Eisenbarth v. Reusser
18 N.E.3d 477
Ohio Ct. App.2014Background
- In 1954, deed reserved one-half of all minerals under two Monroe County tracts to William, while lease rights to develop and lease were given to Paul and Ida.
- William later transferred his half of the minerals to Mildred Reusser, making a half-interest in minerals subject to leasing by the Eisenbarths’ predecessors.
- In 1974, Paul and Ida recorded a 1973 oil and gas lease covering all minerals; Eisenbarths later signed a 2008 lease and received a $766,250 signing bonus, half of which was escrowed.
- The 1989 Dormant Mineral Act (DMA) provides a look-back mechanism and savings events to prevent abandonment of severed mineral interests.
- In 2008, the Reussers timely preserved their interest after notice of abandonment, while the Eisenbarths sued to declare abandonment and to quiet title; the Reussers counterclaimed to share the bonus.
- The trial court found the Reussers’ mineral interest had not been abandoned and awarded them half the 2012 lease bonus; Eisenbarths appealed, Reussers cross-appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is a recorded oil and gas lease a savings event under DMA? | Eisenbarths: lease is not a title transaction; signing cannot save Reusser minerals. | Reussers: lease over all minerals affects title and counts as a savings event. | Yes; a recorded lease over minerals can be a savings event. |
| What look-back period applies under the 1989 DMA, fixed or rolling? | Look-back is rolling from any date between 1989 and 2006; 1974 lease would be stale by 1994. | Look-back is fixed from enactment; 20-year periods from 1989 and then 2006 define abandonment. | Trial court’s fixed look-back period applied; no abandonment under 1989 DMA in this case. |
| Are the Reussers entitled to half the signing bonus if there was no abandonment? | Bonus rights may belong to Eisenbarths as grantors under the reservation. | Reservation granted executive lease rights but not exclusive to bonuses; reclaimed by co-owners sharing. | Reussers entitled to share in half of the bonus. |
Key Cases Cited
- Harris v. Ohio Oil Co., 57 Ohio St. 118 (1897) (oil and gas lease creates a vested, determinable interest)
- Moore v. Indian Camp Coal Co., 75 Ohio St. 493 (1907) (severance of mineral interests; separate incidents may transfer)
- Back v. Ohio Fuel Gas Co., 160 Ohio St. 81 (1953) (oil and gas documents can be encumbrances affecting title)
- Kramer v. PAC Drilling & Oil, 2011-Ohio-6750 (9th Cir. 2011) (oil and gas lease constitutes a fee interest determinable upon events)
- Pure Oil Co. v. Kindall, 116 Ohio St.3d 188 (1921) (reservation language governs royalty vs. mineral corpus)
- Dodd v. Croskey, 2013-Ohio-4257 (7th Dist.) (whether a surface deed's repetition of a prior reservation is a savings event)
- Walker v. Shondrick-Nau, 2014-Ohio-1499 (7th Dist.) (debate over 1989 ODMA control; rolling vs fixed look-back discussions)
- Swartz v. Householder, 2014-Ohio-2359 (7th Dist.) (ODMA interpretation; 2006 amendments remedial)
- Dahlgren v. Brown Farm Props., LLC, Unknown official reporter (2013) (supports 2006 ODMA controlling disputes filed after its effective date)