Thompson v. Custer ( 2018 )

[Cite as Thompson v. Custer, 2018-Ohio-4476.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
TRUMBULL COUNTY, OHIO
ANN HALL THOMPSON, INDIVIDUALLY : OPINION
AND AS EXECUTRIX OF THE ESTATE
OF EDWARD J. THOMPSON, :
DECEASED, et al., CASE NO. 2017-T-0087
Plaintiffs-Appellants/ :
Cross-Appellees,
- vs - :
NATHAN J. CUSTER, et al., :
Defendants-Appellees/ :
Cross-Appellants,
:
BP AMERICA PRODUCTION CO.,
:
Defendant-Appellee.
Civil Appeal from the Trumbull County Court of Common Pleas.
Case No. 2013 CV 2358.
Judgment: Affirmed.
Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270,
Warren, OH 44482; and Marty Nosich, The Law Offices of Marty D. Nosich, L.L.C., 143
West Main Street, Cortland, OH 44410 (For Plaintiffs-Appellants/Cross-Appellees).
Gregory W. Watts and Matthew W. Onest, Krugliak, Wilkins, Griffiths & Dougherty Co.,
L.P.A., 4775 Munson Street, N.W., P.O. Box 36963, Canton, OH 44735-6963 (For
Defendants-Appellees/Cross-Appellants).
Peter A. Lusenhop, Vorys, Sater, Seymour and Pease, LLP, 52 East Gay Street, P.O.
Box 1008, Columbus, OH 43215; and Steven A. Chang, Vorys, Sater, Seymour and
Pease, LLP, 106 South Main Street, Suite 1100, Akron, OH 44308 (For Defendant-
Appellee).
TIMOTHY P. CANNON, J.
{¶1} Appellants, Ann Hall Thompson, individually and as the Executrix of the
estate of Edward J. Thompson1, and Mae Thompson Baxter (“the Thompsons”), and
cross-appellants, Nathan J. Custer and Noelle M. Custer (“the Custers”), appeal from
the June 28 and August 21, 2017 judgment entries of the Trumbull County Court of
Common Pleas. The trial court granted summary judgment in favor of the Custers on
the Thompsons’ claims for slander of title, conversion, and unjust enrichment. The trial
court granted summary judgment in favor of the Thompsons on their quiet title claim.
The trial court’s judgment is affirmed for the following reasons.
{¶2} On March 18, 1950, Isabel Bacon, Lorene Bacon Langley, and Lawrence
H. Langley (“the Langleys”) transferred approximately 100 acres in Vernon Township,
Trumbull County, Ohio (hereinafter referred to as the “Real Estate”) to LeRoy H.
Rufener and Sylvia Valot Rufener (“the Rufeners”). The Langleys reserved an interest
in one half of the oil and gas rights. The deed was recorded on March 22, 1950.
{¶3} The Custers are the current surface owners of the Real Estate and have
been since 2011. The Custers also own an undisputed one-half mineral interest in the
Real Estate. Ownership of the remaining one-half mineral interest became the subject
of dispute between the Custers and the Thompsons. The Thompsons claim the interest
as the Langleys’ living heirs.
{¶4} On April 11, 2012, the Custers entered into an oil and gas lease with
appellee, BP America Production Company (“BP”) for the mineral interests. Pursuant to
1. Upon the death of Edward J. Thompson during the trial court proceedings, Ann Hall Thompson, as
Executrix of the Estate of Edward J. Thompson, was substituted as a party plaintiff.
2
the lease, BP agreed to pay the Custers a signing bonus of $3,900.00 per net acre
contained within the leased premises, subject to BP’s determination that the Custers
have defensible title to the leased premises. A “Memorandum of Oil and Gas Lease”
pertaining to the Custers’ lease with BP was recorded in Trumbull County on April 12,
2012.
{¶5} BP sent the Custers a Title Defect Notice on September 22, 2012, as a
result of the Langleys’ reservation of the one-half mineral interest in the 1950 recorded
deed to the Rufeners. This effectively reduced the net acres leased from the Custers to
BP by one-half. BP paid the Custers half of the negotiated signing bonus, in the amount
of $192,977.85, on or about October 25, 2012.
