                                                                              ACCEPTED
                                                                          12-15-00177-CV
                                                             TWELFTH COURT OF APPEALS
                                                                           TYLER, TEXAS
                                                                   10/22/2015 11:04:34 AM
                                                                                Pam Estes
                                                                                   CLERK

                     NO. 12-15-00177-CV

     __________________________________________________
                                                     FILED IN
                                                 12th COURT OF APPEALS
                                                       TYLER, TEXAS
            IN THE TWELFTH COURT OF       APPEALS10/22/2015 11:04:34 AM
                      TYLER, TEXAS                      PAM ESTES
                                                          Clerk
     __________________________________________________

        WALTER BOUNDS and wife, CAROLYN BOUNDS,
               Appellants and Cross-Appellees

                              v.

JOHN THOMAS PRUD'HOMME, JOSEPH GILBERT PRUD'HOMME,
JOSEPH LYNN PRUD'HOMME, PETER A. BREEN, Individually and as
 Successor Trustee of the BREEN FAMILY TRUST, JANET M. SUTRO,
 SUSAN E. BREEN, and TERRANCE E. BREEN, Individually and d/b/a
  E.G. AND M.A. PRUD'HOMME BENEFICIARIES PARTNERSHIP,

                 Appellees and Cross-Appellants
     __________________________________________________

                    BRIEF OF APPELLEES

     __________________________________________________



                               Robert G. Hargrove
                               State Bar No. 24032391
                               rob@texasenergylaw.com
                               Osborn, Griffith & Hargrove
                               515 Congress Avenue, Suite 2450
                               Austin, Texas 78701
                               (512) 476-3529
                               (512) 476-8310 Facsimile
               IDENTITY OF PARTIES AND COUNSEL

Defendants-Appellees/Cross Appellants:

John Thomas Prud’homme
Joseph Gilbert Prud’homme
Joseph Lynn Prud’homme
Peter A. Breen, Individually and as Successor Trustee of the Breen Family
Trust
Janet M. Sutro
Susan E. Breen
Terrence E. Breen
The E.G. and M.A. Prud’homme Beneficiaries Partnership

Trial and Appellate Counsel for Appellees/Cross Appellants:

Robert G. Hargrove
Osborn, Griffith & Hargrove
515 Congress Avenue, Suite 2450
Austin, Texas 78701

Additional Trial Counsel for Appellees/Cross Appellants:

J. Keith Stanley
Russell R. Smith
Fairchild, Price, Haley & Smith, LLC
P.O. Drawer 631668
Nacogdoches, Texas 75963

Plaintiffs-Appellants/Cross Appellees:

Walter Bounds and wife, Carolyn Bounds

Trial and Appellate Counsel for Appellants/Cross Appellees:

Thomas R. McLeroy, Jr.
P.O. Box 668
Center, Texas 75935




                                       ii
                                 TABLE OF CONTENTS


IDENTITY OF PARTIES AND COUNSEL……………………………........ii
INDEX OF AUTHORITIES…………………………………………….........v
STATEMENT OF THE CASE……………………………………………....ix
STATEMENT REGARDING ORAL ARGUMENT…………………….......x
RECORD…………………...………………………………………………....x
BACKGROUND……………………………………………………………..1
SUMMARY OF ARGUMENT………………………………………………2
ARGUMENT………………………………………………………………....3

 I.   Response to Issue No. 1: The Warranty Deeds unambiguously
      reserved the mineral estate to the Prud’hommes as a matter of law. ....3

      A.    Summary of Unambiguous Reservation Argument .....................3

      B.    Standard of Review for Unambiguous Reservation Argument ...4

      C.    Under Texas rules of construction, the deeds unambiguously
            reserved the mineral estate to the Prud’hommes as a matter of
            law. ...............................................................................................5

            1. The deeds unambiguously reserved the mineral estate to the
               Prud’hommes as a matter of law under the “four corners”
               rule. ........................................................................................ 5

            2. The deeds unambiguously reserved the mineral estate to the
               Prud’hommes as a matter of law because “magic words”
               are not required to effect a reservation. ................................. 8

            3. The deeds unambiguously reserved the mineral estate to
               the Prud’hommes under Texas rules regarding subsidiary
               canons of construction. ........................................................ 10

      D. The Bounds Appellants incorrectly apply the surrounding
         circumstances evidence and parol evidence rules. ........................13




                                                    iii
 II. Response to Issue No. 2: There was no “mutual mistake” as a matter
     of law. .................................................................................................16

      A.       Summary of Mutual Mistake Argument ....................................16

      B.       Standard of Review under Mutual Mistake Argument ..............16

      C.       Burden of Proof under Mutual Mistake Argument ....................17

      D.       The trial court correctly held that there was no mutual mistake
               as a matter of law. ......................................................................19

 III. Response to Issue No. 3: The four-year statute of limitations bars
      the Bounds Appellants’ claims as a matter of law. .............................22

      A.       Summary of Statute of Limitations Argument...........................22

      B.       The purpose of statutes of limitations requires that the Bounds
               Appellants cannot toll the four-year statue of limitations. .........23

      C.       Burden to prove statute of limitations argument. .......................24

      D.       The Bounds Appellants cannot toll the four-year statue of
               limitations as a matter of law. ....................................................24

               1. What is the discovery rule? ................................................. 24

               2. The discovery rule does not apply to unambiguous deeds
                  under Texas law. .................................................................. 25

               3. Mr. Prud’homme’s alleged silence is irrelevant to the
                  discovery rule’s application. ................................................ 29

 IV. Even if the Bounds Appellants were right, which they are not, they
     request the wrong relief. .....................................................................31

PRAYER………………………………………………………....……….. 32
CERTIFICATE OF SERVICE…….……………………………..……..…34
CERTIFICATE OF COMPLIANCE……………………………..……..…34




                                                      iv
                                   INDEX OF AUTHORITIES

Cases	  
Barfield v. V.C. Holland,
 844 S.W.2d 759 (Tex.App.—Tyler 1993, writ denied) .......................26, 29

Boulanger ex rel. Westlum Trust v. Waste Mgmt. of Tex., Inc.,
  403 S.W.3d 1 (Tex.App.–Houston [1st Dist.] 2012, pet. denied)
  ................................................................................................................4,12

BP America Production Co. v. Marshall,
  342 S.W.3d 59 (Tex. 2011) .................................................................25,30

Bright v. Johnson,
  302 S.W.3d 483 (Tex. App.—Eastland 2009, no pet. h.) ........................6,7

Brown v. Havard,
  593 S.W.2d 939 (Tex. 1980) ...............................................................27,28

Cherokee Water Co. v. Freeman,
  33 S.W.3d 349 (Tex.App.—Texarkana 2000, no pet.) .............................11

Coker v. Coker,
  650 S.W.2d 391 (Tex. 1983); ..................................................................4,5

Computer Associates International v. Altai,
  918 S.W.2d 453 (Tex. 1994) ....................................................................25

Computer Assocs. Int'l, Inc. v. Altai, Inc.
  918 S.W.2d 453 (Tex. 1996) ....................................................................23

Concord Oil Co. v. Pennzoil Exploration and Prod. Co.,
  966 S.W.2d 451 (Tex. 1998) ......................................................................8

Cosgrove v. Cade,
  ___ SW3d ___, No. 14-0346, 2015 WL 3976719 ....................2,3,12,25,27

Day & Co. v. Texland Petroleum,
  786 S.W. 2d 667 (Tex. 1990) .....................................................................7


