OPINION
Opinion by:
Beren
Background
TAR sued Beren seeking a partition-in-kind of their jointly owned oil and gas interests in approximately 5,000 acres (“deep rights” at depths below 5,700 feet) in Dimmit and Zavala Counties (the “Property”). There are eleven oil and gas leases
Competing summary judgment motions were filed regarding the parties’ ownership interests in the Property and the parties’ declaratory judgment claims involving the binding effect of the 1970 JOA. The trial court granted summary judgment in favor of TAR on the question of ownership, finding that it owned 70% of the Property and Beren owned 30% of the Property. However, the court granted summary judgment for Beren on the question of whether the 1970 JOA was binding on the parties, finding that it was not.
Subsequently, a jury trial was held on TAR’s claim for partition-in-kind of the Property. The jury made a single finding: that the Property is partitionable in-kind. The court then entered a final judgment incorporating the summary judgment orders and holding the Property is “susceptible to fair and equitable partition in kind” and appointing a surveyor and three commissioners to make the partition. The in-kind partition of the Property means that TAR would separately own 3,500 acres (70%) and Beren would separately own 1,500 acres (30%). Beren now appeals the judgment ordering a partition-in-kind.
Beren’s Appeal
Beren raises two issues in its appeal: (1) whether the trial court erred in refusing to submit its additional proposed jury instruction; and (2) whether the jury’s finding that the Property is subject to a fair and just partition-in-kind is against the great weight and preponderance of the evidence, i.e., whether the evidence is factually insufficient to support the jury’s finding.
Omission of Requested Jury Instruction
In its first issue, Beren argues the court erred in failing to submit its proрosed jury instruction informing the jury of factors to consider under White v. Smyth in determining whether “uncertainties not resolvable at a reasonable cost” preclude partition-in-kind of the mineral estate. White v. Smyth,
The charge asked the jury to answer a single question: “Do you find from a preponderance of thе evidence that the Subject Property is partitionable in-kind?” The jury answered ‘Tes.” The court’s instructions with respect to this question were:
... partitionable in-kind means that the Subject Property is “partitionable in-kind” unless Defendants have proved by a preponderance of the evidence that the Subject Property is not “partitionable in-kind.” You do not need to agree upon any particular division to find that the property is “partitionable in-kind.” ... the question is not asking whether the Subject Property is incapable of division in a physical sense. Any land could conceivably be divided into microscopic fractional pieces. Instead, you must look to determine,
(1) If a partition in-kind would be impracticable, given the relative size of some interests,
(2) Whether the divided interest would have an equal interest relevant to its percentage of the whole, and
(3) Whether the value of the share of each would not be materially less than his shаre of the money equivalent that would be obtained for the whole.
In answering this question, you may consider whether dividing the land into parcels causes its value to be substantially less than its value when whole. You may also consider whether the land could be divided into several parts of equal value, and if so, whether the combined value of the smaller parts would be materially less than the value of the undivided whole.
Beren requested the following additional instruction based on languаge in White which the trial court declined to give:
You are further instructed that in situations involving the ownership of mineral interests or mineral leases, it is the general rule that known mineral lands, because of elements of uncertainty, not resolvable at a reasonable cost, are not capable of fair division.
Standard of Review
We review a trial court’s refusal to submit a requested jury instruction for an abuse of discretion. Thota v. Young,
Beren’s Argument
Beren does not argue that the instructions submitted to the jury were erroneous — to the contrary, it agrees they were correct and, in fact, were the instructions requested by Beren. However, Beren asserts the jury should have been instructed on additional factors pertaining to partition-in-kind of a mineral estate versus surface land, particularly known mineral producing land on which the distribution of the quantity and quality of the minerals is uncertain.
