mineral rights

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Last year we reported on the flood of appeals pouring in to the Ohio Supreme Court raising dozens of questions about the Ohio Dormant Mineral Act (DMA), which can be found at R.C. 5301.56. A year later we finally have a few answers and the surge of new DMA appeals seems to have subsided.

This blog post provides a comprehensive update on DMA cases that have been decided and which remain pending before the Ohio Supreme Court to date. Overall, two cases have been decided – Dodd v. Croskey and Chesapeake Exploration, L.L.C. v. Buell – and 13 cases presenting 39 questions of law have been accepted and remain pending. There are no pending DMA appeals that have not been accepted for review.Continue Reading Ohio Supreme Court still mulling many questions about the Dormant Mineral Act

The Ohio shale boom started slowly when a few small companies quietly began acquiring mineral leases for as little as $25 per acre.  This soon gave way to a full blown land rush in the fall of 2010.  But as lease prices skyrocketed through the Fall of 2011, disillusioned lessors who signed before the peak of the market were the ones rushing – to the courthouse to file lawsuits to cancel their leases.

In order to gain leverage and legitimize their lawsuit, lessors frequently allege that their lease is “unconscionable” or they were fraudulently induced to sign it.  “Exhibit A” to these lawsuits is often a technical error in the lease signing or a “fraudulent” statement made by a landman.  There are exceptions, but many of these kinds of lawsuits have no legal basis.Continue Reading Lawsuits Over “Fraudulent” Oil & Gas Leases Often Lack Merit

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.

Background

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