                                                          v
Dynegy Midstream Servs., Ltd. P’ship v. Apache Corp.,
 294 S.W.3d 164 (Tex. 2009) ....................................................................4,5

Elder v. Anadarko, No. 12-10-00250, 2011 WL 2713817
  (Tex.App.—Tyler, no pet.) ..........................................................3,4,5,11,12

Estes v. Republic Nat. Bank of Dallas,
  462 S.W.2d 273 (Tex. 1970) ....................................................................18

Fisher v. Wynn,
   No. 12-11-00008-CV, 2011 WL 3338771,
  (Tex.App.—Tyler 2011, no pet.) (mem. op.) .......................................10,14

Friendswood Development Co. v. McDade & Co.,
  926 S.W.2d 280 (Tex. 1996) ....................................................................14

Glidden Co. v. CDNE, Inc.,
  No. 12-09-00283-CV, 2011 WL 686286
 (Tex.App.—Tyler 2011, no pet.) (mem. op.) .......................................17,19

GXG, Inc. v. Texacal Oil & Gas,
 977 S.W.2d 403 (Tex.App.—Corpus Christi 1998, pet. denied)...............17

Hardy v. Bennefield,
 368 S.W.3d 643 (Tex.App.—Tyler 2012 no pet.) .....................................18

Harris v. Windsor,
 294 S.W.2d 798 (Tex. 1956) .......................................................................8

HECI Exploration Co. v. Neal,
  982 S.W.2d 881 (Tex. 1988) ....................................................................12

Hooks v. Samson Lone Star, Ltd. Partnership,
  No. 12-0920, 2015 WL 393380 (Tex., January 30, 2015)..................27, 30

Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd.,
  352 S.W.3d 462 (Tex. 2011) ...............................................................13,14

Johnson v. Conner,
  260 S.W.3d 575 (Tex.App.—Tyler 2008, no pet.) ....................................19


                                                 vi
Johnson v. Driver,
  198 S.W.3d 359 (Tex.App.—Tyler 2006, no pet.) ....................................14

Kachina Pipeline Co., Inc. v. Lillis,
 No 13-0596, 2015 WL 3653272 (Tex. June 12, 2015) ................................4

Little v. Linder,
   651 S.W.2d 895 (Tex. App.—Tyler 1983, writ ref'd n.r.e.) .......................7

Luckel v. White,
  819 S.W.2d 459 (Tex. 1991) ....................................................................5,8

Miles v. Martin,
 321 S.W.2d 62 (Tex. 1959) .......................................................................22

Murray v. San Jacinto Agency, Inc.,
 800 S.W.2d 826 (Tex. 1990) .....................................................................23

National Union Fire Ins. Co. of Pittsburgh, PA v. CBI Industries, Inc.,
 907 S.W.2d 517 (Tex. 1995) ...............................................................4,5,14

Nevil v. TFW Management, Inc.,
 No. 12-11-00023-CV, 2012 WL 220252,
 (Tex.App.—Tyler 2012, no pet.) (mem. opinion) .......................................9

Pounds v. Jurgens,
 296 S.W.3d 100, 107
 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) .................................7

R & P Enterprises v. LaGuarta, Garvel & Kirk, Inc.,
  596 S.W.2d 517 (Tex. 1980) .....................................................................14

S.V. v. R.V.,
  933 S.W.2d 1 (Tex. 1996) .........................................................................25

Santa Fe Petroleum, L.L.C., v. Star Canyon Corp.,
  156 S.W.3d 630 (Tex.App.—Tyler 2004, no pet.) ..............................17, 19

Shell Oil Co. v. Ross,



                                                  vii
  356 S.W.3d 924 (Tex. 2011) .....................................................................30

Stowe v. Head,
  728 S.W. 2d 120 (Tex.App.—Tyler 1987, no writ) .............................26,37

Sullivan v. Barnett,
  471 S.W.2d 39 (Tex. 1971) ..................................................................27,28

Sun Oil Co. v. Madeley,
  626 S.W.2d 726 (Tex. 1981) .....................................................................13

Temple-Eastex Inc. v. Addison Bank,
  672 S.W.2d 793 (Tex. 1984) .....................................................................11

Thalman v. Martin,
  635 S.W.2d 411 (Tex. 1982) .....................................................................18

Tipton v. Brock,
  431 S.W.3d 673
  (Tex.App.—El Paso 2014, pet. denied June 26, 2015) ..............................26

Trahan v. Mettlen,
  428 S.W.3d 905 (Tex.App.—Texarkana 2014, no pet.) ............................26

Victory Energy Corp., SmartGas, L.L.C. v. Oz Gas Corp.,
  461 S.W.3d 159 (Tex.App.—El Paso 2014, pet. denied) ...........................4

Wagner & Brown, Ltd. v. Horwood,
  58 S.W.3d 732 (Tex. 2001) ..........................................................23, 25, 27

Wessley Energy Corp. v. Jennings,
 736 S.W.2d 624 (Tex. 1987) .....................................................................12

Woods v. William M. Mercer, Inc.,
 769 S.W.2d 515 (Tex. 1988) .....................................................................24

Wylie v. Hide-A-Way Lake Club, Inc.,
  No. 12-12-00290-CV, 2013 WL 6797871,
 (Tex.App.—Tyler 2013, pet. denied) (mem. op.) ......................................23




                                                viii
                      STATEMENT OF THE CASE

Nature of the Case:    This is a deed construction case. Defendants-
                       Appellees/Cross-Appellants (the “Prud’hommes”)
                       sold roughly 126 acres of property in San
                       Augustine County to Plaintiffs-Appellants/Cross
                       Appellees (the “Bounds Plaintiffs”) in 2001.
                       Supp.CR209-222. The property was conveyed
                       from the Prud’hommes to the Bounds Plaintiffs by
                       way of six Warranty Deeds. Id. On October 8,
                       2013, the Bounds Plaintiffs filed their Original
                       Petition in the trial court, asserting that the
                       Warranty Deeds conveyed the mineral estate to the
                       Bounds Plaintiffs, and asking, in the alternative,
                       that they be reformed if the court found that the
                       Warranty Deeds reserved the mineral estate to
                       their grantors. Supp.CR5-65. The Prud’hommes
                       answered, generally denying the Bounds Plaintiffs
                       claims, and asserting that the statute of limitations
                       barred     the   potential     reformation     claim.
                       Supp.CR66-69.
Trial Court:           1st District Court of San Augustine County, Texas;
                       The Honorable Craig M. Mixson presiding.
Course of Proceedings: The case was tried to the court on February 25,
                       2015, and a Judgment was entered on March 9,
                       2015. Supp.CR202-208. By its Judgment, the
                       court found that one of the six deeds was
                       unambiguous, that it reserved the mineral estate to
                       its grantors, and that the Bounds Plaintiffs could
                       not prevail on their attempt to reform the deed. Id.
                       The Prud’hommes do not appeal those rulings.

                         The Judgment also found that the other five deeds
                         were ambiguous and did not reserve the mineral
                         estate to their grantors. Id. The Prud’hommes
                         appeal those findings. Supp.CR225-226. Findings
                         of Fact and Conclusions of Law were signed by
                         the court on May 6, 2015. Supp.CR209-222




                                     ix
           STATEMENT REGARDING ORAL ARGUMENT

      This is a fairly straightforward case involving the construction of deeds

and the application of the statute of limitations. The Prud’hommes do not

believe oral argument would significantly aid the decisional process, and so

they do not request oral argument. However, if the Court decides that oral

argument is appropriate, the Prud’hommes would request that they be

permitted to participate.


