In December, 2008, my late wife and I sold our homestead in Richland Hills, TX. The closing was conducted in the office of a fee attorney by one of his employees/escrow agents. We had an active mineral lease at the time and intended to reserve all mineral rights. This reservation was included in our sales contract and was, in fact, a part of the warranty deed that we signed. At closing, we were given, and I still have a signed deed with a signed mineral reservation exhibit. (The warranty deed that I have is a copy of the one that was supposed to have been sent to be filed at Tarrant County. The acknowlegement is signed by the notary but not completed or sealed. The Exhibit has original signatures but is not required to be signed by a notary.) I assumed that all of this had been filed for record. Executed deeds are sent to the new owner and not to the seller. In late 2014 or early 2015, I contacted Chesapeake to try to find out the status of several properties for which I own mineral rights. (Chesapeake does not seem to keep property owners updated on inactive properties except when Division Orders are issued or a lease needs to be renewed.) As a result of this inquiry, a Chesapeake employee informed me that I was not entitled to any mineral rights to my old homestead because the mineral reservation exhibit to the transferring warranty deed was not filed in the county real estate records. He wrote that the second page of the warranty deed did refer to an exhibit containing a mineral reservation; however, no exhibit was ever attached or recorded. By not being able to read what the reservation actually was, it became an invalid reservation. Although I did own the minerals when I signed the lease for this property, the minerals passed to the next owner and have since been passed again, because of the incomplete reservation involved in my conveyance.
Can my mineral rights and lost royalties be restored to me in view of the above?
Would there be a statute of limitations issue associated with a any civil suit in this case since I am just discovering this "negligent" act by the fee attorney or his agent(s)?
Can Chesepeake pass my rights on to another owner without contacting me, even though I had a lease agreement with them and there was mention of my reservation in the warranty deed?
I understand that the value of these natural gas royalties for a city lot are not of great value. I am 70 years old at this time. And I would probably not be able to recoup in my lifetime all of the legal fees associated with litigation.
I found your deed on the Tarrant County website, I see where it mentions the "Mineral Reservation Exhibit with Surface Waiver". Texas has very strict rules with regard to correction deeds, usually you can't correct a mineral interest in a deed, but in this case, there is at least an argument that a missing exhibit that was referenced in the deed ought to be able to be added.
Furthermore, by law, all recitals in a deed are deemed known by all people who are subsequent purchasers, so subsequent purchasers are required to inquire further into anything found on the face of their deed. It looks like the person you sold it to has since sold it, but all is not technically lost, as they may have had a legal duty to inquire about this, or at least there is a legal argument that you could make that it is not. Whoever told you that the reservation became an "invalid reservation" is not being completely accurate.
You could possibly recover your minerals in a litigation based on the face of the deed saying that there is a mineral reservation, but you would have to provide some evidence that the exhibit you have in your file is accurate, which may be difficult to prove.
You can sue an attorney for malpractice for a period of 2 years after you DISCOVER or SHOULD HAVE DISCOVERED the malpractice action (but I am not saying that what the attorney or his agent did was or was not malpractice).
It is futile to question what Chesapeake can or cannot do. They do lots of stuff that they "can't" do. Only after you resolve this with the other parties involved would it be worth getting in touch with Chesapeake.
Patrick Murphy
Problem Solver
Troublemaker
Lawyer
Patrick,
Thank you for your very helpful reply. I will have to think about what I might do next. Whatever it is, it will have to be inexpensive for this cause. I have thought about contacting the fee attorney involved to see if he would try to get it straight at his costs. However, he might not be willing to do this because accepting this task may be viewed as acknowlegement of his error. And research on the net has revealed that he has had some very dissatisfied clients. I have previously corresponded with an attorney with Stewart Title (the company that the fee attorney represented in my case). The Stewart Title attorney pulled the file and said that a copy of the reservation exhibit was not in the file and opined that the fee attorney had probably failed to include the exhibit for filing. So, as you said, it may be difficult to prove that my original copy of the exhibit is valid/accurate. I am concerned at this point about putting much effort or resources into this because I recently read something about a Texas court ruling that pretty much makes the clock start on the statute of limitations on mineral rights at the moment of the property transaction with no excuse to delay the clock for a person in my position.
Kenney Ownbey
I first suggest going to the title company that closed the sale and see if they sent the complete deed for recording. It is not unheard of for a county clerk to lose a page or for the title company clerk to fail to send a complete document for recording. You will need your GF #, which is the file number the title company assigns each of its closings.
In addition to the excellent responses and advice you have already received, if you are absolutely unable to get the deed corrected and the exhibit added to the Tarrant County records, consider filing a claim against the title company. They should carry Error & Omissions insurance for a situation just like this.
Here's my question to you: At the time of the CLOSING, you signed a Warranty Deed AND you signed the Mineral Reservation Exhibit, right? If the answer is "Yes," then in my opinion you have a claim against the Title Company's Errors and Omissions Insurance Policy. I think they are required by law to carry one. And even if you did not sign the Mineral Reservation Exhibit at the time of the closing, you might STILL have a claim against the Title Company IF, as you stated, the mineral reservation WAS a part of the Sales Contract. Isn't the Title Company's job to make sure that the Sales Contract is fulfilled?
In addition to all the other thoughts, I would add threethoughts.
1. There is a statute of limitations, so don't wait too long to do something.
2. There are many lawyers who would take this case on a contingency, In other words, they would get part of the minerals recovered.
3. Have you talked to the buyers?
Low cost. Record the reservation exhibit yourself referencing the recorded deed of sale. You will be placing a cloud on the title of the mineral rights and before the surface owner will be paid royalty you will have to be dealt with.
Then you make some phone calls. Maybe you can work something out. I would not be surprised if Stewart Title made the error as they made an error regarding my mineral rights when I bought my home but I caught it.