author: JIM R. WRIGHT, Chief Justice.

text:
    CAPROCK INVESTMENT CORP., Appellant, v. Elton MONTGOMERY, Appellee.
    No. 11-08-00138-CV.
    Court of Appeals of Texas, Eastland.
    May 27, 2010.
    Opinion Denying Rehearing July 8, 2010.
    See also 17 S.W.3d 707, 89 S.W.3d 179, and 2005 WL 3118787.

      D. Patrick Long, Jennifer Keefe, Robert A. Hawkins, Patton Boggs, L.L.P., Dallas, for appellant.
    Craig T. Enoch, Melissa Prentice Lor-ber, Winstead PC, Austin, Andrew D. Sims, Russell R. Barton, Harris, Finley & Bogle, P.C., Fort Worth, for appellee.
    Panel consists of: WRIGHT, C.J., McCALL, J„ and STRANGE, J.
   OPINION

JIM R. WRIGHT, Chief Justice.

This case involves a promissory note signed by Elton Montgomery and others no longer involved in the suit. The original petition in this case was filed in 1989, and this is the fourth appeal. The note is owned by Caprock Investment Corp. In its sixth amended petition, Caprock alleged both fraud and breach of contract causes of action against Montgomery. Both parties moved for summary judgment. The trial court granted Montgomery’s motion, denied Caprock’s motion, and entered a take-nothing summary judgment. We reverse in part and affirm in part.

I. Issues

Caprock presents two issues for review. In these issues, Caprock argues that the trial court erred in granting Montgomery’s motion for summary judgment and in denying Caprock’s. Montgomery moved for summary judgment on the bases that res judicata barred Ca-prock’s claim for breach of the note, that collateral estoppel barred Caprock’s claim for breach of the note, that the note had been satisfied by the bankruptcy of a cosigner (AI Jonietz), and that there was no evidence to support various elements of Caprock’s fraud claim. The trial court granted Montgomery’s motion in its entirety. Caprock moved for summary judgment on its breach of contract cause of action for the amount due under the note and also on Montgomery’s counterclaims.

We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). When both sides move for summary judgment on the same issue and the trial court grants one motion and denies the other, the appellate court considers the summary judgment evidence presented by both sides, determines all questions presented, and may render the judgment the trial court should have rendered on that issue. Id. In this case, both parties moved for summary judgment on breach of contract claims.

II. Montgomery’s Motion

A. Promissory Note — Defenses.

With respect to the affirmative defenses urged by Montgomery in his motion, Montgomery had the burden to establish his right to summary judgment by conclusively proving each element of any of the defenses as a matter of law. See Tex.R. Crv. P. 166a(c); Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex.2000); Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex.1999); Walker v. Harris, 924 S.W.2d 375, 377 (Tex.1996). A defendant moving for summary judgment on an affirmative defense has the burden to conclusively establish that defense. Rhône-Poidenc, 997 S.W.2d at 223. On appeal, the movant bears the burden of showing that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Id.

1. Res Judicata.

Res judicata bars the relitigation of claims that have been finally adjudicated or that could have been litigated in the prior action. Montgomery asserted in his motion that he was entitled to summary judgment because res judicata barred Ca-prock’s suit on the note. Montgomery relied upon the judgments of the trial court and the court of appeals in Caprock III, a suit filed by Caprock against Montgomery First Corporation (MFC) in Young County, as the basis for his res judicata defense. To establish the defense of res judicata, Montgomery must have proven each of these elements: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex.2007); Caprock II, 89 S.W.3d at 185.

After this court’s decision in Caprock II and while this case was pending on remand to the trial court in Nolan County, Caprock brought a separate suit against MFC in Young County, seeking judicial foreclosure on the deeds of trust, damages for breach of contract on the deeds of trust for failing to maintain the oil and gas properties, and the excess due under the note. Upon motion by Montgomery, the trial court in Nolan County abated the present case pending the final resolution of the Young County suit. The district court in the Young County suit entered a take-nothing summary judgment in favor of MFC against Caprock based upon MFC’s defenses of res judicata, collateral estop-pel, and satisfaction of the note via the Jonietz bankruptcy. The Fort Worth Court of Appeals in Caprock Ill affirmed the Young County summary judgment in favor of MFC on the ground of res judica-ta only: the same rationale used by this court to reverse the summary judgment against MFC in Caprock II.

In his motion for summary judgment in the present case, Montgomery relied upon the Young County summary judgment and the decision of the Fort Worth Court of Appeals in Caprock III as the basis for his entitlement to summary judgment based upon res judicata. With respect to the second element of res judicata, Montgomery does not contend that he was a party to the Young County suit, but he argues that he is a person in privity with a party because he is the president of MFC, shares an identity of interests in the lawsuits, and is the person who controlled the litigation in Young County. We cannot agree that Montgomery met his burden of establishing this element of res judicata as a matter of law.

There is no general definition of privity that can be automatically applied in all res judicata cases; the circumstances of each case must be examined. Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 800 (Tex.1992). Privity exists if the parties share an identity of interests in the basic legal right that is the subject of litigation. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 653 (Tex.1996). Those in privity with a party may include persons who exert control over the action, persons whose interests are represented by the party, or successors in interest to the party. Getty Oil, 845 S.W.2d at 800-01.

