Tommie S. Dodd, Linda Lou Crosland, and Carley H. Dodd v. James L. Wiatrek, and Wife Elaine R. Wiatrek, and Garret J. Wiatrek ( 2012 )


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  •                                 MEMORANDUM OPINION
    No. 04-11-00829-CV
    Tommie S. DODD, Linda Lou Crosland, and Carley H. Dodd,
    Appellants
    v.
    James L. WIATREK, Elaine R. Wiatrek, and Garret J. Wiatrek,
    Appellees
    From the 81st Judicial District Court, Wilson County, Texas
    Trial Court No. 11-06-0363-CVW
    Honorable Donna S. Rayes, Judge Presiding
    Opinion by:      Steven C. Hilbig, Justice
    Sitting:         Catherine Stone, Chief Justice
    Phylis J. Speedlin, Justice
    Steven C. Hilbig, Justice
    Delivered and Filed: October 31, 2012
    REVERSED AND RENDERED
    Tommie S. Dodd, Linda Lou Crosland, and Carley H. Dodd (“the Dodds”) appeal from a
    judgment interpreting a deed and declaring that a royalty reservation in their favor has expired
    and the royalty interest has reverted to James L. Wiatrek, Elaine R. Wiatrek, and Garret J.
    Wiatrek (“the Wiatreks”). We reverse the trial court’s judgment and render judgment for the
    Dodds.
    04-11-00829-CV
    BACKGROUND
    By the deed dated June 7, 1983, Leota Dodd conveyed real property to James and Elaine
    Wiatrek. The deed granted to the Wiatreks 76 ¼ acres of land described and all of the grantor’s
    rights to the property with warranty and vendor’s lien language. The conveyance was made
    subject to all conditions, easements, covenants, and restrictions of record, specifically
    referencing two previous mineral leases. Finally, the deed included two reservations to the
    grantor, in the following language:
    SAVE AND EXCEPT there is reserved unto Grantor, her heirs and
    assigns, an undivided two-thirds (2/3) interest in all of the payments do [sic] to be
    paid Grantor under the existing Mineral Lease covering the subject property oil
    well presently located and producing on the property.
    and
    SAVE AND EXCEPT and in addition to the reservation found
    immediately above, but not in lieu thereof there is reserved unto Grantor, her heirs
    and assigns, and [sic] undivided one-half (1/2) interest in the existing royalty and
    all future royalty interests, in all of the oil, gas, coal, lignite, iron, uranium and
    other minerals, in and under and what may be produced, (by what ever method
    produced by extraction), from the above property. Grantor, her heirs and assigns,
    shall not participate in the making of any Oil, Gas or Mineral Lease covering said
    property, nor shall they participate in any bonus which may be paid for any such
    Lease, nor shall they participate in any rental or shutin gas well royalty to be paid
    under any such Lease. Provided further, that such royalty reservation shall
    terminate and revert to Grantees, fifteen (15) years from date of closing unless
    there has been production of any of the above- described minerals. Grantees, their
    heirs and assigns shall not unreasonably withhold the leasing of the property.
    The Wiatreks sought a declaratory judgment that the royalty reservation in the deed in
    favor of the Dodds had expired and the royalty interests reverted to the Wiatreks. The Wiatreks
    asserted in the trial court that the two-thirds reservation of payments due, in the first “save and
    except” reservation provision (hereinafter “first reservation”), added to the one-half reservation
    of royalties, in the second “save and except” reservation provision (hereinafter “second
    reservation”), would amount to more than one hundred percent of the royalty interest. Thus, the
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    Wiatreks claimed that the only reasonable interpretation of the reverter provision of the second
    reservation was that, to prevent reverter, any production had to be from a “new” well rather than
    the existing well, within fifteen years from the closing.
    The Dodds denied the Wiatreks’ allegations and counterclaimed, seeking removal of a
    cloud on their title to the undivided one-half interest in all royalties reserved to them in the deed.
    The Dodds argued that the first reservation, by the express terms, referred only to lease payments
    due to Grantor at the time the deed was executed. The second reservation reserved a one-half
    interest in all royalties from the property, subject to reversion fifteen years from the date of the
    closing unless there was production of “any” of the described minerals. The Dodds also asserted
    that, harmonizing the plain meaning of the first and second reservations, the grantor was to
    receive two-thirds of any payments due to the grantor under the referenced lease before the date
    of the conveyance and the grantor retained a one-half interest in the existing and all future
    royalty interests from all minerals from the property, subject to possible reversion. Finally, the
    Dodds asserted that the Wiatreks’ interpretation required the insertion of additional words,
    language or implied terms that were not in the deed.
    The only evidence before the trial court was the deed itself and certain stipulated facts.