                                 RECORD

      The record in this appeal includes a Clerk’s Record and a

Supplemental Clerk’s Record. Citations to each will be to page number:

CR___ or Supp.CR___. The record in this appeal includes a two-volume

Reporter’s Record. Citations to it will be to volume and page number:

___RR___. The trial exhibits are found in Volume 2 of the Clerk’s Record,

and they will be cited as P.Ex.__ or D.Ex.__.




                                      x
TO THE HONORABLE COURT OF APPEALS:

                               BACKGROUND

      This case, tried to the court, is a dispute over the construction of a

series of warranty deeds executed in 2001 to consummate a real estate

transaction in which the Prud’hommes sold approximately 126 acres of land

in San Augustine County to the Bounds Plaintiffs.

      The parties prepared and executed the deeds in two phases. A single

initial deed was prepared and executed, which conveyed the majority of the

interest in the property. Later, five additional deeds were prepared and

executed, which conveyed the remainder of the interest in the property.

      More than a decade after the transaction closed, the Bounds Plaintiffs

asserted that the mineral estate should have been conveyed to them in the

transactions and filed this lawsuit.

      The court ruled in the Prud’hommes favor as to the initial deed, both

that it unambiguously did reserve the minerals to the Prud’hommes, and that

the Bounds Plaintiffs could not reform it. The Bounds Plaintiffs appealed

that ruling, and this Appellees’ Brief responds to that appeal.

      The court also ruled that the five subsequent deeds were ambiguous,

and the court construed them to convey the mineral estate to the Bounds




                                       1
Plaintiffs.   The Prud’hommes appealed those rulings.           Brief of Cross-

Appellants, filed September 24, 2015.

                       SUMMARY OF ARGUMENT

       The need for stability and certainty is critical in deed cases, especially

in Texas, where significant mineral interests, as well as ongoing exploration

and production of oil and gas, are at stake.       The Bounds Appellants are

attempting to blur the lines in an area of law that, according to a recent

Supreme Court of Texas case, “requires bright lines and sharp corners.”

Cosgrove v. Cade, ___ SW3d ___, No. 14-0346, 2015 WL 3976719 at *5-*6

(Tex. June 26, 2015, rehearing denied). They are asking this Court to ignore

an unambiguous mineral reservation in a deed, and, failing that, to reform

the deed more than eight years after the statute of limitations expired.

       At trial, the Bounds Appellants based a significant part of their closing

argument on a Fort Worth Court of Appeals case that held plaintiffs may toll

the statute of limitations to reform unambiguous deeds. 1RR163:21-25 –

1RR164:1-24. Since trial, the Supreme Court of Texas reversed the Fort

Worth Court’s judgment. Cosgrove, 2015 WL 3976719 at *1. The Supreme

Court held that “A plainly evident omission on an unambiguous deed’s face

is not a type of injury for which the discovery rule is available . . . At

execution, the grantor is charged with immediate knowledge of an




                                        2
unambiguous deed’s material terms.” Cosgrove, 2015 WL 3976719 at *3.

Since the deed at issue in this appeal unambiguously reserved the contested

minerals to the Prud’hommes, and since the Bounds Appellants cannot

legally reform the deed, this Court should uphold the portion of the trial

court’s holding that the initial deed is unambiguous, and that it reserved any

and all minerals to the Prud’hommes.

                               ARGUMENT



I.    Response to Issue No. 1: The Warranty Deeds unambiguously
      reserved the mineral estate to the Prud’hommes as a matter of
      law.
      A. Summary of Unambiguous Reservation Argument

      On June 26, 2015, the Supreme Court of Texas explained that there is

a critical “need for stability and certainty in deed records.” Cosgrove, 2015

WL 3976719, at *5-*6. This area of law “requires bright lines and sharp

corners.” Id. There are strict rules for deed construction in Texas, and the

jurisprudence favors courts finding deeds unambiguous. See, e.g., Elder v.

Anadarko, No. 12-10-00250, 2011 WL 2713817 at *3 (Tex.App.—Tyler, no

pet.) (mem. op.). The Bounds Appellants ignore these clear mandates and

create their own standards as they go, picking and choosing various canons

of construction that do not apply. Under Texas law, it is clear that the trial

court correctly held that the initial deed is unambiguous as a matter of law.


                                       3
C.L.1; 1RR26:23-25 to 1RR27:1-4.          The initial deed is unambiguous

according to: (1) the “four corners” rule; (3) no “magic words” being

required to effect a reservation; (3) subsidiary canons of construction; and

(4) Texas rules of evidence.


      B.   Standard of Review for Unambiguous Reservation Argument

      Whether a deed is ambiguous is a legal question for the court, as is the

construction of an unambiguous deed.         Both these legal questions are

reviewed de novo. See Kachina Pipeline Co., Inc. v. Lillis, No 13-0596,

2015 WL 3653272 (Tex. June 12, 2015) (“Whether a contract is ambiguous

is itself a legal question for the court,” citing Dynegy Midstream Servs., Ltd.

P’ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009)); National Union

Fire Ins. Co. of Pittsburgh, PA v. CBI Industries, Inc., 907 S.W.2d 517, 520

(Tex. 1995); Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983); Elder, 2011

WL 2713817 at *1; Victory Energy Corp., SmartGas, L.L.C. v. Oz Gas

Corp., 461 S.W.3d 159, 172 (Tex.App.—El Paso 2014, pet. denied) (“We

review questions of deed construction de novo.”); Boulanger ex rel.

Westlum Trust v. Waste Mgmt. of Tex., Inc., 403 S.W.3d 1, 5 (Tex.App.–

Houston [1st Dist.] 2012, pet. denied).




                                      4
      C. Under Texas rules of construction, the deeds unambiguously
         reserved the mineral estate to the Prud’hommes as a matter
         of law.
             1.   The deeds unambiguously reserved the mineral estate
                  to the Prud’hommes as a matter of law under the “four
                  corners” rule.

      In order to determine whether deeds are ambiguous, a court must first

attempt to ascertain the parties’ intent solely from the “four corners” of the

deeds. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991). If the deeds can

be given a definite legal meaning, then they are not ambiguous. National

Union Fire Ins. Co., 907 S.W.2d at 520, Coker, 650 S.W.2d at 393; Elder,

2011 WL 2713817 at *1.         Even if different parts of the deeds appear

contradictory, the court must strive to harmonize all of the parts, construing

the deeds to give effect to all of their provisions. Luckel, 819 S.W.2d at 462.

Deeds are not ambiguous simply because the parties disagree over their

meaning and advance conflicting interpretations.          Dynegy Midstream

Services, Ltd., 294 S.W.3d at 168; Elder, 2011 WL 2713817 at *1.

      The Bounds Appellants attempt to create confusion and ambiguity

where none exists. The deeds at issue unambiguously reserved the mineral

estate to the Prud’hommes with the following language:

      Reservations from and Exceptions to Conveyance and
      Warranty: TITLE to any of the oil, gas and other minerals, in,
      under and that may be produced from the above-described real




                                      5
      property, together with all rights, privileges and immunities
      relating thereto, including the following . . .

P.Ex.5.

      The paragraph then goes on to enumerate two specific earlier mineral

reservations, which would be exceptions to the deed’s warranty. P.Ex.5.

