The Court of Appeals of Texas, Eleventh District, recently addressed an issue of will interpretation. Prather v. Callon Petroleum Operating Co.[1], tackles the often-complicated matter of ascertaining Testatrix intent when disputes arise concerning what, if any, interest passed to the decedent’s heirs.
For context, Olga Stamps executed her will in 1995, and named her daughters, June and Margaret, as her sole beneficiaries. Importantly, June predeceased Olga. When Olga passed, June’s heirs (“June’s Heirs”) assumed they had inherited 50% of Olga’s mineral interests (“Olga’s Minerals”) and they executed mineral leases based on this assumption.
Margaret outlived her mother. Upon Margaret’s death, her interest in Olga’s Minerals passed to Margaret’s own heirs. Ultimately, this interest became vested in various royalty companies (“Royalty Companies”) that also executed mineral leases.
A question arose concerning whether June’s Heirs inherited any of Olga’s Minerals at all. Predictably, they claimed they were vested with 50% of these minerals. The Royalty Companies disagreed, asserting 100% ownership interest in Olga’s Minerals. When the operator became aware of the ownership dispute, it suspended royalty payments, thus triggering a breach of contract claim from June’s Heirs.
Although both sides claimed the will was unambiguous, they failed to find a clear interpretation they could both agree on. On appeal, the court concluded the crux of the ownership dispute boiled down to whether survivorship was a condition of inheritance under the disputed provision in the will. The disputed language at issue provided, “In the event that one of the beneficiaries in this paragraph is not living at the time of my death, then his or her share shall go to the survivor(s) thereof.”[2]
June’s Heirs argued that the phrase “survivor(s) thereof” included them, as survivors of June. On the other hand, the Royalty Companies argued that, because June predeceased Olga, Margaret was the sole “survivor(s) thereof.” Concerning the proper interpretation of this provision, the trial court agreed with the Royalty Companies and the appellate court affirmed. It appears the conditional survivorship hinged on surviving Olga. Both courts held that the Royalty Companies owned 100% of Olga’s Minerals because Margaret was the only beneficiary to survive Olga.
When seeking to interpret the provisions of a will, parties should look to the Testator/Testatrix’s intent. In Prather, the court notes that Olga’s intent should be carried out to the extent allowed by law. In discerning intent, the court considers:
- Instrument language
- Provisions as a whole
- The actual meaning of the words used
The court further notes that the “plain and usual sense” of a word or words should be used in interpreting the intent of a will unless it’s obvious that the word or words were intended to be otherwise interpreted. [3]
In using the whole body of the will to aid in interpretation, the court contemplates additional language in the will’s Residuary Clause that serves to help distinguish intent. While the provision that addressed Olga’s Minerals contains the “survivor(s) thereof” phrase, the Residuary Clause does not. The Court concludes, then, that Olga intended survivorship to be a condition of inheriting her mineral interests.
The takeaway from Prather is this: Testator/Testatrix intent will be ascertained through analysis of the will as a whole, and not limited to the disputed provision. It’s easy to understand why June’s Heirs believed they had a valid claim to half of Olga’s Minerals, but a critical and sophisticated examination of Olga’s will early on would have at least raised enough questions to avoid lengthy litigation.
[1] 648 S.W.3d 618 (Tex. App.—Eastland 2022, no pet.)
[2] Id. At 621.
[3] Id.
Brad represents clients in connection with upstream energy transactions, complex mineral titles, pooling issues, lease analysis, joint operating agreements, surface use issues, title curative and general oil and gas business matters.