Yesterday, September 25, 2018, the Supreme Court of Ohio issued the decision of Dundics v. Eric Petroleum Corporation, 2018-Ohio-3826, which could have broad implications for third-party landmen, land companies and oil and gas producers in Ohio. In that decision, the Court held that the Ohio Real Estate Brokers’ statute, R.C. Chapter 4735, applies to transactions involving oil and gas. Specifically, the Court held that an outside landman must be a licensed real estate broker in order to seek compensation for work performed in obtaining an oil and gas lease on behalf of a producer.
In Dundics, an outside landman sued a producer for breach of contract, claiming that the producer failed to make promised payments for work performed by the landman in obtaining oil and gas leases. The producer moved to dismiss the lawsuit, arguing that because the landman was not a licensed real estate broker, the landman was not entitled to enforce his agreement with the producer. The trial court granted the motion to dismiss and the court of appeals affirmed.
The Supreme Court affirmed the dismissal of the lawsuit. The Court found that because oil and gas interests are included within the broad definition of “real estate” under R.C. 4735.01(B) and because there was no exception for oil and gas leases or landmen, the statute applied, and the landman was unable to seek compensation for his work because he was not a licensed broker.