Walter Bounds and Wife, Carolyn B. Bounds, Appellants/Cross-Appellees v. John Thomas Prud'Homme, Appellees/Cross-Appellants

ACCEPTED 12-15-00177-CV TWELFTH COURT OF APPEALS TYLER, TEXAS 9/22/2015 4:50:16 PM Pam Estes CLERK

CAUSE NO. 12-15-00177-CV

FILED IN IN THE COURT OF APPEALS 12th COURT OF APPEALS TYLER, TEXAS FOR THE 9/22/2015 4:50:16 PM PAM ESTES TWELFTH COURT OF APPEALS DISTRICT Clerk

AT TYLER, TEXAS.

WALTER BOUNDS and wife, CAROLYN B. BOUNDS, Appellant,

VS.

JOHN THOMAS PRUD’HOMME, JOSEPH GILBERT PRUD’HOMME, JOSEPH LYNN PRUD’HOMME, PETER A. BREEN, Individually and as Successor Trustee of the BREEN FAMILY TRUST, JANET M. SUTRO, SUSAN E. BREEN, and TERRANCE E. BREEN, individually and d/b/a E. G. AND M. A. PRUD’HOMME BENEFICIARIES PARTNERSHIP, Appellee.

On Appeal from the 1st Judicial District Court of San Augustine County, Texas.

BRIEF OF APPELLANT

Thomas R. McLeroy, Jr. Bar No. 13766800 P. O. Box 668 Center, Texas 75935 (936) 598-2701 FAX (936) 598-6086 mcleroylaw@sbcglobal.net

ATTORNEY FOR APPELLANT

ORAL ARGUMENT REQUESTED

IDENTITY OF PARTIES AND COUNSEL

Pursuant to TEX. R. APP. P., 38.1(a), the following persons are parties to the trial court’s judgment or other order appealed from and the names and addresses of all trial and appellate counsel, to-wit: PARTIES:

Appellant: WALTER BOUNDS CAROLYN B. BOUNDS

Appellee: JOHN THOMAS PRUD’HOMME JOSEPH GILBERT PRUD’HOMME JOSEPH LYNN PRUD’HOMME PETER A. BREEN, The BREEN FAMILY TRUST JANET M. SUTRO SUSAN E. BREEN TERRANCE E. BREEN The E.G. AND M.A. PRUD’HOMME BENEFICIARIES PARTNERSHIP

i COUNSEL OF RECORD:

Attorney for Appellant:

Thomas R. McLeroy, Jr. Bar No. 13766800 P. O. Box 668 Center, Texas 75935 (936) 598-2701 FAX (936) 598-6086 mcleroylaw@sbcglobal.net

Attorney for Appellee:

Robert G. Hargrove Bar No. 24032391 Osborn, Griffith & Hargrove 515 Congress Avenue, Suite 2450 Austin, Texas 78701 (512) 476-3529 FAX (512) 476-8310 rob@texasenergylaw.com

ii

TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL. . . . . . . . . . . . . . . . . . . . . . . . . . . . i PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i COUNSEL OF RECORD.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii INDEX OF AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 1

ISSUES PRESENTED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 3 ISSUE NO. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 3 ISSUE NO. 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 3 ISSUE NO. 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 3

STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 3

ISSUE NO. 1 (Restated). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 9

SUMMARY OF THE ARGUMENT (Under Issue No. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 9

ARGUMENT AND AUTHORITIES (Under Issue No. 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 10

ISSUE NO. 2 (Restated). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 20

SUMMARY OF THE ARGUMENT (Under Issue No. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 21

ARGUMENT AND AUTHORITIES (Under Issue No. 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 22

ISSUE NO. 3 (Restated). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 31

SUMMARY OF THE ARGUMENT (Under Issue No. 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 31

iii

ARGUMENT AND AUTHORITIES (Under Issue No. 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 32

CONCLUSION AND PRAYER.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 40 CERTIFICATE OF COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . page 42 CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 43

TAB 1 (Trial Court’s Judgment). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -I-

TAB 2 (Trial Court’s Findings of Fact and Conclusions of Law). . . . . . . . . -IX-

TAB 3 (Farm and Ranch Contract).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -XXIV-

TAB 4 (Prud’homme Partnership Deed). . . . . . . . . . . . . . . . . . . . . . . . . . . . . -XL-

TAB 5 (Breen Deeds).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -XLVI-

TAB 6 (Title Insurance Commitment No. SA01-135 Schedules). . . . . . . . -LXII-

TAB 7 (Bounds’ Title Insurance Policy). . . . . . . . . . . . . . . . . . . . . . . . . . -LXXIII-

iv

INDEX OF AUTHORITIES

RULES: TEX. R. APP. P., 38.1(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i TEX. R. APP. P., 9.4(i)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 42 TEX. R. APP. P., 9.5.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 43 STATUTES: TEX. BUS. & COM. CODE, §26.01. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 30 TEX. CIV. PRAC. & REM. CODE, §16.051. . . . . . . . . . . . . . . . . . . . . . . . . . page 33 TEX. CIV. PRAC. & REM. CODE, §§37.001, et seq.. . . . . . . . . . . . . . . . . . . . page 2 TEX. PROP. CODE, § 5.01(a).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 15 CASES: Alford v. Crum, 671 S.W.2d 870 (Tex. 1984). . . . . . . . . . . . . . . . . . . . . . . page 14 Anderson v. City of Seven Points, 806 S.W.2d 791 (Tex. 1991). . . . . . . . page 22

B.M.C. Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 23, page 24

Bagby v. Bredthauer, 627 S.W.2d 190 (Tex. App. –Austin, 1981, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 12

Bass v. Harper, 441 S.W.2d 825 (Tex. 1969). . . . . . . . . . . . . . . . . . . . . . . page 12 Brown v. Havard, 593 S.W.2d 939 (Tex. 1980). . . . . . . . . . . . . . . . . . . . . page 33 Cherokee Water Co. v. Forderhause, 741 S.W.2d 377 (Tex. 1987). . . . . page 24

City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005). . . . . . . . . . . . . . . . page 23 v

City of Stamford v. King, 144 S.W.2d 923 (Tex. Civ. App. –Eastland, 1940, writ ref’d.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 14

Coker v. Coker, 650 S. W. 2d 391 (Tex. 1983). . . . . . . . . . . . . . . . . . . . . . page 10 Davis v. Grammar, 750 S.W.2d 766 (Tex. 1988). . . . . . . . . . . . . page 30, page 31

Dewitt County Electric Coop. v. Parks, 1 S.W.3d 96 (Tex. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 10, page 11, page 17

Farm & Ranch Investors, Ltd., v. Titan Operating, L.L.C., 369 S.W. 3d 679 (Tex. App. –Ft. Worth, 2012, pet. denied). . . . . . . . . . page 14

Garrett v. Dills, 157 Tex. 92, 299 S.W.2d 904 (1957). . . . . . . . . . . . . . . . page 14

Hardy v. Bennefield, 368 S.W.3d 643 (Tex. App. –Tyler, 2012, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 24, page 25

Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462 (Tex. 2011).. . . . . . . . . . . . . . . . page 16, page 17

Johnson v. Conner, 260 S.W.3d 575 (Tex. App. –Tyler, 2008, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 14, page 15

Lott v. Lott, 370 S.W.2d 463 (Tex. 1963). . . . . . . . . . . . . . . . . . . . . . . . . . page 14 Luckel v. White, 819 S.W.2d 459 (Tex. 1991). . . . . . . page 10, page 11, page 14 Ortiz v. Jones, 917 S.W.2d 770 (Tex. 1996). . . . . . . . . . . . . . . . . . . . . . . . page 23 Pich v. Langford, 157 Tex. 335, 302 S.W.2d 645 (1957). . . . . . . page 11, page 12 Sharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153 (1952). . . . . . . . . . . . . . page 15

Simpson v. Curtis, 351 S.W.3d 374 (Tex. App. –Tyler, 2010, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 24, page 25, page 30

Smith v. Allison, 157 Tex. 220, 301 S.W.2d 608 (1956). . . . . . . . . . . . . . page 11 Sullivan v. Barnett, 471 S.W.2d 39 (Tex. 1971). . . . . . . . . . . . . . . . . . . . . page 33

Tex. Dep’t of Pub. Safety v. Stockton, 53 S.W.3d 421 (Tex. App. —San Antonio 2001, pet. denied). . . . . . . . . . . . . . . . . . . . . . page 24

vi

Walker v. Foss, 930 S.W.2d 701 (Tex. App. –San Antonio, 1998, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 15

Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231 (1958). . . . . . . . . . . . . . . . page 14 Williams v. Glash, 789 S.W.2d 261 (Tex. 1990).. . . . . . . . . . . . . . . . . . . . page 25 OTHER AUTHORITIES: Blacks Law Dictionary (10th ed. 2014). . . . . . . . . . . . . . . . . . . . . . . . . . . . page 12

vii

CAUSE NO. 12-15-00177-CV

IN THE COURT OF APPEALS

FOR THE

TWELFTH COURT OF APPEALS DISTRICT

AT TYLER, TEXAS.

WALTER BOUNDS and wife, CAROLYN B. BOUNDS, Appellant,

VS.

