trial court should have rendered. Valence Operating, 164 S.W.3d at 661; FM Props., 22 S.W.3d
at 872.
We review the trial court’s ruling on a motion for summary judgment de novo. Dorsett,
164 S.W.3d at 661; Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.
2003). When reviewing a summary judgment, we take as true all evidence favorable to the
nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant's
favor. Knott, 128 S.W.3d at 215. A trial court must grant a traditional motion for summary
judgment if the moving party establishes that no genuine issue of material fact exists and that the
movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Lear Siegler, Inc. v.
Perez, 819 S.W.2d 470, 471 (Tex. 1991). A trial court must grant a no-evidence motion for
summary judgment unless the nonmovant produces more than a scintilla of probative evidence to
raise a genuine issue of material fact. TEX. R. CIV. P. 166a(i); Wal-Mart Stores, Inc. v.
Rodriguez, 92 S.W.3d 502, 506 (Tex. 2002).
The General Rule
As far back as 1862, the Texas Supreme Court in Mitchell v. Bass, 26 Tex. 372, 380
(Tex. 1862), adopted a general rule where a grantor conveyed an easement or right-of-way for a
public road and retained the underlying fee, including the minerals:
The established doctrine of the common law is, that a conveyance of land
bounded on a public highway carries with it the fee to the center of the road . . . .
Such is the legal construction of the grant unless the inference that it was so
intended is rebutted by the express terms of the grant. The owners of the land on
each side go to the center of the road, and they have the exclusive right to the soil,
subject to the right of passage in the public.
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Many courts have referred to two doctrines as justification for the general rule: (1) the
appurtenance doctrine and (2) the strip and gore doctrine. The appurtenance doctrine is based on
the presumption that a conveyance reflects an intention to carry with it the appurtenant
easements and incidents belonging to the property at the time of the conveyance. Angelo v.
Biscamp, 441 S.W.2d 524, 526 (Tex. 1969); Rio Bravo Oil Co. v. Weed, 50 S.W.2d 1080, 1085
(Tex. 1932). Appurtenances include all rights and interests necessary for the full enjoyment of
the property conveyed. Pine v. Gibraltar Sav. Ass’n, 519 S.W.2d 238, 241 (Tex. Civ. App.—
Houston [1st Dist.] 1974, writ ref’d n.r.e.).2
The Strip and Gore Doctrine
The strip and gore doctrine is essentially a presumption that, when a grantor conveys
land he owns adjacent to a narrow strip that thereby ceases to be of benefit or importance to him,
he also conveys the narrow strip unless he plainly and specifically reserves the strip for himself
in the deed by plain and specific language. Angelo, 441 S.W.2d at 526; Cantley v. Gulf Prod.
Co., 143 S.W.2d 912, 915 (Tex. 1940). The presumption is intended to apply to relatively
narrow strips of land that are small in size and value in comparison to the adjoining tract
conveyed by the grantor. Angelo, 441 S.W.2d at 526-27. Under the presumption, a conveyance
of land bounded by a public highway carries with it the fee to the center of the road as part and
parcel of the grant. This is the legal construction of the grant unless the presumption that the
strip was included in the grant is rebutted by the express terms of the grant. State v. Williams,
335 S.W.2d 834, 836 (Tex. 1960) (quoting Mitchell, 26 Tex. at 380). A legal description that
defines the property conveyed as extending only to the boundary of the highway does not
expressly rebut the presumption that the conveyance extends to the center of the highway. See
Williams, 335 S.W.2d at 836; Krenek v. Texstar N. Am., Inc., 787 S.W.2d 566, 568 (Tex. App.—
Corpus Christi 1990, writ denied).
Analysis
Appellant asserts in its first issue that the strip and gore doctrine is not applicable to a
mineral interest lying underneath a separately conveyed fee estate to the State. It cites
Goldsmith v. Humble Oil & Ref. Co., 199 S.W.2d 773, 776-77 (Tex. 1947), in support of this
proposition. Goldsmith involved a small strip of land located adjacent to a one-acre block. 199
2
See William G. Bredthauer & Shawna Snellgrove Rinehart, Ownership and Leasing of Minerals Under Highways and
Right-of-Ways, 16 TEX. WESLEYAN L. REV. 3, 8-9 (2009), for a discussion of the distinction between the appurtenance doctrine
and the strip and gore doctrine.