The use of the term “including” indicates that the following listed earlier

mineral reservations are a partial list – i.e., part of the general reservation of

the entire mineral estate – and not an exclusive list. See Black’s Law

Dictionary (9th ed. 2009) (definition of “include”).

      Under the standard paragraph heading “Reservations from and

Exceptions to Conveyance and Warranty:” the deeds did the following:

First, they reserved existing mineral rights to the property in favor of the

Prud’hommes. Second, they excepted from the conveyance and warranty

two prior mineral reservations.

      The Bounds Appellants seek to manufacture ambiguity in the deeds

by confusing and conflating the terms “reservation” and “exception.” But

these terms have clear, distinct, and settled meanings under Texas law. A

“reservation” is the creation of a new right in favor of the grantor arising out

of the conveyance; it must always be in favor of and for the benefit of the

grantor. See Bright v. Johnson, 302 S.W.3d 483, 488 (Tex. App.—Eastland

2009, no pet. h.) (distinction between reservation and exception is that


                                        6
reservation must always be in favor of and for benefit of grantor); see also

Little v. Linder, 651 S.W.2d 895, 900-01 (Tex. App.—Tyler 1983, ref n.r.e.)

(attempted reservation in favor of third party is ineffective).       A classic

example of a reservation is a grantor’s retention of all or part of the mineral

rights to the property.    See, e.g., Bright, 302 S.W.3d at 486 (grantor’s

reservation to himself of royalty interests, mineral rights, and other rights);

Pounds v. Jurgens, 296 S.W.3d 100, 107 (Tex. App.—Houston [14th Dist.]

2009, pet. denied) (reservation of mineral interests by the owner effects

horizontal severance and creates two separate and distinct estates – one in

surface and one in minerals).

      An “exception,” by contrast, is typically made for any part of the

described property that the grantor does not own. An exception may exclude

a particular part of the tract that the grantor or a prior owner sold to a third-

party or – as here – a portion of the mineral rights reserved by a previous

owner of the property. See, e.g., Day & Co. v. Texland Petroleum, 786 S.W.

2d 667, 669-70 (Tex. 1990) (deed excepted fraction of mineral estate

previously reserved by prior grantor).

      Applying these principles here, the reference to “TITLE to any of the

oil, gas and other minerals, in under and that may be produced from the

above-described real property” – which directly follows the heading




                                         7
“Reservations from and Exceptions to Conveyance and Warranty” – could

only be a reservation. This is a classic reservation of mineral rights in favor

of the grantors.       This severs the property rights into a mineral estate

(reserved to the Prud’hommes) and a surface estate (conveyed to the Bounds

Appellants).        The fact that it is made subject to the prior excepted

reservations does not and cannot change its character.


               2.    The deeds unambiguously reserved the mineral estate
                     to the Prud’hommes as a matter of law because “magic
                     words” are not required to effect a reservation.

      The Bounds Appellants wrongly suggest that the deeds required some

sort of “magic words” to effect a reservation of the minerals in favor of the

grantors.   The Texas Supreme Court has long rejected arbitrary and

mechanical rules of construction, such as magic words or clauses.

      We have long since relaxed the strictness of the ancient rules
      for the construction of deeds, and have established the rule for
      the construction of deeds as for the construction of all contracts,
      -that the intention of the parties, when it can be ascertained
      from a consideration of all parts of the instrument, will be given
      effect when possible. That intention, when ascertained, prevails
      over arbitrary rules.

Harris v. Windsor, 294 S.W.2d 798, 800 (Tex. 1956) (citations omitted).

See also Concord Oil Co. v. Pennzoil Exploration and Prod. Co., 966

S.W.2d 451, 454 (Tex. 1998) (citing Luckel, 819 S.W.2d at 461-62).

Similarly, this Court found deed restrictions unambiguous and rejected the



                                        8
argument that “absence of any specific language” was indicative of the

framer’s intent.        Nevil v. TFW Management, Inc., No. 12-11-00023-CV,

2012 WL 220252, *4 (Tex.App.—Tyler 2012, no pet.) (mem. opinion).

          Despite this clear legal authority, the Bounds Appellants insist on

“magic words,” and argue that the language that their own attorney used to

draft the deeds, which was from a State Bar of Texas form, was insufficient

to create a reservation. Brief of Appellant, p. 11. They complain that “the

deeds’ text is not a complete sentence and contains no verb,” and that there

is no “affirmative expression.” Brief of Appellant, p. 13-14. But there is an

affirmative expression in the reservations and exceptions clause itself. What

could a description of the grantors’ mineral estate,1 typed directly under the

heading “Reservations from and Exceptions to Conveyance and Warranty,”

possibly be, if not a reservation?

          If this Court were to adopt the Bounds Appellants’ argument, then the

State Bar of Texas form deed of that era would be rendered ineffective, and

record title would become unsettled, statewide.




1
    As distinguished from the subsequent descriptions of prior reservations.



                                              9
             3.   The deeds unambiguously reserved the mineral estate
                  to the Prud’hommes under Texas rules regarding
                  subsidiary canons of construction.

      The fundamental rules of construction discussed above require courts

to ascertain the parties’ intent as expressed in the four corners of deeds, to

harmonize all parts of deeds, and to construe deeds to give effect to all of

their provisions. The Bounds Appellants incorrectly use subsidiary canons

of construction to argue that this Court should construe the deeds against the

Prud’hommes.      The Bounds Appellants allege that deeds should be

construed: (1) most strongly against the grantor; and (2) to confer upon the

grantee the greatest estate that the terms will permit. These canons of

construction do not apply here. The Twelfth Court of Appeals has stated

that when a deed can be given a definite legal meaning, the following

subsidiary canons of construction do not apply: (1) that a deed’s language

should be construed against the grantor; and (2) deeds should be read to

convey the greatest estate possible to the grantee. Fisher v. Wynn, No. 12-

11-00008-CV, 2011 WL 3338771, *5-6 (Tex.App.—Tyler 2011, no pet.)

(mem. op.). The Court explained, “[b]oth are subordinate to the rule that

every part of the deed should be harmonized and given effect.” Id. at *6.

      Subsidiary canons of construction are inapplicable here, because the

four corners of the deeds clearly reserve the minerals. But if the Court were




                                     10
to consider subsidiary canons, such canons also require a ruling in favor of

the Prud’hommes. Texas courts construe a writing strictly against the party

who drafted it. Temple-Eastex Inc. v. Addison Bank, 672 S.W.2d 793, 798

(Tex. 1984). This canon favors the Prud’hommes’ interpretation, because

the Bounds Appellants’ attorney drafted the deeds. 1RR117:12-18; F.F.14.

      Notably, the Texarkana Court of Appeals has held that construing a

deed strictly against the drafter trumps construing a deed against the grantor.

Cherokee Water Co. v. Freeman, 33 S.W.3d 349, 355 (Tex.App.—

Texarkana 2000, no pet.). The court explained that “it is not the identity of

the grantor, but the drafter, that is important because the law requires that

any doubt should be resolved against the scrivener . . . The language will be

construed strictly against the party who drafted the deed because the drafter

is responsible for the language used.” Id.

