ACCEPTED 13-14-00623-CV THIRTEENTH COURT OF APPEALS CORPUS CHRISTI, TEXAS 6/16/2015 2:52:27 PM CECILE FOY GSANGER CLERK FILED IN THE 13TH COURT OF APPEALS CORPUS CHRISTI - EDINBURG

6/16/15 CECILE FOY GSANGER, CLERK BY DTello

NO. 13-14-00623-CV RECEIVED IN 13th COURT OF APPEALS IN THE COURT OF APPEALS CORPUS CHRISTI/EDINBURG, TEXAS 13TH DISTRICT OF TEXAS 6/16/2015 2:52:27 PM CORPUS CHRISTI, TEXAS CECILE FOY GSANGER Clerk

G.W. KOLSTAD AND WILLIAM FRASER, APPELLANTS, v. MARY JUNE OWEN MERRELL, APPELLEE

On Appeal from the 156th Judicial District Court of Live Oak County, Texas CAUSE NO. L-13-0197-CV-B

BRIEF OF APPELLANTS- PLAINTIFFS, G.W. KOLSTAD AND WILLIAM FRASER

S. Tim Yusuf State Bar No. 50511534 Law Offices of S. Tim Yusuf, PLLC Pearland Town Center 11200 Broadway, Suite 2743 Pearland, Texas 77584 Telephone: 866-249-7633 Facsimile: 866-249-7635 [email protected] Attorney for Appellants/Plaintiffs IDENTITY OF PARTIES & COUNSEL Appellants’ counsel certifies that the listed persons and entities, as described in TEX. R. APP. P. 38, have an interest in the outcome of this case: Appellants – Plaintiffs: G. W. Kolstad and William Fraser, as successor in interest to Ms. Doris Fraser, are residents of Montana and rightful owners of the mineral estate made the basis of the declaratory judgment.

Counsel for Appellants – Plaintiffs: S. Tim Yusuf State Bar No. 50511534 Law Offices of S. Tim Yusuf, PLLC Pearland Town Center 11200 Broadway, Suite 2743 Pearland, Texas 77584 Telephone: 866-249-7633 Facsimile: 866-249-7635 [email protected] M. Ryan Kirby State Bar Number: 24036915 KIRBY, MATHEWS & WALRATH, PLLC Esperson Building Walker St., Suite 240 Houston, TX 77002 Telephone: (713) 489-4620 Telecopier: (713) 489-4619

Appellee – Defendant: Mary June Owen Merrill, the surviving spouse of Charles R. Merrell, is the lessee on the mineral lease made the basis of the declaratory judgment.

Counsel for Appellee Mary June Owen Merrell Michael C. Sartori 502A Houston Street P.O. Box 1222 George West, Texas 78022-1222 [email protected]

TABLE OF CONTENTS

IDENTITY OF PARTIES & COUNSEL .............................................................. 2 TABLE OF AUTHORITIES .................................................................................. 5 APPENDIX .......................................................................................................... A1 STATEMENT OF THE CASE .............................................................................. 6 ISSUES PRESENTED FOR REVIEW…………………………………………...7 STATEMENT OF FACTS…………………………………………………..……8 STANDARD OF REVIEW…………………………………………………..…10 SUMMARY OF THE ARGUMENT…………………………………………...11 ARGUMENT……………………………………………………………………11 I. The property sought and granted by the prior Judgment was already severed from the mineral estate.

a. Appellee Merrell’s claim under the five-year statute conveys title after the mineral estate was already severed.

b. Under the ten or twenty-five year statutes, Appellee Merrell lacked exclusivity because the record holder of title exercised dominion over the mineral estate.

