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Paul v. Hannon

Court of Appeals of Ohio, Seventh District, Carroll

March 31, 2017

TERRI L. PAUL, PLAINTIFF-APPELLANT,
v.
HARRIETT LUCINDA HANNON, ET AL., DEFENDANTS-APPELLEES.

         Civil Appeal from Court of Common Pleas of Carroll County, Ohio Case No. 2013CVH27582.

          For Plaintiff-Appellant Attorney David E. Butz Attorney Matthew W. Onest

          For Defendants-Appellees Attorney Karen J. Greenwell Attorney G. Brian Wells Attorney Eric C. Johnson

          JUDGES: Hon. Gene Donofrio Hon. Cheryl L. Waite Hon. Mary DeGenaro

          OPINION

          DONOFRIO, J.

         {¶1} Plaintiff-appellant, Terri Paul, appeals from a Carroll County Common Pleas Court judgment denying her motion for partial summary judgment and granting the motion for summary judgment filed by defendants-appellees, Harriet Hannon and the Estate of Robert Douglas Hannon.

         {¶2} This case involves the Ohio Dormant Mineral Act (ODMA). Appellant is the owner of a 70-acre tract of land in Perry Township (the Property) and the owner of a one-half interest in the oil and gas interest below the Property. Appellees are the owners of the other one-half interest in the oil and gas below the Property. Appellant sought to reunite appellees' oil and gas interest with her interest pursuant to the ODMA. Appellees sought to preserve their one-half interest pursuant of the ODMA.

         {¶3} On October 25, 1944, Raymond and Nellie Davis sold to R.H. Hannon a one-half interest in all oil and gas and other minerals except coal underlying the Property. The deed is referred to as the "Davis Deed."

         {¶4} On October 30, 1944, Russell and Florence Cain sold to R.H. Hannon a one-half interest in all the oil and gas under a 60-acre tract of land in Perry Township, Carroll County. This is referred to as the "Cain Deed."

         {¶5} On December 16, 1944, W. McClelland and Wilma Patterson transferred to R.H. Hannon a one-half interest in all the oil and gas under a 147-acre tract of land which is referred to as the "Patterson Deed."

         {¶6} On July 31, 1989, the above three interests, those represented by the Davis, Cain, and Patterson Deeds, and any other mineral interests in Carroll County, Ohio owned by R.H. Hannon, were conveyed to R.H. Hannon's children Lucinda Hannon, Doug Hannon, and Hal Hannon, in equal shares by the Estate of R.H. Hannon. This transfer is referred to as the "Children's Deed." In addition to other things, the Children's Deed specifically referenced the Davis, Cain, and Patterson Deeds stating:

Lands situated in Section 30, Township 12, Range 5, Perry Township, Carroll County, Ohio as more particularly described in an instrument from Russell Cain and Florence Cain dated October 30, 1944 and recorded in Volume 28, Page 33, Volume 28, Page 32 and Volume 28, Page 39, Lease Records, Carroll County, Ohio.

         {¶7} Hal Hannon later sold all of his interest in the Children's Deed to Lucinda Hannon. That transfer, dated August 14, 1989, is referred to as "Hal's Deed." Thus, at this point, Lucinda owned a two-thirds interest in the minerals conveyed by the Children's Deed and Doug Hanon (now his estate) owned one third.

         {¶8} In 1989, appellant and her spouse acquired from Thelma Borland and Nellie Davis the surface and other interest in what is described above as the Davis Deed with the specific exception of the one-half interest in oil and gas and other minerals deeded to R.H. Hannon. This transfer from Borland and Davis to appellant and her spouse is called the "Paul Deed."

         {¶9} On May 27, 2010, appellant's spouse transferred his interest in the Paul Deed to appellant by quitclaim deed. This deed is referred to as the "Quitclaim Deed." As a result, appellant now owns the surface lands and one-half interest in the minerals below the land and appellees own the other one-half interest in the minerals below the surface land in the Property.

         {¶10} In 2011, appellant leased her oil and gas interest in the Property to Chesapeake Exploration, LLC. A memorandum of the lease was recorded. Subsequently, appellant learned that Chesapeake would pay her only one-half of the proceeds because it determined that one-half of the oil and gas rights belonged to appellees. In April 2012, appellant took steps to try to obtain appellees' one-half interest by initiating the steps set forth in the ODMA.

         {¶11} On April 20, 2012, appellant mailed to both appellees a document titled Notice of Intent to Declare Mineral Interest Abandoned Pursuant to R.C. 5301.56.

         {¶12} On May 25, 2012, both appellees filed a document titled Affidavit to Preserve Mineral Interest which stated that appellees wished to preserve their oil and gas interests.

         {¶13} On June 14, 2012, appellant recorded two documents both titled Affidavit of Fact Relating to Title to Real Estate, which state that the mineral interests previously owned by appellees have been abandoned.

         {¶14} On July 24, 2012, appellant recorded two documents both titled Affidavit of Facts asking the County Recorder to marginally note the abandonment of the mineral interests of appellees pursuant to the previously filed Affidavits of Abandonment.

