Texas Court Concludes Devise of “All Right, Title, and Interest” in Land Did Not Include Mineral Rights

Austin, TX (Law Firm Newswire) June 19, 2020 – The case highlights the importance of understanding the terms of a contract to lease, assign or sell mineral rights in Texas

Earlier this year, a state appellate court issued a written opinion in a Texas oil and gas case discussing whether a will that purported to transfer “all right, title and interest” in a property included the mineral estates of the property or whether the conveyance was only for the surface estate. Ultimately, the court concluded that the phrase “all right, title and interest” only referred to the surface estate. The case illustrates the importance of artfully drafting all documents dealing with oil and gas matters.

The facts of the case

The facts giving rise to this dispute are lengthy, complex, and involve more detail than is necessary to understand the import of the court’s decision. In summary, the case involves a single tract of land, referred to as Ranch Las Piedras. A woman named Leonor Ramirez, owned all of the surface estate to the ranch and a one-fourth interest in the mineral estate. When Leonor passed away in 1990, she devised to her son, Leon, “all of my right, title and interest in and to Ranch Las Piedras … during term of his natural life,” and on his death “to his children then living in equal shares.” Leon subsequently signed an oil and gas lease on the ranch, which was later acquired by ConocoPhillips. Throughout the Ramirez family’s ownership of the property, the family used the term “Ranch Las Piedras” repeatedly in various partition deeds, referring to only the surface estate.

When Leon died in 2006, he left three children behind. In 2010, the children sued ConocoPhillips for an accounting and to establish their one-fourth interest in the mineral estate to Ranch Las Piedras. The children argued that the oil and gas lease (now held by ConocoPhillips) did not bind them, as once their father passed away the property legally passed to them, terminating any existing leases. At trial, the children were awarded title to the minerals and $11.1 million for their share of net profits on production from the Ranch, plus over $2 million in attorneys’ fees and prejudgment interest. The San Antonio Court of Appeals affirmed. ConocoPhillips appealed to the Texas Supreme Court.

The question for the Texas Supreme Court was whether the language devising “all right, title and interest” in Ranch Las Piedras included the one-fourth interest in the Ranch’s mineral estate. ConocoPhillips argued that the phrase did not convey the mineral interest, which instead passed to the beneficiaries of Leonor’s residual estate upon her death. The children argued that the one-fourth interest passed to their father directly.

The court concluded that Leonor’s will only devised the surface estate to her son, and that the mineral interests were passed to the beneficiaries of Leonor’s residual estate. The court based its decision on how the family treated the Ranch Las Piedras estate in other documents and transactions since they owned the property. Particularly, the court was convinced by the fact that the family frequently used the term “Ranch Las Piedras” when it was referring to only the surface estate. Thus, the court determined that the only interpretation that was consistent with how the family used such language in the past was that it did not include the mineral interests. As a result of the court’s decision, the children were unable to recover for the income generated by the Ranch, and were not awarded mineral rights.

Austin oil and gas attorney, Gregory D. Jordan, reminds the owners of mineral rights of the importance of using clear and concise language when drafting any document related to oil and gas rights. Mineral rights can be extremely valuable and the laws governing the related legal issues can be very complex. Lessees often have teams of lawyers working to protect their interests and, too often, unsuspecting owners end up giving up more than they intended. By working with a knowledgeable attorney, owners of mineral rights can better protect their interests by ensuring all contracts are clearly worded and accurately reflect the deal they believe they are making.

At the Law Offices of Gregory D. Jordan, Attorney Jordan represents individuals and businesses in all types of Texas oil and gas cases and contractual disputes. Attorney Jordan has over 30 years of relevant experience helping clients confront the complex legal issues they face throughout Texas. Contact the Law Offices of Gregory D. Jordan at http://www.theaustintriallawyer.com/.