Neuhoff v. Piranha Partners

• Decision Date: 15 May 2018
• Docket Number: No. 07–16–00136–CV,07–16–00136–CV
• Citation: Neuhoff v. Piranha Partners, 578 S.W.3d 543 (Tex. App. 2018)
• Parties: Joe B. NEUHOFF and Nancy M. Neuhoff; Thomas H. Neuhoff and Judy Neuhoff; Robert V. Neuhoff and Andrea D. Neuhoff; and Boca Vail, Inc., Appellants v. PIRANHA PARTNERS, Randolph Mundt and Thomas H. Owen, Jr., individually and as Partners of Piranha Partners, and Charles Ray Owen, Appellees
• Court: Texas Court of Appeals

578 S.W.3d 543

Joe B. NEUHOFF and Nancy M. Neuhoff; Thomas H. Neuhoff and Judy Neuhoff; Robert V. Neuhoff and Andrea D. Neuhoff; and Boca Vail, Inc., Appellants

v.PIRANHA PARTNERS, Randolph Mundt and Thomas H. Owen, Jr., individually and as Partners of Piranha Partners, and Charles Ray Owen, Appellees

No. 07–16–00136–CV

Court of Appeals of Texas, Amarillo.

May 15, 2018

Kerri L. Stampes, Dallas, for AppellantRobert V. Neuhoff.

Thomas C. Riney, Amarillo, for AppellantNancy M. Neuhoff.

F. Franklin Honea, Dallas, for AppellantJoe B. Neuhoff.

John Smithee, Kenneth R. Netardus, Dusty J. Stockard, Amarillo, for AppelleesPiranha Partners, Charles Ray Owen, Thomas H. Owen.

Before CAMPBELL and HANCOCK and PIRTLE, JJ.¹

MEMORANDUM OPINION

Patrick A. Pirtle, Justice

This appeal involves the proper construction of an assignment purporting to convey an oil, gas, and mineral interest from Neuhoff Oil & Gas Corporation to Piranha Partners.The assignment in question was executed to be effective October 1, 1999, and it was recorded at Volume 467, Page 698, of the Deed Records of Wheeler County, Texas.It is the peculiarity of the description of the property or properties transferred that gives rise to this dispute.Appellants, Joe B. Neuhoff, Nancy M. Neuhoff, Thomas H. Neuhoff, Judy A. Neuhoff, Robert V. Neuhoff, Andrea D. Neuhoff, and Boca Vail, Inc.(hereinafter collectively "Neuhoffs") are the successors in interest to the assignor while Appellees, Piranha Partners, Randolph Mundt, Thomas H. Owen, Jr., and Charles Ray Owen(hereinafter "Piranha") are assignees or successors in interest to the assignee of the assignment in question.

The Neuhoffs originally sued Piranha seeking, among other relief, a declaratory judgment that they owned all of a certain overriding royalty interest² accruing from an oil, gas, and mineral lease covering Section 28, Block A–3, H & GN RR. Co. Survey, Wheeler County, Texas, save and except that portion assigned to Piranha by the assignment in question.The Neuhoffs contend the assignment only conveyed to Piranha their overriding royalty interest in a specific well drilled on the Northwest Quarter (NW/4) of Section 28, to-wit: the PuryearNo. 1–28 well.Piranha subsequently filed a counterclaim and cross-action for trespass to try title and for a declaratory judgment finding that the assignment in question conveyed the Neuhoffs' overriding royalty interest, in its entirety, in Section 28 to Piranha.

On April 29, 2014, Piranha filed its Motion for Partial Summary Judgment requesting the trial court grant summary judgment in its favor on the Neuhoffs' action to quiet title and for slander of title.Piranha further prayed that "Piranha is entitled to summary judgment as a matter of law on [the Neuhoffs'] suit to quiet title and for slander of title and title to the overriding royalty interest burdening the Puryear Lease (covering the full section) should be quieted in Piranha."On May 29, 2014, the Neuhoffs filed their own Motion for Partial Summary Judgment requesting the trial court grant summary judgment declaring that they hold title to and own the overriding royalty interest as to "all oil and gas produced within Section 28, save and except that oil and gas in place in the Northwest Quarter of Section 28, which is produced from the Puryear1–28 Well."A hearing on the competing motions for partial summary judgment was heard, and on March 21, 2016, the trial court entered an order providing, in part, as follows:

It is, therefore, ORDERED, ADJUDGED AND DECREED that the Piranha Defendants' Motion for Partial Summary Judgment is in all matters GRANTED.

It is further ORDERED, ADJUDGED AND DECREED that The Neuhoff's [sic]Motion for Partial Summary Judgment Directed Against Piranha Partners, Its Partners and Charles R. Owen is in all matters DENIED.

In addition to the two paragraphs cited above, the order severed the remaining claims, counterclaims, and causes of action pertaining to other parties from the action in this case, presumably to make the summary judgment order a final, appealable order.All other relief not expressly granted was denied.

