Login | November 26, 2020

7th District appellate court reverses ODMA dispute

Legal News Reporter

Published: November 13, 2020

A Monroe County trial court erred by determining Cain Ridge Beef Farm, LLC complied with abandonment provisions under the under the Ohio Dormant Mineral Act, according to the 7th District Court of Appeals.
In 1907, Henry and Mary Strauch owned 113.13 acres of real property in Monroe County. They later conveyed the property to Charles Miller (the Strauch deed). In the Strauch deed, Henry and Mary reserved one-half of all the oil and gas underlying the property (the Strauch reservation).
Henry’s estate conveyed his interest in the Strauch reservation to seven heirs: Oscar Elmer Strauch, Selma Louise Strauch, Emil Sampson Strauch, Albert Wesley Strauch, Edna Lydia Strauch, Elizabeth Esther Strauch, and Alice Winona Strauch – the appellants who claim complete ownership of the Strauch reservation.
Appellees Mark and Terri Milosavljevic acquired the surface rights and one-half of the mineral rights to 95 acres of the property. In 2012, the Milosavljevics executed an oil and gas lease on the property with CNX Gas Company.
In 2014, the Milosavljevics conveyed their interest in the property to appellee Cain Ridge. The Milosavljevics are the sole owners of Cain Ridge.
Between Nov. 5, 2014 and January 2, 2015, the Milosavljevics were unsuccessful with serving the Staunch heirs of their notice of intent to abandon severed mineral interests. On Feb. 26, 2015, appellees published their notice of intent to declare the Strauch heirs’ interest in the Strauch reservation abandoned. This published notice listed the Milosavljevics as the surface owners to the property.
Appellees filed their affidavit of abandonment with the Monroe County Recorder listing the Milosavljevics as the surface owners to the property and one-half of all of the oil and gas underlying the property.
On June 2, 2015, they filed their notice of failure to file.
At various points between September 2016 and January 2017, appellants attempted to lease their interest in the Strauch reservation to CNX Gas Company.
On April 5, 2018, appellees filed a complaint seeking a declaratory judgment that appellants’ interest in the Strauch reservation was abandoned and that the oil and gas leases executed by appellants were void and seeking to quiet title in their favor.
Both parties filed motions for summary judgment. Appellees’ motion argued that, under ODMA, appellants’ interest in the Strauch reservation was abandoned and the Strauch reservation vested in the surface.
Appellants’ motion argued appellees did not exercise reasonable diligence under the ODMA in attempting to identify the current interest holders. They also argued the ODMA required the surface owner to perform the abandonment procedure.
The trial court granted appellees’ motion for summary judgment and denied appellants’ motion for summary judgment. The trial court also held that Cain Ridge was entitled to the property’s oil and gas rights.
On appeal, the heirs claimed appellees failed to comply with several aspects of the ODMA’s abandonment procedure.
The appellate panel agreed.
“… The ODMA states several times that the surface owner is to file the abandonment documents,” 7th District Judge Gene Donofrio said in the appellate court’s opinion. “Even though Cain Ridge is the surface owner, at no point did it file any of the abandonment documents. Moreover, the Milosavljevics knew they were not the surface owners because they conveyed the property to Cain Ridge on Nov. 12, 2014, less than three months before they published their notice of intent in the Monroe County Beacon.
“Appellees also argue that the Milosavljevics were acting on behalf of Cain Ridge because even if Cain Ridge completed the abandonment procedure, it would have been the Milosavljevics who signed everything on behalf of Cain Ridge. But none of the abandonment documents indicate that the Milosavljevics were acting on behalf of Cain Ridge. To the contrary, the abandonment documents state that the Milosavljevics were the surface owners despite the fact that Cain Ridge owned the surface. Based on the above, appellees’ abandonment filings did not comply with the ODMA because they do not identify the correct surface owner. Since appellees’ abandonment documents did not comply with the ODMA, the trial court erred when it granted summary judgment in favor of appellees.”
Appellate judges Carol Ann Robb and David A. D’Apolito concurred. The case is cited Cain Ridge Beef Farm, L.L.C. v. Fisher, 2020-Ohio-4727.