Harold Temple v. Marsha McCall

REVISED June 25, 2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 20, 2013
No. 12-30661
Lyle W. Cayce
Clerk
HAROLD H. TEMPLE,
Plaintiff-Appellant
v.
MARSHA PAUL MCCALL; MAJORIE RYALS PAUL; NED WALTER
JENKINS, III; DAVID PAUL JENKINS; LETHA BROWN TAYLOR,
Defendants-Appellees
Appeal from the United States District Court
for the Western District of Louisiana
Before KING, HIGGINBOTHAM, and CLEMENT, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
This appeal arises out of a dispute over a mineral servitude located in
Sabine Parish, Lousiana. Appellant Harold Temple brought this declaratory
judgment action, alleging that he is the owner of certain mineral rights in the
land previously sold to the Sabine River Authority. Temple claims that the
mineral rights were conveyed via credit deed in 1969 to his predecessors-in-
interest. Appellees Marsha McCall et al. (“McCall”) counter that, since the
language used in the deed did not expressly convey the mineral rights along with
the surface-area rights, those mineral rights remained reserved. McCall’s
No. 12-30661
argument is supported by expert testimony on the common interpretation of
language used in conveyance deeds. As there is no competing indication that the
mineral rights were conveyed to Temple’s predecessors-in-interest, we hold that
McCall owns the disputed mineral rights. The district court’s judgment is
AFFIRMED.
FACTS AND PROCEEDINGS
The 40-acre tract of land at issue was originally owned by Elizabeth Paul
Jenkins and T.J. Paul, Jr. On April 30, 1965, Jenkins and Paul conveyed 35.89
acres of the 40-acre tract to the Sabine River Authority (“SRA”) for the creation
of the Toledo Bend Lake, but reserved the mineral rights in the land in
perpetuity as allowed by statute. On September 4, 1965, Jenkins transferred to
Paul all of her interest in the originally owned property, including the mineral
rights (the “Jenkins-Paul Deed”).
On April 8, 1969, Paul sold a portion of the property via credit deed to R.V.
Woods (the “Paul-Woods Deed”). There is no dispute that, through this
transaction, Paul sold Woods some of the surface-area property that had not
been conveyed to the SRA as well as the mineral rights underlying that property.
The parties disagree, however, as to whether Paul also sold Woods his interest
in the mineral rights underlying the surface-area property that had been
conveyed to the SRA. The deed noted that Paul:
Grant[ed], Bargain[ed], S[old], Convey[ed] and
Deliver[ed] with full guaranty of title, and with
complete transfer and subrogation of all rights and
actions of warranty against all former proprietors of the
property presently conveyed unto R.V. Woods . . . the
following described property:
All that part [within the given coordinates that
comprise the original 40-acre tract] lying West and
South of the Public Road, LESS portion sold to Sabine
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No. 12-30661
River Authority.
The clause reading “[a]ll that part . . . lying West and South of the Public Road”
refers to a 15.5-acre tract carved out of the original 40-acre tract. The clause
reading “LESS portion sold to the Sabine River Authority” refers to a 14.982-
acre tract, the surface area which had been conveyed to the SRA. The parties
dispute whether the “LESS” clause excluded from sale only the surface-area
rights in this 14.982-acre tract, clearly belonging to the SRA, or also the mineral
rights underlying that land (the “disputed mineral rights”).
In 2000, Temple purchased the property from Woods. The cash-sale deed
(the “Woods-Temple Deed”) used language identical to that used in the
Paul-Woods Deed to describe the rights and property conveyed by Woods to
Temple.
In 2001 and 2004, Temple granted mineral leases over the surface-area
property that he purchased from Woods, while Paul’s heirs, including McCall,
granted leases of the disputed mineral rights to producer Phillips Petroleum. In
2008, McCall granted another lease of those mineral rights. Upon the
development of a natural gas formation in 2008, however, mineral leasing
activity in the area increased substantially. In September 2010, Temple brought
suit against McCall in the Western District of Louisiana, claiming that he owned
the disputed mineral rights pursuant to the language in the Paul-Woods Deed
and the Woods-Temple Deed. After a bench trial on the merits, the district court
entered judgment against Temple, finding that McCall owns the mineral rights.
