Hausser v. Cuellar
2011 Tex. App. LEXIS 730
| Tex. App. | 2011Background
- Euler: In 1936, Escamilla deed conveyed undivided 1/2 of oil and minerals to grantees, subject to a pre-existing 1936 lease reserving 1/8 royalty (so grantees were paid 1/16 of production).
- Haussers are successors to Escamilla grantees; Cuellar and Rathmell are successors to grantors.
- In 2006, Cuellar/Rathmell executed Paloma Lease covering the property with 1/4 royalty; Haussers began receiving 1/8 under the Escamilla deed but later the payor reduced to 1/16 under the future lease clause.
- Haussers sued for declaratory judgment arguing a 1/2 undivided royalty in Paloma and future leases; Cuellar/Rathmell argued 1/16 fixed royalty under the future lease clause.
- Trial court granted summary judgment to Cuellar/Rathmell; appellate court reversed, holding Haussers entitled to an undivided 1/2 of the Paloma lease royalty (i.e., 1/8 of production) and remanded for attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Escamilla deed grants an undivided 1/2 royalty or a 1/16 under future leases. | Haussers rely on the granting clause for a 1/2 interest. | Cuellar/Rathmell rely on the future lease clause for a 1/16 fixed interest. | Deed is unambiguous; granting clause controls, giving Haussers 1/2 of 1/4 (i.e., 1/8) royalty under Paloma. |
| Does the future lease clause control the amount of royalty reservation? | Granting clause governs amount; future lease clause does not override. | Future lease clause governs after termination of the existing lease. | The court held the four-corners analysis favors the granting clause; future lease clause does not fix a smaller interest. |
| Whether attorney’s fees were properly awarded in a declaratory judgment action involving a title dispute. | Attorney’s fees inappropriate in a title dispute under Property Code Chapter 22. | Act (Civil Practice & Remedies) allows discretionary but reasonable attorney’s fees. | Remanded to determine if an award of attorney’s fees is appropriate; not decided on merits. |
Key Cases Cited
- Luckel v. White, 819 S.W.2d 459 (Tex. 1991) (four-corners rule; harmonize all deed provisions)
- Garza v. Prolithic Energy Co., L.P., 195 S.W.3d 137 (Tex.App.-San Antonio 2006) (harmonize deed parts; fixed rights; future lease language)
- Concord Oil Co. v. Pennzoil Exploration & Production Co., 966 S.W.2d 451 (Tex. 1998) (contends about interpretation of granting vs future lease clauses)
- Neel v. Killam Oil Co., Ltd., 88 S.W.3d 334 (Tex.App.-San Antonio 2002) (previous-deed reliance; later disapproved but discussed for harmony of parts)
- Alford v. Krum, 671 S.W.2d 870 (Tex.1984) (earlier approach; irreconcilable conflict resolved by four-corners rule (overruled))