The Texas Supreme Court on Friday reversed a $12 million judgment against ConocoPhillips in a decade-old dispute over whether mineral interests are owed to heirs of a Zapata County ranch owner.
The court found that two lower courts erred in awarding compensation to siblings who sought a share of royalties Conoco paid their late father, an aunt and an uncle on leases underlying a 1,058-acre tract known as Las Piedras Ranch.
The court was tasked with construing a will executed by the siblings’ grandmother, Leonor Ramirez, in 1987. The principal issue was whether Ramirez’s bequest of all “right, title and interest” to the ranch includes minerals despite an original bequest that severed minerals from the surface estate, which was later partitioned.
Ramirez’s children – Leon Oscar Sr., Ileana and Rodolfo – understood that their mother’s will had given them a fee interest in minerals under multiple tracts totaling 7,016 acres.
When Leon Oscar Sr. died in 2006, his life estate passed in accordance with Ramirez’s will to his three children: Leon Oscar Jr., Rosalinda and Minerva. Leon Sr. left his estate to his son and Rosalinda but left no property to Minerva, who was incapacitated.
In 2010 a guardian for Minerva and the other siblings sued their uncle Rodolfo and his business, their aunt’s estate, and ConocoPhillips. They sought declarations of the parties’ ownership interests although Rosalinda dismissed her claims before the trial court ruled on motions for summary judgment and held a bench trial on attorney fees.
The trial court awarded Oscar Jr. and Minerva each $3.7 million in damages. With prejudgment interest and attorney fees the judgment totaled almost $12 million against ConocoPhillips.
The Fourth Court of Appeals in San Antonio affirmed the trial court in June 2017.
The appeal required the Supreme Court to untangle conveyances over an 80-year period. In his opinion Chief Justice Nathan Hecht included six charts showing how the surface and mineral interests changed as the land was passed down.
The Ramirez siblings argued that the fact that Las Piedras Ranch was not contiguous with the rest of the estate shows that the family meant to treat the minerals separately. They also argued that the leasing of various portions of the minerals over time is inconsistent with joint ownership.
The Supreme Court found strong evidence that the family intended their ownership of all the estate minerals be joint and that executing the leases was always consistent with the family’s joint-ownership understanding.
“Had there been any doubt about the meaning of his mother’s will, it surely was in Leon Oscar Sr.’s interest to raise it rather than share the mineral interest with his siblings and join with them and his aunt in leasing the property,” Hecht said. “The evidence establishes that Leonor, who shared ownership of the Las Piedras Ranch surface with her son, gave him her interest in the surface for life, but gave her interest in the minerals in the 7,016-acre family estate equally to her three children, who already had equal interests.”
Macey Reasoner Stokes and Ben Geslison of Baker Botts represented ConocoPhillips. Lisa Bowlin Hobbs of Kuhn Hobbs represented the Ramirez siblings.
Read the opinion in ConocoPhillips, et al. v. Leon Oscar Ramirez Jr, et al.