The summary judgment evidence, the law of this case, and the prior assertions by Montgomery lead us to conclude that res judicata does not bar the claims against Montgomery. The summary judgment evidence establishes that MFC and others (but not Montgomery) acquired oil and gas leases with the money borrowed from Caprock’s predecessor and that they executed deeds of trust to secure payment of the note. Montgomery signed the deeds of trust in his capacity as president of MFC. However, Montgomery signed the note in his individual capacity. Montgomery did not establish as a matter of law his privity with MFC because the summary judgment evidence indicates that their interests may not be identical in this litigation. See Hammonds v. Holmes, 559 S.W.2d 345, 347 (Tex.1977) (res judicata did not bar action against employee of defendant in earlier suit where employee was sued in separate capacity in subsequent suit).

Moreover, this court previously held, upon the urging of Montgomery and MFC in Caprock II, that Caprock’s claims against MFC were barred by res judicata based upon an earlier summary judgment in favor of MFC that constituted a final judgment because Caprock had not challenged that summary judgment with respect to MFC in Caprock I. 89 S.W.3d at 185-86. In Caprock II, the claims against Montgomery were thereby severed from those against MFC and were remanded to the trial court for further proceedings. 89 S.W.3d at 185-87. Having previously asserted such a position of separateness of MFC and Montgomery, which was relied upon by this court in Caprock II, Montgomery may not now assert in this case that he is actually in privity with MFC. See Brown v. Lanier Worldwide, Inc., 124 S.W.3d 883, 905 (Tex.App.-Houston [14th Dist.] 2004, no pet.) (judicial estoppel may prevent a party from asserting defenses of res judicata or collateral estoppel); Goldman v. White Rose Distrib. Co., 936 S.W.2d 393, 398 (Tex.App.-Fort Worth 1996), vacated pursuant to settlement agreement, 949 S.W.2d 707 (Tex.1997) (applying judicial estoppel as a trump to defense of res judicata); see also Pleasant Glade Assembly of God v. Schubert, 264 S.W.3d 1, 6 (Tex.2008) (judicial estoppel, which is actually a rule of procedure based on justice and sound public policy, precludes a party from adopting a position inconsistent with one that it maintained successfully in an earlier proceeding); Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.2003) (law of the case doctrine); Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.1986) (law of the case doctrine); Long v. Knox, 155 Tex. 581, 291 S.W.2d 292 (1956) (judicial estoppel). Because Montgomery did not establish his affirmative defense of res judicata as a matter of law, the trial court erred in granting summary judgment in favor of Montgomery on that basis.

2. Collateral Estoppel and Satisfaction.

Montgomery also asserted the defense of collateral estoppel, based upon the Young County suit, in his motion for summary judgment. Collateral estoppel, or issue preclusion, bars the relitigation of an issue of fact or law that was actually litigated, was determined by a valid and final judgment, and was essential to the judgment. Tex. Dep’t of Pub. Safety v. Petta, 44 S.W.3d 575, 579 (Tex.2001); Eagle Props., Ltd. v. Scharbauer, 807 S.W.2d 714, 721 (Tex.1990). Collateral estoppel applies when the parties were adversaries in the prior action and the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior suit. Petta, 44 S.W.3d at 579; Eagle Props., 807 S.W.2d at 721.

Montgomery argued in his summary judgment that collateral estoppel constituted a bar in this case because the issue regarding payment of the note was previously decided by the district court in Young County, which held that the note had been paid and satisfied by the Jonietz bankruptcy. Caprock argues on appeal that the only issue determined by a valid and final judgment with respect to the Young County suit is that of res judicata as addressed by the court of appeals. We agree.

The general rule is that there cannot be estoppel by alternative holdings. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 522 (Tex.1998). The supreme court has quoted with approval the following excerpt from the Restatement (Second) of Judgments § 27, cmt. i (1982): “If a judgment of a court of first instance is based on determinations of two issues, either of which standing independently would be sufficient to support the result, the judgment is not conclusive with respect to either issue standing alone.” Id. at 522; Eagle Props., 807 S.W.2d at 722. The district court in Young County made three separate and independent determinations that would support its judgment. Thus, the alternative holdings in the judgment of the district court in Young County are not conclusive for purposes of collateral estoppel.

Via the judgment of the Fort Worth Court of Appeals, the Young County suit became conclusive as to res judicata only. Comment “o” to Section 27 of the Restatement cited above provides in relevant part that, when the judgment of a trial court is based on a determination of two issues either of which would be independently sufficient to support the judgment and the appellate court upholds one of these determinations as sufficient and refuses to consider whether or not the other is sufficient and accordingly affirms the judgment, the judgment is conclusive only as to the first determination. The supreme court relied upon a different part of comment “o” for its ruling in Kenneco, 962 S.W.2d at 522 (alternative findings that are actually reviewed and affirmed by an appellate court may have preclusive effect). We hold that the judgments stemming from the Young County suit were not conclusive as to the issue regarding payment or satisfaction of the note by the Jonietz bankruptcy.

With respect to the collateral estoppel effect of the Jonietz bankruptcy on Caprock’s claim against Montgomery, this court previously held in Caprock I that “the discharge of a debtor’s obligation by operation of the Bankruptcy Code does not discharge or affect in any way a comaker’s liability on his obligation” and that “the issue in the bankruptcy court was the discharge of Jonietz’ liability on the note, not that of his comakers.” 17 S.W.3d at 712, 714. Our previous holding constitutes the law of this case, and there is nothing in the summary judgment evidence indicating that our previous ruling was erroneous. Caprock is not estopped by the Jonietz bankruptcy. See Quinney Elec., Inc. v. Rondos Entm’t, Inc., 988 S.W.2d 212 (Tex.1999). Neither the issue of the collateral’s value nor the issue of satisfaction of the debt is barred by collateral estoppel in this suit against Montgomery to collect on the note. The trial court erred in granting Montgomery’s summary judgment on the grounds of collateral estoppel and satisfaction.

