Opinion
No. 04-16-00827-CV
01-03-2018
Frances M. BUPP, Martha King Berglund, Evelyn Seydler Martin, Andrea Lee Castillo, Mary C. Forister, Shirley Dixon, and Cindy Forister, Appellants v. Harold Joe BISHOP, Jr., Individually and as Trustee of the Bishop Management Trust, General Partner of J & K Bishop Partnership, LTD, and as Executor of the Estate of Melanie Kay Bishop, Appellees
MEMORANDUM OPINION
From the 81st Judicial District Court, Karnes County, Texas
Trial Court No. 15-01-00011-CVK
Honorable Donna S. Rayes, Judge Presiding Opinion by: Rebeca C. Martinez, Justice Sitting: Marialyn Barnard, Justice Rebeca C. Martinez, Justice Irene Rios, Justice REVERSED AND RENDERED; CAUSE REMANDED
In the underlying cause, the appellees, who are the grantees or the successors of the grantees under a warranty deed dated December 17, 2009, sued the appellants, who are the grantors or the successors of the grantors, seeking a declaration that the deed did not reserve or except any royalty interests in favor of the grantors. The appellees also asserted alternative claims for breach of contract, fraudulent inducement, fraud by nondisclosure, and fraud in a real estate transaction. The trial court determined the deed conveyed all royalty interests owned by the grantors to the grantees and granted summary judgment in favor of the appellees. The trial court also denied appellants' motion for summary judgment which sought a declaration in their favor and also asserted the appellees' alternative claims were barred by limitations. We reverse the trial court's judgment and render judgment that the deed excepted the grantors' royalty interests from the conveyance. We remand the cause to the trial court for further proceedings on appellees' alternative claims.
BACKGROUND
Martha Forister owned 100% of the surface and 100% of the mineral interests in several tracts of real property. In her will, Martha devised specific tracts to each of her four children subject to a reservation of "all of the oil royalties, gas royalties, and royalties in other minerals" which she then devised in equal shares to the four children.
In December of 2009, the successors to the interests of two of Martha's children executed a deed conveying a 136.69 acre tract of land to Harold Joe Bishop, Jr. and Melanie Kay Bishop. The deed conveyed all of the grantors' interest in the property "subject to the reservations from and exceptions to conveyance and warranty" set out in the deed as follows:
Reservations from and Exceptions to conveyance and Warranty:
a. Any visible and/or apparent roadway and/or easement over or across the subject property the existence of which does not appear of record.
b. Rights of Parties in Possession.
c. Terms, conditions, and stipulations of Oil, Gas and Mineral Lease from Anita Forister to Hawthorn Energy Partners, L.L.C., dated May 4, 2007, and recorded in Volume 857, Page 242, of the Official Records of Karnes County, Texas.
d. Royalty interest, the royalties, and all other rights in connection with said royalty rights, described in the Will of Martha Forister, and recorded in Cause No. 3656 of the Probate Records of Karnes County, Texas, reference to which instrument is here made fro [sic] all purposes.
On January 16, 2015, the appellees filed the underlying cause. As previously noted, the trial court granted summary judgment in favor of the appellees on their declaratory judgment claim. The trial court's judgment states the deed "conveyed all royalty interests owned by the Grantors/Defendants to the Grantees/Plaintiffs."
STANDARD OF REVIEW
"We review the grant of [a] summary judgment de novo." Katy Venture, Ltd. v. Cremona Bistro Corp., 469 S.W.3d 160, 163 (Tex. 2015). To prevail on a traditional motion for summary judgment, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." TEX. R. CIV. P. 166a(c). We take as true all evidence favorable to the nonmovant, resolve all conflicts in the evidence in the nonmovant's favor, and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Katy Venture, Ltd., 469 S.W.3d at 163.
