Opinion filed May 23, 2019
In The
Eleventh Court of Appeals
__________
No. 11-17-00141-CV
__________
RAHLEK, LTD. ET AL., Appellants/Cross-Appellees
V.
ROBERT G. WELLS ET AL., Appellees/Cross-Appellants
On Appeal from the 42nd District Court
Coleman County, Texas
Trial Court Cause No. 5951
OPINION
This appeal primarily involves a dispute regarding the interpretation of a
warranty deed dated July 6, 2006 (the 2006 Deed). The parties’ dispute centers on
whether the grantors, Rahlek, Ltd. and Eugenia Harris Campbell, conveyed to the
grantee, Lake Phantom Acres, L.P., only a fraction of the grantors mineral and
royalty interests on all new production or whether the grantors conveyed the entirety
of their mineral and royalty interests on all new production. After considering
competing summary judgment motions, the trial court ruled that the deed was
unambiguous and construed it to convey the entirety of the grantors’ mineral and
royalty interests on all new production. The trial court then held a bench trial on
damages, affirmative defenses, and attorney’s fees and rendered a final judgment.
In five issues, Appellants—Rahlek, Ltd., Eugenia Harris Campbell, and her
four children (the successors of Campbell’s interest)—challenge the trial court’s
final judgment in favor of Appellees—Lake Phantom Acres, L.P. and the successors
of Lake Phantom’s interest, which includes Ricky Grubbs. Specifically, Appellants
contend that the trial court erred when it (1) incorrectly construed the 2006 Deed;
(2) denied Rahlek’s counterclaim for unjust enrichment against Grubbs;
(3) permitted Grubbs to bring an unjust-enrichment counterclaim against
Campbell’s four children (the Campbell Children); and (4) denied the Campbell
Children’s affirmative defenses of waiver and estoppel. In Appellants’ fifth issue,
they request us to remand the issue of attorney’s fees if the trial court incorrectly
construed the 2006 Deed.
Appellee Grubbs also cross-appealed. In his sole cross-issue, Grubbs
contends that the trial court erred when it held that Section 16.069 of the Texas Civil
Practice and Remedies Code did not apply to save Grubbs’s otherwise time-barred
counterclaim.
We overrule Appellants’ first and fourth issues, and we do not reach
Issues Two, Three, and Five. We also sustain Appellee/Cross-Appellant Grubbs’s
sole cross-issue. Accordingly, we affirm in part and reverse and remand in part.
Background Facts
On July 6, 2006, Rahlek, Ltd. and Eugenia Harris Campbell conveyed the
property and certain mineral and royalty interests they owned in and under the
property to Lake Phantom Acres, L.P. by a warranty deed with a vendor’s lien. At
the time of this conveyance, Rahlek and Campbell collectively owned the surface
2
and one-quarter (1/4) of the minerals and royalties in and under the property. The
other three-quarters (3/4) of the mineral and royalty interest under the property is not
relevant to this case.
After the execution of the 2006 Deed, Lake Phantom subdivided the property
into multiple tracts and conveyed its interest to multiple parties, who in turn, made
similar conveyances to others. On September 30, 2014, some of these subsequent
property owners, including Robert G. Wells and his wife (collectively, the original
Plaintiffs), filed a declaratory judgment action against Rahlek and Campbell, seeking
a declaration as to what interests the grantors actually conveyed in the 2006 Deed.
Campbell, like Lake Phantom, had also conveyed her interests in the property
after the execution of the 2006 Deed. She conveyed all the mineral and royalty
interests she owned in the property to her four children—Archibald R. Campbell III,
Douglas M. Campbell, Eugenia H. Campbell, and John H. Campbell—in equal
shares. On March 9, 2015, the Campbell Children joined the lawsuit by filing a plea
in intervention. The Campbell Children countersued for declaratory judgment,
similarly asking the trial court to interpret the deed, but in their favor.
As part of their plea in intervention, the Campbell Children also joined several
other parties who likewise had an interest in the property as a result of subsequent
conveyances by Lake Phantom (collectively, Defendants in Intervention). Grubbs
is one of the Defendants in Intervention. In 2008, Lake Phantom sold the property
and all of the mineral interests it owned under the property to Grubbs. Grubbs
subdivided the property into two tracts: the Grubbs “A” Lease Tract and the Grubbs
“D” Lease Tract (collectively, the Grubbs Lease Tracts). Both of these tracts were
originally part of the property conveyed in the 2006 Deed.
In response to the Campbell Children’s plea in intervention, Grubbs filed a
counterclaim in his original answer against the Campbell Children alleging, among
3
other claims, unjust enrichment.1 According to Grubbs, the Campbell Children were
wrongfully paid royalties from production on the Grubbs “A” Lease Tract because
he owned the entirety of the one-quarter (1/4) royalty interest under the tract.2 The
record reflects that the statute of limitations barred this counterclaim. However,
Grubbs argued that the counterclaim was nonetheless authorized under
Section 16.069 of the Texas Civil Practice and Remedies Code.
Rahlek later filed its own unjust-enrichment counterclaim against Grubbs.
Rahlek argued that Grubbs wrongfully received royalties that Rahlek was entitled
to.
After the parties filed competing traditional motions for summary judgment,
the trial court granted partial summary judgment in favor of Appellees (the original
Plaintiffs and Defendants in Intervention). The trial court concluded that the deed
was unambiguous and construed it to convey the entirety of the grantors’ mineral
and royalty interests on all new production and to reserve “all current oil and gas
production.” The trial court also denied Rahlek’s unjust-enrichment counterclaim
and held that Section 16.069 did not revive Grubbs’s time-barred counterclaim. The
trial court then held a bench trial on damages, affirmative defenses, and attorney’s
fees. It ultimately rendered final judgment in favor of Appellees, awarding damages
in accordance with its findings, and declined to award attorney’s fees to either party
on appeal. This appeal followed.
