The San Antonio Court of Appeals recently addressed the proof necessary to establish constructive ouster of a co-tenant so as to begin the running of adverse limitations against a co-tenant.  Hardaway v. Nixon, ___ S.W.3d ___, No. 04-16-00252-CV, 2017 WL 5615635 (Tex. App.—San Antonio, Nov. 22, 2017, no pet. h.).

In the late 1800s, Louis and Eliza Eckford owned a 147.5-acre tract in Karnes County, Texas as community property.  Louis died intestate, and one-half of the real property passed to Ms. Eckford, and the other of half passed to the couple’s nine surviving children.  Ms. Eckford later died intestate, and the court appointed administrator purported to sell the entire 147.5 acres to Fritz Korth, who then conveyed it to Romeo Korth.  Remeo and his wife then leased their mineral rights to Texas Oil & Gas Corp. in 1978.  After their death, Romeo and his wife’s heirs and their descendants continued to exercise possession of the property.

At some point before 2012, Burlington Resources and West 17th Resources discovered information that led them to believe the heirs of Louis and Eliza Eckford owned an unleased one-half interest in the 147.5-acre tract possessed by the Korth heirs.  As a result they sought out and entered in mineral leases with numerous Eckford heirs.  In 2012, because some of the Eckford heirs could not be located, Burlington instituted a receivership proceeding in which it alleged the heirs of Louis Eckford owned a one-half unleased interest in the 147.5 acres and asked for the appointment of a receiver to manage their interest.  The Korth heirs intervened and asserted they held sole ownership of the 147.5-acre tract based on: (1) the doctrine of presumption of deed; (2) record ownership based on recorded deeds and other instruments; and (3) actual or constructive ouster of the cotenants and the ensuing running of the statutes of limitation for adverse possession.  The trial court granted summary judgment for the Korth heirs based only on the third ground of constructive ouster and limitations.

The Eckford heirs appealed, arguing that the Korth heirs failed to establish constructive ouster as a matter of law.  The Korth heirs argued they held uninterrupted possession of the property since 1939, and that amounted to constructive ouster.

The court began its analysis by reviewing the law of adverse possession against a co-tenant.  Because a co-tenant is entitled to equal possession, mere possession of the property will not be considered adverse or hostile to the other co-tenant without proof of actual or constructive ouster, also known as repudiation.  Id. at *4.  Ouster has been defined as “unequivocal, unmistakable, and hostile acts the possessor took to disseize other cotenants.”  Id. Based on Tex-Wis Co. v. Johnson, 534 S.W.2d 895, 899 (Tex. 1976), constructive ouster or repudiation may be established when there has been long-continued possession under a claim of possession and nonassertion of claim by the titleholder.  Id. According to the court, this rule was only set forth in the context of a jury trial, and therefore, the rule only sets fort the facts upon which a jury could infer notice to the cotenant or from which a jury might presume notice.  Id.  As a result, the court held that these facts alone are insufficient to establish a summary judgment movant’s right to judgment as a matter of law.  The court found that the only basis of ouster that the Korth heirs presented was long-continued possession and non-assertion of claim, and therefore, the trial court erred in granting them summary judgment on that basis.  Id. at *7.

The Texas Supreme Court recently held that a clear general granting clause could save a defective property description in Davis v. Mueller, ___ S.W.3d ___, No. 16-0155, 2017 WL 2299316 (Tex. May 26, 2017).  In 1991, Virginia Cope conveyed to James Davis her mineral interests in ten vaguely described tracts in Harrison County, Texas.  The deed contained the following Mother Hubbard and general granting clause:

The “Lands” subject to this deed also include all strips, gores, roadways, water bottoms and other lands adjacent to or contiguous with the lands specifically described above and owned or claimed by Grantors.  If the description above proves incorrect in any respect or does not include these adjacent or contiguous lands, Grantor shall, without additional consideration, execute, acknowledge, and deliver to Grant[ee], its successors and assigns, such instruments as are useful or necessary to correct the description and evidence such correction in the appropriate public records.  Grantor hereby conveys to Grantee all of the mineral, royalty, and overriding royalty interest owned by Grantor in Harrison County, whether or not same is herein above correctly described.