B. Fraud.

Montgomery also asserted in his motion for summary judgment that there was no evidence as to various elements of Caprock’s claim for fraud, including the making of a misrepresentation with knowledge of its falsity at the time it was made. The elements of fraud are (1) that a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 774 (Tex.2009). In response to Montgomery’s motion, Caprock presented no summary judgment evidence showing that the representation regarding the value of the collateral as being $180,000 was false at the time of the representation or that Montgomery knew it was false at that time. Caprock’s summary judgment evidence merely indicated that Montgomery was aware over fifteen months after he signed the promissory note that “the specific properties pledged with the bank do not have enough value to come anywhere close to equaling the liabilities to the bank.” This is no evidence of the collateral’s value at the time of the loan or of a misrepresentation made by Montgomery at that time. Caprock, therefore, failed to present more than a scintilla of summary judgment evidence on these elements of fraud in response to Montgomery’s no-evidence motion. Consequently, the trial court properly granted the motion on this basis. Tex.R. Civ. P. 166a(i).

Caprock’s first issue is sustained as to the grant of summary judgment in favor of Montgomery on his defenses to liability on the promissory note; however, it is overruled as to the grant of a take-nothing summary judgment in favor of Montgomery on Caprock’s fraud claim.

III. Caprock’s Motion

In its second issue on appeal, Ca-prock argues that the trial court erred in denying Caprock’s motion for summary judgment. Caprock urged in its traditional motion for summary judgment that it was entitled to summary judgment on its breach of contract claim and that it was also entitled to summary judgment on Montgomery’s counterclaims, which were “defensive” counterclaims asserted for purposes of offset to negate any recovery by Caprock on its suit on the note.

To prevail on a breach of contract claim, a party must establish the following elements: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff as a result of the defendant’s breach. Eaves v. Unifund CCR Partners, 301 S.W.3d 402, 407 (Tex.App.-El Paso 2009, no pet.). Caprock presented summary judgment evidence in support of these elements. In his response, Montgomery contended that Caprock was not entitled to summary judgment for the following reasons: res judicata, collateral estoppel, satisfaction of the note via the Jonietz bankruptcy, fact issues as to control and possession of the collateral, fact issues as to the amount due on the note, and fact issues regarding Montgomery’s counterclaims. As addressed above, Montgomery’s assertions of res judicata, collateral estoppel, and satisfaction via the Jonietz bankruptcy fail as a matter of law. Montgomery does not otherwise contest the elements of breach of the promissory note establishing his liability, but he does contest the amount owed. The summary judgment evidence shows the existence of a valid promissory note signed by Montgomery, performance by Caprock’s predecessor, and breach by Montgomery. The summary judgment evidence is disputed as to the amount actually owed, the reasonableness of the substituted interest rate, the amount of setoff (if any) available for the alleged mismanagement and waste of the collateral by Caprock and its predecessors, and attorney’s fees. The summary judgment evidence established that, except as to the amount of damages, no genuine issue of material fact existed on Caprock’s claim for breach of contract. Thus, the trial court should have entered summary judgment in favor of Caprock as to Montgomery’s liability for breach of contract but not the amount of damages. Rule 166a(c) provides in part: “The judgment sought shall be rendered forthwith if [the summary judgment evidence, pleadings, motions, and responses] show that, except as to the amount of damages, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law” (emphasis added). Caprock’s second issue is sustained with respect to the trial court’s failure to grant its summary judgment motion regarding liability and is otherwise overruled.

The judgment of the trial court is affirmed as to the take-nothing judgment rendered against Caprock on its claim for fraud. The judgment of the trial court is otherwise reversed. Because both parties moved for summary judgment on the breach of contract claim, we render judgment that Montgomery is liable for breach of the promissory note and that Caprock’s claim for breach of the note is not barred by res judicata, collateral estoppel, or satisfaction. Because issues of fact exist regarding damages — the amount still due and owing under the note, the amount of any offset that Montgomery may be entitled to, and attorney’s fees — we remand the cause to the trial court for a determination of these issues.

OPINION ON MOTION FOR REHEARING

Elton Montgomery has filed in this court a motion for rehearing. We deny that motion, but write to clarify our previous opinion.

Montgomery first contends that we erroneously held that Montgomery cannot raise the defense of payment or seek credit for payments made. Our opinion is not to be construed to contain any such prohibition. We held that Caprock was entitled to judgment as a matter of law as to liability only and that Montgomery had not established his affirmative defenses as a matter of law, but we remanded the cause to the trial court for a determination of the factual issues related to the amount of damages — including the amount owed on the note (if any) — which necessarily allows for credits for any payments made on the note, whether made by Montgomery or others. We specifically recognized that Montgomery’s liability would be discharged “as to any amount actually received” by Caprock and its predecessors. The amount actually received by Caprock and its predecessors is a question of fact for the trier of fact to determine on remand.

