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Court News Ohio
Court News Ohio

Heirs to Oil and Gas Below Eastern Ohio Property Filed Proper Documents to Keep Mineral Rights

Image of a derrick and platform used to drill for shale gas

Holders of mineral interests on a Harrison County property have kept the oil and gas drilling rights by following the steps in a 2006 law.

Image of a derrick and platform used to drill for shale gas

Holders of mineral interests on a Harrison County property have kept the oil and gas drilling rights by following the steps in a 2006 law.

The Ohio Supreme Court today concluded that the owners of land in Harrison County cannot declare that the oil and gas interests below their property have been abandoned because the holders of those interests properly filed documents to preserve their rights.

State law allows a property owner to reclaim separately held oil and gas rights if those rights have been abandoned and the owner publishes notice of the intent to declare that abandonment. However, in a unanimous opinion written by Chief Justice Maureen O’Connor, the court ruled that a mineral rights holder’s claim to maintain those rights, filed according to state law, prevents the loss of those interests if the claim is filed within 60 days after the surface owner publishes the notice.

The decision affirmed the judgment of the Seventh District Court of Appeals only on the issue of the mineral rights holders’ claim to preserve.

Property Owners Assert Oil and Gas Rights Have Been Abandoned
In 1989, the General Assembly enacted the Ohio Dormant Mineral Act to allow severed surface and mineral rights to be rejoined if the mineral rights have been abandoned as described in the statute. The law was amended in 2006.

Phillip Dodd and Julie Bologna bought property in Harrison County in 2009, and the deed excluded the oil and gas rights under the land. When an oil and gas company contacted Dodd and Bologna about leasing the mineral interests, they took steps to reclaim those rights under the Dormant Mineral Act by publishing a notice of abandonment of the interests in the local newspaper on Nov. 27, 2010.

John W. Croskey filed a document on Dec. 23, 2010, to hold on to the oil and gas interests on behalf of 36 persons named as the current owners of the property’s mineral rights.

In February 2011, Dodd and Bologna sued, arguing that the mineral rights had been abandoned and restored to them. The trial court ruled in favor of Croskey and the group staking a claim to the mineral rights. On appeal, the Seventh District agreed only that the affidavit filed by Croskey met the requirements of a “claim to preserve” under state law and allowed the mineral rights holders to keep their interests.

Court Interprets Dormant Mineral Act
The court explained that this appeal involves a notification procedure added to the law in the 2006 amendments. According to the statute, to reunite the mineral and surface rights, the surface owner must first serve notice to the mineral rights holders that the owner intends to declare that the mineral interests have been abandoned. Then the owner must file and record an abandonment affidavit between 30 and 60 days after the notice is served or published.

To counter this claim of abandonment, mineral rights holders must, within 60 days after the notice, file with the county recorder either 1) a claim to preserve or 2) an affidavit that identifies an event that maintains their interests and that took place within 20 years before the notice.

Chief Justice O’Connor described two purposes of a claim to preserve. If the claim to preserve is filed within the 20 years before the surface owner’s notice, it operates as a “saving event” under R.C. 5301.56(B)(3)(e). If filed within 60 days after the notice, the claim to preserve prevents the mineral interests from being deemed abandoned, under R.C. 5301.56(H)(1)(a).

“The statute plainly permits a mineral-interest holder to preserve his or her claim by filing eithera claim to preserve within 60 days oran affidavit identifying a saving event in the 20 years preceding notice,” she wrote.

While Croskey’s filing was titled using the word “affidavit,” it clearly met the statutory requirements for a claim to preserve and was filed within 60 days after the notice by Dodd and Bologna was published, Chief Justice O’Connor explained. As a result, the court determined that the mineral rights holders have held on to the oil and gas interests below this property.

“Allowing a claim preserving a mineral interest to be filed after the surface owner’s notice furthers the legislative purpose [of the Dormant Mineral Act] because a claim to preserve describes an identifiable mineral-interest holder who presents a chain of title from which that holder claims interest in the mineral rights,” Chief Justice O’Connor concluded.

Related Oil and Gas Cases
The court also mentioned that other cases awaiting decision examine the 1989 version of the Dormant Mineral Act, which included no notification procedure, and question whether mineral rights automatically vest to the surface property owner after 20 years if the owner takes no action and no saving event occurs. In this case, though, the parties did not dispute that the 2006 version applied.

2013-1730. Dodd v. Croskey, Slip Opinion No. 2015-Ohio-2362.

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Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

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