{¶6} On October 11, 2012, BP entered into an oil and gas lease with the
Thompsons for their share of the mineral interests. A “Memorandum of Oil and Gas
Lease” pertaining to the Thompsons’ lease with BP was recorded in Trumbull County on
October 25, 2012. The lease itself is not included in the record before us.
{¶7} On December 6, 2012, the Custers filed an Affidavit of Abandonment with
the Trumbull County Recorder, describing the disputed one-half mineral interest as
“abandoned” and averring they now hold the entire mineral interest as owners of the
surface rights. Due to a timing issue with notice and publication, the Custers recorded a
second Affidavit of Abandonment on March 18, 2013.
{¶8} On March 20, 2013, BP sent the Thompsons a Title Defect Notice, as a
result of its determination that the mineral interest was entirely vested in the surface
owner. BP indicated it would not pay the Thompsons the signing bonus unless they
were able to clear all defects to BP’s satisfaction. On March 25, 2013, the Thompsons
3
recorded a Notice of Claim to Preserve Mineral Interest, stating they do not intend to
abandon but, instead, to preserve their rights in the mineral interest.
{¶9} BP subsequently decided, however, that the entire mineral interest was
vested in the Custers and paid them the remaining half of the negotiated signing bonus,
in the amount of $192,977.85, on or about July 30, 2013. They recorded a Ratification,
Amendment and Memorandum of Oil and Gas Lease on August 2, 2013, which
indicated BP had delivered the signing bonus to the Custers under the terms of their
original lease.
{¶10} On December 4, 2013, the Thompsons filed a two-count complaint against
the Custers, BP, and the Ohio Attorney General, requesting (1) a declaratory judgment
that the Thompsons are the lawful owners of the disputed one-half mineral interest and
(2) a declaratory judgment that the 1989 Ohio Dormant Mineral Act is unconstitutional.
{¶11} The Thompsons and the Custers submitted competing summary judgment
motions, and the trial court granted summary judgment in favor of the Custers. The trial
court considered application of the current and former version of R.C. 5301.56, known
as Ohio’s Dormant Mineral Act (“DMA”). The trial court determined that under the 1989
DMA, the disputed one-half mineral interest merged with the surface rights in 1992.
The trial court concluded the 2006 DMA did not revive a claim that was already
abandoned and vested in the 1992 surface owners.
{¶12} The Thompsons filed a notice of appeal, and this court affirmed the trial
court’s judgment. We held that “[t]he plain language of the 1989 version of R.C.
5301.56 provided for automatic vesting of the mineral rights in the surface owner unless
a ‘savings event’ occurred within the preceding 20 years.” Thompson v. Custer, 11th
4
Dist. Trumbull No. 2014-T-0052, 2014-Ohio-5711, ¶22. “Additionally, former R.C.
5301.56(B)(2) provided that a mineral interest shall not be deemed abandoned due to a
lack of savings events until three years from the March 22, 1989 effective date of the
act.” Id. It was undisputed that after 1950, no action was taken regarding the reserved
one-half mineral interest until the Thompsons’ recording of the Memorandum of Gas
and Oil Lease with BP in October 2012. Accordingly, we held the disputed one-half
mineral interest in the Real Estate vested in the surface owners on March 22, 1992. Id.
We further held that, as the 1989 DMA “did not involve a retroactive application that
would have stripped mineral rights owners of their rights upon its effective date, it is
therefore constitutional.” Id. at ¶28.
{¶13} On September 15, 2016, the Supreme Court of Ohio reversed our
decision and remanded the case to the trial court on the authority of Corban v.
Chesapeake Exploration, L.L.C., 149 Ohio St. 3d 512, 2016-Ohio-5796 and Walker v.
Shondrick-Nau, 149 Ohio St. 3d 282, 2016-Ohio-5793. See Thompson v. Custer, 150
Ohio St. 3d 347, 2016-Ohio-5823.
