Shane and Kristie Trahan v. Jimmy and Peggy Mettlen
428 S.W.3d 905
| Tex. App. | 2014Background
- In March–April 2006 the Mettlens sold 22.61 acres to the Trahans; the written purchase contract did not mention any mineral reservation, but the recorded warranty deed (executed April 10, 2006; recorded April 21, 2006) expressly reserved mineral rights to the Mettlens.
- Trahan attended the closing but testified he did not read or receive a copy of the deed at that time and first obtained a copy in September 2010 after noticing oil/gas activity on the property.
- The Trahans sued in December 2010 seeking reformation of the deed (claiming mutual mistake or the equivalent) and ownership of the mineral interests, more than four years after the deed date.
- The Mettlens moved for summary judgment asserting the four-year statute of limitations bars the suit; the trial court granted summary judgment for the Mettlens.
- The court assumed the evidence could support a unilateral mistake known to the Mettlens (equivalent to mutual mistake) and thus that reformation might be an appropriate remedy if timely, but focused on whether the claim was time-barred.
- The court held the reservation was clear and unambiguous on the face of the recorded deed, the discovery rule and fraudulent-concealment tolling did not apply, and the limitations period began at the deed execution/delivery date.
Issues
| Issue | Plaintiff's Argument (Trahan) | Defendant's Argument (Mettlen) | Held |
|---|---|---|---|
| Accrual/tolling of limitations for reformation based on mutual or equivalent mistake | Suit timely because Trahans did not discover reservation until 2010; discovery rule tolls limitations | Deed plainly discloses reservation; purchasers charged with knowledge; limitations began at deed execution/delivery | Held for Mettlens: claim accrued at deed execution/delivery; discovery rule inapplicable |
| Equivalence of unilateral mistake + other party's knowledge to mutual mistake (availability of reformation) | Reformation available because Trahans were mistaken and Mettlens knew of that mistake (title company insertion) | Even if equivalent mistake exists, reformation claim still subject to limitations and must be timely | Court assumed equivalent mistake could be shown but rejected reformation as untimely |
| Fraudulent concealment tolling of limitations | Mettlens fraudulently concealed reservation; tolling applies until discovery in 2010 | Reservation was unambiguous on deed; no concealment after closing; plaintiffs could have discovered by reading deed | Held for Mettlens: fraudulent-concealment tolling inapplicable because plaintiffs could have discovered by reasonable diligence |
| Effect of delivery/possession of deed on accrual | Trahans claim deed was not delivered so accrual delayed | Attendance at closing and signing constituted delivery; recorded deed later found at title company does not change accrual | Held for Mettlens: execution/delivery at closing sufficed; accrual from deed date |
Key Cases Cited
- Sullivan v. Barnett, 471 S.W.2d 39 (Tex. 1971) (purchasers charged with knowledge of deed defects; accrual rules)
- Miles v. Martin, 321 S.W.2d 62 (Tex. 1959) (statute begins when mistake discovered when mistake not evident on deed)
- McClung v. Lawrence, 430 S.W.2d 179 (Tex. 1968) (discovery rule applies where legal effect of term not clear on face of deed)
- Davis v. Grammer, 750 S.W.2d 766 (Tex. 1988) (unilateral mistake known by other party is equivalent to mutual mistake)
- Shell Oil Co. v. Ross, 356 S.W.3d 924 (Tex. 2011) (fraudulent-concealment tolling lasts only until plaintiff discovers or could have discovered fraud by reasonable diligence)
- BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59 (Tex. 2011) (same principle on discovery and tolling)