Harvey v. Sines

Harvey, et al. v. Sines, et al., No. 0691, September Term 2015
HEADNOTES:
DORMANT MINERAL INTERESTS ACT – CONSTITUTIONALITY – DUE
PROCESS - RETROSPECTIVITY
Where mineral rights and surface rights have been severed, law that allowed surface
owners to petition court to terminate mineral interest that had not been used or recorded
within the previous twenty years was valid under Article 24 of the Maryland Declaration
of Rights and Article III, Section 40 of the Maryland Constitution, because law did not
operate retrospectively. The law did not impermissibly impact the reasonable reliance
and settled expectations of mineral interest owners because the continued non-use of the
mineral interest demonstrated little reliance on the property and because the law provided
procedural safeguards and fair notice in the form of a grace-period before petitions could
be filed.
DORMANT MINERAL INTERESTS ACT – CONSTITUTIONALITY – DUE
PROCESS – VESTED RIGHTS
Severed mineral interest constituted a property right, and, thus, a vested right.
DORMANT MINERAL INTERESTS ACT – CONSTITUTIONALITY – DUE
PROCESS – VESTED RIGHTS
The law satisfied due process as required by Article 24 of the Maryland Declaration of
Rights because, similar to adverse possession, the Act allowed a person to, after twenty
years of neglect, file an action analogous to a petition to quiet title, which allowed the
land and minerals beneath it to be put to beneficial use.
DORMANT MINERAL INTERESTS ACT – CONSTITUTIONALITY –
TAKINGS
Termination of dormant mineral interest did not constitute a taking without just
compensation. The General Assembly, under the State’s police power, has some ability
to regulate and restrict the rights of private property owners without providing just
compensation—including doctrines such as adverse possession, abandonment, and
escheat, and this legislation regulating dormant mineral interests.
UNREPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 0691
September Term, 2015
MARY HARVEY, et al.
v.
JOSEPH SINES, et al.
Krauser, C.J.,
Berger,
Zarnoch, Robert A.,
(Retired, Specially Assigned),
JJ.
Opinion by Zarnoch, J.
Filed: June 2, 2016
* The Honorable Christopher Kehoe did not participate in the conferencing or adoption of this
opinion.
The opening of the Marcellus Shale in the late-2000s spawned a resurgence in
natural resource extraction across the Northeast and Mid-Atlantic regions, including
Western Maryland. In 2010, the General Assembly enacted the Maryland Dormant
Mineral Interests Act, now codified at Section 15-1201, et seq. of the Environment
Article (“Env.”), Maryland Code (1982, 2014 Repl. Vol.), to allow surface owners to
terminate severed mineral interests that had gone unused for twenty years or more.
Toward the end of 2014, Joseph L. Sines and Sandra S. Sines (“the Sineses”),
appellees, brought an action in the Circuit Court for Garrett County to terminate an
undivided half-mineral interest owned by the descendants of Henry B. Harvey—Mary
Harvey and Patricia Sue Lannom née Harvey (“the Harveys”), appellants. After the
parties filed cross-motions for summary judgment, and without a hearing, the court found
no material facts in dispute, and entered an order terminating the mineral interest of the
Harveys.
The Harveys appealed to this Court and present the following question for our
review, which we have rephrased:
Whether the Dormant Mineral Interests Act is unconstitutional under
Article 24 of the Maryland Declaration of Rights and Article III, Section 40
of the Maryland Constitution?[1]
We hold that the Maryland Dormant Mineral Interests Act is constitutional because it
1
The Harveys, in their question presented, also mention Article 19 of the
Maryland Declaration of Rights (right of access to the courts) in their questions
presented; however, they make no other reference to Article 19, and make no argument in
support of their contention, so we do not consider the issue.
does not retroactively impair vested rights, nor does it take property without just
compensation. We affirm the decision of the circuit court.
