United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED November 15, 2023 No. 23-20023 Lyle W. Cayce ____________ Clerk

Elmen Holdings, L.L.C.,

Plaintiff—Appellee,

versus

Martin Marietta Materials, Incorporated, Successor by Merger to Texas Industries, Incorporated,

Defendant—Appellant. ______________________________

Appeal from the United States District Court for the Southern District of Texas USDC No. 4:19-CV-3293 ______________________________

Before Higginbotham, Smith, and Elrod, Circuit Judges. Jerry E. Smith, Circuit Judge: This appeal concerns a sand and gravel mining lease executed in 1970. The original leaseholder transferred its interest to Martin Marietta Materials, Inc. (“Martin Marietta”), in 2014, and Elmen Holdings, L.L.C. (“Elmen”), acquired title to the underlying land in 2018. Elmen contends that Martin Marietta did not make required royalty payments to it or prior lessors; Elmen sought a declaration that the lease had terminated. Both parties moved for summary judgment, and a magistrate judge recommended that the district court grant Elmen’s motion and deny Martin Marietta’s. The district court Case: 23-20023 Document: 00516968730 Page: 2 Date Filed: 11/15/2023

No. 23-20023

adopted that recommendation. Though we disagree with the magistrate judge’s and district court’s reasoning, they reached the correct result, and we AFFIRM the summary judgment for Elmen and AFFIRM the denial of summary judgment for Martin Marietta.

I. In 1970, Wilma and Minton Minarcik leased a portion of their land to Texas Industries, Inc., to mine sand and gravel (“the Gravel Lease”). The Gravel Lease was to extend “for as long as merchantable materials are mined or produced from the leased premises, or for as long as Lessee shall pay the advance minimum royalty as hereinbelow specified.”1 Paragraph six of the lease specified the advanced minimum royalty payments that would be due: Commencing on April 16, 1972, and on or before said day and month of each successive year hereunder, Lessee shall pay or tender to Lessor, annual advance royalties as follows: (a) $2,500 per year for the years 1972 and 1973; then, (b) $4,000 per year for each year thereafter up to and including the year during which mining or production operations are commenced on any portion of the land; then, (c) $3,000 per year for each year following the year in which mining or production operations are begun on any portion of said land, until this agreement is terminated. No mining operations ever took place on the Minarcik land, meaning that— after 1973—the lease could be maintained only by the payment of $4,000 on or before April 16 each year.

_____________________ 1 Paragraph two of the lease reads in full, “Subject to the other provisions herein contained the term of this lease shall be for as long as merchantable materials are mined or produced from the leased premises, or for as long as Lessee shall pay the advance minimum royalty as