Temple appeals.
STANDARD OF REVIEW
“The standard of review for a bench trial is well established: findings of
fact are reviewed for clear error and legal issues are reviewed de novo.” Kona
Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 601 (5th Cir. 2000). As this
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court exercises diversity jurisdiction over this case, it applies the substantive law
of Louisiana. See id.
DISCUSSION
Temple raises three primary issues on appeal: (1) whether the language
in the conveyance deeds adequately reserved the disputed mineral rights for
Paul’s heirs, namely McCall; (2) whether the district court was Erie-bound by
the Court of Appeal of Louisiana’s decision in Sheridan v. Cassel, 70 So. 3d 89
(La. Ct. App. 2011), which held that mineral rights must be expressly reserved
in a conveyance of land; and (3) whether we should certify the question of
Louisiana law to the Louisiana Supreme Court. We affirm the district court’s
determinations on the first two issues and decline to certify this question to the
Louisiana Supreme Court.
I.
Louisiana law states that mineral rights are “real rights,” LA. REV. STAT.
ANN. § 31:16, that can be conveyed, reserved, or leased by the landowner, LA.
REV. STAT. ANN. § 31:15. In other words, “ownership of ‘land’ and ownership of
mineral rights in such land are not necessarily one and the same.” Plaquemines
Parish Gov’t v. State, 826 So. 2d 14, 20 (La. Ct. App. 2002). Mineral rights can
be detached from the surface area from which they are derived. See Mobil Oil
Corp. v. Brennan, 385 F.2d 951, 953–54 (5th Cir. 1967) (holding that mineral
rights remain attached to the surface area “unless expressly detached therefrom
by the surface owner”). McCall’s predecessors executed such a detachment in
1965, when Jenkins and Paul conveyed part of their surface-area property to the
SRA, but reserved the mineral rights in that property.
Neither party disputes that Jenkins and Paul adequately reserved the
disputed mineral rights in 1965. What Temple disputes is McCall’s contention
that those mineral rights continued to be reserved in subsequent conveyances.
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No. 12-30661
According to Temple, the “LESS” language in the 1969 and 2000 conveyance
deeds only meant that he would not receive the surface-area property that was
sold to the SRA. He contends that this “LESS” language did not carve out the
mineral rights underlying that land. Since these disputed mineral rights were
not explicitly described in the conveyance deeds, McCall’s predecessors-in-
interest could not have expressly reserved the mineral rights via the “LESS”
language. Under this theory, with each conveyance of the property, the mineral
rights were also transferred by the vendors to the new purchasers.
We look to Louisiana law to assess the parties’ arguments regarding the
language used in the conveyance deeds. Under Louisiana law, “[o]wnership of
immovable property (which includes mineral rights) in dispute must be
determined from the public records,” or in this case, the conveyance deeds.
Texaco, Inc. v. Newton & Rosa Smith Charitable Trust, 471 So. 2d 877, 882 (La.
Ct. App. 1985). The language used in the 1969 and 2000 conveyance deeds,
however, is ambiguous. There is no mention of whether or not the disputed
mineral rights are included in these conveyances, and there is no indication of
whether the description of the property excluded from sale is intended to
encompass only the surface-area property owned by the SRA, or also the mineral
rights underlying that property.
When a contract is “not specific in its wording,” Louisiana courts have
looked to “the usual and customary manner of fulfilling like contracts” as
“persuasive [evidence of] the intention of the parties.” Par-Co Drilling, Inc. v.
Franks Petroleum Inc., 360 So. 2d 642, 644 (La. Ct. App. 1978); see also
Frischhertz Elec. Co., Inc. v. Hous. Auth. of New Orleans, 534 So. 2d 1310, 1313
(La. Ct. App. 1988) (considering the “customary manner of fulfilling like
contracts . . . to interpret the meaning of the ambiguous terms of the contract”
(citing LA. CIV. CODE ANN. art. 2053)). The use of expert testimony is
appropriate where, for example, a phrase in a contract is ambiguous and a court
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No. 12-30661
seeks to determine “whether there is a received usage in the trade which would
shed light on its meaning.” Jefferson Disposal Co., Inc. v. Jefferson Parish, 459
So. 2d 639, 642 (La. Ct. App. 1984).