1
Because Grubbs seeks to recover past royalties paid to the Campbell Children through various
legal theories and because an action for unjust enrichment is the proper mechanism through which to seek
such a remedy, Gavenda v. Strata Energy, Inc., 705 S.W.2d 690, 692 (Tex. 1986), we consider all of
Grubbs’s counterclaims together as simply a claim for unjust enrichment. Unjust enrichment claims are
governed by a two-year statute of limitations. Elledge v. Friberg-Cooper Water Supply Corp., 240 S.W.3d
869, 871 (Tex. 2007).
2
This is the same interest that Appellees contend Rahlek and Campbell conveyed to Lake Phantom.
4
Analysis
In Appellants’ first issue, they contend that the trial court erred when it granted
Appellees’ traditional motion for summary judgment because the trial court
erroneously interpreted the 2006 Deed. Specifically, Appellants assert that the trial
court erred when it held that the deed was unambiguous and construed it to convey
the entirety of the grantors’ mineral and royalty interests in and under the property
to Lake Phantom.
We review a summary judgment de novo. Provident Life & Acc. Ins. Co. v.
Knott, 128 S.W.3d 211, 215 (Tex. 2003). In doing so, we consider all the evidence
in the light most favorable to the nonmovant, indulge all reasonable inferences in
favor of the nonmovant, and determine whether the movant proved that there were
no genuine issues of material fact and that it was entitled to judgment as a matter of
law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When
competing traditional motions for summary judgment are filed, and one is granted
and the other denied, we must review all issues presented and render the judgment
the trial court should have rendered. Comm’rs Court of Titus Cty. v. Agan, 940
S.W.2d 77, 81 (Tex. 1997).
To determine whether the trial court erred in its interpretation of the 2006
Deed, the first issue we must address is whether the deed is ambiguous. The question
of whether a deed is ambiguous is a question of law for the court. See
ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 874 (Tex. 2018). Our primary
goal when construing a deed is to ascertain the true intention of the parties as
expressed within the “four corners” of the instrument. See Luckel v. White, 819
S.W.2d 459, 461 (Tex. 1991). The four-corners rule requires the court to ascertain
the intent of the parties solely from all of the language in the deed. Wenske v. Ealy,
521 S.W.3d 791, 794 (Tex. 2017) (citing Luckel, 819 S.W.2d at 461). The intent
that governs is not the intent that the parties meant but failed to express but, rather,
5
the intent that is expressed. Luckel, 819 S.W.2d at 462. Additionally, we must strive
to “harmonize all parts of the deed” and construe it “to give effect to all of its
provisions.” Id. When different parts of a deed appear to be contradictory or
inconsistent, we must attempt to construe the instrument so that no provision is
rendered meaningless. Id.
An ambiguity does not arise simply because the parties advance conflicting
interpretations. Endeavor Energy Res., L.P. v. Discovery Operating, Inc., 554
S.W.3d 586, 601 (Tex. 2018). Rather, only when a deed remains susceptible to two
or more reasonable interpretations, after the court applies the applicable rules of
interpretation, is the deed ambiguous. See ConocoPhillips, 547 S.W.3d at 874. If a
deed is worded in such a way that it can be given a certain or definite legal meaning,
then the deed is not ambiguous. See Endeavor, 554 S.W.3d at 601.
Generally, deeds are construed to confer upon the grantee the greatest estate
that the terms of the instrument will allow. Lott v. Lott, 370 S.W.2d 463, 465 (Tex.
1963). In other words, a deed will pass whatever interest the grantor has in the land,
unless it contains language showing a clear intention to grant a lesser estate. See
Sharp v. Fowler, 252 S.W.2d 153, 154 (Tex. 1952). Thus, unless the deed contains
reservations or exceptions that reduce the estate conveyed, a warranty deed will pass
all of the estate owned by the grantor at the time of the conveyance. Cockrell v. Tex.
Gulf Sulphur Co., 299 S.W.2d 672, 675 (Tex. 1956).
Both reservations and exceptions in deeds must be clear and specific. We will
not find “reservations by implication.” Perryman v. Spartan Tex. Six Capital
Partners, Ltd., 546 S.W.3d 110, 119 (Tex. 2018) (quoting Sharp, 252 S.W.2d at
154). “A reservation of minerals to be effective must be by clear language.” Id.
(quoting Sharp, 252 S.W.2d at 154). Similarly, exceptions, which generally are
strictly construed against the grantor, must identify, with reasonable certainty, the
6
property to be excepted from the larger conveyance. Combest v. Mustang Minerals,
LLC, 502 S.W.3d 173, 179–180 (Tex. App.—San Antonio 2016, pet. denied).
The 2006 Deed
The 2006 deed lists Rahlek and Campbell as the “Grantor” and Lake Phantom
as the “Grantee.” It is undisputed that together Rahlek and Campbell owned all of
the surface estate and that each owned an undivided one-eighth (1/8) interest in the
mineral and royalties under the property (i.e., they each owned one-half (1/2) of the
collective one-fourth (1/4) interest in minerals and royalties). The deed is fairly short
and contains the following provisions in the order they appear:
Property:
1680.21 acres of land in Coleman County, Texas being out of the John
Sanders Survey 162, Abstract 594, said 1680.21 acres being that tract
of land described in deed from John W. Harris to Eugenia Harris
Campbell and Joan Harris Kelso dated August 4, 2000, and recorded in
Volume 698, Page 94, Coleman County Deed Records and being more
particularly described in attached Exhibit “A.”
