Hausser v. Cuellar

• Decision Date: 02 February 2011
• Docket Number: No. 04–09–00560–CV.,04–09–00560–CV.
• Citation: 345 S.W.3d 462
• Parties: William S. HAUSSER, Albert F. Hausser, Robert Hausser Jr., Eugene L. Ames Jr., Lawrence J. Flume Jr., Corwin D. Denney Foundation, and Des Cygne Denney Settlement Partners, Ltd., Appellants,v.Fernando D. CUELLAR and Jacob F. Rathmell Jr., Successor Co–Trustees under the Wills of Fernando Cuellar and Inocente T. De Cuellar, and Trustees under Trust Deeds executed by Fernando Cuellar and Inocente T. De Cuellar, Appellees.
• Court: Texas Court of Appeals

345 S.W.3d 462

William S. HAUSSER, Albert F. Hausser, Robert Hausser Jr., Eugene L. Ames Jr., Lawrence J. Flume Jr., Corwin D. Denney Foundation, and Des Cygne Denney Settlement Partners, Ltd., Appellants,

v.Fernando D. CUELLAR and Jacob F. Rathmell Jr., Successor Co–Trustees under the Wills of Fernando Cuellar and Inocente T. De Cuellar, and Trustees under Trust Deeds executed by Fernando Cuellar and Inocente T. De Cuellar, Appellees.

No. 04–09–00560–CV.

Court of Appeals of Texas, San Antonio.

Feb. 2, 2011.

John F. Carroll, Law Office of John F. Carroll, San Antonio, TX, for Appellants.Donato D. Ramos, Jr., Law Office of Donato D. Ramos, P.L.L.C., Laredo, TX, V.E. Lanfear, Jr., Attorney At Law, San Antonio, TX, for Appellees.Sitting en banc: CATHERINE STONE, Chief Justice, KAREN ANGELINI, Justice, SANDEE BRYAN MARION, Justice, PHYLIS J. SPEEDLIN, Justice, REBECCA SIMMONS, Justice, STEVE C. HILBIG, Justice, MARIALYN BARNARD, Justice.

OPINION

Opinion by: MARIALYN BARNARD, Justice.

This is an appeal from a trial court's order granting summary judgment in favor of appellees, Fernando D. Cuellar and Jacob G. Rathmell Jr., successor co-trustees under the wills of Fernando Cuellar and Inocente T. De Cuellar, deceased, and trustees under trust deeds executed by Fernando Cuellar and Inocente T. De Cuellar (“Cuellar and Rathmell”). The dispute involves the interpretation of a deed. Both parties filed motions for summary judgment, seeking a declaration of the rights of the parties as provided by the deed. The trial court granted summary judgment in favor of Cuellar and Rathmell and awarded them attorney's fees. We reversed the trial court's judgment, rendered judgment that the deed conveyed an undivided one-half royalty interest to the appellants, William S. Hausser, Albert F. Hausser, Robert Hausser Jr., Eugene L. Ames Jr., Lawrence J. Flume Jr., Corwin D. Denney Foundation and Des Cygne Denney Settlement Partners, Ltd. (“the Haussers”) in the Paloma lease, including in all future leases, and remanded the issue of attorney's fees to the trial court for reconsideration of whether and to whom attorney's fees should be awarded and what amount, if any, is appropriate. Motions for rehearing were filed by an amicus curiae and appellees Cuellar and Rathmell. We deny the motions for rehearing, but withdraw our July 21, 2010 opinion and judgment and issue this opinion and judgment in its place.

Factual Background

This case involves a dispute regarding the interpretation of a deed. Specifically, the parties disagree on the amount of royalty interest conveyed in the deed. In March of 1936 under a deed known as the Original Escamilla Deed (“the Escamilla deed”), grantors Reyes and Margarita Garza de Escamilla conveyed their royalty interest in oil, gas, and other minerals in a 256.6 acre tract in Zapata County to grantees, Nathan Rosenberg, Bob Rose, Mary Ley, and J.W. Edwards. The granting clause of the Escamilla deed conveyed an undivided one-half (1/2) interest in all the oil, gas, and minerals produced. At the time of execution, the Escamilla deed was subject to a pre-existing 1936 lease which provided and reserved to the lessors a one-eighth (1/8) royalty interest. As a result of this lease, the grantees of the Escamilla deed were paid a one-sixteenth (1/16) royalty interest (derived by multiplying the one-half interest specified in the granting clause of the Escamilla deed by the one-eighth royalty reserved in the 1936 lease). It is undisputed that the pre-existing 1936 lease is now terminated.

The Haussers are successors in interest to the grantees of the Escamilla deed; Cuellar and Rathmell are successors in interest to the grantors.

