David v. Goss v. Addax Minerals Fund, LP and AG Royalties, LLC

In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-14-00167-CV
DAVID V. GOSS, APPELLANT
V.
ADDAX MINERALS FUND, LP AND AG ROYALTIES, LLC, APPELLEES
On Appeal from the 97th District Court
Montague County, Texas
Trial Court No. 2013-0135 M-CV, Honorable Jack A. McGaughey, Presiding
April 21, 2016
MEMORANDUM OPINION
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
Appellant David V. Goss brought suit against appellees Addax Minerals Fund, LP
and AG Royalties, LLC (collectively “Addax”) to establish his title to the mineral estate in
land in Montague County. Addax answered, asserted affirmative defenses and brought
a counterclaim. On Addax’s motion for summary judgment, the trial court rendered
judgment that Goss take nothing by his suit and that Addax owns the minerals. Goss
appeals. We will affirm.
Background
In October 1994 W.L. Bell and his wife Alma Bell signed an earnest money
contract for the sale of acreage they owned to Kestrel Properties, Inc. Among other
things, the contract provided the Bells would retain no mineral rights and Kestrel was “to
receive 100% of minerals, royalties and timber interest.” At the time, Goss was
president and sole shareholder of Kestrel. He was present when the contract was
signed. Kestrel then employed Montague County Abstract and Title Company, Inc. to
prepare a warranty deed conveying the property to Kestrel. The Bells signed the deed
in December 1994 and it was recorded that month. It is undisputed that Goss saw a
copy of the deed during 1994.
The Bells’ deed1 to Kestrel contained the following paragraph:
RESERVATIONS FROM AND EXCEPTIONS TO CONVEYANCE AND
WARRANTY: Reservations, restrictions and easements of record, and
current year ad valorem taxes. LESS, SAVE AND EXCEPT HEREFROM
ALL OIL, GAS AND OTHER MINERALS, IN, UNDER AND PRODUCED
FROM THE ABOVE DESCRIBED PROPERTY.
The deed’s granting and warranty language read as follows:
GRANTOR, for the consideration and subject to the reservations from and
exceptions to conveyance and warranty, GRANTS, SELLS, AND
CONVEYS to Grantee the property, together with all and singular the
rights and appurtenances thereto in anywise belonging, to have and to
hold it to Grantee, and to Grantee’s heirs, executors, administrators,
successors, and assigns, forever. Grantor hereby binds Grantor and
Grantor’s heirs, executors, administrators, and successors to warrant and
forever defend all and singular the property to Grantee and Grantee’s
1
The format of the warranty deed generally follows the form contained in the
1986 version of the Texas Real Estate Forms Manual published by the State Bar of
Texas. See Real Estate Forms Comm., State Bar of Tex., Texas Real Estate Forms
Manual, Warranty Deed, at 302-c, 302-7 (1986).
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heirs, executors, administrators, successors, and assigns, against every
person whomsoever lawfully claiming or to claim the same or any part
thereof, except as to the reservations from and exceptions to warranty. 2
The Bells died and their estates passed to their grandson Nicholas Bell. In
November 2005 Carolyn Guilliams, president of the title company, signed an affidavit
stating her “scrivener’s error in preparing the deed . . . erroneously reserved the mineral
estate unto [Mr. and Mrs. Bell].” The affidavit was recorded on November 30, 2005. It
is undisputed Goss knew Guilliams was preparing an affidavit relating to the property
and had read the Bell-Kestrel deed before the affidavit was recorded. It also is
undisputed that in 2005 and 2006 Goss communicated with the title company
concerning ownership of the minerals. Kestrel dissolved in March 2006 and Goss
received its assets.
By an oil and gas lease signed by Goss as its president, Kestrel leased the
disputed mineral interest to an oil company in February 2006, and Goss individually
signed a lease with another oil company in May 2010. Nicholas Bell signed a lease of
the minerals in March 2012, and in December 2012 he conveyed any interest he owned
in the minerals to Addax by a “mineral deed.”
Alleging Nicholas Bell’s lease and subsequent mineral deed were a cloud on his
title to the minerals, Goss filed suit to quiet title in April 2013. In the suit he alleged the
Bells’ 1994 deed unambiguously conveyed the minerals to Kestrel and asserted the
“reservation from conveyance and warranty” language merely removed the mineral
interest from the deed’s general warranty. In a paragraph seeking reformation, he
2
Bolding and capitalization in original.