Reservations from and Exceptions to Conveyance and Warranty:
Easements, rights-of-way, and prescriptive rights, whether of
record or not; all presently recorded restrictions, reservations,
covenants, conditions, oil and gas leases, mineral severances, and other
instruments, other than liens and conveyances, that affect the property,
rights of adjoining owners in any walls and fences situated on a
common boundary; and discrepancies, conflicts or shortages in area or
boundary line; and encroachments or overlapping of improvements.
Grantor, for the consideration and subject to the reservations
from and exceptions to conveyance and warranty, grants, sells, and
conveys to Grantee the property, together with all and singular the
rights and appurtenances thereto in any wise belonging, to have and
hold it to Grantee, Grantee’s heirs, executors, administrators,
successors, or assigns, forever. Grantor binds Grantor and Grantor’s
heirs, executors, administrators, and successors to warrant and forever
defend all and singular the property to Grantee and Grantee’s heirs,
7
executors, administrators, successors, and assigns against every person
whomsoever lawfully claiming or to claim the same or any part hereof,
except as to the reservations from and exceptions to conveyance and
warranty.
When the context requires, singular nouns and pronouns include
the plural.
Grantor RESERVES unto itself and its successors and assigns all
current oil and gas production. Grantor CONVEYS unto Grantee and
its successors and assigns one-eighth (1/8) of mineral and royalty on all
new production which are owned by Grantors upon the date of this
conveyance.
The parties stipulated at trial that “current oil and gas production” meant
production from wells producing on the date of the 2006 Deed. Further, they
stipulated that “new production” meant production from new wells drilled after the
date of the 2006 Deed. On the date of the conveyance, the property was subject to
two oil and gas leases signed in the 1920s.
While both Appellants and Appellees argue that the 2006 Deed is
unambiguous, they propose drastically different interpretations. The parties agree
that, under the 2006 Deed, the grantors generally conveyed all of the surface estate
and reserved “all current oil and gas production.” They dispute, however, what
percentage of the minerals and royalties the deed conveyed on all new production.
Their dispute centers on the specific conveyance of an interest in minerals and
royalties “on all new production,” which appears after the general conveyance of the
surface and mineral estate in the granting/habendum clause. The general
conveyance reads: “Grantor . . . grants, sells, and conveys to Grantee the property,
together with all and singular the rights and appurtenances thereto in any wise
belonging . . . .” The specific conveyance reads: “Grantor CONVEYS unto Grantee
and its successors and assigns one-eighth (1/8) of mineral and royalty on all new
production which are owned by Grantors upon the date of this conveyance.”
8
According to Appellants, the plain language of the specific conveyance
indicates that the grantors conveyed only a fraction (1/8) of their collective mineral
and royalty interests (1/4) on all new production and that grantors did not convey the
entirety of each of their fractional interests. Appellants argue that the specific
conveyance limited the scope of the general conveyance. Under Appellants’
interpretation, the grantors conveyed only one-eighth (1/8) of their collective one-
quarter (1/4) mineral interest and one-eighth (1/8) of the royalties on new production
attributable to such one-quarter (1/4) mineral interest—the legal effect of such
conveyance being that they retained seven-eighths (7/8) of their collective one-
quarter (1/4) mineral interest and seven-eighths (7/8) of the royalties on new
production attributable to such one-quarter (1/4) mineral interest.
Appellees, on the other hand, argue that, because each grantor owned an
undivided one-eighth (1/8) mineral and royalty interest and because the deed
conveys that same interest (“one-eighth (1/8)”) in “mineral and royalty on all new
production,” the deed indicates that the grantors conveyed the entirety of each of
their fractional interests in mineral and royalty on all new production. Appellees
argue that the word “which” in the specific conveyance refers to the two separate
one-eighth (1/8) interests that each grantor owned. Appellees also argue that the
word “of” in the phrase “one-eighth (1/8) of mineral and royalty” does not
proportionally reduce the grant but simply highlights the type of interests being
conveyed. Appellees also note that Appellants did not expressly reserve any mineral
interests other than “current oil and gas production.” Under Appellees’
interpretation, the grantors each conveyed 100% of their individual one-eighth (1/8)
mineral and royalty interests on all new production (or, in other words, 100% of their
collective one-fourth (1/4) interest in minerals and royalties on all new production),
and the grantors did not reserve any interest in minerals or royalties on new
production. We agree with Appellees.
9
Based on its granting/habendum clause, we first note that the 2006 Deed
initially conveyed a full fee-simple interest in the property. See Sharp, 252 S.W.2d
at 154; City of Stamford v. King, 144 S.W.2d 923, 928–29 (Tex. Civ. App.—
Eastland 1940, writ ref’d). This includes all of the surface and mineral rights in and
under the property. See Sharp, 252 S.W.2d at 154; City of Stamford, 144 S.W.2d at
928–29. Here, along with the entirety of the surface estate, the deed conveyed “all
and singular the rights and appurtenances thereto in any wise belonging [to the
property]”—in other words, all of the mineral estate. See Taylor v. Cty. Sch. Trustees
of Eastland Cty., 229 S.W. 670, 671 (Tex. Civ. App.—El Paso 1921, writ ref’d)
(explaining that such language in the habendum clause “was a conveyance of the
fee-simple title,” which included the oil, gas, and other mineral interests under the
property).
The deed, however, expressly makes this general conveyance “subject to the
reservations from and exceptions to conveyance and warranty.” The only express
reservation that the grantors made in the 2006 Deed appears two paragraphs after
the granting/habendum clause. That reservation reads: “Grantor RESERVES unto
itself and its successors and assigns all current oil and gas production.” Importantly,
the 2006 Deed does not contain a provision clearly reserving any other mineral rights
to the grantors. As a result, the grantors failed to clearly and expressly reserve seven-
eighths (7/8) of their collective one-fourth (1/4) mineral interest and seven-eighths
(7/8) of the royalties on new production attributable to such one-quarter (1/4)
mineral interest. See Melton v. Davis, 443 S.W.2d 605, 608 (Tex. Civ. App.—Tyler
1969, writ ref’d n.r.e.) (holding that, if appellees had intended to reserve the disputed
minerals, they could have done so by apt language specifically and unequivocally
expressing such intent). As such, the only interest reserved in the 2006 Deed is in
“all current oil and gas production.”
