Eisenbarth v. Reusser , 2014 Ohio 3792 ( 2014 )

[Cite as Eisenbarth v. Reusser, 2014-Ohio-3792.]
STATE OF OHIO, MONROE COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
LELAND EISENBARTH, et al., )
) CASE NO. 13 MO 10
PLAINTIFFS-APPELLANTS/ )
CROSS-APPELLEES, )
)
VS. ) OPINION
)
DEAN REUSSER, et al., )
)
DEFENDANTS-APPELLEES/ )
CROSS-APPELLANTS. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas Court,
Case No. 2012-292.
JUDGMENT: Affirmed; Cross-Appeal Dismissed.
APPEARANCES:
For Plaintiffs-Appellants/ Attorney Craig Sweeney
Cross-Appellees: Attorney Richard Yoss
122 North Main Street
Woodsfield, Ohio 43793
For Defendants-Appellees/ Attorney Andrew Lycans
Cross-Appellants: Attorney Patrick Noser
225 North Market Street
P.O. Box 599
Wooster, Ohio 44691
JUDGES:
Hon. Joseph J. Vukovich
Hon. Gene Donofrio
Hon. Mary DeGenaro
Dated: August 28, 2014
[Cite as Eisenbarth v. Reusser, 2014-Ohio-3792.]
VUKOVICH, J.
{¶1} The Eisenbarth plaintiffs appeal the summary judgment granted by the
Monroe County Common Pleas Court in favor of the Reusser defendants. The
Reussers cross-appeal in the event this court agrees with the Eisenbarths’ argument
that the trial court erred in finding a savings event. The trial court found that the
Reussers’ one-half mineral interest in the minerals under the Eisenbarths’ land was
not abandoned under the 1989 Dormant Mineral Act and that a bonus paid under an
oil and gas lease must be evenly split between the Eisenbarths and the Reussers.
{¶2} The Eisenbarths first argue that an oil and gas lease is not a title
transaction and thus not a savings event or that their own act of signing the lease
cannot save the Reussers’ minerals from abandonment. We disagree and conclude
that a recorded oil and gas lease of all of the minerals can be a statutory savings
event.
{¶3} The Eisenbarths then argue that the 1974 recorded lease ceased to be
a savings event in 1994, urging that the statute uses a rolling twenty-year look-back
period rather than a fixed period. We uphold the trial court’s application of a fixed
look-back period and thus agree there was no abandonment under the 1989 DMA.
{¶4} Lastly, the Eisenbarths urge that the Reussers are not entitled to half of
the bonus under the lease because the grant of the exclusive right to lease to the
Eisenbarths should necessarily include the right to all bonus money. We disagree
and conclude that the court properly split the bonus in half just as the mineral interest
in split in half. For the following reasons, the Eisenbarths’ arguments are overruled,
the Reussers’ cross-appeal is dismissed, and the trial court’s judgment is affirmed.
STATEMENT OF THE CASE
{¶5} In 1954, William Eisenbarth transferred two tracts of land covering
approximately 153 acres in Monroe County to Paul and Ida Eisenbarth. The deed
reserved for William one-half of all minerals underlying the lands and all rights to
develop and remove those minerals. The right to lease the minerals, however, was
expressly given to Paul and Ida. William then transferred by royalty deed his half of
the mineral estate to his other child, Mildred Reusser. Paul and Ida entered various
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oil and gas leases in the years thereafter, the last being signed in 1973 and recorded
on January 23, 1974.
{¶6} In 1989, they transferred nearly 27 acres (tract II) to their son Keith in a
deed stating that it was subject to all reservations of record. When Paul died, his
interest in tract I was conveyed to Ida by a certificate of transfer filed in 1990, which
included the 1954 deed’s language on the mineral reservation and the right to lease.
When Ida died, a 1998 certificate of transfer was filed, which transferred tract I to her
three sons, Keith, Leland, and Michael (hereinafter the Eisenbarths) and included the
language from the 1954 deed. The Eisenbarths executed a joint and survivorship
deed for themselves, again repeating the aforementioned language.
{¶7} Mildred Reusser died in 2002, leaving her estate to the defendants
herein: Dean Reusser, Marilyn Ice, Wilda Fetty, Martha Maag (who then died leaving
her interest to her husband Robert Maag), Vernon Reusser, Paul Reusser, Davis
Reusser, and Dennis Reusser (hereinafter collectively referred to as the Reussers).
{¶8} In 2008, the Eisenbarths signed an oil and gas lease. In 2009, they
published a notice of abandonment of Mildred Reusser’s one-half interest in the
minerals, and the Reussers responded with a claim to preserve. In 2012, the
Eisenbarths signed an oil and gas lease with another company and received a
$766,250 signing bonus, half of which is being held in escrow.
{¶9} The Eisenbarths then filed the within lawsuit against the Reussers
seeking in pertinent part a declaration that the 1954 deed did not reserve the right to
bonus money and that the Reussers’ mineral interest is deemed abandoned under
the 1989 Dormant Mineral Act. The Reussers counterclaimed seeking in pertinent
part quiet title to their one-half mineral interest and half of the bonus money paid
under the 2012 lease. The parties filed cross motions for summary judgment.1
1
Below, the Eisenbarths argued abandonment under both the 1989 DMA and the 2006 DMA.
The Reussers initially contested the Eisenbarths’ ability to proceed under the 1989 DMA but make no
arguments on appeal that the 1989 DMA cannot be applied. Their final submission below suggested
they no longer contested the Eisenbarths’ position that any abandonment under the 1989 DMA was
self-executing and that the court could use that version to determine if the mineral interest was
abandoned. See Defendant’s Apr. 29, 2013 Reply at 11 (“Defendants have never argued that the
Dormant Mineral Act of 1989 was not a self-executing statute. Defendants have also never argued
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{¶10} On June 6, 2013, the trial court granted judgment to the Reussers,
quieting title to their one-half mineral interest underlying the two tracts and awarding
them half of the bonus money. The trial court found that the Reussers’ mineral
interest had not been abandoned as oil and gas lease over all of the minerals
recorded in 1974 was a savings event. The court stated that an oil and gas lease
conveys a determinable fee interest in the minerals that is subject to reverter in the
event there is no production or the lease expires, citing Bender v. Morgan,
Columbiana C.P. No. 2012-CV-378 (Mar. 20, 2013). The court also held that a grant
of the right to lease does not implicitly convey away the right to receive bonuses on
the minerals retained.
{¶11} The Eisenbarths filed a timely appeal. The Reussers cross-appealed
contesting the trial court’s initial conclusion that various surface deeds in the
Eisenbarths’ chain of title were not savings events because they merely repeated the
original reservation.
STATUTORY OVERVIEW
{¶12} Pursuant to former R.C. 5301.56(B)(1), a mineral interest held by a
person other than the surface owner of the land subject to the interest shall be
deemed abandoned and vested in the owner of the surface unless (a) the mineral
interest deals with coal, (b) the mineral interest is held by the government, or (c) a
savings event occurred within the preceding twenty years.
{¶13} The six savings events are as follows: (i) the mineral interest has been
the subject of a title transaction that has been filed or recorded in the recorder’s
office; (ii) there has been actual production or withdrawal by the holder; (iii) the holder
used the mineral interest for underground gas storage; (iv) a mining permit has been
that the Court could not consider whether the mineral interest could be deemed abandoned under the
1989 version of the Act.”), after conducting a case review of Texaco, Inc. v. Short, 454 U.S. 516, 533-
534, 102 S. Ct. 781, 70 L. Ed. 2d 738 (1982) (which case characterized the provision in Indiana’s
Mineral Lapse Act, that an interest shall be extinguished and ownership shall revert if unused for 20
years, as a self-executing feature that provides for automatic lapse and reversion). This court has
since concluded that prior abandonments under the 1989 DMA can still be formalized even after the
2006 amendments. Swartz v. Householder, 7th Dist. Nos. 13JE24, 13JE25, 2014-Ohio-2359; Walker
v. Shondrick-Nau, 7th Dist. No. 13NO402, 2014-Ohio-1499 (fka Walker v. Noon).
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issued to the holder; (v) a claim to preserve the mineral interest has been filed; or (vi)
a separately listed tax parcel number has been created. R.C. 5301.56(B)(1)(c)(i)-(vi).
{¶14} The effective date of this statute was March 22, 1989, but a grace
period was provided whereby a mineral interest shall not be deemed abandoned due
to a lack of (B)(1) circumstances until three years from the effective date of the
statute. R.C. 5301.56(B)(2). Another section provides that a mineral interest may be
preserved indefinitely from being abandoned by the occurrence of any of the savings
events in (B)(1)(c), including, but not limited to, successive filings of claims to
preserve mineral interests. R.C. 5301.56(D)(1).
ASSIGNMENT OF ERROR NUMBER ONE
{¶15} The first assignment of error set forth by the Eisenbarths provides:
{¶16} “The Trial Court erred in finding that an oil and gas lease is a ‘title
transaction’ as defined by ORC §5301.47.”
{¶17} As aforementioned, a mineral interest held by a person other than the
surface owner is not deemed abandoned if within the preceding twenty years: “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.” R.C. 5301.56(B)(1)(c)(i). The lease here was recorded in the county
recorder’s office. Notably, R.C. 5301.09 provides: “All leases, licenses, and
assignments thereof, or of any interest therein, given or made concerning lands or
tenements in this state, by which any right is granted to operate or to sink or drill
wells thereon for natural gas and petroleum or either, or pertaining thereto, shall be
filed for record and recorded in such lease record without delay, and shall not be
removed until recorded.”
{¶18} A title transaction is defined as: “any transaction affecting title to any
interest in land, including title by will or descent, title by tax deed, or by trustee's,
assignee's, guardian's, executor's, administrator's, or sheriff's deed, or decree of any
court, as well as warranty deed, quit claim deed, or mortgage.” R.C. 5301.47(F)
(applicable to Marketable Title Act in 5301.47-5301.56). Thus, the ultimate issue is
whether a one-half mineral interest was the subject of any transaction affecting title to
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any interest in land when the surface owner, who also owns half of the minerals and
possess the right to lease, entered into a recorded oil and gas lease over all of the
minerals.
{¶19} The Eisenbarths make various arguments in support of their contention
that a lease is not a title transaction. They posit that a lease is a mere contract and is
not a transaction affecting title to any interest in land, urging the trial court erred in
relying on Bender, which held that an oil and gas lease is a fee simple determinable
with a possibility of reverter. They note that after a lease is entered, the mineral
owner still has title and can transfer his interest in the minerals (subject to the lease).
They state that the lease only affected their own leasing rights, not the Reussers’ title
to their half of the minerals, relying on the general principle that a person cannot
convey his co-tenant’s title and emphasizing that the Reussers did not sign anything
affecting their interest. They also refer to a provision regarding leases in the
Marketable Title Act. See R.C. 5301.53(A) (preserving lessor’s right to reversion of
possession on lease expiration and lessee’s rights in lease except as per the DMA).
