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Fifth District Court of Appeals States That "Reasonable Search" in Relation to Abandonment Procedures Under Dormant Mineral Act Does Not......

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

On June 28, 2019, the Fifth District Court of Appeals issued a decision in Gerrity v. Chervenak, 2019-Ohio-2687, concerning the requirements for a reasonable search for heirs of mineral holders prior to serving notice by publication under Ohio’s Dormant Mineral Act.


In Gerrity, T. D. Farwell originally reserved oil and gas rights underlying a Guernsey County property in a 1961 deed. Mr. Farwell’s estate conveyed the reserved mineral rights to his daughter, Jane F. Richards, via a recorded certificate of transfer in 1965. The certificate of transfer listed Ms. Richards as living at a Cleveland, Ohio address. There were no further conveyances of record in Guernsey County of the reserved interest.


In 1999, the Chervenaks were vested in title to the surface of the lands subject to the reserved interest. In 2012, the Chervenaks initiated abandonment procedures under the Dormant Mineral Act, during which they sent notice of abandonment via certified mail to Ms. Richards at the Cleveland address listed on the 1965 certificate of transfer. When that attempt at certified mail failed, the Chervenaks serviced notice of abandonment via publication in a Guernsey County newspaper, and then completed the abandonment process by filing a notice of failure to file.


Timothy Gerrity, a resident of Franklin County, Ohio, was the sole heir of Jane F. Richards, and claimed to be the rightful owner of the mineral interest by means of a probate action in Florida. Mr. Gerrity sued the Chervenak Family Trust (the successor to the Chervenaks and owner of the surface estate), claiming that the abandonment procedures were invalid due to the Chervenaks’ failure to exercise reasonable diligence to locate him and serve him notice under the Dormant Mineral Act. The trial court found in favor of the Chervenak Family Trust, determining that the Chervenaks’ efforts to locate the heirs were reasonable, and that the mineral interest was successfully abandoned under the Dormant Mineral Act. Mr. Gerrity appealed to the Fifth District Court of Appeals. 


The Fifth District Court of Appeals upheld the trial court’s decision in its entirety, determining that the Chervenaks’ attempts to locate the heirs of Ms. Richards were reasonable under the purview of the Dormant Mineral Act. The Fifth District noted that the certificate of transfer listed Ms. Richards’ address as being in Cleveland, Ohio as of 1965, and while she died in Broward County, Florida in 1997, there was nothing of record in Guernsey County or Cuyahoga County to point the Chervenaks to Florida.  The Chervenaks served Ms. Richards via certified mail at the Cleveland, Ohio address, which came back failed and marked “Vacant – Unable to Forward.” The Chervenaks then searched the recorder’s and probate records in Guernsey County, Ohio (location of property) and Cuyahoga County, Ohio (last known address for Ms. Richards) and found nothing to indicate any other location for Ms. Richards or her heirs.
 Accordingly, the Chervenaks had met their burden under the Dormant Mineral Act (specifically, Ohio Revised Code Section 5301.56(E)(1)), stating that, if certified mail fails, then the surface owner shall publish notice of the owner’s intent to abandon in a newspaper of general circulation in the county in which the property was located. Since the Chervenaks published the notice of intent only after their certified mail attempt and efforts to locate Ms. Richards’ heirs failed, they had perfected notice under the statute and thus successfully abandoned the interest.


Gerrity argued that, unlike in a pair of Seventh District cases, Shilts v. Beardmore, 2018-Ohio-863, and Sharp v. Miller, 2018-Ohio-4740, the Chervenaks did not conduct an online internet search via ancestry.com, MyHeritage.com, and other online search engines and thus, their search attempts were unreasonable. In refuting that notion, the Court noted that: a) Gerrity was an attorney in Franklin County, Ohio, with a different last name than Ms. Richards, the registered holder of the interest; b) the Chervenaks searched recorder and probate records in both the county in which the property was located and the county of Ms. Richards’ last known location; and c) that search did not reveal any further addresses for Ms. Richards or her heirs. Under the facts of the case, the Chervenaks followed the plain language of the statute (certified mail to the last known holder, then notice via publication after a reasonable search in the two counties with a known relation to the mineral interest). The Fifth District determined that the Dormant Mineral Act did not contemplate a “worldwide exhaustive search” for a holder.


Landowners must be aware that, based on the Gerrity decision, the determination for the reasonableness of a search for a holder under the Dormant Mineral Act is a fact-dependent, case-by-case analysis. While an internet search is not an absolute necessity, landowners must be certain to serve certified mail at the last known address of all the known holders of a mineral interest, and then search the recorder and probate records of any county where the property or holders are located for additional information, prior to serving notice by publication. We are seeing an uptick in the amount of challenges and litigation related to search efforts under the Dormant Mineral Act, and we encourage landowners to contact us if they have any questions or concerns related to these efforts or other mineral rights issues.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

 
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