10
Therefore, in light of the general conveyance and express reservation, at this
point in the 2006 Deed, the grantors have conveyed all of the surface estate and the
mineral estate (which implicitly includes the minerals and royalties on all new
production) and have only explicitly reserved “all current oil and gas production.”
Now, the question remains: What did the grantors intend by the inclusion of the
second, more specific conveyance of “one-eighth (1/8) of mineral and royalty on all
new production which are owned by Grantors upon the date of this conveyance”?
To read the specific conveyance as limiting the mineral and royalty interests
being conveyed to only a fractional carve-out of the grantors’ collective one-quarter
(1/4) interest, as opposed to the entirety of their fractional interests in the property,
would contradict and conflict with the general conveyance—by which the grantors
conveyed the entirety of the mineral estate—and would render the general
conveyance meaningless and superfluous. More importantly, to read the specific
conveyance as granting a lesser estate (that is, a fractional one-eighth (1/8) of the
collective one-quarter (1/4) interest rather than a conveyance of each grantors’ entire
one-eighth (1/8) fractional interest) would, in effect, allow the grantors to make a
reservation by implication. That is, it would permit the grantors to generally convey
the entire mineral estate, then specifically convey a portion of the mineral interests,
and in turn implicitly reserve the mineral interests not explicitly reserved in the
specific conveyance. Such an interpretation, in light of the general conveyance,
would directly contradict the rule against reservations by implication. Perryman,
546 S.W.3d at 119. Thus, we decline to read the second conveyance in such a
manner.
Instead, we read the specific conveyance as simply clarifying, highlighting,
and confirming the specific quantity and extent of the grantors’ mineral interest
being conveyed to the grantee through the general conveyance—the entirety of their
individual one-eighth interests on new production—rather than to read it as limiting
11
the general conveyance. Because each grantor owned an undivided one-eighth (1/8)
interest in the minerals and royalties, which is the same fractional interest being
conveyed in the specific conveyance, and because the grantors only expressly
reserved “all current oil and gas production,” we construe the 2006 Deed as
(1) conveying the entirety of each of their individual one-eighth, fractional interests
in “mineral” and “royalty on all new production” and (2) reserving only “all current
oil and gas production.” We conclude that this interpretation is required to ensure
that no provision in the 2006 Deed is rendered meaningless. See Luckel, 819 S.W.2d
at 462. That is, it is the only reasonable way to harmonize the provisions in the 2006
Deed—namely, the general conveyance, the express reservation, and the specific
conveyance.
To support their position that Rahlek and Campbell did not convey the entirety
of each of their one-eighth (1/8) mineral and royalty interest on new production,
Appellants rely heavily upon Hunsaker v. Brown Distributing Co., 373 S.W.3d 153
(Tex. App.—San Antonio 2012, pet. denied). In Hunsaker, the grantor owned an
undivided one-quarter (1/4) interest in minerals underlying his property, which
consisted of approximately 1,120 acres in La Salle County. Hunsaker, 373 S.W.3d
at 155. The grantor executed a deed in which he purported to convey the entirety of
the property, which he described by metes and bounds in an attached exhibit. Id. In
that exhibit, which described the surface of the property, the grantor also included a
specific grant of a mineral interest. Id. The specific grant read as follows: “There
is also included in this conveyance one-half (1/2) of all oil, gas, and other minerals
. . . in, on and under said property now owned by Grantor.” Id. The parties disputed
whether the grantor conveyed a fraction of his mineral interest or the entirety of his
mineral interest. Id. at 156–57. The grantor agreed that “he did not reserve one-half
of his mineral interest in the property, but emphasize[d] that he need not have
reserved anything as he conveyed only half of his mineral interest.” Id. at 157.
12
Based upon the language in the Hunsaker deed, and by harmonizing all of the
provisions within the four corners of the deed, the San Antonio Court of Appeals
concluded that the grantor conveyed only one-half (1/2) of his one-quarter (1/4)
mineral interest rather than the entirety of his one-quarter (1/4) mineral interest. Id.
at 157–58. As in Hunsaker, where the grantor generally conveyed the property
without any limiting language and then specifically conveyed a fractional mineral
interest without expressly reserving a mineral interest, Appellants argue that the
grantors here also conveyed the surface estate and specifically conveyed only a
fractional mineral estate on new production. Appellants assert that, similar to the
facts in Hunsaker, there was no need for the grantors to expressly reserve any
mineral or royalty interests on new production because they specifically granted only
a fraction of their interests on new production, by including the latter, specific
conveyance. We disagree.
Unlike the 2006 Deed, the deed in Hunsaker did not include in its
granting/habendum clause language indicating a conveyance of a full fee-simple
interest. See City of Stamford, 144 S.W.2d at 928–29. Specifically, it did not include
the following language, which does appear in the 2006 Deed: “Grantor . . . grants,
sells, and conveys to Grantee the property, together with all and singular the rights
and appurtenances thereto in any wise belonging . . .” (emphasis added). To the
contrary, the granting/habendum clause in the Hunsaker deed simply reads: The
grantor does “GRANT, SELL, AND CONVEY unto the said Grantees the following
described property situated in LaSalle County, Texas, to-wit: [a description of the
surface estate].” Hunsaker, 373 S.W.3d at 155. Thus, the Hunsaker deed did not
express an intent to convey both the surface estate and the mineral estate. As such,
because the grantor in Hunsaker did not generally convey the mineral estate in the
granting/habendum clause—unlike the grantors in this case—there was no need for
the grantor in Hunsaker to expressly reserve a mineral interest when he later
13
specifically conveyed only a fraction of his collective mineral interest. See id. at
158.
