Yates Energy Corporation, EOG Resources, Inc., Jalapeno Corporation, ACG3 Mineral Interests, Ltd., Glassell Non-Operated Interests, Ltd., and Curry Glassell v. Broadway National Bank, Trustee of the Mary Frances Evers Trust ( 2018 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-17-00310-CV
YATES ENERGY CORPORATION, EOG Resources, Inc., Jalapeno Corporation, ACG3
Mineral Interests, Ltd., Glassell Non-Operated Interests, Ltd., and Curry Glassell,
Appellants
v.
BROADWAY NATIONAL BANK, Trustee of the Mary Frances Evers Trust,
Appellee
From the Probate Court No. 2, Bexar County, Texas
Trial Court No. 2015PC2618
Honorable Tom Rickhoff, Judge Presiding
Opinion by: Marialyn Barnard, Justice
Concurring Opinion by: Patricia O. Alvarez, Justice
Sitting: Marialyn Barnard, Justice
Patricia O. Alvarez, Justice
Irene Rios, Justice
Delivered and Filed: December 19, 2018
REVERSED, RENDERED AND REMANDED
Appellee Broadway National Bank, Trustee of the Mary Frances Evers Trust (hereinafter,
“Broadway Bank”), brought suit against appellants, Yates Energy Corporation, EOG Resources,
Inc., Jalapeno Corporation, ACG3 Mineral Interests, Ltd., Glassell Non-Operated Interests, Ltd.,
and Curry Glassell, seeking a declaration as to the validity of an amended correction deed covering
real property interests in DeWitt County and Gonzales County. After the parties filed competing
motions for summary judgment, the probate court granted summary judgment in favor of
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Broadway Bank and declared, among other things, the amended correction deed to be a valid deed
that conveyed only a life estate to Eben John Evers (“John”). On appeal, appellants argue the
probate court erred in: (1) granting summary judgment in favor of Broadway Bank because the
suit was barred by limitations as a matter of law; (2) finding that the 2003 Trust Amendment
authorized the trustee to convey only a life estate to John; and (3) concluding the amended
correction deed complied with the requirements of the material corrections statute as set out in
section 5.029 of the Texas Property Code (“the Code”). Appellants further contend that in the
event we determine the amended correction deed to be a valid deed, any rights claimed under it
are subject to appellants’ interests pursuant to section 5.030 of the Code. Finally, appellants argue
the probate court erred in denying their breach of express warranty claim against Broadway Bank
and denying their request for attorney’s fees. After consideration, we reverse judgment of the
probate court and render judgment that the amended correction deed did not comply with the
requirements of the material corrections statute as set out in section 5.029 of the Code. With
respect to appellants’ breach of express warranty counterclaim, we reverse the probate court’s
judgment denying the counterclaim and remand the counterclaim and the issue of attorney’s fees
to the probate court for further proceedings consistent with this court’s opinion.
BACKGROUND
This case concerns the ramifications of an amended correction deed executed in 2013 (“the
2013 Amended Correction Deed”) by Broadway Bank, as trustee of an intervivos trust created by
Mary Frances Evers. During her lifetime, Mary executed several amendments to the trust. The
final amendment was dated February 28, 2003 (“the 2003 Trust Amendment”) and, among other
things, set out how the trust property would be allocated upon her death. On September 3, 2003,
Mary died, and at the time of her death, the trust estate included mineral interests in DeWitt County
and Gonzales County.
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According to the terms of the 2003 Trust Amendment, upon Mary’s death, Broadway
Bank, as trustee, was responsible for allocating the trust property to Mary’s descendants who
survived her in per stirpes shares. It is undisputed that Mary’s surviving descendants included her
four children: Mariellen Evers Dyal, Sandra Evers Pierce, Jamie Evers Drago, and John. The 2003
Trust Amendment further provided that Broadway Bank “shall distribute each share allocated for
a descendant of settlor (other than Mariellen Evers Dyal, Eben John Evers or any descendant of
William Harry Evers) to such descendant, per stirpes.” With regard to any share of trust property
allocated for a child of settlor but not distributed, that share should be distributed to Broadway
Bank to hold as trustee in a separate trust for that descendant. The 2003 Trust Amendment also
provided that with regard to the trust estate allocated to John, in the event his separate trust did not
terminate during his lifetime, then it should terminate upon his death with the remaining trust estate
to be divided into two equal shares: (1) one share being distributed to Jamie, if she survives John,
and if she does not survive him, then her surviving descendants, per stirpes and (2) the other share
being distributed to Mike E. Dyal, if he survives John, and if he does not survive him, then his
surviving descendants per stirpes.