    The parties stipulated that an oil well located on the property produced 322 barrels of oil from
    June, 1983 through March 31, 1984, and there was no production or extraction of any oil, gas,
    lignite, iron, uranium or other minerals from the property, except from the existing oil well.
    The trial court rendered judgment for the Wiatreks, holding that the parties intended for
    the reservation in the second reservation to expire if there was no production within fifteen years
    from the date of the deed from any source other than the well referenced in the first reservation.
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    The trial court rendered judgment that the second reservation expired by its terms and the royalty
    interests reverted to the Wiatreks. The Dodds appeal that judgment.
    CONSTRUCTION OF THE DEED
    Standard of Review
    Neither party contends the deed is ambiguous. The construction of an unambiguous deed
    is a question of law. Luckel v. White, 
    819 S.W.2d 459
    , 461 (Tex. 1991). The applicable standard
    of review is de novo. City of Del Rio v. Clayton Sam Colt Hamilton Trust, 
    269 S.W.3d 613
    , 616
    (Tex. App.—San Antonio, 2008, pet. denied); see Karm v. City of Castroville, 
    219 S.W.3d 61
    ,
    63 (Tex. App.—San Antonio 2006, no pet.) (“To the extent that the issues involved stipulated
    facts and only questions of law were presented to the trial court, this court reviews the trial
    court’s decision de novo.”). We will construe the language of the deed to ascertain the intent of
    the parties as a matter of law without considering parol evidence. Averyt v. Grande, Inc., 
    717 S.W.2d 891
    , 893 (Tex. 1986); Eastin v. Dial, 
    288 S.W.3d 491
    , 500 (Tex. App.—San Antonio
    2009, pet. denied).
    Deed Construction Rules
    When interpreting a deed, the intent of the parties is to be determined from the express
    language found within the four corners of the document. French v. Chevron U.S.A. Inc., 
    896 S.W.2d 795
    , 796 (Tex. 1995); 
    Luckel, 819 S.W.2d at 461-63
    . The intent that governs is not the
    intent that the parties meant but failed to express, but rather the intent that is expressed. Moon
    Royalty LLC v. Boldrick Partners, 
    244 S.W.3d 391
    , 394 (Tex. App.—Eastland 2009, pet.
    denied). Even if the court could discern the actual subjective intent of the parties, it is not the
    subjective intent that governs, but the intent “expressed in the instrument as a whole, ‘without
    reference to matters of mere form, relative position of descriptions, technicalities, or arbitrary
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    04-11-00829-CV
    rules.’” 
    Luckel, 819 S.W.2d at 462
    (citing Sun Oil Co. v. Burns, 
    125 Tex. 549
    , 552, 
    84 S.W.2d 442
    , 444 (1935)).
    In seeking to ascertain the intentions of the parties, the court should harmonize all parts of
    the deed. 
    Luckel, 819 S.W.2d at 462
    ; Altman v. Blake, 
    712 S.W.2d 117
    , 118 (Tex. 1986). The
    court must construe the deed so as to give each provision meaning and purpose so that no
    provision is rendered meaningless or moot. See Moon Royalty 
    L.L.C., 244 S.W.3d at 394
    (citing
    Mark K. Glasser & Keith A. Rowley, On Parol: The Construction and Interpretation of Written
    Agreements and the Role of Extrinsic Evidence in Contract Litigation, 49 BAYLOR L. REV. 657,
    664-82 (1997)). “[T]he parties to an instrument intend every clause to have some effect and in
    some measure to evidence their agreement.” 
    Luckel, 819 S.W.2d at 462
    (quoting 
    Altman, 712 S.W.2d at 118
    ). Even if different parts of the deed appear contradictory or inconsistent, the court
    must strive to harmonize all of the parts, construing the instrument to give effect to all of its
    provisions. Benge v. Scharbauer, 
    152 Tex. 447
    , 451, 
    259 S.W.2d 166
    , 167 (1953). The court
    should “not strike down any part of the deed, unless there is an irreconcilable conflict wherein
    one part of the instrument destroys in effect another part thereof.” 
    Luckel, 819 S.W.2d at 462
    (quoting 
    Benge, 259 S.W.2d at 167
    ). The court must construe the “language as it is written and
    . . . [has] no right to alter it by interpolation or substitution.” Dahlberg v. Holden, 
    150 Tex. 179
    ,
    183, 
    238 S.W.2d 699
    , 701 (1951). The court may not interpolate or substitute in harmonizing
    deed provisions to change the clear and unambiguous language. 
    Luckel, 819 S.W.2d at 463
    .