JOHN THOMAS PRUD’HOMME, JOSEPH GILBERT PRUD’HOMME, JOSEPH LYNN PRUD’HOMME, PETER A. BREEN, Individually and as Successor Trustee of the BREEN FAMILY TRUST, JANET M. SUTRO, SUSAN E. BREEN, and TERRANCE E. BREEN, individually and d/b/a E. G. AND M. A. PRUD’HOMME BENEFICIARIES PARTNERSHIP, Appellee.

BRIEF OF APPELLANT

TO THE HONORABLE COURT OF APPEALS:

Now come WALTER BOUNDS and CAROLYN B. BOUNDS, the Appellants in the above styled and numbered matter, and respectfully submit the following brief of their arguments and authorities:

STATEMENT OF THE CASE

The Appellants, hereinafter referred to as the “Bounds,” filed this suit to recover a mineral interest that the Appellees, hereinafter referred to as the Prud’hommes,” agreed to convey to the Bounds but later claimed they reserved. The conveyance was accomplished by six almost identical deeds from the Prud’hommes to the Bounds. (Appendix, Tab 4, Tab 5). The Bounds sought relief in the trial court under the statute and rules governing Trespass to Try Title suits, for a construction of their instruments of conveyance under the Uniform Declaratory Judgment Act, TEX. CIV. PRAC. & REM. CODE, §§ 37.001, et seq., for reformation, if necessary, of their instruments of conveyance due to fraud, accident, mistake or scriveners’s error and for cancellation of certain mineral leases executed by the Prud’hommes as a cloud upon the Bounds’ title to the minerals. The Prud’hommes answered with their plea of “not guilty,” a general denial and a plea of limitations. After a bench trial, District Judge Craig M. Mixon entered a judgment denying the Bounds recovery of an undivided 45% interest in the mineral estate from the Prud’hommes and awarding the title to and possession of those minerals to the Prud’hommes. The judgment awarded Bounds title to and possession of an undivided 5% interest in the mineral estate claimed by Appellants, Peter A. Breen, individually and as Successor Trustee of the Breen Family Trust, Janet M. Sutro, Susan E. Breen, and Terrance E. Breen. (Appendix, Tab 1). The Bounds appeal from the judgment denying them relief with respect to the 45% interest awarded to the Prud’hommes.

page 2

ISSUES PRESENTED

ISSUE NO. 1 (I CR, pg. 91, “Findings of Fact and Conclusions of Law,” Conclusion of Law Nos. 1 - 2)

WHETHER THE TRIAL COURT INCORRECTLY CONSTRUED THE

DEEDS FROM THE PRUD’HOMME PARTNERSHIP TO THE BOUNDS TO UNAMBIGUOUSLY RESERVE THE GRANTORS’ MINERALS.

ISSUE NO. 2 (I CR, pp. 86, 90, 92, “Findings of Fact and Conclusions of Law,” Findings of Fact Nos. 19, 43 - 45, Conclusion of Law No. 6)

WHETHER THE TRIAL COURT INCORRECTLY RULED THAT THE

DEEDS FROM THE PRUD’HOMMES TO THE BOUNDS WERE NOT

SUBJECT TO REFORMATION DUE TO FRAUD, ACCIDENT, MISTAKE

OR SCRIVENER’S ERROR.

ISSUE NO. 3 (I CR, pp. 90 - 92, “Findings of Fact and Conclusions of Law,” Findings of Fact Nos. 46 - 48, Conclusions of Law Nos. 3 - 5)

WHETHER THE TRIAL COURT INCORRECTLY RULED THAT THE

STATUTE OF LIMITATIONS BARRED THE BOUNDS FROM SEEKING

RELIEF BY WAY OF REFORMATION.

STATEMENT OF FACTS

In 2001, Walter Bounds and his wife, Carolyn Bounds, decided to purchase a tract of rural property in order to fulfill Mrs. Bounds’ dream of land ownership. (I RR, pg. 32, lines 1 - 15; pg. 71, line 20 - pg. 72, line 8). Because they were inexperienced in the process of acquiring and managing land, they

page 3 enlisted the assistance of their son-in-law, Terry Scull, who was experienced in the matters of real estate acquisitions and management. (I RR, pg. 32, line 6 -18; pg. 70, lines 7 - 21). Through his contacts and connections, Mr. Scull was aware that the Prud’hommes desired to sell the 126.632 acre tract involved in this suit. (I RR, pg. 33, line 16 - pg. 34, line 3; pg. 71, lines 5 - 19). The parties referred to the tract as the pine “plantation.” (I RR, pg. 32, line 21 - pg. 33, line 9; pg. 122, lines 15 - 25). From the beginning, the Prud’hommes’ offer included the sale their mineral interest. (I RR, 38, line 3 - pg. 40, line 4; pg. 73, lines 9 -21; pg. 121, lines 8 - 24; pg. 122, lines 15 - pg. 123, line 20; II RR, Plaintiff’s Exhibit 28; Exhibit P-27, pg. 65, line 25 - pg. 66, line 12). The Bounds, along with Mr. Scull, inspected the property, discussed its merits and advantages, including benefits of owning the minerals, and, in due course, determined that it would be a suitable acquisition. (I RR, pg. 33, lines 10 - 13; pg. 38, line 3 - pg. 40, line 4; pg. 71, lines 5 - pg. 72, line 8; pg. 74, line 9 - pg. 74, line 2). The Bounds relied upon their son-in-law to negotiate the terms of the sales contract and arrange for the closing. (I RR, pg. 34. lines 11 - 23; pg. 72, line 72 - pg. 73, line 3; pg. 74, line 24 - pg. 75, line 2). Neither the Bounds nor Mr. Scull had any direct dealings with the Prud’hommes during the negotiations or the closing of the sale. (I RR, pg. 34. line 24 - pg. 35, line 7; pg. 74, lines 3 - 7). Both Mr. Scull and the Prud’hommes communicated with each other through Mr. John Gorham, a consulting forester, and John Crawford, a realtor and the Prud’hommes’ consulting forester. (I RR., pg 71, lines 9 - 16;pg. 73, lines 9 -16;

page 4 pg. 74, lines 3 -10; pg. 122, lines 15 - 25; pg. 123, line 21 - pg. 124, line 8).

As a result of the negotiations, a written sales contract between the Bounds and the E. G. and M. A. Prud’homme Beneficiaries Partnership was executed. (I RR, pg. 35, line 20 - pg. 36, line 18; pg. 74, lines 11 - 23; pg. 76, line 16 - pg. 78, line 6; pg. 112, line 25 - pg. 113, line 23; pg. 121, lines 8 - 17; pg. 125, lines 2 - 4; II RR, Plaintiffs’ Exhibit 21). In compliance with the Prud’hommes’ offer, the contract provided that “All minerals owned [by the Seller are] to be conveyed” and did not provide for the retention of any interest by the Seller. (II RR, Plaintiffs’ Exhibit 21, Paragraph 2(A), 2(A)(2)). The contract, also, provided that closing of the sale would occur on or before September 2, 2001, or within 7 days after objections to matters disclosed in the title insurance commitment have been cured, whichever date is later. (II RR, Plaintiffs’ Exhibit 21, Paragraph 9). Upon failure to close, specific remedies were available to the non-defaulting party. (II RR, Plaintiffs’ Exhibit 21, Paragraph 9). In the case of the Seller’s failure to close for any reason other than Seller’s failure to make timely casualty repairs or deliver the title insurance commitment, the Buyer’s remedy included enforcement of specific performance, seeking any other relief provided by law, or both. (II RR, Plaintiffs’ Exhibit 21, Paragraph 15).

The sale closing did not occur on September 2, 2001. (I RR, pg. 114, lines 6 - 10). When the title insurance commitment was issued, it showed title to the property to be vested in certain individual members as well as the E.G. and M. A. Prud’homme Beneficiaries Partnership, and required execution of the

page 5 proposed deed to the Bounds by the individual members of the partnership, including Eleanor Prud’homme Breen. (II RR, Exhibit D-23). Eleanor Prud’homme Breen had died testate two years earlier, survived by her husband, Hal Joseph Breen, and four children, Appellees Terrance J. Breen, Susan E. Breen, Peter A. Breen and Janet M. Breen Suttro. (II RR, Plaintiffs’ Exhibit 4). Her will left her estate to a family trust of which her husband was the trustee. (II RR., Plaintiffs’ Exhibit 4). The requirement that they execute the deeds delayed the closing. (I RR, pg. 114, lines 6 - 25; pg. 116, line 19 - pg. 118, line 3; pg. 147, line 7 - pg. 148, line 10; II RR, Exhibit P-27, pg 67, lines 6 - 17). The Breens initially objected to signing the deeds, but eventually agreed to do so and permit the partnership to receive the funds. (I RR., pg. 143, line 15 - pg. 145, line 11; pg. 150, lines 5 - 14). The closing was, therefore, delayed by the Prud’hommes’ inability or unwillingness to execute the conveyances required by the title insurance company as a prerequisite to insuring the Bounds’ title. By the time the title insurance company’s requirements were addressed, closing had been delayed until after the Breens last deed was executed on October 17, 2001. (II RR, Plaintiffs’ Exhibits 7 - 9).

