Gerrity v. Chervenak (Slip Opinion)Gerrity v. Chervenak (Slip Opinion)
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
{¶ 1} This appeal calls upon this court to once again address provisions of the Ohio Dormant Mineral Act,
Facts and Procedural Background
{¶ 2} Unlike many cases concerning mineral interests, this case’s facts are neither disputed nor complicated. Appellee, John E. Chervenak, trustee of the Chervenak Family Trust (“Chervenak”), owns approximately 108 acres of land in Guernsey County, Ohio. The rights to the minerals underlying that property were severed in a warranty deed, filed in November 1961, in which T.D. Farwell transferred the surface rights but reserved to himself “all minerals (coal, oil and gas) underlying” the property. John and Gloria Chervenak acquired the surface estate by warranty deed recorded in November 1999. They transferred the property to the Chervenak Family Trust by quitclaim deed recorded in March 2015.
{¶ 3} In 2012, a title search for the Chervenak property identified Jane F. Richards, Farwell’s daughter, as the owner
{¶ 4} Richards died in 1997. At the time of her death, she was a Florida resident. Appellant, Timothy Gerrity, is Richards’s son and sole heir. He claims that he is the rightful owner of the mineral rights underlying the Chervenak property as a result of the probate of Richards’s estate in Florida. The records filed with the Guernsey County Recorder, however, contain no evidence of Richards’s death or of Gerrity’s inheritance of the mineral interest.
{¶ 5} In June 2012, seeking to reunite the severed mineral interest with the surface estate pursuant to the Dormant Mineral Act, the Chervenaks recorded with the Guernsey County Recorder an affidavit of abandonment of the severed mineral interest. As relevant here, the affidavit stаted that notice of abandonment had been sent by certified mail to Richards at her last known address—the Cleveland address listed in the 1965 certificate of transfer—but had been returned, marked “Vacant-Unable to Forward.” It also stated, “Richards, her unknown heirs, devisees, executors, administrators, relicts, next of kind [sic] and assigns” had been served notice of abandonment by publication on May 4, 2012. In July 2012, the Chervenaks filed with the Guernsey County Recorder a notice of the mineral interest holder’s failure to file a contrary claim and requested that the recorder note in the margins of the 1961 deed and the 1965 certificate of transfer that the mineral interest had been abandoned.
{¶ 6} Five years later, in August 2017, Gerrity filed this аction in the Guernsey County Court of Common Pleas to quiet title and for a declaratory judgment that he is the exclusive owner of the mineral rights. Gerrity claims that the Chervenaks’ purported use of the Dormant Mineral Act was ineffective because they did not comply with the act’s notice requirements. Chervenak filed a counterclaim to quiet title and for a declaratory judgment that by operation of the Dormant Mineral Act, the trust is the owner of the mineral rights.
{¶ 7} Gerrity and Chervenak each moved for summary judgment. Without any written analysis of the parties’ arguments or the applicable law, the trial court entered summary judgment for Chervenak and declared the trust the owner of the mineral rights. In a split decision, the Fifth District Court of Appeals affirmed the trial court’s judgment. 2019-Ohio-2687, 140 N.E.3d 164. This court has accepted Gerrity’s discretionary appeal. 157 Ohio St.3d 1440, 2019-Ohio-4211, 132 N.E.3d 700.
Analysis
{¶ 8} We have previously recognized the common practice in mineral-producing regions of severing the rights to subsurface minerals from the rights to the surface of land. Dodd v. Croskey, 143 Ohio St.3d 293, 2015-Ohio-2362, 37 N.E.3d 147, ¶ 7. We have further recognized that as severed mineral interests are divided or transferred, often over long periods of time, it can become “difficult, or even impossible, to find the owners of such severed mineral rights.” Id.; see also Corban v. Chesapeake Exploration, L.L.C., 149 Ohio St.3d 512, 2016-Ohio-5796, 76 N.E.3d 1089, ¶ 16. The General Assembly enacted the Dormant Mineral Act in 1989 as a supplement to the Ohio Marketable Title Act,
{¶ 9} As amended in 2006, the Dormant Mineral Act provides that unless a severed mineral interest is in coal or is coal related, the interest is held by the United States, the state or any other political body described in the statute, or a saving event enumerated in
Before a mineral interest becomes vested under division (B) of this section in the owner of the surface of the lands subject to the interest, the owner of the surface of the lands subject to the interest shall do both of the following:
(1) Serve notice by certified mail, return receipt requested, to each holder or each holder’s successors or assignees, at the last known address of each, of the owner’s intent to declare the mineral interest abandoned. If service of notice cannot be completed to any holder, the owner shall publish notice of the owner’s intent to declare the mineral interest abandoned at least once in a newspaper of general circulation in each county in which the land that is subject to the interest is located. The notice shall contain all of the information specified in division (F) of this section.
