Shale Energy Law Blog
The Court of Appeals of Ohio, Seventh Appellate District, recently held that (i) heirs had standing to challenge a surface owners’ notice of abandonment under the Dormant Mineral Act (DMA), and (ii) an affidavit of preservation constitutes a valid claim to preserve mineral interests, regardless of whether the affidavit specifies a savings event. In M&H P’ship v. Hines, 2017-Ohio-923, the appellant surface owner asserted that the heirs were not holders of the mineral interest, and therefore, had no standing to challenge the notice of abandonment. The surface owner also asserted that the claim and affidavit filed by the heirs in response to the notice of abandonment did not identify any savings events that occurred in the 20-year period preceding the notice of abandonment, and therefore, the heirs did not properly preserve their interest. The Court found both assertions to be meritless.
With regard to the standing issue, the Court held that the broad definition of “Holder” under the DMA includes heirs of the original record owner of the mineral. Holder means the record holder of a mineral interest, and any person who derives the person’s rights from, or has a common source with, the record holder and whose claim does not indicate, expressly or by clear implication, that it is adverse to the interest of the record holder. In this case, the heirs derive their rights from or have a common source with grandparents, who were the original record owner of the mineral interest. Therefore, the court found that the definition of holder in the DMA is broad and includes the heirs.
As for the affidavit of preservation issue, the Court relied on the reasoning in Dodd v. Croskey, 2015-Ohio-2362, to hold that heirs’ affidavit of preservation constituted a valid claim to preserve their interest under the DMA. Nothing in the DMA states that a claim to preserve must refer to a saving event that occurred within the preceding 20 years. Additionally, the notice procedures do not require that the claim to preserve be itself filed in the 20 years preceding notice by the surface owner. Instead, the statute plainly states that such a claim can be filed within 60 days after notice from the surface owner. Accordingly, the plain language of the DMA allows the holder to file a claim to preserve the mineral interest or an affidavit that identifies a saving event that occurred within the 20 years preceding notice. In this case, the heirs filed a document titled Affidavit Preserving Minerals, which identified the heirs as the current owners of the mineral interest and stated that the heirs did not intend to abandon their rights in the mineral interest, but intend to preserve their rights. The Court held that this affidavit constituted a valid claim to preserve under the DMA and that no savings event needed to be specified therein.