Last year we reported on the flood of appeals pouring in to the Ohio Supreme Court raising dozens of questions about the Ohio Dormant Mineral Act (DMA), which can be found at R.C. 5301.56. A year later we finally have a few answers and the surge of new DMA appeals seems to have subsided.

This blog post provides a comprehensive update on DMA cases that have been decided and which remain pending before the Ohio Supreme Court to date. Overall, two cases have been decided – Dodd v. Croskey and Chesapeake Exploration, L.L.C. v. Buell – and 13 cases presenting 39 questions of law have been accepted and remain pending. There are no pending DMA appeals that have not been accepted for review.

In both decisions rendered thus far, the Court has been extremely careful not to step beyond the specific questions on appeal and are said to be based on the plain language of the statute. Perhaps the most fiercely contested case decided to date was Dodd v. Croskey—which held that the plain language of the 2006 DMA permits a mineral-interest holder, within 60 day of receiving notice from the surface owner, to preserve the mineral holder’s interest by filing eithera claim to preserve or an affidavit identifying a saving event in the 20 years preceding notice.Dodd v. Croskey, 143 Ohio St. 3d 293, 2015-Ohio-2362, 37 N.E.3d 147, ¶ 35 (Emphasis added). Notably, the Dodd Court did not try to explain why the legislature would give mineral holders two options that have the same effect.

In Chesapeake Exploration, L.L.C. v. Buel,l the Court concluded that a recorded oil and gas lease is a “title transaction” under the DMA but the expiration of an oil and gas lease is not a title transaction. Chesapeake Exploration, L.L.C. v. Buell, Slip Opinion 2015-Ohio-4551, Syllabus. However, the Buell Court was careful to not that without giving further guidance, the lease at issue in Buell expired on its own terms and that their decision was not based on a recorded expiration or termination of lease. Id. at ¶72.

The Buell decision generally discusses how oil and gas leases should be regarded or legally characterized. While Buell seems to approve of the frequent characterization of traditional oil and gas leases as fee simple determinable interests in property, the Court stopped short of issuing an opinion about the lease at issue in Buell, saying “the nature of the instrument is not a dispute presented to us for resolution.” Id. at ¶65, footnote 5. However, the Court did clarify and distinguish its own precedent on this point, ultimately advising that its prior decisions “demonstrate that the nature of the instrument and its effect on the parties’ property interest in the oil and gas is determined by the language of the granting clause.” Id. at ¶48.

Below are all DMA cases and issues decided by, or currently pending before, the Ohio Supreme Court:

DMA Decisions

Phillip Dodd et al. v. John Croskey et al. Ohio Supreme Court Case Number 2013-1730 (Argued 8/20/2014)

  • Proposition of law: 
    • Ohio Rev. Code § 5301.56(B)(1) requires a showing by a party claiming the preservation of a prior mineral interest of a “savings event” that occurred in the 20 years prior to the notice being served and not a “savings event” after the date of the notice being served.
  • Question accepted sua sponte:
    • Does a transfer of the surface that specifically references the severed mineral interest qualify as a “title transaction?”
  • Decided June 18, 2015
    • “A mineral-interest holder’s claim to preserve filed pursuant to R.C. 5301.56(H)(1)(a) is sufficient to preclude the mineral interests from being deemed abandoned if filed within 60 days after notice of the surface owner’s intent to declare those interests abandoned.”
    • Question accepted sua sponte is moot.
    • Dodd v. Croskey, 143 Ohio St. 3d 293, 2015-Ohio-2362, 37 N.E.3d 147, ¶37.

Chesapeake Exploration, L.L.C., et al. v. Kenneth Buell et al.  Ohio Supreme Court Case Number 2014-0067 (Argued 8/20/2014)

  • Certified questions of state law:
    • Is the recorded lease of a severed subsurface mineral estate a title transaction under the Ohio Dormant Mineral Act, Ohio Rev. Code § 5301.56(B)(3)(a)?
    • Is the expiration of a recorded lease and the reversion of the rights granted under that lease a title transaction that restarts the 20-year forfeiture clock under the ODMA at the time of the reversion?
  • Decided Nov. 5, 2015
    • A recorded oil and gas lease is a title transaction under R.C. 5301.56(B)(3)(a).
    • The unrecorded expiration of a recorded oil and gas lease and the accompanying reversion to the lessor of rights granted by the lease is not a title transaction that restarts the 20-year clock under the Dormant Mineral Act, R.C. 5301.56.
    • Chesapeake Exploration, L.L.C. v. Buell, Slip Opinion 2015-Ohio-4551, Syllabus.

