The 11th Court of Appeals has affirmed two partial summary judgements granted by a Midland trial court in a mineral interest dispute that generated two permissive appeals to the court of appeals.
The Thagard Mineral Partnership, LP v. Michael L. Cass et al. (No. 11-23-00207-CV; August 21, 2025) arose from a dispute over the ownership of overriding royalty interests (ORRI) and property rights to the subject property, Sections 32 and 41 of Block 38, Township 4 South in Midland County. Cass assigned overriding royalty interests (ORRI) to Thagard in 1990. Thagard then assigned to Cass “all of [Thagard’s] right, title, and interest in and to the lands, tracts, oil and gas and/or mineral leases and leasehold interests” in the property. Thagard asserted that these transactions were part of an ongoing, verbal agreement between he and Cass under which Thagard would acquire leases and assign them to Cass for an ORRI. Thagard alleged that he executed the assignment to “facilitate the transaction between Cass and Plains Petroleum, not to convey Thagard’s ORRI to Cass.”
In the interim between the Thagard Agreement and the later deal between Cass and Plains Petroleum, Thagard executed several division orders with other companies, including XTO, and a stipulation of interest with Cass. Cass’s agreement with Plains Petroleum conveyed the same assets which were conveyed to him by Thagard in their agreement. In 2018 XTO suspended ORRI payments to Thagard for Sections 32 and 41 because of the ownership dispute. XTO further suspended payment on leases other than Sections 32 and 41 to recoup alleged overpayments on them. In response, Thagard filed suit against Cass and XTO, seeking declaratory and equitable relief, including to quiet title to the ORRI, damages from XTO, attorney’s fees from Cass and XTO, and costs. Defendants filed counterclaims against Thagard for money had and received, premised on the wrongful ORRI payments. Cass asserted crossclaims against XTO for as fraud and breach of contract in addition. The RIM parties (remaining parties in appeal) intervened, claiming that they were owners of mineral and royalty interests that Cass had conveyed to Plains Petroleum, the predecessor in interest to the RIM parties, including interests in depths below 8,700 feet that Cass claimed to own.
The trial court granted partial summary judgment in favor of Cass concerning both title disputes, the one between Thagard and Cass and the other between Cass and the RIM parties. First, it determined that Thagard unambiguously conveyed all of Thagard’s property interests in the Midland County tracts, including all ORRI. Second, it found that Cass’s assignment to Plains conveyed Cass’s entire mineral fee interest in the Midland County tracts, including those to all depths below 8,700 feet. Both parties requested permissive appeal, which the trial court permitted and the court of appeals accepted. The trial court identified two controlling questions of law: (1) whether the assignment executed between Thagard and Cass unambiguous and a successful transfer to Cass of all right, title and interest that Thagard owned, and (2) whether the second assignment between Cass and Plains successful in transferring Cass’s entire mineral fee interest in all depths in the same property. Thagard also appealed, challenging the trial court’s finding that his assignment to Cass was unambiguous and that it transferred his royalty or leasehold interests to Cass. Cass argued on appeal that the trial court erred in its determination that the second assignment transferred the entirety of Cass’s mineral fee interest at all depths.
In an opinion by Justice Trotter, the court of appeals affirmed. Thagard argued that the Thagard Assignment was facially incomplete because 1) it refers to leases listed on Exhibit A, but no leases are listed under Exhibit A, resulting in a material omission, and 2) the Thagard Assignment purports to be “subject to” a missing instrument. Because of these “ambiguities,” he contended, extrinsic evidence must be used to complete the contract terms. Additionally, even if the Thagard Agreement was complete, Thagard argued, it would fail to convey any ORRI because it fails to satisfy requirements under the statute of frauds. Cass countered, stating that a reasonable interpretation of the agreement was the conveyance of all of Thagard’s interests in Sections 32 and 41, and that the scope of the conveyance and its effective date can be determined as a matter of law. Cass further argued against Thagard’s missing instrument argument, contending that the “subject to” phrase in Exhibit A refers to the Thagard Assignment itself. Thagard, however, pointed to the language in the assignment stating that it was “subject to that certain Assignment, Bill of Sale and Conveyance dated July 5th, 1990 by and between Greg Thagard, Assignor, and Michael L. Cass, Assignee.” He reasoned that there must be an additional assignment, which limits the description in Exhibit A of the Thagard Assignment. According to the Deed Records of Midland County, no such document exists. Cass disagreed, asserting that there was no other assignment. Finding no evidence of a preceding assignment, the court rejected Thagard’s ambiguity argument.