A question concerning the finality of the judgment arose because the order being appealed did not declare anything other than that Piranha's partial motion for summary judgment was granted and the Neuhoffs' partial motion for summary judgment was denied.Because the order was facially incomplete in that it required extrinsic evidence to clarify, explain, or give meaning to its terms, this court ordered the trial court to enter a judgment which more accurately reflected the ruling of the trial court.SeeNeuhoff v. Piranha Partners , No. 07-16-00136-CV, 2016 WL 5781033, at *1, 2016 Tex. App. LEXIS 10713, at *4(Tex. App.—Amarillo Sept. 20, 2016, order).Thereafter, on October 20, 2016, the trial court entered its Order Clarifying This Court's Prior Order , declaring Piranha to be the owner of the overriding royalty interest covering the entirety of Section 28.

Raising four issues, the Neuhoffs contend the trial court erred by (1) granting Piranha's motion for partial summary judgment, (2) denying their motion for partial summary judgment, (3) excluding certain summary judgment evidence, and (4) implicitly excluding other summary judgment evidence.We reverse the judgment of the trial court and render judgment declaring Piranha to be the owner of the overriding royalty interest covering the Northwest Quarter of Section 28 only and we remand this cause to the trial court for further proceedings consistent with this opinion.

BACKGROUND

On July 21, 1975, Billie Jean Mallot, and others, acting as Lessors, and Marie Lister, acting as Lessee, executed an Oil, Gas and Mineral Lease(the "Puryear Lease") covering all of Section 28, Block A–3, H & GN RR Survey, Wheeler County, Texas.The Puryear Lease was recorded in the deed records of Wheeler County at Volume 247, Page 818.

Later that same year, Lister, as assignor, executed an Assignment of Oil and Gas Lease, conveying an undivided two-thirds interest in the Puryear Lease (covering all of Section 28) to Neuhoff Oil and Gas Corp., as assignee.This assignment was recorded in the deed records of Wheeler County at Volume 247, Page 898.A correction assignment of the same property was later recorded in the deed records of Wheeler County at Volume 268, Page 760, on August 16, 1978.

Three years later, on August 14, 1978, Neuhoff Oil and Gas Corp. and Three "L" Oil Company assigned all their right, title, and interest in the Puryear Lease (covering all of Section 28) to Bobby Reeves, subject to "the Landowners' Three–Sixteenths (3/16th) Royalty Interest" and a "one-sixteenth (1/16th) Overriding Royalty Interest" reserved and retained by the assignors.This assignment was recorded in the deed records of Wheeler County at Volume 269, Page 209, on September 6, 1978.

In September of 1999, Neuhoff Oil and Gas Corp. offered certain properties for sale at an auction conducted by The Oil and Gas Asset Clearinghouse.The Clearinghouse furnished all prospective buyers with an auction catalog describing the properties being offered.Included within the properties being sold by Neuhoff Oil and Gas Corp. was Lot 320.2, described as "Puryear 1–28" in Wheeler County, Texas.The "property data sheet" for Lot 320.2 referenced only production data from the Puryear 1–28 well.

Prior to bidding on the property, Piranha made its own investigation regarding the properties being sold and it was provided for review a form assignment, identical to the assignment it eventually received, save the omission of the name of the grantee.The form assignment contained the same property description as the final assignment.

Neuhoff Oil and Gas Corp. did not make any oral representations to Piranha prior to or at the auction sale.At the auction, Piranha submitted the winning bid for Lot 320.2 and the Clearinghouse subsequently delivered Neuhoff Oil and Gas Corp.'s assignment.At no time did Neuhoff or its affiliates make any oral representations to Piranha prior to or at the time the Clearinghouse delivered the assignment.

In that assignment, dated October 1, 1999, Neuhoff Oil and Gas Corp. assigned to Piranha, without warranty, "all of Assignor's right title and interest in and to the Properties described in Exhibit ‘A’(the ‘Properties’)."This language was immediately followed by a paragraph limiting the interests being transferred to "interests, INSOFAR AND ONLY INSOFAR AS set out in Exhibit A."

Exhibit "A" attached to the assignment of overriding royalty interest describes the "properties" as follows:

Lands and Associated Well(s):    Miles Unit #1
                                                   Wheeler County, Texas
                  Tract 1:    All of Section 2, Block-4, H&GN RR Survey
                              containing 640 acres, more or less
                  Oil and Gas Lease(s)/Farmout Agreement(s)
                  Oil & Gas Lease(s)
                         [Followed by a description of ten leases designated: A. — J.]
                  Only insofar as these leases cover the lands described hereinabove
                  Lands and Associated Well(s):   Puryear # 1-28
                                                  Wheeler County, Texas
                        NW/4, Section 28, Block A-3, H&GN Ry Co. Survey
                  Oil and Gas Lease(s)/Farmout Agreement(s)
                        Lessor:      Billie Jeanne Mallot, et al.
                        Lessee:      Marie Lister
                        Recorded:    Volume 297, Page 818
                

This assignment, the assignment at issue in this case, was recorded at Volume 467, Page 698, of the Deed Records of Wheeler County, Texas.Part of the problem in this case is the fact that the property description in that assignment, as it pertains to the Puryear 1–28 well, references an oil and gas lease recorded at Volume 297, Page 818; whereas the Puryear Lease was recorded at Volume 247, page 818.The instrument recorded at Volume 297, Page 818, of the Deed Records of Wheeler County, Texas, is a Ratification and Adoption of a lease of property located in Section 6, IRR Co. Survey, Wheeler County, Texas, involving different...