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Pending Ohio Supreme Court Cases on Dormant Mineral Act (DMA) and Marketable Title Act (MTA)

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

In Gerrity v. Chervenak, 2019-Ohio-4211, 157 Ohio St. 3d 1440, 132 N.E.3d 700, the Ohio Supreme Court accepted for review the question of whether a surface owner can publish before serving every holder with certified mail and what kind of search is required to identify the holder or holders of the severed mineral interest. 

The mineral holders are arguing that every holder must be identified before a surface holder can attempt to use the DMA.  Of course, this practically means that, any time an heir cannot be identified, one would be precluded from using the statute.  Conversely, the surface owner argued that only the public records of the county in which the land is located should have to be searched, and if addresses or identities are not located, publication should be allowed.  Adopting such a bright line rule would hopefully reduce the amount of litigation concerning the due diligence necessary to provide adequate notice under the DMA, which currently is determined on a case by case basis, resulting in a situation where oil and gas companies are unable to rely on abandonments without a court judgment upholding the same. 

The oral argument was had on June 17, 2020, in this case can be heard at the following link:

http://www.ohiochannel.org/video/supreme-court-of-ohio-case-no-2019-1123-gerrity-v-chervenak

Can both the Marketable Title Act (MTA) and Dormant Mineral Act (DMA) apply to Severed Mineral Interests?

As discussed below, both the 5th and 7th District Court of Appeals (which cover the vast majority of the Utica activity in Ohio) have ruled that both statutes, the MTA and DMA, can be used by surface owners to extinguish or abandon, respectively, severed mineral interests in their chain of title.  The MTA acts to extinguish a severed mineral interest if certain statutory factors are not met for at least a 40-year period from an individual’s root of title (which is defined by statute).  If an interest has not been extinguished pursuant to the MTA, then a surface owner can attempt to have that interest abandoned, if a different set of factors have not occurred for 20 years under the DMA.  

Conversely, severed mineral interest holders have argued the DMA should be the exclusive way for surface owners to attempt to reclaim severed mineral interests.  They argue that the DMA, which is specific to minerals, should usurp the MTA, which applies to minerals and other interests, arguing that the two statutes conflict with each other since they have different tests (factors) to determine if an interest is extinguished or abandoned.  Surface owners have argued the two statutes are not in conflict but work together to do two different things based upon two different tests.  If the MTA requirements are met, then the interest is extinguished by operation of law and null and void.  However, if the interest has not been extinguished under the MTA, then a surface owner can attempt an abandonment (which can be negated by a mineral holder filing a claim to preserve in relation to the notice) if the interest has been “dormant” for 20 years.  

The Ohio Supreme Court will hear oral argument on this issue in West v. Bode, 2020-Ohio-122, 157 Ohio St. 3d 1535, 137 N.E.3d 1196, on July 8, 2020. The argument can be viewed at the following link: http://www.ohiochannel.org/collections/supreme-court-of-ohio

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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