Thompson & Knight Secures Significant Appellate Court Win in Texas Mineral Royalty Dispute

DALLAS — A Texas appellate court has ruled in favor of WTX Fund LLC (WTX), a Lubbock-based private equity firm, in a longstanding royalty dispute with members of a West Texas family. In reversing an earlier trial court ruling, the Eighth Circuit Court of Appeals found that a 1951 deed did not convey to J. F. Holt mineral royalties resulting from oil and gas production on the property in Reagan County.

In the opinion issued on January 8, the Court determined that the term “benefits” in the granting language of the deed did not include all royalty rights. The case will now return to the trial court to determine the damages and the amount of legal fees owed to WTX.

A Thompson & Knight team of Robert Vartabedian, Richard B. Phillips, Jr., and Conrad Hester represented WTX for the appeal.

“This ruling is an excellent example of a court conducting a thorough analysis to determine the proper construction of a deed,” said Mr. Vartabedian. “In considering what rights were and were not conveyed in the precise granting language of the deed, the circumstances prevailing at the time it was drafted, and the expressed intent of the grantors to reserve the royalty interest, the El Paso Court has continued the trend of Texas courts taking a holistic approach to deed construction—not just focusing on mechanical interpretation rules or a few stray words in a deed.”

The case is WTX Fund v. Roy Holt Brown et al in the Eighth Circuit Court of Appeals in El Paso.