II. Appellee’s res judicata defense in 2015 is not supported by Appellee’s record in 1993.

CONCLUSION AND PRAYER…………………………………………….…16 CERTIFICATE OF COMPLIANCE……………………………………...……17 CERTIFICATE OF SERVICE………………………………………………..…17

TABLE OF AUTHORITIES

Conley v. Comstock Oil & Gas, LP, 356 S.W.3d 755, 769 (Tex. App. – Beaumont 2011, no pet.)…………………12 Great Am Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965)…………………………………………..............10 Marino v. State Farm Fire & Cas. Ins. Co., 787 S.W.2d 948, 950 (Tex. 1990)……………………………………………..…14 Rhodes v. Cahill, 802 S.W.2d 643, 645 (Tex. 1990)………………………………………………..13 Skiles v. Jack in the Box, Inc., 170 S.W.3d 173, 178 (Tex. App. – Dallas 2006, no pet)………………………10 In re Staley, 320 S.W.3d 490, 502 (Tex. App. – Dallas 2010, pet. denied)…………...……15 Tran v. Macha, 213 S.W.3d 913, 914-15 (Tex. 2006)……………………………………………13 Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005)………………………………………..………10 Wilhoite v. Sims, 401 S.W.3d 752, 758 (Tex.App. - Dallas 2013, no pet.)………………………13

STATEMENT OF THE CASE On October 28, 2013, Appellants (Plaintiffs) filed suit against Appellee (Defendant) to establish rights under a mineral lease (R.1-12) by means of a Suit to Quiet Title, Trespass to Try Title and the Declaratory Judgments Act. (R. 8-10) Appellee asserted that Appellants’ claims are barred by res judicata because the prior judgment granted her adverse possession of both the mineral and surface rights to the property in question. (R. 42). Parties agreed to most facts. Appellee’s asserted res judicata barred Appellants’ claims. (R. 126) Appellants’ analyzed why the 1993 judgment, as a matter of law, could not have granted the mineral rights along with the surface rights. (R. 343-345) Appellee’s motion for summary judgment was granted on September 24, 2014. (R. 357).

Appellants’ filed their Notice of Appeal.

ISSUES PRESENTED FOR REVIEW Does the conveyance of mineral rights by record title owner negate the element of exclusivity prerequisite to a claim for adverse possession?

Does the conveyance of mineral rights by record title owner constitute the exercise dominion over property?

Does the execution of a mineral lease constitute the exercise of dominion?

Does ambiguity in a judgment preclude res judicata?

Does ambiguity in a judgment create a genuine issue of material fact precluding summary judgment based upon res judicata?

Does res judicata allow a prevailing party to define an ambiguous judgment to include relief contrary to substantive law?

Does prior litigation between parties serve as a bar to claims outside the scope of the prior judgment?

Can an incorrect finding of fact or conclusion of law result in a void judgment immune from subsequent challenges?

Can the improper application of res judicata deprive a party from an adequate remedy at law?

STATEMENT OF FACTS Parties agree to the following facts regarding the title history of the property in question: By warranty deed dated November 1, 1917, the United States Installment Realty Company, as Grantors conveyed Tracts 191, 192, and in Block 16 of the Live Bee Land Subdivision No. 4, and originally a part of the Festus Doyle Survey, No. 4, Live Oak County, to H. E. Hanson and reserved a one-half (1/2) mineral interest. Thereafter, H. E. Hanson passed away intestate in January, 1940. As such, his one-half (1/2) mineral interest devolved in accordance with the Texas laws concerning intestate distribution as follows: one-half of one-half (1/2 of 1/2) to Eli Ness Hanson, and one-third of one-half (1/3 of 1/2) to Annie H. Kolstad, Hannah H. Keeney, and Sophia R. Routier, each. Eli Ness Hanson passed away intestate on January 26, 1955, and her interested devolved in equal shares to Annie H. Kolstad, Hannah H. Keeney, and Sophia R. Routier. By Quit-Claim deed dated January 29, 1965, Sophia Routier, as Grantor, quit- claimed all her interest in Lots 191, 192, and 193 of Block 16 of the Live Bee Land Subdivision in the Festus Doyle Survey No. 4, to Hannah Keeney, as Grantee. By Warranty Deed dated June 10, 1970, recorded in Volume 227, Page 208 of the Deed Records, Hannah Keeney and Annie Kolstad, as Grantors, conveyed the surface only to Tracts 191, 192, and 193, Block 16,