{¶20} The Reussers counter that said provision shows that a lease can affect
title to an interest in land and was enacted to prevent termination unless in
compliance with the DMA. The Reussers urge that a surface owner who owns half of
the minerals and has the executive right to lease owes a fiduciary duty to the non-
executive mineral owner and signs leases for the entire estate. They point to cases
involving the remedy of quiet title concerning oil and gas leases and ask how one
could seek quiet title if an oil and gas lease does not affect title to an interest in land.
The Reussers also note that the original bill for the 1989 DMA stated that a mineral
interest would be preserved if within the preceding 20 years “[t]he interest has been
conveyed, leased, transferred, or mortgaged by an instrument filed or recorded in the
recorder’s office of the county in which the lands are located.” They state that
instead of limiting coverage to these four specific verbs, the legislature adopted the
broader phrase “subject of a title transaction,” as title transaction was already defined
as “affecting title to an interest in land” followed by a non-exclusive list of examples.
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{¶21} As there is no Ohio appellate case law on the topic, a federal district
court has asked the Ohio Supreme Court to review the issue of whether an oil and
gas lease is a title transaction and the Supreme Court has accepted the certified
question for review and briefing was completed in June of 2014. Chesapeake
Exploration, L.L.C. v. Buell, Sup. Ct. No. 2014-0067 (from S.D. Ohio No. 2:12-CV-
00916). We considered staying our case pending a potential decision in that case
but have decided to proceed on the issue.
{¶22} There have been trial courts that have ruled on the issue. In the case
relied upon the trial court here, the surface owner argued that oil and gas leases
were not title transactions under R.C. 5301.47(F), but the trial court disagreed.
Bender v. Morgan, Columbiana C.P. No. 2012-CV-378 (Mar. 20, 2013). The Bender
Court pointed out that a title transaction must merely “affect” a land interest and
found that an oil and gas lease clearly affects the interest in the minerals. The
Bender court also found that an oil and gas lease created a vested estate in the
lands and conveyed a fee simple determinable to the oil and gas, subject to reverter
if there is no production or the lease otherwise expires. Id., citing Harris v. Ohio Oil
Co., 57 Ohio St. 118, 48 N.E. 502 (1897) and Kramer v. PAC Drilling & Oil, 197 Ohio
App.3d 554, 2011-Ohio-6750, 968 N.E.2d 64, ¶ 11 (9th Dist.) (a free gas case).
{¶23} In Harris, the Supreme Court stated that an oil and gas lease was more
than a mere license as it created a vested, though limited, estate in the lands for the
purposes named in the lease. Harris, 57 Ohio St. at 129-130. The Ninth District’s
Kramer case relied upon the Harris holding and a Texas case stating that an oil and
gas lease is not a “lease” in the traditional sense of a surface lease because in a
typical oil or gas lease, the lessor grants a fee simple determinable interest to the
lessee, who is granted ownership in all minerals in place that the lessor purported to
lease, subject to the possibility of reverter upon the occurrence of events that the
lease specifies will cause termination of the estate. See Kramer, 197 Ohio App. 3d
554 at ¶ 11, citing Natural Gas Pipeline Co. of Am. v. Pool, 124 S.W.3d 188, 192, 47
Tex. Sup. Ct. J. 153 (2003). The Ninth District also cited Moore, where the Supreme
Court stated: “the creation of a separate interest in the mineral with the right to
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remove the same, whether by deed, grant, lease, reservation, or exception, unless
expressly restricted, confers upon the owner of the mineral a fee-simple estate, which
is, of course, determinable upon the exhaustion of the mine.” Moore v. Indian Camp
Coal Co., 75 Ohio St. 493, 499, 80 N.E. 6 (1907) (permitting severance of the
ownership of the surface from the ownership of the different strata of mineral
underlying the surface). See also Tisdale v. Walla, 11th Dist. No. 94-A-0008 (Dec.
23, 1994) (lease was determinable fee interest, noting the habendum term was for a
number of years and then “as long thereafter as * * *”).
{¶24} We recognize that after Harris, the Ohio Supreme Court characterized
oil and gas as migratory and found that a document conveying those minerals and
the right to obtain them represented something other than the grant of real property.
Back v. Ohio Fuel Gas Co., 160 Ohio St. 81, 86, 113 N.E.2d 865 (1953). Yet, that
document was said to be a license. Id. at 89. And, the syllabus did not contain this
statement as that case dealt with merely whether the document provided constructive
notice to a purchaser where it was recorded in the lease records instead of the deed
records.
{¶25} Regardless, this case does not deal with the Dormant Mineral Act,
which provides a specific statutory test. That is, if an oil and gas lease is considered
a determinable fee, it may be easier to categorize as a savings event; however, the
statutory question under the 1989 DMA is not whether a fee was transferred. See
McLaughlin v. CNX Gas Co., S.D. Ohio No. 5:13CV1502 (Dec. 13, 2013) (finding that
Back does not answer the question here and concluding that an oil and gas lease is
a title transaction). Compare R.C. 5301.56(A)(3) (2006 DMA language adding that a
mineral interest “means a fee interest” but then also stating “regardless of how the
interest is created and of the form of the interest”). The question here is whether the
mineral interest has been the subject of any transaction affecting title to any interest
in land that has been filed or recorded with the county recorder. See R.C. 5301.47(F)
combined with R.C. 5301.56(B)(1)(c)(i).
{¶26} The Eisenbarths make statements about how they are unable to convey
the Reussers’ actual title to the mineral right, citing to a Fourth District case which
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stated the general principle that a surface owner cannot defeat title of the mineral
rights by signing an oil and gas lease. See Morgenstern v. National City Bank, 4th
Dist. No. 85CA23 (Jan. 27, 1987). Here, however, the surface owner owned half of
the mineral estate and had the right to sign oil and gas leases covering all the
mineral rights, and we are not dealing with an attempt to defeat title or to convey
more rights than the Eisenbarths were permitted to transfer.
{¶27} In Dodd, this court concluded that merely repeating a prior mineral
reservation in a surface deed is not a savings event because that reserved mineral
interest was not the “subject of” that title transaction. Dodd v. Croskey, 7th Dist. No.
12HA6, 2103-Ohio-4257. We applied the common definition of the word “subject” as
a topic of interest, primary theme, or basis for action and concluded that the minerals
were not a primary purpose of the surface transfer. Id. at ¶ 48. We also mentioned,
in the context of a surface deed, that the grantor would have to be conveying or
retaining the mineral interest for that interest to be the “subject of” that particular title
transaction. Id. That case involved a deed and thus a title transaction clearly
existed. The question there revolved solely around whether the mineral interest was
the subject of that deed.
{¶28} In the present case, the subject of the oil and gas lease was the mineral
interest under the surface of the Eisenbarths’ property, an undivided half of which
was owned by the Reusser branch of the family. The question here revolves around
whether the oil and gas lease fits within the definition of a title transaction.
{¶29} The statute says the mineral interest must be the subject of a
transaction affecting title to any interest in land without limiting the title transaction to
the total conveyance of a title. R.C. 5301.47(F). Notably, a mortgage does not
transfer away title. See Levin v. Carney, 161 Ohio St. 513, 520, 120 N.E.2d 92
(1954) (the legal and equitable title to the real estate remains in the mortgagor so
long as conditions remain unbroken). See also Blakely v. Capitan, 34 Ohio App. 3d
46, 48, 516 N.E.2d 248 (11th Dist.1986) (a 1968 court order validating a 1941
residential-only use restrictions falls under the definition of a title transaction in R.C.
3501.47(F) thus concluding that the court decree affected the title to an interest in
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land even though title did not transfer). Still, a mortgage is specifically enumerated in
the statute’s non-exhaustive list of examples of title transactions, i.e. a mortgage is
an example of a transaction affecting title to any interest in land.
{¶30} A recorded oil and gas lease is a transaction that similarly affects title to
an interest in land. It remains with the realty if title is transferred during its terms; it
would not only follow the surface estate but would also follow the mineral estate upon
any transfer. The Supreme Court has stated that an oil lease is an encumbrance and
thus its removal would be required under an offer to provide title “free and clear of
liens and encumbrances.” Karas v. Brogan, 55 Ohio St. 2d 128, 378 N.E.2d 470
(1978). As such a lease is considered an encumbrance on a title, we conclude that it
falls into the definition of “any transaction affecting title to any interest in land.”
{¶31} The fact that the Eisenbarths signed and recorded the lease and thus
essentially performed the savings event for the Reussers does not prevent the
transaction from being considered as a potential savings event. The Eisenbarths had
the executive right to sign leases over the entire mineral estate. Thus, when they
signed, it affected the entire estate and its minerals. There is no requirement of a
voluntary act; a court decree may not be “voluntary,” but a court decree is specifically
listed as an example of a title transaction. See Blakely, 34 Ohio App. 3d at 48. (And,
since the right to lease was voluntarily granted at the original reservation, the
subsequent leases could be considered voluntary transactions affecting the minerals
in any event.)
{¶32} In sum, the Eisenbarths were provided the right to lease by the original
reservation so that a lease they sign affects both their mineral interest and the
Reussers’ mineral interest. All of the minerals could be extracted, and the entire
mineral estate (not just the Eisenbarths’ half) was subject to a lease transaction that
was recorded. The mineral interest was a subject of a transaction that affected an
interest in land. For all of the foregoing reasons, we conclude that a recorded oil and
gas lease over the minerals sought to be abandoned can be a savings event. Accord
McLaughlin v. CNX Gas Co., S.D. Ohio No. 5:13CV1502 (Dec. 13, 2013). We
overrule this assignment of error and uphold the trial court’s decision that the oil and
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gas lease recorded in 1974 can qualify as a savings event (if it falls within the
relevant look-back period, which leads to the next assignment of error).
ASSIGNMENT OF ERROR NUMBER TWO
{¶33} The Eisenbarths’ second assignment of error provides:
{¶34} “The Trial Court erred in holding that the severed oil and gas interest
was not abandoned under the previous version of ORC §5301.56 (effective from
March 22, 1989 through June 30, 2006).”
{¶35} The version of the Dormant Mineral Act being utilized herein was
enacted on March 22, 1989. It provides that a mineral interest held by anyone other
than the surface owner shall be deemed abandoned and vested in the surface owner
unless certain listed circumstances exist, one of which is: “[w]ithin the preceding
twenty years * * * the mineral interest has been the subject of a title transaction” that
has been filed in the county recorder’s office. R.C. 5301.56(B)(1)(c)(i). Division
(B)(2) goes on to state that a mineral interest shall not be deemed abandoned under
(B)(1) due to the lack of applicable circumstances until three years from the effective
date of this section. R.C. 5301.56(B)(2).
