Face Challenges Confidently

191 Hlavinka v. Hlavinka

Tuesday, September 1st, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Hlavinka v. Hlavinka, 2008 WL 2151527 (Tex. App.—Corpus Christi, May 22, 2008, no pet.), holds that the expiration of a twenty-five year term mineral interest should be calculated from the date of the correction deed, rather than the original deed. Two deeds executed in 1977 were corrected by two deeds approximately nine months later in 1978. There was a term mineral reservation of twenty-five years or for so long as there was production in paying quantities. Twenty-five years later, there was production with an initial flow rate of 2,000 MCFPD and 831 BOPD. If the twenty-five year term was calculated from the date of the original deeds, the reservation terminated without production. If the twenty-five year term was calculated from the date of the correction deeds, production was timely commenced and the reservation continued in effect. Grantee  contended that under  the doctrine  of ―relation  back,‖ the time  should be calculated from the date of the original deeds resulting in the termination of the mineral reservations. Grantor contended that the doctrine of ―relation back‖ did not apply because the correction deeds materially and substantively changed the terms of the agreement. The principal differences were:

  1. The original deeds created a perpetual reservation and the correction deeds specified twenty-five years ―from the date hereof.‖
  2. The mineral  reservation  was  defined  to  extend  to  property owned  by Grantor and Grantee as tenants in c
  3. The size or quantum of interest reserved and conveyed was changed.
  4. A recorded 1/16 interest to a third party was recognize
  5. An option to extend by mutual consent was included in the correction deed

The court held that the doctrine of ―relation back‖ did not apply.  There is authority that

―a correction deed generally relates back to the date of the agreement, which it purports to express more accurately.‖ However, it is also held that ―a correction deed takes precedence over and is in substitution of the document that it seeks to correct.‖

Grantee argued that the recitals in the correction deeds assert  as  the  purpose  only  the failure to note the outstanding royalty interest and the error in the quantum of interest reserved and conveyed. Because each correction deed continued by reciting that the correction deed ―in all other respect ratifies and confirms such former Deed,‖ Grantee contended that the twenty-five year reservation should begin in 1977. Grantee thus argued that the only changes were merely scrivener’s errors, and the issue should be governed by the date of the original deeds.
Only one of the 1978 deeds was labeled as a ―correction‖ deed, but the court focused on the substance of the deeds rather than the label. The court applied the general rules of construction that to determine the intent of the parties all of the express language within the four corners of the document should be examined. Although the court considered all of the substantive revisions, the fact that the language ―from the date hereof‖ only appeared in the correction deeds carried considerable weight. The correction deeds could have recited that they were retroactive to 1977, but they recited ―from the date hereof.‖ The deeds expressed the intent of the parties to do more than simply correct some facial imperfections in title or to correct scrivener’s errors.
Any recital of ―from the date hereof‖ carries some risk because many deeds will have different dates, such as:  date of execution, effective date, and multiple dates of acknowledgment – and any one of those dates could be left blank. The better practice, particularly when a term interest is involved, would be to recite a date certain.