Lula Eades once owned minerals in Loving County, Texas. In 2000, in a single lawsuit the Wink-Loving ISD and Loving County foreclosed on the mineral and royalty interests of more than 80 owners, including Lula. In Ridgefield Permian Minerals et al v. DOH Oil Company, plaintiff Ridgefield alleged that it acquired Lula’s interests in 2022 by deeds from Lula’s successors. Defendant DOH claimed that in July 2001, after the foreclosure, DOH acquired minerals formerly owned by Lula by a Sheriff’s Tax Deed.
Ridgefield’s suit was to quiet title. One assertion was that the liens in the 2000 tax suit only extended to interests in production under a specific lease which had reverted and therefore could not be foreclosed. In response, DOH asserted res judicata (more about that later) and other defenses.
In 2010 Endeavor interpleaded funds in a Midland County suit to resolve rival claims for minerals that were originally owned by Abbott and were also foreclosed in the 2000 Loving County tax suit. A judgment in the Midland County suit, agreed by DOH and Abbott’s successors, declared that DOH acquired the interests of Abbott and his heirs in a corrected Sheriff’s Tax Deed.
DOH asserted that this case arises from “the same nucleus of operative facts” as the 2010 Midland suit and therefore the judgment declaring that DOH had valid title to Abbott’s interests bars Ridgefield’s challenge to other interests that were subject to the 2000 foreclosure (Lula’s interests, to be specific). Ridgefield’s response: (1) the interests at issue in this case were not derived from Abbott and his successors and (2) Ridgefield did not have notice of the Midland County judgment because it was not filed in Loving County; therefore Ridgefield was a bona fide purchaser.
The trial court agreed with DOH. The appellate court reversed, agreeing with Ridgefield. (We will ignore the question whether the trial court order met the requirements for a permissive appeal.)
“Res judicata”
Res judicata bars claims that have already been litigated or that “arise out of the same subject matter and that could have been litigated in the prior action”. The doctrine bars a suit if there is proof of these elements:
- A prior final judgment on the merits by court of competent jurisdiction;
- The identity of parties or those in privity with them;
- The second action is based on the same claims as were raised or could have been raised in the first action.
The first element was satisfied. To resolve the third element – and the case – the court didn’t look at the claims in each suit, but whether both claims arose from the same subject matter. The claims in this suit did not involve the same subject matter as the 2010 Midland County suit. The claims in Midland were over mineral interests in Section 14 Block C-26; the claims in this case were over Section 3 Block C-27. Recall that real property is unique; the two properties are not the same subject matter. The interests in the property here were not litigated and determined in the Midland County suit. The court rejected DOH’s argument that, if one of Ridgefield’s predecessors challenged the foreclosure then Ridgefield cannot challenge the foreclosure any other of his predecessors.
The result
The mineral interests in this lawsuit were not adjudicated in the 2010 Midland County suit; thus res judicata did not bar Ridgefield’s suit. Reversed and remanded to the trial court to consider Ridgefield’s claims.
Your musical interlude