5
S.W.2d at 775. The court noted that the strip “was not an existing road, passageway or alley in
which an easement had been created or acquired when the deed [to the adjoining one-acre block]
was executed.” Id. at 776. Citing Weed, 50 S.W.2d at 1085, the court in Goldsmith noted that
the reason given for the “presumption of intention to convey to the center of the street or
highway” is “the fact that valuable rights and privileges appurtenant to property should be
presumed to pass in a conveyance thereof in the absence of a clear and unequivocal intention to
the contrary.” 199 S.W.2d at 776. The court concluded in Goldsmith that the presumption was
inapplicable because the grantor’s title in the strip was not burdened by an existing easement
creating a highway, street, road, passageway, or alley that provided an appurtenant right or
benefit to the neighboring tract being conveyed. Appellant contends that the strip and gore
doctrine is inapplicable in this case under Goldsmith because the mineral estate underneath the
highway strip arose by virtue of a deed rather than an easement and that the mineral estate was of
no benefit to the tracts subsequently conveyed to Crowley Farmland Partners.
Appellant’s reliance on Goldsmith is misplaced. The facts in Goldsmith are
distinguishable because the Crouches had earlier conveyed the highway strip from their larger
tract of property to the State for the construction of a highway. Furthermore, the fact that the
conveyance to the State occurred as a result of a deed rather than an easement is of no practical
consequence. Even more important, the grantor’s property interest in the strip does not have to
benefit his property interest in the larger tract being conveyed in order for the strip and gore
doctrine to apply. The Texas Supreme Court recognized this principle in Angelo when it
distinguished the “appurtenance doctrine” discussed in Weed from the strip and gore doctrine
discussed in Cantley and in Strayhorn v. Jones, 300 S.W.2d 623 (Tex. 1957). Angelo, 441
S.W.2d at 526. The strip and gore doctrine is based on the rationale that the strip ceases to be of
benefit or importance to the grantor. Angelo, 441 S.W.2d at 526-27. Accordingly, the fact that
the mineral interest underneath the highway strip may not benefit the larger adjoining tracts
conveyed to Crowley Farmland Partners does not preclude the application of the strip and gore
doctrine.
We would additionally note that in Reagan v. Marathon Oil Co., 50 S.W.3d 70, 80 (Tex.
App.—Waco 2001, no pet.), the court determined that the strip and gore doctrine was applicable
to a mineral estate lying beneath a public highway in which the State held a fee estate in the
surface. See also Krenek, 787 S.W.2d at 567-68. The facts in Reagan are analogous to the facts
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in this appeal. We agree with the holding in Reagan that a mineral interest underneath a
highway reserved in a deed to the State is subject to the strip and gore doctrine. Appellant’s first
issue is overruled.
In its second issue, appellant asserts that the strip and gore doctrine is inapplicable
because there is no ambiguity in the deed from the Crouches to Crowley Farmland Partners.
Appellant cites McKee v. Stewart, 162 S.W.2d 948 (Tex. 1942), in support of this proposition.
McKee involved the conveyance of a tract located near a creek. The deed conveying the tract did
not include the creek as a boundary. McKee,162 S.W.2d at 950. Instead, the deed referenced a
straight line near the creek as its boundary. The court did not apply the strip and gore doctrine
on the basis that there was no uncertainty or ambiguity as to the land intended to be conveyed
either appearing on the face of the deed or arising from an attempt to apply the description on the
ground. Id.; see Miller v. Crum, 314 S.W.2d 389, 395 (Tex. Civ. App.—Fort Worth 1958, no
writ). In reaching its holding, the court in McKee distinguished the conveyance at issue in
Cantley. The court concluded that there was “uncertainty” with the conveyance at issue in
Cantley because the deed in Cantley called for a road as a boundary without express words
indicating whether the grantor intended to convey or reserve the fee that he owned in the road.
McKee, 162 S.W.2d at 950; Cantley, 143 S.W.2d at 914.
The conveyance at issue in this appeal is more similar to the conveyance in Cantley than
the conveyance in McKee. The deed from the Crouches to Crowley Farmland Partners uses the
boundaries of the highway strip conveyed to the State as boundaries for Tracts II and III in the
conveyance. As was the case in Cantley, there is uncertainty as to the land to be conveyed
because the deed from the Crouches to Crowley Farmland Partners does not expressly indicate
whether the Crouches intended to convey or reserve their mineral interest underneath the
highway strip. McKee, 162 S.W.2d at 950. Appellant’s second issue is overruled.
