On November 28, 2018, in Sharp v. Miller, 2018-Ohio-4740, the Seventh District Court of Appeals (which covers Belmont, Carroll, Columbiana, Harrison, Jefferson, Mahoning, Monroe and Noble Counties), held the Jefferson County trial court correctly determined that the appellants’ (mineral heirs) interests were abandoned pursuant to the 2006 DMA.
This oil and gas case involved the ownership of mineral interests that lie beneath approximately 153 acres of land located in Springfield Township, Jefferson County. The minerals were reserved by I.W. Poole and R.S. Smith in 1944. On July 9, 2014, the Millers (the surface owners) filed a notice of intent to declare the mineral interests abandoned. They could not locate the names or addresses of any Poole/Smith heirs and filed the notice by publication. On November 12, 2014, Jeffrey and Bradley Sharp (heirs) filed a claim of preservation.
Appellants argued that the Millers failed to comply with the notice requirements of R.C. 5301.56(E). Appellants argue that the Millers did not use reasonable diligence when researching potential heirs, making service by publication improper. Pursuant to R.C. 5301.56(E)(1), a surface owner attempting to reunite the surface with the mineral interests must:
Serve notice by certified mail, return receipt requested, to each holder or each holder's successors or assignees, at the last known address of each, of the owner's intent to declare the mineral interest abandoned. If service of notice cannot be completed to any holder, the owner shall publish notice of the owner's intent to declare the mineral interest abandoned at least once in a newspaper of general circulation in each county in which the land that is subject to the interest is located. The notice shall contain all of the information specified in division (F) of this section.
R.C. 5301.56(E)(1) allows notice by publication when notice cannot be completed through certified mail. Relying on a prior Seventh District Court of Appeals case, the Court stated an attempt to provide notice by certified mail is unnecessary where a reasonable search fails to reveal the names or addresses of potential heirs who must be served. Shilts v. Beardmore, 7th Dist. No. 16 MO 0003, 2018-Ohio-863, ¶ 15, appeal not allowed by Shilts v. Beardmore, 153 Ohio St.3d 1433, 2018-Ohio-2639, 101 N.E.3d 464. The issue in this case was what types of efforts are required to satisfy reasonable due diligence in locating heirs before service by publication can be employed.
In Shilts, the Court reviewed whether the following search efforts satisfied the “reasonable due diligence” standard: probate records, public records, Ohio Department of Natural Resources (“ODNR”) records, and an internet search. Id. at ¶ 14. The Court found that, based on the facts of that case, these efforts satisfied the due diligence requirement. Id. at ¶ 15. In Sharp, the Appellants asked the Court to require these exact efforts in every case. Contrary to Appellants’ arguments, the Sharp Court clarified they did not establish in Shilts a bright-line rule or definition of “reasonable due diligence.” Because the standard relies on the reasonableness of any party’s actions, whether that party’s efforts constitute “due diligence” will depend on the facts and circumstances of each individual case. In other words, reasonable actions in one case may not be reasonable in another case.
The evidence in the case showed that Appellees had searched public records, specifically probate and deed records, and were unable to locate any heirs prior to publishing the notice of abandonment. The sole address obtained in the search was a post office box that formally belonged to I.W. and Ruth Poole. The surface owners’ search also revealed I.W. Poole’s release of estate from administration, which did not refer to the mineral interests, and a title report also failed to reveal any potential heirs.
Subsequent to the publication, in trial preparation, another search to locate heirs was conducted via online searches using paid subscription services such as ancestry.com, world vital records, and MyHeritage Company. That exhaustive search, which consisted of more than 80 hours of searching, did not locate all heirs, and the searcher could not confirm the information obtained was correct. Regardless, the Seventh District Court of Appeals held the search that occurred prior to the filing of the notice was at issue here, not any later-conducted search.
The Sharp Court noted the only difference between the Millers’ search and the Shilts search was the internet component. However, the Court held an internet search would not likely have been helpful in this case, because the only names available to Appellees were Smith and Poole. The Court found there was no evidence that a simple internet search would have revealed the actual Smith/Poole heirs. Based on the facts and circumstance of this case, the Court held Appellees’ public record search constituted reasonable due diligence.
Additionally, the Court held that an oil and gas lease entered into by the surface owner, to which the mineral heirs were never a party, cannot in any way be construed as a savings event under the 2006 DMA. As the mineral interests at issue were not properly conveyed or retained, they cannot validly be the “subject of” a title transaction. Further, the Court reiterated that the 2006 DMA replaced any theory of common law abandonment.