Mehaffy v. Clark

• Decision Date: 25 May 2022
• Docket Number: CV-21-97
• Citation: Mehaffy v. Clark, 2022 Ark.App. 268, 646 S.W.3d 651 (Ark. App. 2022)
• Parties: Patrick Dixon MEHAFFY, Appellant v. Marley Jo CLARK, Individually and as Trustee of the Clark Revocable Trust Dated August 7, 2003; the Clark Revocable Trust Dated August 7, 2003; Marley Jo Clark, as Trustee of the Marley Jo Clark Revocable Trust; the Marley Jo Clark Revocable Trust; and Marley Jo Clark, Jr., Individually and as Trustee of the Clark Revocable Trust, Appellees
• Court: Arkansas Court of Appeals

2022 Ark. App. 268

646 S.W.3d 651

Patrick Dixon MEHAFFY, Appellant

v.Marley Jo CLARK, Individually and as Trustee of the Clark Revocable Trust Dated August 7, 2003; the Clark Revocable Trust Dated August 7, 2003; Marley Jo Clark, as Trustee of the Marley Jo Clark Revocable Trust; the Marley Jo Clark Revocable Trust; and Marley Jo Clark, Jr., Individually and as Trustee of the Clark Revocable Trust, Appellees

No. CV-21-97

Court of Appeals of Arkansas, DIVISIONS III AND IV.

Opinion Delivered May 25, 2022

Richard Mays Law Firm PLLC, Little Rock, by: Richard H. Mays, for appellant.

Taylor & Taylor Law Firm, P.A., by: Andrew M. Taylor and Tasha C. Taylor, for appellee.

MIKE MURPHY, Judge

This case is a dispute over percentage ownership in mineral interests in a tract of land in Faulkner County, Arkansas.On March 9, 2022, in Mehaffy v. Clark , 2022 Ark. App. 125, 643 S.W.3d 55, we reversed and remanded the circuit court's order quieting title in the minerals with a 1/2 interest to the appellees and 1/4 interest to the appellant, Patrick Mehaffy.¹We agreed with Mehaffy that the court erred in its calculation, so we remanded for entry of judgment awarding 3/8 interest in the mineral rights to both sides.On March 28, 2022, the appellees filed a petition for rehearing; Patrick Mehaffy did not file a response.We grant the petition for rehearing and issue the following substituted opinion.

The parties derived their respective mineral interests from two brothers: L.R. Clark, Mehaffy's predecessor; and W.G. Clark, Jr., Marley Jo Clark's late husband.The brothers were shareholders in National Holding Company, an Arkansas corporation.²In June 1980, National Holding received a warranty deed from Joyce and Robert Mayer conveying approximately 1,780 acres of land, including the property now at issue.In that deed, the Mayers retained and reserved a 1/4 interest in the oil, gas, and other minerals.Two years later, National Holding transferred its interest to two shareholders, W.G. Clark, Jr., and L.R. Clark, pursuant to two quitclaim deeds dated April 16, 1982.The granting clauses in those deeds both state that for the sum of ten dollars, National Holding Company

does grant, sell, quitclaim unto the said GRANTEE and unto his heirs and assigns forever, all its right, title, interest and claim in and to the following lands lying in Faulkner County, Arkansas

An undivided half of the following: [the legal description of the land, including the land in dispute].

No mention was made in either quitclaim deed of the 1/4 reservation by Joyce and Robert Mayer or minerals in general.The deeds were executed on the same day (April 16, 1982), in the presence of the same witnesses, and with the stamp of the same notary public.Two and a half years later, and once again on the same day (June 1, 1984), the deeds were recorded in Faulkner County.³The W.G. Clark, Jr., deed was recorded by the Faulkner County Circuit Clerk and Ex-Officio Recorder at 4:10 p.m., and the L.R. Clark deed was recorded at 4:15 p.m.⁴

Turning to present day, the mineral interests were subsequently leased by the respective parties to oil- and gas-exploration companies, and it was during the examination of title by those companies that the issue of the timing of the filing of the two deeds came about.In 2019, Mehaffy filed this quiet-title action against the appellees because one of the companies was holding royalties from production from the property pending resolution of the issue.Because National Holding owned a 3/4 interest in the mineral rights and conveyed an undivided and unreserved 1/2 interest by quitclaim to each grantee, Mehaffy argues that each grantee (and thus, their successors) subsequently possessed a 3/8 mineral interest.

The appellees denied the claim and took the position that they owned 1/2 of the mineral rights by virtue of their predecessor in title filing his deed first, leaving only a 1/4 interest in the disputed mineral rights to L.R. Clark.Their argument relies on the plain language of the granting clause conveying 1/2 of the entire tract, not just 1/2 of National Holding's 75 percent mineral interest.And since the W.G. Clark deed was recorded first, they believe he received 4/8 (or 1/2) of the disputed mineral interests, and L.R. Clark received the remaining 2/8 (or 1/4) of the disputed mineral interest.They also counterclaimed, asserting adverse possession and stating that they were entitled to a declaratory judgment that they owned 1/2 of the mineral rights.

On November 9, 2020, the court entered an order in favor of the appellees, adopting their reasoning and granting them declaratory judgment.⁵It found that the evidence of the order of delivery was lacking and that priority of recording is controlling because Mehaffy could not prove that the brothers were on notice of each other's deed.To support its findings, the court's order provided:

10.Although it's likely that a person of ordinary intelligence would have known about his brother's conveyance, when the litigation does not involve the original parties, a subjective inquiry into what the original parties understood is barred by Arkansas law.

11.Determining the grantor's subjective intent with extrinsic evidence is only allowed to construe an "ambiguous, uncertain, or doubtful deed."Deltic Timber Corp. v. Newland , 374 S.W.3d 261, 267(Ark. Ct. App.2010);see also, Riffle v. Worthen , 327 Ark. 470, 472, 939 S.W.2d 294, 295(1997).See also, Mason v. Buckman , 2010 Ark. App. 256, 7, 2010 WL 962054(Ark. App.2010).

12.Because the deed is not ambiguous, extrinsic evidence is barred.See , e.g., Deltic Timber Corp. v. Newland , 374 S.W.3d 261, 267(Ark. Ct. App.2010).

13.Because this case does not involve the original parties, interpretation of the subjective intent of the grantor and grantee is "inappropriate."Peterson v. Simpson , 286 Ark. 177, 690 S.W.2d 720, 723(1985).

Mehaffy now appeals from the trial court's order.⁶On appeal, he argues that the circuit court clearly erred in awarding him only a 1/4 interest in the minerals and instead should have awarded him a 3/8 interest.

Quiet-title actions have traditionally been reviewed de novo as equity actions.SEECO, Inc. v. Holden , 2015 Ark. App. 555, at 4, 473 S.W.3d 36, 38.Our standard of review on appeal from a bench trial is not whether there was substantial evidence to support the finding of the circuit court but whether the circuit court's findings...