{¶14} In Corban, the Ohio Supreme Court concluded “that the 1989 law was not
self-executing and did not automatically transfer ownership of dormant mineral rights by
operation of law.” Corban, supra, at ¶28. “Rather, a surface holder seeking to merge
those rights with the surface estate under the 1989 law was required to commence a
quiet title action seeking a decree that the dormant mineral interest was deemed
abandoned.” Id. The Supreme Court explained that the 2006 DMA “modified only the
method and procedure by which the right [to abandoned mineral interests] is recognized
and protected.” Id. at ¶35. As of the 2006 effective date, “R.C. 5301.56(E) directs the
5
surface holder to give advance notice to the mineral rights holder, allowing it an
opportunity to preserve its mineral rights from being deemed abandoned and merged
with the surface estate.” Id. at ¶30. The Supreme Court held that applying the 2006
DMA to all claims asserted after the effective date of the statute “does not impair vested
rights in violation of the Retroactivity Clause contained in Article II, Section 28, of the
Ohio Constitution.” Id. at ¶32. In Walker, the Supreme Court held that, pursuant to the
2006 DMA, a mineral interest holder’s Affidavit and Claim to Preserve Mineral Interests,
filed within 60 days of the surface owner’s Affidavit of Abandonment, “was sufficient to
prevent the mineral rights from being ‘deemed abandoned and vested’ in the surface
owner.” Walker, supra, at ¶18-19.
{¶15} On September 23, 2016, the Thompsons filed in the trial court a motion for
leave to file a supplemental complaint instanter, pursuant to Civ.R. 15(E). The
supplemental complaint alleged the following claims: (1) slander of title against the
Custers and BP, alleging the Memorandum of Oil and Gas Lease, Affidavits of
Abandonment, and Ratification, Amendment and Memorandum of Oil and Gas Lease
were slanderous statements disparaging the Thompsons’ title; (2) conversion, alleging
the Custers’ lease with BP was invalid and that the Custers converted all money, rents,
and royalties therefrom; and (3) unjust enrichment, alleging the Custers should not be
permitted to retain wrongfully obtained benefits.
{¶16} On October 3, 2016, the Thompsons filed a motion for leave to amend
their supplemental complaint instanter, pursuant to Civ.R. 15(A), adding claims for (4)
tortious interference with contract relations and (5) quiet title. The Custers and BP filed
briefs in opposition.
6
{¶17} On November 29, 2016, the trial court issued a judgment entry in which it
treated the motion for leave to file a supplemental complaint as a motion for leave to
amend the original complaint and granted said motion. The trial court specifically
referenced only the first three supplemental claims; it is clear from the record, however,
that it was understood by the parties and the court that the Thompsons had been
granted leave to prosecute all five supplemental claims.
{¶18} On December 15, 2016, the Custers filed a motion for partial summary
judgment, arguing they were entitled to summary judgment on the Thompsons’ claims
for slander of title, conversion, unjust enrichment, and tortious interference. On March
21, 2017, the Thompsons filed a brief in opposition and a cross-motion for summary
judgment against the Custers. The Thompsons withdrew their claim for tortious
interference and moved for summary judgment on their quiet title claim. The Custers
filed a reply brief, arguing the 2006 DMA was unconstitutional as applied to them.
{¶19} BP also filed a motion for partial summary judgment on the Thompsons’
claim for slander of title. The Thompsons filed a brief in opposition and a cross-motion
for partial summary judgment against BP.
{¶20} On June 28, 2017, the trial court granted summary judgment in favor of
BP and the Custers on the Thompsons’ claim for slander of title, and in favor of the
Custers on the claims for conversion and unjust enrichment.
{¶21} On August 21, 2017, the trial court granted summary judgment in favor of
the Thompsons on their quiet title claim. The trial court applied the 2006 DMA, pursuant
to Corban. The trial court held the Thompsons filed a timely Notice of Claim to Preserve
7
Mineral Interest in response to the Custers’ Affidavit of Abandonment, which was
sufficient to preserve their one-half mineral interest.
{¶22} The Thompsons noticed a timely appeal, and the Custers cross-appealed.
