Harmon v. Capstone Holding Co.

         Civil Appeal from the Court of Common Pleas of Noble County, Ohio Case No. 213-0048

          For Danny & Karen Harmon: Atty. Clifford N. Sickler

          For Capstone Holding Co.: Atty. Geoffrey B. Mosser, Law Offices of Geoffrey B. Mosser, Atty. Michael D. Dortch Atty. Richard R. Parsons Kravitz, Brown, & Dortch, LLC

          For Eclipse Resources-Ohio, LLC: Atty. Steven B. Silverman Babst, Calland, Clements & Zomnir PC

          Atty. Matthew S. Casto Babst, Calland, Clements & Zomnir PC BB&T Square

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

          OPINION

          WAITE, J.

         {¶1} Appellants Eclipse Resources Ohio, LLC ("Eclipse"), and Danny and Karen Harmon, (collectively referred to as "Appellants") appeal a February 18, 2014 Noble County Common Pleas Court decision to grant summary judgment in favor of Appellee Capstone Holding Co. ("Capstone"). Appellants collectively argue that the trial court misapplied the 1989 Dormant Mineral Act ("DMA"). Pursuant to Corban v. Chesapeake Exploration, LLC, __ Ohio St.3d __, 2016-Ohio-5796, __ N.E.3d__, and Albanese v. Batman, 148 Ohio St.3d 85, 2016-Ohio-5814, 68 N.E.3d 800, Appellants' arguments are without merit and the judgment of the trial court is affirmed.

         Factual and Procedural History

         {¶2} This appeal concerns the ownership of mineral rights beneath 73.059 acres of land located in Beaver Township, Noble County. On October 28, 1971, Seaway Coal Company ("Seaway") conveyed the surface rights to Gilbert and Beulah LaFever. Seaway reserved and excepted the mineral rights through the following language: "EXCEPTING AND RESERVING from the above described [property] all of the coal of every vein and description and all other minerals, surface or subsurface deposits, and oil and gas." (10/28/71 Deed) The deed was recorded on November 11, 1971.

         {¶3} On June 17, 1974, the LaFevers conveyed the surface rights to J.C. and Sheryl LaFever. The deed referenced the Seaway reservation and was recorded on August 27, 1974. On December 28, 1979, the LaFevers conveyed the surface rights to Michael J. and Kathleen M. Billi. The Seaway reservation was again referenced within the deed which was recorded on December 28, 1979. Seaway apparently dissolved its corporation sometime in 1979. On November 12, 1992, Seaway conveyed its interests to R&F Coal Company ("R&F") who later became Capstone.

         {¶4} On May 2, 1994, the Billis conveyed the surface rights to the Harmons. The deed contained the Seaway reservation and was recorded on May 3, 1994. The Harmons later learned that Seaway had dissolved and, on August 25, 2008, served Seaway with notice of intent to declare its mineral interests abandoned pursuant to R.C. 5301.56(E)(1). Seaway failed to respond. Consequently, on September 26, 2008, the Harmons filed an affidavit of abandonment. On February 4, 2010, the Harmons entered into an oil and gas lease with Oxford Oil Company, who later became Eclipse. On January 12, 2012, Capstone filed an affidavit to preserve its interests pursuant to R.C. 5301.56(E)(2).

         {¶5} On March 22, 2013, the Harmons filed a declaratory judgment and quiet title complaint against Capstone and Oxford Oil Co./Eclipse. Both parties filed an answer and Capstone filed a counterclaim asserting that the Harmons lacked standing to file the complaint. On November 20, 2013, the Harmons filed a motion for a judgment on the pleadings. On December 17, 2013, Capstone filed a combined motion for summary judgment and memorandum in opposition to the Harmons' motion. On February 18, 2014, the trial court granted Capstone's motion and denied the Harmons'. The trial court found that none of the parties in the action held an interest in the minerals. Instead, the court determined that pursuant to the 1989 DMA, the Billis were the mineral interest holders. The court alternatively ruled that if the 2006 DMA applied, the Harmons still could not succeed in their action as they failed to provide notice to interest holder of record in accordance with R.C. 5301.56(E)(2). Both the Harmons and Eclipse filed notices of appeal. Capstone filed a cross appeal which it later voluntarily dismissed. The remaining notices of appeal were consolidated.

         Summary ...