Stalder v. Gatchell
| Decision Date | 15 April 2022 |
| Docket Number | 20 MO 0010 |
| Citation | 2022 Ohio 1325 |
| Parties | JESSE STALDER et al., Plaintiffs-Appellees/Cross-Appellees, v. MARGARET GATCHELL et al., Defendants-Appellants/Cross-Appellants. |
| Court | Ohio Court of Appeals |
Atty Craig J. Wilson, CJ Wilson Law, LLC, for Plaintiffs-Appellees/Cross-Appellees and
Atty Melanie M. Norris, Steptoe and Johnson, Atty. John Kevin West, Atty. John C. Ferrell, Steptoe and Johnson, for Appellant Gulfport Energy Corporation and Atty. Timothy B. Pettorini, Roetzel & Andress, LPA, Atty. Sara E. Fanning, Roetzel & Andress, LPA, for Cross-Appellants Richard and Mallette Parry.
BEFORE: Carol Ann Robb, Gene Donofrio, David A. D'Apolito, Judges.
OPINION AND JUDGMENT ENTRY
{¶1} Defendant-Appellant Gulfport Energy Corporation appeals the June 1, 2020 decision of the Monroe County Common Pleas Court granting summary judgment in favor of Plaintiffs-Appellees Jesse and Lindsay Stalder. Gulfport argues an oil and gas lease did not entitle the Stalders to a signing bonus or royalties corresponding to a one-half mineral interest underlying the Stalders' property (the Gatchell Reservation) because the Stalders did not own the Gatchell Reservation. In support, Gulfport states the Stalders' attempt to have the Gatchell Reservation deemed abandoned under the Dormant Mineral Act was invalid because Gulfport was producing from the land as (or for) the holder. Gulfport alternatively argues that even if the Gatchell Reservation was abandoned and vested in the Stalders in 2016, this was not the status at the time the Stalders signed the lease in 2011 and Gulfport should not be required to pay the signing bonus upon a subsequent reuniting of the minerals with the surface. Gulfport's arguments are overruled.
{¶2} Cross-Appellants Richard and Mallette Parry contest the portion of the summary judgment decision stating the Gatchell Reservation was abandoned and vested in the Stalders without mentioning their earlier settlement with the Stalders. They are concerned this may be read as conflicting with the court's January 27, 2020 settlement enforcement order, memorializing the agreement to settle by splitting the Gatchell Reservation 75% to the Stalders and 25% to the Parrys. However, there is no indication the trial court reconsidered its order enforcing settlement which was recorded. The order enforcing settlement between the Stalders and the Parrys remained effective and the later summary judgment which resolved the issues between the Stalders and Gulfport is to be read consistent with the settlement order. The trial court's judgment is affirmed.
{¶3} The Gatchell Reservation represents one-half of the oil and gas underlying property containing 64.73 acres in Sunsbury Township, Monroe County. The Gatchell Reservation was created in a deed recorded on January 27, 1904, wherein Margaret J Gatchell conveyed the property to Cyrena J. Mathess (or Mathew), while reserving for herself and her heirs and assigns one-half of the oil and gas (with the right to mine and drill for it). (Vol. 62, P. 575).
{¶4} The chain of title for the Gatchell Reservation shows Margaret J. Gatchell conveyed it in 1938 to Minnie E. Parry, who conveyed it in 1955 to Georgia Parry. Georgia Parry conveyed the Gatchell Reservation (and other mineral interests) to Society National Bank of Cleveland, Trustee in a quit claim deed recorded on December 12, 1965.
{¶5} The next deed in the chain of title was executed by "Thayer L. Parry, Sole Heir & Devisee of Georgia Parry, deceased, and Katherine L. Parry, Wife of Thayer L. Parry" on April 2, 1984 and recorded on November 20, 1984. This deed conveyed the Gatchell Reservation (and other mineral interests) to "Society National Bank, Trustee" with an address of 127 Public Square in Cleveland (the same address as the bank in the prior deed).
{¶6} Cross-Appellant Richard Parry then inherited the Gatchell Reservation from his father Thayer Parry, who died in 1996 and whose estate was administered in Summit County. The will named Society National Bank, Cleveland as the executor. As Katherine had predeceased Thayer, the will directed the bank or its successor to distribute a trust to his sole child, Richard Parry. The trust, as modified in 1994, also directed distribution to Richard Parry upon Thayer Parry's death. No deed was thereafter recorded transferring the Gatchell Reservation to Richard Parry.