{¶36} The trial court used a fixed look-back period to ascertain the existence
of a savings event, looking back twenty years from the date of enactment (with
acknowledgement that the mineral holders would also have the three-year grace
period during which a savings event could also occur). The court found that the 1973
oil and gas lease was recorded in 1974 and thus fell within the pertinent twenty-year
period.
{¶37} The Eisenbarths argue that the 1989 version of DMA was in effect from
March 22, 1989 until June 30, 2006 (when the new version changed future look-back
periods to twenty years immediately preceding the date on which the newly-created
notice of abandonment is served or published). The Eisenbarths urge that there is a
rolling twenty-year look-back period under the 1989 statute, meaning that the surface
owner can pick any date that exists between March 22, 1989 and June 30, 2006 and
then look back 20 years from that date (with the grace period applying in the three
years after enactment). They then state that the January 1974 recordation of the oil
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and gas lease would have expired as a savings event in January of 1994, resulting in
automatic abandonment at that time.
{¶38} The Reussers initially contend that the Eisenbarths waived or invited
any error because they gave multiple options below as to the look-back period.
However, one can place multiple arguments before a trial court as to the proper
period and alternatively argue why they would win under any period. And, the
Eisenbarths’ did not argue for a fixed look-back period but stated that there were no
savings events in the first twenty-year period (looking back from the 1989 effective
date) or in what they considered to be the last twenty-year period (looking back from
June 30, 2006) and thus none within any applicable period.
{¶39} The Reussers substantive counterargument is that under the language
of the statute, it is unreasonable to allow the surface owner to choose any random
date from which to look back. They note that the legislature stated merely,
“preceding twenty years,” not “any twenty-year period.” They suggest that (B)(1)’s
bare statement “[w]ithin the preceding twenty years” read with (B)(2)’s provision of no
abandonment under (B)(1) until three years from the effective date of this section
shows that the “preceding twenty years” language establishes only one look-back
period, looking back only from the effective date of the section.
{¶40} The Eisenbarths reply that the legislature did not state “twenty years
from the date of the enactment.” The Eisenbarths point to division (D)(1), which
states: “A mineral interest may be preserved indefinitely from being deemed
abandoned under division (B)(1) by the occurrence of any of the circumstances
described in division (B)(1)(c) of this section, including but not limited to, successive
filings of claims to preserve mineral interests under division (C) of this section.” R.C.
5301.56(D)(1). They urge that the statute’s allowance of successive claims to
preserve shows that it covers more than one fixed twenty-year period.
{¶41} The Fifth District has applied the twenty-year period preceding the date
of enactment. Riddel v. Layman, 5th Dist. No. 94CA114 (July 10, 1995). In that
case, a 1965 deed reserving 49% of the mineral interest was recorded in 1973. In
1994, a subsequent surface owner sought to have that mineral interest deemed
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abandoned. The Fifth District stated that the original reservation was a title
transaction and it was recorded so it was a savings event as of 1973. The court
concluded: “Finally, the title transaction must have occurred within the preceding
twenty years from the enactment of the statute, which occurred on March 22, 1989.
Appellee Layman recorded the deed on June 12, 1973, well within the preceding
twenty years from the date the statute was enacted.” Id.
{¶42} The Reussers ask that we adopt this holding as a statement that there
is only one look-back and that is from the effective date (although, the three year
grace period would also have to be implemented). The Eisenbarths point out that the
49% mineral rights owner filed a claim to preserve. From the facts of the Riddel
decision, it can only be determined that this occurred in or after 1990; the
Eisenbarths look outside of the decision and state that the claim to preserve was filed
on May 28, 1992. The Eisenbarths thus conclude that the Riddel court was not
concerned with looking forward due to a claim to preserve being filed within twenty
years of the June 1973 recordation of the deed and the only concern was whether
the recordation in 1973 or the signing in 1965 was the pertinent consideration.
{¶43} The parties also discuss how a trial court looked back from March 22,
1992 (the date of enactment plus the three year grace period) and found
abandonment as of that date. Wendt v. Dickerson, Tuscarawas C.P. No. 2012-CV-
02-133 (Feb. 21, 2013). The Eisenbarths reiterate their position that where
abandonment already occurred in the earliest period, there is no need for the court to
look at later periods.
{¶44} The Columbiana County Common Pleas Court in Bender looked back
twenty years from enactment of the 1989 DMA and found a 1988 lease constituted a
savings event and then looked forward twenty years from the 1988 lease and found
that a prospective twenty year period was interrupted by the 2006 amendments,
which now require notice. That case was then settled and dismissed.
{¶45} If the legislature intended that a saving events occurring in the original
look-back period would last only twenty years (i.e. a rolling look-back), they did not
clearly state this. The statute does not specify that a savings event must occur every
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twenty years from the last savings event. Notably, Indiana’s statute discusses
abandonment of a mineral interest “if unused for a period of twenty years” (and “use”
is defined with the various savings events). Ohio’s OVI statutory look-back period
states, “within twenty years of the offense.” Ohio’s 2006 DMA states within twenty
years immediately preceding the date on which notice is served or published.
{¶46} Ohio’s 1989 DMA, however, merely states that the interest is deemed
abandoned if none of the savings events occurred within the preceding twenty years.
The question is: within the preceding twenty years of what? The Eisenbarths’
position means that the answer to this question is: the preceding twenty years of
every single day after the statute’s enactment (until the new statute was enacted).
{¶47} In considering this question, we ask: would a mineral rights owner be
unreasonable in reading the statute on March 22, 1989, the day of enactment and
saying, “I have a savings event in the past twenty years as I just bought these
mineral rights in 1974; so, I’m safe,” without realizing that they had to reassert their
interest by 1994 (5 years after enactment and 2 years after the grace period)?
{¶48} We credit such thoughts as reasonable, and we conclude that the
statute is ambiguous as to whether the look-back period is anything but fixed. The
use of the words “preceding twenty years,” without stating the preceding twenty years
of what, does not create a rolling look-back period. Rather, the imposition of
successive look-back periods would have required language that the mineral interest
is deemed abandoned and vested if no savings events occurred within twenty years
after the last savings event.
{¶49} The mention of successive claims to preserve and indefinite
preservation in R.C. 5301.56(D)(1) could merely be a reference to any preservations
that were filed under the OMTA as existed prior to the 1989 DMA in order to show
that a new claim to preserve can still be filed if the old one was filed outside of the
new twenty-year look-back. There is other statutory language connecting the twenty-
year look-back period to the date of enactment as (B)(2)’s grace period provides
three years from the date of enactment before items will be deemed abandoned.
R.C. 5301.56(B)(2). As forfeitures are abhorred in the law, we refuse to extend the
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look-back period from fixed to rolling. See generally State ex rel. Falke v.
Montgomery Cty. Resid. Dev., Inc., 40 Ohio St. 3d 71, 73, 531 N.E.2d 688 (1988) (the
law abhors a forfeiture).
{¶50} As to the Eisenbarths’ query of why the legislature would enact a “dead
letter law,” the point of the 1989 DMA may have been to give three years to eliminate
or refresh stale mineral claims in the original look-back period, and the legislature
planned to enact a new version for the next twenty-year period if public policy
reasons for abandonment still applied in the future. And, the legislature did then
enact the 2006 DMA within twenty years of the former DMA, adding a new look-back,
twenty years from the service of notice. (Or, the intent was a multiple future periods,
but that intent was not properly expressed.)
{¶51} This assignment of error is overruled as the trial court properly applied
a fixed look-back period. Because the oil and gas lease here was a savings event,
the Reussers’ conditional argument, that transfers between surface owners should
count as title transactions, need not be addressed. See Appellee’s Brief at 28. See
also Pang v. Minch, 53 Ohio St. 3d 186, 199-200, 559 N.E.2d 1313 (1990). In
accordance, the Reussers’ cross-appeal, which attempts to distinguish Dodd v.
Croskey, 7th Dist. No. 12HA6, 2013-Ohio-4257, is dismissed.
ASSIGNMENT OF ERROR NUMBER THREE
{¶52} The final assignment of error set forth by the Eisenbarths contends that,
even if there was no abandonment:
{¶53} “The Trial Court erred in finding that Defendants-Appellees are entitled
to a portion of the bonus monies received as a result of the exercise of the oil and
gas leasing rights.”
{¶54} Briefly, the Eisenbarths claim that the terms of their new lease itself do
not provide for the Reussers and that the Eisenbarths are the only intended
beneficiaries. The Reussers counter that the Eisenbarths did not make this argument
below. Moreover, as the Reussers respond, one cannot terminate another’s rights by
signing a lease with someone else. It was also admitted at oral argument that if there
was production, the Reussers would be entitled to share in the royalties.
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{¶55} The Eisenbarths’ main claim here is that as the owners of the exclusive
right to lease the minerals, they are entitled to the bonus earned by their exercising
their right to sign leases. They urge that the reservation must be construed in favor
of the grantee and against the grantor, citing Pure Oil Co. v. Kindall, 116 Ohio St. 3d
188, 156 N.E. 119 (1927).
{¶56} However, that general principal applies only when the deed is
ambiguous. See id. at 202-203. In Pure Oil, a deed reserved to the grantors and
their heirs and assigns forever a percentage of “all royalty in the oil, gas and
gasoline, produced * * *”. The Court concluded that this reserved a royalty interest
only, not any interest in the actual underground minerals. Id. at 200 (reservation of
royalties and rentals is not equivalent of reserving corpus of minerals). The Court
noted that the reservation did not use common language to reserve the mineral
estate, such as, “reserving and excepting all the oil and gas lying under and within
the premises hereby conveyed.” Id. at 202. The latter language is more akin to the
language used herein.
{¶57} The Eisenbarths also cite a Seventh District case and equate the
Reussers’ situation to a non-participating royalty interest with no right to bonuses.
See Buegel v. Amos, 7th Dist. No. 577 (June 5, 1984). However, Buegel is
distinguishable. In that case, the grantor reserved half “of all Royalty oil and gas * *
*.” Id. The court stated that a non-participating royalty interest includes features
such as: no charge for share of discovery and production, no right to act to discover
or produce, no right to grant a lease, and no right to bonuses and delay payments.
Id. (also stating that a royalty is the return on the oil or gas removed from the
premises). Just prior to stating this, the court explained that it was speaking of an
interest that was designated “royalty” and was not an interest in the minerals in situ.
Id., citing Annotation, 4 A.L.R. 2d 505.
{¶58} Here, the original reservation provided that the grantor reserved “one
half of all oil and gas and all other minerals underling said lands together with all
rights to develop any or all of said one-half oil, gas and other minerals and to remove
the same from the premises. The right to lease however is given to [the grantees].”