Beren’s premise is that the evaluation of whether a mineral estate is susceptible to partition-in-kind is “radically different” from a surface estate because the nature of oil and gas means they may be produced from one part of a tract and not from another part. Beren relies on many of the same cases as TAR which set out the basic principles for partition of mineral estates. In Henderson v. Chesley,
Beren asserts the trial was one of “dueling experts,” and because the evidence was conflicting it necessarily established that unсertainties exist about the quantities and qualities of the minerals beneath the land, thereby making it inequitable and unfair to divide the minerals in-kind. Beren argues the court erred in failing to submit its instruction based on White because it was a correct statement of the law, would have assisted the jury, and was raised by the pleadings and evidence. Beren contends that without proper guidance through its White instruction the jury was free to find the mineral estate partitionable in-kind even if they believed the quantitiеs, qualities, and values of the minerals at different locations on the Property were uncertain.
TAIi’s Argument
Based on its wording, TAR asserts Beren’s proposed instruction was an impermissible comment on the weight of the evidence on the central contested fact issue, and its submission would have effectively compelled a verdict in favor of Beren. See Tex.R. Civ. P. 277 (prohibiting the court’s charge from making a direct comment on the weight of the evidence or advising the jury of the effect of their answers). TAR argues the proposed White instruction assumed the truth of a controverted fact by telling the jury that “because of elements of uncertainty [these] known mineral lands ... are not capable of fair division;” it presumed that the trial evidence conclusively established uncertainty regarding the minerals. The wording of the instruction implicitly advised the jury that a fact was established when it actually was hotly contested. See Tex. A & M Univ. v. Chambers,
Analysis
An impermissible comment on the evidence occurs when a jury instruction assumes the truth of a controverted material fact, or “tilts” or “nudges” the jury in one direction. See Lemos v. Montez,
Factual Sufficiency — Adverse Jury Findiny
In its second issue, Beren asserts the evidence is factually insufficient to support the jury’s finding that the Property is par-titionable-in-kind. Beren argues the great weight and preponderance of the evidence demonstrated that an in-kind partition of the mineral estate would be unfаir and inequitable to one of the co-tenants, i.e., Beren, due to uncertainty about the minerals’ quantity and quality across the Property; therefore the mineral estate is incapable of partition-in-kind and must be partitioned by judicial sale. See Tex.R. Civ. P. 770. TAR argues that Beren’s sufficiency analysis depends on its flawed premise that White controls this case. TAR asserts that we must review the factual sufficiency of the evidence against the jury charge as submitted, to which Beren did not objeсt, and that the jury’s finding that the Property may be partitioned in-kind is not against the great weight and preponderance of the evidence.
Standard of Review
In reviewing the factual sufficiency of the evidence, we consider and weigh all the evidence and will set aside the verdict only if it is so contrary to the overwhelming weight of the evidence that it is clearly wrong and manifestly unjust. Cain v. Bain,
Applicable Law Regarding Partition In-Kind of Mineral Estate
It is well established that Texas law favоrs partition-in-kind rather than partition by judicial sale. See Tex.R. Civ. P. 756-771; Tex. Prop.Code Ann. § 23.001
The threshold question in a partition suit is whether the property is “susceptible of partition” or “incapable of partition” because a “fair and equitable division” cannot be made. Tex. R. Civ. P. 761, 770. The determination of whether a partition-in-kind is fair and equitable includes whether the “property can be divided in kind without materially impairing its value.” Champion,
Here, in answering the question whether the Property is susceptible to partition-in-kind, the jury was instructed to consider the following factors: (1) whether a partition-in-kind would be impracticable given the relative size of some interests, (2) whether the divided interest would have an equal interest relevant to its percentage of the whole, and (3) whether the value of the share of each would not be materially less than the share of the money equivalent that would be obtained for the whole. See Cecola,
Analysis
Both sides acknowledge this case was a “battle of the experts” and that there was conflicting evidence given on the key factors used by the jury in determining
Beren’s Evidence
Beren presented the testimony of two experts, Michael Hiner, a geologist, and Bill Crenshaw, a petroleum engineer. Hiner testified that he “could not say for sure” how faults near the Property would trend across the Property because there was not enough data. Hiner discussed the problems of running across a fault when drilling a horizontal well, and stated that prior to drilling most companies invest in an exploratory technique similar to a 3-D survey, which is costly. Crenshaw critiqued the methodology used by Waymon Gore, TAR’s petroleum engineer, in analyzing and extrapolating from the production data for Eagle Ford wells drilled near the Property. Crenshaw stated his opinion that the Property could not be fairly divided because “sоmebody is going to get a better deal.”