At trial, McCall’s land-conveyancing expert testified that the type of
property description used in the 1969 and 2000 conveyance deeds often depicts
the “surface area of a piece of property” being conveyed in situations where the
property consists of jagged edges and is not a perfect square. In the expert’s
opinion, the use of language, such as “southwest of Section 28 less and except
that part already sold to Mr. Jones”—which is similar to the language at issue
here—is “the preferred way” of “describing a conveyance to a new buyer . . . if
[the parties are not] going to have the property surveyed.” This is because the
seller must ensure that he is conveying “all of the surface area in that subsection
except what he has already sold to somebody else.” Furthermore, the expert
testified that, in his opinion, McCall’s predecessors-in-interest did not transfer
or intend to transfer the disputed mineral rights to subsequent purchasers via
the conveyance deeds. The expert opined that the sellers likely would have used
words such as “oil, gas, [or] minerals” or would have “included a specific
reference to the servitude” if they intended to transfer the disputed mineral
rights.
We accept as persuasive the expert’s opinion on the correct interpretation
of the language in the conveyance deeds. Specifically, the expert’s testimony
indicates that the “all that part” language describes the surface area being
conveyed, but does not encompass the disputed mineral rights as well. When the
conveyance deeds’ ambiguous language is viewed in light of the customary
interpretation of such language, as clarified by expert testimony, we are led to
conclude that the disputed mineral rights were never transferred to Temple’s
predecessors-in-interest.
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No. 12-30661
Our conclusion is in alignment with the case relied upon most heavily by
Temple in support of his argument, Sheridan v. Cassel, 70 So. 3d 89. In
Sheridan, Appellee Tommy Cassel sold 80 acres of property to his sister,
Gertrude Cassel Ray, without reserving any mineral rights in the property.
According to the 1969 Cash Sale Deed, Cassel:
Grant[ed], Bargain[ed], S[old], Convey[ed] and Deliver[ed]
with full guaranty of title, and with complete transfer and
subrogation of all rights and actions of warranty against all
former proprietors of the property herein conveyed unto
Gertrude Cassel Ray . . . the following described property:
...
[The property], containing 80 acres, more or less,
together with all buildings and improvements thereon.
Id. at 94 (Cooks, J., dissenting) (emphasis added). However, prior to that sale,
Cassel conveyed a portion of the surface area of that property (approximately 3
acres) to the Sabine River Authority and reserved the mineral rights in that
property for himself. Thus, at the time of his sale to Ray, Cassel owned
approximately 77 surface area acres and 3 mineral acres of property.
Upon Ray’s death, Cassel re-acquired the aforementioned property and
then sold all of his interest in the property to Appellant Carolyn Sheridan.
According to the Cash Sale Deed, Cassel conveyed to Sheridan:
[A]ll of his interest . . . in and to [the property], less a 3.27
acre tract in the northwest corner, Sabine Parish, Louisiana,
containing 77.0 acres, more or less.
Id. at 94–95 (Cooks, J., dissenting). On the same date, in a document entitled
“Conveyance and Assignment of Interest in Estate” (the “Conveyance and
Assignment”), Cassel further described the property conveyed to Sheridan as:
[A]ll of my right, title, claim, and interest, real and personal,
in and to the Estate of [Ray] including, but not limited to all
real property and all personal property of said estate . . .
including . . . all other properties and assets of said estate,
wheresoever located, and of whatsoever kind and nature, and
all rights of said estate of every kind and character.
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No. 12-30661
Id. at 95 (Cooks, J., dissenting) (emphasis added) (first alteration in original).
