1989 Ohio Dormant Mineral Act now applied by 6 Judges in 6 different Counties
The 1989 Ohio Dormant Mineral Act has now been applied by 6 Judges in 6 different counties.
Tuscawaras - Wendt v Dickerson - Feb 21, 2013
Monroe - Eisenbarth v Reusser - June 6, 2013
Jefferson - Shannon v Householder - July 17, 2013
Columbiana - Bender v Morgan - March 20, 2013
Noble - Walker v Noon - March 20, 2013
Morgan - Wiseman v Potts - June 29, 2010
They have all concluded that it does apply when reviewing a title and that it was an automatic abandoning.
Go here to read the new decisions.
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Replies to This Discussion
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Permalink Reply by Jake on -
Has there been any cases/rulings where the lesee does not develop the deep formations for decades that have been excepted out during an assignment and the excepted deep rights portion of the lease is terminated due to "implied covenants" that require the lesee to develop and market minerals from the land?
Usually there is shallow production in the tract of land but no deep development.
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Permalink Reply by M Thomas on
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It's now 7 counties and 9 decisions. All regard the 1989 DMA as an automatic abandoning and vesting by operation of law. This decision plainly calls the DMA a "use it or lose it statute".
Belmont - Taylor v Crosby - Sept 16, 2013
http://www.ohiodormantmineralact.com/taylor-v-crosby/
Complete list
Tuscawaras - Wendt v Dickerson - Feb 21, 2013
Monroe - Marty v Dennis - April 11, 2013
Monroe - Eisenbarth v Reusser - June 6, 2013
Jefferson - Shannon v Householder - July 17, 2013
Columbiana - Bender v Morgan - March 20, 2013
Noble - Walker v Noon - March 20, 2013
Morgan - Wiseman v Potts - June 29, 2010
Belmont - Tribett v Shepherd - July 22, 2013
Belmont - Taylor v Crosby - Sept 16, 2013
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There is a new case from Federal court - Ohio Southern District - Chesapeake v Buell.
It is waiting for the Ohio Supreme Court to certify two questions which affect whether a lease counts as a title transaction.
What is remarkable already is that the Federal Court found that the 1989 act is an automatic vesting, thus siding with the nine common pleas courts decisions of 2013.
Here is the excerpt:
The 1989 ODMA does not specify any method for vesting of the mineral rights in the land owner, and thus, if no savings event occurs, the interest in the mineral rights held is deemed abandoned and vests automatically in the land owner upon the twentieth year. That statute requires no further action by the land owner, but it did provide a three year grace period under which a mineral rights holder could maintain his interest. The three year grace period expired on March 23, 1992.
Here's the decision in full, as it stands so far - http://www.ohiodormantmineralact.com/chesapeake-v-buell/
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There is a new Belmont County case, which speaks extensively about the 1989 ODMA, automatic vesting, and the nature of the vested right that it gave surface owners.
It came out last October 2013:
Automatic Vesting
The 1989 version of the Ohio Dormant Mineral Act vests the surface owner with ownership in severed mineral interests without the need for any notice, recordation of any document, assertion of any claim or filing of any action.
Nature of a Vested Right
"A 'vested right' is a right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person's consent."
Read more here - http://www.ohiodormantmineralact.com/hendershot-v-korner/It's now 7 counties and 10 decisions that have upheld the plain language of the 1989 ODMA:
Complete list
Tuscawaras - Wendt v Dickerson - Feb 21, 2013
Monroe - Marty v Dennis - April 11, 2013
Monroe - Eisenbarth v Reusser - June 6, 2013
Jefferson - Shannon v Householder - July 17, 2013
Columbiana - Bender v Morgan - March 20, 2013
Noble - Walker v Noon - March 20, 2013
Morgan - Wiseman v Potts - June 29, 2010
Belmont - Tribett v Shepherd - July 22, 2013
Belmont - Taylor v Crosby - Sept 16, 2013
Belmont - Hendershot v Korner - Oct 28, 2013
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If Dodd v. Croskey is upheld by the Ohio Supreme Court, the 1989 version of the DMA may be doomed. See the attached very recent decisions in which local judges are ruling against the 1989 version.