-16-
Thus, the grantor’s reservation was not labeled as merely half of the royalty in the oil
and gas as was the grantor’s reservation in Buegel. Also different than Buegel is the
language providing the grantor the additional right to develop and remove half of the
minerals. Thus, the discussion in Buegel does not favor the Eisenbarths’ position.
{¶59} We conclude that the reservation was more than the reservation of a
non-participating royalty interest. There was no mention of a “royalty” or a right to a
share in oil and gas “produced.” The deed reserved half of “all” minerals “underlying
the land.” It reserved a large fractional share, which is sometimes a consideration. It
reserved the right to develop and remove half, which involves ingress and egress
rights. The remaining question is whether a grantor’s reservation of a one-half
mineral interest and a grantee’s obtaining the other half plus the right to lease allows
bonuses to be collected by the grantee alone, i.e. must a half mineral reservation that
provides the grantee with the right to lease specifically reserve the right to one-half
bonuses in order for the grantor to retain that right.
{¶60} The Reussers point to a common premise that the right to lease is
merely “one stick the bundle” of the five attributes of a severed mineral estate: right
to develop (with ingress and egress), right to receive bonus payments, right to
receive delay rentals, right to receive royalty payments, and right to lease (known as
the executive right). See, e.g., Lesley v. Veterans Land Bd., 352 S.W.3d 479, 54
Tex. Sup. Ct. J. 1705 (2011), fn.1. The Reussers continue that the conveyance of
one stick does not imply the conveyance of all sticks, urging that the reservation must
indicate the surrender of the right to participate in signing bonuses.
{¶61} It has been stated that the various incidents of ownership of a mineral
interest can be separately transferred. See Sharp v. Gayler, 737 P.2d 120, ¶5-6
(Ok.App.1987), citing various treatises (and concluding that a half mineral interest
owner who conveyed to other the right to explore and lease retained right to signing
bonus). And, in general, it does not appear disputed that the characteristics of
owning a half of a mineral estate in situ remain with the grantor (for his one half)
unless otherwise stated. See id. See also Day & Co., Inc. v. Texland Petroleum,
Inc., 786 S.W.2d 667 (Tex.1990), fn.1 (when a mineral interest is reserved or
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excepted in a deed, the executive right covering that interest is also retained unless
specifically conveyed); Houston v. Moore Investment Co., 559 S.W.2d 850, 852
(Tex.Civ.App.1977) (reservation of half of minerals retains incidents ownership
except those specifically granted).
{¶62} Here, the deed did state otherwise; it conveyed away the right to lease.
This executive right is merely “one stick in the bundle” of conveyable rights. We
agree that the other rights existing in the mineral estate that were not specifically
granted were retained (as to the grantor’s one-half). See Sharp, 737 P.2d 120 at ¶5-
6 (half mineral interest owner who conveyed to other the right to explore and lease
retained right to signing bonus); Houston, 559 S.W.2d at 852 (the reservation of half
of the minerals will retain the incidents of ownership except those specifically
granted); Burns v. Audas, 312 S.W.2d 417 (Tex.Civ.App.1958) (reservation of part of
mineral estate and conveying the surface and the right to lease did not deprive
grantor of share of bonus but merely transferred the executive right).
{¶63} We conclude that merely because a co-owner of minerals in place was
given the executive right does not automatically leave the non-executive grantor with
no right to receive bonus payments. See Charles J. Meyers & Pamela A. Ray,
Perpetual Royalty and Other Non-Executive Interests in Minerals, 29 Rocky Mountain
Min. L. Inst. 651 (1983) (defining a non-executive mineral interest owner as one
entitled to participate in lease benefits, with no right to execute leases and stating
that a mineral interest stripped of the executive right retains the full benefits of an oil
and gas lease, subject to the proportion of mineral interest owned). Accordingly, the
right to share in any bonus was retained with the grantor’s half of the minerals.
{¶64} For the foregoing reasons, the Eisenbarths’ three assignments of error
are overruled. The trial court’s judgment finding the Reussers did not abandon their
mineral interest and that they are entitled to half of the bonus money is affirmed. The
cross-appeal is dismissed.
Donofrio, J., concurs.
DeGenaro, P.J., concurs in judgment only with concurring in judgment only opinion.
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DeGenaro, P.J., concurring in judgment only with concurring in judgment only
opinion.
{¶65} I agree with the majority's analysis that a recorded oil and gas lease is
a mineral interest that constitutes a transaction affecting title to an interest in land. I
also agree that because the Eisenbarths held the executive right to execute a lease
for the mineral rights, any lease the Eisenbarths executed constitutes a savings event
not only for them but for the Reussers as well. Finally, I agree that the Reussers are
entitled to share in the bonus. But I disagree with the majority that the 1989 version
of Ohio's Dormant Mineral Act (ODMA), R.C. 5301.56, controls resolution of this
case. Instead, the 2006 version applies, and as the Reussers timely filed a
preservation of claim pursuant to R.C. 5301.56(H), they continue to hold the severed
mineral rights. As this is the same resolution reached by the majority, I respectfully
concur in judgment only.
{¶66} Moreover, I disagree with the manner in which the majority has
interpreted the 1989 ODMA. Because R.C. 5302.56(D)(1) refers to successive
filings, the 1989 ODMA contemplated that the holder of severed mineral rights was
required to renew that interest of record every 20 years. Thus, the Reussers were
required to make some kind of successive filing before the initial 20 year period
expired. Because they failed to do so, by operation of the 1989 ODMA, the severed
mineral rights reverted back to the Eisenbarths on January 24, 1994. Applying the
majority's rationale that the 1989 ODMA is an automatic self-executing statute, the
2008 oil and gas lease cannot constitute a savings event for the Reussers because
they were no longer holders of mineral rights that could be preserved as of that date.
Although first and foremost I disagree with the majority's decision that the 1989
statute governs here, secondarily I believe their 1989 ODMA analysis is itself flawed.
{¶67} The ambiguity of the 1989 version of the ODMA is readily apparent.
Courts are guided by canons of statutory construction when asked to construe
ambiguous statutory language in order to decipher legislative intent. But given the
unique procedural circumstances this case presents, namely, construing an
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ambiguous statute after it has been amended to remove the ambiguity, we need not
resort to those canons in order to glean that intent. By virtue of the 2006 ODMA, we
have the rare benefit of the General Assembly's statement of its intent with respect to
the ambiguous language of the 1989 ODMA. That alone dictates that the 1989
version is no longer controlling; to decide otherwise makes the enactment of the 2006
ODMA meaningless.
{¶68} This is the third in a series of cases addressing this district's resolution
of the following legal question: Which version of R.C. 5301.56—that enacted in 1989
or 2006—controls abandonment of severed mineral rights where: a) the mineral
rights were severed and the surface owner's fee interest was acquired before or
during the time frame when the 1989 ODMA was in effect; and b) the surface owner
did not claim the mineral rights were abandoned until after the effective date of the
2006 ODMA? Following two recent unanimous decisions by the same three judge
panel in Walker v. Shondrick–Nau, 7th Dist. No. 13 NO 402, 2014-Ohio-1499 (Apr. 3,
2014) (fka Walker v. Noon); and Swartz v. Householder, 7th Dist. Nos. 13 JE 24, 13
JE 25, 2014-Ohio-2359, --- N.E.3d --- (June 2, 2014), the majority of the present
panel reaffirms that in these circumstances the 1989 ODMA controls.
{¶69} As this is my first opportunity to consider an issue of first impression in
this district and in Ohio, I find more persuasive and consistent with Ohio law the trial
court's analysis in Dahlgren v. Brown Farm Props., LLC., Carroll C.P. No. 2013 CVH
274455, holding that the 2006 ODMA controls in these circumstances, which was
rejected by Walker and Swartz. Viewed from the perspective that the 2006 ODMA is
in effect, coupled with the General Assembly's expressed reasons for making those
amendments, and that statutes in derogation of common law must be strictly
construed to preserve individual property rights, the phrase 'deemed abandoned and
vested' in R.C. 5301.56(B)(1), should be construed as defining an inchoate right.
{¶70} The 2006 version of R.C. 5301.56 does what the General Assembly
intended the 1989 ODMA to do but failed to achieve: balance the complementary
policy goals of creating a reliable record chain of title via the Ohio Marketable Title
Act (OMTA) statutory scheme—which includes the ODMA—and facilitate economic
-20-
use of mineral rights. The Ohio General Assembly recognized that the 1989 ODMA
had technical problems and was thus seldom used. Specifically, the 1989 ODMA
failed to define how to calculate the 20 year look-back period before allowable
vesting can occur—to use the General Assembly's verbiage—and define the process
to reunite the interests in the surface owner. The 2006 ODMA corrected inoperable,
not merely ambiguous, statutory language. The current version of R.C. 5301.56 not
only clarifies the process, it specifies the look-back period trigger and mandates
notice to the holder before the mineral rights are deemed abandoned; only then can
allowable vesting occur with the surface owner.
{¶71} Given the Ohio General Assembly's expressed purpose of the 2006
ODMA and the clear, unambiguous language of its modifications, the majority
incorrectly validated the trial court's resolution of the parties' interests to the severed
mineral rights pursuant to the 1989 ODMA. Thus, I concur in the ultimate conclusion
that the Reussers did not abandon their mineral rights and would affirm the trial court,
but do so pursuant to the 2006 ODMA.
{¶72} Moreover, the majority's substantive 1989 ODMA analysis is flawed.
Pursuant to the 1989 ODMA, the January 23, 1974 lease constitutes a savings event
which preserved the Reussers' mineral rights for the statutory 20 year period, here
until January 23, 1994. However, R.C. 5301.56(D)(1) provides the holder of severed
mineral rights can preserve their mineral rights for another 20 year period by filing
successive claims. During the initial statutory 20 year period, the Reussers failed to
file a successive claim to preserve their mineral rights. Applying the majority's
rationale that the 1989 ODMA is self-executing and was still in effect, the Reussers'
mineral rights were automatically abandoned and vested in the Eisenbarths as of
January 24, 1994. Thus, the 2008 oil and gas lease could not constitute a savings
event for the Reussers because they were no longer holders of mineral rights that
could be preserved as of that date.
{¶73} Before turning to my analysis on the merits, several preliminary issues
for contextual purposes need to be addressed: first, the extent of appellate de novo
review where the trial court comes to the correct result but through erroneous
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analysis; second, the nature of the severed mineral interest and how that is affected
by principles of vesting and forfeiture; and finally, the persuasive or precedential
value of law outside of Ohio when construing R.C. 5301.56.
De Novo Review of Correct Judgment with Erroneous Reasoning
{¶74} Because the procedural posture of this case is an appeal of a summary
judgment, which in turn is dependent upon determining which version of R.C.