BACKGROUND
A. The Maryland Dormant Mineral Interests Act2
The General Assembly passed the Maryland Dormant Mineral Interests Act (“the
Act”) by a unanimous vote in each house during the 2010 legislative session. 3 See 2010
Laws, ch. 268 (S.B. 288), ch. 269 (H.B. 320). The Act created a new cause of action,
allowing a surface owner of real property subject to a mineral interest to terminate a
dormant mineral interest.4 Env. § 15-1203(a)(1). The action is “in the nature of and
2
During the 1960s, legal scholars identified “multiplicity of ownership” as a
barrier to the development of mineral resources, resulting in mineral interests whose
owners are unknown or unavailable, and interests whose owners are uncooperative. See
James C. Roberton, Abandonment Of Mineral Rights, 21 Stan. L. Rev. 1227 (1969);
Ernest E. Smith, Methods for Facilitating the Development of Oil and Gas Lands
Burdened with Outstanding Mineral Interests, 43 Tex. L. Rev. 129 (1964). These
scholars recommended, among other things, a statutory solution to the problem in the
form of a dormant mineral interests act, like the one at issue here. But see Joshua Elias
Teichman, Dormant Mineral Acts and Texaco, Inc. v. Short: Undermining The Taking
Clause, 32 Am. U.L. Rev. 157 (1982) (criticizing dormant mineral interests acts as
violations of the Takings Clause of the Fifth Amendment to the U.S. Constitution).
Many states have since adopted dormant mineral interests statutes. See Clearing Land
Titles § 10:1, et seq. (3d ed.).
3
The legislation had previously been introduced in the 2009 session, and had been
unanimously approved in the House of Delegates, but failed to receive a vote in
committee in the Senate. See H.B. 748. A Senate bill, S.B. 775 (2009), also died.
4
The definition of a “mineral” includes: gas, oil and oil shale, coal, gaseous,
liquid, and solid hydrocarbons, cement materials, sand and gravel, road materials, and
building stone, chemical substances, gemstone, metallic, fissionable, and nonfissionable
ores, and colloidal and other clay, steam, and geothermal resources. Envir. § 15-1201(b).
2
require[s] the same notice as is required in an action to quiet title as set forth in § 14-108
of the Real Property Article.”5 Env. § 15-1203(b)(1). “A court order that terminates a
mineral interest merges the terminated mineral interest, including express and implied
appurtenant surface rights and obligations, with the surface estate in shares proportionate
to the ownership of the surface estate, subject to existing liens for taxes or assessments.”
Env. § 15-1203(d)(2).
The Act defines a dormant mineral interest as one that “is unused for a period of
20 or more years preceding the commencement of termination of the mineral interest.”
Env. § 15-1203(a)(2)(i). Additionally, notice of the mineral interest must not have been
recorded during the period of 20 or more years preceding the commencement of the
action to terminate the mineral interest. Env. § 15-1203(a)(2)(ii). Several actions
constitute “use” of the mineral interest by an owner. These include: (i) active mineral
exploration or exploitation; (ii) payment of taxes on a separate assessment of the mineral
interest; (iii) recordation of an instrument that evidences the continued existence of the
mineral interest; and (iv) recordation of a judgment or decree that makes a specific
reference to the mineral interest.6 Env. § 15-1203(c)(1). An owner of a mineral interest
5
“The action may be maintained, whether or not the owner of the severed mineral
interest is an unknown or missing owner.” Env. § 15-1203(b)(2). If the owner is missing
or unknown, the Act provides that the circuit court may create a trust for a severed
mineral interest and appoint a trustee for the mineral interest. Env. § 15-1206. This case
involves known owners, so we need not discuss the trust mechanism.
6
A tax assessor may value and tax mineral interests separately from the surface
estate, as long as the valuation of the severed interests does not exceed the valuation of
the property as a whole. See Md. Code (1985, 2012 Repl. Vol.), Tax-Property Art.