Appellant asserts in its third issue that the strip and gore doctrine does not apply because
the highway for which the highway strip was conveyed to the State did not exist at the time the
adjoining tracts were conveyed to Crowley Farmland Partners. In this regard, appellant’s use of
the term “highway” refers to the improved roadway upon which vehicles actually travel rather
than the wider highway strip wherein the actual roadway would be constructed. In considering
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appellant’s third issue, we assume that it is correct in asserting that the highway had not been
constructed at the time of the conveyance to Crowley Farmland Partners.3
Appellant cites Goldsmith for the proposition that the actual roadway has to be in
existence in order for the strip and gore doctrine to apply. We disagree. In Goldsmith, the court
emphasized that there was nothing in the record to even indicate an intention on the part of the
grantor to create an easement or to dedicate any land for a road or any purpose. The strip did not
exist until the deed of conveyance purported to convey the strip but failed to include it in the
metes and bounds. Goldsmith, 199 S.W.2d at 776-77. The critical factor in applying the strip
and gore doctrine is the existence of the strip at the time of the conveyance rather than the
roadway that may subsequently be constructed within the strip. See Williams, 335 S.W.2d at 836
(“[t]he rule herein announced should be applied if it appears that the appurtenant strip exists in
fact” (emphasis added)); Krenek, 787 S.W.2d at 568 (“[t]his presumption of intent to convey title
to the center of the highway applies if the appurtenant strip exists in fact at the time of the
conveyance” (emphasis added)). There is no dispute that the highway strip existed at the time of
the conveyance to Crowley Farmland Partners because the Crouches conveyed the strip in a prior
conveyance. Furthermore, the deed to Crowley Farmland Partners included the boundaries to the
highway strip as a part of the boundaries for Tracts II and III. Appellant’s third issue is
overruled.
In its fourth issue, appellant asserts that appellees did not meet their burden to establish
their entitlement to summary judgment under the strip and gore doctrine as a matter of law. As
stated by the Texas Supreme Court in Angelo, the requirements for applying the strip and gore
doctrine are as follows:
It is our conclusion that this doctrine was conceived and intended to apply to
relatively narrow strips of land, small in size and value in comparison to the
adjoining tract conveyed by the grantor. In these instances, when it is apparent
that the narrow strip has ceased to be of benefit or importance to the grantor of
the larger tract, it can be presumed that the grantor intended to convey such a
strip.
Angelo, 441 S.W.2d at 526-27 (emphasis added, citations omitted).
3
There is summary judgment evidence indicating that the State did not award a contract for construction of the road
until after the deed from the Crouches to Crowley Farmland Partners.
8
Based on the quote from Angelo, one court stated that the strip and gore doctrine requires
the strip (1) to be small in comparison to the land conveyed, (2) to be adjacent to or surrounded
by the land conveyed, (3) to belong to the grantor at the time of conveyance, and (4) to be of
insignificant or little practical value. Glover v. Union Pac. R.R. Co., 187 S.W.3d 201, 212 (Tex.
App.—Texarkana 2006, pet. denied) (citing Alkas v. United Sav. Ass'n of Tex., Inc., 672 S.W.2d
852, 857 (Tex. App.—Corpus Christi 1984, writ ref’d n.r.e.)). Appellant argues that there was
no evidence on the fourth requirement or there was at least a fact question. Although Glover
stated the fourth requirement is that the strip has “to be of insignificant or little practical value,”
we believe the fourth requirement should be stated as in Angelo: the “strip has ceased to be of
benefit or importance to the grantor of the larger tract.” Angelo, 441 S.W.2d at 527; see Cantley,
143 S.W.2d at 915.4
There was summary judgment evidence to show that the Crouches’ mineral interest
underneath the highway strip ceased to be of benefit or importance to the Crouches at the time of
the conveyance of the adjacent tracts to Crowley Farmland Partners: (1) in their deed to the
State, the Crouches reserved the oil, gas, and sulphur, but waived the rights of ingress and egress
to the tract for purposes of exploring for and developing minerals and (2) in their deed to
Crowley Farmland Partners, the Crouches did not reserve any minerals. The benefit or
importance of the strip to the Crouches is determined at the time of their conveyance to Crowley
Farmland Partners. See Glover, 187 S.W.3d at 212. This evidence was sufficient to show that
the narrow strip had ceased to be of any benefit or importance to the Crouches. Having no
access to the minerals under the strip after the conveyance to Crowley Farmland Partners, it is
reasonable to presume that the Crouches intended to include the strip in the conveyance. The
burden then shifted to appellant to present evidence that the Crouches did not intend to convey
their mineral interest in the narrow strip to Crowley Farmland Partners.
Appellant’s only evidence that the strip had not “ceased to be of benefit or importance” to
the Crouches at the time of the conveyance was a mineral lease dated July 5, 2001, covering
minerals for property five miles from the highway strip. The conveyance to Crowley Farmland
Partners was in November 2000. The benefit or importance had to be determined as of that time,
not by subsequent events. Therefore, appellant presented no evidence to raise a fact question.
4
The Glover court cited Alkas, but the court in Alkas stated the fourth requirement as in Angelo: that the small tracts
were “of no benefit or importance” to the grantor at the time of the later conveyance. Alkas, 672 S.W.2d at 857.
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From appellees’ uncontradicted evidence, it is apparent that the narrow strip ceased to be of
benefit or importance to the Crouches at the time of their conveyance to Crowley Farmland
Partners. Appellant’s fourth issue is overruled.
This Court’s Ruling
The trial court’s judgment is affirmed.
TERRY McCALL
JUSTICE
June 3, 2010
Panel consists of: Wright, C.J.,
McCall, J., and Strange, J.
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