Court News Ohio
Court News Ohio
Court News Ohio

Tuesday, August 16, 2016

In the Matter of the Application of Duke Energy Ohio Inc., Case no. 2014-1651
Public Utilities Commission of Ohio

Vernon Tribett et al. v. Barbara Shepherd et al., Case no. 2014-1966
Seventh District Court of Appeals (Belmont County)

Disciplinary Counsel v. Benjamin Joltin, Case no. 2016-0261
Mahoning County

Can PUCO Allow Regulated Electric Utility’s Sale of Non-Electric Unregulated Products and Services?

In the Matter of the Application of Duke Energy Ohio Inc., Case no. 2014-1651
Public Utilities Commission of Ohio

ISSUE: Did the Public Utilities Commission of Ohio improperly grant Duke Energy of Ohio the right to provide unregulated products and services other than retail electric service?

In June 2014, the Public Utilities Commission of Ohio (PUCO) approved Duke Energy of Ohio’s amendments to its corporate separation plan to provide a number of unregulated products and services that were not retail electric service. Duke Energy of Ohio, formerly Cincinnati Gas and Electric, first received approval of a corporate separation plan from the PUCO in 2000. As part of the state’s 1999 deregulation of the electric utility industry, the state required regulated monopoly power companies to separate the three components of electric service: generation, transmission, and distribution. The state made electric generation an unregulated, competitive service, while distribution and transmission of electricity through power lines would remain a regulated monopoly service.

To transition to a competitive electric generation market, the state required electric distribution utilities like Duke to provide corporate separation plans so that competitive services were provided by a separate affiliate than distribution service to prevent the utilities from subsidizing the competitive service from money it received from the regulated service. Duke proposed amendment to the separation plan would allow the regulated company to sell non-electric services including those listed as “special customer services” that could be obtained from Duke or other companies that supply them. While many, like design and construction of a customer-owned substation, were targeted at commercial customers, others included “whole house surge protection,” and “energy consumption analysis services, tools, and reports” aimed at residential customers.

Interstate Gas Supply Inc. (IGS) and others objected to the PUCO’s approval of the amendment arguing it violated state law. IGS contends that under R.C. 4928.17(A)(1), the PUCO could grant Duke a waiver to provided unregulated products and services only for “good cause” and for a stated limited amount of time. IGS contends the PUCO didn’t follow the law because the commission didn’t explain the good cause for granting it and didn’t clearly limit the time for the service. The PUCO denied IGS’s claims in a rehearing and IGS appealed to the Ohio Supreme Court. Because the PUCO is an administrative agency, the Supreme Court must hear the case.

IGS Argues Only Subsidiary Can Offer Services
IGS argues that under R.C. 4928.17, a former electric utility monopoly can provide competitive retail electric service and nonelectric products and services through a fully separated affiliate of the utility. It argues the PUCO could not grant Duke the right to offer the services, which other companies, including IGS, offer to customers in Duke’s service territory. The only way Duke could provide the services was if the PUCO granted Duke a waiver, and the waiver would allow the services to be offered for an interim period of time on a determination of good cause.

IGS argues the PUCO never demonstrated why the regulated Duke utility should provide the service when others in the territory provide it and Duke never indicated why it could not provide the service through its separated affiliate that offers competitive electric retail service.

PUCO Assets Right to Approve Services
The PUCO noted the exception to the rule requiring a separate affiliate is R.C. 4928.17(C), which authorizes a utility to provide other services for an interim period of time. The PUCO argues that its order required monitoring of Duke’s implementation of the services and addressing any formal complaints filed against the company for violating the agreement, therefore making the order interim.

The commission also argues that under R.C. 4928.17(D), it has broad discretion to approve amendments to a separation plan, and it adopted rules that provide a procedure for amending a plan. The PUCO states its approval of the changes required Duke to charge no less than its full cost for the services to avoid any subsidization and to keep records in a way that the commission could access the information to verify that no subsidization occurs.

“The Commission prudently exercised its discretion to approve an amended plan that adhered to state law, protected the level playing field for retail electric market competition, and ensured ample customer safeguards existed,” the PUCO brief stated.