(2) At least thirty, but not later than sixty days after the date on which the notice required under division (E)(1) of this section is served or publishеd, as applicable, file in the office of the county recorder of each county in which the surface of the land that is subject to the interest is located an affidavit of abandonment that contains all of the information specified in division (G) of this section.
{¶ 10} A surface owner’s failure to satisfy
{¶ 11} The question here is whether the Chervenaks satisfied
{¶ 12} Gerrity asks this court to reverse the Fifth District’s judgment and to adopt two propositions of law regarding
Application of the Dormant Mineral Act is not limited to circumstances in which every holder of a severed mineral interest has been identified
{¶ 13} Gerrity argues under his first proposition of law that the Dormant Mineral Act requires a surface owner to both identify all holders of the severed mineral interest and attempt to serve notice of abandonment to all holders by certified mail before resorting to notice by publication. He maintains that the severed mineral interest here could not be deemed abandoned and vested in the Chervenaks under the Dormant Mineral Act because
{¶ 14} To determine the meaning of a statute, we look first to the statutory language. Boley v. Goodyear Tire & Rubber Co., 125 Ohio St.3d 510, 2010-Ohio-2550, 929 N.E.2d 448, ¶ 20. We read statutory words and phrases in the context of the whole statute and presume that the General Assembly intended the whole statute to be effective. Commerce & Industry Ins. Co. v. Toledo, 45 Ohio St.3d 96, 102, 543 N.E.2d 1188 (1989);
{¶ 15} Gerrity first maintains that application of the Dormant Mineral Act is limited to those circumstances in which the owner of the surface estate identifies every holder of the severed mineral interest.
{¶ 16} Because Gerrity is a “holder” under the Dormant Mineral Act, he argues that the Chervenaks would be in compliance with the statute’s requirements only if Gerrity were identified in the notices required by
Serve notice by certified mail, return receipt requested, to each holder or each holder‘s successors or assignees, at the last known address of each, of the owner‘s intent to declare the mineral interest abandoned. If service of notice cannot be completed to any holder, the owner shall publish notice of the
owner‘s intent to declare the mineral interest abandoned at least once in a newspaper of general circulation in each county in which the land that is subject to the interest is located. The notice shall contain all of the information specified in division (F) of this section.
Gerrity contends that because
{¶ 17} We cannot, however, read
{¶ 18} On the other hand, reading the provision to not require identification of an unidentified holder is consistent with the qualifier in
{¶ 19} Considering
{¶ 20} Such a reading is consistent with the General Assembly’s codified legislative intent that the Dormant Mineral Act “be liberally construed to effect the legislative purpose of simplifying and facilitating land title transactions by allowing persons to rely on a record chain of title.”
{¶ 21} Construing the Dormant Mineral Act as ineffective unless the surface owner identifies every mineral-interest holder, including every successor or assignee of a record holder, would negate the express legislative purpose of the act. No matter the effort expended, a surface owner can never be certain that he has identified every successor and assignee of every holder who appears in the public record. Limitation оf the Dormant Mineral Act in the manner Gerrity proposes would lead to uncertainty and would open every reunification under the act to a later challenge—and perhaps undoing—by a previously unknown heir or assignee who did not appear in the public record. That uncertainty would inhibit the General Assembly’s stated intention to promote the development of the state’s mineral resources. By authorizing notice by publication, as opposed, for example, to service by ordinary mail when service by certified mail cannot be completed,
{¶ 22} We also reject Gerrity’s related argument that a surface owner must attempt service of notice by certified mail on every holder before the surface owner may resort to notification by publication under
{¶ 23} Read together, the introductory language of
{¶ 24} The language of
A surface owner must use reasonable diligence to identify and locate holders of a severed mineral interest, but what constitutes reasonable diligence will vary, based on the facts of each case
{¶ 25} Having rejected Gerrity’s arguments that the Dormant Mineral Act applies only when a surface owner specifically identifies every holder and additionally attempts to serve all such persons with notice by certified mail, we must consider what
{¶ 27} The Dormant Mineral Act’s extrajudicial process for reuniting severed mineral interests does not implicate the jurisdictional concerns underlying