John Griffin, the Bounds’ lawyer, prepared the deeds that the Prud’hommes’ signed. (II RR, Exhibit P-27, pg. 43, line 16 - pg. 44, line 14; pg. 53, line 17 - pg. 54, line 1; pg. 55, lines 2 - 9). Each of the deeds contained a paragraph bearing the heading, “Reservations from and Exceptions to Conveyance and Warranty:” (II RR, Plaintiffs’ Exhibit 5; Plaintiffs’ Exhibits

page 6 6 - 9). Beneath each of the headings, the deeds contained the following statement:

“TITLE to any of the oil, gas and other minerals, in, under and that may be produced from the above-described real property, together with all rights, privileges and immunities relating thereto, including the following: “1. MINERAL RESERVATION as set forth in instrument from Roy Atkinson to V. R. Marlow, dated November 7, 1934, and recorded in Vol.74, Page 542, Deed Records of San Augustine County, Texas, reserving one-half (½) of the minerals and/or royalty interests, the royalties, bonuses and rentals in connection therewith. “2. MINERAL RESERVATION as set forth in the instrument from E. G. Prud’homme, et ux, to Eck G. Prud’homme, et al, dated May 22, 1971, recorded in Vol. 166, Page 239, Deed Records, San Augustine County, Texas, reserving one-half (½) of the minerals and/or royalty interest, the royalties, bonuses and rentals in connection therewith.” (II RR, Plaintiffs’ Exhibits 5 - 9).

The first two clauses of the paragraph quoted above are essentially identical to the corresponding provisions of Schedule B “Exceptions from Coverage” item 9(f) of the title insurance commitment and Schedule B “Exceptions from Coverage” item 6(f) of the Owner Policy of Title Insurance issued in connection with the Bounds’ purchase. (II RR, Exhibits D-23, D-24). Other than the names of the grantors, each of the deeds was identical to the others except that the Breen deeds contained an additional sentence preceding the above quoted paragraphs that read, “This Deed is intended to convey all of the Grantor’s interest in and to the above-described real property.” (II RR., Plaintiff’s Exhibits 6 - 9). Mr. Griffin intended the text following the heading in question to be exceptions to the grantors’ warranties, and not reservations of their mineral interest or exceptions from the conveyance, and was of the opinion

page 7 that the text was effective to do so. (II RR., Exhibit P-27, pg. 6, [pg. 21, lines 8 -20]; pg. 7, [pg. 25, lines 6 - 23]; pp. 12 - 13, [pg. 47, lines 12 - 18; pp. 48, line 13 -pg. 49, line 13; pp. 49, line 20 - pg. 50, line 16]; pg. 18, [pg. 71, line 21 - pg 72, line 13]; pg. 19, [pg. 73, line 6 - pg. 74, line 20]). Mr. Scull and the Bounds were of a like opinion. (I RR., pg. 83, line 3 - pg. 86, line 9; pg. 87, line 19 - pg. 88, line 9; pg. 96, line 2 - pg. 87, line 2). When the Prud’hommes received the deeds, however, they claim that they construed the text as a mineral reservation, assumed that the Bounds had unilaterally changed the parties’ agreement and closed the transaction without revealing their assumptions to the Bounds or the Bounds’ representatives. (I RR., pg. 116, line 19 - pg. 117, line 11; pg. 118, lines 8 - pg. 119, line 6; pg. 139, line 2 - pg. 140, line 11; pg. 143, line 23 - pg. 145, line 2; pg. 145, line 12 - pg. 146, line 24; pg. 147, line 7 - pg. 149, line 13).

The meaning and legal effect of the text in the quoted portion of the deeds is the basis of this suit. The Bounds claimed that the text creates only an exception to the Grantors warranties under the deeds and that, if it should be construed otherwise, the deeds should be reformed to reflect that the Bounds acquired whatever mineral interest the Grantors owned at the time of the conveyance. (I CR, pp. 9 - 69). In order to circumvent their contractual agreements, the Prud’hommes claimed that the deeds unambiguously reserved their mineral interest and that evidence of contemporary transactions was inadmissable to show that they did not. (1 RR, pg. 8, line 13 - pg. 9, line 6). The trial court ruled that the deed from the E. G. and M. A. Prud’homme

page 8 Beneficiaries Partnership unambiguously reserved the minerals to the partnership. (1 RR, pg. 26, line 24 - pg 27, line 23; 1 CR, pg. 9, “Findings of Fact and Conclusions of Law,” Conclusions of Law Nos. 1, 2). By contrast, the trial court found that Breen deeds were ambiguous and construed them to convey the grantors’ minerals to the Bounds. (1 RR, pg. 26, line 24 - pg. 27, line 23; I Cr, pg. 10, “Findings of Fact and Conclusions of Law,” Conclusions of Law Nos. 7 -11).

ISSUE NO. 1 (Restated)

Whether the Trial Court Incorrectly Construed the Deeds from the Prud’hommes to the Bounds to Unambiguously Reserve the Grantors’ Minerals.

SUMMARY OF THE ARGUMENT (Under Issue No. 1)

The trial court construed the deed conveying the property in question from the E.G. and M.A. Prud’homme Beneficiaries Partnership to the Bounds as unambiguously reserving the partnership’s interest in the oil, gas and other minerals. In doing so, the trial court erred. The deed clearly did not contain an express reservation of minerals by the grantors. The trial court failed to construe the deeds most strongly against the grantor to confer upon the grantee the greatest estate permitted by the terms of the deed and to convey, in the absence of language clearly showing an intention to convey a lesser interest, all of the grantor’s interest. The trial court, also, ignored the policy which does not favor reservations or exceptions by implication. The trial court’s construction

page 9 of the partnership deed is inconsistent with its construction of the other deeds executed as part of the parties’ contract. If the deeds are construed in the light of the facts and circumstances surrounding their execution, it becomes clear that the text in question was intended as a limitation of the grantors’ warranty and not intended as a mineral reservation or exception. A proper application of the traditional rules of construction dictate that the text in question should have been construed as unambiguously limiting the grantors’ warranties.

ARGUMENT AND AUTHORITIES (Under Issue No. 1)

The trial court construed the deed conveying the property in question from the E.G. and M.A. Prud’homme Beneficiaries Partnership to the Bounds as unambiguously reserving the partnership’s interest in the oil, gas and other minerals. (I RR., pg. 26, line 23 - pg. 27, line 4; pg. 27, lines 16 - 23; I CR, pg. 91, “Findings of Fact and Conclusions of Law,” Conclusion of Law Nos. 1-2). The trial court erred in its construction.

Construction of an unambiguous deed is a question of law for the court. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991). Contract language is not ambiguous when it can be given a certain or definite meaning and the court is obligated to interpret the language as a matter of law. Coker v. Coker, 650 S. W. 2d 391, 393 (Tex. 1983). A term is not ambiguous because of a simple lack of clarity, nor does an ambiguity arise merely because parties to an agreement proffer different interpretations of a term. Dewitt County Electric Coop. v. Parks, 1 S.W.3d 96, 100 (Tex. 1998). An ambiguity results if the application of

page 10 established rules of construction leaves the agreement susceptible to more than one meaning. Id. Both potential meanings must be reasonable. Id. The ultimate purpose in construing a deed is to ascertain the intention of the grantor. Luckel v. White, 819 S.W.2d at 461; Smith v. Allison, 157 Tex. 220, 229, 301 S.W.2d 608, 614, (1956). When this intention is ascertained, that construction which carries the intention into effect governs and controls. Smith v. Allison, 157 Tex. at 229, 301 S.W.2d at 614.

As a matter of law, the Prud’homme partnership deed did not unambiguously reserve the grantors’ minerals. The deeds in question were prepared from a State Bar of Texas form. (II RR, Exhibit P-27, pg. 11 [pg. 44, lines 10 - 20]). The text that the trial court found to be an unambiguous began with a heading supplied by the form that read, “Reservations from and Exceptions to Conveyance and Warranty.” (II RR, Exhibit P-27, pg 12 [pg. 47, lines 19 - 25]). The quoted text is a heading and, in the absence of any other following text, would clearly not, of itself, create any legal rights or relationships between the grantors and the grantee. The subject referenced in the heading was not limited solely to “reservations.” The references are to four different and distinct aspects of Deeds.

Although they are often used interchangeably, the words “exception” and “reservation are not strictly synonymous. Pich. v. Langford, 157 Tex. 335, 342, 302 S.W.2d 645, 650. (1957). A “reservation” is a creation by and on behalf of the grantor, of a new right issuing out of the thing granted that did not exist

page 11 before the grant. Pich v. Langford, 157 Tex. at 343, 302 S.W.2d at 650; Bagby v. Bredthauer, 627 S.W.2d 190, 195, (Tex. App. –Austin, 1981, no writ). On the other hand, an “exception” is an exclusion from the grant in favor of the grantor only to the extent that such interest as is excepted may then be vested in the grantor and not outstanding in another. Pich v. Langford, 157 Tex. at 343, 302 S.W.2d at 650; Bagby v. Bredthauer, 627 S.W.2d at 195.