Beren characterizes its evidence as proving a wide disparity of economic productivity among nearby wells and material unanswered questions about the nature of the fracture network underlying the Property, leading to too much uncertainty about the quantity and quality of the minerals underlying the Property, which cannot be resolved without significant cost. Therefore, Beren contends that it proved by a preponderance of the evidence that the mineral estate is not partitionable in-kind under White.
TAR’s Evidence
In addition to the testimony of its president, David Honeycutt, TAR similarly presented the testimony of a petroleum engineer, Waymon Gore, and a geologist, Gordon Marney.
Gore explained that the Property contains three geologic formations: the Austin Chalk, the Eagle Ford, and the Buda. Gore stated that no Eagle Ford wells below 5,700 feet have yet been drilled on the eight-square miles of the Proрerty. Therefore, he reviewed Railroad Commission drilling records and production data from five Eagle Ford wells within a five-mile radius of the Property; all were horizontal wells with similar drilling and completion methods and all had “very similar” initial production rates. Based on his calculations using the well production data, Gore concluded the oil and gas for each of the five wells was of relatively equal value. Gore opined that an Eagle Ford well drilled at any location on the Property would produce quantities of oil and gas in the same estimated production range as the five nearby wells. He concluded that all wells drilled on the Property would be “wells with very similar recoveries,” stating the wells on Beren’s 1,500 acres would be “just like” the wells on TAR’s 3,500 acres after partition.
Marney testified that he reviewed three types of data: (i) a 1977 report analyzing a core sample taken below 5,700 feet, (ii) well logs for 20 wells drilled about 5,700 feet in the Austin Chalk and San Miguel formations, and (iii) 1970’s and 1980’s seismic data from several seismic lines that cross the Property. Marney also created his own seven synthetic seismograms based on the available data. Based on his analysis of the combined data, Marney opined that each of the formations underlying the Property is uniform in thickness, distribution, and rock properties across the Property, the hydrocarbons are uniformly distributed across the Property, and the value of each portion of the Property is the same.
Finally, Honeycutt stated that he has years of experience in the oil and gas
TAR argues that its experts’ testimony that the estimated oil/gas production is equal across the Proрerty, i.e., that no one acre is different from any other one acre for purposes of mineral production or value, provides ample evidence to support the jury’s finding that the Property is susceptible to a fair and equitable partition-in-kind.
Conclusion
In a factual sufficiency review, we consider all the evidence rather than merely the evidence in favor of the verdict, but must still defer to the jury’s assessments of the weight and credibility of the trial evidence. See City of Keller v. Wilson,
Conclusion
Based on the above reasons, we overrule Beren’s appellate issues and affirm the trial court’s judgment ordering partition-in-kind of the Property. We therefore need not reach TAR’s conditional cross-appeal.
Notes
. "Bеren” includes the following appellants/cross-appellees: (1) Daven Corporation; (2) Zalman Resources, Inc.; and (3) Sport Resources, Inc. The corporations are owned by three brothers, David Beren, Jonathan Beren, and Daniel Beren, respectively.
. "TAR” includes the following appel-lees/cross-appellants: (1) oil and gas company Texas American Resources, LLC ("TAR”), which acquired the original plaintiff TARH E & P Holdings, L.P.'s assets, including its interests in the Property, and was substituted as a party plaintiff in the lawsuit in place of TARH; (2) Alexander Energy; and (3) James W. Alexander, trustee of the James W. Alexander Living Trust.