Duke Energy Maintains Law Allows Services
The Court permitted Duke to intervene in the case to support the PUCO’s approval of its plan. Duke argues IGS is wrong to imply that the non-electric products and services must be provided by a separate affiliate. Duke maintains the law requires only competitive generation services must be supplied by the separate affiliate, but that it has had the right to offer special customer services since it filed its original separation plan.

Duke also asserts that IGS is applying the wrong law when it charges that the PUCO had to grant a waiver for an interim period of time to Duke for the special services. The company states the waiver and show of good cause fall under R.C. 4928.17(A)(1) and (C), and apply to approval of a separation plan. Amendments under R.C. 4928.17(D), such as the one offering the non-electric services, don’t require the waiver or show of good cause, but rather are allowed when the PUCO uses its discretion to approve.

“It is evident that the legislature provided the Commission with discretion in the area of amendments, and that the Commission lawfully and reasonably exercised that discretion. It decision was not contrary to law,” Duke’s brief stated.

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Interstate Gas Supply: Joseph Oliker, 614.659.5000

Representing the PUCO from the Ohio Attorney General’s office: Thomas McNamee, 614.466.4397

Representing Duke Energy of Ohio: Amy Spiller, 513.287.4359

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Does 1989 Ohio Dormant Mineral Act Protect Belmont County Couple’s Rights to Oil and Gas Interests?

Vernon Tribett et al. v. Barbara Shepherd et al., Case no. 2014-1966
Seventh District Court of Appeals (Belmont County)


  • Is the 1989 version of the Ohio Dormant Minerals Act self-executing?
  • If the act is self-executing, does it violate the Ohio Constitution’s limits on retroactive laws?
  • Are claims under the 1989 version of the act subject to the 21-year statute of limitations set by R.C. 2305.04?

The dispute between the Tribett and Shepherd families is about ownership of oil and gas rights under property the Tribetts acquired in Belmont County. Attorneys for the Shepherds explain this is the last of seven cases scheduled to be heard by the Ohio Supreme Court regarding the Ohio Dormant Mineral Act (DMA). Many of the issues in this case are similar to ones in the other DMA cases pending before the Supreme Court, and the justices ordered the parties to narrow the oral arguments to two issues not yet fully considered in the other cases. The Court has asked the parties to argue about whether the 1989 version of the law is constitutional and whether any claims under the law had to be filed by March 2013.

The property at issue is the severed oil and gas mineral rights underneath 61 acres owned by Susan Tribett and her deceased husband. As the case was pending in lower courts, the Tribetts sold the surface property but recorded a reservation of the oil and gas mineral rights.

In 1962, Joseph, John, and Keith Shepherd owned 137 acres in Belmont County, including the 61 acres now in dispute. The three sold the surface rights of the property to Seaway Coal Company, and recorded a severance deed that reserved the oil and gas rights to the three and “their heirs and assigns.” In 1986, Seaway sold the surface rights to Shell Mining Company and the deed specifically referenced the oil and gas reservations by the Shepherds. Shell then sold the land to R&F Coal Company in 1992, and that deed again referenced the Shepherds’ reservation.

R&F sold the 137 acres to 12 different owners, including 61 acres to the Tribetts. In 2011, the Tribetts attempted to lease the mineral interests under their property. Oil and gas industry representatives urged the couple to assure they had a clear title by using the abandonment process outlined in the 2006 version of the DMA. The process requires attempting to reach anyone who previously claimed an interest in the mineral rights.

The Tribetts discovered that Joseph, John, and Keith Shepherd were all dead, and they hadn’t found any recording that they conveyed or transferred their mineral rights to anyone else. Following the 2006 DMA guidelines, the Tribetts published notice of the intent to declare the mineral interest abandoned in a local newspaper, and a few months later, Barbara, Joseph A., and David Shepherd, heirs of the three Shepherds who had owned the mineral rights, filed affidavits claiming their intent to preserve the rights.

The Tribetts then sought a declaratory judgment from the Belmont County Common Pleas Court to find the Shepherds had abandoned their claims to the oil and gas, and that the Tribetts should be declared the owners of the rights. The trial court sided with the Tribetts, and the Shepherds appealed to the Seventh District Court of Appeals. In 2014, the Seventh District affirmed the trial court’s decision, finding that the 1989 version of the DMA controlled, and because of the self-executing nature of the law, the Shepherds’ interest in the mineral rights was declared abandoned even before the Tribetts bought the land.

