Court Rules 1989 Version of Dormant Mineral Act Vested Mineral Rights in Surface Owner

Just saw this new case concerning the Ohio Dormant Mineral Act

http://www.ohiodormantmineralact.com/

Wendt v Dickerson

It seems like any mineral reservation made  before 1986, that did not have a saving event, is automatically abandoned. The minerals would then be reunited with the surface.

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Permalink Reply by Finnbear on March 7, 2013 at 11:05am

The 1989 version of 5301.56 declared that under certain conditions, (ie. no lease, no production, no saving event, no separate deed for minerals, dormant for over 20 years, etc.) a mineral reservation would be automatically vested back with the landowner. This was modeled after the UDMIA of 1986 and has been adopted in similar form in many states. If you have such a problem with the statute, you should have made your case against it before it was adopted in 1989 - this is not a new issue. It was later amended to provide a mechanism for county recorders to memorialize the reunification of mineral interest and surface owner which was missing from the original statute.

You citing 2913.02 has no bearing on 5301.56 which is and has been the law of the state of Ohio for over 20 years now. Any historical mineral interest holder who wished to preserve that interest should have begun taking the necessary steps to preserve it in 1989 when the Dormant Minerals Act was adopted. A simple separate deed for the mineral interest is a quick easy way to protect it. Pennsylvania uses this method for severed mineral interests. The dirty little secret is that this creates a taxable property in the eyes of the local real estate taxing authority (county). Many interest holders didn't want to or were too cheap to spend the money on the RE taxes to protect the interest and it now appears that gamble was a losing one. You can't have your cake and eat it too.

Many of the people who are now outraged over the Dormant Minerals Act are mad because they are "losing" mineral rights they either didn't bother to protect or had no idea they owned until the notice declaring the "abandonment" arrived in their mailboxes.

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Permalink Reply by Belmontlandowner on March 8, 2013 at 4:56am

"Many of the people who are now outraged over the Dormant Minerals Act are mad because they are "losing" mineral rights they either didn't bother to protect or had no idea they owned until the notice declaring the "abandonment" arrived in their mailboxes."

AMEN - Couldn't have said it better!

Permalink Reply by jesse on March 8, 2013 at 8:16am

it is ok to take gas and oil but coal can not be taken back and you cannot take back from the goverment if you can take back from an individual you should be able to take back from the goverment 

Permalink Reply by Gary Miller on March 8, 2013 at 1:26pm

Question.

Why would the same not be true for the oil and gas companies with the old shallow well leases, many are holding excess acreage beyond the 40 acres required for the well? I don't see a whole lot of difference, to me 20 years is more than enough time to develop that acreage.

Did they pay taxes on any of that property?

Permalink Reply by Gary Miller on March 8, 2013 at 4:09pm

Thanks for the information.

I have had two attorneys say it would be something they could try regarding implied covenants but it is not a sure thing. They did not seem to interested,they suggested it might be best to stay in good relations with the gas company .

Are there attorney's out there having success with this? 

Permalink Reply by Finnbear on March 8, 2013 at 5:28pm

Did you include a Pugh clause and a unit size limitation in that old shallow well lease? If you did, they could only hold what is in the drilling unit for the well and would be required to release the rest. These ideas are not new with the shale development.

Permalink Reply by Gary Miller on March 9, 2013 at 3:58am

 

My lease is somewhat unique, 10 pages long from a old Akron Boy Scout Camp. 1982 lease, wells still producing.

 

Some of the terms stated are:

Number and location of wells- Lessee is to drill 2 un-unitized wells on the leased premises. I have two separate parcels with one well each. 1 @ 68 acres and 1 @ 79 acres. (Another issue I cant get a straight answer on is that both wells go into 1 meter, doesn't seem right).

Unitizing-In the event Lessee desires to incorporate a portion of Lessor's acreage not assigned to the two un-unitized wells on Lessor's property, Lessor grants to Lessee, its heirs and assigns the right to include such acreage in additional drilling units. Such units are not to exceed (80) acres.

No Assignment-Lessee shall not, assign or attempt to assign this Lease or sublet the premises or any part thereof.

Full page of land use conditions.

No Pugh clause.

I know of many excess acres being held by 1 well in my area, (Southwest Harrison County). Attorneys do not seem all that interested with some of the issues with these old leases. Maybe the best thing to do is sit back and wait for the gas company to come to me, just to many grey areas for the landowners.

I have been following this site from the beginning, I would like to thank all the great contributors, (priceless). Sometimes I feel like the more I know the less I understand. Attorneys, Land men and Gas Companies, you have to take the bad with the good. 

Made a deal with a attorney and reclaimed a parcel of rights under the dormant mineral act for a percentage of the signing bonus. Looks like they may have already been mine from what I am reading? Have not signed a lease yet and I did not sign any agreement so maybe I need to look into this further. 

Right now I will think positive and be patient, and hope everyone can make the most of their situation. Looing forward to the 1st. quarter results.

There are some people who seem too think that since it is business anything goes, I don't agree.

Any advice appreciated.

Thanks...

 

Permalink Reply by Dan on March 17, 2013 at 5:34am

James, I understand that at this point the level at which this case was argued does not set legal precedent, in the sense that it could be referenced by another court.  But the way it was argued has the markings of a precedant-setting case in that it is ready for a climb up the appelate ladder, and when it does, it very well could affect tens of thousands of mineral holders in Ohio.

You say battle one has been lost, which implies that you don't think that the right verdict was handed down.  Why?  It seems reasonable enough, if you have read through the 1989 statute. And why are you thinking that it will be overturned on appeal?

Permalink Reply by Dan on March 27, 2013 at 12:15am

Another verdict was just handed down, this time in Noble county on March 20, that went the same way as Wendt v Dickerson, and in fact cites it in the record:

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Permalink Reply by M Thomas on March 27, 2013 at 1:00am

It is interesting to note that Judge Nau in Walker v Noon orders that any appeal to the 2006 amended version of the Ohio Dormant Mineral Act is "moot". This holds the same position as Wendt v Dickerson and Wiseman v Potts.

This decision also adds to the general direction Courts all over the state are taking and will most likely continue to take... that the 2006 amended version did not "un-abandon" or "un-vest" what the 1989 version automatically vested back to many surface owners in 1992.

Permalink Reply by M Thomas on March 27, 2013 at 8:52am

From what I understand, many many in 1992.

But really any reservation that has no saving event before 1986. See attorney Nathan Vaughan's article explaining it -

Mineral Reservations Prior to 1986 Called Into Question Under Prior...

Permalink Reply by E Johnson on March 28, 2013 at 7:57am

Anyone know who the lawyers were than worked on the Walker v. Noon case?

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