Conley v. American Premier Underwriters

[Cite as Conley v. American Premier Underwriters, 2017-Ohio-5705.]
STATE OF OHIO, BELMONT COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
GENE CONLEY, et al. )
)
PLAINTIFFS-APPELLEES )
) CASE NO. 15 BE 0035
VS. )
) OPINION
AMERICAN PREMIER )
UNDERWRITERS, INC., et al. )
)
DEFENDANTS-APPELLANTS )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Belmont County, Ohio
Case No. 14 CV 0277
JUDGMENT: Reversed and Remanded.
APPEARANCES:
For Plaintiff-Appellee, Gene Conley Attorney Jeremy McGraw
1328 National Road
Wheeling, West Virginia 26003
For Appellee, State of Ohio Attorney Jennifer Barrett
Assistant Attorney General
Attorney Tasha Miracle
Assistant Attorney General
2045 Morse Road, A-3
Columbus, Ohio 43229-6693
For Defendants-Appellants, American Attorney Daniel Izenson
Premier Underwriters, Inc. and Ohio Oil & Attorney William Minor
Gas Holdings, LLC One East Fourth Street, Suite 1400
Cincinnati, Ohio 45202
Attorney for Defendant, Paloma Partners, Attorney John Keller
III, LLC 52 East Gay Street, Suite 1008
Columbus, Ohio 43215
JUDGES:
Hon. Mary DeGenaro
Hon. Gene Donofrio
Hon. Cheryl L. Waite
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Dated:
[Cite as Conley v. American Premier Underwriters, 2017-Ohio-5705.]
DeGENARO, J.
{¶1} Defendants-Appellants, American Premier Underwriters, Inc., et al.
(APU) appeal the trial court’s decision to apply the 1989 version of R.C. 5301.56,
Ohio's Dormant Mineral Act and granting summary judgment in favor of Plaintiffs-
Appellees, Gene and Joyce Conley.
{¶2} It was error for the trial court to resolve this action by applying the 1989
version of the DMA as the Ohio Supreme Court recently held that the 2006 version
controls. Accordingly, the judgment of the trial court is reversed, and the case
remanded for the trial court to apply the 2006 version of R.C. 5301.56, pursuant to
the Ohio Supreme Court's recent rulings regarding the DMA.
{¶3} The Conleys are the surface owners of certain real property in Belmont
County. APU claimed it owned the severed mineral interest underlying that property,
and filed a notice of claim of interest with the recorder's office on September 12,
2012. Subsequently, APU conveyed that claimed severed mineral interest to
Appellant Ohio Oil & Gas Holdings, LLC (OOGH). OOGH then entered into an oil
and gas lease for those severed mineral rights with Appellant Paloma Partners III,
LLC.
{¶4} In 2014 the Conleys filed a complaint alleging, inter alia, that the
severed mineral interest in the real property had been automatically forfeited to and
vested in them as the surface owners by operation of the 1989 version of R.C.
5301.56 as of its effective date in 1992.
{¶5} APU and OOGH's joint answer raised multiple defenses, including
challenges to the constitutionality of the 1989 version of the ODMA. The Ohio
Attorney General (OAG) intervened to defend the constitutionality of the statute and
sought summary judgment on that basis.
{¶6} Appellants and the Conleys filed cross-motions for summary judgment.
One of the disputed issues was whether the 1989 or the 2006 version of R.C.
5301.56 controlled. The Conleys argued that the mineral interests were automatically
abandoned and vested in them under the 1989 DMA. APU and OOGH argued that
the 2006 DMA controlled and they are the lawful owners of the mineral interests
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because the Conleys failed to comply with the notice requirements in the 2006 DMA
when they sought to declare the mineral interests abandoned. Paloma Partners III's
motion for summary judgment centered on the Conleys' conversion and unjust
enrichment claims.
{¶7} On May 12, 2015, the trial court granted the Conleys' and the OAG’s
motions for summary judgment and denied Appellants'. In so doing, the trial court
only applied the 1989 version, concluding it was constitutional and pursuant to that
version, the severed mineral rights vested in the Conleys as the surface owners.
