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Ohio's 5th Appellate District Addresses the Due Diligence Standard Under the Dormant Mineral Act

By Jay Carr

The Fifth Appellate District recently addressed whether an internet search to identify / locate the holders of severed mineral interests is always required under Ohio's Dormant Mineral Act ("ODMA"). See, Gerrity v. Chervenak, 2019-Ohio-2687. In 1965, Jane Richards obtained title to certain severed mineral interests located in Guernsey County, Ohio ("Gerrity Minerals"). In 1997, Ms. Richards passed away in Florida and devised all of her real estate to Timothy Gerrity. Although Mr. Gerrity became the owner of the severed mineral interests, no ancillary estate was opened in Guernsey County. A certificate of transfer memorializing the devise was also not recorded.

The owner of the surface subject to the Gerrity Minerals subsequently abandoned the Gerrity Minerals under the ODMA. However, Mr. Gerrity claimed that the abandonment was invalid. Mr. Gerrity argued that the surface owner failed to exercise reasonable diligence to identify, locate, and serve him with a notice of abandonment. Under the ODMA, a surface owner must serve the holder of the mineral interest with a notice of abandonment by certified mail, return receipt requested. However, if service cannot be completed by certified mail, return receipt requested, the surface owner may serve the notice by publication.

In Gerrity, the surface owner attempted to serve Ms. Richards, the record title owner, with a notice of abandonment at her last known address in Cuyahoga County. However, certified mail service failed. Thus, the surface owner searched the county recorder's office and probate court's office in both Guernsey County and Cuyahoga County to identify an alternate address for Ms. Richards. However, the search did not reveal any other addresses for Ms. Richards or any information concerning her probate estate and devisees. As a consequence, the surface owner served its notice of abandonment by publication. 

The trial court found the surface owner to be the lawful owner of the Gerrity Minerals. Mr. Gerrity appealed and argued that reasonable diligence required the surface owner to search the internet for the address of Ms. Richards and for the identity of her devisees and their whereabouts. The court of appeals rejected this argument. The court cited the plain language of the ODMA, which only requires certified mail service at the holder's last known address. In this particular case, the surface owner attempted certified mail service at Ms. Richards' last known address. Further, when certified mail service failed, the surface owner conducted a search of two counties' property and probate records. That search too failed to produce Ms. Richards' probate estate or the identity of her devisees. The court found this searching to be reasonable under the circumstances because the ODMA does not contemplate a worldwide exhaustive search for a holder. 

Tags: Ohio, DMA, Oil and Gas, Energy, Utica, ODMA

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