Kent B. Hoffman, Susan Hoffman Binieck, E. Peter Hoffman Jr., and Marni H. Cooney v. Andrew M. Thomson; CDG Peeler Family Limited Partnership; Cynthia L. Littlefield; The Dick Family Irrevocable Trust; Gordon G. Thomson; Jane Elizabeth Erzen; Larry Wayne McCarty; Linda M. Ball; Michael David Dick; North Thomson Oil and Gas LP; Patricia P. Fleming; Paul W. Peeler Family Limited Partnership; Sandra Shannon Collins; Shannon Family Trust; Thomson Oil & Gas Investments LP; Coconut Point ST, LLC; Coconut Point OE, LLC; Colonial Villa Estates, LLC; Lazy Daze KLA, LLC; Whispering Pines Mobile Home Park, Ltd., and R&H Paul, Inc.

Summary

The Texas Fourth Court of Appeals considers whether a 1956 oil and gas deed reserved a fixed 3/32 nonparticipating royalty interest or a floating 3/4 interest. Applying the presumption discussed in Van Dyke v. Navigator Group, the court concludes that the deed reserved a floating 3/4 royalty interest, reverses the trial court’s judgment, renders judgment for the Hoffmans, and remands for determination of costs and attorney’s fees.

Holdings

1. The Van Dyke presumption applies when an oil-and-gas deed reserves a royalty interest using a double fraction involving 1/8; the presumption is not limited to mineral-estate reservations or to instruments from a particular historical period.
2. The deed's text does not rebut the Van Dyke presumption. The references to the usual one-eighth royalty support, rather than defeat, the conclusion that 1/8 was used as a placeholder for the landowner's royalty.
3. The 1956 deed reserved a floating three-fourths nonparticipating royalty interest, consisting of three-fourths of any royalty reserved in an oil, gas, or mineral lease affecting the property, rather than a fixed 3/32 royalty interest.
4. The trial court's judgment must be reversed in its entirety, judgment must be rendered construing the deed as reserving a floating 3/4 nonparticipating royalty interest, and the cause must be remanded for the trial court to determine costs and any reasonable and necessary attorney's fees.

Questions Presented

1. Whether the 1956 deed's double-fraction language triggered the Van Dyke presumption that 1/8 was used as a term of art referring to the usual landowner's royalty rather than an arithmetic value.
2. Whether the nature of the reserved interest as a nonparticipating royalty, the deed's 1956 date, the repeated use of 3/32, an existing 1/10 royalty on other minerals, or the grantors' relinquishment of future bonus rights rebutted the Van Dyke presumption.
3. Whether the deed reserved a fixed 3/32 nonparticipating royalty interest or a floating 3/4 nonparticipating royalty interest.
4. Whether the trial court's judgment and attorney's-fee award should be reversed and what matters should be remanded.

Disposition

reversed_and_remanded