Likewise, there is a distinction between a “conveyance” and a “warranty.” A “conveyance” is a voluntary transfer of a right or of property. Blacks Law Dictionary (10th ed. 2014). It is equivalent to the noun, “grant.” see Blacks Law Dictionary, (10th ed. 2014). A “warranty,” on the other hand, is a separate covenant from the grant and is not a part of the conveyance; It neither strengthens, enlarges nor limits the title conveyed but is a contract on the part of the grantor to pay damages in the event of failure of title. Bass v. Harper, 441 S.W.2d 825, 827, (Tex. 1969).

If the heading would have no legal significance without following text expressing the parties’ intentions, what text did the deeds contain that unambiguously expressed the parties intent for the Prud’hommes to reserve their minerals? The text following the heading in the Prud’hommes’ deed read, “TITLE to any of the oil, gas and other minerals, in, under and that may be produced from the above-described real property, together with all rights, privileges and immunities relating thereto . . .” followed by specific references to reservations by the prior owners in two instruments appearing earlier in the

page 12 Prud’hommes’ chain of title. (II RR, Plaintiffs’ Exhibits 5 - 9). The text used closely tracked the text that the Bounds’ title insurer used to exclude mineral ownership from the title insurance coverage. (II RR., Exhibit D-23, page PRU_0127, Schedule B, paragraph 9(f)). The deeds’ text is not a complete sentence and contains no verb. The language in the title insurance commitment was part of paragraph 9(f) of Schedule B, Exceptions from Coverage, that began, “In addition to the Exclusions and Conditions and Stipulations, your Policy will not cover loss, cost, attorney’s fees, and expenses resulting from:” followed by a list of numerous matters, one of which was the disclaimer of coverage for the title to the minerals. The text of paragraph 9(f) was part of a sentence that expressly related the language to what the insurance would or would not cover. Unlike the commitment, the text of Prud’hommes’ deeds was not part of a clearly articulated statement identifying what was to be done about the title to the minerals. There is no express declaration that the grantors “reserve” to themselves the “title to” the mineral interests nor that they “excepted” the “title to” the mineral interests from the conveyance. The text merely refers to the “title to” the oil, gas and other minerals, without mentioning a “reservation” or an “exception.” There is nothing in the paragraphs following the heading that would clearly specify that a reservation or exception of the title to the minerals was intended by the grantors rather than merely a limitation of the grantors’ warranty of title with respect to the minerals. In order to construe the text otherwise than as only a limitation of the grantors’ warranty, the trial court had

page 13 to complete the sentence by supplying the missing subject and verb, “Grantors reserve . . .” title to the oil, gas and other minerals. Such a construction in the absence of express words or some other affirmative expression indicating that the title to the minerals was to be reserved or excepted from the both the conveyance and warranty, and not just the grantors’ warranty, is arbitrary. A court must construe the instrument as it is written and has no right to alter it by interpolation or substitution. Alford v. Crum, 671 S.W.2d 870, 872, (Tex. 1984).

If a deed is not ambiguous, it is to be construed under the “four corners” rule. Luckel v. White, 819 S.W.2d at 461. The court, when seeking to ascertain the intention of the parties, attempts to harmonize all parts of the deed. Id. If a deed is worded in such a way that a court may properly give it a certain or definite legal meaning or interpretation, it is not ambiguous. Johnson v. Conner, 260 S.W.3d 575, 579 (Tex. App. –Tyler, 2008, no pet.). There are a number of applicable construction aids that courts have consistently employ to determine the meaning of the language in a deed. Deeds are construed most strongly against the grantor. Garrett v. Dills, 157 Tex. 92, 95, 299 S.W.2d 904, 906 (1957); Farm & Ranch Investors, Ltd., v. Titan Operating, L.L.C., 369 S.W.3d 679, 681 (Tex. App. –Ft. Worth, 2012, pet. denied); City of Stamford v. King, 144 S.W.2d 923, 927 (Tex. Civ. App. –Eastland, 1940, writ ref’d.). A deed will be construed to confer upon the grantee the greatest estate that the terms of the instrument will permit. Lott v. Lott, 370 S.W.2d 463, 465 (Tex. 1963); Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231, 234 (1958). A general warranty deed conveys all of

page 14 the grantor’s interest unless there is language in the instrument that clearly shows an intention to convey a lesser interest. Johnson v. Connor, 260 S.W.3d at 579. The courts do not favor reservations by implication. Sharp v. Fowler, 151 Tex. 490, 494, 252 S.W.2d 153, 154 (1952); see TEX. PROP. CODE, § 5.01(a) (mandating that, “An estate in land that is conveyed . . . is a fee simple unless the estate is limited by express words. . . [emphasis added]).

The trial courts finding that the Prud’hommes’ deed contains an unambiguous reservation of the minerals finds no support by an examination of the deed’s “four corners.” The form’s granting clause states that the Grantor, “. . . subject to the reservations from and exceptions to conveyance and warranty, grants, sells and conveys to the Grantee, the property.” The principal function of the “subject to” clause in the conveyance is to protect the grantor against a claimed breach of warranty. Walker v. Foss, 930 S.W.2d 701, 706 (Tex. App. –San Antonio, 1998, no writ). Subject to” in its ordinary sense means “limited by” or “subordinate to” and does not have the effect of creating any affirmative rights. Id. In conveyances, “subject to” is a term of qualification and does not create new interests. Id. If use of the phrase, “subject to,” creates no new interest, it cannot create any new right in favor of the grantor that is consistent with the definition of a “reservation” where no such right was created under the “Reservations and Exceptions from Conveyance and Warranty” clause. Nor can it preserve for the grantor a right included within the description of the “property” conveyed that is not expressly excluded from the

page 15 conveyance, either by the definition of the property conveyed or by the provisions of the clause in question. The deed’s warranty clause contains none of the ambiguities discussed above. It clearly binds the grantor to warrant the title conveyed, “. . . except as to the reservations from and exceptions to conveyance and warranty,” thereby excluding those matters from breach of warranty claims. Looking at the whole instrument, what is apparent is that it did not clearly and expressly reserve the minerals to the grantors or except the minerals from the conveyance. Because it did not, the only method by which the deed could be construed to contain a reservation in the grantors’ favor is to imply that a reservation was intended. That implication violates the rules of construction that require a reservation or exception to be made in clear and express terms and that, in the absence of clear and express terms, the deed should be construed to convey the greatest possible estate.

If the circumstances involving the negotiation for and preparation of the deeds are considered, the proper construction of the deeds’ text becomes a matter of certainty. A trial court is properly authorized to examine those circumstances. A written contract must be construed to give effect to the parties’ intent expressed in the text as understood in the light of the facts and circumstances surrounding the contract’s execution. Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469 (Tex. 2011). The parole evidence rule applies when parties have a valid, integrated written agreement and precludes enforcement of prior or contemporaneous agreements.

page 16 Id. The rule does not prohibit consideration of surrounding circumstances that inform, rather than vary from or contradict, the contract text. Id. Under generally accepted principles of contract interpretation, all writings that pertain to the same transaction will be considered together, even if they were executed at different times and do not expressly refer to one another. Dewitt County Electric Coop. v. Parks, 1 S.W.3d at 102. The negotiations of the parties may have some relevance in ascertaining the dominant purpose and intent of the parties embodied in the contract interpreted as a whole. Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 at 469 - 470.

Both Bounds and the Prud’hommes’ agree that the Prud’hommes initial offer to sell the property in question included the sale of the minerals and did not provide that the Prud’hommes would reserve the minerals. (I RR, 38, line 3 - pg. 40, line 4; pg. 73, lines 9 - 21; pg. 121, lines 8 - 24; pg. 122, line 15 - pg. 123, line 20; II RR, Plaintiff’s Exhibit 28; Exhibit P-27, pg. 17 [pg. 65, line 25 - pg. 66, line 12]). When an agreement for the sale had been concluded, a written contract was prepared which provided that the Prud’hommes would convey “. . . [a]ll minerals owned . . .” (I RR, pg. 35, line 20 - pg. 36, line 18; pg. 74, lines 11 - 23; pg. 76, line 16 - pg. 78, line 6; pg. 112, line 25 - pg. 113, line 23; pg. 121, lines 8 -17; pg. 125, lines 2 - 4; II RR, Plaintiffs’ Exhibit 21). The deeds to be used to close the transaction were prepared by John Griffin, an experienced attorney whose practice included real estate transactions. (II RR, Exhibit P-27, pg. 3, [pg. 9, line 8 - pg. 10, line 3]; pg. 7, [pg. 25, lines 6 - 23]; pg. 11, [pg. 42, line 24 - pg.

page 17 44, line 20]; pp. 17 - 18, [pg. 68, line 24 - pg. 70, line 17]). The text following the heading in question in all 6 deeds executed by the Prud’hommes or Breens was identical, the only variance in the Breen deeds being the insertion of a sentence between the property description and the heading that expressly stated that the deed was intended to convey all of the grantor’s interest in the above-described property. (II RR., Plaintiff’s Exhibits 5 - 9). Although the Breen deeds contained a more specific declaration of the grantors’ intent, the trial court found them to be ambiguous and construed them to convey the grantors’ mineral interests. (I CR., pp. 92 - 93, “Findings of Fact and Conclusions of Law,” Conclusion of Law No. 7 - 11). The trial court offered no explanation for the inconsistent construction of same text in the Prud’homme partnership deed and the Breen deeds, although both sets of instruments were executed pursuant to the same agreement and the added statement of the general rule of construction in the Breen deeds that would have been implied even if it had not been specifically stated was the only difference in two the sets.

