Mong v. Kovach Holdings, L.L.C.
2013 Ohio 882
Ohio Ct. App.2013Background
- Mong sued Kovach Holdings to reform a deed to include a gas/oil royalty reservation as stated in the contract of sale.
- The contract reserved oil and gas royalties to the “present owner”; the warranty deed to Kovach did not reflect that reservation.
- The deed for the property was recorded October 9, 2009; the contract was executed September 21, 2009.
- Atlas Energy Resources asserted a valid leasehold and was paying royalties into escrow.
- Mong claimed mutual mistake justified reformation; Kovach argued the merger doctrine precludes reformation.
- The trial court granted Kovach’s cross-motion for summary judgment; Mong appealed and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is reformation available where the deed omits a royalty reservation stated in the contract? | Mong asserts mutual mistake warrants reformation. | Kovach asserts no mutual mistake and that reformation is inappropriate. | No; no clear, convincing evidence of mutual mistake. |
| Does the merger doctrine preclude reformation here? | Mong relies on exceptions allowing equity to reform. | Kovach argues the deed merged the prior agreement; no basis to reform. | Merger precludes relief; evidence does not overcome the doctrine. |
Key Cases Cited
- Wagner v. Natl. Fire Ins. Co., 132 Ohio St. 405 (Ohio 1937) (reformation available when mutual mistake exists; equity cannot create contract)
- Fuller v. Drenberg, 3 Ohio St.2d 109 (Ohio 1965) (merger doctrine and exceptions; proper context for reformation)
- Mayer v. Sumergrade, 111 Ohio App.2d 237 (Ohio App. 1960) (exception to merger for mistake)
- First Natl. Bank of Cincinnati v. Tenney, 165 Ohio St. 513 (Ohio 1956) (tools for interpreting reservations in deeds)
- Pure Oil Co. v. Kindall, 116 Ohio St. 188 (Ohio 1927) (construction of reservations against grantor in conveyances)
- Stewart v. Gordon, 60 Ohio St. 170 (Ohio 1899) (requirements to prove mutual mistake by clear and convincing evidence)
- Mason v. Swartz, 76 Ohio App.3d 43 (Ohio App. 1991) (mutual mistake and reformation principles (app. court))