469 S.W.3d 619
Tex. App.2015Background
- 1949 warranty deed reserved to six grantors an undivided interest in and to the 1/8 royalties paid the landowner upon production from the 278-acre Karnes County tract.
- the deed does not explicitly state the royalty shares for Alex and Leo, who later became grantees, but confirms their undivided interest in the 1/8 royalties.
- Medina Interests, Ltd. (successor to Alex/Leo) and the six grantors’ successors filed competing motions for summary judgment on whether the reservation was a fixed 1/8 or a floating royalty.
- later leases (2007 Paid-Up Leases) and 2012 Stipulations of Mineral Interest prompted Medina to challenge Marathon Oil EL LLC’s interpretation of the deed’s royalty reservation.
- the trial court granted summary judgment for the appellees, holding a floating royalty, and Medina appealed seeking a fixed 1/8 royalty interpretation.
- the court affirmed, holding the reservation created a floating royalty rather than a fixed 1/8 royalty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the six grantors reserved a fixed 1/8 royalty or a floating royalty. | Medina contends the deed’s language unambiguously reserves a fixed 1/8 royalty. | Appellees contend the reservation contemplates a floating royalty tied to the landowner’s future lease royalties. | Floating royalty reserved; deed unambiguous in meaning as floating. |
Key Cases Cited
- Luckel v. White, 819 S.W.2d 459 (Tex. 1991) (constraints on fixed vs floating royalties; interpretive framework)
- Concord Oil Co. v. Pennzoil Exploration & Prod. Co., 966 S.W.2d 451 (Tex. 1998) (examine entire instrument to ascertain intent)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (no single provision controls; harmonize whole document)
- Graham v. Prochaska, 429 S.W.3d 650 (Tex. App.—San Antonio 2013) (distinguishes fixed vs floating royalties; entitlement determined by lease royalties)
- Dawkins v. Hysaw, 450 S.W.3d 147 (Tex. App.—San Antonio 2014) (examples of fixed vs floating royalties; floating transfers a share of whatever royalty remains)