Next, Montgomery asserts that this court “has misconstrued” his argument concerning collateral estoppel and that his argument is not based upon Jonietz’s discharge in bankruptcy but upon the 1996 summary judgment in favor of MFC, in which it was determined that Caprock had been paid in full by Jonietz pursuant to his bankruptcy. We do not believe that we misconstrued Montgomery’s argument. In his brief, Montgomery asserted that “he is not liable on the Note because it has been satisfied pursuant to the credit on the Note resulting from the surrender of collateral valued in excess of the debt in Jonietz’s bankruptcy” and that the “Young County Judgment conclusively proves that the Suit on the Note is barred by collateral estoppel” because it “directly addressed the issue of whether the Note was paid and fully satisfied as a result of the Jonietz bankruptcy.” Furthermore, in his motion for summary judgment, Montgomery specifically asserted the following:

• “The Summary Judgment in favor of MFC in Young County has preclusive effect against Caprock’s Suit on the Note.”
• “The Young County summary judgment is a final judgment on the merits that bars relitigation in the Nolan County Suit.”
• “It has been judicially determined that the Note has been paid.... The Young County Judgment conclusively proves that the Suit on the Note is barred by collateral estoppel.”
• “[T]he Young County court directly addressed the issue of whether the Note was paid and fully satisfied as a result of the Jonietz bankruptcy.... [T]he Young County court held that ‘the note at issue in this proceeding was fully paid and satisfied as a result of the bankruptcy proceeding of Albert Jonietz.’ ”

Nowhere in his motion for summary judgment did Montgomery argue that the 1996 summary judgment in favor of MFC entitled Montgomery to summary judgment based upon collateral estoppel.

Moreover, in response to the current argument, the 1996 summary judgment in favor of MFC does not collaterally estop Caprock from seeking payment on the note from Montgomery. This court previously reversed a summary judgment that was granted in favor of Montgomery and was based upon the same ground as MFC’s 1996 summary judgment. 17 S.W.3d 707. Both summary judgments are earlier proceedings in this case. Because the 1996 summary judgment in favor of MFC is not a final judgment from “a separate lawsuit,” the doctrines of res judi-cata and collateral estoppel do not apply. Creative Thinking Sources, Inc. v. Crea tive Thinking, Inc., 74 S.W.3d 504, 512 (Tex.App.-Corpus Christi 2002, no pet.).

The issue upon which MFC moved for, and was granted, summary judgment was determined adversely to Montgomery by this court in Caprock I. The “law of the case” doctrine mandates that the ruling of an appellate court on a question of law raised on appeal will govern throughout the subsequent proceedings of the same case unless clearly erroneous. Bris-coe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.2003). The law of this case as determined in Caprock I is that the Jonietz bankruptcy does not as a matter of law discharge Montgomery’s liability on the note or prove that the indebtedness was fully satisfied based upon the valuation of the collateral in the bankruptcy. 17 S.W.3d at 712, 714. The issue presented in this appeal with respect to the Jonietz bankruptcy is substantially the same as the issue we addressed in Caprock I.

Montgomery next takes issue with this court’s rendition of judgment, rather than remand, based upon our holding that Montgomery’s res judicata defense fails as a matter of law. Had this court merely determined that Montgomery did not establish as a matter of law that he was in privity with MFC and that an issue of fact existed as to privity, we would have remanded the cause with respect to the issue of res judicata. However, Caprock asserted that there was “no privity” between Montgomery and MFC and that this suit is not a “separate” lawsuit from the earlier judgment in favor of MFC but is part of the same lawsuit. We agreed, determining as a matter of law that res judicata does not preclude Caprock’s claims against Montgomery in this suit.

In an earlier proceeding in this same case, Montgomery and MFC presented this court with a question of law concerning res judicata and the finality of the judgment as to MFC. Caprock II, 89 S.W.3d 179. We determined that judgment as to MFC, but not Montgomery, had become final and that res judicata barred further claims against MFC. Id. at 185-86. The cause was remanded for further proceedings on the claims against Montgomery. Thus, the law of this case is that the claims against MFC became final and were thereby severed from those against Montgomery, whereas the claims against Montgomery remained pending as live claims in this suit. Under such circumstances, Montgomery and MFC cannot be in privity for purposes of this suit.

In Caprock III, the Young County suit, it was also determined that res judicata barred further claims against MFC. 2005 WL 3118787. Though res judicata barred the claims asserted in the Young County suit against MFC, res judicata would not have barred claims against Montgomery in that suit as there were live claims pending against Montgomery in Nolan County. Montgomery and MFC, therefore, did not share an identity of interest in the Young County suit.

As to estoppel, our holding was based upon prior assertions made by Montgomery and MFC and relied upon by this court in Caprock II. Our records from Caprock I show, contrary to Montgomery’s contention in his motion for rehearing, that an appeal of the 1996 summary judgment in favor of MFC had been perfected. MFC was named as an appellee in this court and was represented by counsel. In its brief in Caprock I, however, Caprock did not raise any points of error relating to MFC, but it did raise points relating to Montgomery, who had also been granted summary judgment. See Caprock II, 89 S.W.3d at 183. Consequently, at the urging of Montgomery and MFC in Caprock II, we held that, “absent properly assigned error” in Caprock 1, the earlier summary judgment in favor of MFC was final and that any further claims by Caprock against MFC were barred. Id. at 185-86. We note that, when Montgomery and MFC urged their defense of res judicata in Ca-prock II, they did so only as to MFC. Indeed, had they at that point urged privity between the two and res judicata with respect to Montgomery as well as MFC, it is unlikely that this court would have held in Caprock II that res judicata barred the action against MFC. The appeal in Ca-prock I stemmed from the granting of Montgomery’s and MFC’s motions for summary judgment that were, as stated in MFC’s motion, based upon an “identical position.” If Montgomery and MFC had been in privity, the points of error relating to Montgomery would have applied to MFC. Montgomery may not now argue that he is in privity with MFC when he and MFC previously asserted successfully in this court a position inconsistent with that of privity.

