Face Challenges Confidently

337 Escondido Servs., LLC v. VKM Holdings

Monday, August 31st, 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.
 
Escondido Services, LLC v. VKM Holdings, LP, 321 S.W.3d 102 (Tex. App.—Eastland 2010, no pet.), held that the strip and gore doctrine can convey the mineral estate under a small strip of land when the landowners later convey land adjacent to the strip. In 1997, Grantor conveyed a fourteen acre tract of land (“the Highway Strip”) to the State of Texas for the construction of a highway. The deed expressly reserved all the mineral rights but waived the rights of ingress and egress. In 2001, Grantor conveyed four tracts of land adjacent to the Highway Strip to Grantee. Various successors in interest (referred to herein for simplicity as the original parties to the deeds) contested the ownership of the minerals in the Highway Strip under the strip and gore doctrine. The trial court granted summary judgment for Grantee and held that Grantee had superior title to the minerals pursuant to the strip and gore doctrine.
 
The strip and gore doctrine presumes that “when a grantor conveys land he owns adjacent to a narrow strip that thereby cease to be of benefit or importance to him, he also conveys the narrow strip unless he plainly and specifically reserves the strip for himself in the deed by plain and specific language.” Thus, it has frequently been held that the conveyance of a tract adjacent to a road includes the road to the centerline of the road.
 

It is our conclusion that this doctrine was conceived and intended to apply to relatively narrow strips of land, small in size and value in comparison to the adjoining tract conveyed by the grantor. In these instances, when it is apparent that the narrow strip has ceased to be of benefit or importance to the grantor of the larger tract, it can be presumed that the grantor intended to convey such a strip.

The court of appeals rejected Grantor’s first argument that the strip and gore doctrine does not apply to a mineral interest underneath land that was separately conveyed via a deed rather than an easement. The court declined to distinguish between conveyance by deed rather than an easement in applying the strip and gore doctrine. “[T]he grantor’s property interest in the strip does not have to benefit his property interest in the larger tract being conveyed in order for the strip and gore doctrine to apply.” The question is not whether the strip benefits the Grantee, but whether the strip ceases to be of benefit or importance to the Grantor.
 
The court also rejected Grantor’s argument that there was no ambiguity in the deed to Grantee, and, therefore, the strip and gore presumption should not apply. The court held that there was uncertainty in the land being conveyed because the deed to Grantee described the boundary as the Highway Strip and did not specifically state whether or not the Grantor reserved or conveyed the mineral interest under the Highway Strip. The court also rejected Grantor’s contention that the strip and gore doctrine could not apply to the Highway Strip because the State of Texas had not constructed the roadway when the land was conveyed to Grantee.  The court stated that “[t]he critical factor in applying the strip and gore doctrine is the existence of the strip at the time of conveyance rather than the roadway that may subsequently be constructed within the strip.”
 
Finally, Grantor argued that the mineral interest did not cease to be of benefit to the Grantor at the time of the conveyance. The court held there was sufficient summary judgment evidence demonstrating that the mineral interest was no longer of benefit to the Grantor. Grantor’s deed to the State of Texas reserved the mineral rights under the Highway Strip but waived the rights of ingress and egress, and Grantor’s deed to Grantee did not reserve any mineral interest. The court reasoned that the minerals under the Highway Strip could not be of benefit to Grantor because he had no access to the minerals. Therefore, without any contravening evidence, it was reasonable to presume Grantor intended to convey the mineral interest under the Highway Strip to Grantee. Grantor claimed a mineral lease for property five miles from the Highway Strip executed eight months after Grantor’s deed to Grantee demonstrated that the mineral interest was of value to Grantor. The court held that the benefit or importance had to be determined as of the date of the deed to Grantee, and therefore there was no evidence to raise a fact question.
 
The case repeats some well-established principles applicable to the strip and gore doctrine but applies them specifically to minerals in the context of a conveyance of a right-of- way in fee. It also clarifies the application of the doctrine as to issues of timing and valuation in determining whether the strip will be presumed to have no continuing value or no continuing value to the Grantor.