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asserted a cause of action accrued with the signing or recording of Nicholas Bell’s 2012
mineral lease. The discovery rule also was alleged. Addax filed a counterclaim seeking
clarification of title to the minerals in its favor. After some discovery, Addax filed a
traditional motion for summary judgment. Among its grounds, Addax asserted Goss’s
suit was barred by limitations.
The trial court signed a judgment decreeing that Goss take nothing by his suit,
and declaring Addax’s ownership of the disputed mineral interest. The judgment did not
state a basis for the court’s findings.
Analysis
Finality of the Judgment and Adequacy of Summary Judgment Motion
By his second issue, Goss points out he filed a supplemental petition alleging a
claim of adverse possession and seeking declaratory relief after Addax filed its
summary judgment motion, and asserts the judgment may not be final. Because the
issue implicates our jurisdiction, we address it first.
A judgment issued following a summary proceeding enjoys no presumption of
finality and is final for appellate purposes only if it actually disposes of all claims and
parties then before the court, regardless of its language, or with unmistakable clarity it
states its finality as to all claims and all parties. Southern Mgmt. Servs. v. SM Energy
Co., 398 S.W.3d 350, 358 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (citing
Lehmann v. Har-Con Corp., 39 S.W.3d 191, 192-93 (Tex. 2001)). The trial court’s
judgment orders that Goss take nothing by his suit, declares the rights of Addax to the
disputed mineral estate, and concludes with the statement, “This judgment finally
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disposes of all parties and claims and is appealable.” We find the judgment is final for
purposes of appeal. Ritzell v. Espeche, 87 S.W.3d 536, 538 (Tex. 2002) (per curiam);
Lehmann, 39 S.W.3d at 206 (“an order that expressly disposes of the entire case is not
interlocutory merely because the record fails to show an adequate motion or other legal
basis for the disposition”).
By his third issue, Goss also argues Addax’s summary judgment motion is
facially defective because, he contends, it fails to comply with Texas Rule of Civil
Procedure 166a in several respects. He contends it fails to state the specific grounds
for summary judgment, does not properly constitute a no-evidence motion stating the
elements of Goss’s claims for which Addax claims there was no evidence, and fails to
state whether it is a no-evidence or traditional motion. We are not directed to, nor do
we find, in the summary judgment record any indication that Goss brought these
complaints to the trial court as special exceptions and obtained a ruling. McConnell v.
Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993) (“An exception is
required should a non-movant wish to complain on appeal that the grounds relied on by
the movant were unclear or ambiguous”). Accordingly, issue three presents nothing for
our review. TEX. R. APP. P. 33.1(a); McConnell, 858 S.W.2d at 343 n.7 (preservation of
the error for appeal requires the excepting party obtain a ruling at or prior to the
summary judgment hearing). Because the judgment is final and appealable and Goss’s
objections to Addax’s motion were not preserved, we overrule issues two and three.
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Summary Judgment for Addax
We turn to Goss’s issues addressing Addax’s entitlement to summary judgment it
owns the disputed mineral estate.
An appellate court reviews a trial court’s grant of summary judgment de novo.
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). The movant for
summary judgment has the burden of showing there is no genuine issue of material fact
and it is entitled to summary judgment as a matter of law. TEX. R. CIV. P. 166a(c).
Reviewing a summary judgment, we take evidence favorable to the nonmovant as true,
and indulge every inference and resolve every doubt in the nonmovant’s favor. Nixon v.
Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).
Addax contends the deed unambiguously reserved the mineral estate to the
Bells. Goss argues the deed, as a matter of law, contains no reservation of the mineral
estate. Alternatively, Goss contends the deed is ambiguous.
Our primary objective in construing a deed is to determine the intent of the
parties from the four corners of the deed. Luckel v. White, 819 S.W.2d 459, 461 (Tex.
1991). “[W]e must examine and consider the entire writing in an effort to harmonize and
give effect to all the provisions of the contract so that none will be rendered
meaningless.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). No
single provision taken alone will be given controlling effect; rather, all the deed
provisions must be considered with reference to the whole instrument. See Seagull
Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006) (quoting
Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)). The controlling intent is not what
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the parties meant but failed to express but the intent expressed in the deed. Griswold v.
EOG Res., Inc., 459 S.W.3d 713, 717 (Tex. App.—Fort Worth 2015, no pet.).
Whether a deed is ambiguous is a question of law the court determines.