BP has not filed a brief on appeal. We consider the assignments of error out of order
for ease of discussion.
{¶23} The Custers’ first cross-assignment of error states:
{¶24} “The trial court erred when it permitted appellants/cross-appellees to
amend their complaint to file additional claims seeking monetary damages, after this
case had already proceeded through the appeals process.”
{¶25} The Custers submit that the trial court abused its discretion in granting the
Thompsons leave to assert additional claims seeking monetary damages, to wit: slander
of title, conversion, unjust enrichment, and tortious interference with contract relations,
because they relied solely upon facts in existence prior to the filing of their original 2013
complaint.
{¶26} Civ.R. 15(A) states, in pertinent part:
A party may amend its pleading once as a matter of course within
twenty-eight days after serving it or, if the pleading is one to which
a responsive pleading is required within twenty-eight days after
service of a responsive pleading or twenty-eight days after service
of a motion under Civ.R. 12(B), (E), or (F), whichever is earlier. In
all other cases, a party may amend its pleading only with the
opposing party’s written consent or the court’s leave. The court
shall freely give leave when justice so requires.
“Whenever the claim or defense asserted in the amended pleading arose out of the
conduct, transaction, or occurrence set forth or attempted to be set forth in the original
pleading, the amendment relates back to the date of the original pleading.” Civ.R.
15(C).
8
{¶27} “[T]he decision whether to grant a motion for leave to amend a pleading
under Civ.R. 15(A) is within the discretion of the trial court. However, the language of
Civ.R. 15(A) favors a liberal amendment policy and a motion for leave to amend should
be granted absent a finding of bad faith, undue delay or undue prejudice to the
opposing party.” Hoover v. Sumlin, 12 Ohio St. 3d 1, 6 (1984), citing Foman v. Davis,
371 U.S. 178, 182 (1962). Therefore, “[t]he granting of a motion for leave to amend a
pleading shall not be disturbed on appeal absent a showing of bad faith, undue delay or
undue prejudice to the opposing party.” Id. at paragraph two of the syllabus.
{¶28} The trial court granted the Thompsons leave to amend their original
complaint on the grounds that it was not untimely and there was no undue prejudice to
the Custers. It held:
[T]his case has only been active in this Court for a short time.
Summary judgment was granted in favor of the defendants on June
16, 2014. Appeal was taken to the Eleventh District Court of
Appeals which affirmed the summary judgment decision on
December 29, 2014. Subsequently and more recently on
September 30, 2016, the Court of Appeals rendered an additional
mandate reversing the summary judgment in accordance with
precedent from the Ohio Supreme Court.
Therefore, from the perspective of an active docket in this Court,
the matter is relatively young. As a result, the Court finds the undue
prejudice and timeliness arguments are not well taken. The matter
was pending in this Court for barely six months. During that time,
limited discovery, if any, was conducted relative to the summary
judgment issues.
{¶29} The record supports the trial court’s finding that there was no undue delay
or undue prejudice to the Custers. Further, there has been no showing of bad faith.
Therefore, we conclude the trial court did not abuse its discretion in granting the
Thompsons leave to amend their complaint.
9
{¶30} The Custers’ first cross-assignment of error is without merit.
{¶31} The Thompsons’ sole assignment of error states:
{¶32} “The trial court erred in entering summary judgment in Defendants
Custer’s [sic] favor on Plaintiffs’ conversion and unjust enrichment claims below.”
{¶33} The Thompsons present the following two issues for review: “[1.] Whether
Conversion lies where the converter acquired possession of the owner’s personal
property by mistake”; and “[2.] Whether an actionable ‘unjust enrichment’ claim includes
mistaken third-party conferrence of benefit upon the defendant that, in equity and good
conscience, belongs to the plaintiff.”
{¶34} Civ.R. 56(C) provides that summary judgment is proper when
(1) [n]o genuine issue as to any material fact remains to be
litigated; (2) the moving party is entitled to judgment as a matter of
law; and (3) it appears from the evidence that reasonable minds
can come to but one conclusion, and viewing such evidence most
strongly in favor of the party against whom the motion for summary
judgment is made, that conclusion is adverse to that party.