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Gentile v. Ackerman.pdf, 234 KB -
MH Partnership v. Hines.pdf, 161 KB
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Permalink Reply by bessieblues on
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It appears as though plaintiff Gentile acquired the property after the 2006 amended DMA, and possibly there is a producing well on property. This may be the reason for the ruling against the 1989 version. Also, even though MH Partnership acquired their property before the amended 2006 DMA, there was a questionable savings event during the 1992-1969 look back period of the 1989 DMA. (a recorded lease by Hines in July of 1969) This also may be the reason for the ruling against the 1989 version. I say questionable because a federal court has certified 2 questions to the supreme court regarding savings events. #1 does a recorded lease constitute a savings event? and #2 does the expiration of a recorded lease constitute a savings event?. As far as Dodd v. Croskey goes , the 1989 DMA was not applied because it was never plead, not because the 7th district court of appeals didn't choose to apply it. Contrary to the trial court judges opinion in Monroe county, it would NOT be the 7th district court of appeals place to apply the 1989 version. All IMHO.
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Is anyone else bothered by the notion that the government has set an arbitrary and capricious timeline in which someone can "save" an investment interest before it is confiscated and handed to someone else for free? Doesn't this smack of property redistribution based on government's somewhat tenuous compelling interest?
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Permalink Reply by Kathleen on
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Sure do!
When I went blind reading some of those decisions I was shocked what wasn't considered a saving event.
One thing seemed kinda clear to me. If you severe the minerals and have them listed on their own tax card, problem solved.
But in some places that starts a new problem of having them taxed. I know in my county as of today they do not tax minerals severed and on their own tax card.
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Permalink Reply by Finnbear on
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If you severe the minerals and have them listed on their own tax card, problem solved.
Ohio doesn't (or didn't back then) create a separate deed and corresponding tax card for severed minerals. They should, and if you separate the minerals from the surface the mineral holder should be taxed on the minerals, and the surface owner should be taxed on the surface. The surface owner of a property with a severed mineral interest should not pay the same rate as the owner of a property that is still whole with the mineral interest. The property without the minerals has less value than when it still had them attached. By the same token, you should not be able to hold valuable mineral rights (that have been severed from the surface holdings) scott-free. You kept something valuable, and you should be taxed on it. If these "dormant" reservations had been deeded separately and a tax card had been created for them, and taxes had been paid on them, there would be no question as to who they belonged to. Unfortunately, this is not the case, and today, many of the heirs of the original reservists have no idea such reservations ever existed, nor have they been doing anything to maintain those reservations. The problem comes from the fact that once the reservation is mentioned on a deed, there is no good way to track who that reservation ends up with in the future. The surface deed is easy as every time it changes hands, a new deed is created and filed. If a mineral reservation also had a deed, that reservation could then be bought, sold, traded, tracked, and taxed, like any other real property.
Bottom line - if it is valuable enough to reserve, it is worth paying taxes on, worth keeping track of, and worth spending $5 or $10 bucks to file a paper with the county every 20 years to say "Yes, I still wish to hold this interest in the property I no longer own and I may intend to utilize it at some point in the future".
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Jefferson County, Ohio has been using separate, taxable parcel numbers for mineral rights for a long time. The Harrison County Auditor has started assigning parcel numbers for mineral rights, and I was told by one of the clerks last week that they will also start sending out tax bills on them in the future. The counties are now recognizing the cash potential and I believe all of them will be joining the bandwagon.
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Permalink Reply by Kathleen on
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Hi,
Columbiana county, Ohio has minerals listed separate on a few parcels I've come across. These tax cards were not done just a few years ago, they are older. I do know the ones I've seen had a lot of coal removed from their property, so that may have had something to do with it. Or, these people had very good attorney's through the years.
The there is no taxes being collected on these severed minerals.
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Permalink Reply by Finnbear on
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A few is the key here. Not all. Many reservations never get more than a mention on a deed when the property transfers to the next owner, never to surface again until, you guessed it, Utica Shale leasing. Those people did have better attorneys who realized the potential value of the reservations and protected them by deeding them separately. If there had been uniform deeding of these reserved minerals a long, long time ago, we wouldn't be having this conversation today. There was no uniformity however, and the 1989 Dormant Minerals act was the first of many steps to try to sort out this issue. It became law then, and we have to go by what the law stipulated at the time.
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