Walter v. Clendenen v. Union Texas Petroleum Corporation

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-94-00267-CV Walter V. Clendenen, Appellant v. Union Texas Petroleum Corporation, Appellee FROM THE DISTRICT COURT OF RUNNELS COUNTY, 119TH JUDICIAL DISTRICT NO. 10,691, HONORABLE JOHN E. SUTTON, JUDGE PRESIDING PER CURIAM The district court rendered a summary judgment construing a prior judgment that had determined the ownership of certain assignments in an oil and gas lease. Because we believe that the district court correctly construed the prior judgment, we will affirm. Appellant Walter Clendenen sued appellee Union Texas Petroleum Corporation in this cause for wrongfully paying proceeds from gas production to Tom Ricks and Bill Halepeska. (1) Union Texas had contracted to buy gas produced from land subject to mineral leases in which Clendenen held a working interest. The allegedly wrongful payments were attributable to leasehold interests that Clendenen claimed were restored to him by virtue of the prior judgment. Clendenen therefore asked the trial court to declare the parties' interests in the leases in light of that prior judgment. Union Texas denied that it withheld proceeds from Clendenen. It subsequently moved for summary judgment on the ground, among others, that Clendenen sought, not a construction of the prior judgment, but an expansion of its effect that would alter his interest in the lease. Clendenen moved for summary judgment also, asserting that the prior judgment settled the issue of wrongful payment. The trial court granted summary judgment to Union Texas and denied any relief to Clendenen. Clendenen asserts in his sole point of error that the trial court erroneously construed the prior judgment, on which he bases his claims in this cause. Clendenen contests both the denial of his motion for summary judgment and the grant of Union Texas' motion. Judgments are construed like other written instruments, and summary judgment based on an unambiguous writing is proper. R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 519 (Tex. 1980); Permian Oil Co. v. Smith, 107 S.W.2d 564, 567 (Tex. 1937). Because the parties' dispute focuses not on the facts, but on the construction of the prior judgment, we review the cross-motions for summary judgment by determining all legal questions presented. Guynes v. Galveston County, 861 S.W.2d 861, 862 (Tex. 1993). Each party bears the burden of establishing that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a; Guynes, 861 S.W.2d at 862. The parties do not dispute the initial series of transactions by which interests in the mineral lease were obtained. Clendenen owned both the surface estate and a one-third interest in the mineral estate in the tracts of land on which the well was located. In 1978, Clendenen took oil, gas, and mineral leases from himself and the two remaining mineral interest holders, W. H. Varner and Mrs. H. S. Bright. He thereby obtained an undivided seven-eighths mineral interest in the tracts of land subject to the suit. Clendenen then assigned twenty-five percent of his interest in each of the three oil and gas leases to Ricks. On July 19, 1979, Clendenen assigned Ricks twenty-five percent of his interest in the Bright lease, and the assignment was recorded in volume 497, page 167 of the deed records of Runnels County, Texas. On the same date, Clendenen assigned Ricks twenty-five percent of his interest in the Clendenen lease, and the assignment was recorded in volume 497, page 170 of the same deed records. Clendenen assigned Ricks twenty-five percent of his interest in the Varner lease on March 1, 1979. R & H Operating Co., Inc., made up of Ricks and Halepeska, became the operator of the three leases. Ricks, however, proceeded to double record the assignments in the Bright and Clendenen leases: on April 21, 1980, he caused to be recorded a duplicate assignment to him in the Bright lease at volume 497, page 311, and a duplicate assignment to him in the Clendenen lease at volume 497, page 314 of the deed records of Runnels County. The duplicate assignments enabled Ricks to claim fifty percent of Clendenen's interest in the Bright and Clendenen leases. Ricks also conveyed a one-eighth working interest in the Varner lease to Halepeska. In November 1980, Clendenen sued Ricks, individually, and Ricks and Halepeska, d/b/a R. & H. Operators, to set aside "Ricks' twenty-five percent assignment in the lease." Clendenen alleged that, because of a failure of consideration or, alternatively, fraudulent inducement, the lease assignment "marked Exhibit A" should be set aside or reformed. Exhibit A, attached to the petition, is Clendenen's assignment of twenty-five percent of his interest in the Clendenen lease to Ricks, recorded on page 314. (2) This assignment is the duplicate assignment in the Clendenen lease that Ricks caused to be recorded in 1980. Union Texas was notified of Clendenen's suit and, in 1984, deposited funds into the court's registry in a separate interpleader action. Union Texas named as defendants in the interpleader action Clendenen, Ricks, and Halepeska. Union Texas pleaded that it was holding proceeds allocable to Ricks for gas purchases from August 1982 through