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Will Construction Under Texas law

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The January 24, 2020 Texas Supreme Court decision in ConocoPhillips Co. v. Ramirez involved a complicated fact pattern of land ownership spanning generations. However, the issue for decision by the Texas Supreme Court was one of will construction and interpretation under Texas law, and was fairly straightforward.

The question for the Texas Supreme Court was:

Whether a devise of “all…right, title and interest in and to Ranch “Las Piedras’” refers only to a surface estate by that name as understood by the testatrix and beneficiaries at the time the will was made or also includes the mineral estate.

The Texas Supreme Court, applying the rules of will construction, determined that only the surface estate was devised.

The Devises and Deeds Of Las Piedras Ranch

The dispute for the Court involved the interpretation of Leonor Ramirez’s will. Leonor was predeceased by her husband Leon. Leon owned 3,508 acres of surface estate, and a ½ interest in the mineral estate of 7,016 acres of Ramirez land. Leon left Leonor ½ of his surface estate in the Ramirez land and ½ of his mineral estate. Leon left his children the remaining ½ of his surface estate and the remaining ½ of his mineral estate interests.

After Leon’s death, Leonor and her children, Leon, Ileana, and Rodolfo, made partition and exchange agreements over the subsequent years of their surface interests. These agreements expressly excluded conveyances and division of oil, gas, and mineral rights.

In 1987 Leonor made a will. Leonor gave a life estate in “all of [her] right, title and interest in and to Ranch “Las Piedras’” to her son Leon, with the remainder to his living children in equal shares. Leonor devised the residuary of her estate to her three children – Leon, Ileana, and Rodolfo.

Leonor died in 1988. Leon, Ileana, and Rodolfo believed at the time that Leonor had devised her mineral interests in the entire 7,016 acres to them in equal shares as part of the residuary. Over the years, Leon, Ileana, and Rodolfo executed numerous mineral leases on various portions of the land, including the minerals under Las Piedras Ranch to Enron, which was transferred to ConocoPhillips.

Leon died in 2006. Leon’s death terminated his life estate, which passed to his children: Leon Jr., and Rosalinda. Leon’s children filed the instant dispute, contending that Leonor’s residuary devise did not include the mineral interest in Las Piedras Ranch, but that it passed to Leon as part of his life estate. The children asserted that Leonor’s will had left their father Leon a life estate in not only the surface of Las Piedras Ranch but also the minerals beneath it, and that the residuary devise to their father, aunt, and uncle did not include the mineral interests under the Ranch. They claimed ownership rights accordingly and sought a declaration of the parties’ ownership interests.

The Texas Supreme Court painstakingly detailed the ownership rights and agreements over nearly 80 years with charts contained in the opinion. Ultimately, the decision came down to the basics of will construction and interpretation under Texas law.

Will Construction Under Texas Law

Under Texas law, the rules of will construction are as follows:

In construing a will, the court’s focus is on the testatrix’s intent”, which “must be ascertained from the language found within the four corners of the will”, if possible, and “determined as of the time the will is executed”. “[W]hen a term in a will ‘is open to more than one construction,’ a court can consider ‘the circumstances existing when the will was executed.’”

Here, the Texas Supreme Court looked at the language in the will and the circumstances existing when the will was executed.

The Terms of the Will

Leonor’s bequest of a life estate to Leon Oscar Sr. in her will capitalizes “Ranch ‘Las Piedras’” and places the name in quotation marks. This treatment indicates that the terms have a specific meaning to Leonor and her family. The court cited to a Texas appellate court case putting import on the capitalization of words and the enclosure of words in quotation marks to indicate specific terminology.

The Circumstances Existing When the Will Was Executed

The Texas Supreme Court examined the circumstances that existed at the time the will was executed to determine the specific meaning of “Ranch ‘Las Piedras’”.

The Court looked to a 1975 Partition Agreement that refers to a 1,058 acre tract as “Las Piedras Pasture”, expressly stating that only surface of the tracts was covered, not the minerals, which were to remain undivided.

The Court also considered a 1978 exchange agreement between Leon Sr. and Ileana that partitioned the “surface to 1,058 acres …known as “Las Piedras Ranch’” and conveys the surface to the land. Elsewhere the agreement makes clear that the deed of exchange did not include oil, gas and other minerals which remain undivided.

Relying on the terms of the will and the circumstances existing at the time the will was executed, the Texas Supreme Court construed the will as follows:

[T]he history of conveyances since 1941 demonstrate the Ramirez family’s intent that each member’s mineral interest in the larger 7000+ acre tract remain undivided….When the family separated Leon Juan’s surface estate into Las Piedras Ranch and two other parcels, they expressly declined to separate the minerals. This is strong evidence that the family intended that their ownership of all the estate minerals be joint.

The Texas Supreme court reversed the opinion and ruled that petitioners were entitled to judgment as a matter of law. Leonor gave Leon her interest in the surface of Las Piedras Ranch for life, but gave her interest in the minerals in the 7,016 acre family estate equally to her three children.  A very complicated chain of devises and deeds, untangled by the Texas Supreme Court using the basics of will construction under Texas law.

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