Montgomery’s motion for rehearing is denied.

      . See Caprock Investment Corp. v. FDIC, 17 S.W.3d 707 (Tex.App.-Eastland 2000, pet. denied) (Caprock I); Montgomery First Corp. v. Caprock Investment Corp., 89 S.W.3d 179 (Tex.App.-Eastland 2002, no pet.) (Caprock II); and Caprock Investment Corp. v. Montgomery First Corp., No. 02-04-00155-CV, 2005 WL 3118787 (Tex.App.-Fort Worth Nov. 23, 2005, no pet.) (mem. op.) (Caprock III), for more details regarding the parties and the history of this case.

      . We disagree with Montgomery’s contention that Caprock waived this issue; Caprock addressed the issue in its brief in the argument regarding collateral estoppel. Furthermore, any failure by Caprock to address the issue in its response to Montgomery's motion for summary judgment did not waive the issue because Montgomery had the burden to establish its defense as a matter of law. A non-movant has no burden to respond unless the movant conclusively establishes its cause of action or defense. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex.1999). A nonmovant need not have answered or responded to the motion in the trial court to contend on appeal that the movant's summary judgment proof is insufficient as a matter of law. Id. at 223.

      . We note that Caprock does not challenge the first element or otherwise argue on appeal that the judgment from the Young County suit or the Fort Worth Court of Appeals in Ca-prock III is not a prior final judgment on the merits. Accordingly, we do not address that issue.

      . See also Restatement (Second) of Judgments §§ 49, 50 (1982). Section 49 provides that a judgment against one person liable for a loss does not terminate a claim that the injured party may have against another person who may be liable therefor. Section 50 provides that a satisfaction or release of judgment or other agreement terminating a judgment debtor’s obligation does not discharge the liability of any other person liable for the loss, unless otherwise agreed, except as to any amount actually received by the judgment creditor.


source: Caselaw Access Project

author: TERRY McCALL, Justice.

license: Public Domain

text:
    ESCONDIDO SERVICES, LLC, Appellant, v. VKM HOLDINGS, LP; Chesapeake Operating, Inc.; and Chesapeake Exploration, L.L.C., Appellees.
    No. 11-09-00034-CV.
    Court of Appeals of Texas, Eastland.
    June 3, 2010.

      Hal R. Ray, Jr., Pope, Hardwicke, Christie, Schell, Kelly & Ray, L.L.P., Fort Worth, for Appellant.
    Bart A. Rue, Matthew D. Stayton, David E. Keltner, Kelly Hart & Hallman, LLP, Fort Worth, for Appellee.
    Panel consists of: WRIGHT, C.J., McCALL, J., and STRANGE, J.
   OPINION

TERRY McCALL, Justice.

This appeal involves an application of the strip and gore doctrine in the context of a mineral estate lying underneath a strip of land conveyed to the State for the construction of a highway. The trial court concluded that the mineral estate underneath the highway strip was conveyed under the strip and gore doctrine when its owners conveyed tracts of land adjacent to the strip. We affirm.

Background Facts

Joe W. Crouch Jr. is the common source of title to all of the tracts at issue in this appeal. He obtained title to a 319-acre tract of property by virtue of a partition deed executed in 1983. Joe W. Crouch Jr., joined by his wife, Norma Sue Crouch, subsequently conveyed a 14.808-acre tract out of the original 319-acre tract to the State of Texas in a deed executed in 1997. The deed from the Crouches to the State stated that the conveyance was “for the purposes of facilitating the construction, maintenance and operation of a Controlled Access Highway facility.” The Crouches expressly reserved “all of the oil, gas and sulphur in and under the land herein conveyed” but “waivfed] all rights of ingress and egress to the surface thereof for the purpose of exploring, developing, mining or drilling for same.”

The Crouches subsequently conveyed the tracts that were adjacent to the highway strip to Crowley Farmland Partners, L.P. in a deed executed on November 21, 2000, with an effective date of January 9, 2001. The conveyance from the Crouches to Crowley Farmland Partners included four tracts. The field notes for “Tract II” of the conveyance indicated that it is located along the north and west sides of the highway strip. The description for Tract II set out in the field notes included the north and west boundary lines of the highway strip as part of the boundary line of Tract II. The field notes for “Tract III” of the conveyance indicated that it is located along the south side of the highway strip. The description for Tract III set out in the field notes included the south boundary line of the highway strip as part of the boundary line of Tract III. The Crouches did not reserve any minerals in this conveyance to Crowley Farmland Partners.

Appellees, VKM Holdings, LP; Chesapeake Operating, Inc.; and Chesapeake Exploration, L.L.C., are successors-in-interest of the tracts of land conveyed by the Crouches to Crowley Farmland Partners. They assert that the Crouches conveyed their mineral estate lying underneath the highway strip to Crowley Farmland Partners under the strip and gore doctrine when they conveyed the tracts that are adjacent to the highway strip.

In 2001, Crowley Farmland granted by special warranty deed (without reservation) the tracts to Crowley 100, L.P. That deed also expressly described the tracts as bounding the “right-of-way of said Farm to Market Highway No. 1187” and the “right-of-way of proposed Highway No. 1187 bypass.” In December 2004, Crowley 100 granted to VKM by mineral deed without reservation all of the oil, gas, and other minerals under the tracts of the Crowley 100 deed. In 2005, VKM executed a lease to FSOC Gas Co. Ltd.; that lease was assigned to Chesapeake Exploration, L.L.C. effective June 1, 2006. Chesapeake pooled that acreage in the VKM lease and began drilling operations in March 2007.

