O'Bradovich v. Hess Ohio Devs., LLC

• Decision Date: 22 March 2021
• Docket Number: No. 20 JE 0007,20 JE 0007
• Citation: 170 N.E.3d 1240
• Parties: Eli O'BRADOVICH aka Ely O'Bradovich, et al., Plaintiffs-Appellants, v. HESS OHIO DEVELOPMENTS, LLC, et al., Defendants-Appellees.
• Court: Ohio Court of Appeals

170 N.E.3d 1240

Eli O'BRADOVICH aka Ely O'Bradovich, et al., Plaintiffs-Appellants,

v.HESS OHIO DEVELOPMENTS, LLC, et al., Defendants-Appellees.

No. 20 JE 0007

Court of Appeals of Ohio, Seventh District, Jefferson County.

March 22, 2021

Atty. Gregory W. Watts, Atty. Matthew W. Onest, and Atty. William G. Williams, Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A., 4775 Munson Street NW, P.O. Box 36963 Canton, Ohio 44735-6963, for Plaintiffs-Appellants.

Atty. Kevin Colosimo, and Atty. Christopher Rogers, Frost Brown Todd, LLC, Union Trust Building, 501 Grant Street, Suite 800, Pittsburgh, Pennsylvania 15219, for Defendants-Appellees, Ascent Resources — Utica, LLC and Utica Minerals Development, LLC.

Atty. Rodger L. Puz, Dickie, McCamey & Chilcote, P.C., Two PPG Place, Suite 400, Pittsburgh, Pennsylvania 15222.

Atty. Paul J. Schumacher, Dickie, McCamey & Chilcote, P.C., 600 Superior Avenue East, Suite 2330, Cleveland, Ohio 44114, for Appellees, Hess Ohio Developments, LLC and CNX Gas Company LLC.

BEFORE: Cheryl L. Waite, Gene Donofrio, David A. D'Apolito, Judges.

OPINION AND JUDGMENT ENTRY

WAITE, J.

{¶1} Appellants Louis O'Bradovich, Rebecca and Paul Eberhart, Natalie Louise Basnett, Camille and John Keyoski, and Ely (aka Eli) and Sandra O'Bradovich appeal a March 5, 2020 decision of the Jefferson County Common Pleas Court which granted a Civ.R. 12(B)(6) motion to dismiss their complaint. The motion to dismiss was filed by Appellees Hess Ohio Developments, LLC ("Hess"), CNX Gas Company, LLC ("CNX"), Utica Minerals Development, LLC ("Utica"), Ascent Resources - Utica LLC ("Ascent"), and John Does 1-10. In this oil and gas action, Appellants argue that the trial court erroneously determined that a 1940 deed that reserved coal and "other minerals" included oil and gas rights. For the reasons provided, Appellants’ arguments are without merit and the judgment of the trial court is affirmed.

Factual and Procedural History

{¶2} This action involves 144.113 acres of land in Smithfield Township, Jefferson County. On February 22, 1940, Jefferson Coal Company ("JCC") transferred the surface rights to Lawrence T. Heil. The deed included language "[e]xcepting and reserving, however, to the Grantor herein, its successors and assigns, from all the underlying above described Tracts Nos. 2 and 3 all the coal and other minerals in, upon or underlying all of the same." (7/27/17 Complaint, Exh. 1.) Critical to the issue at hand, the deed also reserved easements corresponding to the development of those interests.

{¶3} At various points in time thereafter, the following individuals appear to have obtained a portion of the surface rights: Ely O'Bradovich, Louis O'Bradovich, Rebecca and Paul Eberhart, Ely A. and Sandra E. O'Bradovich, Natalie Louise Basnett, Camille and John Keyoski. After a series of conveyances, Appellees obtained an interest in the minerals through the 1940 deed exception.

{¶4} On July 27, 2017, Appellants collectively filed a complaint against Appellees. The complaint raised several claims and sought, among other things: declaratory judgment that Appellees did not own the oil, gas, and hydrocarbon rights underlying the surface; quiet title; an injunction to prohibit Appellees from leasing, conveying, or transferring the mineral interests; and a finding of trespass based on Appellees’ actions in drilling wells to remove minerals from the subsurface.

{¶5} On August 25, 2017, in lieu of filing an answer, Ascent and Utica filed a Civ.R. 12(B)(6) motion to dismiss the complaint. On September 12, 2017, Hess and CNX filed a Civ.R. 12(B)(6) motion to dismiss the complaint. Appellants filed a memorandum in response to both motions to dismiss. On September 18, 2017, the trial court held a motion hearing.

{¶6} On December 4, 2019, the trial court granted a request to substitute parties following the death of Ely O'Bradovich, Sr. It appears that the relevant parties were already plaintiffs, thus the effect of the entry served only to remove Ely O'Bradovich, Sr. as a party.

{¶7} On March 5, 2020, the trial court granted the Civ.R. 12(B)(6) motion and dismissed the complaint. It is from this entry that Appellants timely appeal.

Civ.R. 12(B)(6)

{¶8} This action was dismissed pursuant to Civ.R. 12(B)(6). "A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be granted tests only the legal sufficiency of the complaint." Youngstown Edn. Assn. v. Kimble , 2016-Ohio-1481, 63 N.E.3d 649, ¶ 11 (7th Dist.), citing State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs. , 65 Ohio St.3d 545, 548, 605 N.E.2d 378 (1992).

