Court Opinion

ID: 9838030
Source: CourtListenerOpinion
Date Created: 2023-09-03 14:06:28.084833+00
Date Added: 2024-06-11T15:33:00.602587
License: Public Domain

Supreme Court of Texas
                            ══════════
                             No. 21-0711
                            ══════════

 Andrew M. Thomson, CDG Peeler Family Limited Partnership,
Cynthia L. Littlefield, The Dick Family Irrevocable Trust, Gordon
G. Thomson, Jane Elizabeth Erzen, Larry Wayne McCarty, Linda
  M. Ball, Michael David Dick, North Thomson Oil and Gas LP,
Patricia P. Fleming, Paul W. Peeler Family Limited Partnership,
Sandra Shannon Collins, Shannon Family Trust, Thomson Oil &
 Gas Investments LP, Coconut Point St, LLC, Coconut Point OE,
    LLC, Colonial Villa Estates, LLC, Laze Daze KLA, LLC,
Whispering Pines Mobile Home Park, Ltd., and R & H Paul, Inc.,
                               Petitioners,

                                    v.

             Kent B. Hoffman, Susan Hoffman Binieck,
            E. Peter Hoffman, Jr., and Marni H. Cooney,
                              Respondents

   ═══════════════════════════════════════
               On Petition for Review from the
       Court of Appeals for the Fourth District of Texas
   ═══════════════════════════════════════

                             PER CURIAM

      Justice Lehrmann did not participate in the decision.

      This case concerns a familiar question of deed construction within
the oil and gas context: whether a royalty interest is fixed or floating. A
1956 deed expressly reserved
             an undivided three thirty-second’s (3/32’s)
             interest (same being three-fourths (3/4’s) of
             the usual one-eighth (1/8th) royalty) in and to
             all of the oil, gas and other minerals. . . .
Other parts of the deed then referred only to 3/32 without using the
double-fraction description.      The question presented is whether the
reservation was a floating 3/4 interest of the royalty—whatever it may
be—rather than a fixed 3/32 interest.
      The court of appeals held that the reservation was a floating 3/4
interest. 630 S.W.3d 427, 436 (Tex. App.—San Antonio 2021). The court
reasoned that the deed used the term “3/32” merely as a substitute for
the longer double-fraction description and that the longer description of
the reservation used the term “1/8” as a placeholder for the royalty
interest generally. Id. at 434.
      The court of appeals’ decision in this case preceded our most recent
double-fraction case, Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex.
2023). We there held that antiquated mineral instruments containing
“1/8” within a double fraction raise a rebuttable presumption that 1/8 was
used as a term of art to refer to the total mineral estate, not simply one-
eighth of it. Id. at 359. Because nothing rebutted the presumption in
Van Dyke, we held that, as used in the 1924 deed at issue, “ ‘one-half of
one-eighth’ equal[ed] one-half of the mineral estate.” Id. at 357.
      Nothing displaced the presumption in Van Dyke itself, but we
emphasized that the presumption is “genuinely rebuttable.” Id. at 364.
“A rebuttal could be established by express language, distinct provisions
that could not be harmonized if 1/8 is given the term-of-art usage . . . ,

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or even the repeated use of fractions other than 1/8 in ways that reflect
that an arithmetical expression should be given to all fractions within
the instrument.” Id. Accordingly, in a double-fraction case, “1/8” will be
regarded as a term of art unless the text or structure of the instrument
rebuts the presumption, which would require giving “1/8” its arithmetical
meaning instead. A third and rarer possibility is that the text may be
inescapably ambiguous because “an instrument may have enough textual
evidence to drain confidence in the presumption yet insufficient evidence
for a court to conclude that a reasonable reader at the time would have
understood the instrument to require mere multiplication.” Id. at 365.
       The parties to this case filed briefs on the merits in this Court
before we heard or decided Van Dyke. Once we issued that opinion, the
parties submitted letter briefs in which they disputed the ways in which
this case and Van Dyke are alike and different and how the analytical
framework described in Van Dyke should apply here.* The court of
appeals, however, did not have the benefit of our decision or the parties’
competing responses to it. The analytical framework introduced in Van
Dyke, while consistent with our precedents, see id. at 364, presents a
new legal formulation, which is why the parties have focused so heavily

       * The  parties debate several such differences. For example, in Van
Dyke, the deed at issue was executed in 1924, reserved a fraction of the entire
mineral estate, and described the interest by using a double-fraction expression
(“one-half of one-eighth”) without ever actually referring to the product of the
multiplication (i.e., “1/16”). By contrast, the deed in this case was executed in
1956, reserved only an interest in the royalty, and used both a double fraction
and the arithmetical product of that double fraction (“3/32”) to describe the
interest reserved, possibly as a definition. We express no view as to whether
those or other differences are material or whether they are sufficient to rebut
the presumption.

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on it in their supplemental briefing. We conclude that the most prudent
course is for the court of appeals to apply Van Dyke to this record in the
first instance. The parties should develop and present their arguments
to that court.
      Because the parties and the court of appeals did not have the
opportunity to evaluate this case in light of the framework articulated
in Van Dyke, we conclude that a remand to the court of appeals “for
further proceedings in light of changes in the law” is appropriate. TEX.
R. APP. P. 60.2(f). Accordingly, without hearing oral argument, TEX. R.
APP. P. 59.1, we grant the petition for review, vacate the court of appeals’
judgment, and remand the case to that court for further proceedings.

OPINION DELIVERED: September 1, 2023

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