5301.56 to apply, these present questions of law which are reviewed de novo. Allied
Erecting & Dismantling Co., Inc. v. Youngstown, 151 Ohio App. 3d 16, 2002-Ohio-
5179, 783 N.E.2d 523, ¶20.
{¶75} Under de novo review, an appellate court is not bound by a trial court's
rationale, but will nonetheless affirm where the judgment is still correct when the
appellate court applies the controlling law and proper analysis. In State v. Garrett,
7th Dist. No. 06 BE 67, 2007-Ohio-7212, the trial court dismissed a post-conviction
petition on the merits. This court affirmed but on other grounds, sua sponte
reasoning the correct basis for dismissal was the trial court lacked jurisdiction to
consider the merits because the petition was untimely, and declining to address the
merit arguments raised by the parties on appeal. Id. at ¶15, citing State v. Peagler,
76 Ohio St. 3d 496, 501, 668 N.E.2d 489 (1996) (appellate court may resolve issue
on different grounds than used by the trial court so long as the issue was raised in
the trial court); Agricultural Ins. Co. v. Constantine, 144 Ohio St. 275, 284, 58 N.E.2d
658 (1944) (erroneous reasoning by the trial court does not warrant reversal of an
otherwise correct judgment). Stated another way, an appellate court will affirm on
other grounds a legally correct judgment, reasoning that no prejudice results from the
trial court reaching the right result albeit for the wrong reason. Reynolds v. Budzik,
134 Ohio App. 3d 844, 732 N.E.2d 485, fn. 3 (6th Dist.1999) fn. 3, citing Newcomb v.
Dredge, 105 Ohio App. 417, 424, 152 N.E.2d 801 (2d Dist.1957); State v. Payton,
124 Ohio App. 3d 552, 557, 706 N.E.2d 842 (1997).
{¶76} Moreover, "an appellate court is bound to affirm a trial court's judgment
that is legally correct on other grounds regardless of the arguments raised or not
raised by the parties." State v. Helms, 7th Dist. No. 08 MA 199, 2013-Ohio-5530,
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¶10 (Vukovich, J. concurring), citing State v. Ingram, 9th Dist. No. 25843, 2012-Ohio-
333, ¶7.
{¶77} The majority notes at footnote 1 that that the Eisenbarths sought
abandonment under both versions of R.C. 5301.56 and that the Reussers contested
the applicability of the 1989 ODMA, placing the question of which version of R.C.
5301.56 controls squarely before the trial court. The majority goes on to suggest that
it appears the Reussers no longer take that position. Regardless, the issue can be
considered on appeal, consistent with the decisions above. We are not bound by the
trial court's or the parties' rationales when conducting de novo review of questions of
law, including determining which version of a statute is controlling.
Nature of Interest, Forfeiture, Vesting and Laches
{¶78} Central to this appeal is resolution of this question of law: how and
when a severed mineral right becomes a vested right, and the process to be followed
to reunite that vested right with the surface fee interest. A fee simple interest—which
includes severed mineral rights—under common law "cannot be extinguished or
abandoned by nonuse, and it is not necessary to rerecord or to maintain current
property records in order to preserve an ownership interest in minerals."2 An
individual's vested right—created by common law or statute—has been generally
defined by the Ohio Supreme Court as being in essence a property right, which is to
be recognized and protected by the state from arbitrary deprivation; a vested right is
more than a mere expectation or interest in the continuity of current common or
statutory law; because it completely and definitely belongs to the individual it cannot
be impaired or divested absent the individual's consent. State ex rel. Jordan v.
Indus. Comm., 120 Ohio St. 3d 412, 2008-Ohio-6137, 900 N.E.2d 150, ¶9; Walker at
¶40. The legal weight a vested right carries is reinforced by the axiom ingrained in
Ohio common law that forfeiture is not favored in law or in equity. State ex rel.
Lukens v. Industrial Commission, 143 Ohio St. 609, 611, 56 N.E.2d 216 (1944).
2
Dahlgren, Carroll C.P. No. 2013 CVH 274455, at *8, quoting the Prefatory Note of the
Uniform Dormant Interests Act, approved by the National Conference of Commissioners on Uniform
State Laws in 1986, approved by the A.B.A. on February 16, 1987.
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{¶79} Prior to the enactment of the 1989 ODMA, severed mineral rights were
governed by Ohio case law. Thus, it is necessary to refine the question of law before
us further. Specifically, we must determine which body of law controls determination
of vesting, the preexisting common law or a choice between statutory options, i.e.,
the 1989 or 2006 ODMA, particularly where the surface owner acquired their fee
interest and/or the litigation was commenced after the effective date of the 2006
statute.3
{¶80} "Ordinarily, it is the rule that statutes in derogation of the common law
are to be strictly construed." Armstrong v. Marathon Oil Co., 32 Ohio St. 3d 397, 414,
513 N.E.2d 776, 792 (1987). "[S]tatutes imposing restrictions upon the use of private
property, in derogation of private property rights, must be strictly construed.
Whenever possible, such statutes must be construed so as to avoid a forfeiture of
property. No forfeiture may be ordered unless the expression of the law is clear and
the intent of the legislature manifest." State v. Lilliock, 70 Ohio St. 2d 23, 26, 434
N.E.2d 723 (1982). "The law requires that we favor individual property rights when
interpreting forfeiture statutes." Ohio Dept. of Liquor Control v. Sons of Italy Lodge
0917, 65 Ohio St. 3d 532, 534, 605 N.E.2d 368 (1992); Dodd v. Croskey, 7th Dist. No.
12 HA 6, 2013-Ohio-4257, discretionary appeal accepted, 138 Ohio St. 3d 1432,
2014-Ohio-889, 4 N.E.3d 1050.
{¶81} Given Ohio's proscription against forfeiture and accordingly the duty
imposed upon courts to strictly construe statutes to favor individual property rights
and avoid forfeiture, I disagree with how Walker and Swartz have construed the Ohio
Supreme Court's holding in State ex. rel. Jordan with respect to vested rights. The
majority has adopted Walker's holding that the 1989 ODMA was self-executing and
given that character can be used to formalize ownership of the severed mineral rights
even after the 2006 ODMA took effect, and affirmed Walker's analysis of what the
3
Although the severed mineral rights holders argued the general rule that the version of a
statute in effect should control resolution of a case, that the surface owners did not acquire their
interest until after the 2006 ODMA took effect, and that their predecessors in interest failed to quiet title
while the 1989 ODMA was in effect, the analysis in Walker ignored these arguments, instead resolving
the appeal based upon retroactivity and vesting principles, the latter concept having been misapplied.
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General Assembly meant by the phrase 'deemed abandoned and vested' in R.C.
5301.56(B). Majority, supra, at ¶9, footnote 1; Walker at ¶41. In other words, the
majority is overwriting the language of the statute by replacing the word 'deemed'
with 'automatic'. Both Walker and Swartz held that by virtue of the holders’ inaction,
the surface owners were automatically, completely and definitely vested with the
formerly severed mineral rights by operation of the self-executing 1989 ODMA before
the 2006 ODMA took effect, reasoning that doing so would improperly divest the
surface owners of their statutorily defined vested interest in the now reunited mineral
rights. Walker at ¶41, Swartz at ¶27-29.
{¶82} However, this rationale ignores that by virtue of Ohio common law the
severed mineral rights were definitely and completely vested in the Reussers when
the 1989 ODMA took effect, and "cannot be taken away without [their] consent."
Harden v. Ohio Atty. Gen., 101 Ohio St. 3d 137, 2004-Ohio-382, 802 N.E.2d 1112,
¶9. Because the 1989 ODMA did not require the holder's consent or notice, the
Reussers' vested interest was taken arbitrarily and operated as a forfeiture, an
especially harsh result considering the 1989 ODMA is being applied in a case filed
after that version is no longer in effect, and the Reussers are precluded from availing
themselves of the current version which provides for notice and the holder's consent.
Logic dictates that if the 2006 ODMA changes cannot be retroactively applied to
divest an owner of an interest deemed vested under the 1989 version, then the 1989
ODMA similarly cannot be used to retroactively divest an owner of an interest
deemed vested under common law. The 2006 version is no more retroactive than
the 1989 version; both refer to a preceding 20 year period, which, depending upon
the facts of a particular case, can occur prior to the effective date of either version.
{¶83} Moreover, Walker, Swartz and the majority (implicitly by relying on
Walker), have misconstrued the full meaning of the phrase 'deemed abandoned and
vested.' Generally, 'interest' is defined as "2. A legal share in something; all or part of
a legal or equitable claim to or right in property < right, title, and interest>.
Collectively, the word includes any aggregation of rights, privileges, powers, and
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immunities; distributively, it refers to any one right, privilege, power, or immunity."
Black's Law Dictionary (9th Ed.2009). Also instructive are the following definitions:
deem. To treat (something) as if (1) it were really something else, or (2)
it has qualities that it does not have.
inchoate interest. A property interest that has not yet vested.
vested interest. An interest for which the right to its enjoyment, either
present or future, is not subject to the happening of a condition
precedent.
Id.
{¶84} Considering the entire statutory phrase from the ODMA, the term
'deem' modifies the remaining language. To say that the severed mineral interest is
'deemed to be abandoned and vested' means that it has the qualities of a vested
right that it does not yet have; in other words, that it is an inchoate interest. The
extent of the right the Eisenbarths held under both the 1989 and 2006 ODMA was
the potential for abandonment and vesting, this right was not lost when the ODMA
was amended. Instead, the procedure surface owners had to follow to reunite the
severed mineral rights with the surface fee was clarified. This interpretation is borne
out by the clarifying language adopted in the 2006 ODMA and the General
Assembly's explanation of the reasons for the amendments, particularly the
Legislative Services' characterization of the phrase as meaning when allowable
vesting can occur; again, an inchoate rather than a fully vested right.
{¶85} Moreover, it must be recalled that the ODMA is part of the OMTA,
which, in other sections, notably use more emphatic language like 'extinguished,' and
'null and void,' which is appropriately characterized as automatic in nature. This
stands in sharp contrast to the 'deemed' language used in the ODMA. R.C. 5301.49,
5301.50, 5301.55. To interpret the 1989 ODMA as self-executing would confound
the purpose of the OMTA, as well as the ODMA: to engender reliance upon publicly
recorded documents rather than private ones for transactions affecting title to real
property, such as ownership of severed mineral rights. Nothing in either version of
the ODMA suggests that it should not be construed in pari materia with the OMTA.
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Notice remains the watchword of the entire OMTA, an omission in the 1989 version
that was corrected by the General Assembly in the 2006 version.
{¶86} This characterization is critical because the controlling definition results
in the statute being construed as having either substantive or remedial effect. "Laws
of a remedial nature providing rules of practice, courses of procedure, or methods of
review are applicable to any proceedings conducted after the adoption of such laws."