      Moreover, the Twelfth Court of Appeals has explained that canons of

construction can be applied for “practical” reasons “in order to avoid a

finding of ambiguity,” not to insert ambiguity where none exists. Elder,

2011 WL 2713817 at *3 (emphasis in original). The Court uses rules of

construction: (1) to avoid “the difficulties inherent in the admission of

extrinsic evidence;” (2) to avoid “individual adjudication of deeds” that

“would lead to disparate results depending on the circumstances extraneous




                                      11
to the instrument;” and (3) to avoid complicating “the job of title examiners

who would be unable to rely on the written word.”            Elder, 2011 WL

2713817 at *3; see also Boulanger ex rel. Westlum Trust v. Waste Mgmt. of

Tex., Inc., 403 S.W.3d 1, 4 (Tex.App.–Houston [1st Dist.] 2012, pet. denied)

(courts consider “rules of construction to avoid a finding of ambiguity in the

deed at issue.”)

      This Court’s practical application (or judicious non-application) of

subsidiary canons of construction is in line with the Supreme Court of

Texas. In June of this year, the Supreme Court of Texas explained that there

is a critical “need for stability and certainty in deed records,” and “[t]he

virtues of legal certainty and predictability are nowhere more vital than in

matters of property ownership, an area of law that requires bright lines and

sharp corners.” Cosgrove, 2015 WL 3976719 at *5-*6; see also HECI

Exploration Co. v. Neal, 982 S.W.2d 881, 887 (Tex. 1988) (Texas

jurisprudence emphasizes the need for stability and certainty when title to

real property is at issue); Wessley Energy Corp. v. Jennings, 736 S.W.2d

624, 629 (Tex. 1987) (“Established title to an ownership of land should be

settled and stable.”). Texas jurisprudence requires that any doubt should be

resolved in favor of a finding that a deed is unambiguous.




                                     12
      D. The Bounds Appellants incorrectly apply the surrounding
         circumstances evidence and parol evidence rules.

      If a court cannot make an ambiguity ruling based on the four corners

of deeds, then it may consider evidence of the circumstances surrounding the

execution of the deeds simply as an aid in the construction of the deeds’

language. Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731-32 (Tex. 1981).

Surrounding circumstances include “the commercial or other setting in

which the [deeds] were negotiated and other objectively determinable factors

that give a context to the transaction between the parties … [and] that

inform, rather than vary from or contradict, the [deeds’] text.” Houston

Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d

462, 468 (Tex. 2011) (internal citations omitted) (emphasis added).

      The Bounds Appellants confuse surrounding circumstances evidence

with parol evidence. They incorrectly ask this Court to consider the Farm

and Ranch Contract and the parties’ negotiations in relation to that Contract.

CR83-96; F.F.12.      But those are not circumstances surrounding the

execution of the deeds. They do not inform the text of the deeds. Rather,

they vary from or contradict, the deeds’ text. The Prud’hommes do not

dispute that the Farm and Ranch Contract said that the minerals would

convey to the Bounds Appellants, while the deeds said that the minerals do

not convey. But the deeds control, and the Farm and Ranch Contract may



                                     13
not be considered here, unless the Court first rules, as a matter of law, that

the deeds themselves are ambiguous. National Union Fire Ins. Co. of

Pittsburgh, PA v. CBI Industries, Inc., 907 S.W.2d 517, 520-521 (Tex.

1995); Friendswood Development Co. v. McDade & Co., 926 S.W.2d 280

(Tex. 1996); R & P Enterprises v. LaGuarta, Garvel & Kirk, Inc., 596

S.W.2d 517, 519 (Tex. 1980); Fisher v. Wynn, No. 12-11-00008-CV, 2011

WL 3338771 at *5 (Tex.App.—Tyler 2011, no pet.) (mem. op.).

      The parol evidence rule precludes consideration of the Farm and

Ranch Contract and the parties’ negotiations in relation to that Contract.

The Twelfth Court of Appeals explained that “[t]he parol evidence rule is

not a rule of evidence, but a rule of substantive law that bars the court from

consideration of evidence violative of the rule.” Johnson v. Driver, 198

S.W.3d 359, 364 (Tex.App.—Tyler 2006, no pet.) (internal citations

omitted). The parol evidence rule prohibits consideration and enforcement

of prior or contemporaneous agreements.        Houston Exploration Co. v.

Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 468 (Tex. 2011).

      Here, consideration of the circumstances surrounding the execution of

the deeds is not necessary, because the deeds are unambiguous on their face.

In fact, the Supreme Court of Texas held that consideration of surrounding

circumstances evidence is prohibited where deeds are so worded that they




                                     14
are not fairly susceptible to more than one legal meaning. Madeley, 626

S.W. 2d 726 at 731-32. The Supreme Court of Texas held that an appellate

court erred in considering evidence of circumstances surrounding the

execution of an agreement because the evidence was not necessary to “aid

their construction.” Id.

       If this Court chooses to consider circumstances surrounding execution

of the deeds to aid in its construction of the deeds’ language, such evidence

shows: (1) the Bounds Appellants were represented by an experienced

attorney (CR83-96, FF No. 13; P.Ex.27, 31:2-42); (2) they received copies of

and had ample opportunity to read the deeds prior to January 1, 2004

(1RR62:3-12); and (3) the Bounds Appellants’ attorney drafted the deeds.

(1RR117:12-18; F.F.14).             Surrounding circumstances evidence is not

necessary here; nonetheless, such circumstances would weigh heavily in

favor of a ruling that the deeds unambiguously reserved the minerals to the

Prud’hommes.




2
 Plaintiff's Exhibit 27 is a transcript of Mr. Griffin’s deposition, the highlighted portions
of which were admitted into evidence at trial.



                                             15
II.   Response to Issue No. 2: There was no “mutual mistake” as a
      matter of law.

      Consistent with the Rules of Appellate procedure, the Prud’hommes

take up the issues in the order briefed by the Bounds Appellants. However,

the issue of mutual mistake should not be reached, as the issue is barred by

limitations, as set out in Section III, below.


      A. Summary of Mutual Mistake Argument

      At trial, the Bounds Plaintiffs failed to meet their burden to prove

mutual mistake. F.F.44; C.L.6. In no uncertain terms, the facts at trial

showed that the Bounds Plaintiffs and the Prud’hommes did not have the

same mistaken belief or assumption when they executed the deeds. Id. On

appeal, the Bounds Appellants again fail to meet their burden. They do not

show that the evidence establishes, “as a matter of law, all vital facts in

support of their mutual mistake assertion.” Nor have they shown that the

trial court’s holding is so contrary to the overwhelming weight of the

evidence as to be clearly wrong and unjust.


      B.    Standard of Review under Mutual Mistake Argument

      The Bounds Appellants claim that there was legally insufficient

evidence for the trial court’s holding that there was no mutual mistake.

C.L.6 (“Even if Plaintiffs’ cause of action for reformation was not barred by




                                        16
limitations, Plaintiffs would still not be entitled to reformation, as they did

not prove by clear, exact, and satisfactory evidence that the deeds’ inclusion

of language of mineral reservation was the result of mutual mistake.”)

      The Twelfth Court of Appeals has explained that “[w]hen the party

who had the burden of proof at trial attacks the legal sufficiency of an

adverse finding, the party must show that the evidence establishes, as a

matter of law, all vital facts in support of the issue.” Glidden Co. v. CDNE,

Inc., No. 12-09-00283-CV, 2011 WL 686286 at *5 (Tex.App.—Tyler 2011,

no pet.) (mem. op.); see also Santa Fe Petroleum, L.L.C., v. Star Canyon

Corp., 156 S.W.3d 630, 636 (Tex.App.—Tyler 2004, no pet.).               While

reviewing a fact finding regarding an ambiguous deed that conflicted with

the underlying contract, another appellate court stated that the “finding can

be set aside only if it is so contrary to the overwhelming weight of the

evidence as to be clearly wrong and unjust.” GXG, Inc. v. Texacal Oil &

Gas, 977 S.W.2d 403, 417 (Tex.App.—Corpus Christi 1998, pet. denied).