In addition to these provisions, the 2003 Trust Amendment included a section outlining the
powers of the trustee. Specifically, Mary granted the trustee all the powers conferred on trustees
by Texas trust law. Mary also granted the trustee additional enumerated powers, including the
power “to sell, exchange, encumber, lease for any period, or otherwise dispose of any asset of a
trust estate, publicly or privately, with or without notice, wholly or partly for cash or credit, without
appraisal, and to give options for those purposes.”
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In 2005, Broadway Bank, acting as trustee of the trust, executed a Mineral Deed (“the 2005
Mineral Deed”), which conveyed, among other interests, 1 an undivided 25% interest in the trust’s
mineral interests in DeWitt County and Gonzales County to John. It is undisputed that the
conveyance was in fee simple. Thereafter, in 2006, Broadway Bank executed a Correction Mineral
Deed (“the 2006 Correction Mineral Deed”), changing the fee mineral interest conveyed to John
to a life estate. The 2006 Correction Mineral Deed further conveyed the remainder mineral interest
in the following amounts to Jamie’s descendants 2 – Benjamin Drago (1/4) and Mary Drago
Strebeck (1/4) – and to Mike E. Dyal (1/2). It is undisputed John did not sign the 2006 Correction
Mineral Deed.
In 2012, John executed a Royalty Deed (the “2012 Royalty Deed”), conveying all of his
“right, title and interest in and to any and all royalty interests in oil, gas, and other minerals
produced, saved, and marketed from the lands covered by those certain oil and gas leases described
on Exhibit ‘A’” to Yates Energy Corporation. The leases listed in Exhibit A included multiple
leases covering the mineral interests in DeWitt County and Gonzales County that were conveyed
to John by Broadway Bank. The 2012 Royalty Deed was dated effective February 1, 2012 and
thereafter filed and recorded in the DeWitt County and Gonzales County deed records. John also
executed an Assignment of Overriding Royalty Interest, assigning all of his right, title, and interest
in any and all the overriding royalty interests in the oil, gas, and other minerals produced from
certain leases, including those leases covering the subject interests, to the Yates Energy
Corporation. The assignment was also dated effective February 1, 2012 and filed and recorded in
1
In addition to the conveyance to John, the 2005 Mineral Deed also conveyed the trust’s mineral interests in DeWitt
County and Gonzales County to the following individuals in the following portions: (1) an undivided 25% interest to
Sandra Evers Pierce; (2) an undivided 12.5% interest to Benjamin F. Drago; (3) an undivided 12.5% interest to Mary
Drago Strebeck; (4) an undivided 8.33% interest to Traci L. Cole; (5) an undivided 8.34% interest to Mike E. Dyal;
and (6) an undivided 8.33% interest to Patrick T. Dyal.
2
The record reflects Jamie died on October 13, 2004.
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the DeWitt County and Gonzales County deed records. Yates Energy Corporation then, pursuant
to a farmout agreement with EOG Resources, assigned 70% of its rights in the royalty interests to
EOG Resources. Ultimately, Yates assigned its remaining rights in the royalty interests to
Jalapeno Corporation, EnerQuest Oil & Gas, LLC, ACG3 Mineral Interests, Ltd., Glassell Non-
Operated Interests, Ltd., Curry Glassel, DKE Dyersdale, Inc., Cathy Dohnalek, Walter Mengden,
Jr., WHMIII Dubose, LLC, Joseph Mengden, Carl C. Mengden, Susan Mengden, Michel C.
Mengden, and Pati-Dubose, Inc. These instruments were also dated effective February 1, 2012,
and filed and recorded in the DeWitt County and Gonzales County deed records.