DMA Cases Argued and Awaiting Decision

Hans Michael Corban v. Chesapeake Exploration, L.L.C., et al. Ohio Supreme Court Case Number 2014-0804 (Argued 5/6/2015)

  • Certified questions of state law:
    • Does the 2006 version or the 1989 version of the ODMA apply to claims asserted after 2006 alleging that the rights to oil, gas and other minerals automatically vested in the surface land holder prior to the 2006 amendments as a result of abandonment?
    • Is the payment of a delay rental during the primary term of an oil and gas lease a title transaction and “savings event” under the ODMA?

Jon Walker, Jr. v. Patricia J. Shondrick-Nau. Ohio Supreme Court Case Number 2014-0803 (Argued 6/23/2015)

  • Propositions of law:
    • The 2006 version of the DMA is the only version of the DMA to be applied after June 30, 2006, the effective date of said statute.
    • To establish a mineral interest as “deemed abandoned” under the 1989 version of the DMA, the surface owner must have taken some action to establish abandonment prior to June 30, 2006. In all cases where a surface owner failed to take such action, only the 2006 version of the DMA can be used to obtain relief.
    • To the extent the 1989 version of the DMA remains applicable, the 20-year look-back period shall be calculated starting on the date a complaint is filed which first raises a claim under the 1989 version of the DMA.
    • For purposes of Ohio Rev. Code § 5301.56(B)(3), a severed oil and gas mineral interest is the “subject of” any title transaction which specifically identifies the recorded document creating that interest by volume and page number, regardless of whether the severed mineral interest is actually transferred or reserved.
    • Irrespective of the savings events in Ohio Rev. Code § 5301.56(B)(3), the limitations in Ohio Rev. Code § 5301.49 can separately bar a claim under the DMA.
    • The 2006 version of the DMA applies retroactively to severed mineral interests created prior to its effective date.

Leland Eisenbarth, et al. v. Dean Reusser, et al. Ohio Supreme Court Case Number 2014-1767 (Argued 11/17/2015)

  • Propositions of law:
    • The 1989 version of DMA was prospective in nature and operated to have a severed oil and gas interests “deemed abandoned and vested in the owner of the surface” if none of the savings events enumerated in Ohio Rev. Code § 5301.56(B) occurred in the 20-year period immediately preceding any date in which the 1989 DMA was in effect.
    • Assuming, arguendo, that the 1989 DMA operated on a “fixed” 20-year look-back period from the date of enactment, an oil and gas lease is not a “title transaction” within the meaning of Ohio Rev. Code § 5301.47(F) and Appellees’ interest has nonetheless been abandoned.

Mark Albanese, et al. v. Nile Batman, et al. Ohio Supreme Court Case Number 2015-0120 (Appeal accepted but Proposition of Law I is held for decision in Walker.  Proposition of Law II Argued 01/06/2016)

  • Propositions of law:
    • The 1989 Dormant Mineral Act was prospective in nature and operated to have a severed oil and gas interest “Deemed abandoned and vested in the owner of the surface” if none of the savings events enumerated in ORC Section 5201.56(B) occurred in the twenty (20) year period immediately preceding any date in which the 1989 Dormant Mineral Act was in effect.
    • The act of recording an out-of-state Will is not a title transaction.

Wayne Lipperman, et al. v. Nile Batman, et al. Ohio Supreme Court Case Number 2015-0121 (Appeal accepted but Proposition of Law I is held for decision in Walker. Proposition of Law II and III Argued 01/06/2016)

  • Propositions of law:
    • The 1989 Dormant Mineral Act was prospective in nature and operated to have a severed oil and gas interest “Deemed abandoned and vested in the owner of the surface” if none of the savings events enumerated in ORC Section 5201.56(B) occurred in the twenty (20) year period immediately preceding any date in which the 1989 Dormant Mineral Act was in effect.
    • The act of recording an out-of-state Will is not a title transaction.
    • XTO Energy, Inc. and Phillips Exploration, Inc. have no standing to appear in this case.

DMA Cases Accepted But Not Yet Argued

Dan Swartz, et al. v. Jay Householder, Sr., et al. Ohio Supreme Court Case Number 2014-1208 (Appeal accepted but held for decision in Walker)

  • Propositions of law:
    • The 1989 version of the Dormant Mineral Act does not apply after the effective date of the 2006 version of the Dormant Mineral Act.
    • In order for a mineral interest to vest under the 1989 version of the Dormant Mineral Act, the surface owner must take some action in order to establish abandonment prior to the effective date of the 2006 Dormant Mineral Act.
    • The 2006 DMA operates retrospectively and applies to severed mineral interests created before its effective date.

