CHAPTER 16 EXAMINATION OF TRACTS WITHIN TOWNSITES
| Jurisdiction | United States |
(Jan 2014)
EXAMINATION OF TRACTS WITHIN TOWNSITES
Burleson LLP
Houston, Texas
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JOSH VAN MAELE is a senior associate with Burleson LLP in Houston, Texas. He concentrates his practice in oil and gas matters and title concerns, in addition to contributing to the management of the oil and gas title practice in Burleson's Houston office. He is Board Certified in Oil, Gas and Mineral Law by the Texas Board of Legal Specialization. Prior to joining Burleson, Josh began his legal career in oil and gas with a small firm in San Antonio, focusing on oil and gas title needs in the Barnett Shale, South Texas, and West Texas. His background includes stand-up title examinations and the rendering of original drilling, division order, and banking title opinions. He has drafted various legal instruments, including mineral deeds, stipulations of interest, affidavits, and warranty deeds. His experience also extends to the drafting of curative documents and general transactional work. Josh-is a graduate of St. Mary's School of Law and The University of Texas at Austin. He is an active member of both the American and Houston Bar Associations.
Examination of Tracts within Townsites: Unique Issues and Methods of Management
I. INTRODUCTION
With the increased emergence of North American shale plays and technological advancements made in horizontal drilling, the footprint of lands capable of oil and gas production has expanded dramatically. As a result, more populated areas that have not historically witnessed the production of oil and gas have begun to experience the benefits and burdens of mineral development. Even for the seasoned attorney, lands located within townsites and urban areas present legal issues that are not ordinarily considered in traditional title examinations. Although the absence of historical production eliminates some of the more complex mineral conveyancing and legacy leasehold issues, new and unique complexities arise when addressing mineral ownership to lands located in urban areas. This paper addresses some of these unique issues, as well as traditional title issues more frequently encountered in examinations of townsites and heavily-populated areas. This paper concludes with a discussion of suggested methods for effectively managing the workload of a title examination involving numerous tracts, as well as structuring the title opinion to convey the information in an organized manner in line with the client's needs.
II. "PUBLIC LANDS" - ROADWAYS, STREETS, PARKS AND CEMETERIES
A. ROADWAYS
Although the task of determining mineral ownership of roads, rights-of-way and other strips of land is not new to the title examiner, horizontal drilling has increased the likelihood and frequency which this determination must be made. This is particularly true for urban areas, where a single lateral well could traverse dozens of roadways, and roads and rights-of-way could comprise a significant portion of the acreage devoted to a pooled unit. Accordingly, the title examiner must be especially knowledgeable of the applicable rules and procedures to properly address mineral ownership.
The procedure for ascertaining ownership of the minerals underlying roadways initially involves identifying how the road was created, and the resulting estate. An easement is merely a nonpossessory interest in land that authorizes its holder to use certain property for particular purposes.1 An easement for right-of-way purposes is limited to that and does not carry with it title to the minerals thereunder. A careful examination of the instrument(s) associated with the
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initial transfer of the roadway, where available,2 should provide the requisite information to determine whether the right-of-way was created as an express easement or a fee tract.
1. Fee vs. Easement
To accurately define the scope of the conveyance, the examiner must focus on the words employed by the granting party in the instrument creating the roadway. In cases involving deed interpretation, courts will attempt to discern the intent of the parties, limited though, to the intent as expressed by the words utilized in the four corners of the instrument.3
Although Texas courts have generally adopted a four corners approach when analyzing deeds, they also place great weight on the language in the granting clause.4 Where the granting clause conveys a tract or strip of land, and not just a right-of-way over it, the grantee obtains land in fee simple.5 Subsequent recitals regarding the use or purpose have no bearing upon the extent of the interest granted.6 However, a deed which by the terms of the granting clause conveys a "right-of-way" over a tract of land conveys only an easement.7
Most jurisdictions do not enjoy such a bright line rule, and while courts will consider the language employed in the granting clause, they will generally consider it in the light of the rest of the language used in the deed. Two cases out of Colorado, however, appear to place a dispositive emphasis on the granting clause, holding that conveyances of strips of "land" to railroad companies convey fee simple interests.8 The dissent in Radetsky indicates that the subject deed mentioned the land as a right-of-way three different times, and described the tract as being over, across and through the parent tract.9 Yet (in this case), the court made the granting clause conclusive on the question of intent, ignoring the fact that the land was taken as a right-of-way.10 This emphasis appears to be limited, though, to the similar facts present in both Radetsky and Switzer.