In August of 2013, a title attorney informed EOG Resources that the 2006 Correction
Mineral Deed raised a number of concerns, first of which that it could be considered to be invalid
because it was not executed by the grantees of the 2005 Mineral Deed. To further complicate
matters, the title attorney indicated the 2003 Trust Amendment could be interpreted as only
authorizing Broadway Bank to convey a life estate in the trust property to John, and in the event
of such interpretation, then Broadway Bank could only convey what it was authorized to convey
to John as opposed to the fee simple estate in minerals it conveyed in the 2005 Mineral Deed. The
title attorney concluded that for the 2006 Correction Mineral Deed to be valid, an amended
correction deed should be executed by “all of the parties to show that [John] and all of the
[g]rantees to said [2005 Mineral Deed] accept the change of ownership in the [2006 Correction
Mineral Deed].” The title attorney further concluded that if an amended correction deed was
executed, it would affect the type of interest – life estate or fee – John conveyed to Yates Energy
Corporation in the 2012 Royalty Deed and Assignment of Overriding Royalty Interest, and
subsequently, the type of interest Yates Energy Corporation assigned to EOG Resources. The title
attorney advised that if EOG Resources wanted to secure a full fee estate interest, it needed to
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obtain John’s life estate interest from Yates Energy Corporation and assignments of overriding
royalty from the remaindermen identified in the 2006 Correction Deed.
On November 4, 2013, Broadway Bank ultimately executed an amended correction deed
(“the 2013 Amended Correction Deed”), which was signed by Broadway Bank, John, and all of
the original grantees of the 2005 Mineral Deed. The 2013 Amended Correction Deed, however,
was not signed by Yates Energy Corporation or any of the assignees in the subsequent assignments
executed by Yates Energy Corporation. The 2013 Amended Correction Deed provided that the
2005 Mineral Deed made an incorrect conveyance of fee to John and stated it replaced the 2005
Mineral Deed. Under the 2013 Amended Correction Deed, Broadway Bank conveyed a life estate
in an undivided 25% of trust’s mineral interests in DeWitt County and Gonzales County to John,
with a remainder interest to Benjamin Drago (1/4), Mary Drago Strebeck (1/4), and Mike E. Dyal
(1/2).
On February 10, 2014, John died, and the parties disputed whether the royalty interests
John conveyed to Yates Energy Corporation and that Yates subsequently assigned to others vested
in Benjamin Drago, Mary Drago Strebeck, and Mike E. Dyal – the remaindermen identified in the
2013 Amended Correction Deed. On July 31, 2015, Broadway Bank filed a request for declaratory
relief against Yates Energy Corporation, EOG Resources, Jalapeno Corporation, EnerQuest Oil &
Gas, LLC, ACG3 Mineral Interests, Ltd., Glassell Non-Operated Interests, Ltd., Curry Glassel,
DKE Dyersdale, Inc., Cathy Dohnalek, Walter Mengden, Jr., WHMIII Dubose, LLC, Joseph
Mengden, Carl C. Mengden, Susan Mengden, Michel C. Mengden, and Pati-Dubose, Inc. In its
request for declaratory relief, Broadway Bank sought a declaration that: (1) Yates Energy
Corporation acquired only a life estate under the 2012 Royalty Deed, and (2) Mike E. Dyal and
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Westco Family Limited Partnership 3 currently own the remainder interests. In its petition,
Broadway Bank also alleged Dyal and Westco Family Limited Partnership were necessary parties;
subsequently, Dyal and Westco Family Limited Partnership answered and filed cross-claims
against Yates Energy Corporation, EOG Resources, Jalapeno Corporation, EnerQuest Oil & Gas,
LLC, ACG3 Mineral Interests, Ltd., Glassell Non-Operated Interests, Ltd., Curry Glassel, DKE
Dyersdale, Inc., Cathy Dohnalek, Walter Mengden, Jr., WHMIII Dubose, LLC, Joseph Mengden,
Carl C. Mengden, Susan Mengden, Michel C. Mengden, and Pati-Dubose, Inc. also seeking the
same declarations as Broadway Bank.