Appellant, Escondido Services, LLC, also claims title to the mineral estate underneath the highway strip through the Crouches. In 2008, Norma Sue Crouch conveyed the mineral estate underneath the highway strip to appellant in a quitclaim deed. The quitclaim deed was backdated to be “effective for all purposes as of January 10, 2007.” Appellant contends that Mrs. Crouch continued to own the mineral estate in 2007 at the time she executed the quitclaim deed. Appellant reasons that the mineral estate underneath the highway strip was not conveyed under the strip and gore doctrine to Crowley Farmland Partners when the Crouches conveyed the tracts adjacent to the highway strip.

Procedural Facts

Appellant filed a trespass to try title action against appellees alleging trespass, conversion, and theft arising from the extraction of minerals underneath the highway strip. Appellant subsequently filed a motion for partial summary judgment seeking to establish that it possesses superior title to the mineral estate underneath the highway strip. Appellant also sought partial summary judgment on no-evidence grounds with respect to appellees’ defense to the trespass-to-try-title claim. By its motion for a no-evidence summary judgment, appellant sought on various legal grounds to preemptively negate appellees’ reliance on the strip and gore doctrine. Appellees filed written responses to appellant’s motion for partial summary judgment in which they asserted an application of the strip and gore doctrine to defeat appellant’s motion for partial summary judgment. Appellees subsequently filed their own motion for summary judgment seeking to establish their superior title in the mineral estate underneath the highway strip under the strip and gore doctrine.

The trial court considered the competing motions for summary judgment at a hearing on November 14, 2008. The trial court granted appellees’ motion for summary judgment and denied appellant’s motion for partial summary judgment. Accordingly, the trial court entered a “take-nothing” judgment against appellant based upon its determination that appellees have superior title as a matter of law under the strip and gore doctrine. Appellant challenges the trial court’s judgment in four issues. The first three issues raise legal grounds that appellant raised in its motion for partial summary judgment that would preclude an application of the strip and gore doctrine to the conveyance to Crowley Farmland Partners. In its fourth issue, appellant contends that appellees failed to meet their evidentiary burden to conclusively establish the applicability of the strip and gore doctrine.

Scope and Standard of Review

When both parties move for summary judgment and the trial court grants one motion and denies the other, the appellate court considers the summary judgment evidence presented by both sides and determines all questions presented. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000). If the appellate court determines the trial court erred, it must render the judgment the trial court should have rendered. Valence Operating, 164 S.W.3d at 661; FM Props., 22 S.W.3d at 872.

We review the trial court’s ruling on a motion for summary judgment de novo. Dorsett, 164 S.W.3d at 661; Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant’s favor. Knott, 128 S.W.3d at 215. A trial court must grant a traditional motion for summary judgment if the moving party establishes that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991). A trial court must grant a no-evidence motion for summary judgment unless the nonmovant produces more than a scintilla of probative evidence to raise a genuine issue of material fact. Tex.R. Civ. P. 166a(i); Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex.2002).

The General Rule

As far back as 1862, the Texas Supreme Court in Mitchell v. Bass, 26 Tex. 372, 380 (Tex.1862), adopted a general rule where a grantor conveyed an easement or right-of-way for a public road and retained the underlying fee, including the minerals:

The established doctrine of the common law is, that a conveyance of land bounded on a public highway carries with it the fee to the center of the road.... Such is the legal construction of the grant unless the inference that it was so intended is rebutted by the express terms of the grant. The owners of the land on each side go to the center of the road, and they have the exclusive right to the soil, subject to the right of passage in the public.

Many courts have referred to two doctrines as justification for the general rule: (1) the appurtenance doctrine and (2) the strip and gore doctrine. The appurtenance doctrine is based on the presumption that a conveyance reflects an intention to carry with it the appurtenant easements and incidents belonging to the property at the time of the conveyance. Angelo v. Biscamp, 441 S.W.2d 524, 526 (Tex.1969); Rio Bravo Oil Co. v. Weed, 121 Tex. 427, 50 S.W.2d 1080, 1085 (1932). Appurtenances include all rights and interests necessary for the full enjoyment of the property conveyed. Pine v. Gibraltar Sav. Ass’n, 519 S.W.2d 238, 241 (Tex.Civ.App.-Houston [1st Dist.] 1974, writ ref'd n.r.e.).

The Strip and Gore Doctrine

The strip and gore doctrine is essentially a presumption that, when a grantor conveys land he owns adjacent to a narrow strip that thereby ceases to be of benefit or importance to him, he also conveys the narrow strip unless he plainly and specifically reserves the strip for himself in the deed by plain and specific language. Angelo, 441 S.W.2d at 526; Cantley v. Gulf Prod. Co., 135 Tex. 339, 143 S.W.2d 912, 915 (1940). The presumption is intended to apply to relatively narrow strips of land that are small in size and value in comparison to the adjoining tract conveyed by the grantor. Angelo, 441 S.W.2d at 526-27. Under the presumption, a conveyance of land bounded by a public highway carries with it the fee to the center of the road as part and parcel of the grant. This is the legal construction of the grant unless the presumption that the strip was included in the grant is rebutted by the express terms of the grant. State v. Williams, 161 Tex. 1, 335 S.W.2d 834, 836 (1960) (quoting Mitchell, 26 Tex. at 380). A legal description that defines the property conveyed as extending only to the boundary of the highway does not expressly rebut the presumption that the conveyance extends to the center of the highway. See Williams, 335 S.W.2d at 836; Krenek v. Texstar N. Am., Inc., 787 S.W.2d 566, 568 (Tex.App.Corpus Christi 1990, writ denied).