Live Bee Land Subdivision No. 4, to Maurice M. Chapman, as Grantee, and specifically reserved all minerals. After this Warranty Deed in 1970, 100% of the surface was vested in Maurice M. Chapman, and a 2/3 of 1/2 mineral interest was vested in Hannah Keeney and a 1/3 of 1/2 mineral interest was vested in Annie Kolstad.

In January 1989, Charles R. and Margie L. Merrell, husband and wife, unlawfully entered, occupied and sought to adversely possess the subject property. (R. 235) In March 1989, Charles R. and Margie L. Merrell, husband and wife, filed Charles R. Merrell, et al vs. Mrs. Henrietta Williman, et al., Cause No. 6990-A in the 36th Judicial District Court of Live Oak County, Texas. (R. 218-234).

After being served with citation of suit, Appellants (Defendants) G.W. Kolstad and Ms. Doris Fraser predecessor in interest to Appellant William Fraser, answered in April 1989 (R. 265-279). In addition, to entering a general denial to the adverse possession, Kolstad and Fraser provided Merrell with evidence of Kolstad and Fraser’s mineral interests on some of the property identified in Merrell’s suit. Two years later, Kolstad and Fraser were served with an amended petition. Kolstad and Fraser reviewed the amended petition and found that Merrell had not changed a single word of the factual claims, property descriptions or causes of action and did not refute or reply to their claims in any way.

Kolstad and Fraser took no further action and Merrell adversely possessed the surface rights in May 1993 (R. 293-310). Years later, Kolstad and Fraser discovered that Mary June Merrell, had signe a lease as Lessor and, granted, leased and let Tracts 191, 192, and 193, Block 16, Live Bee Land Subdivision No. 4, Killam Oil Co, LTD, as Lessee.

After brief discussions among the relevant parties, Appellants Kolstad and Fraser file suit.

STANDARD OF REVIEW A summary judgment is reviewed de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). On appeal, evidence that favors the movant will not be “considered unless it is uncontroverted.” Great Am Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965). When the motion for summary judgment is based on several different grounds and the order granting the motion is silent as to the reason for granting the motion, the appellant must show that each independent grounds alleged is insufficient support summary judgment.

Skiles v. Jack in the Box, Inc., 170 S.W.3d 173, 178 (Tex. App. – Dallas 2006, no pet.)

SUMMARY OF THE ARGUMENT The 1993 judgment was factually and legally insufficient to have conveyed the mineral estate as Appellees assert based upon the agreed upon facts and relevant law. Appellee’s interpretation of the scope of the previous judgment is incorrect or would result in a void judgment. As such, Appellants’ claims should pierce the res judicata defense and be presented before the trier of fact.

ARGUMENT I. The property sought and granted by the prior Judgment was already severed from the mineral estate.

a. Appellee Merrell’s claim under the five-year statute conveys title after the mineral estate was already severed.

In making a claim under the five-year statute, Merrell specifically claimed adverse possession of the real property described and conveyed “under Deed dated October 31, 1975, and duly registered and recorded in Vol. 265, Page 436 of the Deed Records of Live Oak County, Texas…” (R. (Orig. Pet.)), (R. 255 (Am. Pet.)), (R. 305 (Judm.)).

Parties agree that Warranty Deed dated June 10, 1970, recorded in Volume 227, Page 208 of the Deed Records, in which Hannah Keeney and Annie Kolstad, as Grantors, conveyed the surface only to Tracts 191, 192, and 193, Block 16, Live Bee Land Subdivision No. 4, to Maurice M.

Chapman, as Grantee, and specifically reserved all minerals. After this

Warranty Deed in 1970, 100% of the surface was vested in Maurice M.