However, where, as in the present case, the deed does express an intent to
convey both the surface estate and the mineral estate, we conclude that the grantors
were required to expressly reserve a mineral interest if they intended to reserve such
an interest. Because the 2006 Deed limits its general conveyance to only the listed
reservations and exceptions, and then only reserves “all current oil and gas
production” without reserving any other mineral interests, we conclude that
Hunsaker does not compel us to reach a similar result—that the grantors only
conveyed a fraction of their collective mineral and royalty interests. To the extent
that Hunsaker stands for the proposition that a grantor may reserve an interest in
minerals without making an express reservation, we decline to follow such a rule, in
light of the Texas Supreme Court’s decision in Perryman v. Spartan Texas. See
Perryman, 546 S.W.3d at 119 (holding that the court will not find a “reservation[]
by implication”).
Accordingly, because the 2006 Deed can be given a definite and certain legal
meaning, we conclude that it is unambiguous. See Endeavor, 554 S.W.3d at 601.
We interpret the deed to convey the entirety of each of the grantors’ individual one-
eighth (1/8) mineral interest, which includes all of the royalties on new production
attributable to such an interest, and to reserve only current oil and gas production.
Therefore, we affirm the trial court’s interpretation of the 2006 Deed and overrule
Appellants’ first issue.
In light of our disposition of Appellants’ first issue, we need not reach
Appellants’ second, third, and fifth issues, which are all contingent upon this court
finding error in the trial court’s interpretation of the 2006 Deed. See TEX. R.
APP. P. 47.1.
14
In Appellants’ fourth issue, they contend, in the alternative, that even if the
trial court correctly construed the 2006 Deed, the trial court nonetheless erred when
it denied the Campbell Children’s affirmative defenses of waiver, equitable estoppel,
and quasi estoppel against Grubbs’s unjust-enrichment counterclaim. Appellants
assert that they conclusively proved these affirmative defenses at trial as to the
Grubbs “A” Lease Tract. We disagree.
When, as in this case, neither party requests findings of fact and conclusions
of law following a bench trial, we will imply all findings necessary to support the
trial court’s judgment. Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex.
2017). Thus, we presume that the trial court resolved all factual disputes against
waiver, equitable estoppel, and quasi estoppel. See Mo. Pac. R.R. Co. v. Limmer,
299 S.W.3d 78, 84 (Tex. 2009). If the reporter’s record is filed on appeal, as it was
here, implied findings may be challenged on factual- and legal-insufficiency grounds
in the same manner as jury findings or a trial court’s express findings of fact.
Bradberry, 526 S.W.3d at 480.
To successfully challenge the legal sufficiency of an adverse finding on an
issue on which the appellant had the burden of proof, the appellant must conclusively
establish all vital facts in support of that issue. Dow Chem. Co. v. Francis, 46
S.W.3d 237, 241 (Tex. 2001) (per curiam). We review the evidence in the light most
favorable to the verdict, crediting favorable evidence if a reasonable factfinder
could, and disregarding contrary evidence unless a reasonable factfinder could not.
City of Keller v. Wilson, 168 S.W.3d 802, 807, 822, 827 (Tex. 2005). We cannot
substitute our judgment for that of the factfinder if the evidence falls within this zone
of reasonable disagreement. Id. at 822. Evidence is conclusive only if reasonable
people could not differ in their conclusions, which depends on the facts of each case.
Id. at 816.
15
We conclude that Appellants have not conclusively established all the vital
facts of either waiver, equitable estoppel, or quasi estoppel. Waiver is an affirmative
defense that can be asserted against a party who intentionally relinquishes a known
right or engages in intentional conduct inconsistent with claiming that right.
Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996). “The elements
of waiver include (1) an existing right, benefit, or advantage held by a party; (2) the
party’s actual knowledge of its existence; and (3) the party’s actual intent to
relinquish the right, or intentional conduct inconsistent with the right.” Ulico Cas.
Co. v. Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008). Waiver is largely an
issue of intent. Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003). A party may
establish an implied waiver through a party’s actions, but the surrounding facts and
circumstances must clearly demonstrate an intent to waive the right. Id. Mere
silence or inaction cannot establish waiver unless the inaction shows an intent to
relinquish the right. Id. at 157. Waiver is ordinarily a question of fact. Id. at 156.
However, when the facts and circumstances are undisputed, the question is one of
law. Id. at 156–57.
In support of their affirmative defenses, the Campbell Children cite to the
following undisputed facts: Grubbs owns the surface of the Grubbs “A” and Grubbs
“D” Lease Tracts. At the time Grubbs purchased the property from Lake Phantom
in 2008, Grubbs believed that he owned the entirety of the one-quarter (1/4) interest
in mineral and royalties under the property. Grubbs is the sole owner and manager
of Premier Royalties, LLC, which is the operator of the Grubbs Lease Tracts. In
March 2013, Grubbs, on behalf of Premier, authorized and directed his secretary to
send letters to each of the four Campbell Children.3 The letters expressed that
While there is no copy of the letter that was sent to John H. Campbell, Grubbs testified that “it’s
3
almost 99.9 or a hundred percent that he was” also sent such a letter.
16
Grubbs “paid property taxes on [the Campbell Children’s] royalty interest in Grubbs
A.” In the letters, Grubbs also requested, on behalf of Premier, that the Campbell
Children reimburse Premier for the taxes Grubbs paid on the Campbell Children’s
behalf.4
Further, in response to these letters, three of the Campbell Children—
Douglas, Eugenia, and Archibald—reimbursed the property taxes paid on their
behalf. In fact, in response to Douglas’s payment, Grubbs sent a letter in April 2013
to Douglas, on behalf of Premier, thanking Douglas for Douglas’s payment of taxes
“paid on [Douglas’s] behalf for [Douglas’s] royalty interest in Grubbs A.” Finally,
all of the Campbell Children continued to receive royalties from the Grubbs “A”
Lease Tracts until they were placed in suspense in December of 2014. We further
note that Grubbs and the Campbell Children agree that all of the production on the
Grubbs Lease Tracts qualified as “new production” under the 2006 Deed.