From the beginning, Mr. Griffin was aware that the contract provided that the Prud’hommes were to convey their minerals. (II RR., Exhibit P-27, pp. 7 -8, [pg. 27, line 14 - pg. 29, line 9]; pg. 17, [pg. 65, line 25 - pg. 67, line 2]). Mr. Griffin explained that, in the area of his practice, none of the title insurance companies offered title insurance coverage for minerals but commonly listed prior transactions concerning the mineral estate. (II RR, Exhibit P-27, 9, [pg. 34, line 10 - pg. 35, line 23]; pg. 19, [pg. 75, line 23 - pg. 76, line 7). When

page 18 preparing real estate documents, he commonly relied on the title company for information about the minerals and made the conveyance subject to them. (II RR, Exhibit P-27, pp. 9 - 10, [pg. 35, line 24 - pg. 37, line 8]). If the grantor was to reserve the minerals, he explained, he would include a separate, express statement that the grantors reserve the minerals. (II RR., Exhibit P-27, pp. 12 -13, [pg. 48, line 2 - pg. 49, line 13], pg. 18, [pg. 70, line 18 - pg. 71, line 4]; pg. 18, [pg. 70, line 18 - pg. 71, line 4; pg. 71, lines 6 - 21]).

In preparing the deeds, Mr. Griffin inserted the title insurance commitment’s text following the heading dealing with reservations and exceptions. (II RR., Exhibit P-27, pg. 12, [pg. 48, lines 13 - 19]; pg. 13, [pg. 49, line 20 - pg. 50, line 16]). His intention in using the commitment’s text was to limit the grantors’ warranties. (II RR., pg. 19, [pg. 73, lines 6 - 21]). Mr. Griffin’s opinion was that the matters following the heading in question were effective as exceptions to the grantors’ warranties, and not reservations of their mineral interest or exceptions from the conveyance. (II RR., Exhibit P-27, pg. 6, [pg. 21, lines 8 - 20]; pg. 7, [pg. 25, lines 6 - 23]; pp. 12 - 13, [pg. 47, lines 12 -18; pp. 48, line 13 - pg. 49, line 13; pp. 49, line 20 - pg. 50, line 16]; pg. 18, [pg. 71, line 21 - pg 72, line 13]; pg. 19, [pg. 73, line 6 - pg. 74, line 20]).

Because the text of the deed contains no clear and explicit reservation of minerals, it plainly did not unambiguously reserve the grantors’ minerals. Viewing the documents in question within their “four corners,” the text used after the heading is reasonably capable of construction as a limitation of the

page 19 grantors’ warranty and the trial court erred as a matter of law in failing to construe it that way. Application of the appropriate rules of construction require this result because of the absence of any clearly expressed reservation or exception and the disfavor of implied reservations or exceptions. The construction of the text following the reservations and exceptions heading only as a limitation of the grantors’ warranty gives effect to text consistently with the requirements that deeds are construed most strongly against the grantor to convey the greatest possible estate and avoids the necessity of having to imply the existence words of reservation or exception that were not in fact used in connection with the mineral estate. Construing the text as a limitation of the grantors’ warranties, also, avoids inconsistencies in the construction of the other deeds which were part of the same transaction. The correctness of this construction is confirmed by examining the circumstances surrounding the sale that show the intention of the parties, the scrivener’s reasons for using the text and his opinion of the meaning of the text used. The trial court, therefore, erred as a matter of law in its construction of the Prud’homme partnership deed.

ISSUE NO. 2 (Restated)

Whether the Trial Court Incorrectly Ruled That the Deeds from the Prud’hommes to the Bounds Were Not Subject to Reformation Due to Fraud, Accident, Mistake or Scrivener’s Error.

page 20

SUMMARY OF THE ARGUMENT (Under Issue No. 2)

The trial court concluded as a matter of law that there was no mutual mistake of the parties in regard to the execution of the deeds in question. The conclusion was based on its findings that the Bounds and the Prud’hommes understanding of the legal effect of the text used in the deeds in question was different and that, as a result, the parties did not have a mutual intent and understanding of the deeds in question. The trial court’s conclusion misapplies the law to the facts found. If it was true that the Prud’homme partnership deed unambiguously reserved the grantors’ minerals and that the Bounds and Prud’hommes each thought the current agreement contained different terms, the undisputed evidence shows that each of them labored under a common misconception that the deeds complied with the contract that was current in their understanding. That the parties had a different understanding of the terms of the agreement or the meaning of the deeds is not determinative. The mistaken fact was that the deeds complied with the contract and was, therefore, a mutual mistake. The undisputed evidence, moreover, shows that, if the Bounds’ mistake was not shared by the Prud’hommes, their mistake, when coupled with the Prud’hommes’ silence, was legally equivalent to a mutual mistake. As a result, the trial court’s conclusion of law that there was no mutual mistake was not supported by legally sufficient evidence and the only evidence supporting such a conclusion is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust.

page 21

ARGUMENT AND AUTHORITIES (Under Issue No. 2)

The court concluded as a matter of law that the Bounds did not prove by clear, exact and satisfactory evidence that a mineral reservation was included in the Prud’homme partnership’s deed by a mutual mistake of the parties. (1 CR., pg. 92, “Findings of Fact and Conclusions of Law,” Conclusion of Law No. 6). The court’s legal conclusion was based on its finding that, at the time Gilbert Prud’homme executed the deed dated September 7, 2001, from the E. G. and M. A. Prud’homme Beneficiaries Partnership to the Bounds, he understood that it reserved the minerals in and under the 126 acres to its grantors. (I CR, pg 86, “Findings of Fact and Conclusions of Law,” Finding of Fact No. 19). The court, further, found that, although the Bounds believed they were acquiring whatever mineral interest the Prud’hommes owned with respect to the property being purchased, the Prud’hommes believed they were reserving the minerals. (I CR., pg. 90, “Findings of Fact and Conclusions of Law,” Findings of Facts Nos. 43 -44). As a result, the trial court found that the Bounds’ and Prud’hommes’ did not have an identical intent and understanding at the times the deeds in question were executed. (I CR., pg. 90, “Findings of Fact and Conclusions of Law,” Finding of Fact No. 45). The evidence adduced at trial was legally and factually insufficient to support the trial court’s findings of fact and conclusions of law.

Findings of fact in a bench trial have the same force and dignity as a jury verdict and are reviewable for legal and factual sufficiency of the evidence by the same standards as applied in reviewing a jury’s findings. Anderson v. City of

page 22 Seven Points, 806 S.W.2d 791, 794, (Tex. 1991). To determine whether legally sufficient evidence supports a challenged finding of fact, the reviewing court must credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827, (Tex. 2005). The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review. Id. A reviewing court must sustain a legal sufficiency or no evidence challenge when the record discloses one of the following situations: (1) there is a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of the vital fact. Id. at 810.

In reviewing a trial court's findings for factual sufficiency, the reviewing court must weigh all of the evidence in the record and may overturn a finding only if the finding is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. Ortiz v. Jones, 917 S.W.2d 770, 772, (Tex. 1996).

Appellate courts review a trial court’s conclusions of law de novo. B.M.C. Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794, (Tex. 2002). An appellant may not challenge a trial court’s conclusions of law for factual insufficiency; however the reviewing court may review the trial court’s legal

page 23 conclusions drawn from the facts to determine their correctness. Id. Conclusions of law will not be reversed unless they are erroneous as a matter of law. Tex. Dep’t of Pub. Safety v. Stockton, 53 S.W.3d 421, 423, (Tex. App. —San Antonio 2001, pet. denied).

The underlying objective of reformation is to correct a mutual mistake made in preparing a written instrument, so that the instrument truly reflects the original agreement of the parties. Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379, (Tex. 1987). Reformation requires two elements: (1) an original agreement; and (2) a mutual mistake, made after the original agreement, in reducing the original agreement to writing. Id. A party is, therefore, entitled to reformation of a deed when it proves that it reached an agreement with the other party but the deed does not reflect the true agreement due to a mutual mistake. Hardy v. Bennefield, 368 S.W.3d 643, 650, (Tex. App. –Tyler, 2012, no pet.). A mutual mistake is one common to both or all parties, wherein each labors under the same misconception respecting a material fact, the terms of the agreement, or the provision of a written agreement designed to embody such an agreement. Hardy v. Bennefield, 368 S.W.3d at 650; Simpson v. Curtis, 351 S.W.3d 374, 378 -379, (Tex. App. –Tyler, 2010, no pet.). If a mistake has been made by a scrivener or typist, an instrument may be reformed and modified by a court to reflect the true agreement of the parties, if the mistake was a mutual mistake. Simpson v. Curtis, 351 S.W.3d at 379. A mutual mistake is generally established from all of the facts and circumstances surrounding the parties and the execution of the

page 24 instrument. Id. The parole evidence rule does not bar extrinsic proof of a mutual mistake. Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). Reformation is unavailable, however, unless the party claiming mutual mistake presents “clear, exact and satisfactory evidence.” Hardy v. Bennefield, 368 S.W.3d at 648.