Chapman, and a 2/3 of 1/2 mineral interest was vested in Hannah Keeney and a 1/3 of 1/2 mineral interest was vested in Annie Kolstad.

In order for mineral rights to pass along with surface rights to adverse possessors, it must be prior to severance of the minerals from the surface estate. Conley v. Comstock Oil & Gas, LP, 356 S.W.3d 755, 769 (Tex. App. – Beaumont 2011, no pet.) When a mineral interest has been separated from the surface ownership, no interest in the minerals can be acquired; for the mineral owner has an estate that is distinct from the surface fee.

b. Under the ten or twenty-five year statutes, Appellee Merrell lacked exclusivity because the record holder of title exercised dominion over the mineral estate.

Appellants’ Kolstad and Fraser Original Answer asserted claims and defenses with particularity, “[defendants] are the owners of one-half (1/2) of the oil and gas mineral estate and ores underlying said Tracts 191, 192, 193…” (R. 269). Appellants also submitted a mineral lease executed by G.W. Kolstad in 1983. (R. 276-279) Merrell’s subsequent amended petition, findings of fact and judgment, however, failed to refute or address in any way, Appellants’ claims. In fact, from the original petition in March 1989 (R. 218) until the final judgment in May 1993 (R. 310) - Merrell’s factual allegations and

claims remained word for word identical. Merrell’s judgment failed to explain or even address why Kolstad’s 1983 lease ought not break the chain of Merrell’s adverse possession.

“Adverse Possession,” as defined in TEX. CIV. PRAC. & REM. CODE 16.021, “must be commenced and continued under a claim of right that is inconsistent with and hostile to the claim of another.” The possession of the land cannot be shared with the record title owner or the public in general. Tran v. Macha, 213 S.W.3d 913, 914-15 (Tex. 2006); see Rhodes v. Cahill, 802 S.W.2d 643, 645 (Tex. 1990) ([adverse] possession must be of such character as to indicate unmistakably an assertion of a claim of exclusive ownership in the occupant (emphasis in original)). Appellee Merrell must show possession exclusive enough to exclude Kolstad’s mineral lease. Wilhoite v. Sims, 401 S.W.3d 752, 758 (Tex.App. - Dallas 2013, no pet.)(denying adverse possession because the element of exclusive possession was unsatisfied).

II. Appellee’s res judicata defense in 2015 is not supported by Appellee’s record in 1993.

A judgment is res judicata only with respect to facts and conditions that existed at the time of the judgment. Res judicata will not bar a later action if there had been a change in the material facts between the first judgment and the second suit. Marino v. State Farm Fire & Cas. Ins. Co., 787 S.W.2d 948, 950 (Tex. 1990). The underlying record herein reveals a material change in Appellee’s actions. If the underlying record (1989 – 1993) contained even one of the numerous arguments from Appellee’s summary judgment, Appellants would have been on notice to directly attack the judgment. Comparing Appellee’s original petition (R. 219- 237) with the amended petition (R. 239-257) filed (two years) after Appellants’ answers – not a single word was changed. The reasonable conclusion is that Appellee had no need to respond to Appellants’ defenses because Appellee’s was unaffected by them – because, Appellee only sought to adversely possess the surface estate.

In 2015, Appellee argues that the adverse possession, (R. 132)

Whereas in 1989, Appellee swears:

Appellee makes the same statement two years later. (R. 254) This is clearly a material change in facts and representations between 1993 and 2015. Res judicata is a plea in avoidance. It does not deny the plaintiff's claims but rather alleges an independent reason why the plaintiff should not recover.

In re Staley, 320 S.W.3d 490, 502 (Tex. App. – Dallas 2010, pet. denied). For the doctrine of res judicata to apply in a subsequent proceeding, the original judgment must not be void nor contain fundamental error.

