Mineral Title Examination – It’s Not Easy

Gray Reed

Let’s get right to the takeaway: Despite the humble hourly rate operators are typically willing to fork over for title examination, the job isn’t easy and you’d better put your trust in a practitioner with expertise, patience, and an eye for detail.

It took a court of appeal two tries to get this one right, after being enlightened by an aggrieved party. The typical way these errors are discovered in the real life of a producer is by an aggrieved royalty owner after you’ve overpaid somebody else. Let’s hope the well is still producing when they bring the matter to your attention.

You might recall Hahn v. Gips back in November. After the original opinion, everybody requested a rehearing. Only Kenneth’s was granted. This new opinion replaces the original, and Kenneth came out ahead.

I’ll save you from studying the entire 17 pages looking for Waldo. The opinions are virtually identical, except for a few words at the top of page 15 (page 16 of the original) and the resulting adjustment in the mineral ownership.

On rehearing the Court concluded, under the identical analysis as the first, that in the deed to Gipses “Kenneth reserved a one-half interest of the one-fourth undivided mineral estate interest that he owned in Tract A, or an undivided one-eighth interest to Tract A’s mineral estate.” In the original, Kenneth reserved those interests in “the entire tract of the Parent Property’s mineral estate”. (emphasis in both is mine. Again, just trying to help you out).

Why this matters is obvious. The result is that the Gipses now own an undivided interest in Kenneth’s original one-fourth mineral interest in the 37-acre Tract A, not the entire 74-acre Parent Property.

The Gipses’ mineral interest was halved, and the difference went to Kenneth. Your appreciation of this opinion doesn’t turn as much on who owns what in this particular set of conveyances as on the need to think through how the legal analysis is applied to the instruments being examined.

There’s good new for trial lawyers here: No one had to explain this hot mess to a jury.

Today’s musical interlude is dedicated to Kenneth’s lawyers, who must have worked overtime to accomplish a rare feat: Convincing an appellate court panel to change its mind.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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