(Continued . . . )
3
may record, at any time, a notice of intent to preserve the mineral interest or a part of a
mineral interest. Env. § 15-1204(a)(1)
After a petition to terminate a dormant mineral interest has been filed, an owner of
the mineral interest can still “record a late notice of intent to preserve the mineral interest
as a condition of dismissal of the action, if the owner of the mineral interest pays the
litigation expenses incurred by the surface owner of the real property that is subject to the
mineral interest.” Env. § 15-1205(b). However, the Act precludes an owner of a mineral
interest that has been unused for a period of 40 years or more preceding the
commencement of the action from filing a late notice of intent to preserve the mineral
interest. Env. § 15-1205(c). The Standing Committee on Rules of Practice and
Procedure adopted rules to aid the implementation of the Act.7 See Md. Rules 12-701, et
seq.
The Act’s stated purpose “is to make uniform the law governing dormant mineral
interests among the states.” Env. § 15-1202(b). In that vein, Act was patterned on the
Uniform Dormant Mineral Interests Act, which in turn was designed “to enable and
(. . . continued)
(“Tax-Prop.”) § 8-229; Macht v. Dep’t of Assessments of Baltimore City, 266 Md. 602,
610 (1972).
7
The Chair of the Rules Committee expressed concerns with the constitutionality
of the mechanism terminating the rights of unknown or missing owners, mentioned
supra, n.5, because of the Act’s disparate treatment of known and unknown owners of
mineral rights. See Draft minutes of the November 19, 2010 meeting of the Standing
Committee on Rules of Practice and Procedure. As noted above, this case involves
known owners, so we do not consider the Chair’s concerns.
4
encourage marketability of real property and to mitigate the adverse effect of dormant
mineral interests on the full use and development of both surface estate and mineral
interests in real property.” Uniform Law Commission, Uniform Dormant Mineral
Interests Acts § 1(a). The uniform act also provides that it “shall be construed to
effectuate its purpose to provide a means for termination of dormant mineral interests that
impair marketability of real property.” Id. § 1(b). The Attorney General, in a letter to
Governor Martin O’Malley, dated May 3, 2010, approved of the constitutionality of the
statute.
B. The Sineses’ Property
The Sineses are the surface owners of approximately twenty acres in Garrett
County, and own an undivided one-half interest in the minerals beneath the property. On
November 20, 2014, the Sineses filed a petition in the circuit court to terminate any
dormant mineral rights mineral rights on their property. They identified the Harveys as
potential owners of a portion of the mineral interest, as descendants of Henry B. Harvey
who purchased a one-half interest in the minerals on the property, evidenced by a deed
dated March 26, 1912 and recorded in the Garrett County land records.
On April 17, 2015, the parties filed cross-motions for summary judgment. The
record showed that there had been no use of the mineral interest for at least the past 40
years. The Sineses asserted that because there was no use during the past 40 years, the
court should enter an order terminating the dormant mineral rights, pursuant to Env. §§
15-1203(a), -1205(c). The Harveys asserted that, among other things, the statute was
facially unconstitutional because it abrogated vested rights. The Sineses opposed the
5
Harveys’ motion for summary judgment. Neither party requested a hearing, and the
record before the circuit court was sparse.
On May 12, 2015, the court entered an order, granting summary judgment for the
Sineses, denying the Harveys’ motion, and terminating the dormant mineral interest in
the property. The Harveys appealed to this Court on June 11, 2015.
DISCUSSION
Whether a circuit court’s grant of summary judgment is proper in a particular case
is a question of law, subject to a non-deferential review on appeal. Charles Cnty.
Comm’rs v. Johnson, 393 Md. 248, 263 (2006). In reviewing a grant of summary
judgment, we review independently the record to determine whether the parties generated
a dispute of material fact and, if not, whether the prevailing party was entitled to a
judgment as a matter of law. Muskin v. State Dept. of Assessments & Taxation, 422 Md.