In response, the defendants filed multiple answers, raising several affirmative defenses,
including limitations, statute of frauds, laches, and estoppel by deed. The defendants also filed
counterclaims for breach of express warranty and declaratory relief, requesting declarations that:
(1) the 2005 Mineral Deed was binding and enforceable; (2) the 2006 Correction Mineral Deed
and 2013 Amended Correction Deed were ineffective; (3) Yates Energy Corporation’s status as a
bonafide purchaser is irrelevant because the 2006 Correction Mineral Deed and 2013 Amended
Correction Deed were ineffective; and (4) Broadway Bank’s express warranty of title and duty to
defend extends to EOG Resources as John’s successor and assign under the 2005 Mineral Deed.
Broadway Bank then moved for summary judgment on its declaratory judgment action, and in
response, the defendants filed multiple responses and cross-motions for summary judgment on
their counterclaim for declaratory relief and affirmative defenses.
The probate court ultimately granted summary judgment in favor of Broadway Bank,
declaring: (1) the 2013 Amended Correction Deed to be a valid deed that granted John only a life
3
It is undisputed that by February 4, 2014, Westco Family Limited Partnership acquired all interests of Benjamin
Drago and Mary Drago Strebeck, including any mineral and royalty interests conveyed to them in the 2006 Correction
Mineral Deed.
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estate in the mineral interests; (2) Yates Energy Corporation only received a life estate in the
interests it obtained from John; and (3) Dyal and Westco Family Partnership own the remainder
interests which vested in them upon John’s death. Thereafter, the probate court rendered a final
judgment, incorporating the probate court’s order granting summary judgment in favor of
Broadway Bank as well as an order awarding attorney’s fees to Dyal and Westco Family
Partnership. The final judgment also dismissed all the claims and causes of action asserted by or
against the following defendants: DKE Dyersdale, Inc., Cathy Dohnalek, Walter Mengden, Jr.,
WHMIII Dubose, LLC, Joseph Mengden, Carl C. Mengden, Susan Mengden, Michel C. Mengden,
and Pati-Dubose, Inc. Appellants then perfected this appeal.
ANALYSIS
On appeal, appellants raise several issues, arguing the probate court erred in: (1) granting
summary judgment in favor of Broadway Bank because the suit was barred by limitations as a
matter of law; (2) finding that the 2003 Trust Amendment authorized the trustee to convey only a
life estate to John; and (3) concluding the 2013 Amended Correction Deed complied with the
requirements of the material corrections statute as set out in section 5.029 of the Code and thus,
effectively replaced the 2005 Mineral Deed. Appellants further contend that in the event we
determine the 2013 Amended Correction Deed to be a valid deed, any rights claimed under it are
subject to appellants’ interests pursuant to section 5.030 of the Code. Finally, appellants argue the
probate court erred in denying its breach of express warranty claim against Broadway Bank and
denying its request for attorney’s fees.
Standard of Review
We review a trial court’s grant of summary judgment de novo. Nassar v. Liberty Mut. Fire
Ins. Co., 508 S.W.3d 254, 257 (Tex. 2017); Jarzombek v. Ramsey, 534 S.W.3d 534, 535-36 (Tex.
App.—San Antonio 2017, pet. denied). To prevail on a traditional motion for summary judgment,
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the movant must show “there is no genuine issue as to any material fact and the [movant] is entitled
to judgment as a matter of law.” TEX. R. CIV. P. 166a(c); Nassar, 508 S.W.3d at 257; Jarzombek,
534 S.W.3d at 536; Webb v. Martinez, No. 04-16-00042-CV, 2016 WL 7234044, at *1 (Tex.
App.—San Antonio 2016, no pet.) (mem. op.). “When a party moves for a no-evidence summary
judgment, the nonmovant must produce some evidence raising a genuine issue of material fact.”
Webb, 2016 WL 7234044, at *1 (quoting Romo v. Tex. Dep’t of Transp., 48 S.W.3d 265, 269 (Tex.
App.—San Antonio 2001, no pet.)). “In reviewing the granting of a traditional summary judgment,
we consider all the evidence in the light most favorable to the non-movant, indulging all reasonable
inferences in favor of the non-movant.” Whitfield v. Ondrej, No. 04-15-00052-CV, 2016 WL
7383823, at *3 (Tex. App.—San Antonio 2016, no pet.) (mem. op.). When, as is the case here, all
parties move for summary judgment and the trial court grants one but denies the others, we review
all the summary judgment evidence, determine all the issues presented, and render the judgment
the trial court should have rendered. Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520
S.W.3d 39, 45 (Tex. 2017).