If this court determines that the Prud’hommes’ deeds unambiguously reserved the grantors’ minerals, the evidence that they did so as the result of a mutual mistake or scrivener’s error is clear, exact and satisfactory. The Prud’hommes’ own testimony establishes the mutual mistake. It is undisputed that the parties entered into a sales contract that required the Prud’hommes to convey their minerals to the Bounds. When Gilbert Prud’homme, the partner’s general manager, signed the contract, he expressly agreed on behalf of the partnership to convey whatever minerals the partnership owned. (I RR, pg. 113, lines 7 - 23; pg. 121, line 8 - pg. 125, line 4). After the sales contract was signed, the title insurance company raised an objection to the property’s title and required a conveyance from all of the individual partners of the E. G. and M. A. Prud’homme Beneficiaries Partnership, including Eleanor P. Breen, who was then deceased. (I RR, pg. 114, lines 6 - 15; pg. 116, line 19 - pg. 117, line 11; pp. 122 - 131; II RR., Plaintiffs’ Exhibit 4; Exhibit D-23, pg. PRU_0122, Schedule A, paragraph 3; pp. PRU_0128 - 0129, Schedule C, paragraph 4(g)). Deeds were prepared by John Griffin and sent by him or by the title company to Gilbert Prud’homme. (II RR., Exhibit P-27, pg. 11, [pg. 42, line 24 - pg. pg. 44, line 20]).

page 25 Mr. Prud’homme received the deeds on September 7, 2001. (I RR, pg. 139, lines 2 - 6). When he received the deeds, Mr. Prud’homme reviewed them and assumed from their text that the grantors were reserving the minerals. (I RR., pg. 118, lines 8 - 17). Although he was aware that the original contract provided that the Bounds were to get the minerals, he did not immediately call this matter to the attention of Mr. Griffin, the Bounds or Mr. Crawford, but, rather, assumed that the terms of the sale had changed and did nothing. (I RR., pg. 118, 18 - pg. 119, line 6; pg. 139, line 2 - pg. 140, line 11). Mr. Prud’homme was aware that the sales contract pursuant to which deeds had been prepared clearly stated that, “Closing of the sale will be on or before September 2, 2001, or within 7 days after objections to matters disclosed in the Commitment . . . have been cured, whichever date is later,” [emphasis added]. (I RR., pg. 147, line 7 - pg. 148, line 14; II RR, Plaintiffs’ Exhibit 21 [page 5]). He, also, understood that the title insurance company had required the execution of deeds from the Breen heirs. (I RR., pg. 114, lines 6 - 25; pg. 143, line 15 - pg. 145, line 2; pg. 148, line 8 - pg. 149, line 3). Mr. Prud’homme, nevertheless, presumed incorrectly that the contract had expired even though there had been no communication between Mr. Prud’homme and Mr. Prud’homme’s agent, Mr. Crawford, Mr. Griffin or the Bounds and even though the Breens delayed for over a month in signing the deeds. (I RR., pg. 116, line 19 - pg. 117, line 11; pg. 139, line 2 - pg. 140, line 11; pg. 143, line 23 - pg. 145, line 2; pg. 145, line 12 - pg. 146, line 24; pg. 147, line 7 - pg. 149, line 13; II RR., Plaintiff’s Exhibits 7 - 9).

page 26

When Mr. Prud’homme received the deeds from Mr. Griffin, he forwarded the Breen deeds to the others. (I RR, pp. 117, line 23 - 118, line 3). The deed from the partnership and its living members was signed between September 8, 2001, and September 12, 2001, about a month before Mr. Prud’homme tried to confirm his assumption that the terms of the sale contract had changed with any other person. (I CR, pg. 86, “Findings of Fact and Conclusions of Law,” Finding of Fact No. 16). The Breen deeds were all signed between October 5, 2001, and October 17, 2001. (II RR., Plaintiffs’ Exhibits 6, 7, 8, 8A and 9). At that time, Mr. Prud’homme had not confirmed with any of the other parties his understanding that the original contract had expired and that the deeds represented a new contract between the Prud’hommes and the Bounds. He stated that his understanding that the expiration of the contract and the change in the terms of the sales agreement was an “implicit” understanding between him and Mr. Griffin, even though it was never articulated and “just assumed” between Mr. Griffin and Mr. Prud’homme. (1 RR., pg. 139, lines 7 -23). There was no discussion about Mr. Prud’homme’s assumptions with any other party to the transaction until mid October, 2001, when he called Mr. Griffin’s office to find out if the deeds affected only half of the minerals or all of them. (I RR., pg. 140, line 12 - pg. 146, line 24). That discussion was not with Mr. Griffin, nor the Bounds, nor his agent, Mr. Crawford, but with an unidentified girl in Mr. Griffin’s office. (I RR., pg 139, line 24 - pg. 140, line 11; pg. 145, line 12 - pg. 146, line 24). The only discussion Mr. Prud’homme had

page 27 directly with Mr. Griffin related to the Breens reluctance to comply with the title insurance company’s requirement that they sign deeds conveying the property to the Bounds. (I RR., pg. 143, line 15 - pg. 146, line 24).

The Bounds understood from the time of the Prud’hommes’ initial offer that they were to receive the Prud’hommes’ minerals. (I RR., pg. 36, lines 1 - 18; pg. 37, line 22 - pg. 40, line 24; pg. 45, line 7 - pg. 52, line 14; pg. 63, lines 1 - 6; pg. 65, line 7 - pg. 66, line 25). Likewise, the Bounds’ son-in-law, Terry Scull, who assisted them in concluding the sale, understood that the Prud’hommes’ minerals were to be conveyed. (I RR., pg. 73, lines 9 - 21; pg. 80, line 22 - pg. 81, line 3). Mr. Griffin, who drafted the deeds, knew that the Bounds were to receive the minerals from the time he received the sales contract and discussed that specific fact with Mr. Prud’homme. (II RR., Exhibit P-27, pg. 17, [pg. 65, line 25 - pg. 66, line6]). He did not believe or intend that the deeds would be effective to reserve the Prud’hommes’ mineral interests to the grantors. (II RR., Exhibit P-27, pg. 6, [pg. 21, lines 8 - 20]; pg. 7, [pg. 25, lines 6 - 23]; pp. 12 - 13, [pg. 47, lines 12 - 18; pp. 48, line 13 - pg. 49, line 13; pp. 49, line 20 - pg. 50, line 16]; pg. 18, [pg. 71, line 21 - pg 72, line 13]; pg. 19, [pg. 73, line 6 - pg. 74, line 20]). The first time that either he or the Bounds became aware of the Prud’hommes’ claim of mineral ownership through a reservation was late in the year, 2010, or early in the year, 2011. (I RR., pg. 47, line 10 - pg. 50, line 2; pg. 81, lines 4 - 16). Even then, upon examination of the documents as a result of the Prud’hommes’ claim, Mr. Scull believed that the deeds properly conveyed the

page 28 Prud’hommes’ minerals to the Bounds. (I RR., pg. 83, line 3 - pg. 86, line 9; pg. 87, line 19 - pg. 88, line 9; pg. 96, line 2 - pg. 87, line 2).

That the text of the deeds that Mr. Griffin prepared in order to complete the contract is subject to reasonable interpretation in different ways is shown in the arguments contained herein under Issue No. 1. That the deeds’ text was in fact interpreted in different ways by the Bounds and the Prud’hommes may be inferred by the testimony outlined above. It is clear that, despite Mr. Prud’homme’s assumptions about a new agreement, no such contract change was ever discussed with, or agreed to by, the Bounds, or anyone else on their behalf. The Prud’hommes, in this case, seek to avoid their contractual obligations to Bounds by unilaterally choosing to ignore what would have been an obvious mistake in drafting the deeds and then rationalizing that the Bounds had agreed to a contract change that they had never agreed to. Thereafter, by remaining silent about the imaginary contract until the oil companies required curative work on their mineral titles, they insured that the Bounds would not learn of their misappropriation for years. Should this court permit the Prud’hommes assertion of a phantom contract entered into by only one party to the agreement to prevent the assertion of a mutual mistake in drafting the deeds by the other party who did not agree to the change and who had no knowledge of its existence, it will have provided unscrupulous persons a new and convenient vehicle for avoiding their disadvantageous but otherwise legally binding contracts.

page 29

Mr. Prud’homme was a lawyer and should have been aware of the requirement that real estate sales contracts must be in writing, yet there is no evidence that he signed such a document containing a new agreement addressing a mineral reservation or requested a copy of it for review. See, TEX. BUS. & COM. CODE, §26.01(a), (b)(4). As a lawyer, he should have known that the sales contract expressly provided that the date of closing depended on addressing the title insurance company’s requirements, but chose to ignore those requirements when he unilaterally decided that the contract under which the curative deeds had been sent to him had expired. And, as a lawyer, he should have known that his silence in the face of an apparent mistake in the drafting of the deeds would be justification for reforming the deeds. See Davis v. Grammar, 750 S.W.2d 766, 768, (Tex. 1988) (holding that a unilateral mistake by one party, and knowledge of that mistake by the other party, is equivalent to mutual mistake). Nevertheless, without taking the precaution of verifying his assumptions, but keeping them to himself, Mr. Prud’homme presumed that the deeds were sent pursuant to a new agreement that he had not made with the Bounds.

