Co-author Gunner West

Ambiguity is handy for office-seekers intending to walk back “promises” they later say they really didn’t make. It doesn’t work so well for the stability of land titles. In Thagard Mineral Partnership, LP v. Cass v. RIM, LLP, a Texas court of appeals resolved a dispute over whether vague exhibits in two assignments limited broad granting language.

The first assignment transferred all interests in oil and gas leases, including overriding royalty interests, even though no leases were listed. The second assignment conveyed the mineral fee to all depths even though depth limitations appeared in one section of the exhibit.

Thagard-to-Cass Assignment

Thagard executed an assignment to Cass conveying “all of [Thagard’s] right, title, and interest” in the lands and leases in and to the subject lands “listed and to the extent described on Exhibit A.” Exhibit A identified sections of land but listed no leases. Scriveners and title examiners, see the opinion for details. The rest of us can get by with this summary.

Did the assignment unambiguously transfer all right, title, and interest, including an override? Yes, Cass prevails.

Thagard argued that the assignment was “subject to” a missing document. A circular reference to a “subject to” clause was inartful drafting but was not evidence of a missing document.

Thagard also argued ambiguity: The assignment referenced “leases listed” in Exhibit A but no leases appeared. Said Thagard, where an exhibit is referenced to describe property being conveyed, the description of the interest in the exhibit controls over the scope of the grant, regardless of broad granting language. The court disagreed: “… an instrument of conveyance of real property passes whatever interest the grantor has … , unless it contains language expressing the intention to grant a lesser estate.” Exhibit A had no exceptions.

The court distinguished the requirement of Piranha Partners v. Neuhoff that override conveyances identify underlying leases. Piranha was of an override only, whereas Thagard granted “all” his interests. The property description sufficiently identified the land, allowing location of associated leases and production data.

Cass-to-Plains Assignment

Shortly after the Thagard assignment, Cass assigned interests now owned by RIM LLP. The exhibit had two parts: a table of “Proved Developed Producing Properties” labeled in bold, underlined, all-caps as “MICHAEL L. CASS’ PERSONAL INTEREST INCLUDING HIS O.R.R.I. & MINERAL INTEREST”, showing percentages but no depth limitations—and a “Leases Covering” section in the second part of Exhibit A listing specific leases “from the surface to 8700 feet … .”

Did the assignment unambiguously transfer Cass’s entire mineral fee interest to all depths? Yes. RIM prevails.

Cass argued depth limitations in the “Leases Covering” section applied to everything in Exhibit A. The counterargument: The structure of Exhibit A is relevant to its interpretation; depth limits applied only to leases, not mineral interests.

The court rejected Cass’s position, emphasizing Exhibit A’s deliberate segregation. The table explicitly addressed Cass’s “PERSONAL INTEREST INCLUDING . . . MINERAL INTEREST” with emphatic labeling but no depth language. The “Leases Covering” section listed specific leases with 8,700-foot limitations.

Section IV of the assignment shed further light on the meaning of Exhibit A by disclaiming decimal interests as limitations. They were “for informational purposes only” and stated the intent to convey “the entire right, title and interest” in the properties.

The assignment negated the one potential limitation in a “Producing Properties” table showing WI and NRI percentages and was silent about depth restrictions. If depth limits applied to mineral fee interests, they could have appeared in the table or been addressed in Section IV.

The depth limitations applied only to the leases, not Cass’s personal mineral fee. 

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