Analysis

Appellant asserts in its first issue that the strip and gore doctrine is not applicable to a mineral interest lying underneath a separately conveyed fee estate to the State. It cites Goldsmith v. Humble Oil & Ref. Co., 145 Tex. 549, 199 S.W.2d 773, 776-77 (1947), in support of this proposition. Goldsmith involved a small strip of land located adjacent to a one-acre block. 199 S.W.2d at 775. The court noted that the strip “was not an existing road, passageway or alley in which an easement had been created or acquired when the deed [to the adjoining one-acre block] was executed.” Id. at 776. Citing Weed, 50 S.W.2d at 1085, the court in Goldsmith noted that the reason given for the “presumption of intention to convey to the center of the street or highway” is “the fact that valuable rights and privileges appurtenant to property should be presumed to pass in a conveyance thereof in the absence of a clear and unequivocal intention to the contrary.” 199 S.W.2d at 776. The court concluded in Goldsmith that the presumption was inapplicable because the grantor’s title in the strip was not burdened by an existing easement creating a highway, street, road, passageway, or alley that provided an appurtenant right or benefit to the neighboring tract being conveyed. Appellant contends that the strip and gore doctrine is inapplicable in this case under Goldsmith because the mineral estate underneath the highway strip arose by virtue of a deed rather than an easement and that the mineral estate was of no benefit to the tracts subsequently conveyed to Crowley Farmland Partners.

Appellant’s reliance on Goldsmith is misplaced. The facts in Goldsmith are distinguishable because the Crouches had earlier conveyed the highway strip from their larger tract of property to the State for the construction of a highway. Furthermore, the fact that the conveyance to the State occurred as a result of a deed rather than an easement is of no practical consequence. Even more important, the grantor’s property interest in the strip does not have to benefit his property interest in the larger tract being conveyed in order for the strip and gore doctrine to apply. The Texas Supreme Court recognized this principle in Angelo when it distinguished the “appurtenance doctrine” discussed in Weed from the strip and gore doctrine discussed in Cantley and in Strayhorn v. Jones, 157 Tex. 136, 300 S.W.2d 623 (1957). Angelo, 441 S.W.2d at 526. The strip and gore doctrine is based on the rationale that the strip ceases to be of benefit or importance to the grantor. Angelo, 441 S.W.2d at 526-27. Accordingly, the fact that the mineral interest underneath the highway strip may not benefit the larger adjoining tracts conveyed to Crowley Farmland Partners does not preclude the application of the strip and gore doctrine.

We would additionally note that in Reagan v. Marathon Oil Co., 50 S.W.3d 70, 80 (Tex.App.-Waco 2001, no pet.), the court determined that the strip and gore doctrine was applicable to a mineral estate lying beneath a public highway in which the State held a fee estate in the surface. See also Krenek, 787 S.W.2d at 567-68. The facts in Reagan are analogous to the facts in this appeal. We agree with the holding in Reagan that a mineral interest underneath a highway reserved in a deed to the State is subject to the strip and gore doctrine. Appellant’s first issue is overruled.

In its second issue, appellant asserts that the strip and gore doctrine is inapplicable because there is no ambiguity in the deed from the Crouches to Crowley Farmland Partners. Appellant cites McKee v. Stewart, 139 Tex. 260, 162 S.W.2d 948 (1942), in support of this proposition. McKee involved the conveyance of a tract located near a creek. The deed conveying the tract did not include the creek as a boundary. McKee, 162 S.W.2d at 950. Instead, the deed referenced a straight line near the creek as its boundary. The court did not apply the strip and gore doctrine on the basis that there was no uncertainty or ambiguity as to the land intended to be conveyed either appearing on the face of the deed or arising from an attempt to apply the description on the ground. Id.; see Miller v. Crum, 314 S.W.2d 389, 395 (Tex.Civ.App.-Fort Worth 1958, no writ). In reaching its holding, the court in McKee distinguished the conveyance at issue in Cantley. The court concluded that there was “uncertainty” with the conveyance at issue in Cantley because the deed in Cantley called for a road as a boundary without express words indicating whether the grantor intended to convey or reserve the fee that he owned in the road. McKee, 162 S.W.2d at 950; Cantley, 143 S.W.2d at 914.

The conveyance at issue in this appeal is more similar to the conveyance in Cantley than the conveyance in McKee. The deed from the Crouches to Crowley Farmland Partners uses the boundaries of the highway strip conveyed to the State as boundaries for Tracts II and III in the conveyance. As was the case in Cantley, there is uncertainty as to the land to be conveyed because the deed from the Crouches to Crowley Farmland Partners does not expressly indicate whether the Crouches intended to convey or reserve their mineral interest underneath the highway strip. McKee, 162 S.W.2d at 950. Appellant’s second issue is overruled.

Appellant asserts in its third issue that the strip and gore doctrine does not apply because the highway for which the highway strip was conveyed to the State did not exist at the time the adjoining tracts were conveyed to Crowley Farmland Partners. In this regard, appellant’s use of the term “highway” refers to the improved roadway upon which vehicles actually travel rather than the wider highway strip wherein the actual roadway would be constructed. In considering appellant’s third issue, we assume that it is correct in asserting that the highway had not been constructed at the time of the conveyance to Crowley Farmland Partners.