Material Corrections Statute
Because it is dispositive, we begin by addressing appellants’ argument that the 2013
Amended Correction Deed is invalid because it failed to comply with the material corrections
statute. According to appellants, the statute requires the 2013 Amended Correction Deed to be
executed by John’s successors and assigns – in this case, Yates Energy Corporation, EOG
Resources, Jalapeno Corporation, EnerQuest Oil & Gas, LLC, ACG3 Mineral Interests, Ltd.,
Glassell Non-Operated Interests, Ltd., Curry Glassel, DKE Dyersdale, Inc., Cathy Dohnalek,
Walter Mengden, Jr., WHMIII Dubose, LLC, Joseph Mengden, Carl C. Mengden, Susan
Mengden, Michel C. Mengden, and Pati-Dubose, Inc. Appellants contend that because John’s
successors and assigns owned a portion of the disputed interests when the 2013 Amended
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Correction Deed was executed, the “if applicable” clause of the material corrections statute was
triggered, requiring the successors and assigns to execute the deed. Appellants further contend
that requiring only the original parties of the deed rather than the current interest holders to execute
a correction deed would harm subsequent purchasers and cause title instability by divesting
subsequent purchasers of property for which they paid consideration. Appellants therefore
conclude that because the 2013 Amended Correction Deed was not signed by John’s successors
and assigns, it did not comply with the material corrections statute as a matter of law, and as a
result, John was conveyed a fee simple estate in the mineral interests under the 2005 Mineral Deed.
In response, Broadway Bank contends appellants’ interpretation of the material corrections
statute ignores the plain language of the statute. Pointing to the word “or,” Broadway Bank
contends the material corrections statute requires a correction deed to be executed by either the
original parties to the deed, or in the event an original party is unavailable, then that party’s heirs,
successors, or assigns. According to Broadway Bank, appellants’ concern that its interpretation
would harm subsequent purchasers ignores the protection section 5.030(b) provides to subsequent
purchasers who qualify as bonafide purchasers. Broadway Bank therefore concludes that because
the 2013 Amended Correction Deed was properly executed by the parties to the original instrument
– Broadway Bank and John – the deed replaced the 2005 Mineral Deed.
Applicable Law
The Code authorizes the correction of a recorded instrument of conveyance of real
property. See TEX. PROP. CODE ANN. §§ 5.028 & 5.029. These statutes – commonly known as the
correction-instrument statutes – were added by the Legislature in 2011 in response to the Texas
Supreme Court’s decision in Myrad Properties, Inc. v. La Salle Bank National Ass’n, 300 S.W.3d
746 (Tex. 2009), which held a correction deed could not convey additional property. Tanya L.
McCabe Trust v. Ranger Energy LLC, 531 S.W.3d 783, 794 (Tex. App.–Houston [1st Dist.] 2016,
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pet. denied). The specific requirements a party must comply with depends on whether the
correction being made to the original instrument is nonmaterial or material. See TEX. PROP. CODE
ANN. §§ 5.028 & 5.029. Under section 5.028 of the Code, a person with personal knowledge of
the facts relevant to the correction of an original instrument may execute a correction instrument
that makes a nonmaterial change. See TEX. PROP. CODE ANN. § 5.028.
Here, however, it is undisputed that the 2013 Amended Correction Deed made a material
correction to the 2005 Mineral Deed by changing the conveyance to John from fee simple to a life
estate. In cases in which a material correction is made, we turn to section 5.029 for guidance. See
id. § 5.029. Section 5.029(a) begins by identifying who may execute a correction instrument that
makes a material correction. Id. § 5.029(a). It states:
In addition to nonmaterial corrections, including the corrections described
by Section 5.028, the parties to the original transaction or the parties’ heirs,
successors, or assigns, as applicable may execute a correction instrument to make
a material correction to the recorded original instrument of conveyance. . . .
Id. Section 5.029(b) then identifies who must execute the correction instrument, providing that:
A correction instrument under this section must be:
(1) executed by each party to the recorded original instrument of conveyance
the correction instrument is executed to correct or, if applicable, a party’s heirs,
successors, or assigns; and
(2) recorded in each county in which the original instrument of conveyance that
is being corrected is recorded.