    Discussion
    The Wiatreks variously assert that royalty payments are the only subject of the first
    reservation, that the Dodds reserved a two-thirds interest in the existing producing well and that
    two-thirds interest added to the one-half royalty interest reserved in the second reservation would
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    be more than 100 percent. The Wiatreks reason, therefore, that the second reservation cannot
    apply to the existing well. We disagree with this reasoning.
    The first reservation reserved to the grantor an undivided two-thirds of all the payments due
    to her under the referenced lease. The second reservation refers not to payments, but rather to
    “the existing royalty and all future royalty interests . . . .” The first reservation plainly reserved
    the right to receive accrued and owing payments, but did not reserve an interest in realty, such as
    a royalty interest. The first reservation refers retrospectively to payments accrued before the date
    of the deed, and the second reservation refers prospectively to realty interests existing at the time
    of the deed or arising thereafter. There is no overlap in the reservations as they do not reserve
    different percentages of the same thing—royalty interests.
    The Wiatreks also assert that, to meet the “unless there has been production” qualification
    under the second reservation, the production must be from a “subsequent lease.” They also
    argue that, because the second reservation “is not in lieu” of the first reservation, the production
    referenced in the reverter provision must be from any well or source other than the existing well.
    We again disagree.
    The Wiatreks’ interpretation ignores the plain language of the second reservation, which
    reserved to the Dodds an interest in “the existing royalty” as well as all future royalty interests.
    In addition to ignoring this language, the Wiatreks’ interpretation requires this court to add
    language to the deed, going beyond the four corners. The reverter provision does not refer to
    minerals “other than those” from any particular well or lease, but refers only to “any” minerals
    “in and under and what may be produced . . . from the above property.” We must construe the
    deed as written; addition of any other language is not warranted. See, e.g., Luckel, 819 S.W.2d at
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    462, 463; 
    Dahlberg, 238 S.W.2d at 701
    . We do not discern any reason to deviate from the
    express language of the deed.
    The Wiatreks further argue that, because the parties knew the existing well was
    producing oil at the time of the deed, the parties could not have intended the reverter provision to
    include that existing well. Because of the existing production, there would never be a possibility
    of reverter under the second reservation and the reverter provision would be rendered
    meaningless. This argument does not dissuade us from our conclusion.
    There is no evidence regarding the parties’ circumstances or states of mind at the time the
    deed was signed nor can the necessary facts be inferred from the deed. See, e.g., Lozano v.
    Lozano, 
    52 S.W.3d 141
    , 149 (Tex. 2001) (material fact must be reasonably inferred from known
    circumstances). The first reservation notes that the existing oil well was “presently” producing;
    the reverter provision’s relevant time is “the date of closing.” Because these provisions served
    different purposes and addressed different times, neither party’s state of mind or knowledge of
    facts and circumstances can be reasonably inferred from the deed alone.
    More importantly, the Wiatreks’ assertion improperly speculates about the parties’
    subjective intent over the intent actually expressed in the deed as a whole. See 
    Luckel, 819 S.W.2d at 462
    (even if court could discern actual subjective intent of parties, it is not subjective
    intent that governs, but intent of parties as expressed in instrument as a whole); Moon 
    Royalty, 244 S.W.3d at 394
    (intent that governs is not intent parties meant but failed to express but rather
    intent expressed). The plain language of the deed as a whole clearly indicates the intent of the
    parties expressed in the deed and must prevail.
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    04-11-00829-CV
    REVERSION OF ROYALTY INTERESTS
    The parties stipulated that Railroad Commission records showed that the oil well located
    on the 76 ¼ acres purchased by the Wiatreks produced 322 barrels of oil from June, 1983
    through March 31, 1984. The reverter provision in the second reservation provides “that such
    royalty reservation shall terminate and revert to Grantees, fifteen (15) years from the date of
    closing unless there has been production of any of the above described minerals.” Under the
    plain language of this provision, there was production of oil (one of the specified minerals)
    during the fifteen years after closing. Therefore, the royalty interests reserved to the Dodds did
    not terminate or revert.
    This interpretation harmonizes the deed, and particularly the first and second
    reservations, to give all the provisions meaning and purpose. See, e.g., Moon 
    Royalty, 244 S.W.3d at 394
    .        There is no conflict in these provisions and, certainly, there is not such
    irreconcilable conflict that one part of the deed destroys another part. 
    Luckel, 819 S.W.2d at 462
    . 1
    CONCLUSION
    We reverse the trial court’s judgment and render judgment that the Dodds own an
    undivided one-half interest in the existing and all future royalty interests in all of the oil, gas,
    coal, lignite, iron, uranium, and other minerals, in and under and what may be produced, from
    the property conveyed in the deed in this cause.
    Steven C. Hilbig, Justice
    1
    Because we reverse the trial court’s judgment based on the construction of the deed, we do not address the Dodds’
    legal and factual sufficiency of the evidence point.
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