{¶7} As for the prior Cyrena Mathess property (the surface and the other one-half of the oil and gas), Jesse Stalder obtained the property (with co-owner Elizabeth Landefeld). It was then conveyed to Jesse and his wife Lindsay (the Stalders) in a deed recorded December 11, 2012; the deed noted the property was subject to the exception of the 1904 Gatchell Reservation.
{¶8} The Stalders executed an oil and gas lease with Gulfport on September 15, 2011, providing the exclusive rights to the oil and gas underlying the subject property. The parties say a memorandum of lease was recorded on August 14, 2013. (There is a suggestion the Stalders believed the 1989 Dormant Mineral Act was self-executing and the Gatchell Reservation had already been automatically deemed abandoned.) Gulfport only paid the Stalders a signing bonus representing one-half of the 64.73 acres due to the Gatchell Reservation covering the other one-half of the oil and gas.
{¶9} On April 12, 2012, the Stalders published a notice of intent to declare the mineral interest abandoned in the local newspaper in an attempt to utilize the 2006 Dormant Mineral Act. There was no attempt to serve the last record holder by certified mail. The published notice only said it was being served upon Margaret J. Gatchell and her heirs, assigns, and successors to the mineral Reservation created in Monroe County Deed Record Vol. 62, P. 575. The Stalders recorded an affidavit of abandonment on May 30, 2012 and thereafter notified the recorder to note the abandonment on the deed which created the Gatchell Reservation.
{¶10} In 2015, Gulfport recorded a declaration of pooling and unitization for the Truax unit, which included approximately 20 acres of the subject property. Production from the Truax well began in the second quarter of 2015. Gulfport only paid the Stalders one-half of the royalties due under the lease due to the outstanding Gatchell Reservation.
{¶11} The Stalders decided to engage in another abandonment attempt. They learned Society National Bank and Society National Bank of Cleveland merged into KeyCorp, the holding company for KeyBank National Association also called KeyBank. The Stalders sent a notice of intent to declare the mineral interest abandoned by certified mail to KeyBank at 127 Public Square in Cleveland. The return receipt showed the certified mailing was received by KeyBank on November 27, 2015, and the name "RON S." was stamped in a box. (This was not the signature box, which was blank).
{¶12} The notice said it was being served on: Society National Bank, Trustee; Society National Bank of Cleveland, Trustee; KeyBank; and any other unknown successors and assigns to the mineral interest in the 1968 and 1984 deeds. The notice cited the location of these deeds in the public record and provided a description of the property. (The notice did not recite a grantor name in describing these deeds, and thus the Parry name was not mentioned). The notice also cited the location in the public record for the original Reservation of the one-half of the oil and gas rights.
{¶13} KeyBank did not record an affidavit or claim to preserve. The Stalders recorded an affidavit of abandonment on January 26, 2016, and thereafter notified the recorder to note the abandonment on the deed which created the Gatchell Reservation.
{¶14} On September 23, 2017, Richard Parry and his wife Mallette Parry executed a paid-up oil and gas lease with Gulfport for the Gatchell Reservation. The lease said the effective date was May 16, 2014 (more than three years before execution). A memorandum of lease was recorded September 27, 2017. Richard Parry recorded an affidavit containing a claim to preserve the Gatchell Reservation on June 1, 2018.
{¶15} On April 3, 2018, the Stalders filed a complaint against Richard and Mallette Parry, Gulfport, and the bank (the record holder and prior trustee of the Gatchell Reservation). Specifically, the complaint named: Society National Bank, Trustee; Society National Bank of Cleveland, Trustee; KeyCorp; and KeyBank Corporation. The Stalders also named as defendants the former record holders of the Gatchell Reservation (Margaret Gatchell, Minnie Parry, Georgia Parry, and Thayer Parry), along with their unknown heirs, assigns, and certain named relatives. Default judgment was eventually granted against these individuals (except Richard and Mallette Parry).
{¶16} The Stalders' complaint set forth four claims. The first claim sought a declaratory judgment on abandonment of the Gatchell Reservation under the 2006 DMA, and the second claim sought quiet title to the Gatchell Reservation on this basis. The third and fourth claims were asserted only against Gulfport for breach of lease, seeking the signing bonus and royalties corresponding to the Gatchell Reservation (alleging Gulfport only paid half of the signing bonus and royalties required by the Stalder lease).
{¶17} Gulfport's answer alleged it was not required to pay the signing bonus and royalties corresponding to the Gatchell Reservation because the Stalders did not own it. This answer said the Stalders' notice of abandonment was invalid under the 2006 DMA and there was a savings event.
{¶18} The bank's answer denied the...
To continue reading
Request your trial