544, 554 (2011) (citing Charles Cnty. Comm’rs, 393 Md. at 263). We review the record
in the light most favorable to the non-moving party and construe any reasonable
inferences that may be drawn from the well-pled facts against the moving party. Id.Here, neither party has argued that any of the facts are in dispute; therefore it was proper
for the trial court to make a decision on the parties’ motions for summary judgment. See
id.The Harveys argue that the Act violates Article 24 of the Maryland Declaration of
Rights and Article III, Section 40 of the Maryland Constitution because it retroactively
impairs vested rights and takes property without just compensation under the Court of
Appeals’s decisions in two cases: Muskin v. State Dep’t of Assessments & Taxation, 422
6
Md. 544 (2011) and Scharf v. Tasker, 73 Md. 378 (1891). The Sineses assert that the
cases are distinguishable and that the statute is constitutional because it does not
impermissibly divest the mineral interest owner of a vested right.
In addressing a claim involving the constitutionality of a statute, we begin “with a
presumption that the statute is constitutional.” Beattie v. State, 216 Md. App. 667, 678
(2014) (citing Walker v. State, 432 Md. 587, 626 (2013)). We are reluctant to find a
statute unconstitutional if, “by any construction, it can be sustained.” Galloway v. State,
365 Md. 599, 611 (2001) (quoting Beauchamp v. Somerset County, 256 Md. 541, 547
(1970)). The appellant bears the burden of overcoming this presumption and establishing
the statute’s unconstitutionality. Beattie, 216 Md. App. at 678. We undertake an
“independent constitutional appraisal” to determine whether a constitutional right has
been infringed. Watkins v. Sec’y, Dept. of Pub. Safety & Corr. Services, 377 Md. 34, 46
(2003) (citing Crosby v. State, 366 Md. 518, 526 (2001)).
In light of the posture of and contentions in this case, the Harveys’ arguments are
tantamount to a facial challenge to the Act. However, they would gain nothing if they
contested the constitutionality of the Act as applied to their specific circumstances,
considering the protracted time that this property was neither used nor taxed. The
Harveys have not asserted their rights since the property was acquired more than 100
years ago in 1912.8
8
However, we express no view on the constitutionality of the Act as applied to a
situation where the appellant had made a more recent use of a mineral interest.
7
The Court of Appeals observed in Muskin v. State Dep’t of Assessments &
Taxation:
Together, Maryland’s Declaration of Rights and Constitution
prohibit the retrospective reach of statutes that would have the effect of
abrogating vested rights. Dua v. Comcast Cable of Md. Inc., 370 Md. 604,
630 n. 9, 805 A.2d 1061, 1076 n. 9 (2002). Article 24 of the Maryland
Declaration of Rights, guaranteeing due process of law, and Article III, §
40 of the Maryland Constitution,[9] prohibiting governmental taking of
property without just compensation, have been shown, through a long line
of Maryland cases, to prohibit the retrospective reach of statutes that would
result in the taking of vested property rights. See Dua, 370 Md. at 604, 805
A.2d at 1061 and cases therein.
422 Md. 544, 555-56 (2011). The Maryland Declaration of Rights and the Maryland
Constitution are generally read in concert with their federal constitutional counterparts,
and cases interpreting federal constitutional provisions are treated as “persuasive
authority by a Maryland court interpreting the Maryland Declaration of Rights and
Constitution.” Id. (citing Dua, 370 Md. at 604).
A. Retrospectivity
We first consider whether the statute operates retrospectively. “[A] statute does
not operate ‘retrospectively’ merely because it is applied in a case arising from conduct
9
Article 24 of the Maryland Declaration of Rights states: “That no man ought to
be taken or imprisoned or disseized of his freehold, liberties or privilege, or outlawed, or
exiled, or in any manner, destroyed, or deprived of his life, liberty or property, but by the
judgment of his peers, or by the Law of the land.”
Article III, § 40 of the Maryland Constitution states: “The General Assembly shall
enact no Law authorizing private property, to be taken for public use, without just
compensation, as agreed upon between the parties, or awarded by a Jury, being first paid
or tendered to the party entitled to such compensation.”