The Shepherds have appealed to the Supreme Court, arguing the 1989 version of the law is unconstitutional, and if the Tribetts intended to use the 1989 version to claim ownership, they waited too long to act.

Shepherds Argue Law Unconstitutional
The  Shepherds note the 1989 version of the act, which was substantially revised in 2006, stated that any mineral interest held by a person other than the surface owner shall be considered abandoned and the ownership will vest with the surface owner, unless within the proceeding 20 years one or more so-called “savings events” took place. The Shepherds contend the 1986 transfer from Seaway to Shell and the 1992 transfer from Shell to R&F constitute savings events that occurred within 20 years of the enactment of the 1989 law. They argue those transfers put the surface owners on notice that there was a reservation of the mineral rights in existence that belongs to the three Shepherd men, who reserved them, and their heirs.

While the 2006 law put in specific steps a surface owner must take to have a mineral right declared abandoned, including trying to serve notice on those claiming a right, the 1989 DMA was deemed by the lower courts to be “self-executing.” As a self-executing law, neither the Tribetts nor any other surface owners had to take any action to initiate the abandonment process. The 1989 law gave mineral rights owners three years to take an action to declare they had not abandoned the mineral rights. Those landowners could also prove they had not abandoned their rights by showing a savings event took place. Savings events could include actions such as the transferring of the title to the mineral rights, filing a notice to pay taxes on the property, or proof that work to extract the minerals had taken place.

The Shepherds argue that the 1989 version of the DMA is poorly drafted and not self-executing. They contend the law implied a surface owner must take an action to start the 20-year look-back period. If the law was self-executing, then the Ohio Constitution’s Article II, Section 28 prohibition against retroactive laws makes the DMA unconstitutional. If the law examines only the 20 years prior to its passage, then it takes away any mineral rights that were created and vested in owners, the Shepherds maintain. Anticipating their opponents would point to the three-year grace period built into the law to give mineral rights owners the chance to record documents restating their interest in preserving the rights, the Shepherds assert that just because a law has some portions that cover acts after passage doesn’t mean the law is constitutional.

The Shepherds also suggest the 1989 DMA violates Article 1, Sections 1 and 19 of the Ohio Constitution regarding due process, which they note the Court has ruled previously is stronger than the U.S. Constitution’s due process rights when it comes to property ownership.

“Under [Tribett’s] view of this statute the property rights of mineral owners across Ohio automatically vanished as a matter of law on March 22, 1992. In other words, innumerable property owners [including the Shepherds] were automatically and irrevocably divested of one of their most fundamental and inviolate rights, without any advance notice or opportunity to be heard,” the Shepherds’ brief states.

The Court also asked the parties to address whether the Tribetts were bound by a 21-year statute of limitations expressed in R.C. 2305.04. The law provides that an “action to recover the title to or possession of real property shall be brought within 21 years after the cause of action accrued.” The Shepherds argue the “cause of action” in the case was the March 1989 effective date of the DMA, and the Tribetts were attempting to “recover” the property rights claimed by the Shepherds that was triggered when the Shepherd heirs responded to the newspaper notice and filed claims. The Tribetts filed their case to have them declared the mineral rights owners in April 2012, which the Shepherds note is more than 21 years after the cause of action, and so the statute of limitations passed and their lawsuit is invalid.

Tribett Asserts Mineral Rights Were Abandoned
Despite attempting to use the 2006 version of the law at the urging of the oil and gas industry, Tribett argues the 1989 DMA applies to her dispute with the Shepherds, and the self-executing nature of the law didn’t require her to take any action to become the owner of the mineral rights. Tribett maintains the law was constitutionally proactive giving the heirs of the Shepherds three years after the law took effect to demonstrate they had a right to the minerals and they were preserving them. Tribett argues that the Shepherds haven’t provided any evidence that the mineral rights were passed on to them, and that neither the original owners nor the heirs took any steps to preserve the rights until they responded to the newspaper notice in 2011.