December 1983 and allocable to Halepeska from May through December 1983. Ricks entered a stipulation in the suit in which he recognized that he owned only the original twenty-five percent interest in the three leases; according to the stipulation, that twenty-five percent interest was disputed by Clendenen. In a partial summary judgment order signed June 16, 1983, the trial court declared that Clendenen owned seventy-five percent of the seven-eighths working interest in the Bright lease. (3) The trial court rendered judgment in Clendenen's suit against Ricks on November 28, 1984, and ordered that 1. [t]he 25% of the 7/8ths oil, gas and other mineral interests heretofore conveyed on July 19, 1979, by Walter Von Clendenen to Tom E. Ricks in and to that certain property set out and described in an Assignment recorded in Volume 497, Page 314, of the Deed Records of Runnels County, Texas, be and same is hereby set aside as of the 19th day of July, 1979, and all rights purported to be conveyed are hereby vested in Walter Von Clendenen. 2. All funds held by this Court and attributable to such 25% of 7/8s of oil, gas and mineral interest in the name of Tom E. Ricks in and under the property described in the Assignment recorded in Volume 497, Page 314 of the Deed Records of Runnels County, Texas, shall be paid and delivered to Walter Von Clendenen and the Clerk of this Court is hereby authorized to make such disbursement. No other property interest is mentioned. The judgment rendered in this suit has become final. Clendenen brought the present suit against Union Texas in 1986. Clendenen pleaded that from July 1982 through July 1983, Union Texas wrongfully paid Ricks $113,094.73, and from June 1982 through July 1983, wrongfully paid Halepeska $25,553.20. Clendenen alleged that Union Texas made the payments after it was notified of Clendenen's earlier suit and from proceeds that were controverted and should have been held in suspense during that suit. Although Clendenen never specified in his pleadings the leasehold interests to which the allegedly wrongful payments were attributable, this Court may look to Union Texas' answer to supply the deficiency. Texas Dep't of Transp. v. Horrocks, 841 S.W.2d 413, 417 (Tex. App.--Dallas 1992), rev'd on other grounds, 852 S.W.2d 498 (Tex. 1993); Flatte v. Kossman Buick Co., 265 S.W.2d 643, 644 (Tex. Civ. App.--Texarkana 1954, writ ref'd n.r.e.). Union Texas alleged in its pleadings that the disputed payments were attributable to the original assignments from Clendenen to Ricks of twenty-five percent of Clendenen's interest in the three leases. Union Texas asserted in its summary-judgment pleadings that during the prior suit it continued to pay proceeds from the original twenty-five percent assignments to Ricks and Halepeska and suspended only the proceeds from the duplicate assignments, based on what it understood to be in dispute. In any event, both parties seek to resolve this suit based on the prior judgment: Clendenen claims that he is due the money because the prior judgment voided the three original lease assignments to Ricks; Union Texas claims that it properly paid Ricks and Halepeska the money because the prior judgment voided only the duplicate assignments to Ricks in the Bright and Clendenen leases. The partial summary judgment rendered in the prior cause concerns only the duplicate assignment in the Bright lease and declares that Clendenen owns seventy-five percent of the seven-eighths working interest in that lease. Although the order recites that Ricks' twenty-five percent interest in the Bright lease is disputed, that dispute is resolved by the final judgment. The final judgment in that cause refers to one specific lease assignment, recorded at volume 497, page 314 of the county deed records, and it sets aside only that assignment. The assignment set aside is the duplicate twenty-five percent assignment to Ricks in the Clendenen lease. The final judgment, which incorporates the partial summary judgment, unambiguously sets aside only the duplicate assignments in the Bright and Clendenen leases. R & P Enters., 596 S.W.2d at 519. The original assignments from Clendenen to Ricks remained intact under the judgment. Because the trial court correctly construed the judgment to deny Clendenen's claim to proceeds from the entire seven-eighths working interest in the leases, we overrule point one. We affirm the judgment of the trial court. Before Justices Powers, Aboussie and B. A. Smith Affirmed Filed: May 17, 1995 Do Not Publish 1. 1 Union Texas cross-claimed against Ricks for indemnification against any loss it suffered to Clendenen, and Ricks counterclaimed against Union Texas. Ricks is not a party to the appeal. 2. 2 Although the volume number is not visible on this copy of the assignment, the copy is the same as the lease assignment that the parties do not dispute was filed in volume 497 of the county deed records. 3. 3 The order refers to an attachment that "more fully describe[s]" the original twenty-five percent interest conveyed to Ricks in the Bright lease. Although the attachment appears to be the duplicate assignment to Ricks in the Clendenen lease, this defect does not vitiate the clear language of the order.