Id. § 5.029(b) (emphasis added). A correction instrument that complies with either the nonmaterial
or material correction statutes is deemed to be “effective as of the date of the recorded original
instrument of conveyance.” Id. § 5.030(a)(1) (emphasis added). In other words, it “replaces and
is a substitute for the original instrument.” Id. § 5.030(b).
Whether the material corrections statute requires the 2013 Amended Correction Deed to
be signed by John’s successors and assigns is an issue of statutory interpretation. We review issues
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involving statutory interpretation de novo. Tex. Lottery Com’n v. First State Bank of DeQueen,
325 S.W.3d 628, 635 (Tex. 2010); Tanya L. McCabe Trust, 531 S.W.3d at 794. When determining
the meaning of a statute, our primary objective is to give effect to the intent of the Legislature.
Laredo Merchs. Ass’n v. City of Laredo, No. 04-15-00610-CV, 2016 WL 4376627, at *4 (Tex.
App. Aug. 17, 2016), aff’d, 550 S.W.3d 586 (Tex. 2018). To determine the Legislature’s intent,
we start with the plain language of the statute before resorting to rules of construction. McIntyre
v. Ramirez, 109 S.W.3d 741, 745 (Tex. 2003). We view the statute as a whole rather than in
isolated provisions and apply ordinary meanings to any undefined words unless a different
meaning is supplied by legislative definition, is apparent from the context, or the plain meaning
leads to absurd results. Laredo Merchs Ass’n, 2016 WL 4376627, at *4; Tanya L. McCabe Trust,
531 S.W.3d at 794.
Application
Viewing the statute as a whole, we hold section 5.029 sets forth two ways in which a
correction instrument making a material change must be executed in order to replace an original
recorded instrument. See Laredo Merchs Ass’n, 2016 WL 4376627, at *4. The statute provides
that the correction instrument must be “executed by each party to the recorded original instrument”
– in other words, the original parties – or, if applicable, “a party’s heirs, successors, or assigns.”
These ways are linked by the phrase, “or, if applicable” to which we must apply an ordinary
meaning. See id.; Tanya L. McCabe Trust, 531 S.W.3d at 794. It is understood that the word “or”
is a disjunctive conjunction “used to link alternatives.” WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY 1232 (2002). “The term separates words or phrases,
indicating that ‘either of the separated words or phrases may be employed without the other.’” In
re B.N.S., 247 S.W.3d 807, 809 (Tex. App.—Dallas 2008, no pet.) (citing Jones v. State, 175
S.W.3d 927, 932 (Tex. App.—Dallas 2005, no pet.)). The phrase “if applicable” is a conditional
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clause meant to apply when appropriate or relevant. WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY 76, 865, & 1232 (2002). Therefore, when read together,
which of the two separate ways a correction instrument making a material change must be executed
depends on whether the condition outlined by the “if applicable” provision is triggered.
We hold the provision is triggered and a correction instrument making a material change
must be executed by a party’s heirs, successors, or assigns, as opposed to the original parties of
the recorded instrument, if the property interest conveyed in the original instrument has been
assigned or conveyed by an original party to that party’s heirs, successors, or assigns. And
although Broadway Bank argues against this interpretation, emphasizing the statute provides a
choice in alternatives connected by the conjunction “or,” we disagree because such an
interpretation would render the conditional clause, “if applicable,” meaningless. Here, contrary to
Broadway Bank’s assertion, the “if applicable” clause was triggered because John’s successors
and assigns were current interest holders at the time the 2013 Amended Correction Deed was
executed; in other words, they were relevant parties who were required to sign the new deed.
Accordingly, to comply with section 5.029, the 2013 Amended Correction Deed was
required to be signed by the original parties’ heirs, successors or assigns. Stated differently, the
2013 Amended Correction Deed was required to be signed by the successors in interest to
Broadway Bank, who were John and his siblings, as well as the successors and assigns to John,
which was anyone who currently held an interest in the royalty at the time the 2013 Amended
Correction Deed was signed.