In November of 2006, Cuellar and Rathmell executed a new oil, gas, and mineral lease (“the Paloma Lease”) covering the 256.6 acre tract with Paloma Partners I, L.L.C. (“Paloma Partners”). The Paloma Lease provided and reserved to the lessors a royalty interest of twenty-five percent (1/4). Thereafter, Paloma Partners initiated drilling operations, and following the commencement of production, began to account to the Haussers for their royalty interest as set forth in the Escamilla deed. Paloma Partners initially accounted to the Haussers for one-half of the twenty-five percent (1/2 times 1/4), in other words one-eighth, royalty interest pursuant to the granting clause of the Escamilla deed. Subsequently, Paloma Partners reduced the royalty payments paid to the Haussers to a one-sixteenth interest in all the oil, gas, and minerals derived from the Paloma Lease based on the future lease clause of the Escamilla deed.

The Haussers filed a suit for declaratory judgment, requesting the trial court to declare their ownership interest under the Escamilla deed as an undivided one-half of the royalty reserved by the Paloma Lease. Thereafter, both parties filed motions for summary judgment requesting the trial court to declare the royalty interests of the parties as provided by the Escamilla deed. Specifically, the Haussers argued that under the Escamilla deed's granting clause, the Escamilla deed conveyed to them an undivided one-half interest in any of the oil, gas, and mineral royalty derived from the Paloma Lease and all future leases. Cuellar and Rathmell countered that under the future lease clause, the Escamilla deed granted the Haussers only a one-sixteenth fixed royalty interest in oil, gas, and minerals derived from the Paloma Lease as well as all future leases.

The trial court entered final summary judgment in favor of Cuellar and Rathmell and against the Haussers, declaring the Escamilla deed “conveyed an undivided one-sixteenth (1/16th) royalty in the oil, gas and other minerals as to all future lease or leases executed after the lease in effect on April 17, 1936 terminated, and not an undivided one-half (1/2) interest as alleged by Plaintiffs.” The trial court further declared that under the current oil and gas lease, the Haussers were entitled “to only an undivided one-sixteenth (1/16th) of all of the oil, gas and other minerals produced from the property.” Lastly, the trial court awarded attorney's fees to Cuellar and Rathmell.

Standard of Review

We review a trial court's ruling on a summary judgment motion de novo. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). Where, as here, both parties file motions for summary judgment, and the trial court grants one motion and denies the other, we review all issues presented and enter the judgment the trial court should have entered. See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex.2001); Moon Royalty, LLC v. Boldrick Partners, 244 S.W.3d 391, 393 (Tex.App.-Eastland 2007, no pet.). This court “must consider all the evidence in the light most favorable to the nonmovant, indulging all reasonable inferences in favor of the nonmovant, and determine whether the movant proved that there were no genuine issues of material fact and that it was entitled to judgment as a matter of law.” Moon Royalty, 244 S.W.3d at 393–94 (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex.1985)).

Discussion

Construction of Deed

In their first issue, the Haussers contend the trial court erred in granting summary judgment in favor of Cuellar and Rathmell. The Haussers contend the trial court misconstrued the language in the Escamilla deed by concluding the Haussers' ownership interest amounted to only an undivided one-sixteenth fractional royalty interest in the oil, gas, and minerals derived from the Paloma Lease and all future leases. The Haussers contend that based on the four corners of the Escamilla deed, the intent of the parties was to grant the grantees an undivided one-half interest in any of the oil, gas, and mineral royalty derived from a lease as specified by the granting clause. According to the Haussers, in accordance with the Escamilla deed and Paloma Lease, royalty payments should be calculated by multiplying the one-half interest specified in the granting clause of the Escamilla deed by the twenty-five percent royalty reserved in the Paloma Lease. As part of their argument, the Haussers contend each of the clauses in the Escamilla deed can be read harmoniously and consistently with one another only if the granting clause governs the amount of royalty reserved to the grantees. The Haussers argue any other interpretation would render the granting clause meaningless.

In construing the meaning of a deed, our primary duty is to ascertain the intent of the parties as provided in the four corners of the document. Luckel v. White, 819 S.W.2d 459, 461 (Tex.1991). To do this, we must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the agreement, even if different parts of the deed appear inconsistent or contradictory. Id. at 462; Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). We must assume the parties to the instrument intended every clause to have some effect; therefore, the language of the deed should be interpreted so that no provision is rendered meaningless. See Luckel, 819 S.W.2d at 461; Coker, 650 S.W.2d at 393. Each word and phrase should be given its plain, grammatical meaning unless doing so would clearly defeat the parties' intent. Moon Royalty, 244 S.W.3d at 394. No provision of the deed should be struck unless an irreconcilable conflict exists which causes one part of the deed to destroy another part. Id.

A deed may be either ambiguous or unambiguous, and this determination is a question of law. Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex.1996). To make this determination, the trial court must examine the deed as a whole in light of the circumstances present at the time of its execution. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996); Derwen Resources, LLC v. Carrizo Oil & Gas, Inc., No. 09–07–00597–CV, 2008 WL 6141597, at *4 (Tex.App.-Beaumont May 21, 2009, no...