Based on this standard of review, the Bounds Appellants’ insufficient

evidence challenge fails.


      C. Burden of Proof under Mutual Mistake Argument

      To establish their deed reformation case, the Bounds Appellants were

required to prove:



                                      17
      (1) there was an agreement before the deed was written; and

      (2) the deed did not reflect the true agreement of the parties
      because of a mutual mistake.

      Thalman v. Martin, 635 S.W.2d 411, 413 (Tex. 1982). They had to

prove these elements by “clear, exact and satisfactory evidence.” Hardy v.

Bennefield, 368 S.W.3d 643, 650 (Tex.App.—Tyler 2012 no pet.). This is a

“rather stringent requirement … [and] proof that there was an agreement

which is at variance with the writing” is not enough. Id., citing Estes v.

Republic Nat. Bank of Dallas, 462 S.W.2d 273, 275 (Tex. 1970). Plaintiffs

“must go further and establish the fact that the terms or provisions of the

writing which differ from the true agreement made were placed in the

instrument by mutual mistake.” Id. (internal citations omitted).

      Mutual mistake is established by the following elements:

      (1) a mistake of fact;

      (2) held mutually by the parties;

      (3) which materially effects the agreed upon exchange.

      Bennefield, 368 S.W.3d at 651.

      The key element is that the mistake must be “held mutually by the

parties.”   Bennefield, 368 S.W.3d at 651.     Specifically, “[f]or a mutual

mistake to exist, there must be the same mistaken belief or assumption in the

minds of the grantors and grantees named in the deed … Two separate


                                     18
unilateral mistakes in the minds of the grantors and grantees do not create a

factual issue for a mutual mistake cause of action.” Johnson v. Conner, 260

S.W.3d 575, 582 (Tex.App.—Tyler 2008, no pet.) (affirming trial court’s

summary judgment ruling because there was “no probative summary

judgment evidence” establishing mutual mistake where the parties filed

conflicting affidavits as to their differing beliefs about whether mineral

rights were to be conveyed).


      D. The trial court correctly held that there was no mutual
         mistake as a matter of law.

      At trial, the Bounds Appellants did not prove mutual mistake. F.F.44;

C.L.6. Nor does their Appellant’s Brief come close to demonstrating that

the evidence establishes, “as a matter of law, all vital facts in support of their

mutual mistake assertion.” Glidden Co, 2011 WL 686286 at *5; see also

Santa Fe Petroleum, L.L.C., v. Star Canyon Corp., 156 S.W.3d 630, 636

(Tex.App.—Tyler 2004, no pet.) Rather, the Bounds Appellants strain to

create a mutual mistake where none existed. Their claim that “The mistaken

fact was that the deeds complied with the contract and was, therefore, a

mutual mistake” is nonsensical. Brief of Appellant, p. 21.

      The facts show that the Bounds Appellants and the Prud’hommes did

not have the same mistaken belief or assumption when they executed the




                                       19
deeds. F.F.44. Mr. Prud’homme believed that although the Prud’hommes

agreed to convey the minerals under the Farm and Ranch Contract, the deal

changed and that Contract expired. F.F.19; 1RR113:17-23; 1RR116:19-22.

The deeds were not a mistake; they simply reflected the new deal.

1RR118:4-25 - 119:1-6.         He believed the deeds correctly reserved the

minerals to the Prud’hommes. Id; F.F.19.

      Although the Bounds Appellants’ attorney and their son-in-law

testified (years after the fact) that they believed that the deeds did not reserve

the minerals to the Prud’hommes, each disinterested party who examined the

deeds believed the opposite.

      John Griffin, the attorney who drew up the deeds for the Bounds

Appellants, testified in his deposition (which testimony was admitted into

evidence at trial) that the Bounds Appellants’ title insurance carrier believed

that these same deeds did reserve the minerals, and that he would have

provided this information to the Bounds Appellants “at the time it was

issued.” P.Ex.27 (Griffin Deposition, 62:23-64:17). The November 5, 2001

title insurance policy, admitted into evidence at Defendants' Exhibit 24,

plainly states that these deeds (identified by Volume and Page) reserved

these minerals to the Prud’hommes. D.Ex.24.




                                       20
       Similarly, the oil company that leased the minerals from the

Prud’hommes believed that the deeds reserved the minerals to the

Prud’hommes. 1RR93:5-21; 1RR119:18-22; F.F.35; F.F.36.

      The Bounds Appellants claim that Mr. Prud’homme’s “silence in the

face of an apparent mistake in the drafting of the deeds would be

justification for reforming the deeds.” Brief of Appellants, p. 30. This

argument ignores Mr. Prud’homme’s testimony. Mr. Prud’homme did not

believe that there was a mistake in drafting the deeds. He testified that he

believed that the original agreement to convey the minerals had changed,

and that there was no mistake at all.       1RR113:17-23; 1RR116:19-22;

1RR118:2-25 – 119:1-6; F.F.19. The Bounds Appellants imply that Mr.

Prud’homme had a duty to verify the terms of the deeds on their behalf. He

did not. The Bounds Appellants were represented by an attorney. CR83-96,

FF No. 13; P.Ex.27, 31:2-4. Their attorney drafted the deeds. 1RR117:12-

18; F.F.14. As discussed in detail in section III below, it was the Bounds

Appellants’ duty to read the deeds, to use reasonable diligence, and to make

themselves aware.

      The trial court correctly held that the Bounds Appellants failed to

prove mutual mistake.      F.F.44; C.L.6.    And on appeal, the Bounds

Appellants clearly have not met their burden to show that the evidence




                                    21
establishes, as a matter of law, all vital facts in support their mutual mistake

claim. Nor have they shown that the trial court’s holding is so contrary to

the overwhelming weight of the evidence as to be clearly wrong and unjust.



III.   Response to Issue No. 3: The four-year statute of limitations bars
       the Bounds Appellants’ claims as a matter of law.

       A. Summary of Statute of Limitations Argument

       Deed reformation claims are subject to a four-year statute of

limitations. Miles v. Martin, 321 S.W.2d 62, 69 (Tex. 1959). The Bounds

Appellants’ claim for deed reformation accrued no later than November

2001, but they waited almost eight years after the statute of limitations had

expired to sue the Prud’hommes.3 They ask the Court to ignore plain mineral

reservations in the 2001 deeds, and, failing that, they ask the Court to reform

the deeds, these many years later. Since the deeds at issue clearly reserve the

contested minerals to the Prud’hommes, and since it is far too late to reform

them, all of the Bounds Appellants’ claims are time-barred as a matter of law.



       3
         The trial court found that “to the extent Plaintiffs believed that the 2001 deeds
should have conveyed the minerals to the Plaintiffs, they were on notice that the 2001
deeds did not do so, or were ambiguous, no later than early November 2001, when the
received the title insurance policy.” F.F.48. The title insurance policy references the
“Mineral Reservation as set forth in” the 2001 deeds. F.F.35-37. Plaintiff Mr. Walter
Bounds, who owns and operates an insurance agency, reviewed that title insurance
policy. F.F.38. The Bounds Plaintiffs filed this lawsuit on October 8, 2013. F.F.49.




                                           22
      B.   The purpose of statutes of limitations requires that the
           Bounds Appellants cannot toll the four-year statue of
           limitations.