Kilbreath v. Rudy, 16 Ohio St. 2d 70, 242 N.E.2d 658, (1968), paragraph two of the
syllabus. "Moreover, a statute is properly applied prospectively if it has been enacted
after the cause of action but before the trial of the case." (Citations omitted.) Estate
of Johnson v. Randall Smith, Inc., 135 Ohio St. 3d 440, 2013-Ohio-1507, 989 N.E.2d
35, ¶20.
{¶87} The interpretation of the 1989 ODMA in Walker and Swartz and
adopted by the majority has resulted in a retroactive, substantive deprivation of the
Reussers' common law vested interest in the severed mineral rights. The ODMA is
remedial in nature; specifically, it was enacted to delineate the procedure to
determine whether or not a severed mineral interest has been abandoned and if so,
how to reunite it with the surface fee. By virtue of the 2006 ODMA, which we cannot
ignore, the General Assembly clarified a major ambiguity in the 1989 ODMA; the
2006 ODMA expressly set forth the process for how to define the triggering event for
calculation of 'the preceding twenty years' and 'successive filings.'
{¶88} As differentiated by the Ohio Supreme Court in a case concluding that a
statutory amendment changed the method to calculate prejudgment interest rather
than eliminated the right to seek it:
"The legislature has complete control over the remedies afforded
to parties in the courts of Ohio, and it is a fundamental principle of law
that an individual may not acquire a vested right in a remedy or any part
of it, that is, there is no right in a particular remedy. * * * A party has no
vested right in the forms of administering justice that precludes the
Legislature from altering or modifying them and better adapting them to
effect their end and objects. "
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(Internal citations omitted.) Longbottom v. Mercy Hosp. Clermont, 137 Ohio St. 3d
103, 2013-Ohio-4068, 998 N.E.2d 419, ¶25.
{¶89} The function of the ODMA has always been remedial; to set forth the
judicial process to follow when ownership of a severed mineral right is disputed.
Resolution of the substantive question of ownership is an issue of common law. To
interpret the 1989 ODMA as extinguishing a severed mineral rights holder's
preexisting common law right to that interest would violate the Retroactivity Clause of
the Ohio Constitution. Id. Consistent with Longbottom, the 2006 ODMA modified the
remedy available to surface fee owners to reunite the severed mineral interest by
clarifying the process to follow. See Longbottom at ¶26. Both versions of the ODMA
applied prospectively to any actions filed after their respective effective date.
Because the Eisenbarths filed this case after the effective date of the 2006 ODMA,
that version controls resolution of this appeal; had it been filed before, the 1989
version would have controlled. As discussed below, sponsor testimony regarding the
clarifications contained in the 2006 ODMA notes that those changes "will neither alter
the balance between surface owners and mineral rights owners" further reinforcing
the remedial character of R.C. 5301.56.
{¶90} Finally, conceding this argument was not raised by the parties,
nonetheless the doctrine of laches is a fair consideration when determining which
version of the ODMA to rely upon when a surface owner's claim to the severed
mineral rights could have been, but was not, asserted before the effective date of the
2006 ODMA. "'Laches is an omission to assert a right for an unreasonable and
unexplained length of time, under circumstances prejudicial to the adverse party.'
Connin v. Bailey (1984), 15 Ohio St. 3d 34, 35, 15 OBR 134, 472 N.E.2d 328, quoting
Smith v. Smith (1957), 107 Ohio App. 440, 443, 8 O.O.2d 424, 146 N.E.2d 454." Still
v. Hayman, 7th Dist. No. 02 JE 27, 153 Ohio App. 3d 487, 2003-Ohio-4113, 794
N.E.2d 751, ¶8 (laches barred child support and reimbursement claims where
paternity was hidden from father for over 15 years).
{¶91} Here, the Eisenbarths failed to avail themselves of the 1989 ODMA
while it was still in effect. An action to quiet title could have been filed on or
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immediately after January 24, 1994 when the mineral rights arguably automatically
reverted to them by operation of the statute. Instead, it wasn't until after the 2006
ODMA went into effect, that the Eisenbarths published a notice of abandonment
pursuant to the 2006 ODMA—in response to which the Reussers timely filed a claim
to preserve—in 2009, and then further delayed until September of 2012 to file a quiet
title action, a lapse of 18 years. The prejudice to the Reussers is evident. Logic
dictates that if the holder can be divested of their severed mineral rights as having
been abandoned due to their inaction under the 1989 ODMA, then the 2006 ODMA
can similarly be used to preclude reuniting the interest with the surface fee because
of the surface owner's inaction, i.e., his failure to commence a quiet title action while
the 1989 ODMA was still in effect.
{¶92} Inherent in the automatic, self-executing character ascribed to the 1989
ODMA by Swartz and the majority here is that the statute operates as a forfeiture.
Swartz at ¶27 (1989 ODMA self-executing); Majority, supra, ¶9, footnote 1, ¶49;
Dodd at ¶35 (concluding the provision in R.C. 5301.56(D)(1) which allows mineral
rights holder to file a claim to preserve that interest even after having failed to do so
within the 20 year look back period is premised upon the principle that forfeiture is
abhorred in the law).
{¶93} Measured against Ohio's proscription against forfeiture, the 1989
ODMA as interpreted by Walker, Swartz, and the majority, has continued to validate
a statute in derogation of the common law principle that a mineral right cannot be
extinguished or abandoned by nonuse. Construed as an automatic self-executing
statute, the 1989 ODMA operates as a forfeiture which is disfavored as a matter of
Ohio law. Instead, the 1989 ODMA must be strictly construed to avoid forfeiture
because to do otherwise would be in derogation of private property rights. With
respect to the caveat that forfeiture can only be ordered where the legislative intent to
do so is manifestly clear, we have the inverse here. By virtue of the 2006 ODMA, the
General Assembly has made manifest that it did not intend for the 1989 ODMA to be
self-executing. Rather, the holder was to have notice and an opportunity to preserve
their severed mineral rights even after they have lapsed for failure to file a claim to
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preserve or the occurrence of a savings event within the previous 20 year look back
period.
{¶94} R.C. 5301.56 presently is not, nor was it ever intended to be, self-
executing. When comparing the 1989 and 2006 versions of R.C. 5301.56, the latter
clarifies that the purpose of the phrase 'deemed abandoned and vested' as intended
by the General Assembly, was to set parameters against which to assess whether
mineral rights have been abandoned and create a process through which allowable
vesting could occur in the surface owner. Had the 1989 ODMA provided for
automatic vesting, the General Assembly could have used more definitive terms such
as 'extinguished' or 'null and void' as found in other sections of the OMTA, rather than
the more equivocal term 'deemed.'
{¶95} Rather, only after the holder has had notice that the owner claims the
mineral rights have been abandoned, and has had one last opportunity to either
establish that in fact the mineral rights have not been abandoned or else to revive
them, only then may the surface owner cause such abandonment to be memorialized
in the county recorder's office; only then have the mineral rights vested in the surface
owner. R.C. 5301.56(H).
{¶96} The intended purpose of the 1989 ODMA was to create and maintain a
clear, current and reliable record chain of title with respect to ownership of severed
mineral rights. The ODMA was not enacted to force holders to 'use their mineral
rights or lose them.' The holders' presumed failure to develop those mineral rights
does not support this interpretation of the 1989 ODMA because it is based upon an
arbitrary assumption that the severed mineral rights holders have deliberately
abandoned their vested common law property rights. Instead, the intended purpose
of the 1989 ODMA was to maintain a current public record of the severed interests
being held until such time—as this litigation bears out—that technology advances
make it economically feasible to develop those mineral rights. Therefore, it is
reasonable to conclude that the changes made in the 2006 ODMA were remedial,
i.e., they clarified procedure to judicially determine whether or not the holders wish to
preserve or abandon their interest.
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{¶97} For all these reasons, the 1989 ODMA created an inchoate, not a
vested right. To construe it otherwise creates a forfeiture which is rejected as a
matter of Ohio law. R.C. 5301.56 is a remedial statute that sets forth the procedure
to determine ownership of a severed mineral interest.
Indiana Lapsed Mineral Act and Texaco v.Short
{¶98} The majority suggests at footnote 1 that the Reussers have conceded
that the trial court could use the 1989 ODMA and that it was a self-executing statute
akin to Indiana's Mineral Lapse Act as so characterized by the U.S. Supreme Court
decision in Texaco, Inc. v. Short, 454 U.S. 516, 102 S. Ct. 781, 70 L. Ed. 2d 738
(1982). Thus, it appears the majority has implicitly adopted and applied the Texaco
rationale, consistent with the Swartz panel's express reliance on Texaco, which
referenced and relied upon Walker in doing so. Majority, supra at ¶9, footnote 1;
Swartz, ¶27-28. I disagree. Again, as discussed above, regardless of any
concession made by a party with respect to controlling law, neither Texaco nor the
Indiana statute has persuasive or precedential value.
{¶99} First turning to two elemental points, the constitutionality of Indiana's
statute was at issue in Texaco, whereas the constitutionality of the 1989 ODMA was
not at issue in this appeal, Walker or Swartz, further undermining the persuasive
value of Texaco. On this basis alone Texaco is distinguishable. Second, it appears
that Indiana's Act remains unchanged with respect to its notice provisions, and
presumably because the U.S. Supreme Court in Texaco held the Act did not violate
federal constitutional principles, affirming the Indiana Supreme Court's decision in
Short v. Texaco, Inc., 273 Ind. 518, 406 N.E.2d 626 (1980) that a self-executing
statutory abandonment is constitutionally enforceable.
{¶100} Substantively, the language of the Indiana statute is unequivocal, and
lends itself to an interpretation that vesting is automatic. Ind.Code 32-23-10-2
provides: "An interest in coal, oil and gas, and other minerals, if unused for a period
of twenty (20) years, is extinguished and the ownership reverts to the owner of the
interest out of which the interest in coal, oil and gas, and other minerals was carved.
However, if a statement of claim is filed in accordance with this chapter, the reversion
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does not occur." (Emphasis added.) Id. This language is consistent with other
portions of the OMTA which, as explained above, use terms such as 'null and void' or
'extinguished,' and arguably warrant an automatic characterization, unlike the
qualified phrase in R.C. 5301.56 'deemed abandoned and vested,' which should not
be construed as having a similar automatic effect.
{¶101} In contrast to the Indiana statute, the Ohio General Assembly
amended R.C. 5301.56 to clarify when a mineral interest became abandoned and
delineate the exact process to reunite the severed mineral rights with the surface
owner. Central to those modifications is that in all instances before any allowable
vesting can occur, the surface owner must notify the holder of the severed mineral
rights of the owner's intention to declare the rights abandoned, even in the absence
of a saving event within the now clearly defined look-back period, in order to afford
the holder one final opportunity to preserve their mineral rights from abandonment.