8
antedating the statute’s enactment. . . .” John Deere Const. & Forestry Co. v. Reliable
Tractor, Inc., 406 Md. 139, 147 (2008) (quoting Landgraf v. USI Film Products, 511
U.S. 244, 269 (1994)) (Internal quotation marks omitted). Moreover, a statute “is not
made retroactive merely because it draws upon antecedent facts for its operation.”
Landgraf, 511 U.S. at 297 n.24 (quoting Cox v. Hart, 260 U.S. 427, 435 (1922)). In
evaluating retrospectivity, we consider three factors, “fair notice, reasonable reliance, and
settled expectations,” to determine “the nature and extent of the change in law and the
degree of connection between the operation of the new rule and a relevant past event.”
John Deere Const., 406 Md. at 147 (quoting Landgraf, 511 U.S. at 270) (Internal
quotation marks omitted).
In Muskin, the Court of Appeals considered the constitutionality of a ground rent
statute, which provided that, upon the failure of a ground rent owner to register this
interest with the State, that interest in the land was automatically extinguished and
transferred to the tenant. The Court concluded that the statute at issue in Muskin satisfied
fair notice by providing a reasonable time period—two years—between its enactment and
the registration deadline. 422 Md. at 558. Although the statute satisfied fair notice, it
nevertheless operated retrospectively because it impermissibly impacted the reasonable
reliance and settled expectations of ground rent owners. Id.Because of the nature of a ground rent lease—where the fee simple owner (the
ground rent owner) of a property received an annual or semi-annual payment (ground
rent) and retained the right to re-enter the property and terminate the lease if the
leaseholder failed to pay—the statute infringed upon the owners’ reasonable reliance and
9
settled expectations. The Court noted that “[g]round rent owners rel[ied] reasonably on
the future income from ground rents or the ability to sell the fee simple interest on the
open market or in the future, if necessary.” Muskin, 422 Md. at 550, 558 (citing Kolker v.
Biggs, 203 Md. 137, 141 (1953)). Moreover, the statute did not provide for additional
remedies for the ground rent owner, such as an opportunity for a hearing or an appeal
process. The Court posited a valid, alternative statutory approach in which the failure to
register before a fixed deadline triggered restrictions on the property interest short of a
total extinguishment of rights. Id. at 559.
Here, the Act provides fair notice. Although not quite the two-year grace period in
Muskin, it provides for a similar grace period of one and a half years—the statute was
enacted on May 4, 2010 and allowed the filing of a petition only on or after October 1,
2011.10 See John Deere Const., 406 Md. at 148 (Parties are presumed to be aware of the
actions of the General Assembly). “The Maryland Constitution requires that a plaintiff
must have a reasonable period of time, after the enactment of the new statute, to bring the
cause of action which existed under prior law.” Dua, 370 Md. at 633; see Env. § 15-
1204(a) (“An owner of a mineral interest may record, at any time, a notice of intent to
preserve the mineral interest or a part of a mineral interest”) (Emphasis added). In this
10
Similar legislation was introduced in 2009 (S.B. 775), and sections of the Act
were amended in 2012 (2012 Laws, ch. 370, H.B. 402). Thus, by virtue of the fact that
the General Assembly was considering regulation of dormant mineral interests as early as
2009, and the fact that legislation concerning this issue was passed again in 2012, the
Harveys were doubly on notice that efforts were being undertaken in Annapolis, which
had the potential to affect their rights.
10
case, the Sineses did not file a petition until November 20, 2014, more than four years
after the law went into effect—providing the Harveys with a reasonable period of time to
exercise their rights.
In contrast to Muskin, however, the Act does not impermissibly infringe the
reasonable reliance and settled expectations of mineral interest owners. The owners
subject to the act, by their very definition as owners of dormant mineral interests, are not
relying on rents or income from the property. They have not made use of the interests for
at least twenty, and in this case well beyond 40 years. In fact, the conveyance was made
in 1912, over 102 years before this action was initiated, and there was no evidence that
the mineral interest had ever been exploited.