Webster, 128 S.W.3d at 229; Coker, 650 S.W.2d at 394. Determining ambiguity may
require consideration of rules of contract interpretation. See, e.g., Brown v. Havard, 593
S.W.2d 939, 942 (Tex. 1980) (relying on general contract interpretation precedents to
analyze whether a deed was ambiguous). Language is not ambiguous merely because
it lacks clarity. DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex.
1999); Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 157
(1951). Nor is an instrument ambiguous merely because the parties disagree on its
meaning. Seagull Energy, 207 S.W.3d at 345; DeWitt County, 1 S.W.3d at 100.
Rather, a deed is ambiguous only if application of established rules of construction
leaves the instrument susceptible to more than one meaning. Havard, 593 S.W.2d at
942; DeWitt County, 1 S.W.3d at 100. And the two meanings must each be reasonable.
Lopez v. Munoz, Hockema & Reed, 22 S.W.3d 857, 861 (Tex. 2000) (“Ambiguity does
not arise simply because the parties advance conflicting interpretations of the contract;
rather, for an ambiguity to exist, both interpretations must be reasonable”); Columbia
Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). Said
differently, a deed is not ambiguous if it can be given a definite or certain legal meaning.
Coker, 650 S.W.2d at 393. A warranty deed will pass the entire estate owned by the
grantor at the time of the conveyance unless reservations or exceptions reduce the
estate conveyed. Griswold, 459 S.W.3d at 717 (citing Cockrell v. Tex. Gulf Sulphur Co.,
157 Tex. 10, 299 S.W.2d 672, 676 (1956)).
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The foundation of Goss’s position on appeal is the assertion the “less, save and
except herefrom all oil, gas and other minerals . . .” language appearing in the deed
under the heading “reservations from and exceptions to conveyance and warranty,”
coupled with the “subject to” language in the deed’s granting clause, is a limitation on
the Bells’ warranty of title and not a reservation of the minerals to the Bells. Goss’s
argument emphasizes the distinction the law draws between reservations and
exceptions.
Courts recognize that reservations and exceptions “are not strictly synonymous.”
See, e.g., Griswold, 459 S.W.3d at 718 (quoting Pich v. Lankford, 157 Tex. 335, 302
S.W.2d 645, 650 (1957)). The chief distinction between a reservation and an exception
is that a reservation always operates for the benefit of the grantor. Bright v. Johnson,
302 S.W.3d 483, 488 (Tex. App.—Eastland 2009, no pet.) (citing Patrick v. Barrett, 734
S.W.2d 646, 647 (Tex. 1987) and Pich, 302 S.W.2d at 648-50). “An exception generally
does not pass title itself; instead, it operates to prevent the excepted interest from
passing at all.” Griswold, 459 S.W.3d at 717; accord, Bright, 302 S.W.3d at 488. But,
as the Fort Worth court reiterated in its recent opinion in Griswold, even though not
effective to pass title, a save-and-except clause may exempt a portion of the grantor’s
estate from passing title to the grantee, leaving title with the grantor provided the
interest excepted is not outstanding in another. Griswold, 459 S.W.3d at 718 (citing
Pich, 302 S.W.2d at 650; Patrick, 734 S.W.2d at 648 n.1). No one suggests that any
interest in the minerals underlying the land the Bells conveyed to Kestrel was
outstanding in a third party. For that reason, absent an ambiguity, the trial court was
correct to find the deed left title to the minerals in the Bells, regardless whether the
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“less, save and except herefrom all oil, gas and other minerals” language is considered
a reservation or an exception.
In support of his alternative contention the deed contains an ambiguity, Goss
again asserts the position the “subject to” language in the deed’s granting clause is
intended only to limit the warranty of title. Addax argues Goss’s position disregards the
plain language of the granting clause, which states the grant is made “for the
consideration and subject to the reservations from and exceptions to conveyance and
warranty.” We agree with Addax. See J.M. Davidson, Inc., 128 S.W.3d at 229; Glover
v. National Ins. Underwriters, 545 S.W.2d 755, 761 (Tex. 1977) (noting the plain
language of an instrument will be given effect when the parties’ intent may be discerned
from that language).
Moreover, Goss’s ambiguity argument leaves us to assume the Bells intended to
convey the mineral estate to Kestrel but, for reasons unexplained, excluded it from the
warranty of title. We find Goss’s alternative reading of the deed to be unreasonable and
thus conclude no ambiguity is shown. See Hausser v. Cuellar, 345 S.W.3d 462, 467
(Tex. App.––San Antonio 2011, pet. denied) (deed is ambiguous if both interpretations
are reasonable). The deed unambiguously left the mineral estate in the Bells. The trial
court did not err in so declaring.
