2. Seventh District Court of Appeals
The two main issues in this case were: first, whether the restatement of a prior mineral interest reservation in a later deed constituted a “title transaction” under the 2006 Ohio Dormant Mineral Act30 (“the 2006 ODMA”); second, when was notice by publication considered sufficient under the statute. This case is important because the court upheld the rule set forth in Dodd v. Croskey31 as to what qualifies as a “title transaction” and that notice by publication is permitted by the 2006 ODMA. Finally, the court dismissed several other claims as moot under Corban v. Chesapeake Exploration L.L.C.;32 those claims will not be addressed in this brief.
On March 28, 1914, members of the Beardmore and Moore families executed a deed to Stephen V. Beardmore (“the 1914 Deed”). The 1914 Deed conveyed all the surface and reserved a mineral interest. Eventually, the surface was conveyed to Richard F. Shilts (“Shilts”). Pursuant to the 2006 ODMA, Shilts sought to reunite the reserved interest with the surface estate by publishing notice of his intent to declare the interest abandoned on October 19, 2012, in the Monroe County Beacon. Shilts received no response to this publication and, after waiting the appropriate time, filed and recorded an Affidavit of Abandonment on December 4, 2012.
On October 7, 2014, Shilts filed a quiet-title claim against the original grantors of the 1914 Deed and their “unknown heirs, devisees, executors, administrators, relicts, next of kin, and assignees.”33 On January 6, 2015, Marie I. Christman (“Christman”), as a successor to one of the original grantors, filed an answer. On February 8, 2016, the trial court granted Shilts motion for summary judgment, holding that the mineral interest had vested in him through application of the 2006 ODMA.
Christman appealed asserting a total of eight points of error; however, this brief will only address the court’s treatment of the following arguments: (1) that the trial court erred by holding that a restatement of a prior mineral reservation in later deeds does not qualify as a “title transaction” and (2) that the trial court erred by holding that Shilts satisfied the notice requirement of the 2006 ODMA by publishing notice of intent to declare the minerals abandoned rather than providing notice by certified mail.
Christman first argued that two subsequent deeds in the chain of title, which transferred surface rights but also included reference to the reserved interest, qualify as title transactions, and therefore, the interest has not been abandoned. The court disagreed. Citing Dodd v. Croskey, the court stated that when surface rights alone are conveyed, and no new interest has been reserved, even if the prior reservation is restated in the conveyance, the purpose is solely the sale of the surface rights, and thus, the reserved interest is not the subject of the title transaction as required by the clear language of §5301.56 (B) (3) (a) (emphasis added). In applying the Dodd rule to the facts of this case, the court held that because the purpose of the later deeds was to convey only the surface, the reserved interest was not the subject of a title transaction, and therefore, the interest had been abandoned.
Regarding the notice argument, the court began by quoting, “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 […]” §5301.56 (E) (emphasis added). Christman argued that under Ohio law a “whatever it takes” standard is required, and the surface owner must at least attempt notice by certified mail.34 The court rejected this argument and instead, agreed with Shilts that the appropriate standard is one of “reasonable diligence.” The court stated that the reasonable diligence standard permits notice by publication when the party has made reasonable efforts to determine the names and addresses of the interest holders and their successors. If, after these reasonable efforts, the owner is still unable to obtain the pertinent information, it becomes obvious that notice by certified mail cannot be completed, and the owner need not make a futile attempt to serve notice in this manner. The court found that Shilts had made reasonable efforts to obtain the names and addresses of the interest holders and their heirs or successors by conducting a search of public records, including a search of probate records, an online search, examining the chain of title of the property, and by including the names of all original grantors, as well as a blanket statement addressing all possible heirs and successors to the interest in the notice; thus, notice by publication was permitted.
This case is important because the court provided further guidance on how to apply the rule set forth in Dodd v. Croskey when determining whether an instrument acts as a “title transaction” under the 2006 ODMA. Further, because the court determined that the surface owner’s search methods met the reasonable diligence standard, this case provides guidance to parties as to what search methods they should use when attempting to serve notice prior to the execution of an Affidavit of Abandonment.
29 Seventh Dist. Monroe No. 16 MO 0003, 2018-Ohio-863.
30 OHIO REV. CODE ANN. § 5301.56 (West 2014).
31 143 Ohio St. 3d 293, 2015-Ohio-2362, 37 N.E.3d 147.
32 149 Ohio St. 3d 512, 2016-Ohio-5796, 76 N.E.3d 1089.
33 Shilts v. Beardmore , Seventh Dist. Monroe No. 16 MO 000, 2018-Ohio-863, at ¶4.
34 Id. at ¶11.