Tribett relies on the U.S. Supreme Court’s 1982 Texaco v. Short opinion, which found Indiana’s dormant mineral rights law was constitutional. The Indiana statute is similar to Ohio’s, except that it only gave mineral rights owners two years after the effective date to take an action to preserve their rights. Tribett points to the high court’s finding that the act didn’t violate the due process clause of the federal constitution. Shepherd suggests the Texaco ruling doesn’t apply because it is about the federal constitution’s due process clause, not the Ohio Constitution’s stronger due process rights regarding property.

Tribett argues the law isn’t retroactive, and if it were, it would still be constitutional because Ohio allows retroactive laws if they are just “remedial” in nature. She suggests the law is remedial because the retroactive part of the law didn’t take any rights from anyone. The mineral rights were only considered abandoned in 1992, three years after the law took effect if no action was taken by an alleged mineral right owner. Unlike the 2006 law, the 1989 version didn’t require the surface owner or the state to inform those claiming to have mineral rights about the need to take action. Tribett maintains Ohio law is clear that property owners are responsible for knowing the laws impacting their property rights and the Shepherds should have known what acts to take and acted before 1992 if they wanted to claim the mineral rights.

In response to the statute of limitations, Tribett suggests the clock didn’t start in 1989, but either started in 2011 when the Shepherds responded to the newspaper notice, or 1992 when the three-year period to take action ended. Her 2012 filing was within 21 years under either scenario.

Ohio Attorney General Supports Tribett
An amicus curiae brief supporting Tribett’s position has been submitted by the Ohio Attorney General’s Office. The attorney general states two important interests led to filing a brief: first, the office is defending the state’s legally enacted statute; second, as a property owner itself, the state wants a clear interpretation of the DMA to clarify its ownership interests as well as those of many Ohio property owners.

The attorney general argues the statute isn’t retroactive and the law follows the precedent for clearing a property’s title that was established in the 1973 Marketable Title Act. The attorney general cites testimony from the hearings by the General Assembly regarding the DMA where advocates noted their desire to reunify unused mineral rights with the surface owners so they could begin to make arrangements with oil and gas companies to make productive use of the land. The advocates for the law provided model legislation suggested by representatives from a group of states that attempted to address dormant mineral rights without compromising anyone’s constitutional rights.

The attorney general also maintains the law was permissible even if retroactive because all it did was change the procedure for preserving one’s mineral rights and gave individuals three years after the passage of the law to take advantage of the procedure if they had done nothing in the prior 20 years to save the mineral rights.

Tribett agreed to divide her allotted oral argument time with the attorney general.

Other Friend-of-Court Briefs
An amicus brief in support of Tribett’s position was filed by David and Carolyn Stanley, also surface owners in Belmont County who are in a dispute with former owners of the property claiming to have preserved the mineral rights under their land. Several landowners led by Jeffco Resources, Inc., which collectively owns more than 9,000 acres of property in eastern Ohio also filed a brief in support of Tribett.

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Barbara Shepherd et al.: Matthew Warnock, 614.227.2300

Representing Vernon L. Tribett et al.: Richard Myser, 740.635.0162

Representing the State of Ohio from the Ohio Attorney General’s Office: Eric Murphy, 614.466.898

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Attorney Discipline

Disciplinary Counsel v. Benjamin Joltin, Case no. 2016-0261
Mahoning County

The Board of Professional Conduct recommends a two-year suspension with 18 months stayed, on certain conditions, for Canfield attorney Benjamin Joltin. The board found the attorney misappropriated client funds, mismanaged his client trust account, and failed to fully cooperate with the disciplinary investigation.

Joltin and the Office of Disciplinary Counsel, which investigated the complaints against the attorney, agree about the professional conduct violations and basic facts related to the misconduct, but disagree about the appropriate sanction.

Attorney Pays Himself Before Doing Work
Joltin has been a solo practitioner since 2012 and handles criminal and family law cases. In September 2012, Lisa Torok hired Joltin to handle her divorce and paid him $18,000 to hold in trust. He deposited the money into his client trust account. Six days later, Joltin paid himself $4,000 from the account without having earned the fee or noted any expenses.

Torok and Joltin agreed to a $3,000 flat fee for the divorce, and Torok requested the return of $15,000 in early 2013. When Torok cashed the check months later, it bounced. Soon after, Joltin paid back more, but not all, of her money, and she fired him as her lawyer in February 2014. By April, Torok had refunded her all but $3,000, which he eventually paid nine days before a December 2015 disciplinary hearing.