Temple v. Wean United, Inc., 50 Ohio St. 2d 317, 327 (1977).
{¶35} “[T]he moving party bears the initial responsibility of informing the trial
court of the basis for the motion, and identifying those portions of the record before the
trial court [e.g., pleadings, depositions, answers to interrogatories, etc.] which
demonstrate the absence of a genuine issue of fact on a material element of the moving
party’s claim.” Dresher v. Burt, 75 Ohio St. 3d 280, 292 (1996), citing Civ.R. 56(C) and
Celetox Corp. v. Catrett, 477 U.S. 317, 323-324 (1986). If the moving party satisfies
this burden, the nonmoving party has the burden to provide evidence demonstrating a
genuine issue of material fact, pursuant to Civ.R. 56(E). Id. at 293.
10
{¶36} On appeal, we review a trial court’s entry of summary judgment de novo,
i.e., “independently and without deference to the trial court’s determination.” Brown v.
Cty. Commrs. of Scioto Cty., 87 Ohio App. 3d 704, 711 (4th Dist.1993) (citation omitted);
see also Grafton v. Ohio Edison Co., 77 Ohio St. 3d 102, 105 (1996).
{¶37} The Thompsons’ first issue for review pertains to their conversion claim
against the Custers.
{¶38} “[C]onversion is the wrongful exercise of dominion over property to the
exclusion of the rights of the owner, or withholding it from his possession under a claim
inconsistent with his rights.” Joyce v. Gen. Motors Corp., 49 Ohio St. 3d 93, 96 (1990),
citing Zacchini v. Scripps-Howards Broadcasting Co., 47 Ohio St. 2d 224, 226 (1976),
rev’d on other grounds, 433 U.S. 562 (1977). “In order to set forth a cause of action for
conversion, one must allege that he has ownership or a right to possess the property at
the time; that another wrongly converted or disposed of the property; and resulting
damages.” Kish v. Magyar, 11th Dist. Ashtabula No. 2015-A-0059, 2016-Ohio-7355,
¶48 (citation omitted). “In order to maintain an action for conversion of money, the
plaintiff must establish that the funds were ‘earmarked,’ that is, that the defendant had
an obligation to deliver a specific corpus of money capable of identification and not
merely that the defendant had an obligation to pay a certain sum as a general debt.”
RAE Assocs., Inc. v. Nexus Communications, Inc., 10th Dist. Franklin No. 14AP-482,
2015-Ohio-2166, ¶31, citing Haul Transport of Virginia, Inc., v. Morgan, 2d Dist.
Montgomery No. 14859, 1995 WL 328995 (June 2, 1995).
{¶39} The Thompsons argue they are entitled to half of the bonus payment the
Custers received from BP (i.e., $192,977.85) because they have defensible title to one-
11
half of the mineral interests and the Custers converted those funds. In support of their
argument, the Thompsons cite to Eisenbarth v. Reusser, 7th Dist. Monroe No. 13 MO
10, 2014-Ohio-3792. The facts of Eisenbarth, however, are distinguishable from the
present case.
{¶40} In Eisenbarth, William Eisenbarth transferred two tracts of land to Paul
and Ida Eisenbarth. Id. at ¶5. William reserved a one-half mineral interest in the land
for himself but expressly gave the right to lease the entire mineral interest to Paul and
Ida. Id. William then transferred his one-half mineral interest to his daughter, Mildred
Reusser. Id. Paul and Ida’s interest in the land, including the right to lease the entire
mineral interest, was eventually transferred to their children; Mildred Reusser’s one-half
mineral interest was transferred to her children. Id. at ¶6-7. The Eisenbarths signed an
oil and gas lease for the entire mineral rights, and the Reussers argued they were
entitled to half the signing bonus from that lease, pursuant to their one-half interest in
the mineral rights. Id. at ¶8-9. The trial court awarded half of the signing bonus to the
Reussers. Id. at ¶10. On appeal, the Eisenbarths argued that because they were the
exclusive owners of the right to lease the mineral rights, they were entitled to the entire
bonus payment. Id. at ¶55. The Seventh District Court of Appeals determined that the
right to lease and the right to bonus payments are separate attributes of a severed
mineral interest that can be separately transferred. Id. at ¶61. The Court further
determined the Reussers had retained their right to bonus payments and were therefore
entitled to their proportionate share of the bonus payment from the lease. Id. at ¶62.