      The purpose of limitations statutes is to “afford plaintiffs what the

legislature deems a reasonable time to present their claims and protect

defendants and the courts from having to deal with cases in which the search

for truth may be seriously impaired by the loss of evidence, whether by …

fading memories … or otherwise.” Murray v. San Jacinto Agency, Inc., 800

S.W.2d 826, 828 (Tex. 1990).      Limitations statutes are critical, so parties

have a fair opportunity to defend “while the evidence is fresh in the minds of

the parties and witnesses.” Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d

732, 734 (Tex. 2001); Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d

453, 455 (Tex. 1996); Wylie v. Hide-A-Way Lake Club, Inc., No. 12-12-

00290-CV, 2013 WL 6797871, *8 (Tex.App.—Tyler 2013, pet. denied)

(mem. op.). “It is in society’s best interest to grant repose by requiring that

disputes be settled or barred within a reasonable time.”        Horwood, 58

S.W.3d at 734; Wylie, WL 6797871 at *8.

      The purpose of statutes of limitations is highlighted by the testimony

in this case. Plaintiff Mr. Walter Bounds’ testified that: “… it has been a

long time. I do not remember – I don’t have a vivid memory of what [the

papers my lawyer, Mr. Griffin gave me] were” (1RR43:18-20);               “My




                                      23
memory is not perfect on that” (1RR45:1); “You know, I don’t remember

the dates” (1RR54:20); and “I don’t remember exactly what we did.”

(1RR61:10).        Similarly, at the time of trial, Defendant Mr. Gilbert

Prud’homme was 80 years old. 1RR108:18-20. If the Bounds Appellants

had filed their lawsuit within the time permitted by the statute of limitations,

Mr. Prud’homme testified that his memory would have been clearer, and he

would have been able to more easily access the various documents that he

had moved to his house after he closed his office.             1RR120:14-18;

1RR120:19-25 – 121:1-3.


      C. Burden to prove statute of limitations argument.

      The Bounds Appellants did not meet their burden to prove and to

secure favorable findings with respect to their argument that limitations

should be tolled here. Woods v. William M. Mercer, Inc., 769 S.W.2d 515,

517-18 (Tex. 1988). (“The party seeking to benefit from the discovery rule

bears the burden of proving and securing favorable findings thereon.”).


      D. The Bounds Appellants cannot toll the four-year statue of
         limitations as a matter of law.
              1.   What is the discovery rule?

      The discovery rule is “a very limited exception to statutes of

limitation.” BP America Production Co. v. Marshall, 342 S.W.3d 59, 66




                                      24
(Tex. 2011); Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex.

2001). It applies only where the injury is “both inherently undiscoverable

and objectively verifiable.”        Id.    “The requirement of inherent

undiscoverability recognizes that the discovery rule exception should be

permitted only in circumstances where it is difficult for the injured party to

learn of the negligent act or omission.” Computer Associates International

v. Altai, 918 S.W.2d 453, 456 (Tex. 1994) (citations omitted).         As the

Supreme Court of Texas explained:

      Inherently undiscoverable does not mean that a particular
      plaintiff did not discover his or her particular injury within the
      applicable limitations period. Instead, we determine whether an
      injury is inherently undiscoverable on a categorical basis
      because such an approach brings predictability and consistency
      to the jurisprudence.

Horwood, 58 S.W.3d at 735 (internal quotations and citations omitted); see

also S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996) (“An injury is inherently

undiscoverable if it is by nature unlikely to be discovered within the

prescribed limitations period despite due diligence.”)


             2. The discovery rule does not apply to unambiguous
                deeds under Texas law.

      The discovery rule does not apply to cases in which there is an

unambiguous deed, because in the case of an unambiguous deed, the parties

are charged with “constructive knowledge” of that deed. See Cosgrove,



                                      25
2015 WL 3976719 at *3 (“A plainly evident omission on an unambiguous

deed’s face is not a type of injury for which the discovery rule is available . .

.. At execution, the grantor is charged with immediate knowledge of an

unambiguous deed’s material terms.”); see also Stowe v. Head, 728 S.W. 2d

120, 126 (Tex.App.—Tyler 1987, no writ); see also Tipton v. Brock, 431

S.W.3d 673 (Tex.App.—El Paso 2014, pet. denied June 26, 2015) (A

warranty deed which clearly describes a reservation of mineral rights in

contravention of the grantor’s intent is not the type of inherently

undiscoverable injury contemplated by the discovery rule.); see also Barfield

v. V.C. Holland, 844 S.W.2d 759, 770 (Tex.App.—Tyler 1993, writ denied)

(plaintiff was charged with “constructive notice” of the terms in the deed

because the deed was an essential link in plaintiff’s chain of title; plaintiff

had a duty of “inquiry” and to “examine the public records…not to rely on

representations made by the grantors of the deeds.”); see also Trahan v.

Mettlen, 428 S.W.3d 905 (Tex.App.—Texarkana 2014, no pet.).

      The Bounds Appellants misstate the law. They complain that they

“lacked actual knowledge,” and should therefore be permitted to circumvent

the four-year statute of limitations. Brief of Appellant, p.36. Whether the

Bounds Appellants had actual knowledge is irrelevant. They cannot toll the

statute of limitations, because the deeds are unambiguous as a matter of law.




                                       26
They are therefore charged with constructive knowledge of those deeds no

later than November 2001. F.F.47-48. The question is not whether the

Bounds Appellants used reasonable diligence (they did not (F.F.46)) or

when they actually detected the alleged mistake in the deeds, but “whether

theirs is the type of injury that generally is discoverable by the exercise of

reasonable diligence.” Horwood, 58 S.W.3d at 735 (emphasis added).

      Recent Supreme Court of Texas cases have held that an alleged

mistake in an unambiguous deed is not the type of injury contemplated by

the discovery rule. Cosgrove v. Cade, 2015 WL 3976719 at *1; Hooks v.

Samson Lone Star, Ltd. Partnership, No. 12-0920, 2015 WL 393380 at *4

(Tex., January 30, 2015). Even if, as the Bounds Appellants allege, the

mineral reservation was included in the deeds as a result of mistake, accident

or scrivener’s error, the Bounds Appellants’ cause of action is still barred as

a matter of law. They are presumed to have discovered the mistake on the

date the deeds were executed, or at the very least, on the date that they

received the title insurance policy (November 2001). F.F.47; F.F.48; see

also Stowe, 728 S.W.2d at 26.

      The Bounds Appellants’ reliance on Brown v. Havard, 593 S.W.2d

939, 943-44 (Tex. 1980), and Sullivan v. Barnett, 471 S.W.2d 39, 45 (Tex.

1971) is misplaced.     More recent Supreme Court of Texas cases have




                                      27
clarified the rules pertaining to unambiguous deeds and held that the

discovery rule does not apply in such cases. Moreover, Brown and Sullivan

make clear that the discovery rule may be invoked only after the party rebuts

the presumption of immediate notice.       See Brown, 593 S.W.2d at 944

(“[O]nce the presumption of immediate knowledge is rebutted, the statute of

limitation will commence to run when the mutual mistake was, or in the

exercise of reasonable diligence should have been, discovered.” (quoting

Sullivan, 471 S.W.2d at 45)).   Here, the recording of the deeds created an

irrebuttable presumption that the Bounds Appellants were on notice of the

mineral reservation in the deeds. Since the Bounds Appellants cannot rebut

this presumption of notice, they cannot invoke the discovery rule.

