# Myers-Woodward, LLC v. Underground Servs. Markham, LLC

Supreme Court of Texas, No. 22-0878

**Myers-Woodward, LLC v. Underground Servs. Markham, LLC, No. 22-0878 (Tex. May 16, 2025). Holding: Absent an agreement otherwise, ownership of underground salt does not include ownership of the empty space left by salt mining: the surface owner owns the empty caverns, and the mineral owner may use them only as reasonably necessary to produce its minerals, which does not include storing hydrocarbons produced elsewhere; and, reading the 1947 deeds as a whole, Myers's royalty on salt is an in-kind royalty and not one-eighth of market value.**

Practice areas: oil and gas, real property

## Key issues

- Absent an agreement otherwise, the surface owner, not the mineral owner, owns the empty underground space left by salt mining, and the mineral owner may use that space only as reasonably necessary to produce its minerals, not to store hydrocarbons produced off-site; the Court overruled Mapco v. Carter to the extent inconsistent.
- Read as a whole, the 1947 mineral deed and correction deed reserved to the surface owner an in-kind royalty of one-eighth of the salt produced, not merely one-eighth of its market value, so the lower courts' royalty calculation was wrong and the case is remanded.

## Factual History
Myers-Woodward, LLC (Myers) owns 160 acres in Matagorda County, and in 1947 its predecessors kept the surface estate but conveyed "all of the said oil, gas, and other minerals" to the predecessor of Underground Services Markham, LLC and United Brine Pipeline Company, LLC (USM), reserving "a perpetual one-eighth (1/8th) royalty on all oil" to "be delivered at the wells," and a correction deed that August added "a royalty of 1/8 of all the gas or other minerals" (Opinion, PDF pp. 3, 22). In 2008 USM acquired from Texas Brine Company "all of the salt and salt formations only" on the property, subject to royalty obligations (Opinion, PDF pp. 3-4). The parties could not agree on the royalty owed on produced salt brine, and USM produced 2,674,058.90 tons of salt between 2015 and 2019 without paying Myers any royalty (Opinion, PDF p. 4). Mining created large empty caverns in the salt formation, and the dispute is over who owns them and may use them to store oil and gas produced elsewhere (Opinion, PDF pp. 1-2).

## Procedural History
In 2013 USM sued the royalty holders for declarations that its royalty obligation is satisfied by tendering one-eighth of the brine in its natural state and that it owns the caverns its mining created, and Myers counterclaimed for unpaid royalties (Opinion, PDF p. 4). The district court held that USM owns the caverns but may use Myers's land only for the purposes stated in the 1947 deed, and after a bench trial it awarded Myers $258,850.41 as one-eighth of the salt's market value at the point of production (Opinion, PDF pp. 4-5). The Thirteenth Court of Appeals affirmed the royalty calculation but held that Myers, as surface owner, owns the empty caverns, and both parties petitioned for review, Myers on January 20, 2023, and USM by cross-petition the same day (Opinion, PDF pp. 5-7; Docket). The Court requested merits briefing on September 29, 2023, granted both petitions on August 30, 2024, heard argument on October 29, 2024, and decided the case on May 16, 2025 (Docket; Opinion, PDF pp. 1, 25).

## Issues Presented
USM presents whether the owner of an unrestricted solid-mineral estate owns, or at least has the exclusive right to use, underground caverns that its salt mining created within the salt formation (Brief on the Merits (Underground Services Markham, LLC, et al), PDF p. 17; Petition for Review #2 (Underground Services Markham, LLC, et al), PDF p. 15). Myers presents whether the trial court erred in holding that its royalty is one-eighth of the market value of USM's salt production at the wellhead and whether the deed's royalty clause is an in-kind royalty entitling it to one-eighth of the net proceeds of USM's sales, along with an implied-marketing-covenant issue (Brief on the Merits (Myers-Woodward, LLC, et al), PDF p. 16; Petition for Review (Myers-Woodward, LLC, et al), PDF p. 11). The Court decided who owns the empty caverns and whether the mineral owner may use them to store hydrocarbons produced off-site, and whether Myers's royalty is payable in kind (Opinion, PDF pp. 2, 7, 17-19).

## Standard(s) of Review
The Court construes a conveyance by ascertaining the parties' intentions as expressed in the instrument, examining the entire document and considering each part with every other, and it begins with the text and not with generalizations about the default nature of surface and mineral estates (Opinion, PDF pp. 7, 19-20).

## Legal Arguments
**Who owns the empty salt caverns and what use may be made of them.**

**Cross-Petitioner (USM):** Salt is a solid mineral owned in place, and USM owns the salt formation itself, so its ownership includes the caverns its mining created and the right to use them for storage, as the court of appeals in *Mapco v. Carter* held; the oil-and-gas cases that the court of appeals relied on concern migratory minerals (Brief on the Merits (Underground Services Markham, LLC, et al), PDF p. 33; Opinion, PDF pp. 10-11).

**Petitioner and Respondent (Myers):** Subsurface empty space is not a mineral, and under *Lightning Oil* and *Humble Oil* the surface owner owns everything the grantor did not expressly convey, including the caverns; the mineral owner may use the property only to produce its minerals (Brief on the Merits (Myers-Woodward, LLC), PDF p. 25; Response to Petition (Myers-Woodward, LLC), PDF p. 14).

**Whether Myers's royalty is payable in kind.**

**Petitioner (Myers):** The deed's reservation of "a royalty of 1/8 of all the . . . other minerals" is an in-kind royalty entitling it to one-eighth of the salt produced or of the net proceeds from its sale, not a share of market value (Petition for Review (Myers-Woodward, LLC, et al), PDF p. 11; Brief on the Merits (Myers-Woodward, LLC, et al), PDF p. 16).

