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Corban v. Chesapeake Exploration, L.L.C., Et Al.
149 Ohio St. 3d 512
| Ohio | 2016
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Background

  • Surface owner Hans Michael Corban sued mineral-rights holders (North American Coal Royalty and others) in 2013 seeking quiet title and declaratory relief, claiming mineral rights had vested in him by abandonment before 2006.
  • The mineral estate had been severed from the surface in 1959; leases and delay-rental payments were made at various times, and production began under later leases in 2011.
  • The district court certified two questions of Ohio law: (1) whether the 1989 or the 2006 version of the Dormant Mineral Act (R.C. 5301.56) governs claims filed after June 30, 2006 that assert abandonment before 2006; and (2) whether payment of delay rentals is a “title transaction” / saving event under the Dormant Mineral Act.
  • The 1989 Dormant Mineral Act (DMA) provided that a dormant mineral interest “shall be deemed abandoned and vested” in the surface owner unless certain saving events occurred within 20 years, but did not use the word “extinguish” or require recording by the surface owner.
  • The 2006 amendment added an affirmative notice-and-recording procedure (including a presuit notice and a right for the mineral holder to file a claim) so that mineral interests become marketable-record title only after specified steps are taken.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Which version of the Dormant Mineral Act applies to claims filed after June 30, 2006 (when abandonment allegedly occurred before 2006)? Corban: the 1989 DMA was self-executing; mineral rights vested automatically on abandonment prior to 2006, so 2006 amendments cannot be applied to divest his vested rights. Respondents: 1989 DMA created a conclusive presumption for litigation but was not self-executing; the 2006 procedures govern claims filed after June 30, 2006 and do not impair vested rights but prescribe how to perfect them. The 2006 version applies to all claims asserted after June 30, 2006; the 1989 DMA was not self-executing (it created an evidentiary/conclusive presumption in litigation, but vesting into marketable record title required judicial or later-record steps).
Is payment of delay rental during a lease’s primary term a "title transaction" or saving event under the Dormant Mineral Act? Corban: delay rentals are not title transactions because they do not transfer or affect title; thus they do not preserve the mineral interest unless recorded. Respondents: payment of delay rentals signals continued use of the interest, affects title indirectly, and recording the lease gives notice of payment dates and amounts. Payment of delay rental is neither a title transaction nor a saving event: delay rentals do not affect title independently and are not recorded in the county recorder’s records required for a saving event.

Key Cases Cited

  • Texaco, Inc. v. Short, 454 U.S. 516 (U.S. 1982) (upheld constitutionality of a self-executing dormant-mineral statute in Indiana)
  • Heifner v. Bradford, 4 Ohio St.3d 49 (Ohio 1983) (interpreting Marketable Title Act and demonstrating limits in clearing severed mineral interests)
  • Beer v. Griffith, 61 Ohio St.2d 119 (Ohio 1980) (abandonment of property requires intent; nonuse alone insufficient)
  • Van Slooten v. Larsen, 410 Mich. 21 (Mich. 1980) (discussing statutory approaches to dormant mineral interests and vesting without pre-vesting hearings)
  • Mun. Resale Serv. Customers v. FERC, 43 F.3d 1046 (6th Cir. 1995) (conclusive presumption created by the word "deemed")
  • Rowe v. New Hampshire Motor Transport Assn., 552 U.S. 364 (U.S. 2008) (interpreting statutory "deemed to know" language as creating conclusive presumption)
Read the full case

Case Details

Case Name: Corban v. Chesapeake Exploration, L.L.C., Et Al.
Court Name: Ohio Supreme Court
Date Published: Sep 15, 2016
Citation: 149 Ohio St. 3d 512
Docket Number: 2014-0804
Court Abbreviation: Ohio