Appellant cites Goldsmith for the proposition that the actual roadway has to be in existence in order for the strip and gore doctrine to apply. We disagree. In Goldsmith, the court emphasized that there was nothing in the record to even indicate an intention on the part of the grantor to create an easement or to dedicate any land for a road or any purpose. The strip did not exist until the deed of conveyance purported to convey the strip but failed to include it in the metes and bounds. Goldsmith, 199 S.W.2d at 776-77. The critical factor in applying the strip and gore doctrine is the existence of the strip at the time of the conveyance rather than the roadway that may subsequently be constructed within the strip. See Williams, 335 S.W.2d at 836 (“[t]he rule herein announced should be applied if it appears that the appurtenant strip exists in fact” (emphasis added)); Krenek, 787 S.W.2d at 568 (“[t]his presumption of intent to convey title to the center of the highway applies if the appurtenant strip exists in fact at the time of the conveyance” (emphasis added)). There is no dispute that the highway strip existed at the time of the conveyance to Crowley Farmland Partners because the Crouches conveyed the strip in a prior conveyance. Furthermore, the deed to Crowley Farmland Partners included the boundaries to the highway strip as a part of the boundaries for Tracts II and III. Appellant’s third issue is overruled.

In its fourth issue, appellant asserts that appellees did not meet their burden to establish their entitlement to summary judgment under the strip and gore doctrine as a matter of law. As stated by the Texas Supreme Court in Angelo, the requirements for applying the strip and gore doctrine are as follows:

It is our conclusion that this doctrine was conceived and intended to apply to relatively narrow strips of land, small in size and value in comparison to the adjoining tract conveyed by the grantor. In these instances, when it is apparent that the narrow strip has ceased to be of benefit or importance to the grantor of the larger tract, it can be presumed that the grantor intended to convey such a strip.

Angelo, 441 S.W.2d at 526-27 (emphasis added, citations omitted).

Based on the quote from Angelo, one court stated that the strip and gore doctrine requires the strip (1) to be small in comparison to the land conveyed, (2) to be adjacent to or surrounded by the land conveyed, (3) to belong to the grantor at the time of conveyance, and (4) to be of insignificant or little practical value. Glover v. Union Pac. R.R. Co., 187 S.W.3d 201, 212 (Tex.App.-Texarkana 2006, pet. denied) (citing Alkas v. United Sav. Ass’n of Tex., Inc., 672 S.W.2d 852, 857 (Tex.App.Corpus Christi 1984, writ ref'd n.r.e.)). Appellant argues that there was no evidence on the fourth requirement or there was at least a fact question. Although Glover stated the fourth requirement is that the strip has “to be of insignificant or little practical value,” we believe the fourth requirement should be stated as in Angelo: the “strip has ceased to be of benefit or importance to the grantor of the larger tract.” Angelo, 441 S.W.2d at 527; see Cantley, 143 S.W.2d at 915.

There was summary judgment evidence to show that the Crouches’ mineral interest underneath the highway strip ceased to be of benefit or importance to the Crouches at the time of the conveyance of the adjacent tracts to Crowley Farmland Partners: (1) in their deed to the State, the Crouches reserved the oil, gas, and sulphur, but waived the rights of ingress and egress to the tract for purposes of exploring for and developing minerals and (2) in their deed to Crowley Farmland Partners, the Crouches did not reserve any minerals. The benefit or importance of the strip to the Crouches is determined at the time of their conveyance to Crowley Farmland Partners. See Glover, 187 S.W.3d at 212. This evidence was sufficient to show that the narrow strip had ceased to be of any benefit or importance to the Crouches. Having no access to the minerals under the strip after the conveyance to Crowley Farmland Partners, it is reasonable to presume that the Crouches intended to include the strip in the conveyance. The burden then shifted to appellant to present evidence that the Crouches did not intend to convey their mineral interest in the narrow strip to Crowley Farmland Partners.

Appellant’s only evidence that the strip had not “ceased to be of benefit or importance” to the Crouches at the time of the conveyance was a mineral lease dated July 5, 2001, covering minerals for property five miles from the highway strip. The conveyance to Crowley Farmland Partners was in November 2000. The benefit or importance had to be determined as of that time, not by subsequent events. Therefore, appellant presented no evidence to raise a fact question. From appellees’ uncontradicted evidence, it is apparent that the narrow strip ceased to be of benefit or importance to the Crouches at the time of their conveyance to Crowley Farmland Partners. Appellant’s fourth issue is overruled.

This Court’s Ruling

The trial court’s judgment is affirmed.

      . The record reflects that Joe W. Crouch Jr. died on August 31, 2002. Mrs. Crouch executed the quitclaim deed to appellant in her individual capacity and in her capacity as trustee of the Crouch Family Trust.

      . See William G. Bredthauer & Shawna Snellgrove Rinehart, Ownership and Leasing of Minerals Under Highways and Right-of-Ways, 16 Tex. Wesleyan L.Rev. 3, 8-9 (2009), for a discussion of the distinction between the appurtenance doctrine and the strip and gore doctrine.

      . There is summary judgment evidence indicating that the State did not award a contract for construction of the road until after the deed from the Crouches to Crowley Farmland Partners.

      . The Glover court cited Alkas, but the court in Alkas stated the fourth requirement as in Angelo: that the small tracts were “of no benefit or importance’’ to the grantor at the time of the later conveyance. Alkas, 672 S.W.2d at 857.