2017 Ohio 5704
Ohio Ct. App.2017Background
- The dispute concerns ownership of a 1/2 oil-and-gas royalty reserved by Nick and Flora Kuhn in a 1915 deed conveying surface of a 60-acre parcel in Monroe County, Ohio.
- Surface title passed to David Blackstone (1969) and later to David and Nicolyn Blackstone (2001); the Blackstones executed oil-and-gas leases on the property in 1976 and 2012.
- In May 2012 the Blackstones recorded a notice of intent to declare the mineral interests abandoned and filed suit (June 4, 2012) for declaratory judgment and quiet title; several Kuhn heirs (Appellants) asserted preserved mineral rights and filed an affidavit under R.C. 5301.56.
- The trial court granted summary judgment to the Blackstones, finding abandonment under the 1989 Dormant Mineral Act (DMA) and that the Marketable Title Act (MTA) had extinguished the Kuhn reservation; Appellants appealed.
- The Seventh District reversed: it held the 2006 DMA (as interpreted in Corban) governs post-2006 claims and that Appellants had timely preserved their interests; it also held the reservation reference in the chain of title was sufficiently specific to survive the MTA, so the MTA did not extinguish the royalty.
Issues
| Issue | Plaintiff's Argument (Blackstone) | Defendant's Argument (Kuhn heirs) | Held |
|---|---|---|---|
| Whether royalty interest is subject to the MTA/DMA | MTA broadly extinguishes all interests in a record chain, including royalties | Royalty is a perpetual nonparticipating royalty or contractual right not subject to MTA/DMA | MTA/DMA apply to royalty interests (court affirmed applicability) |
| Which version of the DMA applies | 1989 DMA applies prospectively; minerals automatically reunited absent saving event | 2006 DMA applies to post-2006 claims and requires statutory notice and preservation procedure | 2006 DMA controls; 1989 DMA not self-executing; Appellants preserved interests under 2006 DMA |
| Whether trial court abused discretion allowing amendment to add MTA claim | Amendment timely and not prejudicial given extensions; alternative theory became available | Amendment was untimely and prejudicial because it added MTA claim late | Allowing amendment was not an abuse of discretion (no shown prejudice) |
| Whether the MTA extinguished the Kuhn reservation by being a general reference | Reference insufficiently specific to identify reserving instrument; MTA extinguishes prior unpreserved interests | Deed reference named reservor and nature of interest and thus is specific under R.C. 5301.49(A) | Reference was sufficiently specific (per court’s 4-factor test); MTA did not extinguish the reservation |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (sets standard for de novo appellate review of summary judgment)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (Ohio 1977) (explains Civ.R. 56 summary judgment standard and view of evidence)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (plaintiff/nonmoving party burden in response to a properly supported summary judgment motion)
- Hoyt, Inc. v. Gordon & Assoc., Inc., 104 Ohio App.3d 598 (Ohio Ct. App. 1995) (materiality of facts depends on substantive law)
- Brewer v. Cleveland Bd. of Edn., 122 Ohio App.3d 378 (Ohio Ct. App. 1997) (nonmoving party must produce evidence that reasonable factfinder could favor them)
- Toth v. Berks Title Ins. Co., 6 Ohio St.3d 338 (Ohio 1983) (discusses specificity required to preserve interests in chain of title under marketable-title principles)