Noble County Mineral Rights Holder Properly Preserved Oil and Gas Rights
A Noble County mineral rights holder properly preserved those rights when a surface owner attempted to have them deemed abandoned under Ohio’s Dormant Mineral Act (ODMA), the Ohio Supreme Court ruled today.
Applying today’s ruling in Corban v. Chesapeake Exploration L.L.C.,the Supreme Court reversed a Seventh District Court of Appeals decision to grant Jon D. Walker Jr. the mineral rights under Noble County land he purchased in 2009. In Walker v. Shondrick-Nau, Chief Justice Maureen O’Connor wrote the majority opinion that found the estate of John Noon properly retained the mineral rights when Noon followed the procedures of the 2006 version of the ODMA to preserve them.
Walker had argued that the 1989 version of ODMA applied to his claims and that Noon had lost his mineral rights years before the 2006 version took effect. In separate dissenting opinions, Justices Paul E. Pfeifer and William M. O’Neill agreed with Walker, writing the 1989 law wiped out Noon’s rights and Walker did not need to take any judicial action to claim the mineral rights prior to the effective date of the 2006 amendments to the ODMA.
Walker Initially Files Affidavit of Abandonment in 2012
Noon acquired his Noble County real estate in 1965. That year he transferred the surface rights, but severed the surface and mineral estates by reserving his rights to the coal, oil, gas, and other minerals under the surface. In 1970 and 1977, the surface rights were transferred again, and each time the recorded deed that conveyed the property reflected that Noon had a recorded reservation of the mineral rights.
In 2009, Walker acquired parts of the surface property above Noon’s mineral rights, and each deed expressly noted that it was prepared without a title examination and made no warranty or guarantee regarding the state of the title. The deeds transferring property to Walker did not specifically reference Noon’s 1965 deed.
At some point, Walker became aware of the 1965 deed and referenced it when he sent a “notice of abandonment of mineral rights” to Noon at his last known address in St. Clairsville. Following the procedures required under the 2006 ODMA, R.C. 5301.56, Walker filed an affidavit of abandonment of mineral interests in 2012 in the county recorder’s office. Noon filed an affidavit and claim to preserve the mineral interests with the county recorder and stated he had “no intention to abandon” his interests.
Walker then filed a declaratory judgment action to seek quiet title to the mineral interests. Walker claimed by operation of the 1989 ODMA, Noon’s mineral interests were deemed abandoned no later than March 1992, and the mineral interests merged with the surface property. Walker moved for and was granted summary judgment by the trial court, and Noon appealed to the Seventh District.
The Seventh District agreed that the 1989 version of the law was “self-executing” and that Walker and other surface owners did not have to seek judicial action to claim dormant mineral rights. The 1989 law states in part that “any mineral interest held by any person, other than the owner of the surface of the lands subject to the interest, shall be deemed abandoned and vested in the owner of the surface,” unless the mineral interests are related to coal, the interests are held by a government body, or one of several “saving events” occurred in the a relevant 20-year period. One type of saving event is when “the mineral interest has been the subject of a title transaction that has been filed or recorded in the office of the county recorder of the county in which the lands are located.”
Although Noon had argued the reservations noted in the 1970 and 1977 property transfers counted as saving events, the Seventh District ruled that the “mere mention” of the reservation in the deed did not make it the “subject of a title transaction,” and Noon could not rely on those transactions as saving events.
Noon died while the case was pending on appeal, and his daughter, Patricia J. Shondrick-Nau, the executor of Noon’s estate, appealed to the Supreme Court, which agreed to hear the case.
Two Recent ODMA Decisions Guide Case
Chief Justice O’Connor explained the Court’s Corban decision found the 1989 ODMA was not self-executing and that the 2006 ODMA applies to all claims asserted after 2006 to declare the mineral rights abandoned.
“There is no evidence in the record of action being taken by Walker or his predecessors prior to the effective date of the 2006 amendments to have the mineral rights deemed abandoned under the 1989 version of the Dormant Mineral Act. Thus, pursuant to Corban, the 2006 version of the act applies here,” she wrote.
The chief justice also explained that the Court’s 2015 Dodd v. Croskey decision affirmed that a mineral rights owner can use the process outlined in R.C. 5301.56(H)(1)(a) to preclude the mineral interests from being deemed abandoned by filing a claim to preserve the rights within 60 days of the surface owner’s service or publication of an intent to declare the mineral rights abandoned.
After Walker filed his notice, Noon responded within the required time limit, and the Court concluded his actions were sufficient under the 2006 act to prevent the mineral rights from being deemed abandoned and vested in Walker.
Because the Court ruled that Walker and Noon were subject to the 2006 act, and Noon’s filing of a claim to preserve satisfied the 2006 act, the Court did not have to determine whether the 1970 and 1977 conveyances were saving events that would have preserved the mineral rights.
Justices Terrence O’Donnell, Judith Ann Lanzinger, Sharon L. Kennedy, and Judith L. French joined Chief Justice O’Connor’s opinion.
Dissent Found Rights Abandoned
Justice Pfeifer noted that he had dissented in Corban and maintained that the 1989 ODMA was self-executing. He agreed with the Seventh District that the title transfers in Noon’s case were just mentions of his interest and were not title transactions. For that reason, he found that Walker had the right to claim the mineral rights were abandoned.
Justice Pfeifer wrote that three appellate courts, the Seventh, Fifth, and Eleventh, had all found the 1989 version of the ODMA to be self-executing.
“But this court in Corban held to the contrary. In doing so, Corban has simplified the law. All it took was rewriting it,” he wrote.
Justice O’Neill wrote that he joined Justice Pfeifer in his dissent in Corban, but unlike Justice Pfeifer, he would hold the 1977 reservation of the mineral interest would qualify as a title transaction, and a saving event.
However, in his opinion, the 1977 deed operated to preserve the mineral rights for 20 years. In the absence of any activity after that, Noon’s mineral rights expired in 1997, Justice O’Neill maintained. By the time the 2006 law took effect, Noon had no mineral interests to preserve, he concluded.
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