{¶41} Here, the Thompsons have retained both the right to lease their one-half
mineral interest and the right to receive bonus payments, as they did not convey either
12
of those rights to the Custers. Thus, unlike the Eisenbarths, the Custers did not have
the right to lease any portion of the mineral interest they did not own. There was no
agreement or transfer of rights between the Thompsons and the Custers under which
the Custers had any obligation to deliver any portion of the signing bonus to the
Thompsons.
{¶42} The Custers were also under no obligation, under the terms of their lease
with BP, to deliver half of the signing bonus to the Thompsons. The Thompsons were
free to enter into their own lease for their one-half mineral interest, which they did. The
lease itself is not included in the record before us, only the memorandum of lease,
which does not include terms of any negotiated signing bonus. Regardless of whether
the Thompsons’ lease contains a provision for a similar signing bonus, the Thompsons
are not entitled to half the signing bonus that was negotiated between the Custers and
BP, as they were not party to that contract.
{¶43} The lease between the Custers and BP provides: “The bonus payment
shall be paid to the Lessor * * * subject to Lessee’s determination that Lessor has
Defensible Title to the Leased Premises[.]” This provision does not assign any portion
of the bonus payment to a third party. Rather, it indicates that BP will not pay the bonus
payment unless BP determines the Custers have defensible title to the leased premises.
As the bonus payment was part of the consideration for the lease agreement between
the Custers and BP, any issue regarding a mistaken overpayment is an issue to be
resolved between the Custers and BP. The Custers, however, have no legal obligation
to pay any portion of what they received from BP to the Thompsons.
13
{¶44} The first issue under the Thompsons’ sole assignment of error is not well
taken.
{¶45} The second issue presented for review pertains to the Thompsons’ unjust
enrichment claim. The Thompsons argue the Custers were unjustly enriched by
retaining the entire signing bonus.
{¶46} “The doctrine of unjust enrichment provides an equitable remedy imposed
to prevent injustice.” Giles v. Hanning, 11th Dist. Portage No. 2001-P-0073, 2002-Ohio-
2817, ¶13 (citation omitted). Unjust enrichment occurs when one individual receives a
benefit which, in justice and equity, belongs to another. Id., citing Adkins v. Thompson,
11th Dist. Portage No. 98-P-0045, 1999 WL 689750, *3 (Aug. 20, 1999), citing Liberty
Mut. Ins. Co. v. Indus. Comm. of Ohio, 40 Ohio St. 3d 109, 111 (1988). “The elements
of unjust enrichment are: ‘(1) a benefit conferred by a plaintiff upon a defendant; (2)
knowledge by the defendant of the benefit; and (3) retention of the benefit by the
defendant under circumstances where it would be unjust to do so without payment.’”
Id., quoting Hambleton v. R.G. Barry Corp., 12 Ohio St. 3d 179, 183 (1984).
{¶47} We have already determined the Thompsons were not entitled to the
benefit at issue, i.e., half of the Custers’ signing bonus, as a matter of law. Further, any
benefit the Custers received under the lease they negotiated with BP was conferred
upon them by BP, not by the Thompsons. Based on this fact alone, the Thompsons
cannot succeed on their claim of unjust enrichment as a matter of law. The Thompsons
assert this is “a myopic understanding and expression of the unjust enrichment
doctrine.” In support, they cite to a 1973 treatise on remedies. Ohio law is clear,
however, that the benefit unjustly retained must have been conferred on the defendant
14
by the plaintiff. See, e.g., Johnson v. Microsoft Corp., 106 Ohio St. 3d 278, 2005-Ohio-
4985, ¶22; Paulus v. Beck Energy Corp., 7th Dist. Monroe No. 16 MO 0008, 2017-Ohio-
5716, ¶94-95; see also Hughes v. Oberholtzer, 162 Ohio St. 330, 335 (1954) (“The
purpose of the quasi-contract action is not to compensate the plaintiff for any loss or
damage suffered by him but to compensate him for the benefit he has conferred on the
defendant.”).
