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Dave practices principally in the area of commercial litigation, focusing on intellectual property and trade secret issues. A considerable amount of his practice has involved foreign clients. Dave has obtained favorable decisions on important intellectual property and contract issues in the First, Sixth and Federal Circuit Court of Appeals.

A decision out of the Eleventh District Court of Appeals of Ohio, Mong v. Kovach Holdings, LLC, 2013-Ohio-882 (Ohio 11th Dist. March 11, 2013), represents a cautionary reminder that parties should carefully review the language of contracts they enter, especially the essential terms of the document, and especially contracts that convey away property rights. That is particularly true when a party parts with property rights set forth in warranty deeds. My colleague Jeff Fort blogged about this recently and asked me to add my thoughts.

In Mong v. Kovach Holdings, the plaintiff, Joseph Mong, sold approximately 70 acres of land near Warren, Ohio, he had recently acquired from Alice McMenamin to Defendant Kovach Holdings at auction. Mr. Mong apparently intended to reserve to himself the oil and gas rights associated with the property. According to Mr. Mong, the auctioneer informed the prospective purchasers of that reservation immediately preceding and subsequent to the auction. The auctioneer confirmed that he did so in a following affidavit. The purchaser of the property, Kovach Holdings, denied that that the auctioneer described any such limitations or reservations. The property sold for $245,300.

The parties shortly thereafter executed a standard purchase agreement, but which included the following handwritten language: “Gas + oil Royalty Reserved by Present owner.” Mr. Mong argued this language revealed that the oil and gas rights were not a part of the sale to Kovach Holdings. The problem, for Mr. Mong at least, was that the subsequent warranty deed by which Mr. Mong conveyed the property included no comparable language. It did, however, include merger language.
Continue Reading Oil and Gas Rights — Reserved? A Litigator’s Perspective On The Mong Case

As the demand for oil and gas rights along with other mineral rights continues to grow in Ohio, more disputes will almost certainly arise and end up in the courts.  It is therefore important to keep an eye on such cases as the law governing such rights takes further shape.  As a case in point, the Northern District of Ohio recently issued an interesting ruling in Binder v. Trinity OG Land Development and Exploration, LLC, No. 4:11-cv-02621, 2012 WL 1970239 (ND May 31, 2012), regarding commissions for the leasing of mineral rights, which may have impact oil and gas leasing practices.


The plaintiff in that case, Binder, alleged that he was a deal maker.  In 2009, he entered into an oral agreement with the defendants to identify property owners in Northeast Ohio and Western Pennsylvania who might be willing to sell mineral rights.  This agreement purportedly provided that Binder would receive from $50 to $200 for every acre of mineral rights the defendants leased or purchased from land owners whom Binder referred to them.  According to Binder, the defendants obtained mineral rights to over 10,000 acres through his efforts.  Binder calculated that, as a result, the defendants owed him at least $500,000.

Rather than pay Binder anywhere near that amount, the defendants sent him a check for $22,012.94. With it, the defendants included language stating that the check was full and final payment for any money they owed, suggesting that if  Binder accepted and cashed the check, he would waive any claims he had against the defendants for more money. Whether that gambit would have worked in this case is not clear.  Under Ohio law, in order for a party to prevail on an “accord and satisfaction” defense under Ohio Rev. Code §1303.40, the party asserting it must show that there was a bona fide dispute regarding the debt in question. If the debt amount was not in dispute, but the defendants simply wanted to pay Binder less money, the defense would have failed, and Binder could have cashed the check without risk. See Morgan v. The Village Printers, Inc., 2004-Ohio-3751,¶¶ 9-10,  2004 WL 1585553 (1st Dist. July 16, 2004).  In any event, it didn’t matter because instead of cashing the check, Binder filed suit for fraud and breach of contract.

To read more on Binder’s claim and the result, read on after the jump. 

Continue Reading Broker Broke on Mineral Rights Commissions