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Trial Court Issues Key Ruling on Ohio's Dormant Mineral Act

An Ohio trial court issued a key ruling on Ohio’s Dormant Mineral Act (“DMA”). The Carroll County Court of Common Pleas in Dahlgren v. Brown Farm Properties, LLC departed from a series of trial court decisions adopting the legal theories of surface owners concerning “automatic vesting” under the 1989 version of the DMA. In a 20-page opinion, the court analyzed both the 1989 version of the DMA and the 2006 version and concluded that the 2006 version applied to a mineral interest that was originally created in 1949. The surface owners argued that the 1989 version of the DMA should apply to the case and that the mineral interest was abandoned after a 20 year period. The court rejected their arguments and instead applied the 2006 version of the DMA as advocated by the holders of the severed mineral interest. The court set forth multiple reasons why the theory of automatic vesting does not comport with the purpose of the DMA and Ohio’s Marketable Title Act, which are to simplify and facilitate land title transactions. The court provided additional grounds in support of its ruling and also determined that the 2006 version of DMA provides a specific statutory procedure to follow in order to deem a severed mineral interest “abandoned” under the law. Thus, the record chain of title will clearly demonstrate the existence or abandonment of the severed mineral interest as opposed to the automatic vesting theory, which would provide no notice.

The DMA was originally enacted in 1989 and later amended in 2006. The 1989 version of the DMA provides that where a severed mineral interest has not been the subject of a title transaction (e.g. there has been no leasing activity) for a period of 20 years, the mineral interest may “merge” with the surface estate and the owners of the surface become the owners of the minerals. However, the 1989 version does not expressly define the procedures to be followed in order for the surface owners to claim ownership. The 2006 version of the DMA amended the 1989 DMA to provide specific procedures that a surface owner must follow to obtain ownership in the mineral estate. The 2006 DMA also provides the owner of the severed mineral estate a means by which he can preserve his interest by filing an affidavit of preservation. Among the unsettled issues of law is whether the 1989 version or 2006 version applies to pending lawsuits.

The Dahlgren decision is significant because it interrupts a trend of trial court decisions in which courts were adopting the automatic vesting theory of the surface owners. An additional recent appellate court decision applied the 2006 version of the DMA although the issue of which version of the DMA applied was not at issue in the case. See Dodd v. Croskey, 7th Dist. Harrison No. 12 HA 6, 2013-Ohio-4257. These two decisions could indicate a reversal of the current trend favoring application of the 1989 version of DMA and the automatic vesting theory.