      Brown is further distinguishable factually. It turned on the question of

when the alleged mistake in the deed should have been discovered. Brown,

592 S.W.2d at 944. The mineral reservation in Brown was complicated.

Unlike the straightforward clause at issue here, the Brown clause was a

multiple-fraction clause in which the issue was not simply whether minerals

were reserved, but in what percentage (or percentage of prior percentage).

While the it may not have been reasonable to expect someone to be able to

look at the reservation in Brown and appreciate that it might be different

from what one expected, that is not the case here. There is simply no




                                     28
competent evidence, at all, to suggest that the Bounds Appellants should not

have been on notice of what was plainly stated in their deeds, as highlighted

by their title insurance policy.4 D.Ex. 24; F.F. 47; F.F.48.


               3.   Mr. Prud’homme’s alleged silence is irrelevant to the
                    discovery rule’s application.

       The     Bounds      Appellants’      allegations     that   the    Prud’hommes

“permit[ed] them to believe that the original offer to convey their minerals

had not ben withdrawn or superseded” and “that the Prud’hommes remained

silent about their assumptions and did not apprise the Bounds of their

claims” are immaterial.         Brief of Appellant, pp. 35, 39.           Even if these

allegations were true, they form no basis whatsoever for the Bounds

Appellants to avoid the statute of limitations. As this Court has explained:

       Land titles are governed by notice imparted by the deeds in the
       chain of title, duly recorded in the public records of the county
       where the land is situated, and not by personal representations,
       warranties, reliance, and estoppel.

Barfield v. V.C. Holland, 844 S.W.2d 759, 770 (Tex.App.—Tyler 1993, writ

denied).



4
  Mr. Bounds testified that he would have been “incapable of understanding” the plain
language in the title insurance policy, which references a mineral reservation in the deeds
before this Court. 1RR67:11-69:18. Given that he, as an insurance broker, reads
insurance policies and advises clients as to their contents for a living, the evidence
supports the Court's implicit finding that this testimony should be given little, if any,
weight.



                                            29
      The Supreme Court of Texas agrees. In January 2015, the Court

explained that the discovery rule does not apply when there is constructive

notice, or when information is “readily accessible and publicly available.”

Hooks v. Samson Lone Star, Ltd. Partnership, No. 12-0920, 2015 WL

393380 at *4 (Tex., January 30, 2015). In Hooks, The Supreme Court of

Texas discussed two of its relevant decisions: Shell Oil Co. v. Ross, 356

S.W.3d 924, 928 (Tex. 2011) (rejecting tolling and stating: “Reasonable

diligence requires that owners of property interests make themselves aware

of relevant information available in the public record.”); and BP Am. Prod.

Co. v. Marshall, 342 S.W.3d 59, 66 (Tex. 2011). In Marshall, despite the

fact that BP fraudulently concealed facts, the Supreme Court of Texas held

that the discovery rule did not apply because an expert could have

discovered information showing injury if he had gone to the Railroad

Commission and reviewed well logs and a plugging report. Marshall, 342

S.W.3d at 66-77. If that fraudulently concealed injury was not inherently

undiscoverable, then the Bounds Appellants’ alleged injury in this case

clearly was not, and the discovery rule does not apply as a matter of law.




                                      30
IV. Even if the Bounds Appellants were right, which they are
    not, they request the wrong relief.

      Finally, in their Conclusion and Prayer, the Bounds Appellants

request that this Court modify the trial court’s Judgment to award to them

“title and possession of an undivided fifty percent, (50%), of the oil, gas, and

other minerals situated in, on or under the real property described in the trial

court's judgment.”     Brief of Appellants, p. 41.        Even if the Bounds

Appellants were entitled to relief (which they are not, for the reasons set out

above), they would not be entitled to 50% of the minerals; they would be

entitled to 25%.

      In 1971, E.G. and M.A. Prud’homme, the parents of the Prud’hommes

involved in this case, conveyed the property at issue in this case to a Texas

general partnership called the E.G. and M.A. Prud’homme Beneficiaries

Partnership.   P.Ex.3; 1RR108:21-110:8;        FF 1-5.     At the time of this

conveyance, E.G. and M.A. Prud’homme only owned 50% of the mineral

estate in and to this property. FF 1; P.Ex.5 (set out in exception (i.)).

      The 1971 conveyance to the E.G. and M.A. Prud’homme

Beneficiaries Partnership reserved to E.G. and M.A. Prud’homme one-half

of any and all minerals that they owned at the time. P.Ex.3. Accordingly,




                                       31
that conveyance only conveyed to the Partnership 25% of the total mineral

estate.

          When E.G. and M.A. Prud’homme died, the 25% of these minerals

which they had reserved and owned passed not to the Partnership, but to a

separate trust. 1RR110:16-111:24; P.Ex. 16; P.Ex. 17.

          The initial deed, which is the subject of the Bounds appeal,

specifically excepts from its grant the 25% of the mineral estate reserved to

E.G. and M.A. Prud’homme in 1971.             P.Ex.5.   This is the exception

enumerated with the roman numeral ii.          Id.   This exception is plainly

consistent even with the Bounds’ alleged reformation evidence, as the real

estate contract relied upon by the Bounds is plainly between only the

Partnership and the Bounds. P.Ex.21; 1RR113:7-9.

          Since the partnership only ever owned 25% of the mineral estate, even

if the Bounds Appellants are successful here, they could only be awarded

title and possession of an undivided 25% of the minerals, not the undivided

50% set out in their Prayer.

                                    PRAYER

          The Prud’hommes respectfully request that the Court of Appeals

affirm the portion of the trial court’s judgment that pertains to the initial

deed (Plaintiff’s Exhibit 5), and render judgment that the initial deed is




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unambiguous, and that it reserved any and all minerals to its grantors, the

Prud’hommes.

      Further, as set out in their brief as cross-Appellants, the Prud’hommes

respectfully request that the Court of Appeals reverse that portion of the trial

court’s judgment that deals with the five subsequent deeds (Plaintiff's

Exhibits 6, 7, 8, 8A, and 9), and render judgment that those deeds were

unambiguous, and that they reserved any and all minerals to their grantors,

the Prud’hommes.




                                 Respectfully submitted,

                                 OSBORN, GRIFFITH & HARGROVE
                                 Robert G. Hargrove, SBN 24032391
                                 515 Congress Avenue, Suite 2450
                                 Austin, Texas 78701
                                 (512) 476-3529
                                 (512) 476-8310 Facsimile
                                 rob@texasenergylaw.com


                                 By:    /s/ Robert G. Hargrove
                                        Robert G. Hargrove

                                 ATTORNEYS FOR PRUD’HOMME
                                 DEFENDANTS/APPELLEES




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                      CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing document
is being served on the following persons through the electronic filing and
service system on this the 22nd day of October, 2015.


Thomas R. McLeroy Jr.
SBN 13766800
P.O. Box 668
Center, Texas 75935
ATTORNEY FOR APPELLANTS AND CROSS-APPELLEES



                                      By:    /s/ Robert G. Hargrove
                                             Robert G. Hargrove




                   CERTIFICATE OF COMPLIANCE

      I hereby certify that the foregoing instrument was prepared using
Microsoft Word for Mac 2011, and that, according to its word-count
function, the sections of the foregoing pleading covered by TRAP 9.4(i)(1)
contain 7,091 words.


                                      By:    /s/ Robert G. Hargrove
                                             Robert G. Hargrove




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