Haywood WI Units, Ltd v. B&S Dunagan Investments, Ltd
13-15-00454-CV
| Tex. App. | Dec 13, 2017Background
- Willis Heirs owned ~15,000 acres and by a 1972 deed granted Marvey A. Finger one-half of the minerals in the listed properties, while reserving certain rights; the disputed tract is a 640-acre parcel within Exhibit A.
- Finger conveyed portions of his mineral interest; by 1994 Haywood acquired a 1/16 royalty interest (half of a joint venture’s 1/8) in the 640-acre tract and received royalty payments accordingly.
- Willis Heirs executed leases and received royalty payments (historically treated as a 1/4 royalty share) and later executed correction deed documents in 2011 that Haywood did not sign.
- Haywood sued, claiming the Willis Heirs conveyed their entire 1/2 mineral interest in 1972 and thus have no executive or royalty rights unless they execute a lease; he asserted claims including violations of the Natural Resources Code, accounting, conversion, fraud, constructive trust, trespass to try title, and declaratory relief seeking a determination he owned a 1/8 interest rather than the 1/16 paid.
- Appellees (Willis Heirs and Crimson) moved for summary judgment seeking declaratory relief that Willis Heirs reserved a 1/4 royalty interest and retained executive leasing rights; the trial court granted appellees’ motions, denied Haywood’s, and awarded attorneys’ fees.
- On appeal, the court addressed (1) construction of the 1972 deed (royalty and executive rights), (2) whether Haywood suffered harm even if Willis Heirs lacked executive rights, and (3) entitlement to attorney’s fees under the UDJA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Construction of 1972 deed: did Willis Heirs reserve royalty/executive rights or convey all mineral rights? | Haywood: Willis Heirs conveyed their entire 1/2 to Finger and reserved only a contingent right to royalties if they join a lease (i.e., no present vested royalty). | Willis Heirs/Crimson: deed read as a whole reserves Willis Heirs a present 1/2 share of what Finger received (i.e., 1/4 royalty) and reserves executive leasing rights. | Court: deed vests the Willis Heirs with a present, vested right to 1/4 of royalties, bonuses, and delay rentals; summary judgment for appellees affirmed. |
| Effect of absence of express reservation language for executive rights | Haywood: lack of typical reservation wording means no executive right reserved. | Appellees: reservation language read in context shows intent to reserve executive rights; even if executive right question unresolved, result unchanged. | Court: did not decide executive-rights question; held that even if Willis Heirs lacked executive rights, appellees paid correct shares and Haywood suffered no harm. |
| Royalties paid: did Crimson underpay Haywood by paying him 1/16 instead of 1/8? | Haywood: he owns larger share and was underpaid; seeks additional royalties and accounting. | Appellees: payments followed the deed allocation (Willis Heirs 1/4, Haywood 1/16); payment was proper and statute/estoppel bars Haywood’s claims. | Court: Crimson properly paid Haywood 1/16; Haywood not injured; summary judgment for appellees stands. |
| Attorneys’ fees under the UDJA | Haywood: appellees’ claims are effectively trespass-to-try-title (no fees), so UDJA fees improper. | Appellees: suit sought declaratory relief for non-possessory interests (royalties) where UDJA fees are available; trespass-to-try-title not the proper vehicle for non-possessory interests. | Court: award of fees under UDJA was not an abuse of discretion because the dispute concerned non-possessory royalty interests, not a trespass-to-try-title action. |
Key Cases Cited
- Luecke v. Wallace, 951 S.W.2d 267 (Tex. App.—Austin 1997) (reserved royalty language can create a vested present royalty interest even if phrased as payable under future leases)
- Kelly Oil Co. v. Svetlik, 975 S.W.2d 762 (Tex. App.—Corpus Christi 1998) (royalty interest is an interest in real property with attributes of real property)
- Elick v. Champlin Petrol. Co., 697 S.W.2d 1 (Tex. App.—Houston [14th Dist.] 1985) (parties’ agreement to join in future leases can create an executory interest absent typical reservation wording)
- Richmond v. Wells, 395 S.W.3d 262 (Tex. App.—Eastland 2012) (royalty interests are non-possessory and generally not proper subjects of trespass-to-try-title)
- Concord Oil Co. v. Pennzoil Expl. & Prod. Co., 966 S.W.2d 451 (Tex. 1998) (recognizing royalty interest as non-possessory)
- Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (summary judgment burden rules)
- Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195 (Tex. 1995) (burden shift where movant establishes right to judgment as a matter of law)