We also note that a mineral interest owner may “use” the interest by paying taxes
on it. “If minerals and mineral rights are owned separately from the land in which they
are located, the supervisor may assess the minerals and mineral rights separately from the
land.” Tax-Prop. § 8-229. The owner of the mineral rights can be assessed tax on its
value even if the minerals are not then being exploited. See Macht, supra, 266 Md. at608-09 (citing Weil v. Supervisor of Assessments, 266 Md. 238 (1972); Sears Roebuck v.
State Tax Comm., 214 Md. 550, 557-558 (1957)) (noting that “situations may be
postulated where a fair and equitable valuation can only be achieved by the use of this
mechanism. It has long been established that assessors have reasonable latitude in
selecting a method of valuation, so long as they arrive at the ‘full cash value’”). There
was no evidence that taxes had ever been paid on the Harveys’ mineral interest.
11
The Act is also distinguishable from the legislation at issue in Muskin, because the
interest is not automatically extinguished. The General Assembly, in this case, did not
provide for unavoidable reversion of a mineral interest if the owner failed to register the
interest by a certain date. Instead, it is the surface owner who initiates the process by
filing an action in the circuit court. The owner of a mineral interest can, of course, use
the interest at any time before the petition is filed by exploring for minerals or even
paying taxes on the interest. Env. § 15-1203(c)(1). Alternatively, the owner can record a
notice of intent to preserve the interest. Env. § 15-1204(a). Here, the Harveys had more
than forty years to take some action to protect their property rights.
Unlike in Muskin, the Maryland Rules provide that the circuit court can hold a
hearing on the petition, see Md. Rule 12-704(d), and a dominant mineral interest owner
can appeal a court decision terminating his or her rights. Additionally, the Act provides
remedies to the mineral owners who desire to retain their interests after a petition has
been filed—if there has been a use of the mineral interest within forty years but later than
twenty years, the mineral owner may file a late notice of intent to use. Env. § 15-1205.
In consideration of “the nature and extent of the change in law and the degree of
connection between the operation of the [Act,]” its notice and procedural safeguards, and
the continued non-use of the mineral interest, see John Deere Const., 406 Md. at 147, we
conclude that the Act does not operate retrospectively to impair vested rights.
B. Takings and Vested Rights
Even if we had concluded that statute operated retrospectively, we would also
conclude that it did not operate to impermissibly impair vested rights. Vested rights
12
include “that which is regarded as a property right under Maryland property law.”
Muskin, 422 Md. at 560 (quoting Dua, 370 Md. at 631) (Internal quotation marks
omitted). The Act defines a “mineral interest” as “an interest in a mineral estate,
however created and regardless of form, whether absolute or fractional, divided or
undivided, corporeal or incorporeal, including a fee simple or any lesser interest or any
kind of royalty, production payment, executive right, nonexecutive right, leasehold, or
lien in minerals, regardless of character.” Env. § 15-1201(c). From this, we conclude
that a severed mineral interest constitutes a property right, and is, thus, a vested right.
In Safe Deposit & Trust Co. v. Marburg, the Court of Appeals considered the
constitutionality of a statute that terminated a vested property right if the owner failed to
exercise his or her rights for twenty years, as required under the statute. 110 Md. 410(1909). Somewhat similar to the Dormant Mineral Interests Act, in Marburg, if a ground
rent owner failed to collect rent for twenty years, the statute specified that the owner’s
interest would be extinguished and fee simple would vest in the tenant of the property
through adverse possession. Id. at 412. The act imposed new restrictions on a vested
property right and potentially resulted in a transfer of property from the ground rent
owner to the tenant, but only if the ground rent owner failed to exercise his or her rights.
The Court upheld the statute, stating that the General Assembly has the power “to pass
laws which may result in vesting good titles in those holding lands by adverse
possession—provided, of course, the former owners have a reasonable time after the
passage of such laws within which to assert their rights.” Id. at 414. The statute did not
effect an unconstitutional impairment of vested rights or taking of property. See id.13
In Muskin, the Court specifically contrasted the ground rent statute, in which
owners were actively collecting rents, with a situation where the vested interest had gone
unused for a long period of time. The Court stated:
Adverse possession doctrine existed historically to encourage
beneficial use of properties and an orderly title system. [The statute] does
not differentiate between ground rent owners who abandon their interests in
the property and active, responsible ground rent owners, but rather strictly
between registrants under an entirely new scheme and non-registrants.
