639 F. App'x 296
6th Cir.2016Background
- Nancy McLaughlin acquired surface rights to a 143-acre Ohio tract at a tax sheriff’s sale; oil and gas rights had been severed long before her purchase.
- Consolidation Coal originally owned the full estate, leased the oil and gas rights in 1979, and thereafter conveyed the surface while expressly reserving mineral rights.
- A Partial Release of Oil and Gas Lease was recorded in 1992 by the lessee as to a portion of the lease; McLaughlin purchased the land in 1994 and Consolidation conveyed its mineral rights to CNX in 2011.
- McLaughlin sued in state court to quiet title, claiming the severed mineral rights had been abandoned and vested in her under Ohio’s Dormant Mineral Act (ODMA); CNX removed and moved for judgment on the pleadings.
- The district court granted judgment for CNX; the Sixth Circuit stayed the appeal pending the Ohio Supreme Court’s Buell decision and then affirmed, holding the oil and gas lease (and related title events) were ODMA “title transactions” preventing abandonment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether oil and gas leases (and related releases) are ODMA “title transactions” that save mineral interests from abandonment | McLaughlin: leases/releases do not qualify as title transactions and therefore minerals abandoned and vested in surface owner | CNX: leases/releases are title transactions under ODMA (and Marketable Title Act definition), so mineral interest was preserved | Lease/releases are title transactions; ODMA savings event occurred, so minerals did not vest in McLaughlin |
| Whether McLaughlin obtained mineral title via sheriff’s deed from the tax sale | McLaughlin: sheriff’s deed did not mention severed minerals, so tax sale conveyed minerals to her | CNX: seller at tax sale (International Environmental Services) never owned minerals; one cannot convey what one does not own | Sheriff’s deed did not convey minerals because seller lacked title to them |
| Whether failure to separately tax or list the mineral parcel (or other claimed omissions) caused abandonment | McLaughlin: tax sale and lack of separate tax parcel indicate abandonment | CNX: Ohio law disfavors forfeiture for taxing authority omissions; failure to list or tax mineral estate does not extinguish ownership | Court rejects a tax- or list-based theory of abandonment; such omissions do not forfeit mineral rights |
Key Cases Cited
- Tucker v. Middleburg-Legacy Place, 539 F.3d 545 (6th Cir. 2008) (standard of review for judgment on the pleadings)
- JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577 (6th Cir. 2007) (standards for Rule 12(c) judgment on the pleadings)
- Fritz v. Charter Twp. of Comstock, 592 F.3d 718 (6th Cir. 2010) (plausibility pleading standard applied on Rule 12(c))
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading-standards framework)
- Weiner v. Klais & Co., 108 F.3d 86 (6th Cir. 1997) (consideration of documents central to complaint on Rule 12 motions)
- Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429 (7th Cir. 1993) (treating referenced documents on motions without converting to summary judgment)
- Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327 (6th Cir. 2007) (courts may consider public records on Rule 12(c))
- Yoss v. Markley, 68 N.E.2d 399 (Ohio C.P. 1946) (taxing authorities’ failure to levy taxes on severed mineral interests does not bar mineral-owner rights)
- Frate v. Rimenik, 152 N.E. 14 (Ohio 1926) (principle that one cannot convey what one does not own)