Charles Alford and Mary Lou Alford v. Robert Thomas McKeithen, EOG Resources, Inc. and Central Texas Land Services, 12-14-00262-CV

Background

In 2003 Charles and Mary Lou Alford purchased a 117.5-acre pasture (plus a 2-acre home site) from Jack and Annie Jessup; the transaction was largely a handshake and financed by a note.
The deed recites the property is “more particularly described by metes and bounds on Exhibit ‘A’ attached hereto.” Exhibit A's metes-and-bounds for Tract One includes a mineral reservation in the same text block as the boundary description.
The Alfords admit they saw Exhibit A at closing but did not read it and did not discuss minerals with the Jessups before closing; a life estate for the Jessups in Tract Two was discussed and appears on the face of the deed.
In 2012 (nearly nine years later) the Alfords sued to declare ownership of 50% of the minerals or to reform the deed for mutual mistake; EOG was joined because it paid royalties to the competing claimant (McKeithen).
The trial court ruled the deed was ambiguous; the jury found the mineral reservation was part of the deed, that the Alfords were not entitled to reformation for mutual mistake, and that the Alfords were not diligent in reviewing their deed.

Issues

Issue	Plaintiff's Argument (Alfords)	Defendant's Argument (EOG & McKeithen)	Held
Does the deed unambiguously exclude the mineral reservation (deed interpretation/ambiguity)?	The deed’s reference to Exhibit A was only to supply metes-and-bounds; therefore the mineral reservation in Exhibit A is not incorporated into the deed.	The deed’s unqualified reference to Exhibit A incorporates the exhibit (including the mineral reservation); the deed is reasonably susceptible to both constructions and thus ambiguous.	Trial court: deed ambiguous. Jury: mineral reservation was part of the deed; Alfords’ interpretation does not render EOG’s view unreasonable.
Is the Alfords’ claim to title through interpretation of a voidable deed time-barred? (limitations)	(Not argued to overcome limitations)	A claim to title via construction of a voidable deed accrues when the deed is executed/recorded; suit must be brought within four years—Alfords sued after ~9 years.	Held: claim is time-barred (accrual at recording; discovery rule/diligence not available given Alfords admitted they did not read the deed and jury found lack of diligence).
If Alfords own minerals, did they prove damages against EOG?	Alfords point to a single royalty check from EOG to McKeithen as evidence of amounts paid on the property (arguing that supports damages).	The check alone is insufficient: the leases and royalty terms for McKeithen and the Alfords were not admitted, so there is no evidence of production, revenue, or applicable royalty rate to compute damages.	Held: insufficient evidence to compute damages; directed-verdict/ take-nothing judgment on damages appropriate.

Key Cases Cited

Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (document ambiguous if reasonably susceptible to more than one meaning; interpretation of ambiguous instrument is fact issue)
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (courts must harmonize all provisions; ambiguity exists when a writing cannot be given a definite legal meaning)
Owen v. Hendricks, 433 S.W.2d 164 (Tex. 1968) (a signed instrument that plainly refers to another writing may incorporate that writing)
Progressive County Mut. Ins. Co. v. Kelley, 284 S.W.3d 805 (Tex. 2009) (separate documents may be ambiguous as to whether they constitute one integrated agreement)
Poag v. Flories, 317 S.W.3d 820 (Tex. App.—Fort Worth 2010) (a suit to quiet title premised on interpretation of a voidable deed is barred by the four-year limitations period)
Bob Montgomery Chevrolet, Inc. v. Dent Zone Cos., 409 S.W.3d 181 (Tex. App.—Dallas 2013) (discussion of incorporation by reference and when external materials supply binding terms)
Oryx Energy Co. v. Shelton, 942 S.W.2d 637 (Tex. App.—Tyler 1996) (plaintiff must prove damages with reasonable certainty to enable computation)