Covering the Land of Lincoln

Ignorance is still not bliss… Ohio’s 7th District Confirms DMA Surface Owners Ignore County-Record Evidence at their Peril

In another due diligence statement for a surface owner seeking the abandonment of segregated minerals under Ohio’s Dormant Mineral Act, RC 5301.56 (the “DMA”), the Court of Appeal of the 7th of a segregated mineral interest outside of state ruled that the surface owner ignored this information at your own risk.[1]

Roy Beckett owned approximately 110 1/2 acres in Smithfield Township, Jefferson County, Ohio.[2] Beckett died on December 10, 1966, leaving the property to his children Leroy II and Grace by last will and will, which was suspended in Jefferson County.[3] These papers established that Grace had an address in Urbana, Illinois and Leroy’s address in Manchester, Connecticut.[4] A transfer receipt recorded to this effect showed Grace with an address in RFD Rayland, Ohio and Leroy with an address in Manchester, Connecticut.[5] By separate deeds dated January 28, 1980, Grace and Leroy gave Fred and Helen Straus their interests and reserved oil and gas. Notably, Grace’s deed was notarized in Champaign County, Illinois, where Urbana is located.[6] Subsequent promotions landed the property on each of the Appellees.[7]

In 2011, Rosza et al. Conducted (by an attorney) searches of Jefferson County public records relating to any transfer or maintenance of the 1980 oil and gas reserves by the Beckett heirs. The attorney alleged that he had not found any promotions or preservation events and also no incidental goods for Grace or Leroy II filed in Jefferson County.[8] For this reason, no attempt has been made to deliver the holders by registered mail.[9] The intention of the task was announced through publication and, if no notice (s) of retention were submitted, marginal notes were made to substantiate the task.[10]

Grace and Leroy II’s heirs leased their shares in Wolf Run in 2017, and an inheritance transferred their interest in Wolf Run in 2018.[11] Wolf Run and the heirs sued Rosza et al. requested, among other things, to retire the title because its DMA implementation was void from the start due to non-compliance with the notification obligations of the DMA. After the discovery, the parties made counter motions for a summary judgment. The court of first instance ruled in favor of Rosza et al. on the grounds that, despite the information on records about addresses abroad, enough time had passed without the activities that Rosza et al. than have fulfilled their obligations under the DMA.[12]

Two weeks after the argument, the Seventh District issued its position, quickly overturned the first instance court, overturned its verdict, and issued a summary judgment for Beckett et al. To explain its rationale, the Seventh District assumed that a Surface Owner’s failure to perform the due diligence obligations of RC 5301.56 (E) was decisive in determining whether the task was effective.[13] The Seventh District Court quoted Gerrity, [14] where the Ohio Supreme Court ruled that there is no light test for adequacy of due diligence – that can only come from lawmakers. Rather, appropriateness is determined on a case-by-case basis, which, in short, can be reduced to a test of appropriateness and common sense. If independent knowledge or other discovered information results in the seeker leaving the county or state, this notice must be followed with reasonable care.[15] The Seventh Ward considered Gerrity dispositive: “In applying for Gerrity, we find that the search of the Appellees was unreasonable because there was evidence in the Jefferson County estate records that Leroy lived in Connecticut and Grace, Illinois.”[16]

All in all, the Seventh Ward reached the correct conclusion based on the number of cases cited by the opinion of the Ohio Supreme Court in Gerrity. A search of the district registers forms the basis of an appropriate RC 5301.56 (E) search – not the cap – and the landowner ignoring information demonstrating residence outside of the state does so at their own risk. And while a bright, legal litmus test would be ideal, Ohio’s case law is emerging as a useful guide.

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