DECLARATORY JUDGMENT CLAIM
A. Construction of a Deed
The construction of an unambiguous deed is a question of law for the court which we review de novo. Wenske v. Ealy, 521 S.W.3d 791, 794 (Tex. 2017); Kardell v. Acker, 492 S.W.3d 837, 842 (Tex. App.—San Antonio 2016, no pet.). In this case, neither party contends the deed is ambiguous, and we agree the deed is unambiguous.
In construing an unambiguous deed, our primary duty is to ascertain the intent of the parties as expressed from the language within the four corners of the deed. Wenske, 521 S.W.3d at 794; Kardell, 492 S.W.3d at 842. The Texas Supreme Court has recently instructed that if a court can ascertain the parties' intent from the language of the deed, "that should [generally] be the end of our analysis." Wenske, 521 S.W.3d at 794. In that circumstance, "[a]pplying default rules or other mechanical rules of construction to determine the deed's meaning is ... both unnecessary and improper." Id. at 796.
B. Exceptions and Reservations
A warranty deed will pass all of the estate owned by the grantor at the time of the conveyance unless there are reservations or exceptions that reduce the estate conveyed. See Combest v. Mustang Minerals, LLC, 502 S.W.3d 173, 179 (Tex. App.—San Antonio 2016, pet. denied); Griswold v. EOG Res., Inc., 459 S.W.3d 713, 717 (Tex. App.—Fort Worth 2015, no pet.). "Property 'excepted' or 'reserved' under a deed is never included in the grant and is something to be deducted from the thing granted, narrowing and limiting what would otherwise pass by the general words of the grant." Combest, 502 S.W.3d at 179 (internal quotations omitted); see also Griswold, 459 S.W.3d at 717 (same). Reservations must be made by clear language, and courts do not favor reservations by implication. Combest, 502 S.W.3d at 179; Griswold, 459 S.W.3d at 717. Exceptions must identify, with reasonable certainty, the property to be excepted from the larger conveyance. Combest, 502 S.W.3d at 179; Griswold, 459 S.W.3d at 717.
Reservations and exceptions are not synonymous. Pich v. Lankford, 302 S.W.2d 645, 650 (Tex. 1957); Griswold, 459 S.W.3d at 718; Bagby v. Bredthauer, 627 S.W.2d 190, 195 (Tex. App.—Austin 1981, no writ). Understanding the distinction between the two terms is critical to our construction of the deed in the instant case.
A reservation is made in favor of the grantor and creates a new right issuing out the conveyance. Griswold, 459 S.W.3d at 718; Bagby, 627 S.W.2d at 195. A reservation is a taking back by the grantor of a part of the interest being granted. Bagby, 627 S.W.2d at 195. A reservation must always be in favor of and for the benefit of the grantor. Pich, 302 S.W.2d at 650; Klein v. Humble Oil & Refining Co., 67 S.W.2d 911, 915 (Tex. Civ. App.—Beaumont 1934), aff'd in part, rev'd in part on other grounds, 86 S.W.2d 1077 (Tex. 1935).
An exception operates to exclude some interest from the grant. Bagby, 627 S.W.2d at 195. An exception does not pass title or create a new interest, but rather prevents the excepted interest from passing with the grant. Griswold, 459 S.W.3d at 718; Bagby, 627 S.W.2d at 195. "'[A]n exception is a mere exclusion from the grant, in favor of the grantor only to the extent that such interest as is excepted may then be vested in the grantor and not outstanding in another.'" Pich, 302 S.W.2d at 650 (quoting Klein, 67 S.W.2d at 915); see also Patrick v. Barrett, 734 S.W.2d 646, 648 n.1 (Tex. 1987) (same). Stated differently, an exception vests the excepted interest in the grantor if "the interest excepted is not outstanding in another." Goss v. Addax Minerals Fund, LP, No. 07-14-000167-CV, 2016 WL 1612918, at *4 (Tex. App.—Amarillo Apr. 21, 2016, pet. denied) (mem. op.).
