Jefferis Real Estate Oil & Gas Holdings, L.L.C. v. Schaffner Law Offices, L.P.A.
2017 Ohio 1013
| Ohio Ct. App. | 2017Background
- In 1936 John W. and Helen S. Kirk reserved one-half of the mineral rights when they conveyed surface acreage in Belmont County.
- Decedents and heirs (including Jane Hinch and her children) later claimed succession to the reserved mineral interest; several estates and probates occurred (some inventories allegedly not listing the mineral interest).
- Surface owners (now Jefferis Real Estate Oil & Gas Holdings, LLC) recorded a notice of abandonment in March 2013 and filed an affidavit of abandonment in the county recorder’s office; multiple heirs filed timely “claims to preserve.”
- Surface owners sued for quiet title, asserting abandonment under the 1989 Dormant Mineral Act (DMA) or, alternatively, the 2006 DMA, and also pleaded extinguishment under the Marketable Title Act and slander of title.
- The trial court granted judgment on the pleadings for the surface owners, concluding the 1989 DMA caused automatic vesting of the severed one-half mineral interest in the surface owners as of March 22, 1992.
- On appeal this court reversed: after Ohio Supreme Court decisions changed the law, the 1989 DMA could not be applied to claims asserted after the 2006 amendments; the court remanded for further proceedings because the trial court did not rule on (and the record did not permit review of) alternative theories under the 2006 DMA or the Marketable Title Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1989 Dormant Mineral Act automatically vested dormant minerals in the surface owner | Jefferis: 1989 DMA was self-executing; no savings events occurred, so minerals vested in surface owners as of 1992 | Schaffner: 1989 DMA not applicable to post-2006 claims; cannot cause automatic forfeiture; constitutional concerns | Reversed trial court: under controlling Ohio Supreme Court precedent the 1989 DMA did not automatically vest and cannot be applied to claims asserted after the 2006 amendments |
| Whether the 2006 Dormant Mineral Act or its notice/claim procedures preserve the mineral interest | Jefferis: claims to preserve were ineffective because claimants are not successors/holders; publication notice sufficed for non-holders | Schaffner: certified-mail notice required before publication; timely recorded claims to preserve under 2006 DMA preserved the interest for all successors | Not decided on appeal — trial court never ruled on these issues; remanded for further proceedings |
| Whether the Marketable Title Act extinguished the severed mineral interest (40-year unbroken record chain) | Jefferis: root-of-title deed from 1960 gives surface owners marketable record title; severed mineral interest null and void under the Act | Schaffner: disputed; argued title transactions and probate filings may constitute preservation/savings events | Not decided on appeal — trial court did not address Marketable Title Act extinguishment; remanded |
| Standing/eligibility of heirs to file claims to preserve under DMA | Jefferis: heirs are not successors/holders merely by descent if the probate inventory omitted the minerals | Schaffner: heirs who derive title by will/descent are successors/holders and could timely preserve rights | Not decided on appeal — trial court did not resolve this factual/legal eligibility issue; remanded |
Key Cases Cited
- Dodd v. Croskey, 37 N.E.3d 147 (Ohio 2015) (a timely post-notice claim to preserve filed by one successor preserves the mineral interest for all successors)
- Bowen v. Kil-Kare, Inc., 585 N.E.2d 384 (Ohio 1992) (procedural posture and ripeness principles; appellate courts should not decide issues the trial court never reached)
- Murphy v. Reynoldsburg, 604 N.E.2d 138 (Ohio 1992) (summary-judgment/de novo review does not relieve trial courts of deciding threshold issues before appellate review)