Appellee Merrell’s claim under 1993 judgment includes a finding of fact that “The persons holding the apparent record title to the Property, or portions thereof, have not exercised dominion over the property… during the twenty-

five (25) years preceding the commencement of this action.” (R. 306, emphasis added). This statement can only be correct if the judgment was limited to the surface estate. If Appellee Merrell’s judgment is expanded to include the mineral estate, res judicata is still inapplicable.

CONCLUSION AND PRAYER Appellants’ claims should not be barred by res judicata. Appellee’s claims to the mineral rights are unsupported by the underlying record and untenable at law. WHEREFORE PREMISES CONSIDERED, Appellants pray that this Court grant the relief requested and allow the case to be remanded to the 156th District Court for actions consistent with the orders of this Court.

Respectfully submitted, LAW OFFICES OF S. TIM YUSUF, PLLC.

By:___________________________________ S. Tim Yusuf State Bar No. 50511534 Pearland Town Center 11200 Broadway, Suite 2743 Pearland, Texas 77584 Telephone: 866-249-7633 Facsimile: 866-249-7635 [email protected]

CERTIFICATE OF COMPLIANCE I certify that this document was produced on a computer using Microsoft Word 2011 for Mac and contains 2,611 words as determined by the computer software’s word-count function and complies with TRAP 9.4(i)(3).

________________________________ S. Tim Yusuf

CERTIFICATE OF SERVICE The undersigned hereby certifies that on the 8th day of June 2015, a true and correct copy of the attached and foregoing Appellants’ Brief was electronically filed with the Clerk of the Court for the 13th Circuit Court of Appeals, and a copy of the foregoing Appellants’ Brief electronically served upon Counsel for Appellee

Counsel for Appellee Mary June Owen Merrell Michael C. Sartori 502A Houston Street P.O. Box 1222 George West, Texas 78022-1222 [email protected] __________________________________________ S. Tim Yusuf

NO. 13-14-00623-CV

IN THE COURT OF APPEALS 13TH DISTRICT OF TEXAS CORPUS CHRISTI, TEXAS

G.W. Kolstad and William Fraser, Appellants, v. Mary June Owen Merrell, Appellee

APPELLANTS’ APPENDIX

Documents from Kolstad and Fraser v. Merrell, Cause No. L-13-0197-CV-B in the 156th Judicial District Court, Live Oak County, Texas 1. Order Granting Summary Judgment - September 24, 2014 R. 357 ........................................................................................................... A003 2. Plaintiffs’ Original Petition – October 28, 2013 R. 5. .............................................................................................................. A004 3. Defendant’s Original Answer – November 21, 2013 R. 13. ............................................................................................................ A012 4. Defendant’s 1st Am. Answer – July 14, 2014 R. 41. ............................................................................................................ A040 5. Defendant’s 2nd Am. Answer – July 17, 2014 R. 53. ............................................................................................................ A052

A001 Documents from Merrell & Merrell v. Williman, et al, Cause No. 6990-A in the 36th Judicial District Court, Live Oak County, Texas

6. Plaintiff’s Original Petition for Adverse Possession – March 29, 1989 R. 219 ........................................................................................................... A125

7. Original Answer, Kolstad & Fraser – April 21, 1989 R. 265 ........................................................................................................... A144

8. Plaintiff’s 1st Am. Petition – October 23, 1991 R. 239 ........................................................................................................... A156

9. Findings of Fact from Adverse Possession – May 12, 1993 R. 281 ........................................................................................................... A175

10. Judgment granting Adverse Possession – May 12, 1993 R. 294 ........................................................................................................... A187