The only mutual agreement between the parties to the deed was reflected in the original sales contract. Both the Bounds and the Prud’hommes were, however, under the impression that the deeds followed the terms of their sales agreement. If both parties were wrong in their assumption, then both parties labored under the same misconception that the deeds correctly reflected the current agreement. See Simpson v. Curtis, 351 S.W.3d at 379. Mr. Prud’homme,

page 30 moreover, believed that the deeds failed to comply with the written sales contract, but did not advise the Bounds of this circumstance. Even if the Bounds’ understanding of the documents was a unilateral mistake, it amounts to a mutual mistake when coupled with the Prud’homme’s silence with regard to the failure of the documents to comply with the contract. See Davis v. Grammar, 750 S.W.2d at 768. The trial court’s findings of fact that the parties to the sale did not have the same understanding of the agreement do not, therefore, address the issue of whether they labored under a mutual mistake. There was no credible evidence that either of the parties did not think that the deeds effectively complied with their existing real or imagined agreements. Mr. Prud’homme’s testimony conclusively establishes that he believed the deeds were drawn in conformity to a new contract that the Bounds had offered but that he remained silent about his assumptions. Because it’s findings of fact were not supported by legally and factually sufficient evidence, the trial court’s conclusion that there was no mutual mistake was an error of law.

ISSUE NO. 3 (Restated)

Whether the Trial Court Incorrectly Ruled That the Statute of Limitations Barred the Bounds from Seeking Relief by Way of Reformation.

SUMMARY OF THE ARGUMENT (Under Issue No. 3)

The evidence was legally and factually insufficient to support the trial court’s findings that the Bounds were on notice that the Prud’hommes’ deeds

page 31 contained a mineral reservation from at least the time they received their title insurance policy. The unchallenged evidence establishes that the Bounds reasonably construed the deeds to convey all of the Prud’hommes’ mineral interests and had no actual notice of the Prud’hommes’ construed the deeds otherwise until less than 3 years before this suit was filed. The Prud’hommes did not inform the Bounds of their interpretation of the deeds or their imagined new agreement concerning the minerals until December, 2010. The title insurance policy issued to the Bounds does not provide any greater notice of the Prud’hommes’ claim than a reading of the deeds would give and does not excuse the Prud’hommes’ silence with regard to their assumptions about the changed contract terms.

ARGUMENT AND AUTHORITIES (Under Issue No. 3)

The trial court found that the Bounds failed to exercise reasonable diligence to discover that the deeds in question did not convey the Prud’hommes’ minerals because they had constructive notice of the contents of the deeds from the time they were delivered to the Bounds or from the time they received their title insurance policy. (I CR., pp. 90 - 91, “Findings of Fact and Conclusions of Law,” Findings of Fact Nos. 46 - 48). Based on those findings, the trial court concluded as a matter of law that the statute of limitations bars Bounds’ action for reformation of the deed. (I CR., pg. 92, “Findings of Fact and Conclusions of Law,” Conclusions of Law Nos. 3 - 5). The trial court erred as a matter of law in concluding that the statute of limitations had run because its findings of fact

page 32 are supported by legally and factually insufficient evidence.

The Prud’hommes claim that the Bounds suit is barred by the four year statute of limitations. A suit for reformation of a deed is governed by the four year statute of limitations. TEX. CIV. PRAC. & REM. CODE, §16.051; Brown v. Havard, 593 S.W.2d 939, 943, (Tex. 1980). The frequently stated rule is that a party is charged with knowledge of the contents of his deed from the date of its execution, and that limitations begins to run on such date against any action to correct it. See Sullivan v. Barnett, 471 S.W.2d 39, 45, (Tex. 1971). This rule has not been strictly applied in the past and courts have noted numerous exceptions over the years. Id. at 45 - 46. The presumption can be rebutted and there are various circumstances which will excuse a delay in discovery of the mutual mistake. Id. at 45. Once the presumption of immediate knowledge is rebutted, however, the statute of limitation will begin to run when the mutual mistake was, or in the exercise of reasonable diligence should have been, discovered. Brown v. Havard, 593 S.W.2d at 944; Sullivan v. Barnett, 471 S.W.2d at 45). As between the original parties to a transaction, the statute of limitation does not commence to run against actions for cancellation and reformation of deeds on the basis of mutual mistake and fraud until four years after the mistake was, or in the exercise of reasonable diligence should have been, discovered. Sullivan v. Barnett, 471 S.W.2d at 47). The question of when a mistake should have been discovered is one of fact. Brown v. Havard, 593 S.W.2d at 944.

The Bounds’ action for reformation is not barred under the four year

page 33 statute of limitations. The trial court’s findings of fact assume that the Bounds were “on notice” of the Prud’hommes’ claimed mineral reservation from the date of the execution of the deeds or the receipt of their title insurance policy from the title company. The trial court returned no other finding of fact with respect to when the Bounds discovered, or could have, in the exercise of reasonable diligence, discovered that the deeds failed to transfer the Prud’homme’s minerals.

The facts are largely undisputed. The Bounds received copies of their deeds and their title insurance policy at or before November, 2001. As explained in the argument under Issue No. 1, the deeds in question did not clearly and expressly reserve the minerals to the grantors. They were not so plainly worded that resort to the rules of construction and the examination the contemporary background of the transaction are not needed to explain their meaning. Although Mr. Prud’homme was a lawyer, the Bounds were not and had no experience in real estate matters. (I RR., pg. 31, lines 12 - 25; pg. 67, lines 1 - 7). They did not possess the sophistication necessary to determine the meaning of the text in the deeds or the title insurance policy and had to rely on the opinion of others. (I RR., pg. 32, lines 6 - 15; pg. 64, line 3 - pg. 65, line 6; pg. 66, lines 5 -12). Their son-in-law, upon whom the Bounds relied and who was better acquainted with the legal aspects of land ownership, and Mr. Griffin, the lawyer who prepared the deeds, believed that the text amounted only to an exclusion of minerals from the Prud’hommes’ warranties, and not a mineral reservation. (1

page 34 RR., pg. 95, line 15 - pg. 97, line 2; Exhibit 27, pg. 6 [pg. 21, lines 8 - 20]; pg. 7, [pg. 25, lines 6 - 12]; pp. 12 - 13 [pg. 47, line 7 - pg. 49, line 13). Because they both believed that the deeds were effective to convey the minerals, no inquiry of them would have revealed any reason to believe the Prud’hommes possessed a contrary claim. (I RR., pg. 45, lines 14 - 18). If professions dealing with such matters on a regular basis would have formed an opinion that the deeds did not reserve the minerals, it is unreasonable to expect that the Bounds, who had no experience in or understanding of these matters, to be placed on notice that the Prud’hommes might claim that the effect of the language in the deeds was to reserve the grantors’ minerals.

The Prud’hommes admitted that they failed to talk to the Bounds, Mr. Griffin or to Mr. Gorham about their changed understanding of the sale terms, thus permitting them to believe that the original offer to convey their minerals had not been withdrawn or superceded . (1 RR., pg. 139, line 7 - pg. 146, line 24). The Prud’hommes presented no evidence of any new contract to which the Bounds had expressly agreed, either directly or through their representatives, to complete the sale on the terms that Mr. Prud’homme imagined. The only contact that Mr. Prud’homme had with anyone about the text relating to the minerals was a conversation he alleges he had with an unidentified girl in Mr. Griffin’s office, whose authority and competence was not shown, in which he inquired, “Whats the deal. Do you understand? Whats the deal. Is it a half interest or is it a full interest?” (I RR., pg. 140, lines 20 - 23). Although Mr.

page 35 Prud’homme documented many of his contacts with Mr. Griffin in his time sheets, they did not show this discussion and Mr. Prud’homme depended on his recollection to fix the time at which the discussion occurred. (I RR., pg. 141, line 10 - pg. 143, line 14).

There is nothing to impeach the Bounds evidence that they lacked actual knowledge of the Prud’homme’s claim. The Bounds were unaware that the Prud’homme defendants claimed to own the minerals under the property in question until December, 2010. On that date, they received a telephone call from Gilbert Prud’homme requesting the Bounds to execute a correction deed to the property to correctly state the terms of the conveyance with respect to the minerals. (I RR., pg. 47, line 10 - pg. 50, line 24; pg. 51, line 22 - pg. 52, line 14; pg. 95, line 15 - 20; pg. 80, line 22 - pg. 83, line 2; pg. 87, line 19 - pg. 88, line 9; pg. 92, line 8 - pg. 93, line 1; pg. 95, lines 15 - 20; II RR., pg. 5, [pg. 18, line 9 - pg. 20, line 12], pg. 6, [pg. 21, line 8 - pg. 22, line 17; pg. 23, line 4 - pg. 23, line 22]). In that call and his subsequent dealings, Mr. Prud’homme suggested that the minerals should be split, even though he believed the assumed new agreement had permitted the grantors to keep all of their minerals. (I RR., pg. 49, line 15 -pg. 50, line 2; pg. 80, line 22 - pg. 61, line 16; pg. 87, line 25 - pg. 88, line 9; II RR., pp. 19 - 20, [pg. 76, lines 9 - 22; pp. 77, line 8 - pg. 78, line 8]). In January, 2011, the Bounds declined Mr. Prud’homme’s request. (I RR., pg. 47, line 25 -pg. 49, line 20; pg. 87, line 25 - pg. 88, line 12).