Around the same time as Cope’s conveyance, James Mills conveyed his mineral interests in two tracts to Davis using the same language quoted above.  In 2011, Cope and Mills conveyed the same interests to Mark J. Mueller, a landman.  Mueller then filed suit against Davis to quiet title to the mineral interests.  Mueller asserted that the specific property descriptions in the 1991 deeds were insufficient to satisfy the Statute of Frauds and the general granting clause did not remedy the defective description.  Both sides moved for summary judgment on the title issue and the trial court entered a take-nothing judgment against Mueller.

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You own some property that, shall we say, has some warts. You want to sell it before those warts require costly treatment. But how do minimize the risk of a buyer holding you liable for the treatment? One tactic is to draft an “as-is clause” into your sales contract. Generally speaking, an as-is clause seeks to shift risk regarding the property’s condition to the buyer, i.e., the buyer agrees to accept the property “as-is,” which includes those warts you are concerned about. Sounds simple enough, right? Not so fast. Two recent Texas opinions demonstrate that as-is clauses can be the shield a buyer wants it to be, but it can also be nothing but a paper tiger. In this post, I’ll briefly summarize the two recent opinions and then provide tips and suggestions for buyers and sellers of real estate to consider in relation to as-is clauses. Read More

For all of the real estate developer readers out there in the Dallas area, I wanted to alert you to the event below that sounds very interesting.  You can register for the event by clicking here.  If you decide to attend, please find me and say hello.

BlackAcre Oct. 9 Invitation

courtesy of wfaa.com

A recent decision from the Dallas Court of Appeals arising out of a fire in Dallas demonstrates the importance of including written notice provisions in commercial leases and the risks of failing to enforce them. Read More

At Milby PLLC, one of our primary practice areas is defending architects, engineers, and other design professionals against claims asserted against them relating to services performed on construction projects. Occasionally contractors have attempted to assert claims against design professionals in an attempt to recover increased costs incurred on a construction project. These claims have usually been couched as negligence or negligent misrepresentation causes of action because the contractors typically have no contractual relationship with the design professionals. Until a few weeks ago, it was unsettled whether such claims were legally viable in Texas, but the Texas Supreme Court answered the question recently in the negative: contractors cannot recover economic losses from design professionals based on alleged negligence or negligence misrepresentation. See LAN/STV v. Martin K. Eby Construction Co., No. 11-0810, 2014 WL 2789097 (Tex. June 20, 2014) (opinion available here).

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The terms “null and void” or “void ab initio” are commonly used in various real estate contracts. These terms are typically used to express the same concept: the contract will be considered to have never come into existence. Occasionally these terms are used when “terminate” is probably a better expression of the parties’ true intent. Generally speaking, when a contract is terminated, the contract stops. Despite the termination, however, the contract is still considered to have been effective and enforceable prior to the termination, which could give rise to pre-termination liability.

A recent real estate case, Bannum, Inc. v. Mees, No. 07-12-00458-CV, 2014 Tex. App. LEXIS 6804 (Tex. App.—Amarillo June 24, 2014) provides an illustration of the potential unintended effect of using the terms “null and void” or “void ab initio” instead of “terminate” (opinion available here). Read More

In a foreclosure suit, a federal district court in Texas recently held that the bank’s acceleration had not been abandoned, and therefore, the bank’s attempt to enforce its mortgage lien more than four years after acceleration was barred by limitations. Murphy v. HSBC Bank USA, No. H-12-3278, 2014 U.S. Dist. LEXIS 57612 (S.D. Tex. Apr. 23, 2014) (opinion available here).
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Last week, a Texas appellate court in Noell v. City of Carrollton (opinion available here) invalidated a Carrollton ordinance and order closing Air Park Dallas—putting the kibosh, at least for now, on efforts to re-develop the Air Park into a mixed use development.  The case addresses the limits of a municipality’s nuisance abatement power and the crafting of real property related ordinances.  Perhaps most importantly though, it is a cautionary tale about being too creative with one’s development efforts.

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