Ronald Dahlgren, et al. v. Brown Farm Properties LLC, et al. Ohio Supreme Court Case Number 2014-1655 (Appeal accepted but held for decision in Walker and Corban)

  • Dahlgren’s Propositions of law:
    • The 2006 amendment of Ohio’s “dormant mineral” statute was remedial in nature and intended to apply to facts occurring before its enactment. In suits filed after June 30, 2006 (the effective date of the amendment), courts should apply the new version of the statute, rather than the old version.
    • Under the 1989 version of Ohio’s “dormant mineral” statute, the 20-year dormancy period is measured from the date suit was commenced to determine title to the minerals.
  • Chesapeake’s Propositions of law:
    • The 2006 version of R.C. 5301.56 controls in the ODMA proceedings and quiet title action initiated by Plaintiff after 2006.
    • The 1989 version of the ODMA does not provide for an “automatic” transfer of mineral rights from record holders to surface owners.
    • The 2006 version of the DMA applies retrospectively to severed mineral interests created prior to its effective date.

Benjamin Taylor, et al. v. Donald Crosby, et al. Ohio Supreme Court Case Number 2014-1886 (Appeal accepted but held for decision in Walker)

  • Proposition of law:
    • The 1989 DMA is prospective in nature an operates using a rolling application of the phrase, “preceding twenty years.”

Virgil Farnsworth, et al. v. James Burkhart, et al. Ohio Supreme Court Case Number 2014-1909 (Appeal accepted but held for decisions in Eisenbarth and Dodd)

  • Propositions of law:
    • The 1989 version of R.C. § 5301.56, the Ohio Dormant Minerals Act (“Former DMA”), was prospective in nature; division (B) applies to any 20-year period that elapses while the Former DMA was in effect.
    • A Claim to Preserve filed and recorded under division H(1)(A) of the current version of R.C. § 5301.56 (“Current DMA”) does not have the same effect as a claim filed and recorded under division B(3)(e) of the Current DMA.

Vernon Tribett, et al. v. Barbara Shepherd, et al. Ohio Supreme Court Case Number 2014-1966 (Initially held for decision in Walker but stay was lifted on 2/10/2016)

  • Propositions of law:
    • The 2006 version of the DMA is the only version of the DMA to be applied after June 30, 2006 (the effective date of said statute) because the 1989 version of the DMA was not self-executing.
    • To establish a mineral interest as “deemed abandoned” under the 1989 version of the DMA, the surface owner must have taken some action to establish abandonment prior to June 30, 2006. In all cases where a surface owner failed to take such action, only the 2006 version of the DMA can be used to obtain relief.
    • Interpreting the 1989 version of the DMA as “self-executing” violates the Ohio Constitution.
    • A severed oil and gas mineral interest is the “subject of” any title transaction which specifically identifies the recorded document creating that interest by volume and page number.
    • Irrespective of the savings events in Ohio Rev. Code § 5301.53(B)(3), the limitations in Ohio Rev. Code § 5301.49 can independently bar a claim under the DMA.
    • If a Court applies the 1989 version of the DMA in a lawsuit filed after June 30, 2006, the 20-year look-back period shall be calculated starting on the date a complaint is filed which first raises a claim under the 1989 version of the DMA.
    • A claim brought under the 1989 version of the DMA must have been filed within 21 years of March 22, 1989 (or, at the very latest, March 22, 1992), or such claim is barred by the statute of limitations in Ohio Rev. Code § 2305.04.

Christopher Wendt, et al. v. Dickerson, et. al. Ohio Supreme Court Case Number 2014-2051 (Appeal accepted but held for decision in Walker)

  • Propositions of law:
    • The 2006 version of the Ohio Dormant Minerals Act controls the vesting of title in a surface owner who did not make a claim for the mineral interests before the 2006 enactment.
    • The 1989 version of the ODMA did not provide mineral owners with the due process of law required under the state and federal constitution.

Edward Thompson, et al. v. Nathan Custer, et al. Ohio Supreme Court Case Number 2015-0195 (Appeal accepted but held for decision in Walker)

  • Propositions of law:
    • The 2006 version of the Dormant Minerals Act (“DMA”) is the only version of the Act to be applied after its 6/30/06 effective date.
    • The 1989 version of the DMA impliedly required some form of implementation before finally settling the subsurface owners’ and surface owners’ competing mineral interests, either by recorded abandonment claim permitting the subsurface owner to challenge its validity or by appropriate court proceedings to confirm that abandonment.

Todd Carney, et al. v. Ronnie Shockley, et al. Ohio Supreme Court Case Number 2015-0235 (Appeal accepted but held for decision in Eisenbarth)

  • State of Ohio’s Proposition of law:
    • The 1989 Dormant Mineral Act contained a rolling look-back period, such that any severed mineral interests were deemed abandoned and vested in the owner of a surface estate if no savings event occurred within any twenty-year period.
  • Carney’s Proposition of law:
    • From March 22, 1992, to June 30, 2006, the Ohio Dormant Mineral Act of 1989 operated on a rolling basis, such that a severed mineral interest was abandoned and vested in the surface estate of the property from which it was severed if any 20-year period had passed without the occurrence of a savings event identified within OCC 5301.56(B).