Take-Nothing Summary Judgment Against Goss
The trial court did not state a reason for rendering a take-nothing judgment
against Goss on his claims. When the trial court does not state the ground on which it
relied for rendering summary judgment, we may affirm the summary judgment on any
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meritorious ground asserted in the movant’s motion for summary judgment. Dow
Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (per curiam). As noted, one of
the grounds Addax asserted was its affirmative defense of statute of limitations.
A claim for reformation of a deed is subject to a four-year limitations period.
Cosgrove v. Cade, 468 S.W.3d 32, 37 (Tex. 2015) (citing Havard, 593 S.W.2d at 943).
Limitations will not bar an action to quiet title if a deed is void 3 or has expired by its own
terms. Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615, 618 (Tex. 2007). “But the
same rule does not apply when a deed is voidable rather than void.” Id. If a deed is
merely voidable, the four-year statute of limitations will apply to the suit. Id. No one
here argues the Bell deed is void or somehow has expired.
In his petition Goss alleged the discovery rule. Under this doctrine accrual of a
cause of action is deferred until the injured party learned of, or in the exercise of
reasonable diligence should have learned of, the injury-causing act. Cosgrove, 468
S.W.3d at 37. But availability of the discovery rule is limited to those instances where
“the nature of the injury incurred is inherently undiscoverable and the evidence of injury
is objectively verifiable.” Id. (citing Computer Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d
453, 456 (Tex. 1996)). The focus in discovery rule cases is not on causes of action but
on categorical types of injury. Id. (citing Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314
(Tex. 2006)).
3
It is said that a deed is void if, for example, the grantee entity does not exist,
Parham Family L.P. v. Morgan, 434 S.W.3d 774, 787-788 (Tex. App.—Houston [14th
Dist.] 2014, no pet.), the deed is forged, Dyson Descendant Corp. v. Sonat Exploration
Co., 861 S.W.2d 942, 947 (Tex. App.—Houston [1st Dist.] 1993, no writ), or the deed
lacks a description of the land involved, Brown v. Moss, 265 S.W.2d 613, 617 (Tex. Civ.
App.—Fort Worth 1954, writ ref’d n.r.e.).
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We have found the deed here unambiguous and believe the retention of minerals
by the grantors is plain on its face. As both parties have emphasized in asserting their
respective positions, the deed contains only one express reference to the mineral
estate, and that appears under the heading “reservations from and exceptions to
conveyance and warranty.” Thus the discovery rule has no application. See Cosgrove,
468 S.W.3d at 37 (“A plainly evident omission on an unambiguous deed’s face is not a
type of injury for which the discovery rule is available”); id. at 34 (Texas Property Code
section 13.002 provides all persons have notice of contents of properly recorded
instrument); see Aston Meadows, Ltd. v. Devon Energy Prod. Co., L.P., 359 S.W.3d
856, 859 (Tex. App.—Fort Worth 2012, pet. denied) (bona fide purchaser claim;
recorded instruments in grantee’s chain of title “generally establish an irrebuttable
presumption of notice) (citing Ford, 235 S.W.3d at 617 (fraud claim)).
Even if we are mistaken, however, and the discovery rule applies, Goss’s claims
are nonetheless barred by limitations. Goss had read the deed before November 30,
2005, and was aware Guilliams was preparing an affidavit concerning the property
before her affidavit was filed on November 30, 2005. Guilliams’ affidavit, which states
she made a scrivener’s error in preparing the 1994 deed, also was filed of record on
November 30, 2005. Goss “communicated” with the title company of which Guilliams
was president in 2005 and 2006 regarding ownership of the minerals. Goss states in
his reply brief that the title company assured him the scrivener’s error was corrected
and “confirmed his title and ownership.” Regardless of his subjective belief concerning
the effect of the deed, Goss knew or reasonably should have known no later than 2006
of the deed’s provisions concerning the minerals. Yet his lawsuit was not filed until April
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2013. Goss’s claim was barred by the statute of limitations. The trial court did not err in
rendering judgment that he take nothing.
Conclusion
Having found the trial court correctly rendered summary judgment that Goss take
nothing by his lawsuit and rightly found title to the minerals in Addax under its
counterclaim, we affirm the judgment.
James T. Campbell
Justice
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