Regarding the affirmative defense of waiver, Appellants assert that Grubbs
intentionally engaged in conduct inconsistent with claiming a right to recover
royalties from production on the Grubbs “A” Lease Tract. They argue that Grubbs
testified that he believed he owned all of the disputed mineral and royalty interests
under the Grubbs Lease Tracts at the time he purchased the property from Lake
Phantom. But, in spite of this belief, Grubbs represented in the letters to the
Campbell Children that they owned a royalty interest in the Grubbs “A” Lease Tract.
Appellants also note that, for over a year after the letters were sent, the Campbell
Children continued to receive royalties and that Grubbs waited over two years from
4
The letters addressed to each Campbell Child are entitled: “Property Taxes on Your Royalty
Interest in Grubbs A.” The letters state: “I paid property taxes on your royalty interest in Grubbs A to [the
recipient of the property taxes].” The letters then identify the specific amount paid and request the Campbell
Child to “[p]lease remit a total of [dollar amount] to Premier Royalties at the below address for taxes I paid
on your behalf.” The letters then include a signature block, which includes the initials of Ricky Grubbs and
his secretary above a single printed name: “Rick Grubbs.”
17
when he sent the letters before he filed his counterclaim to recover those royalty
payments. Therefore, Appellants contend that Grubbs waived his right to recover
such royalties.
Appellee Grubbs maintains that he did not waive his right to recover royalties
because Premier (not Grubbs personally) sent the letters to the Campbell Children.
Thus, according to Grubbs, the only way the actions of Premier could be imputed to
him individually “would be via an alter ego allegation.” Grubbs appears to argue
that, because the Campbell Children “did not plead piercing the corporate veil and
did not offer evidence” in support of that claim, Grubbs did not waive his right to
individually recover the royalties. Essentially, Grubbs argues that, because he did
not personally engage in conduct (in his individual capacity) inconsistent with the
right he now claims—entitlement to 100% of the royalties from production on the
Grubbs “A” Lease Tract—but, rather, did so as an agent on behalf of Premier, the
trial court correctly denied Appellants’ affirmative defense of waiver.
At the outset, we first note that Appellee Grubbs’s reliance on veil-piercing
and alter-ego principles is misplaced. In Texas, such principles are typically used to
hold a corporation’s agent—such as its shareholders, officers, and directors—
personally liable for the legal obligations of the corporation. In other words, these
“theories are purely remedial and serve to expand the scope of potential sources of
relief by extending to individual shareholders . . . what is otherwise only a corporate
liability.” Spring St. Partners-IV, L.P. v. Lam, 730 F.3d 427, 443 (5th Cir. 2013)
(discussing principles of Texas law). Policies governing piercing the corporate veil
also apply to limited liability companies, such as Premier. See Shook v. Walden, 368
S.W.3d 604, 621 (Tex. App.—Austin 2012, pet. denied). However, because the
Campbell Children are not seeking to impose individual liability on Grubbs based
upon the business liability of Premier, we conclude that there was no need for the
Campbell Children to plead piercing the corporate veil or allege alter ego.
18
Moreover, we note that while generally “the actions of a corporate agent on
behalf of the corporation are deemed the corporation’s acts”—and not the person’s
individual actions—this rule simply stands for the proposition that a corporate agent
may not generally “be held liable in damages for inducing the corporation to violate
a contractual obligation.” Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex. 1995)
(citing Maxey v. Citizen’s Nat’l Bank, 507 S.W.2d 722, 726 (Tex. 1974)) (emphasis
added). Appellee Grubbs cites to no authority, and we have found none, to support
his argument that he could not have waived his individual right to recover royalties
from the Grubbs “A” Lease Tract when he sent letters to the Campbell Children only
in his capacity as an agent on behalf of Premier. The fact that Grubbs directed the
letters to be sent in his capacity as an agent (rather than in his individual capacity)
does not strip him of the knowledge he possessed when he did so—that the Campbell
Children were receiving royalties from and possessed a royalty interest in the Grubbs
“A” Lease Tract. Accordingly, we conclude that, with the requisite knowledge and
intentional acts, Grubbs could have waived his personal right to recover royalties, in
part, by sending the letters to the Campbell Children.
Nevertheless, we conclude that, when we view the evidence in the light most
favorable to the verdict, it is not clear from Grubbs’s conduct that he intended to
relinquish his right to recover royalties from the Campbell Children. Although
Grubbs testified that he believed he owned 100% of the disputed one-quarter royalty
interest at the time Lake Phantom conveyed to him the property in 2008, Appellants
have not presented conclusive evidence to indicate that Grubbs maintained this
belief at all times prior to bringing his unjust-enrichment counterclaim in 2015. In
particular, Appellants failed to present conclusive evidence to show that, when
Grubbs sent the letters to the Campbell Children in 2013, he actually knew he had a
full one-quarter royalty interest in the Grubbs Lease Tracts. Nor is there any
conclusive evidence that establishes that Grubbs knew he had such an interest after
19
sending the letters. Therefore, because evidence showing that Grubbs had actual
knowledge of the existence of his right (100% of the one-quarter royalty interest) at
the time he sent the letters is lacking, the evidence fails to conclusively show that
Grubbs intentionally engaged in conduct inconsistent with the right he now claims.
Accordingly, we conclude that the trial court did not err when it denied the Campbell
Children’s affirmative defense of waiver.