Thus, based on the foregoing analysis, we hold that by including only the signatures of the
original parties to the 2005 Mineral Deed and not the signatures of the parties’ heirs, successors,
or assigns, the 2013 Amended Correction Deed did not comply with the requirements of section
5.029 of the Code, and as a result, it did not replace the 2005 Mineral Deed. See TEX. PROP. CODE
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ANN. § 5.030(a)(1). Accordingly, John received a fee simple mineral interest in the trust property
under the 2005 Mineral Deed and subsequently conveyed a fee simple royalty interest to Yates
Energy Corporation, which then assigned its rights in the royalty interests in the trust property
pursuant to a farmout agreement and series of assignments dated effective February 1, 2012. We
therefore hold the probate court erred in granting summary judgment in favor of Broadway Bank
and declare the 2013 Amended Correction Deed to be invalid.
Breach of Express Warranty
Turning to appellants’ breach of express warranty counterclaim, appellants argue the
probate court erred in denying its counterclaim against Broadway Bank. According to appellants,
Broadway Bank breached the general warranty outlined in the 2005 Mineral Deed by attempting
to change the fee mineral interest conveyed to John to a life estate. For support, appellants rely on
the “hereby warrant said title . . . and do hereby agree to defend” language in the 2005 Mineral
Deed. In response, Broadway Bank argues it did not breach any express warranty granted in the
2005 Mineral Deed because the 2005 Mineral Deed is ineffective and replaced by the 2013
Amended Correction Deed. From the probate court’s judgment, it appears the probate court denied
the relief the appellants sought in their breach of express warranty counterclaim based on its
conclusion that the 2013 Amended Correction Deed is valid. Because we hold the 2013 Amended
Correction Deed is not valid and therefore does not replace the 2005 Mineral Deed, we further
hold the probate court erred in denying appellants’ breach of express warranty counterclaim on
that basis. Accordingly, because the trial court did not otherwise address the merits of this claim,
we reverse the portion of the judgment denying appellants’ breach of express warranty
counterclaim and remand that counterclaim to the probate court for further proceedings.
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Attorney’s Fees
In their final argument, appellants argue the probate court erred in denying their request
for attorney’s fees. According to appellants, they are entitled to attorney’s fees under either
Chapter 37 of the Texas Civil Practice and Remedies Code based on their breach of express
warranty counterclaim against Broadway Bank or Chapter 38 of the Texas Civil Practice and
Remedies Code based on their counterclaim for declaratory relief.
Section 37.009 of the Texas Civil Practice and Remedies Code provides that “[i]n any
proceeding under this chapter, the court may award costs and reasonable and necessary attorney’s
fees as are equitable and just.” TEX. CIV. PRAC. & REM. CODE ANN. § 37.009. Moreover, section
38.001 of the Texas Civil Practice and Remedies Code permits an award of attorney’s fees for
breach of express warranty claims. Id. § 38.001; Medical City Dal., Ltd. v. Carlisle Corp., 251
S.W.3d 55, 63 (Tex. 2008) (holding breach of express warranty claim constitutes suit based on
written contract for purposes of section 38.001 of Texas Civil Practice and Remedies). In light of
our disposition above, we also remand the cause to the probate court for reconsideration of the
issue of attorney’s fees. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009; North Tex. Mun. Water
Dist. v. Ball, 466 S.W.3d 314, 323-24 (Tex. App.–Dallas 2015, no pet.) (remanding appeal
involving cross motions for summary judgment to trial court for determination of attorney’s fees).
CONCLUSION
Based on the foregoing, we hold the 2013 Amended Correction Deed did not comply with
the requirements of section 5.029 of the Code, and as a result, it did not replace the 2005 Mineral
Deed. We therefore reverse the probate court’s judgment in favor of Broadway Bank and render
judgment in favor of appellants that the 2013 Amended Correction Deed is invalid as a matter of
law. We further reverse the portion of the probate court’s judgment denying appellants’ breach of
express warranty counterclaim and remand the claim to the probate court for further proceedings.
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Finally, based on our reversal and rendition relating to the validity of the 2013 Amended
Correction Deed and our remand of appellants’ breach of express warranty counterclaim, we
remand the issue of attorney’s fees to the probate court for reconsideration in light of our decision.
Marialyn Barnard, Justice
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