C. Analysis
In this case, the deed groups reservations and exceptions under one heading. See Bounds v. Prud'Homme, No. 12-15-00177-CV, 2016 WL 1254072, at *3 (Tex. App.—Tyler Mar. 31, 2016, pet. denied) (mem. op.) (noting same type of grouping). The appellees contend the appellants' position is that the fourth item listed under the heading "Reservations from and Exceptions to conveyance and Warranty" referencing the royalty interests described in Martha's will is a reservation. The appellants, however, argue the item can be construed as either a reservation or an exception, but in either event, the item prevents all of the royalty interests described in Martha's will from passing to the grantees.
After examining the four items listed under the heading, it is clear that each item is an exception from conveyance. See Lamar Advantage Holding Co. v. City of Stephenville, No. 11-14-00133-CV, 2016 WL 3573931, at *3 (Tex. App.—Eastland Jun 9, 2016, no pet.) (mem. op.) (construing items listed under similar heading to be exceptions). None of the items create a new right which the grantor is reserving. Instead, each of the items refers to a right or interest already in existence which the deed excepts from the conveyance to the grantees. Having determined the reference to the royalty interests described in Martha's will is an exception from conveyance, we must next determine the extent of the royalty interests excepted.
The appellants argue the fourth exception prevented all of the royalty interests described in Martha's will from passing to the grantees. We agree.
Martha's will devised an undivided one-fourth royalty interest to each of her four children. The exception unambiguously refers to all of the royalty interest and royalty rights described in Martha's will. Therefore, the exception prevented the entire royalty interest from passing to the grantees. Griswold, 459 S.W.3d at 718; Bagby, 627 S.W.2d at 195. As a result, the undivided one-fourth royalty interests owned by Martha's two children who were not grantors in the deed remained vested in them, and because the undivided one-fourth royalty interests owned by the successors of the other two children who were grantors were "not outstanding in another," their undivided one-fourth royalty interests remained vested in them. Patrick, 734 S.W.2d at 648 n.1; Pich, 302 S.W.2d at 650; Goss, 2016 WL 161298, at *4.
C. Conclusion
The deed excepted the entire royalty interest described in Martha's will from conveyance. Accordingly, the trial court erred in granting appellees' motion for summary judgment on their declaratory judgment claim and in denying appellants' motion on that claim.
ALTERNATIVE CLAIMS
In their brief, the appellants also assert the appellees' alternative claims are barred by limitations. As previously noted, however, the trial court denied appellants' motion requesting summary judgment on those claims.
An order denying a motion for summary judgment generally is not appealable. Novak v. Stevens, 596 S.W.2d 848, 849 (Tex. 1980); De Miño v. Chu, No. 01-03-01127-CV, 2005 WL 2123537, at *4 (Tex. App.—Houston [1st Dist.] Aug. 31, 2005, pet. denied) (mem. op.). An exception to the general rule applies when "both sides move for summary judgment on overlapping issues and the trial court grants one motion and denies the other." Tex. Dep't of Criminal Justice v. Levin, 520 S.W.3d 225, 229 (Tex. App.—Austin 2017, pet. filed). In those cases, we review the summary-judgment evidence presented by both sides, determine all questions presented, and render the judgment the trial court should have rendered. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013).
In this case, the parties' motions overlapped in seeking summary judgment on the appellees' declaratory judgment claim; however, the appellees did not move for summary judgment on their alternative claims. Accordingly, no overlapping issues were presented with regard to those claims. Therefore, we do not have jurisdiction to review the appellants' issues regarding the appellees' alternative claims in this appeal. See De Miño, 2005 WL 2123537, at *5 (refusing to apply cross-motion exception to general rule to review the denial of a motion for summary judgment where defendant sought a final judgment on her defensive theories but plaintiff did not move for summary judgment on each of his claims).
CONCLUSION
The trial court's judgment granting appellees' motion for summary judgment on the appellees' declaratory judgment claim is reversed, and judgment is rendered that the deed at issue in this case excepted from the conveyance all royalty interests described in Martha's will. The cause is remanded to the trial court for further proceedings on appellees' alternative claims.
Rebeca C. Martinez, Justice