{¶48} The second issue under the Thompsons’ sole assignment of error is not
well taken.
{¶49} Accordingly, the Thompsons’ sole assignment of error is without merit.
{¶50} The Custers’ second cross-assignment of error states:
{¶51} “The trial court erred when it held that the one-half (1/2) severed mineral
interest at issue was not presumed abandoned and subject to judicial abandonment
pursuant to R.C. 5301.56 (in effect prior to June 30, 2006).”
{¶52} Under this assignment of error, the Custers challenge the trial court’s
grant of summary judgment in favor of the Thompsons on their quiet title claim. The
Custers assert the 1989 DMA conferred property rights in the form of a conclusive
presumption and/or cause of action, as enunciated by the Ohio Supreme Court in
Corban. They argue that application of the 2006 DMA to them, as instructed by Corban,
is a violation of their Fifth and Fourteenth Amendment rights under the United States
Constitution.
{¶53} “Where an act is challenged on the ground that it is unconstitutional when
applied to a particular state of facts, the burden rests upon the party making such attack
to present clear and convincing evidence of a presently existing state of facts which
15
makes the act unconstitutional and void when applied thereto.” Belden v. Union Central
Life Ins. Co., 143 Ohio St. 329 (1944), paragraph six of the syllabus, citing Nashville, C.
& St. L. Ry. Co. v. Walters, Commr. of Highways, 294 U.S. 405 (1935).
{¶54} The Fourteenth Amendment to the United States Constitution provides, in
part, that no State shall deprive any person of property without due process of law. The
Fifth Amendment, as applied to the States through the Fourteenth Amendment,
provides, in part, that private property shall not be taken for public use without just
compensation.
{¶55} “[P]roperty interests are founded on the procedural aspects of due
process; they are not substantive rights created by the federal Constitution.” 1946 St.
Clair Corp. v. Cleveland, 49 Ohio St. 3d 33, 36 (1990), citing Cooperman v. Univ.
Surgical Assoc., Inc., 32 Ohio St. 3d 191, 200 (1987) (citations omitted). In order to
establish a procedural due process claim, the Custers must show that (1) they had a
property interest protected by the Due Process Clause; (2) they were deprived of that
interest; and (3) the state did not afford adequate procedural rights prior to depriving
them of the protected interest. Women’s Med. Professional Corp. v. Baird, 438 F.3d
595, 611 (6th Cir.2006).
{¶56} We must first determine whether the Custers’ premise is correct, to wit:
that the 1989 DMA, as enunciated by the Ohio Supreme Court in Corban, conferred
upon them a constitutionally-protected property interest. “Property interests ‘are created
and their dimensions are defined by existing rules or understandings that stem from an
independent source such as state law-rules or understandings that secure certain
16
benefits and that support claims of entitlement to those benefits.’” 1946 St. Clair, supra,
at 36, quoting Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972).
{¶57} In Corban, the Ohio Supreme Court considered the following certified
question: “Does the 2006 version or the 1989 version of the [Dormant Mineral Act] apply
to claims asserted after 2006 alleging that the rights to oil, gas, and other minerals
automatically vested in the surface land holder prior to the 2006 amendments as a
result of abandonment.” Corban, supra, at ¶1. The Court concluded “that the 2006
version of the Dormant Mineral Act, which is codified at R.C. 5301.56, applies to all
claims asserted after June 30, 2006,” even to those that allege mineral rights were
abandoned and vested prior to the 2006 effective date. Id. at ¶2.
{¶58} The 1989 DMA, codified in former R.C. 5301.56, stated: “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 (a) the mineral interest was related to coal, (b) the interest was held by the
United States, the state of Ohio, or another political body described in the statute, or (c)
one or more of certain enumerated saving events had occurred within the preceding 20
years. Former R.C. 5301.56(B)(1).
