Sheba v. Kautz
2017 Ohio 7699
Ohio Ct. App.2017Background
- In 1848 Thomas and Sophia Day conveyed property but expressly reserved "the sole and exclusive right to all the mineral & coal lying under the tract" with two clauses limiting mining to entry from Day's adjacent land and forbidding surface entry on the conveyed tract.
- The property (subject to that 1848 reservation) is now owned by Sheba, who in 2013 granted an oil and gas deed to Ridgetop and published a notice and affidavit of abandonment under Ohio's Dormant Mineral Act (DMA).
- Four heirs of Day (Kautz et al.) filed claims to preserve the mineral interest; Sheba/Ridgetop sued for declaratory judgment and quiet title asserting (1) the 1848 reservation did not reserve oil & gas, (2) abandonment under the 1989 DMA, (3) abandonment under the 2006 DMA, and (4) adverse possession.
- The trial court granted summary judgment to Sheba/Ridgetop on alternative grounds: (a) it initially held the mineral interest was abandoned automatically under the 1989 DMA, and (b) alternatively held the 1848 deed’s language (references to "mining") showed intent to reserve only coal/non-migratory minerals, not oil & gas.
- On appeal, the Seventh District held the trial court erred to the extent it relied on automatic abandonment under the 1989 DMA (due to Ohio Supreme Court holdings), but affirmed summary judgment on the alternative deed-construction ground—applying Detlor principles to conclude the 1848 reservation did not include oil and gas.
Issues
| Issue | Plaintiff's Argument (Sheba) | Defendant's Argument (Kautz) | Held |
|---|---|---|---|
| 1) Applicability of the 1989 Dormant Mineral Act | 1989 DMA caused automatic abandonment of Day heirs’ mineral interest (no savings events). | 1989 DMA inapplicable/ unconstitutional; 2006 DMA controls. | Court: Trial court erred to apply 1989 DMA as automatic; Ohio Supreme Court decisions (Corban/Albanese) make 1989 DMA inapplicable to post-2006 litigation. (Appellants’ first two assignments have merit.) |
| 2) Whether mineral interest "automatically" vested in surface owner under 1989 DMA | Abandonment was automatic; minerals vested in surface owner. | Not automatic; statutory scheme requires procedures (per later precedent). | Court: Automatic vesting under 1989 DMA is incorrect per Ohio Supreme Court; cannot be applied here. |
| 3) Whether 1848 reservation "all the mineral & coal" included oil and gas | The word "all" and "minerals" is broad and includes oil & gas; reservation therefore retained oil & gas. | The deed’s limiting language (twice referring to the right to "mine" and restriction to mine only from grantor’s adjacent land) and the 1848 date indicate intent to reserve only coal/other non-migratory minerals, not oil & gas. | Court: Held the 1848 reservation did not reserve oil and gas—applying Detlor principles (date, locality, and mining-easement language show intent to reserve mined/non-migratory minerals). |
| 4) 2006 DMA / Adverse possession claim | Minerals abandoned under 2006 DMA or subject to adverse possession/leasing history. | Heirs filed timely claim; no adverse possession. | Court: 2006 DMA analysis moot because any interests would have been abandoned earlier under the (erroneously applied) 1989 DMA; appellate disposition affirms summary judgment on deed construction, not DMA grounds. |
Key Cases Cited
- Detlor v. Holland, 57 Ohio St. 492 (1898) (a deed conveying coal and “other valuable minerals” with mining-type easements did not convey oil and gas where context and easements showed intent limited to mining in place).
- Corban v. Chesapeake Exploration, L.L.C., 149 Ohio St.3d 512 (2016) (interpreting the DMA and clarifying that the 1989 DMA is not self-executing to effect automatic abandonment).
- Albanese v. Batman, 148 Ohio St.3d 85 (2016) (addressing application of DMA changes and confirming limitations on automatic vesting under the 1989 Act).
- Chesapeake Exploration, L.L.C. v. Buell, 144 Ohio St.3d 490 (2015) (principles on what surface uses are reasonably necessary for a severed mineral estate; context for interpreting "mine" and surface rights).