In November 2012, Joltin also deposited $88,000 for work he did as executor of his grandparents’ estate into his client trust account, which the board notes improperly mixed his personal funds with his client account.

Personal Injury and Eviction Cases Mismanaged
In a second incident, Joltin represented Roger Johnson in a personal injury lawsuit. One of Johnson’s doctors contacted Joltin in 2009, requesting payment of a medical bill if the case was won or settled. Joltin agreed to pay the doctor, but then put the documents into the wrong file and forgot about them. A settlement was reached, but the doctor wasn’t paid his $3,400 fee until more than two years later, a few days before the December 2015 disciplinary hearing.

In the third grievance considered by the board, Joltin represented a landlord who lives in Florida and needed legal assistance to evict tenants from an Ohio property. The court rejected two filings Joltin made because of technical errors. When the landlord contacted Joltin by phone and email about the case status, Joltin didn’t talk to him, ignored his emails, and failed to keep him informed about the case. This client terminated Joltin’s representation in May 2014 and asked for a refund of the $205 paid. Joltin didn’t reply until he decided to refund the fee in December 2015.

Board Suggests Six-Month Actual Suspension
In its report to the Supreme Court, the board states that Joltin stopped keeping records for his client trust account from 2008 to 2013, the year the disciplinary counsel began an investigation. Joltin failed to maintain required ledgers for each client, overdrew his account, mixed his client and personal funds, and wrote checks for personal expenses at least 85 times in a 14-month period.

Joltin also didn’t respond to multiple inquiries from the disciplinary counsel and didn’t show up for scheduled depositions about these matters, the board notes. Once the disciplinary complaint was filed, though, Joltin cooperated with disciplinary counsel, tightened the scope of his practice, changed his office procedures to comply with attorney conduct rules regarding client trust accounts, found a mentor, and refunded money and apologized in writing to the three clients.

Joltin explained in the hearing that the misconduct took place during a time when he was experiencing personal difficulties, including physical and mental health issues. In December 2015, he began regular counseling and signed a contract with the Ohio Lawyers Assistance Program (OLAP). However, the board determined these weren’t factors that could lessen his disciplinary sanction because there wasn’t enough proof to show the difficulties caused his ethical violations.

Though the disciplinary counsel recommends an indefinite suspension, the board proposes a six-month actual suspension. Eighteen months of the two-year suspension would be stayed on the conditions that Joltin submits to monitored probation, completes coursework about maintaining client trust accounts, finishes his three-year OLAP contract and follows their direction regarding his treatment, and commits no more misconduct.

Investigator Pushes for Stronger Sanction
The disciplinary counsel has filed objections to the board’s recommended sanction. The disciplinary counsel disputes the board’s conclusion that none of the clients were harmed by Joltin’s actions. The divorcing mother needed her money for living and child-related expenses, the doctor waited two years to be paid for services he provided, and the landlord’s tenants extensively damaged the property during the delay in the eviction proceedings, the disciplinary counsel contends.

The disciplinary counsel adds that Joltin’s lack of cooperation with the disciplinary process was egregious and only changed after the complaint against him was formally filed. In the disciplinary counsel’s view, Joltin has shown he is unfit to practice law, and his conduct justifies an indefinite suspension, which prohibits him from applying for reinstatement for two years.

Attorney Satisfied with Board’s Recommendation
Joltin responds, rejecting the claim that he harmed these clients. He notes he successfully negotiated a separation agreement and shared parenting plan for Torok, and he argues no evidence was submitted to support the harm to the clients that has been alleged by the disciplinary counsel.

The attorney cites his good character and reputation throughout his 16 years of practice as demonstrated by 17 letters submitted on his behalf in this case. He stresses that he freely chose to repay his clients, seek counseling, and fix his law-office practices in December 2015 before the disciplinary hearing. Those steps were sincere attempts to correct the wrongs and prevent future misconduct, he asserts, asking the Supreme Court to accept the proposed two-year suspension with 18 months stayed.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing the Office of Disciplinary Counsel: Catherine Russo, 614.461.0256

Representing Benjamin Joltin: Tracey Laslo, 330.823.9757

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.