422 Md. at 562.
The authority relied upon by the Harveys, Scharf v. Tasker, 73 Md. 378 (1891), is
inapposite. In that case, the General Assembly attempted to assess tax on tracts of land,
known as military lots, given to soldiers at the end of the Revolutionary War. 73 Md. at
382. By 1890, many of the owners could not be found, and the legislature passed a law
“to compel these unknown owners to establish their title so that the property might be
placed upon the assessment books of Allegany and Garrett counties.” Id. The Court held
that:
the legislature exceeded the limits of its authority when it undertook, in the
same section, to forfeit the property––the title and estate––of all unknown
owners upon their failure to produce, within the time designated, the
evidence of their title. It needs no argument and no citation of authority to
show that the title of the unknown owners of these lots cannot be forfeited
without due process of law; and that such legislation as this is far from
having even the semblance of due process of law.
Id. Several factors distinguish Scharf from this case. First, the owners of the land at
issue were unknown, and, thus, it was difficult, if not impossible, to ensure that notice of
the requirement to establish title was provided. Second, the 1890 law created a universal
registration requirement and transferred the ownership of the property to the State upon
14
the failure of the owner to register by a certain deadline, similar to the ground rent law
struck down by the Court in Muskin.11
As discussed above, the Act at issue provides fair notice by giving dormant
mineral interest holders a reasonable time after the passage of the law to assert their
rights. Here, Harveys had a large window of opportunity in which they could have put
the property to use or secured their rights by filing a notice of intent to use. The Act also
does not automatically terminate the rights of an interest holder, instead, requiring a
surface owner to initiate an action at some indefinite time. Although not identical to
adverse possession, the process created by the Legislature is in a similar vein. Similar to
the provision found to be constitutional in Marburg, the Act here allows a person to, after
twenty years of neglect, file a petition to, essentially, quiet title and allow the land and
minerals beneath it to be put to beneficial use. Env. § 15-1203; see Marburg, 110 Md. at
414. For these reasons, we hold that the Act satisfies due process as required by Article
24 of the Maryland Declaration of Rights.
We note that similar statutes in other states have been found to be constitutional
under both federal and state constitutions. See, e.g., Texaco, Inc. v. Short, 454 U.S. 516,
526 (1982) (“[T]his Court has recognized that States have the power to permit unused or
abandoned interests in property to revert to another after the passage of time”); Short v.
Texaco, Inc., 406 N.E.2d 625 (Ind. 1980), aff’d, 454 U.S. 516 (1982) (upheld under state
constitution and federal constitution); Van Slooten v. Larsen, 299 N.W.2d 704 (Mich.
11
In Muskin, the ownership of the land was transferred to the tenant.
15
1980) (same); Contos v. Herbst, 278 N.W.2d 732 (Minn. 1979) (same); Love v.
Lynchburg Nat. Bank & Trust Co., 140 S.E.2d 650 (Va. 1965) (upheld under state
constitution).
Moreover, the states that have found dormant mineral interests acts to be
unconstitutional were considering statutory language that differed from the language of
the Maryland act. See, e.g., Wilson v. Bishop, 412 N.E.2d 522, 523 (Ill. 1980); Wheelock
v. Heath, 272 N.W.2d 768 (Neb. 1978); Chicago & N.W. Transp. Co. v. Pedersen, 259
N.W.2d 316, 317 (Wis. 1977). The courts in these cases all considered statutes in which
the mineral interest automatically reverted to surface holder unless the mineral interest
owner registered the interest with the state within the statutory period, a scenario
remarkably similar to the law found to be unconstitutional by the Court in Muskin, and
different from the Act we now consider. Another case declined to give a dormant
mineral act retrospective effect because the statute the failed to provide for a method for
owners to effectively preserve their interests via a grace period or a notice of intent to
use. See Trustees of Tufts Coll. v. Triple R. Ranch, Inc., 275 So. 2d 521 (Fla. 1973).