{¶ 28} Gerrity goes on to argue that at a minimum, a surface owner who wishes to utilize the Dormant Mineral Act must exercise reasonable diligence to identify all holders of the severed mineral interest. The Seventh District Court of Appeals has recently evaluated efforts to identify heirs to a mineral interest using a reasonableness standard. Sharp v. Miller, 2018-Ohio-4740, 114 N.E.3d 1285 (7th Dist.), ¶ 17; Shilts, 7th Dist. Monroe No. 16 MO 0003, 2018-Ohio-863, at ¶ 15. It has held that when “a reasonable search fails to reveal the names or addresses of potential heirs who must be served,” a surface owner need not attempt to provide notice by certified mail under
{¶ 29} Shilts involved the ownership of mineral rights reserved by ten grantors in a 1914 deed. Shilts at ¶ 2. The appellant, an heir of one of the original grantors, challenged the surface owner’s publication in 2012 of notice of an intent to declare the
{¶ 30} In Sharp, the Seventh District reiterated, “An attempt to provide notice by certified mail is unnecessary where a reasonable search fails to reveal the names or addresses of potential heirs who much be served.” Sharp at ¶ 16, citing Shilts at ¶ 15. The surface owner in Sharp unsuccessfully searched available public records, including probate records and recorded deeds, but not the Internet, for heirs to a 1944 mineral reservation. Id. at ¶ 21. Consistent with its refusal to create a bright-line rule, the Seventh District clarified that an Internet search is not a necessary component of reasonable diligence. Looking to the facts and circumstances of that case, the court found no evidence that “a simple Internet search” would have revealed the heirs. Id.
{¶ 31} Gerrity and Chervenak both encourage this court to do what the Seventh District has refused to do—adopt a bright-line rule that defines the steps a surface owner must take to identify and locate holders of a severed mineral interest to comply with
{¶ 32} In support of his motion for summary judgment, Chervenak submitted an affidavit from Barbara K. McCombs,
{¶ 33} Having uncovered no address for Riсhards more recent than that listed in the 1965 certificate of transfer and no information regarding successors, heirs or assigns of Richards’s interest in the mineral rights, the Chervenaks sent notice by certified mail, directed to Richards at the Cleveland address. When that notice was returned as undeliverable, the Chervenaks published notice of their intent to declare the mineral interest invalid in The Jeffersonian, a newspaper of general circulation in Guernsey County. Like the Fifth District majority, see 2019-Ohio-2687, 140 N.E.3d 164, at ¶ 25, under the facts of this case, we conclude that the Chervenaks exercised reasonable diligence to identify holders of the severed mineral interest.
{¶ 34} Gerrity criticizes the Chervenaks for not searching the Internet for a more recent address for Richards to determine whether Richards was still living and to identify any heirs. Gerrity has suggested that the Chervenaks could have located Richards’s obituary online and could have identified him as Richards’s heir by conducting a genealogy search for Farwell, who originally reserved the mineral interest, using the subscription databases on Ancestry.com. The record, however, contains no specific evidence of what an Internet search would have revealed in 2012, when the Chervenaks followed the Dormant Mineral Act. We decline to impose the requirements that Gerrity has proposed as a matter of law. The ever-changing quantum and quality of information available on the Internet, the inconsistent reliability of that information, and the variability of Internet-search results all weigh against a bright-line requirement for online searches, let alone a bright-line requirement that a surface owner consult any particular paid subscription services, to identify heirs to a severed mineral interest.
{¶ 35} The surface owner’s chain of title is the necessary starting point for determining the applicability of the Dormant Mineral Act. Before issuing notice of an intent to declare a severed mineral interest abandoned, the surface owner must first determine whether the Dormant Mineral Act applies. A severed mineral interest may not be deemed abandoned and vested in the ownеr of the surface of the lands subject to the interest if any of the six saving events set out in
{¶ 36} Review of public-property and court records in the county where the land subject to a severed mineral interest is located will generally establish a baseline of reasonable diligence in identifying the holder or holders of the severed mineral interest. There may, however, be circumstances in which the surface owner’s independent knоwledge or information revealed by the surface owner’s review of the public-property and court records would require the surface owner, in the exercise of reasonable diligence, to continue looking elsewhere to identify or locate a holder. But whether that additional search is required will depend on the circumstance of each case, and it was not required in this case. McCombs’s diligent search of the public records in both Guernsey County and Cuyahoga County revealed no indication that the sole record holder was deceased and offered no clue as to the identity of any potential successors or assigns.