         {¶15} On November 7, 2012, December 7, 2012, and December 19, 2012, appellees filed Memorandums of Oil and Gas Lease reflecting the leasing of their oil and gas interests to Chesapeake Exploration, LLC.

         {¶16} On July 11, 2013 appellant filed a complaint against appellees and others seeking relief in the forms of declaratory judgment, quiet title, injunction, slander of title, negligence/negligence per se, and unjust enrichment.

         {¶17} Appellees filed an answer, counterclaim, and third-party complaint. In their counterclaim, appellees sought declaratory judgment, quiet title, and slander of title. The third-party claim was bifurcated and is not an issue here.

         {¶18} Appellant filed a motion for partial summary judgment on her complaint for declaratory relief, quiet title, injunctive relief, and slander of title. Appellant also sought summary judgment on all claims asserted in appellees' counterclaim. Appellees also filed a motion for summary judgment. Appellees sought summary judgment on their counterclaim and on each of appellant's claims against them.

         {¶19} The trial court denied appellant's motion and granted appellees' motion. The court quieted title in favor of appellees with regard to the one-half interest in the oil and gas underlying the Property. The court also awarded appellees nominal damages of $1.00 on their counterclaim for slander of title.

         {¶20} Appellant filed a timely notice of appeal. On appeal, appellant does not challenge the trial court's award of summary judgment to appellees' regarding appellant's claims for unjust enrichment, conversion, or constructive trust.

         {¶21} An appellate court reviews the granting of summary judgment de novo. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. Thus, we shall apply the same test as the trial court in determining whether summary judgment was proper.

         {¶22} A court may grant summary judgment only when (1) no genuine issue of material fact exists; (2) the moving party is entitled to judgment as a matter of law; and (3) the evidence can only produce a finding that is contrary to the non-moving party. Mercer v. Halmbacher, 9th Dist. No. 27799, 2015-Ohio-4167, ¶ 8; Civ.R. 56(C). The initial burden is on the party moving for summary judgment to demonstrate the absence of a genuine issue of material fact as to the essential elements of the case with evidence of the type listed in Civ.R 56(C). Dresher v. Burt, 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996). If the moving party meets its burden, the burden shifts to the non-moving party to set forth specific facts to show that there is a genuine issue of material fact. Id.; Civ.R 56(E). "Trial courts should award summary judgment with caution, being careful to resolve doubts and construe evidence in favor of the nonmoving party." Welco Industries, Inc. v. Applied Cos., 67 Ohio St.3d 344, 346, 1993-Ohio-191, 617 N.E.2d 1129.

         {¶23} Appellant's first assignment of error states:

THE TRIAL COURT ERRONEOUSLY CLASSIFIED R.C. 5305.56 AS A FORFEITURE STATUTE AND AS A RESULT, APPLIED AN IMPROPER STANDARD OF REVIEW FOR APPELLANTS ABANDONMENT EFFORTS.

         {¶24} Appellant argues that the ODMA is properly characterized as an "abandonment statute." She asserts that the trial court's failure to properly define the ODMA tainted its analysis and its decision must be reversed. Appellant argues that the ODMA should be interpreted in favor of the owner of the surface land as their property rights are affected by any unused or forgotten interests.

         {¶25} In addressing this issue, the trial court observed that at common law, severed ownership of mineral interests could not be lost by mere nonuse, that a vested fee interest in real property cannot be abandoned, and that the law abhors a forfeiture.

         {¶26} The trial court explained that appellees' filing of a notice of preservation and a defense in this action demonstrates that they did not intend to abandon their mineral interest. Thus, the only way appellees could legally be divested of their interest was by way of a statutory forfeiture. Accordingly, the trial court characterized the ODMA as a forfeiture statute. The trial court was of the opinion that whether or not the ODMA is viewed as "abandonment" or "forfeiture, " it is contrary to common law and should be construed "to insure that [a] person being deprived of his or her property receives all of the protections the General Assembly provided in the statute." Further, the trial court concluded, it is appropriate to require that appellant, as the one seeking to acquire appellees' property rights, comply with all aspects of the requirements of the ODMA. Lastly, the trial court opined that R.C. 5301.55's mandate that R.C. 5301.56 "shall be liberally construed to effect the legislative purpose of simplifying and facilitating land title transactions by allowing persons to rely on a record chain of title * * * " does not mean that the statute should be liberally construed to make it easier for surface owners to acquire the minerals of others in derogation of countervailing common law principles and without fully satisfying the requirements imposed on surface owners by R.C. 5301.56.

         {¶27} The Ohio Supreme Court recently analyzed the ODMA in Corban v. Chesapeake Exploration, LLC, __ Ohio St.3d __ 2016-Ohio-5796, __ N.E.3d __. In Corban, the Ohio Supreme Court answered two certified questions regarding the 1989 and 2006 versions of the ODMA. In answering those questions, the Ohio Supreme Court explained that in enacting the 1989 version, "the legislature did not intend title to dormant mineral ...


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