We are in the process of posting a series of articles on the Ohio Dormant Minerals Act (DMA), in which we’ll provide analysis about Dahlgren-v-Brown, Carroll C.P., 13CVH27445, (Nov. 5, 2013). However, today we wanted to share news about this Carroll County opinion and what it may portend for future cases.

The facts

Leora Dahlgren owned severed minerals pursuant to a reservation in a deed to Walter Dunlap in 1949. When Leora passed away in 1977, her estate was probated and a Certificate of Transfer conveying the minerals to her heirs was issued and recorded — at the Probate Court rather than the Recorder’s Office — in 1978.1 More than 30 years later, in 2009, the mineral owners leased their oil and gas. During that same period of time, the surface had become owned by successors to Dunlap pursuant to deeds reciting the reservation in the 1949 deed. The surface owners filed a DMA notice of abandonment in March 2012. Within the following 60-day period, the Dahlgren mineral heirs filed their notice of claim and, in 2013, sued to quiet title.

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The county enlisted a retired visiting judge to review the case. He decided that the 2006 version of DMA (DMA’06) controls the 1989 version (DMA’89); thus, precluding an “automatic” abandonment under the former and requiring notice under the latter.

The court reviewed the adoption and purpose of the Ohio Marketable Title Act (MTA), DMA’89 and DMA’06. The opinion revolved around the question of whether DMA’89 — which was enacted as part of the MTA — is self-executing.

Is DMA’89 self-executing?

Under similar circumstances, other courts have held that DMA’89 is self-executing, or automatic, as the MTA is. So, if the facts are such that the requirements of DMA’89 were met — i.e., no savings event between 1989 and 1969 — the surface owner could go to court on that basis because the statute was self-executing.

A surface owner did go to court on such basis in Wiseman v Potts, Morgan C.P., No. 08 CV 0145 (June 29, 2010), where a 1/3 mineral interest severed in 1947 was found to have been abandoned under DMA’89.

Similarly, in Wendt v. Dickerson, the court found that because there had been no title transaction determinative, the mineral interest — severed in 1952 — became vested in the surface owners on March 22, 1992, the effective date of DMA’89 plus the three-year grace period. Wendt v. Dickerson, Tuscarawas C.P. No. 2012 CV 020135 (Feb. 21, 2013). Two additional county courts reached the same outcome in Marty v Dennis (Winkler), Monroe C.P., 2012-203 (April 11, 2013) and Shannon v. Householder, Jefferson C.P. No. 12CV266 (July 17, 2013).

Moreover, county courts found that DMA’06 is not retroactive such that it would change the applicability or effectiveness of DMA’89. Shannon v. Householder, supra, (“[DMA’06] is not retroactive but applies only prospectively in accordance with R.C. §1.48 as the same was not ‘expressly made retroactive’ as is required under said statute.”). A Belmont County case yielded the same result shortly afterward, Tribett v. Shepherd, Belmont C.P. No. 12-CV-180 (July 22, 2013), citing R.C. §1.58 (A)(1) and (2).

The Dahlgren suit

The Dahlgren defendants presented these cases to support their position. The Dahlgren court, however, said it is implied that DMA’89 requires DMA’06 to establish the Constitutionally required notice. Also, even if DMA’89 applies to extinguish a dormant interest for nonuse during the 20-year look-back period: “[A]t most the absence of those conditions created an inchoate right; it could not and did not transfer ownership without judicial confirmation or at least an opportunity for the disowned party to contest their absence or the effect of their absence.”

Further, the Dahlgren court said that DMA’89, “impliedly required implementation [by DMA’06] before it finally settled the parties’ rights, at least by a recorded abandonment claim that permitted the adverse party to challenge its validity…” even though (1) DMA’06 is not retroactive and (2) it has been held that the MTA, like a statute of limitation, automatically terminates old interests. Evans v. Thomas J. Evans Found., 2010 Ohio 541, 2010 Ohio App. LEXIS 427, 2010 WL 560668 (Ohio Ct. App., Licking County Jan. 5, 2010). Discretionary appeal not allowed by the Ohio Supreme Court. Evans v. Thomas J. Evans Found., 125 Ohio St. 3d 1416, 2010 Ohio 1893, 925 N.E.2d 1003, 2010 Ohio LEXIS 1305 (2010).

As these recent opinions show, the implementation and interpretation of DMA has not been consistent. We look forward to exploring DMA issues further in our ongoing series about Ohio dormant minerals.

1 As the court notes: “Those reserved rights were not the subject of any title transaction that anyone recorded in the Carroll County Recorder’s Office between March 22, 1969 (20 years before the effective date for [DMA’89] and Sept. 17, 2009 (the date when one of the plaintiffs first recorded an oil and gas lease) …” which would have been a “savings event.”