{¶8} This appeal had been stayed on August 13, 2015, pending the Ohio
Supreme Court's decision in multiple cases regarding, inter alia, whether the 1989 or
the 2006 version of R.C. 5301.56, the DMA, controls the resolution of disputed claims
to severed minerals rights, where the claims were asserted after the effective date of
the 2006 version.
{¶9} In Corban v. Chesapeake Exploration, L.L.C., Slip Opinion No. 2016-
Ohio-5796 (Sept. 15, 2016), ¶ 2, the Court held "the 2006 version of the Dormant
Mineral Act, which is codified at R.C. 5301.56, applies to all claims asserted after
June 30, 2006[.]" On October 24, 2016, this case was returned to the active docket.
{¶10} For clarity of analysis, Appellants' two assignments of error will be
discussed together as they are interrelated:
The trial court erred in granting Appellees' motion for summary
judgment.
The trial court erred in denying Appellants' motion for summary
judgment.
{¶11} In Corban the Ohio Supreme Court held the 2006 version of R.C.
5301.56 controlled, reasoning in pertinent part:
In accord with this analysis, we conclude that the 1989 law was not self-
executing and did not automatically transfer ownership of dormant
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mineral rights by operation of law. Rather, a surface holder seeking to
merge those rights with the surface estate under the 1989 law was
required to commence a quiet title action seeking a decree that the
dormant mineral interest was deemed abandoned.
***
Dormant mineral interests did not automatically pass by operation of
law to the surface owner pursuant to the 1989 law. Thus, as of June 30,
2006, any surface holder seeking to claim dormant mineral rights and
merge them with the surface estate is required to follow the statutory
notice and recording procedures enacted in 2006 by H.B. 288. These
procedures govern the manner by which mineral rights are deemed
abandoned and vested in the surface holder and apply equally to claims
that the mineral interests were abandoned prior to June 30, 2006.
Id. at ¶ 28, 31.
{¶12} This case was filed with the trial court well after June 30, 2006.
Granting summary judgment, the trial court only discussed and relied upon facts
within the 20 years prior to the effective date of the 1989 version, or within the three-
year statutory grace period ending March 22, 1992, and applied its interpretation of
the 1989 version of R.C. 5301.56—which it held was constitutional—to those facts.
There was no discussion of the law or the facts relative to the 2006 version of R.C.
5301.56 by the trial court. More importantly in this summary judgment action, the
Conleys never addressed the 2006 version of the act in their motion for summary
judgment other than to argue that it did not apply. Because they did not rely on the
2006 act, they presented no evidence and had no opportunity to address any factual
issue pertinent to the 2006 act. As such, issues of fact remain to be resolved by the
trial court.
{¶13} That the Conleys brought their complaint under the 1989 version of the
statute does not change the outcome. In Albanese v. Batman, 148 Ohio St.3d 85,
2016-Ohio-5814, 68 N.E.3d 800, ¶ 16-22, the Ohio Supreme Court concluded that
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the 2006 version of DMA applied, notwithstanding the fact that plaintiffs' claims were
originally framed under the 1989 version.
{¶14} Pursuant to Corban, the trial court erred by applying the 1989 version of
R.C. 5301.56 and granting summary judgment in favor of the Conleys on that basis.
Accordingly, Appellants' first assignment of error is meritorious.
{¶15} As to the second assignment of error, Appellants argue that, had the
trial court applied the 2006 version as they urged in their motion, then they would
have prevailed. As Appellants concede, "the trial court's opinion * * * is silent with
respect to who would prevail if the 2006 DMA is held to apply." We have already
determined that questions of fact remain regarding any of the parties' compliance
with the 2006 DMA. As such, Appellants' second assignment of error is not ripe for
review.
{¶16} Accordingly, the judgment of the trial court is reversed, and the case
remanded in order for the trial court to apply the 2006 version of R.C. 5301.56,
pursuant to the Ohio Supreme Court's recent ruling in Corban.
Donofrio, J., concurs.
Waite, J., concurs.