Similarly, Appellants have not conclusively established that Grubbs is
estopped from making a claim for the royalties in dispute. Equitable estoppel is an
affirmative defense that “generally prevents one party from misleading another to
the other’s detriment or to the misleading party’s own benefit.” Ulico, 262 S.W.3d
at 778. “[T]he doctrine of equitable estoppel requires: (1) a false representation or
concealment of material facts; (2) made with knowledge, actual or constructive, of
those facts; (3) with the intention that it should be acted on; (4) to a party without
knowledge or means of obtaining knowledge of the facts; (5) who detrimentally
relies on the representations.” Johnson & Higgins of Tex., Inc. v. Kenneco Energy,
Inc., 962 S.W.2d 507, 515–16 (Tex. 1998). The party relying on estoppel has the
burden of proof, and the failure to prove any of the elements is fatal. Dempsey v.
Apache Shores Prop. Owners Ass’n, 737 S.W.2d 589, 596 (Tex. App.—Austin
1987, no writ).
Here, Appellants have failed to conclusively prove that Grubbs knowingly
made a false representation or concealment of a material fact. As discussed above,
the record does not reflect that Grubbs knew he owned 100% of the disputed royalty
interest at the time he sent the letters to the Campbell Children. Moreover,
Appellants failed to conclusively establish that they were a party without the
knowledge or the means of obtaining the knowledge of the material facts regarding
who owned the royalty interests under the Grubbs “A” Lease Tract. Accordingly,
20
based on this record, we conclude that the trial court could have held that Appellants
did not meet their burden of proof on the issue of equitable estoppel.
Lastly, we conclude that Appellants have not conclusively established that the
doctrine of quasi estoppel bars Grubbs from asserting the right he now claims. Quasi
estoppel is an affirmative defense that “precludes a party from asserting, to another’s
disadvantage, a right inconsistent with a position previously taken. The doctrine
applies when it would be unconscionable to allow a person to maintain a position
inconsistent with one to which he acquiesced, or from which he accepted a benefit.”
Samson Expl., LLC v. T.S. Reed Props., Inc., 521 S.W.3d 766, 778 (Tex. 2017)
(internal quotation marks omitted, footnote omitted). “Unlike equitable estoppel,
quasi-estoppel does not require a showing of a false representation or detrimental
reliance.” Forney 921 Lot Dev. Partners I, L.P. v. Paul Taylor Homes, Ltd., 349
S.W.3d 258, 268 (Tex. App.—Dallas 2011, pet. denied).
Here, Appellants have failed to present conclusive evidence that, at the time
Grubbs sent the letters to the Campbell Children, he knew he owned the entirety of
the one-quarter royalty interest in dispute. Thus, by sending the letters, the evidence
does not conclusively establish that Grubbs engaged in intentional conduct
inconsistent with the right he now claims. Because such evidence is lacking, it
would not be unconscionable to allow Grubbs to assert his right to recover royalties
from the Campbell Children. Therefore, we conclude that the record supports the
trial court’s conclusion that Appellants failed to establish the affirmative defense of
quasi estoppel.
Accordingly, we overrule Appellants’ fourth issue.
We next turn to Appellee/Cross-Appellant Grubbs’s cross-appeal against the
Campbell Children. In his sole issue, Grubbs contends that the trial court erred when
it concluded that Section 16.069 of the Texas Civil Practice and Remedies Code—
which, in certain cases, bars the application of the statute of limitations—does not
21
apply to revive his counterclaim for unjust enrichment against the Campbell
Children. We agree.
“Whether the statute of limitations is applicable to a given factual situation is
a question of law rather than a question of fact, unless there is a factual dispute as to
when the injury occurred or should have been discovered.” Musgrave v. Brookhaven
Lake Prop. Owners Ass’n, 990 S.W.2d 386, 397 (Tex. App.—Texarkana 1999, pet.
denied). Where, as here, the facts are undisputed, we review de novo the question
of whether Section 16.069 applies to permit a party’s otherwise time-barred
counterclaim. See Chorman v. McCormick, 172 S.W.3d 22, 24 n.3 (Tex. App.—
Amarillo 2005, no pet.); Doyer v. Pitney Bowes, Inc., 80 S.W.3d 215, 218 (Tex.
App.—Austin 2002, pet. denied); see also Musgrave, 990 S.W.2d at 398.
In their plea in intervention filed on March 9, 2015, the Campbell Children
joined Grubbs as a defendant-in-intervention. Afterwards, Grubbs filed a
counterclaim for unjust enrichment against the Campbell Children to recover royalty
payments they received from production on the Grubbs Lease Tracts; Grubbs
claimed that the royalties rightfully belonged to him. The record reflects that
Grubbs’s counterclaim was barred by a two-year statute of limitations.
After the trial court interpreted the 2006 Deed, it concluded that, although the
statute of limitations barred Grubbs’s unjust-enrichment counterclaim, the two-year
limitations period applied only to claims filed prior to March 9, 2013—exactly two
years before the date the Campbell Children filed their plea in intervention.5 As
such, the trial court ruled that Grubbs was entitled to recover damages for past
royalties accruing on and after March 9, 2013, but not before that date. At the
subsequent bench trial, the trial court awarded damages in accordance with its ruling.
The trial court issued this ruling in a letter. Although in the letter, the trial court ruled that “the
5
two-year statute of limitations applies prior to March 5, 2013,” this appears to be a typographical error.
Based on the parties’ stipulation, the correct date is March 9, 2013.
22
Grubbs argues on appeal, as he did at trial, that “[S]ection 16.069 of the Civil
Practice and Remedies Code works [to bar] application of any limitations period to
his claim for reimbursement against the [Campbell Children]” (emphasis added). In
other words, Grubbs asserts that he was entitled to recover royalty payments from
the Campbell Children that they wrongfully received both before and after March 9,
2013.
