Face Challenges Confidently

186 Moon Royalty, LLC v. Boldrick Partners

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.
Moon Royalty, LLC v. Boldrick Partners, 244 S.W.3d 391 (Tex. App.—Eastland 2007, no pet.), held that a conveyance of the wells and lands described on Exhibit ―A‖ to the assignment included two wells which were not listed on Exhibit ―A,‖ but which were located on the lands described on Exhibit ―A.‖ Statewide, as assignor, executed an assignment and an amended assignment to Moon, as assignee, which provided:

Assignor does hereby Transfer, Assign, Convey, and Deliver unto Assignee all of Assignors royalty, overriding royalty and associated mineral interests as specifically described on Exhibit ―A‖ (hereinafter called ―Interests‖) in and to the oil and gas wells described therein (hereinafter called ―Properties‖) and in and to the lands (hereinafter called “Lands”). It is specifically understood between Assignor and Assignee that Assignor may own other interest in the Properties which are not intended to be covered by this Assignment and such Interest are specifically excluded herefrom.

The italicized language did not appear in the original assignment.      Exhibit ―A‖ to the assignment consisted of a table with the following headings:

Assignor    Assignee    Date Description    County Well RI ORRI Book/
Name Page

As to each listed interest in the Statewide to Moon assignment, there was also a description of the conveyance into Statewide. The dispute involved two wells which were not listed by name on Exhibit ―A,‖ but the land on which the wells were located was listed on Exhibit ―A‖.
Statewide contended that because the granting clause was limited to the interests ―as specifically described on Exhibit ‗A‘‖ and because the clause referenced the possibility that Statewide might own other interest in ―the Properties which are not intended to be covered by this Assignment,‖ the amended assignment covered only royalty interests in the listed wells. Statewide argued that if the assignment covered all of its interest in a particular tract, then there would be no reason to describe the specific fractional interests Moon was to  receive,  or  to describe the specific wells included.
The court held that Statewide‘s interpretation would render meaningless the additional language in the amended assignment defining ―Lands.‖  The court noted that the granting clause originally contained two defined terms: ―Interests‖ and ―Properties.‖ Because ―Lands‖ was a separately defined term, and because Statewide conveyed its interests in both the ―Properties‖ and the ―Lands,‖ the term ―Lands‖ must refer to something other than the listed wells to have any meaning.   Thus, utilizing the plain meaning of the word ―land‖, and looking at the four corners of the amended assignment, this term necessarily refers to the tracts described by block and section in Exhibit ―A.‖ Therefore, Statewide conveyed a royalty interest in the listed acreage – whether a well was present or not.
The reference in the assignment to other interest Statewide might own was limited to other interest Statewide might own in the ―Properties.‖ Thus, because ―Properties‖ was defined as the oil and gas wells listed on Exhibit ―A,‖ the reference to other interest owned simply indicated that Statewide might own other interest in the described wells. The court held that the provision therefore had no bearing on the meaning of the term ―Lands‖.
The significance of the case is that it added to existing caselaw giving great weight to the description of property rights as described in the text of the granting clause, when harmonizing the text with the property descriptions on an attached exhibit.