{¶59} The lead opinion in Corban determined that the words “deemed
abandoned” “created a conclusive presumption by establishing that a mineral rights
holder had abandoned a severed mineral interest if the 20 year statutory period passed
without a saving event.” Id. at ¶25. The lead opinion further explained that “by
providing a conclusive presumption that the mineral interest had been abandoned in
favor of the surface owner if the holder failed to take timely action to preserve it, the
17
legislature provided an effective method of terminating abandoned mineral rights
through a quiet title action.” Id.
{¶60} We first note that Corban is a plurality opinion, and a majority of the
justices did not join in the “conclusive presumption” analysis. See Wendt v. Dickerson,
5th Dist. Tuscarawas No. 2017 AP 080024, 2018-Ohio-1034, ¶28. Therefore, it is
merely persuasive and not binding on lower courts. See, e.g., State v. Helms, 7th Dist.
Mahoning No. 08 MA 199, 2012-Ohio-1147, ¶83, citing State ex rel. Rouch v. Eagle
Tool & Machine Co., 26 Ohio St. 3d 197, 218, fn. 7 (1986) (Celebrezze, C.J., concurring
in part and dissenting in part), citing Hedrick v. Motorists Mut. Ins. Co., 22 Ohio St. 3d
42, 44 (1986), rev’d on other grounds.
{¶61} A majority of the Corban Court did agree, however, that the 1989 DMA
“was not self-executing and did not automatically transfer ownership of dormant mineral
rights by operation of law.” Corban, supra, at ¶28; id. at ¶104 (Kennedy, J., concurring
in this part of the decision). The Court concluded that, under the 1989 DMA, a property
right to dormant mineral interests vested in the surface holder only if the surface holder
commenced a quiet title action and the mineral rights holder failed to prove certain
conditions were met. Id. at ¶25-28.
{¶62} The 2006 DMA now provides that a dormant mineral interest “shall be
deemed abandoned and vested in the owner of the surface of the lands subject to the
interest if the requirements established in division (E) of this section are satisfied[.]”
R.C. 5301.56(B). “R.C. 5301.56(E) directs the surface holder to give advance notice to
the mineral rights holder, allowing it an opportunity to preserve its mineral rights from
18
being deemed abandoned and merged with the surface estate.” Corban, supra, at ¶30,
citing R.C. 5301.56(E), (F), & (G).
{¶63} Under the 2006 DMA, surface holders “were not deprived of the right to
bring a cause of action for abandonment through a quiet title or declaratory judgment
action. Rather, what changed was the procedural process, including statutory notice
and recording procedures, by which mineral rights are deemed abandoned and vested
in the surface holder.” Wendt, supra, at ¶29, citing Corban, supra, at ¶35. Thus,
surface holders who had not succeeded in a quiet title action to obtain the mineral rights
as directed under the 1989 DMA lost no property rights when the statute was amended
in 2006.
{¶64} Here, the Custers’ due process rights were not violated because they
never enjoyed a vested property interest in the disputed one-half portion of the mineral
interests. Neither the Custers nor their predecessors in the surface rights ever
commenced, let alone succeeded in, a quiet title action prior to enactment of the 2006
DMA. They argue that because an action did not require notice to the holder of the
dormant mineral rights prior to June 30, 2006, but did so require thereafter—without any
notice of such change to the surface holder—they were deprived of due process. We
note, however, that the Custers did not own the Real Estate until 2011. Therefore, even
assuming the 2006 DMA did deprive surface holders of a right to bring a cause of
action, that right did not belong to the Custers when the statute was amended. At the
time the Custers purchased the Real Estate, the 2006 DMA was already in full force and
effect.
19
{¶65} The trial court did not err in granting summary judgment in favor of the
Thompsons on their claim for quiet title against the Custers.
{¶66} The Custers’ second cross-assignment of error is without merit.
{¶67} For the foregoing reasons, the judgment of the Trumbull County Court of
Common Pleas is hereby affirmed.
THOMAS R. WRIGHT, P.J.,
CYNTHIA WESTCOTT RICE, J.,
concur.
20