Section 16.069(a) provides: “If a counterclaim or cross claim arises out of the
same transaction or occurrence that is the basis of an action, a party to the action
may file the counterclaim or cross claim even though as a separate action it would
be barred by limitation on the date the party’s answer is required.” TEX. CIV.
PRAC. & REM. CODE ANN. § 16.069(a) (West 2015). In such a case, “[t]he
counterclaim or cross claim must be filed not later than the 30th day after the date
on which the party’s answer is required.” Id. § 16.069(b).
Texas courts apply a “logical relationship” test to determine whether a
counterclaim arises out of the same transaction or occurrence that is the basis of the
underlying cause of action. Allen Drilling Acquisition Co. v. Crimson Expl. Inc.,
558 S.W.3d 761, 775 (Tex. App.—Waco 2018, pet. filed) (op. on reh’g); Commint
Tech. Servs., Inc. v. Quickel, 314 S.W.3d 646, 653 (Tex. App.—Houston [14th Dist.]
2010, no pet.); Williams v. Nat’l Mortg. Co., 903 S.W.2d 398, 403–04 (Tex. App.—
Dallas 1995, writ denied). To be logically related, the essential facts on which the
claims are based must be significantly and logically relevant to both claims.
See Wells v. Dotson, 261 S.W.3d 275, 281 (Tex. App.—Tyler 2008, no pet.). Under
this test, a “transaction” is flexible and may constitute a series of many occurrences
logically related to one another. Id.
There is no dispute that Grubbs’s counterclaim for unjust enrichment was filed
within the required period of time under Section 16.069(b). However, the parties
dispute whether Grubbs’s counterclaim arose out of the same transaction or
23
occurrence of the underlying cause of action—the Campbell Children’s declaratory
judgment action.
Appellants assert that no logical relationship exists between Grubbs’s
counterclaim, by which he seeks to recover past royalties from the Campbell
Children, and the Campbell Children’s declaratory judgment action, by which they
seek a declaration of their rights pursuant to the 2006 Deed.
To support their assertion, Appellants cite Freeman v. Cherokee Water Co.,
11 S.W.3d 480 (Tex. App.—Texarkana 2000, pet. denied). In Freeman, the
Cherokee Water Company brought a declaratory judgment action against the
Freemans. Freeman, 11 S.W.3d at 482. The sole basis of the action was the
interpretation of one provision in a deed, pertaining to a grant of fishing rights to the
Freemans’ parents. Id. at 483. In response to this action, the Freemans filed a
counterclaim to set aside the entire deed. Id. at 482. The Freemans’ counterclaim
was “based entirely on the alleged fraudulent execution of the deed.” Id. at 483.
Because their counterclaim was barred by the statute of limitations, the Freemans
relied upon Section 16.069 to revive it. Id. at 482–83.
The Texarkana Court of Appeals concluded that the Freemans’ counterclaim
was not logically related to Cherokee’s action because the interpretation of the single
provision at issue in Cherokee’s action had nothing to do with the basis for the
Freemans’ fraud claim. Id. at 483. Importantly, the court noted that “[t]he matter in
dispute in Cherokee’s declaratory judgment action was not . . . the execution [or
validity] of the deed.” Id. Likewise, the court reasoned that “the Freemans’
counterclaims in no way relate[d] to the fishing rights [provision], or any other
interpretation of the deed.” Id. (emphasis added). Therefore, the court concluded
that the Freemans’ counterclaim could not be saved by Section 16.069. Id.
We conclude that Freeman is easily distinguishable. Here, Grubbs’s
counterclaim and the Campbell Children’s declaratory judgment action are logically
24
related, particularly because both claims depend upon the “interpretation of the
deed.” See id. We note that Grubbs’s counterclaim arose out of the same transaction
or occurrence (the 2006 Deed), which is also the basis for the Campbell Children’s
declaratory judgment action. In their declaratory judgment action, the Campbell
Children sought a declaration as to what interests they owned in the property after
their mother (Campbell) conveyed to them the interest she retained in the property
after the execution of the 2006 Deed. Importantly, the Campbell Children’s action
centered on the interpretation of the 2006 Deed. Likewise, the merits of Grubbs’s
counterclaim also concerned the interpretation of the 2006 Deed. In particular, the
interpretation of the 2006 Deed affects what interest Campbell owned when she
conveyed her interest to her children—which, in turn, affects whether the Campbell
Children were wrongfully paid royalties from the Grubbs Lease Tracts. Therefore,
because the two claims are based on essentially the same facts—the execution of the
2006 Deed—a logical relationship exists between both claims.
Accordingly, we conclude that Section 16.069 barred the application of the
two-year statute of limitations on Grubbs’s counterclaim. As such, the statute of
limitations does not bar Grubbs from recovering royalties that the Campbell
Children received both before and after March 9, 2013. Thus, the trial court erred
when it applied the statute of limitations and prevented Grubbs from recovering
royalties that the Campbell Children received before March 9, 2013. We sustain
Grubbs’s sole cross-issue.
This Court’s Ruling
We affirm the trial court’s judgment pertaining to the interpretation of the
2006 Deed. We also affirm the trial court’s judgment insofar as it denied the
Campbell Children’s affirmative defenses of waiver, equitable estoppel, and quasi
estoppel. However, we reverse the trial court’s judgment insofar as it applied the
statute of limitations to Grubbs’s unjust-enrichment counterclaim. Accordingly, we
25
affirm in part and reverse and remand in part to allow the trial court to enter judgment
consistent with this opinion.
KEITH STRETCHER
JUSTICE
May 23, 2019
Panel consists of: Bailey, C.J.,
Stretcher, J., and Wright, S.C.J.6
Willson, J., not participating.
6
Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.
26