The court next turned to Thagard’s argument that the property description in the assignment (Exhibit A) was incomplete and ambiguous because Exhibit A listed no leases. The court. however, pointed out that granting language of the assignment conveyed “all of [Thagard’s] right, title, and interest in and to the lands, tracts, oil and gas and/or minerals and leasehold interests in and to the subject lands, which are listed and to the extent described” in Exhibit A. While Thagard correctly argued that the description of the interest in the exhibit controlled the scope of the grant, he didn’t also acknowledge that an “instrument of conveyance of real property passes whatever interest the grantor has in the land, unless if contains language expressing the intention to grant a lesser estate.” Rahlek, Ltd. v. Wells, 587 S.W.3d 57, 64 (Tex. App.—Eastland 2019, pet. denied). Consequently, “in proper context, the description of the interest in the exhibit is controlling, regardless of the breadth of the granting language.” Looking to the specific language of the grant, the court found no language “that limits the grant to the surface estate only, nor does it contain any exceptions from the grant whatsoever. As such, it does not at all narrow or limit the broad granting language contained in the Thagard Assignment.”
Next, the court addressed the effective date of the Thagard Assignment, which was tied to the “first runs” of the “leases listed” in Exhibit A. The assignment didn’t define “first runs,” but the effective date “appears to be a condition precedent, for which an exception to the parol evidence rule exists.” The court determined that the effective date postponed the date of the instrument until a future contingency occurred. To determine that question, the court “return[ed] to the question of whether the property description that is contained in Exhibit A is sufficient because it provides the information needed to locate the land,” which the court concluded that it was. If the exhibit sufficiently identified the location of the interests associated with the grant, parties could determine the first production dates of the leases by referring to the leases themselves and “pertinent Railroad Commission information.” The court thus held that the assignment was unambiguous and conveyed to Cass all of Thagard’s right, title, and interest, including ORRI. The trial court correctly granted partial summary judgment for Cass on this issue.
As to Cass’s dispute with the RIM parties, the question was whether the second assignment unambiguously transferred Cass’s entire mineral fee interest in all depths of the subject property. Cass argued that the conveyance was limited to the depths described, while the RIM parties argued that the assignment conveyed “all” of Cass’s personal right, title and interest in the mineral fee interest without limitation regarding depths. Again, the court observed, because the granting language refers to Exhibit A to describe the property being conveyed, the description of the property in the exhibit controls the scope of the grant. Here the exhibit’s table of Producing Properties listed no depth limitations, which appear only in the “Leases Covering” section as to the Midland County properties at issue in this case. The court interpreted these two sections as addressing different aspects of the conveyance. The “Producing Properties” table unambiguously identified Cass’s personal interests, including mineral interests. The “Leases Covering” section, by contract, didn’t mention Cass’s personal interests of any kind, but only addressed the leases that cover “Producing Properties,” which included the 8,700-foot depth limitation on the Midland leases. Finding a “minor ambiguity” between the two parts of the exhibit, the court read the broad granting language “in favor of a broader reading of the assignment.” The granting language unambiguously conveyed everything Cass owned in the “Producing Properties” list, which did not reserve the depths below 8,700 feet.
The court held that “because (1) Exhibit A contains minor ambiguities, (2) the granting language throughout the assignment is very broad, (3) Exhibit A is segregated into two parts and labeled for different purposes, and (4) the first part of Exhibit A does not contain express depth limitations but does include decimal percentages that are disclaimed as for ‘informational purposes only,’ the depth limitations in the second part of Exhibit A cannot be read to apply to the properties that are described in the table in the first part of Exhibit A ….” Since Cass conveyed all of his personal interests in the mineral fee, including royalty interests, the trial court did not err by granting summary judgment in favor of the RIM parties.
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