**Respondents (USM):** The deed is silent on the method of payment and has no language requiring delivery of the minerals, the hallmark of an in-kind royalty, so the default rule of one-eighth of market value at the well applies, and Myers asked the trial court for judgment on that basis (Brief on the Merits (Underground Services Markham, LLC, et al), PDF p. 25; Response to Petition (Underground Services Markham, LLC, et al), PDF p. 17; Opinion, PDF pp. 17, 21-24).

## Stated Reasons the Court Should Take the Case
USM argued that the question who owns the salt caverns created by mining is important to Texas jurisprudence, that the court of appeals' decision conflicts with *Mapco* and with other courts of appeals, and that only this Court can resolve it (Response to Petition (Underground Services Markham, LLC, et al), PDF p. 9; Petition for Review #2 (Underground Services Markham, LLC, et al), PDF p. 26). Myers argued that the court of appeals improperly converted an in-kind royalty clause into a market-value clause (Petition for Review (Myers-Woodward, LLC, et al), PDF p. 11).

## Practice Area Tags
oil-and-gas, real-property

## Procedural Posture/Vehicle
Two petitions for review from the Thirteenth Court of Appeals in a declaratory-judgment and royalty suit after a bench trial; argued October 29, 2024, and decided May 16, 2025 (Opinion, PDF pp. 1, 5-7, 25).

## Amicus Involvement
- An [amicus curiae brief](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=c37f360c-547f-4962-9108-161729272693&coa=cossup&DT=BRIEFS&MediaID=a899c243-8d7d-42d1-89f5-275034776f8b) was filed on October 21, 2024, listed on the docket as received on behalf of Underground Services Markham, LLC.
- [Christopher Greissing of the Essential Minerals Association](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=6971f529-a0aa-4947-acfc-32e635e74931&coa=cossup&DT=BRIEFS&MediaID=69b02ea8-d61c-48d5-9020-27f408208090) filed an amicus curiae letter brief on November 14, 2024.

## Holding
Absent an agreement otherwise, ownership of underground salt does not include ownership of the empty space left by salt mining: the surface owner owns the empty caverns, and the mineral owner may use them only as reasonably necessary to produce its minerals, which does not include storing hydrocarbons produced elsewhere; and, reading the 1947 deeds as a whole, Myers's royalty on salt is an in-kind royalty and not one-eighth of market value (Opinion, PDF pp. 2, 14-17, 20-24).

## Court's Reasoning
**Ownership of the caverns.** The Court began with the text of the 1947 conveyance and the 2008 salt deed, noting that the parties agree USM owns the salt and that Myers's surface estate includes any part of the subsurface not conveyed in the 1947 deed (Opinion, PDF pp. 7-8). Its oil-and-gas decisions in *Humble Oil*, *Lightning Oil*, and *Regency Field Services* establish that the surface owner owns the space under the surface and that the mineral estate includes the right to possess minerals but not the space where they are located (Opinion, PDF pp. 8-9). USM argued that those cases do not govern solid minerals like salt, and the Court acknowledged that the Texas precedent was conceived in the oil-and-gas context and that *Mapco*, the only Texas case on salt caverns, supports USM, but it found *Mapco* unpersuasive and overruled it to the extent inconsistent (Opinion, PDF pp. 10-12). It rejected USM's claim for two reasons: USM does not own the salt formation, only the salt, since its predecessor received only the "minerals," and "empty space is not salt," and a rule that treated space encased in salt differently from space in other rock would add complexity to Texas law, so the Court reaffirmed that the surface owner owns the space absent contrary agreement (Opinion, PDF pp. 12-15).

**Use of the caverns.** The mineral owner has an implied right to use as much of the surface and subsurface as is reasonably necessary to produce its minerals, but USM has not shown that storing hydrocarbons produced elsewhere is reasonably necessary to produce salt and it likely would hinder production, and the mineral owner may not increase the burden on the surface for the benefit of other lands (Opinion, PDF pp. 15-16). The Court therefore affirmed the court of appeals on ownership and use of the caverns (Opinion, PDF p. 17).

**The royalty.** The parties disagree dramatically on the amount, with USM contending one-eighth of market value is about $260,000 and Myers calculating more than $2 million as one-eighth of net proceeds, which the Court found remarkable given salt's stable price, and the question is whether the royalty is in kind (Opinion, PDF pp. 17-19). Both parties agree that delivery language signals an in-kind royalty, and the original deed's oil royalty "to be delivered at the wells" is in kind (Opinion, PDF pp. 20-21). The correction deed added "a royalty of 1/8 of all the gas or other minerals" to the oil royalty and described the intended result as "a total royalty interest of 1/8 of all the oil, gas, or other minerals," so the parties intended identical royalties for all three, and the royalty on salt is payable in kind (Opinion, PDF pp. 21-23). Myers did not waive its in-kind argument by retreating to a fallback market-value position after the trial court rejected it (Opinion, PDF p. 24).

## Disposition
The Court affirmed the court of appeals' judgment as to ownership and use of the space in the salt caverns, reversed it as to the amount of royalty owed, and remanded to the district court for further proceedings consistent with the opinion; because the trial rested on the mistaken market-value premise, other rulings, including on evidence and the implied marketing covenant, may need to be revisited (Opinion, PDF pp. 24-25).

## Vote Breakdown
Chief Justice Blacklock delivered the opinion of the Court (Opinion, PDF p. 1).


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Source: The SCOTX Report, https://scotxreport.com/cases/22-0878. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.