Regarding the Harveys’ contention that the statute constitutes a taking without
compensation under Article III, Section 40 of the Maryland Constitution, the Court has
noted that “the Legislature, under the State’s police power, has some ability to regulate
and restrict the rights of private property owners without providing just compensation.”
Muskin, 422 Md. at 565 (2011) (citing Stevens v. Salisbury, 240 Md. 556, 563 (1965))
(giving as examples taxation and zoning requirements). Incarnations of this power
include doctrines such as adverse possession, abandonment, and escheat. See Md. Code
16
(1974, 2013 Repl. Vol.), Courts & Jud. Proc. Art. § 5-103(a) (adverse possession); Md.
Code (1974, 2011 Repl. Vol.), Real Prop. Art. § 14-108 (quieting title to property), Md.
Code (1975, 2013 Repl. Vol.), Commercial Law Art. (“C.L.”) § 17-101, et seq. (escheat
and abandoned property); Md. Code (1974, 2015 Repl. Vol.), Est. & Trusts Art. § 3-105
(escheat of intestate property). For example, with regard to a savings account in
Maryland, the funds within the account are presumed abandoned if within the three prior
years, the owner has not, among other things, increased or decreased the amount in the
account or engaged in any other transaction with the banking organization. C.L. § 17-
301(a)(1).
The Maryland Dormant Mineral Interests Act is akin to these legislative
provisions.12 In enacting the statute, the General Assembly created yet another vehicle to
ensure the productive use of property in Maryland. The statute does not divest property
from a private owner and transfer the property to the State. Instead, it allows a private
party to maintain an action to clear title to disused property to allow the most productive
use of the estate. Accepting appellants’ argument would allow minerals to go unused in
perpetuity.
Moreover, in this case, the Sineses and the Harveys each own an undivided, one-
half interest in the mineral estate. Divided ownership presents a barrier to productive
mineral use. Legal scholar Ernest Smith observed that “[e]ach division of the mineral fee
12
The doctrine of adverse possession is not directly applicable to the mineral
interest in this case because the mineral interest has been severed from the surface estate,
and, accordingly, one would need to possess the minerals to invoke the doctrine. See
53A Am. Jur. 2d Mines and Minerals § 160 (2006, 2016 Supp.).
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renders its development more difficult” because of the increased opportunity for
disagreement among joint owners, and the possibility that a mineral interest will descend
to an absent owner or a “minor[] or other person[] under a legal disability to contract[.]”
Smith, supra n.2, 43 Tex. L. Rev. at 130. Further, “the uncertainty as to the expenses
which a successful oil and gas producer may deduct in accounting for profits to a
co[owner]” who is not aware of or who has not agreed to the plan of development can
prevent development because “if the drilling operations are unsuccessful, the developing
co[owner] must bear the entire expense himself. If they do result in production, he [or
she] can recoup the nonparticipating co-owner’s share of expenses only from that co-
owner’s share of production, and, even then, some of these expenses may not be
recoverable.” Id. at 131-32. These considerations make a co-owner of a mineral interest,
like the Sineses in this case, reluctant to develop the resources under their property for
fear of shouldering the entirety of the expenses for potentially little return.
Dormant mineral interests acts present a solution to this problem. See id. at 151-
61, 164-66. The General Assembly apparently understood the ramifications of dormant
mineral interests, and enacted Env. § 15-1201, et seq. to address the problems noted
above. For all of these reasons, we conclude that the Maryland Dormant Mineral
Interests Act does not operate retrospectively to impair vested rights and does not take
property without just compensation.
JUDGMENT OF THE CIRCUIT
COURT FOR GARRETT COUNTY
AFFIRMED. COSTS TO BE PAID BY
APPELLANTS.
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