R.C. 5301.56(E)(2) and (G). Even where the holder failed to engage in one of the
statutorily defined actions to preserve their mineral rights, including merely filing an
affidavit preserving those rights, the Ohio General Assembly gave the holder 60 days
to, in essence, revive their mineral interest. This is the antithesis of a self-executing
statute. Moreover, that the 1989 ODMA was not, nor intended to be, self-executing is
evident from the testimony of the 2006 ODMA sponsor and the Legislative Services
final bill analysis, discussed in more detail below. This vigorous statutory protection
stands in stark contrast with Indiana's statute.
{¶102} Ohio's General Assembly seized the opportunity to clarify its intent and
correct R.C. 5301.56, thereby statutorily rejecting Texaco. The majority here and in
Walker and Swartz, measuring R.C. 5301.56 against federal constitutional standards
not at issue here, have created a forfeiture out of what were heretofore private
property rights protected at common law from extinguishment by abandonment or
nonuse; under the common law, affirmative action was required by the mineral rights
holder before they could be divested of their interest. This is in direct contravention
of the General Assembly's express decision to give Ohio citizens more statutory
protections than the Indiana Legislature afforded its citizens.
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{¶103} Thus, Texaco has no bearing on which version of R.C. 5301.56
controls disputes over ownership of mineral rights brought after the Act's June 30,
2006 effective date.
2006 ODMA Governs Resolution of Severed Mineral Rights Dispute
{¶104} Turning to the merits, for cases like this one, where the litigation to
resolve disputes between the surface fee owner and the holder over severed mineral
rights was filed after the 2006 ODMA took effect, the 2006 version controls; the 1989
version has no force or effect. This conclusion is consistent with reading the OMTA
and the ODMA in pari materia, and more importantly, with the General Assembly's
express intent in enacting the 2006 ODMA and the statute's clear unambiguous
language.
{¶105} My rationale for this conclusion is multi-faceted, but must begin with
the fact that the General Assembly has expressly stated the purpose of the OMTA
and the extent of judicial interpretation: "Sections 5301.47 to 5301.56, inclusive, of
the Revised Code, shall be liberally construed to effect the legislative purpose of
simplifying and facilitating land title transactions by allowing persons to rely on a
record chain of title[.]" R.C. 5301.55. See also Collins v. Moran, 7th Dist. No. 02 CA
218, 2004-Ohio-1381, ¶20. And as stated in the Legislative Service Analysis of the
2006 ODMA, a clear public record of ownership of mineral interests will facilitate
economic oil and gas production. Thus, the ODMA, as a portion of the greater
statutory scheme of the OMTA, should be construed to "support reliance on public
documents rather than private communications for title transfers. Dahlgren at *6.
{¶106} To construe the 1989 version as automatically self-executing, as well
as controlling despite being replaced by the 2006 version, thwarts the General
Assembly's express intention to require recordation of all interests to facilitate a
searchable chain of title for real property in general and for mineral rights specifically.
In addition it flies in the face of the General Assembly's stated purpose of
encouraging economic mineral production. The 2006 ODMA corrected omissions
and clarified ambiguities in the 1989 version to bring it in line with the rest of the
OMTA to facilitate the creation and maintenance of a current and accurate chain of
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title of mineral rights. Because of the 1989 ODMA's lack of a clearly defined process
to place and maintain severed mineral rights within a chain of title, mineral rights in
Ohio could not be easily accounted for or gathered for mineral production, an
especially acute problem when as now, it has become economically viable to develop
those interests. Finally, as discussed above, had the General Assembly meant to
equate 'deemed abandoned and vested' with 'automatic vesting' it could have used
more unequivocal language found in other sections of the OMTA. By construing the
1989 ODMA as automatically vesting the mineral rights in the surface fee owner, and
moreover concluding that R.C. 5301.56 left it to the discretion of the surface owner to
record a statement of reunification of the interests, the majority further ignores the
requirements of the OMTA.
{¶107} Interpreting the 1989 ODMA as providing the Eisenbarths with an
inchoate right rather than an automatic vested right is consistent with language in
other sections of the OMTA. As a part of the general statutory scheme addressing all
land title issues, the ODMA is a more specific statute governing title transactions
related only to coal and other mineral rights. R.C. 1.51 dictates that a special
provision should be construed with a more general provision, if possible, to give
effect to both. As part of the general OMTA, the ODMA can be read as the surface
owner having an inchoate right and still give effect to its specific provisions within the
global purposes of the OMTA. An example of the ODMA provisions trumping that of
the OMTA, consistent with the specific versus general statutory canon of
construction, would be that the ODMA 20 year look-back period controls over the
OMTA 40 year look-back provision in the chain of title.
{¶108} Second, a review of sponsor testimony and the Legislative Services
analysis demonstrates that the Ohio General Assembly was aware that the ambiguity
inherent in the 1989 ODMA emasculated the statute to such an extent that it was not
being used, thus defeating the policy goals of fostering the economic development of
mineral interests as well as the stated purpose of the OMTA that all interests
affecting real property be recorded in the chain of title:
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House Bill 288 seeks to update Ohio's mineral rights law, House
Bill 288 contains two proposed amendments to Ohio's existing statutory
scheme affecting energy production. The bill is designed, first, to
address technical problems with Ohio's current Dormant Mineral
Statute and, second, to resolve procedural problems with The Ohio Oil
and Gas Commission. The General Assembly can take these two steps
to help increase the availability of domestic energy supplies without
adversely affecting the environment or state tax collections.
Turning first to the Dormant Mineral Statute, Ohio has had an
active energy production industry since the mid 1800's. During this
period, landowners in mineral producing areas have frequently severed
the mineral rights in their land from the surface rights. Through the
decades, ownership of the severed minerals has been transferred and
factionalized through estates and business transfers. Today, those old
severed mineral rights may be the key to new production sites, as
advances in current technology and the high cost of energy make
reworking old oil and gas fields possible.
The problem is that it may be difficult - if not impossible - to find
the owners or in some cases the multiple partial interest owners of such
old severed mineral rights. Twenty years ago, Ohio joined the majority
of oil and gas producing states by passing a Dormant Mineral Statute
that permitted the surface owner to reunite severed mineral rights with
the surface estate if the mineral rights had been abandoned.
Unfortunately, Ohio's Dormant Mineral Statute has seldom been used,
in large measure because the statute did not clearly define when a
mineral interest became abandoned and exactly how the process to
reunite the mineral ownership with the surface ownership was to be
accomplished.
House Bill 288 removes the ambiguity of the existing statute with
a clear definition of when a mineral right is deemed abandoned. The
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mineral right will be deemed abandoned if there is both (1) no active
use of the mineral rights and (2) a failure by the mineral rights owner to
file to preserve the inactive mineral rights for future use for at least 20
years from the time a surface owner petitions to reunite the surface with
the inactive mineral interest.
The first part of House Bill 288 is designed to fix perceived
problems with the existing maturity provisions. The bill will [not] alter
the balance between surface owners and mineral rights owners[.].
(Emphasis added.) H.B. 288 Rep. Mark Wagoner, Sponsor testimony before the
Ohio House Public Utilities Committee.
{¶109} This testimony contradicts the observation in Swartz that there was a
clear court action which already existed to formalize statutory vesting. Id. at ¶22.
Further, that the 1989 ODMA did not provide for an automatic vesting of the severed
mineral interest in the surface fee holder but rather the potential for vesting—an
inchoate right—can be found in the Ohio Legislative Service Commission final bill
analysis:
ACT SUMMARY
 Defines "mineral" and "mineral interest" for purposes of the
mineral interests law, which specifies circumstances under which a
mineral interest cannot be deemed abandoned, thereby precluding
such an interest being vested in the owner of the surface land.
 Requires that, for any allowable vesting to occur, the landowner
must notify the holder of the mineral interest and file an affidavit of
abandonment as specified in the act.
***
 Defines the length of any such 20-year period as ending on the
service or publication date of requisite surface landowner notification to
the holder of a mineral interest that the landowner is acting to declare
the interest abandoned.
***
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 Requires the abandonment to be memorialized on a specified
county record and provides that the mineral interest then becomes
vested in the landowner, and the record of the mineral interest ceases
to be public notice of the mineral interest.
***
CONTENT AND OPERATION
Vesting of abandoned mineral interests
(R.C. 5301.56)
Ongoing law specifies that any mineral interest held by any
person can be deemed abandoned and vested in the owner of the
surface of the lands subject to that mineral interest except under certain
circumstances. The act revises some of those circumstances and adds
new, specified notification and affidavit requirements for allowable
vesting to occur.
***
Circumstances that prohibit vesting
Six additional circumstances that prohibit vesting under
continuing law are contingent on them having happened within the
preceding [emphasis in original] 20 years. The act specifies that this 20-
year period is the 20 years immediately preceding the date on which
the new holder notification is served or published as required by the act
(see below) (R.C. 5301.56(B)(3)).
OH Bill Analysis, 2006 H.B. 288, 2006 (emphasis added).
{¶110} In light of the foregoing, any arguable ambiguity regarding 'deemed
abandoned and vested' and whether it created an inchoate or automatic vested right
was resolved by the General Assembly. The General Assembly stated that the 1989
version's language was ambiguous because "the statute did not clearly define when
a mineral interest became abandoned and exactly how the process to reunite the
mineral ownership with the surface ownership was to be accomplished." Contra
Swartz. Thus, the General Assembly has expressed the remedial nature of R.C.
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5301.56. Accordingly, it is error to apply the 1989 ODMA to any litigation filed after
the effective date of the 2006 ODMA.
{¶111} Insofar as the sponsor testimony regarding the 2006 ODMA indicates
that it "will [not] alter the balance between surface owners and mineral rights
owners," the statute is clearly not substantive in nature, rather it is remedial. As
discussed above but bears repeating here, "[l]aws of a remedial nature providing
rules of practice, courses of procedure, or methods of review are applicable to any
proceedings conducted after the adoption of such laws." Kilbreath, supra, 16 Ohio
St.2d 70 at paragraph two of the syllabus. Accord Estate of Johnson, 135 Ohio St. 3d
440 at ¶20.
{¶112} Moreover, no part of a statute "should be treated as superfluous
unless that is manifestly required, and the court should avoid that construction which
renders a provision meaningless or inoperative." Boley v. Goodyear Tire & Rubber
Co., 125 Ohio St. 3d 510, 2010-Ohio-2550, 929 N.E. 448, ¶10. Statutes "'may not be
restricted, constricted, qualified, narrowed, enlarged or abridged; significance and
effect should, if possible, be accorded to every word, phrase, sentence and part of an
act.'" Weaver v. Edwin Shaw Hosp.,104 Ohio St.3d 390, 2004-Ohio-6549, 819
N.E.2d 1079, ¶13, quoting Wachendorf v. Shaver, 149 Ohio St. 231, 78 N.E.2d 370
(1948), paragraph five of the syllabus. "In determining the intention of the General
Assembly as to the meaning and operation of statutes, a court, if possible, should
avoid absurd and grotesque results." State v. Nickles, 159 Ohio St. 353, 112 N.E.2d
531 (1953), paragraph one of the syllabus.