{¶9} When reviewing a Civ.R. 12(B)(6) motion, "the court must accept the factual allegations contained in the complaint as true and draw all reasonable inferences from these facts in favor of the plaintiff." Kimble, supra , at ¶ 11, citing Mitchell v. Lawson Milk Co. , 40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988). In order to grant a Civ.R. 12(B)(6) motion, "it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery." O'Brien v. Univ. Community Tenants Union, Inc. , 42 Ohio St.2d 242, 327 N.E.2d 753 (1975), syllabus. However, "[i]f there is a set of facts consistent with the complaint that would allow for recovery, the court must not grant the motion to dismiss." Kimble, supra , at ¶ 11, citing York v. Ohio State Hwy. Patrol , 60 Ohio St.3d 143, 144, 573 N.E.2d 1063 (1991).

{¶10} A Civ.R. 12(B)(6) claim is reviewed de novo. Ford v. Baska , 2017-Ohio-4424, 93 N.E.3d 195, ¶ 6 (7th Dist.), citing Perrysburg Twp. v. Rossford , 103 Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44, ¶ 5.

ASSIGNMENT OF ERROR

THE TRIAL COURT ERRED IN GRANTING APPELLEES MOTION TO DISMISS COMPLAINT.

{¶11} Appellants assert that the plain language of the 1940 deed omitted any reference to oil, gas, and hydrocarbon interests, thus those interests were not reserved or excepted and were transferred along with the surface rights. Appellants argue that the Ohio Supreme Court has declared that a deed omitting any reference to oil and gas rights which does not otherwise show an intent to include such interests does not reserve or except those rights. See Detlor v. Holland, 57 Ohio St. 492, 49 N.E. 690 (1898). Appellants contend that the easement language is geared towards coal mining, not oil and gas development, and does not demonstrate an intent to include any interest in oil and gas. Even if this Court were to accept Appellees’ arguments, Appellants argue that they are entitled to a remand for purposes of admitting extrinsic evidence to demonstrate the parties’ intent in accordance with this Court's decision in Sheba v. Kautz, 2017-Ohio-7699, 97 N.E.3d 893 (7th Dist.).

{¶12} In response, Appellees argue that the general rule in Ohio law provides that the phrase "other minerals" includes oil and gas interests if the easement language within the deed is general enough to allow for the extraction of oil and gas. Appellants urge that the easement language here provides for the "exploring, drilling, testing, mining and removal of said coal or other minerals." (7/27/17 Complaint, Exh. 1.) Appellees distinguish the instant deed from that in Detlor as the easement in that case did not include language relating to the extraction of oil and gas and was drafted at a time when oil and gas development was not common. As to Appellant's request for a remand, Appellees urge that there is no extrinsic evidence available in this matter due to the age of the deed.

{¶13} This case turns on only one relevant issue. The narrow issue before us is whether the phrase "other minerals" in the instant deed included the oil, gas, and hydrocarbon interests. Ohio law has been developed in this area through a series of cases, each of which was addressed within the parties’ briefs.

{¶14} The first of these cases is Detlor. The Detlor deed included an exception/reservation of coal and "other valuable minerals." Id. at 502, 49 N.E. 690. The Detlor Court acknowledged that the phrase looked at in its "broadest sense, would include petroleum oil." Id. at 504, 49 N.E. 690. However, when taking all matters into consideration, the court held that this language was insufficient to reserve oil and gas rights. The Court acknowledged that small amounts of oil were being produced within ten to twenty miles of the property, however, there was no evidence to suggest that the grantor had any knowledge of that limited production. Id. at 503, 49 N.E. 690. Importantly, the Court relied on the fact that the easement language pertaining to the Detlor mineral rights could not be seen as applicable to oil production. The Court noted the absence of words such as "derricks, pipe lines, tanks, the use of water for drilling, or the removal of machinery used in drilling or operating oil or gas wells." Id. at 503, 49 N.E. 690.

{¶15} The next case to provide guidance on this issue is Gordon v. Carter Oil, Co., 19 Ohio App. 319 (5th Dist.1924). While the Gordon opinion does not provide a detailed analysis, the court determined that the deed was devoid of any evidence that the parties intended the phrase "other minerals" to include oil and gas in accordance with Detlor . Id. at 322.

{¶16} In Hardesty v. Harrison, 5th Dist. 1928 WL 2553 (Mar. 5, 1928), the language in the relevant deed reserved "all the coal, clay and mineral rights." Id. at *1. The court held that this language did sufficiently reserve oil and gas rights, as "there is nothing within the deed in question which shows that the parties contemplated something less general than all substances legally ogzibable [sic] as minerals." Id. at *2.

{¶17} The Fourth District addressed the issue in Jividen v. New Pittsburg Coal Co., 45 Ohio App. 294, 187 N.E. 124 (4th Dist.1933). The Jividen court reviewed whether the deed language "all coal and other mineral" sufficiently reserved oil and gas interests. Id. at 295, 187 N.E. 124. The court noted that the specific deed at issue was unique, as it...