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Shiloh Ministries, Inc. v. Simco Exploration Corp.

Court of Appeals of Ohio, Eleventh District, Trumbull

June 10, 2019

SHILOH MINISTRIES, INC., Plaintiff-Appellant,
SIMCO EXPLORATION CORPORATION, et al., Defendants-Appellees.

          Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2016 CV 00057.

          Stephen A. Turner, Turner, May & Shepherd, (For Plaintiff-Appellant).

          Molly K. Johnson, Johnson and Johnson Law Office, (For Defendants-Appellees).


          MARY JANE TRAPP, J.

         {¶1} This is an appeal from the judgment entry of the Trumbull County Court of Common Pleas, in which the trial court overruled objections filed by appellant, Shiloh Ministries, Inc. ("Shiloh"), and adopted the magistrate's January 26, 2018, Decision and Recommendation granting appellee, Ohio Valley Energy Systems ("OVE"), a prescriptive easement for oil and gas on Shiloh's two adjoining parcels of land.

         {¶2} Shiloh appeals, raising the following three arguments against the prescriptive easement granted in OVE's favor: (1) it was improperly raised due to the trial court's findings on summary judgment, (2) OVE lacked standing to do so, and (3) finally, the scope is impermissibly vague.

         {¶3} We find the trial court's rulings on the motions for summary judgment did not preclude consideration of the affirmative defense of a prescriptive easement at trial. OVE had standing to raise the affirmative defense because it established its long history of using the southern parcel for its operations. We also find the prescriptive easement granted by the trial court is not vague in scope. We do find, however, it is vague as to the scope of the relative use of the easement by each party and apportionment of future expenses incurred for repair and maintenance of the easement as necessary to prevent the use of the easement from becoming an annoyance or nuisance to Shiloh. Thus, finding the last assignment of error to have merit in part, we affirm in part, reverse in part, and remand for further proceedings accordingly.

         Substantive and Procedural History

         The Parties and Parcels of Land at Issue

         {¶4} Pastor and president, Reverend Nicholas Furries, leads Shiloh, the owner and lessor of the two adjoining parcels of land at issue (the "southern parcel" and "northern parcel"). Shiloh's predecessor in interest, Lighthouse Tabernacle of the Niles Peoples Full Gospel Mission Church ("Lighthouse"), led by Reverend Frank M. Hewison and his wife, Lois A. Hewison, was the original party to the oil and gas agreements.

         {¶5} Initially, there was a pastor's house on the northern parcel and a church on the southern parcel. Sometime before 2004, the pastor's house was demolished. The church then renovated and expanded so that it now sits on both parcels of land.

         {¶6} OVE is the successor corporation of Simco Exploration ("Simco"). Its primary business is obtaining leases and drilling/managing gas wells. Olympic Oil and Gas, Inc. ("Olympic") was a subcontractor for Simco. Olympic entered into the original Oil and Gas Lease and Non-Drilling Lease Agreements with Shiloh on Simco/OVE's behalf. Thus, Olympic is the signature party to the original lease agreements.

         {¶7} The oil and gas well, "Cheyenne #2," is located on a property adjacent to the northern parcel. Cheyenne #2 was drilled prior to the execution of the agreements in 1989. It was at that time Olympic approached Lighthouse because it needed a location to place the tanks, a meter, and the other equipment associated with the well.

         The Agreements

         {¶8} There are three agreements between the parties. On October 18, 1989, Lighthouse entered into an "Oil and Gas Lease Agreement," which permitted the lessee to conduct surface operations and for equipment to be placed on the northern parcel. It also granted Lighthouse a right to a certain amount of free gas.[1]

         {¶9} On January 19, 1990, the parties entered into a Non-Drilling Oil and Gas Lease Agreement for the use of the southern parcel. This agreement permits the lessee to utilize the property "with other properties, which other properties shall bear the burden of development."

         {¶10} Lastly, there is a Meter Site Agreement between Dominion Energy's predecessor, East Ohio Gas Company ("Dominion") and Lighthouse granting Dominion the right to place equipment and pipelines on the southern parcel to transport gas to and from the well.

         {¶11} The northern parcel contains underground equipment, pipes and tanks, which hold the oil and gas. Piping runs to the southern property where there is a meter, regulators, and piping. To access the holding tanks on the northern property, OVE crosses the southern property by way of the church's parking lot. Both OVE and Dominion also access the southern property to check and maintain the meters.

         Summary Judgment

         {¶12} On January 11, 2016, Shiloh filed a complaint against OVE setting forth four claims for relief: a declaratory judgment that the leases have terminated due to lack of commercial production; a declaratory judgment ruling that the leases have terminated due to lack of commercial production; a breach of contract for the placement of pipeline and meter site equipment on the southern parcel; and lastly, trespass for the installation of equipment and continued operations on the southern parcel.

         {¶13} Both parties filed motions for summary judgment. The trial court found Shiloh was "entitled to judgment" on its breach of contract and trespass claims because there was no dispute of fact that OVE continually entered upon the southern parcel and that equipment had been installed on the southern parcel without permission in violation of the agreement. The trial court further found that the elements of continuing trespass had been met.

         {¶14} OVE argued that the issues raised by Shiloh were barred by the doctrine of res judicata because Shiloh failed to raise them in the parties' previous 2014 suit.[2] The court agreed with this argument in part, finding Shiloh was entitled to judgment on the claims of trespass and breach of contract only from 2014 to the present since there were continuing violations after the date of judgment in the last action.

         {¶15} Turning to the issue of damages, the trial court found that Shiloh had not alleged the breach of contract to be material, and it independently found the breach was not material. While the court found there was no dispute of fact that the parking lot had been damaged by heavy machinery, it found Shiloh failed to provide evidence of the monetary cost of repair regarding its trespass claim or evidence of the ...

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