In a recent case, Crozier v. Pipe Creek Conservancy, L.L.C., 2023-Ohio-4297, Ohio’s Seventh Appellate District grappled with a fundamental issue concerning Ohio’s Marketable Title Act (MTA). The crux of the case concerned whether a near verbatim repetition of a prior oil and gas reservation was a “general” reference to the oil and gas rights, thus allowing them to be extinguished under the provisions of the MTA.

The MTA establishes that an individual possessing an unbroken chain of title of record for at least 40 years holds "marketable record title" to the interest in land. This marketable record title extinguishes any interest or claim existing prior to the date of the root of title, subject to certain statutory exceptions. One such exception is for “[a]ll interests and defects which are inherent in the muniments of which such chain of record title is formed; provided that a general reference in such muniment, or any of them, to…interests created prior to the root of title shall not be sufficient to preserve them, unless specific identification be made therein of a recorded title transaction which creates such…interest.” R.C. 5301.49(A).

Whether the exception found in R.C. 5301.49(A) applies depends upon the application of a three-step test developed by the Ohio Supreme Court. That test asks: “(1) Is there an interest described within the chain of title? (2) If so, is the reference to that interest a ‘general reference’? (3) If the answers to the first questions are yes, does the general reference contain a specific identification of a recorded title transaction?” Blackstone v. Moore, 155 Ohio St.3d 448, 2018-Ohio-4959, 122 N.E.3d 132, ¶12.

In Crozier, the mineral owners’ predecessors-in-title executed a deed conveying the subject property, but “excepted and reserved, all the oil & gas rights and privileges on and underlying the above described tract of land.” The surface owners’ root of title deed conveyed the same real property, also “excepting and reserving all the oil and gas rights and privileges on and underlying the above described tract of land.” Because the mineral owners’ oil and gas rights were reserved prior to the root of title deed, the surface owners claimed that the MTA extinguished them. The mineral owners, however, claimed that R.C. 5301.49(A) applied and, therefore, their mineral rights were preserved.

The Court found that the surface owners’ root of title deed described a prior interest within the chain of title. Thus, the first step in the Blackstone test was satisfied. Undertaking the second step of the Blackstone test, the Court acknowledged that the repetition was nearly verbatim. Indeed, the only difference between the original reservation and the repetition was a change in verb tense: from “excepted and reserved” (original reservation) to “excepting and reserving” (root of title deed). However, in drawing on prior precedent, including Erickson v. Morrison and O’Kelley v. Rothenbuhler, the Court found that the repetition was vague because a title examiner could read the repetition as either a new reservation of oil and gas rights or a reference to the prior reservation. Because the repetition left “it unclear whether a prior interest in fact exists,” the Court held the repetition was a “general” reference to the prior reservation. And the mineral owners’ oil and gas rights were ultimately extinguished, as the surface owners’ root of title deed did not specifically identify the instrument originally reserving the mineral owners’ oil and gas rights.

The Crozier case underscores the ongoing difficulty in determining whether a reference to a previously reserved oil and gas interest is “specific” or “general” under R.C. 5301.49(A).