In an earlier post, we discussed the April 3, 2014, decision of the 7th District Court of Appeals in Walker v. Shondrick-Nau, 2014-Ohio 1499. That decision held in part that the amendment of R.C. §5301.56, the Ohio Dormant Mineral Act (DMA), in 2006 did not apply retroactively to affect any “validation, cure, right, privilege, obligation, or liability previously acquired” (2014-Ohio 1499, ¶37).
On June 2, the 7th District Court of Appeals reaffirmed that holding in Swartz v. Householder, Case No. 13JE 24, 2014-Ohio 2359 , in upholding summary judgment by the Jefferson County Court of Common Pleas in favor of the owners of surface rights.
The Court left no room for doubt that it considers the 1989 DMA to be self-implementing, and that the 2006 Amendment applies only prospectively:
“The theory is thus: when the 2006 version was enacted, any mineral interest that was abandoned under the 1989 version stayed abandoned and continued to be vested in the surface owner, and once the mineral interest vested in the surface owner, it reunified with the surface estate pursuant to statute regardless of whether the event has yet been formalized. See Walker, 7th Dist. No. 13NO402 at ¶41. Additionally, the 2006 DMA contains no language eliminating property rights that were previously expressly said to be vested, i.e. it contains no statement that its new requirements for surface owners and the new rights for mineral holders apply retrospectively. See id. At ¶51. Without express language eliminating the prior automatic abandonment and vesting of rights under the old act, the amendments do not affect causes already existing (regardless of whether a suit is filed before or after the amendments) See id.
In fact, by stating, ‘Before a mineral interest becomes vested under division (B) of this section in the owner of the surface of the lands subject to the interest, the owner of the surface subject to the interest shall do both of the following***,’ the 2006 language shows that it deals with rights that are not yet vested (that is to say, mineral interests that have not yet been deemed abandoned). See R.C. §5301.56(E). The current DMA thus eliminated the automatic vesting after June 30, 2006, but did not erase previously vested interests (merely because a suit had not yet been filed to formalize the reverter.)”
See Swartz, 2014-Ohio 2359, ¶34-35. Although the 7th District held that the constitutionality of the 1989 DMA had not been raised at the summary judgment stage and thus was not presented for review, it discussed at length with apparent approval the rationale of the United States Supreme Court in Texaco v. Short, 454 U.S. 516 in upholding as constitutional the Indiana DMA, noting that the Indiana DMA also was self-executing in the absence of saving events, and included a two year grace period analogous to the three year grace period included in the 1989 version of the Ohio DMA under, which a mineral owner could save its interest before any abandonment would vest. See id. At ¶42.
Having determined that the 1989 DMA is self-executing and can still be employed to show abandonment has occurred notwithstanding the 2006 amendment, the Court did not deal with the mineral owners’ arguments regarding the sufficiency of notices provided by the surface owners under the 2006 amendment. (Id. at¶47).