Mr. Prud’homme’s communication prompted the Bounds to search the

page 36 real estate records, where it was discovered that the Prud’hommes had leased the mineral interest under the property they had sold. (I RR., pg. 80, line 22 -pg. 83, line 2; pg. 88, line 19 - pg. 90, line 12). This suit was filed October 28, 2013, less than four years after Mr. Prud’homme first made the Bounds aware that the original deeds required revision because of the mistake in drafting the provisions relating to the minerals.

The Prud’hommes assert that the Bounds were placed on notice of the Prud’hommes’ mineral reservations because of the statements contained in the title insurance policy they received by November of 2001. Schedule B of that title insurance policy listed numerous exceptions from insurance coverage. That schedule provided, as follows:

“This policy does not insure against loss of damage . . . which arise by reason of . . . the following matters: *** “6. The following matters and all terms of the documents creating or offering evidence of the matters . . .: “f. Title to any of the oil, gas and other minerals in, under and that may be produced from the insured premises. The following is provided for informational purposes only: *** “(iii) Mineral Reservation as set forth in multiple Warranty Deeds from Eck G. Prud’homme, et al, to Walter Bounds and wife, Carolyn B. Bounds, all dated September 7, 2001, and recorded in the Real Property Records of San Augustine County, Texas, as follows: Vol. 24, Page 20; Vol. 24, Page 25; Vol. 24, Page 28; Vol. 24, Page 31; Vol. 24, Page 34; and Vol 24, Page 37; “Title to said interests has not been investigated subsequent to the dates of the aforesaid instruments.”

It may be initially observed that the title insurance policy itself was a

page 37 contract between the Bounds and third parties, and not the Prud’hommes. A fair summary of the meaning of the text is that the policy doesn’t insure the title to the oil, gas and other minerals. The subject addressed by the language, therefore, is the general exclusion of the liability of the title insurance company for failure to the title to any of the minerals, and not specific title defects. The language relied upon by the Prud’hommes as notice to the Bounds appears after a statement that the following references are given for informational purposes only. If the following references had been omitted, the title insurance coverage would still not have included the specific matters referred to and, as far as the policy was concerned, the additional text was surplusage.

The last reference in the title insurance policy was to the “mineral reservation” contained in the Prud’hommes’ deeds to the Bounds. Those deeds were not so plainly written that their meaning was obvious upon inspection. As shown above in the Bounds’ argument under Issue No. 1, the text of those deeds was not clearly a “reservation” and requires consideration of additional factors to construe correctly. If the Bounds possessed the same legal understandings as Mr. Scull and Mr. Griffin, an inspection of those deeds would have produced the opinion that they were exceptions from the grantors’ warranties, and not reservations. Neither the references in the title insurance policy or the text of the deeds, even if they could be read to permit the Prud’hommes assert a claim to the minerals, gave any notice that the Prud’hommes, in fact, were claiming them. The fact that the third party instrument mischaracterized the effect of the deeds’

page 38 text might put the Bounds on notice that their title insurance would not pay for their loss of the minerals, but would not give notice that the Prud’hommes claimed to reserve the minerals. This is particularly true where the text of the deeds is unclear. The Prud’hommes cannot, in this case, rely on a third party to provide the disclosure to the Bounds that they were obligated to give but did not give until December, 2010. The text, even if it could be read to permit the Prud’hommes assert a claim to the minerals, gave no notice that they, in fact, were claiming them.

The only evidence, therefore, in this case establishes that the Bounds, and those who advised them, reasonably believed that the deeds from the Prud’hommes were effective to comply with their sales contract’s requirement for the Prud’hommes to convey all of their minerals, that the Prud’hommes believed or came to believe that the deeds represented a new contract between the parties that permitted them to keep their minerals, but that the Prud’hommes remained silent about their assumptions and did not apprise the Bounds of their claims until at least December of 2010. Consequently, the evidence offered to show when the Bounds were on notice of the possible claim that the deeds contained a mineral reservation conclusively establishes that the text of the deeds was not so clear and express that it unambiguously gave notice of a reservation, that, before December, 2010, the Bounds were not aware that the Prud’hommes might have a possible claim that the text reserved their mineral interest, that the Prud’hommes remained silent about their claim

page 39 throughout that time and that this suit was filed within four years of when the Bounds first learned, or could have learned through the exercise of reasonable diligence, of the Prud’hommes’ claim. There was no evidence that the Bounds had actual notice of the claim prior to Mr. Prud’hommes contact in December of 2010, and any contradictory evidence there may have been was no more than a mere scintilla. The trial court’s findings that the Bounds had notice of the reservation by at least November of 2001 is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust.

CONCLUSION AND PRAYER

The trial court erred as a matter of law in construing the deed in question to unambiguously reserve the grantors’ minerals and in failing to construe the deed as a limitation of the grantors’ warranty.

The evidence was legally and factually insufficient to support the trial court’s findings of fact that the parties did not labor under a mutual mistake and the trial court erred as a matter of law in concluding that an action for reformation of the deeds based on a mutual mistake of the parties would not lie.

The evidence was legally and factually insufficient to support the trial court’s findings of fact upon which it’s legal conclusion that the Bounds suit is barred by the statute of limitations and the trial court erred as a matter of law in so concluding.

For the reasons enumerated above, Appellant prays this court, alternately, to enter its orders:

page 40

Modifying the trial court’s judgment to award Appellant recovery against the Appellees, John Thomas Prud’homme, Joseph Gilbert Prud’homme, Joseph Lynn Prud’homme, Peter A. Breen, Individually and as Successor Trustee of the Breen Family Trust, Janet M. Sutro, Susan E. Breen, and Terrance E. Breen, Individually and d/b/a E. G. and M. A. Prud’homme Beneficiaries Partnership, of the title to and possession of an undivided fifty percent, (50%), of the oil, gas and other minerals situated in, on or under the real property described in the trial court’s judgment, or otherwise modifying said judgment, and affirming the judgment as modified;

Reversing the judgment of the trial court, in whole or in part, and rendering the judgment that the trial court should have rendered; or

Reversing the judgment of the trial court, in whole or in part, and remanding this cause for further proceedings in the trial court consistent with this court’s orders or the interests of justice;

Taxing costs herein against Appellee; and

page 41

Granting such other and further relief to Appellant as they may show themselves entitled.

Respectfully Submitted:

Thomas R. McLeroy, Jr. P. O. Box 668 Center, Texas 75935 (936) 598-2701 FAX (936) 598-6086

BY: /s/ Thomas R. McLeroy, Jr. Attorney for Appellant.

CERTIFICATE OF COMPLIANCE

In compliance with TEX. R. APP. P., 9.4(i)(3) , I certify that the word-count of the foregoing brief is 10,712 words.

/s/ Thomas R. McLeroy, Jr. _______________________________ Attorney for Appellant

page 42

CERTIFICATE OF SERVICE

In compliance with TEX. R. APP. P., 9.5, I hereby certify that service of the foregoing pleading was this date made upon counsel for all parties to this appeal as follows:

Name and Address Date Manner of Service of Persons Served

9/22/2015 eservice Mr. Robert G. Hargrove Osborn, Griffith & Hargrove 515 Congress Avenue, Suite 2450 Austin, Texas 78701 (512) 476-3529 FAX (512) 476-8310 rob@texasenergylaw.com Bar No. 24032391

/s/ Thomas R. McLeroy, Jr. Attorney for Appellant

page 43

TAB 1 (Trial Court’s Judgment)

-I--II--III--IV--V--VI--VII--VIII-

TAB 2 (Trial Court’s Findings of Fact and Conclusions of Law)

-IX--X--XI--XII--XIII--XIV--XV--XVI--XVII--XVIII--XIX--XX--XXI--XXII--XXIII-

TAB 3 (Farm and Ranch Contract)

-XXIV--XXV--XXVI--XXVII--XXVIII--XXIX--XXX--XXXI--XXXII--XXXIII--XXXIV--XXXV--XXXVI--XXXVII--XXXVIII--XXXIX-

TAB 4 (Prud’homme Partnership Deed)

-XL--XLI--XLII--XLIII--XLIV--XLV-

TAB 5 (Breen Deeds)

-XLVI--XLVII--XLVIII--XLIX--L--LI--LII--LIII--LIV--LV--LVI--LVII--LVIII--LIX--LX--LXI-

TAB 6 (Title Insurance Commitment No. SA01-135 Schedules)

-LXII--LXIII--LXIV--LXV--LXVI--LXVII--LXVIII--LXIX--LXX--LXXI--LXXII-

TAB 7 (Bounds’ Title Insurance Policy)

-LXXIII--LXXIV--LXXV--LXXVI--LXXVII--LXXVIII--LXXIX--LXXX--LXXXI--LXXXII-