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A203 CLERK’S RECORD VOLUME 1 OF 1 Trial Court Cause No. L-13-0197-CV-B In the 156th District Court Of Live Oak County, Texas Honorable Joel B. Johnson, Judge Presiding ==================================================================== G.W. KOLSTAD AND WILLIAM FRASER, Appellant v. MARY JUNE OWEN MERRELL, Appellee ==================================================================== Appealed to the Court of Appeals, at Corpus Christi, Texas For the 13th District of Texas, at Corpus Christi, Texas ==================================================================== Attorney for Appellant: Name: SYED-SAIFUDDIN TIM YUSUF Address: 11200 Broadway St. Ste. 2743 Pearland, Texas 77584 Telephone: 866-249-7633 Fax: 866-249-7635 SBOT No. 50511534 Attorney for: G.W. Kolstad and William Fraser, Appellant ==================================================================== Delivered to the Court of Appeals, For the Thirteenth District of Texas, at Corpus Christi, Texas On this the 3rd day of February, 2015 Melanie Matkin, District Clerk Live Oak County, Texas

BY: /S/ Aleasha French deputy ==================================================================== Appellate Court Cause No. 13-14-00623-CV Filed in the Court of Appeals for the 13th District of Texas, At Corpus Christi, Texas This _____ day of February, 2015 Dorian Ramirez, Clerk By ____________________________, Clerk

TRIAL COURT CAUSE NO. L-13-0197-CV-B APPELLANT COURT CAUSE NO. 13-14-00623-CV

G.W. KOLSTAD AND WILLIAM FRASER § IN THE DISTRICT COURT V. § 156th DISTRICT COURT MARY JUNE OWEN MERRELL § LIVE OAK COUNTY, TEXAS _______________________________________________________________________ Volume 1 INDEX_________________________________________ Cover...……………………………………………………………………………….……...1 Index…………………………………………………………………………………………2 Caption ………………………………………………………………………………………4 Original Petition – Filed October 28, 2013………………………………………………… 5 Defendant’s Original Answer – Filed November 21, 2013………………………………13 Defendant’s First Amended Original Answer – Filed July 14, 2014……………………….41 Defendant’s Second Amended Original Answer – Filed July 17, 2014 ………………..… 53 Defendant’s Motion for Traditional Summary Judgment – Filed August 15, 2014 …...…126 Plaintiff’s Response to Defendant’s Motion for Summary Judgment – Filed September 19, 2014 ……………………………………………………………....…341 Defendant’s Reply to Plaintiff’s Response to Defendant’s Motion for Summary Judgment – Filed September 22, 2014 ....................................................................................................347 Order Granting Defendant’s Motion for Summary Judgment – Filed September 24, 2014 ....................................................................................................357 Plaintiff’s Notice of Appeal – Filed October 28, 2014……………………………….....358 Letter of Designation of Clerk’s Record – Filed January 8, 2015 …………………...…..360

p. 2

Bill of Costs – Filed January 9, 2015 …………………………………………………361 Payment Receipt in Full for Clerk’s Record – Filed February 2, 2015 ………………362 Judge’s Docket Sheet………………………………………………………………….363 Clerk’s Certificate …………………………………………………………………….364

The State of Texas § County of Live Oak §

In the 156th District Court of Live Oak County, Texas, the Honorable Joel B. Johnson, Judge Presiding, the following proceedings were held and the following instruments and other papers were filed in this cause, to-wit:

Trial Court Cause Number L-13-0197-CV-B

§ IN THE 156th DISTRICT COURT G.W. KOLSTAD and WILLIAM FRASER, Appellant OF v. MARY JUNE OWN MERRELL, § LIVE OAK COUNTY, TEXAS Appellee

The State of Texas § County of Live Oak §

I, Melanie Matkin, Clerk of the 156th District Court of Live Oak County, Texas, do hereby certify that the documents contained in this record to which this certification is attached are all of the documents specified by Texas Rule of Appellate Procedure 34.5(a) and all other documents timely requested by a party to this proceeding under Texas Rule of Appellate Procedure 34.5(b).

GIVEN UNDER MY HAND AND SEAL at my office in Live Oak County, Texas, this the 3rd day of February, 2015.

MELANIE MATKIN, District Clerk Live Oak County, Texas

By /s/ Aleasha French deputy