In North Sterling Irrigation District v. Knifton,11 the Colorado Supreme Court again considered a right-of-way deed, finding the parties intended to convey an easement only when a
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"strip of ground" was conveyed "over, across and upon" the parent tract.12 The court reasoned that the parties did not intend to convey "land" or they would have used that term.13 Furthermore, the deed also granted the right to erect snow fences on the strip of land - a right which would be superfluous to fee simple ownership.14 When examining the entirety of the instrument, the court concluded the parties intended to convey an easement only.15
Similarly, the Colorado Supreme Court in Board of County Comm'rs v. Morris held that a conveyance of a 30-foot-wide "strip of ground" conveyed an easement only.16 The court indicated that the deeds were substantially similar to those that were under consideration in Knifton, however, the Morris deeds did not include "over, across and upon" language written into the description, and did not grant the right to erect snow fences.17 The absence of these provisions supports the notion that reference to a "strip of ground" in the granting clause, will alone be indicative of intent to create an easement.
In Farmers Reservoir & Irrigation Co. v. Sun Production Co.,18 the Colorado Court of Appeals acknowledged the holdings in the aforementioned cases19 in its analysis of deeds conveying lands for a canal, but necessarily considered other factors present in the deeds in its determination of the parties' intent. The deeds contained several conflicting provisions which supported each party's respective contention that a fee interest or right-of-way had passed.20 The court found the deeds in question were ambiguous, in which case, the ambiguity was to be construed in favor of the grantee.21 Furthermore, the court considered a Colorado statutory provision indicating that a conveyance of an estate in land is presumed to convey a fee simple estate, unless rebutted by express language indicating a lesser estate.22 In ultimately ruling the deeds conveyed fee simple interests in the subject land, the court relied on these guidelines, indicating that the language employed failed to overcome the presumption that fee simple interests were conveyed.23
Some courts will look to the location of specific language in a deed as dispositive of the parties' intent.24 In Stern v. Metro. Water Dist. Of Salt Lake & Sandy, the Supreme Court of Utah held that the location of a purpose clause in certain deeds was indicative of the estate
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intended to be conveyed.25 The deeds conveyed and warranted a strip-shaped tract of land in Salt Lake County, and further stated that the strip of land was for canal purposes only.26 The court reasoned that "the use of prototypical language for conveying a fee simple, the statutory mandate to presume a fee conveyance, and the absence of any contrary 'right-of-way' language strongly evince a conveyance of a fee simple interest."27 Appellants argued that the deeds conveyed easements only due to the presence of language indicating that the strip of land was for canal purposes only.28 In rejecting this contention, the court noted that the purpose language is not part of the granting clause or the description of the property, and if the parties intended to "restrict the conveyance to an easement; they would have placed the purpose provision in a separate habendum provision."29
Earlier this year, the Supreme Court of Wyoming found a deed provision describing a "right-of-way" as ambiguous, but held the deed conveyed a fee simple title based on the nature of the interest when created.30 By a 1907 deed ("1907 deed"), owners of a fee interest in land, bounded respectively on its east and west by a public highway and a railroad, conveyed an 80-foot-wide strip of land to the owners of land located west of the railroad.31 The deed included language describing the subject tract as "all that piece of parcel of land."32 A subsequent 1946 deed ("1946 deed") conveyed the lands west of the railroad, and "also that right of way to be used in connection with said land and described as follows: [legal description of the strip of land in question.]"33 The emphasized language represents the source of...
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