{¶ 37} Finally, to the extent that Gerrity raises a due-process challenge to
{¶ 38} In Texaco, the Supreme Court rejected constitutional challenges to Indiana’s Dormant Mineral Interests Act, which operated to automatically extinguish a severed mineral interest after a 20-year period of nonuse unless the mineral-interest holder filed a claim to preserve the interest. Id. at 518-519. The self-executing Indiana statute did not require a surface owner to take any action or to provide any notice to the mineral-interest holder before the mineral interest lapsed and reunited with the surface estate by operation of law. Id. at 520.
{¶ 39} The appellants in Texaco unsuccessfully claimed, in part, that the lack of direct notice prior to the lapse of their mineral interests deprived them of property without due process of law. Id. at 522. The Supreme Court disagreed and held that a state may condition the permanent retention of a property right “on the performance of reasonable conditions that indicate a present intention to retain the interest.” Id. at 526. In rejecting the appellants’ due-process argument that they were entitled to specific notice that their interests were about to expire, the court stated, “Generally, a legislature need do nothing more than enact and publish the law, and afford the citizenry a reasonable opportunity to familiarize itself with its terms and to comply.” Id. at 532. It reasoned that mineral-interest holders may be presumed to have knowledge of the terms of the act and that pursuant to the act, “an unused mineral interest would lapse unless they filed a statement of claim.” Id. at 533.
{¶ 40} The version of the Dormant Mineral Act at issue here has been in effect since 2006, and Gerrity may be presumed to have had notice of the act’s provisions, including thе statutory actions he could have undertaken, either before or after the Chervenaks filed their notice of abandonment, to prevent the mineral interest from being deemed abandoned and vested in the Chervenaks. Given that the Indiana statute at issue in Texaco, which permitted the extinguishment of a mineral interest without any prior notice to the holder besides the existence of the statutory scheme itself, passes constitutional muster, Ohio’s Dormant Mineral Act, which affords the additional safeguards of notice by certified mail when possible and notice by publication when certified-mail service is not possible, cannot be said to violate Gerrity’s due-process rights.
Conclusion
{¶ 41} A surface owner attempting to comply with
Judgment affirmed.
O’CONNOR, C.J., and KENNEDY, FISCHER, DEWINE, and STEWART, JJ., concur.
DONNELLY, J., concurs in judgment only.
Baker, Dublikar, Beck, Wiley & Mathews, and James F. Mathews; and Finnucan & Associates, L.L.C., and John C. Finnucan, for appellant.
Kravitz, Brown & Dortch, L.L.C., Michael D. Dortch, and Richard R. Parsons, for appellee.
Yukevich, Mаrchetti, Fischer, Zangrilli, P.C., and Mark Fischer, urging reversal for amici curiae Harry A. Fonzi III and Linda Grimes.
Scullin and Cunning, L.L.C., and Sean Richard Scullin, urging reversal for amici curiae Jeffrey H. Sharp, Bradley W. Sharp, Gregory C. Smith, J. Kent Smith, Jeffrey S. Smith, Lelah Cline Smith, and Scott Johnson.
Theisen Brock, L.P.A., and Daniel P. Corcoran, urging affirmance for amici curiae Allen B. Miller, Matilda J. Miller, Craig M. Miller, Tina E. Miller, Brenda D. Thomas, Kevin M. Thomas, Gary Brown, the Billiter Family Land Trust, Kerry R. Hartline, Mary E. Hartline, Doris Craig, Paul Craig, Eleanor Craig, Nina Ice, Terry Ice, Sheila Stollar, Roger Stollar, Lisa Meyer, Kenneth Meyer Jr., Helen Craig, Evelyn Craig, Carissa R. Baker, and Corey A. Stollar.
Chad A. Endsley, Leah F. Curtis, and Amy Milam, urging affirmance for amici curiae Ohio Farm Bureau Federation and Guernsey County Farm Bureau.
Krugliak, Wilkins, Griffiths & Dougherty Cо., L.P.A., Gregory W. Watts, and Matthew W. Onest, urging affirmance for amici curiae Cassandra Ridenour, Senterra, Ltd., Natalia Toma Trust, (by Stefan Toma, Trustee), Pora Putney Ridge Properties, L.L.C., and Paines Run, L.L.C.
Emens, Wolper, Jacobs & Jasin Law Firm Co., L.P.A., Sean E. Jacobs, and Cody R. Smith, urging affirmance for amicus curiae Ohio River Collieries Company.