{¶113} Had the General Assembly intended 'deemed abandoned and vested'
in the 1989 ODMA to mean automatic vesting, and meant that the 2006 ODMA did
not apply to any severed mineral interest which had reunited with the surface fee by
operation of law, it could have so stated. In other words, the General Assembly could
have stated that the 2006 ODMA applies only to severed mineral rights which had not
reverted to the surface fee owner by operation of the 1989 ODMA, or that it applied
only to mineral rights which were severed after the effective date of the 2006 version.
Instead, when crafting the 2006 ODMA language the General Assembly enacted the
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notice provisions and clarified the method for calculating the 20 year look-back period
by defining the triggering event, clearing up the ambiguity in the operation of a
remedial statute. See Longbottom.
{¶114} To construe the 1989 version as a self-executing statute providing for
automatic vesting defeats the purpose of the 2006 ODMA. Why would the General
Assembly create a mechanism for the mineral rights holder to revive that interest if it
had already vested in the surface fee? As this court held in Dodd, "R.C.
5301.56(H)(1)(a) allows for a mineral interest holder to take a present action by filing
a claim to preserve the mineral interest after notice, even though the claim was not
filed within the 20 years immediately preceding notice, is supported by the general
rule that the law abhors a forfeiture." Id. at ¶35. This interpretation of express
statutory language reinforces that the surface fee owner holds an inchoate right. To
construe the 1989 ODMA as automatically self-executing renders the 2006 version
meaningless and inoperative. See Boley. We do not need to determine the General
Assembly's intention with respect to the meaning and future operation of the 1989
ODMA after the effective date of the 2006 ODMA because the newer version of the
statute has told us.
{¶115} For Walker, Swartz and the majority to so construe the 1989 version
and further to give it force and effect after the effective date of the 2006 version
creates an absurd result, nullifying the changes the General Assembly made to
remedy an ambiguous statute. See Nickles; Sponsor testimony, Legislative Service
Report, supra. Carrying the majority's analysis to its logical conclusion: 1) all severed
mineral interests throughout the state of Ohio that did not have a savings event take
place within the 20 year period preceding the 1989 ODMA effective date or within the
3 year grace period automatically vested in the fee surface owner, never to be
revived by operation of R.C. 5301.56(H)(1)(a); or, 2) the 2006 version could only
apply to mineral rights severed after the effective date.
{¶116} Finally, I agree with conclusions made by the trial court in Dahlgren in
support of its determination that the 1989 ODMA created an inchoate right, and
because R.C. 5301.56 is a remedial statute 2006 ODMA controls litigation filed after
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its effective date, regardless of when the mineral rights were severed or the surface
fee holder acquired their interest.
{¶117} First, nothing in either version of the ODMA suggests that the general
provisions of the OMTA which complement the more specific mineral rights
distinctions in the ODMA do not apply when considering disputes over mineral rights.
Dahlgren at *13. Consistent with the express purpose of facilitating reliance on a
recorded chain of title, the General Assembly brought the ODMA in conformity with
this principle by imposing upon both the surface owner and the severed mineral
rights holder the recordation requirements in the 2006 ODMA. R.C. 5301.56(G) and
(H). Second, as discussed above, the ODMA uses "considerably less conclusive
language" than the OMTA which "strongly suggest[s] that it provides standards but
does not resolve the issue." Dahlgren at *15. Finally, the majority's interpretation
creates an anomaly when interpreting the ODMA within the larger statutory scheme
of the OMTA, by concluding that severed mineral rights can be automatically vested
outside of the recorded chain of title where the holder has a recorded marketable title
record. Dahlgren at *15. Said differently, interpreting the 1989 ODMA as a self-
executing statute automatically vesting a severed mineral interest in real property
outside the recorded chain of title carves out an exception to the overall statutory
scheme that defeats, rather than promotes, the legislative purpose of enhancing
reliance on public records with respect to ownership of any interest affecting real
property in general, and encouraging economic use of mineral rights specifically.
{¶118} For all of these reasons, where, as here, the mineral rights were
severed and the surface owner acquired their interest before or while the 1989
ODMA was in effect, but did not take legal action to declare the holder's interest
abandoned and seek reunification of the mineral rights with their surface interest until
after the effective date of the 2006 ODMA, the latter controls resolution of disputes
over ownership of the severed mineral rights. As the Eisenbarths were holders of
one-half of the mineral rights and the sole holders of the executive rights over the
entire mineral interest, the oil and gas lease they executed in 2008 operated as a
savings event pursuant to the 2006 ODMA, thereby preserving the Reussers' interest
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in the severed mineral rights through 2018. Thus, the Reussers' interest is
preserved, and they are entitled to the bonus and any revenue generated by the
executed lease.
Alternative 1989 ODMA Analysis
{¶119} Moreover, I disagree with the manner in which the majority has
interpreted the 1989 version of the ODMA. The 1989 ODMA provides: "A mineral
interest may be preserved indefinitely from being deemed abandoned under division
(B)(1) of this section by the occurrence of any of the circumstances described in
division (B)(1)(C) of this section, including, but not limited to, successive filings of
claims to preserve mineral interests under division (C) of this section." R.C. 5302.56
(D)(1), 1988 S 223, eff. 3-22-89.
{¶120} Because R.C. 5302.56(D)(1) refers to successive filings, the 1989
ODMA contemplated that the holder of severed mineral rights was required to renew
that interest of record every 20 years. Thus, the Reussers were required to make
some kind of successive filing before the initial 20 year period expired on January 23,
1994. Because they failed to do so, by operation of the 1989 ODMA, the severed
mineral rights reverted back to the Eisenbarths on January 24, 1994.
{¶121} Applying the majority's rationale that the 1989 ODMA is self-executing,
the 2008 oil and gas lease cannot constitute a savings event for the Reussers
because they were no longer holders of mineral rights that could be preserved as of
that date. Those mineral rights automatically vested and reverted to the Eisenbarths
on January 24, 1994, 14 years earlier. The 2008 lease was recorded 34 years after
the last savings event, well beyond the 20 year look-back period provided for in the
statute. Only the 2006 ODMA provides a 60 day window for a mineral rights holder
to preserve their interest where, as here, the holder has been notified that there has
been a gap in excess of 20 years from a preceding savings event.
{¶122} I also disagree with the parties' and the majority's characterization of
the 20 year look-back period as either rolling or fixed. Trying to glean the General
Assembly's meaning of the ambiguous phrase 'preceding 20 years' in order to
determine the triggering event for calculating the initial 20 year period requires a
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reading of that language within the context of not only R.C. 5301.56, but the OMTA
as well. As noted above, a statute must be construed so that it is not meaningless or
inoperative; instead each phrase must be accorded meaning in order to avoid absurd
results. Boley, Weaver, Nickles, supra. Again, setting aside that we now know what
the General Assembly intended, a more reasoned interpretation is as noted by the
majority's reference to the trial court's finding in Bender v. Morgan, Columbiana C.P
No. 2012-CV-378. In Bender, the trial court looked back 20 years from the effective
date of the 1989 ODMA and found a savings event, a lease executed in 1988, which
in turn triggered a successive 20 year period preserving the holder's interest.
Majority, supra at ¶44. Such a holding would be consistent with reading R.C.
5301.56 in its entirety, rather than interpreting the meaning of 'successive filings'
found in subpart (D)(1) in a vacuum, contrary to canons of statutory construction.
{¶123} The Eisenbarths' argument to construe the 1989 ODMA as
contemplating a rolling date, which would be subject to an arbitrary selection of some
random date to put a savings event outside the 20 year look-back period is so
violative of due process it does not warrant further discussion.
{¶124} Regarding a fixed period, the majority's analysis at paragraphs 45
through 50 simultaneously reinforces the ambiguity of the 1989 ODMA as a whole,
and ignores the statutory language referencing successive filings. The provision in
R.C. 5301.56(D)(1) delineating the process for preserving severed mineral rights for
successive terms signals the General Assembly's intention that in order to preserve
that interest, every 20 years a savings event must occur or the holder must file a
claim to preserve, in order to retain their interest for another 20 years. Any
speculation to the contrary regarding the General Assembly's intent is put to rest by
virtue of the above discussion with respect to the enactment of the 2006 ODMA.
{¶125} Ambiguous statutes must be construed to give every word meaning if
possible. Since the majority has concluded that the 1989 ODMA is self-executing, in
the absence of a savings event or the filing of a claim to preserve within the initial 20
year period to preserve the interest for a second, prospective 20 year period, the
severed mineral rights are automatically vested in the surface owner. Here, the initial
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20 year period in this case was triggered by the oil and gas lease executed on
January 23, 1974. Because there was not a successive savings event before that
initial 20 year period expired to trigger a second 20 year period, the Reussers'
mineral rights automatically vested in the Eisenbarths on January 24, 1994. Applying
the majority's decision that the 1989 ODMA is self-executing, the 2008 oil and gas
lease could not preserve the Reussers' mineral rights because they no longer owned
them; fourteen years prior ownership automatically transferred to the Eisenbarths. In
sum, the majority's substantive 1989 ODMA analysis is flawed.
Conclusion
{¶126} I am mindful of the principle of stare decisis, and it is the law of this
district—unless and until the Ohio Supreme Court decides the issue—that the 1989
ODMA controls resolution of disputes over severed mineral rights arising before the
effective date of the 2006 ODMA, even where litigation to assert those rights was
filed after the 2006 ODMA effective date. However, as this is my first opportunity to
address what was an issue of first impression in this district and Ohio, I must
disagree. Given the expressed intent of the Ohio General Assembly in enacting the
2006 version—specifically, to correct technical problems which resulted in the
ambiguous 1989 version rarely being used—the 2006 version of R.C. 5301.56 must
control litigation brought after its effective date. However, applying the 2006 ODMA, I
would reach the same conclusion as the majority and would affirm the trial court.
{¶127} Moreover, the majority's substantive 1989 ODMA analysis is flawed.
Applying the majority's determination that the 1989 ODMA controls resolution of this
case, the 2008 oil and gas lease does not constitute a savings event for the
Reussers because it was recorded over 30 years after the preceding savings event.
Given the majority's rationale of the self-executing nature of the 1989 ODMA, the
Reussers' mineral rights were automatically abandoned and vested in the
Eisenbarths as of January 24, 1994, because the Reussers failed to file a successive
claim to continue to preserve their mineral rights pursuant to division (D)(1) of the
1989 ODMA on or before January 23, 1994.
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