Two decades after she acquired the property, Sheridan filed a petitory
action against Cassel, asking for a judgment declaring her to be the owner of the
mineral rights encumbering the property sold to the SRA. Sheridan alleged
that, pursuant to the Cash Sale Deed, Cassel conveyed all of his interest in the
80-acre estate to Ray, including the mineral rights. Thus, when he re-acquired
those rights from Ray and sold them to Sheridan, he conveyed all of his interest
in the 80-acre estate to Sheridan. The Louisiana trial court agreed and granted
summary judgment in favor of Sheridan, finding that:
[I]n the April 5, 1969 cash sale deed to [Ray], [Cassel]
conveyed ‘all rights’ to the subject 80 acres without
reservation of the mineral rights he possessed from the sale
of the subject 3.27 acres to the Sabine River Authority . . .
Thus, [Cassel] transferred 76.73 surface acres and 80 mineral
acres to [Ray] that remained with her until her death.
Id. at 91 (quoting the trial court’s order). The Court of Appeal of Louisiana
affirmed the trial court’s finding.
In comparing his claim to that in Sheridan, Temple focuses singularly on
the “all rights” language used by the conveyance deeds in both cases. See
Sheridan, 70 So. 3d at 93. Temple contends that, like Sheridan, Woods conveyed
all of his rights to the described area, less the surface area previously sold to the
SRA. However, Temple’s reliance on the “all rights” language is misplaced. At
Temple’s trial, the land conveyancing expert testified that the “all rights”
language refers to “rights and actions of warranty . . . not any rights . . . to the
property that’s later described in the non-preprinted form or portion of the deed.”
The district court was correct in noting that the “all rights” language used here
and in Sheridan does not guide our analysis. See Temple v. McCall, No. 10-cv-
1415, 2012 WL 1934013, at *4 (W.D. La. May 29, 2012).
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No. 12-30661
Sheridan is also distinguishable on alternative grounds. In Sheridan, the
state court determined that, through the Conveyance and Assignment, Cassel
conveyed “all of [his] right, title, claim, and interest, real and personal, in and
to” all eighty acres of the property, including the three mineral acres that Cassel
had previously sold to the SRA. Sheridan, 70 So. 2d at 93. In contrast, the
description of the property conveyed here did not include the surface-area
property sold to the SRA.
In failing to acknowledge this discrepancy, Temple essentially ignores
that, in Sheridan, the Conveyance and Assignment clarified the boundaries of
the property to which Sheridan acquired rights. See id. The fact that the
Conveyance and Assignment explicitly described the 80-acre tract of land is
compelling evidence that the conveyance included both the 77 acres of surface
area and the remaining 3 acres of mineral rights. Temple has not pointed to any
analogous instrument that suggests that the land conveyed to him includes the
disputed mineral rights. As the descriptions of the property conveyed and the
instrument used to convey that property are critical to the interpretation of the
1969 and 2000 conveyance deeds, we hold that Sheridan is not controlling.
II.
When evaluating issues of state law, federal courts “look to the final
decisions of that state’s highest court.” Chaney v. Dreyfus Serv. Corp., 595 F.3d
219, 229 (5th Cir. 2010). “In the absence of such a decision, ‘[federal courts]
must make an Erie guess and determine, in [their] best judgment, how [the
supreme court of that state] would resolve the issue if presented with the same
case.’” Six Flags, Inc. v. Westchester Surplus Lines Ins. Co., 565 F.3d 948, 954
(5th Cir. 2009) (quoting In re Katrina Canal Breaches Litig., 495 F.3d 191, 206
(5th Cir. 2007)). “In making an Erie guess, [federal courts] defer to intermediate
state appellate court decisions, unless convinced by other persuasive data that
the highest court of the state would decide otherwise.” Mem’l Hermann
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No. 12-30661
Healthcare Sys. Inc. v. Eurocopter Deutschland, 524 F.3d 676, 678 (5th Cir. 2008)
(quoting Herrmann Holdings Ltd. v. Lucent Tech. Inc., 302 F.3d 552, 558 (5th
Cir. 2002)).
