SCOTX Decision Affirms Summary Judgment for Oil and Gas Producer in Suit to Quiet Title, But Remands to Trial Court for Further Proceedings

The Texas Supreme Court has affirmed a summary judgment in favor of an oil and gas producer who acquired the interests of more than 250 mineral owners in a tax foreclosure sale. At the same time, however, the Court returned the case to the trial court for further proceedings in light of the Court’s recent decisions.

Huntley Gill, Robyn G. Attaway, and Miriam G. Stirn v. David Hill, Individually and d/b/a DOH Oil Company (No. 22-0913; April 26, 2024) stemmed from a 1998 foreclosure sale in which Hill acquired mineral interests of owners who failed to ad valorem taxes to the Pecos-Barstow-Toyah ISD, Reeves County, and Reeves County Hospital District. The taxing entities’ lawyer filed a citation-by-posting affidavit claiming that the names and residences of the owners were unknown and could not be ascertained after diligent inquiry. The court appointed an ad litem lawyer to represent the property owners, but after a bench trial, the trial court rendered judgment authorizing the foreclosure. Two decades later, Plaintiffs’ successors in interest filed a declaratory judgment action to void the foreclosure sale and quiet title to the interests in their names, alleging a violation of their due process rights (failure of service of citation). Defendant moved for summary judgment based on the one-year statute of limitations for challenges to property sold in a tax sale pursuant to § 33.54(a)(1), Tax Code. The trial court granted the motion. On appeal, the El Paso Court of Appeals affirmed, albeit in a split decision. Plaintiffs sought review.

In an opinion by Justice Huddle, SCOTX affirmed. She commenced her analysis with the Court’s ruling in Draughon v. Johnson, 631 S.W.3d 81 (Tex. 2021), which held that a summary judgment motion based on limitations “must also conclusively negate application of the discovery rule and any tolling doctrines pleaded as an exception to limitations.” As to the plaintiff’s burden, the Court further held that “[t]he defendant has the burden regarding any issues raised that affect the runnning of limitations, while the plaintiff has the burden to raise a fact issue on equitable defenses that defeat limiations even though it has run.” In this case, Plaintiffs asserted that limitations cannot bar their suit because their due process rights were violated by the failure of citation of service. In a second case arising from the sameforeclosure sale, Mitchell v. MAP Resources, Inc. 649 S.W.3d 180 (Tex. 2022), plaintiffs countered the defendant’s limitations defense by presenting evidence of warranty deeds on file in the public records showing an address at which one of the owners could have received service. In this case, the Court held that the trial court had to consider those public records in determining whether service on the former owner by publication satisfied due process. The Court thus reversed summary judgment for defendant based on limitations under the Tax Code.

Here, however, Plaintiffs presented no evidence other than their argument. Instead, they relief on the Mitchell case, arguing that since notice was inadequate as to one former owner, it was inadequate as to all. The Court rejected this argument, stating that “an inquiry undergirding the adequacy of due process is individualized to the circumstances of the person to whom notice is directed” (citations omitted). Additionally, the trial court could not in any event have taken judicial notice, as Plaintiffs argued, of the facts in Mitchell as applying equally to them. The Court thus affirmed the trial court judgment in favor of Defendant. Nevertheless, the Court went on to say that since summary judgment in this case occurred before Draughon and Mitchell, Texas Rules of Appellate Procedure 60.2(f) and 60.3 allow the Court to remand when justice requires in the event of intervening developments in controlling law. The Court thus remanded to the trial court in the interest of justice.