Temple alleges that, since there are no Louisiana Supreme Court cases on
point and no “other persuasive data,” id., that would counsel against deference
to Sheridan, the district court was bound by the state appellate court’s decision.1
Temple’s argument rests in large part on his assertion that the district court did
not identify any other persuasive data that would justify its deviation from the
holding in Sheridan.2 However, since the facts in Sheridan are distinguishable,
we are not bound by its holding nor required to identify other persuasive data
in determining that Woods did not convey the disputed mineral rights to Temple.
Cf. Birmingham Fire Ins. Co. of Pa. v. Winegardner & Hammons, Inc., 714 F.2d
548, 550 (5th Cir. 1983) (according less deference to the state appellate court
opinion where “specific tangible circumstances [indicated] that the supreme
court of the state would hold differently from the lower state court”). Our Erie
guess is that the Supreme Court of Louisiana would use the expert’s testimony
as guidance in interpreting the conveyance deeds, and ultimately reach the same
1
“Other persuasive data” that may justify deviation from the appellate court’s holding
could consist of, among other things, “the general rule on the issue, decisions from other
jurisdictions, and general policy concerns.” Chaney, 595 F.3d at 229 (quoting Travelers Cas.
& Sur. Co. of Am. v. Ernst & Young LLP, 542 F.3d 475, 483 (5th Cir.2008)).
2
Temple also maintains that the district court should not have relied on the dissent
in Sheridan as support for its disposition. While this court has expressly refused to “accord a
solo dissenting opinion any weight as an expression of Louisiana law,” Louque v. Allstate Ins.
Co., 314 F.3d 776, 781 (5th Cir. 2002), it is not clear that the district court relied solely on the
dissenting opinion in concluding that Woods reserved the disputed mineral rights in the
Woods-Temple Deed. Instead, it appears that the district court referred primarily to the
Sheridan dissent to obtain a more detailed description of the facts and to understand the
context of the decision. See Temple, 2012 WL 1934013, at *3. Additionally, the district court
did not need to rely on the Sheridan dissent to justify its findings since it noted that the facts
in Sheridan were distinguishable. See id. at *4 (observing that, unlike the language used in
the conveyance deeds, the language used in the Sheridan deed “encompass[es] any mineral
rights the seller had in connection with the described tract”).
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No. 12-30661
conclusion that we do—that the disputed mineral rights were not conveyed to
Temple’s predecessors-in-interest.
III.
Temple alternatively requests that we certify the determinative question
of Louisiana law to the Louisiana Supreme Court. We may certify a
determinative question of Louisiana law to the Louisiana Supreme Court when
that question has not been resolved by “clear controlling precedent” of that court.
LA. REV. STAT. ANN. § 13:72.1; Jesco Constr. Corp. v. NationsBank Corp., 278
F.3d 444, 448 (5th Cir. 2001). However, “[a]s a general proposition, we [are]
chary about certifying questions of law absent a compelling reason to do so; the
availability of certification is such an important resource to this court that we
will not risk its continued availability by going to that well too often.” Jefferson
v. Lead Indus. Ass’n, Inc., 106 F.3d 1245, 1247 (5th Cir. 1997). Thus, “absent
genuinely unsettled matters of state law, [this court has been] reluctant to
certify.” Id.
In requesting certification to the Louisiana Supreme Court, Temple not
only failed to formulate a certifiable question of law, but also rested his
argument on the erroneous assumption that an affirmance of the district court’s
decision would create precedent at odds with the Louisiana Court of Appeal’s
decision in Sheridan. For the reasons discussed above, an affirmance of the
district court’s decision would not be at odds with the appellate court’s holding
in Sheridan. Temple’s request for certification to the Louisiana Supreme Court
is therefore denied.
CONCLUSION
Although Temple claims that the language used in the Deeds encompassed
the disputed mineral rights, his argument is belied by expert testimony on the
common interpretation of such language in land-conveyance transactions. We
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No. 12-30661
agree with the district court that the language used in the conveyance deeds
does not demonstrate that the disputed mineral rights were transferred to
Temple’s predecessors-in-interest. Thus, McCall owns the disputed mineral
rights. The judgment of the district court is AFFIRMED.
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