West v. Bode

• Citation: 145 N.E.3d 1190,2019 Ohio 4092
• Decision Date: 30 September 2019
• Docket Number: No. 18 MO 0017,18 MO 0017
• Court: United States Court of Appeals (Ohio)
• Parties: Wayne L. WEST et al., Plaintiffs-Appellants, v. C.J. BODE et al., Defendants-Appellees.

145 N.E.3d 1190
2019 Ohio 4092

Wayne L. WEST et al., Plaintiffs-Appellants,
v.
C.J. BODE et al., Defendants-Appellees.

No. 18 MO 0017

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

Dated: September 30, 2019

Atty. Ryan M. Regel, Yoss Law Office, 122 N. Main Street, Woodsfield, Ohio 43793, for Plaintiffs-Appellants and

Atty. Charles H. Bean, Thornburg & Bean, 113 West Main Street, P.O. Box 96, St. Clairsville, Ohio 43950 for Defendants-Appellees.

BEFORE: Carol Ann Robb, Gene Donofrio, David A. D'Apolito, Judges.

OPINION AND JUDGMENT ENTRY

Robb, J.

{¶1} Plaintiff-Appellants Wayne and Rusty West ("the landowners") appeal the decision of the Monroe County Common Pleas Court granting summary judgment in favor of Defendant-Appellees John Christman et al. ("the royalty holders"). The landowners sought a declaration that the severed one-half of the royalty in the oil and gas underlying their land was extinguished. The royalty holders intervened, filed a counterclaim to declare they owned this royalty interest, and sought summary judgment on the basis that the Marketable Title Act ("MTA") does not apply to mineral interests. As argued by the landowners, the trial court erred in holding a mineral interest cannot be extinguished under the MTA due to the existence of the more specific Dormant Mineral Act ("DMA"). Extinguishment under the MTA and abandonment under the DMA are distinct tests and rights, which do not irreconcilably conflict. The grant of summary judgment on this ground is reversed.

{¶2} Contrary to the landowners' next contention, the royalty holders' chain of title did not demonstrate a lack of standing to file the counterclaim as an auditor's deed demonstrates how their predecessor obtained the subject royalty interest. The landowners then ask this court to declare the royalty interest extinguished because it was not specifically referred to or identified in their root of title or in the muniments of their subsequent chain of title. They suggest no other recorded instruments can be viewed, while the royalty holders argue recordings in their separate chain of title for the royalty interest preserved the interest. Because the trial court did not reach this issue, the case is remanded for application of the MTA.

STATEMENT OF THE CASE

{¶3} In 1902, George L. Parks transferred to C.J. Bode and George T. Nalley "1/2 part of his royalty of all of the oil and gas in an under" his land in Bethel Township, Monroe County, estimated to contain 66 acres. This "Sale of Royalty" was recorded in the Lease Records at Volume 318, Page 38. This 1902 instrument created the royalty interest at issue in this case.

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{¶4} In 1929, Parks transferred his Bethel Township property to Lettie West in a warranty deed describing approximately 40 acres (in Range 7, Township 5, Section 1) and 28 acres (in Range 6, Township 4, Section 31) for an approximate total of 68 acres ("the West property"). The deed advised: "The one half royalty is reserved by grantor in aforesaid tracts as sold to C.J. Bode and George T. Nalley." The deed for the West property was recorded in the Deed Records at Volume 99, Page 398.

{¶5} In 1959, Lettie West died, and the West property was transferred to George E. West through a certificate issued by the probate court and recorded in the deed records. This certificate of transfer described the 68 acres, attested it was the same premises conveyed in the 1929 deed from Parks to Lettie West at Volume 99, Page 398, and made no reference to any reservation or exception.

{¶6} In 1996, George West transferred the West property to Appellant Wayne West. The recorded general warranty deed described the 68 acres and noted it was the same premises conveyed by Parks to Lettie West in 1929 at Volume 99, Page 398. The deed stated: "Except all easements * * * and reservations of record."

{¶7} In 2002, Wayne West conveyed to Appellant Rusty West just over 5 acres platted out of the West property. The surveyor's description attached to the deed stated: "Subject to all legal * * * reservations, and zoning regulations of record."

{¶8} On February 13, 2017, Appellants Wayne and Rusty West (hereinafter "the landowners") filed a complaint for declaratory judgment alleging the one-half oil and gas royalty interest originally granted to Bode and Nalley by Parks was extinguished under the MTA. The complaint alleged: the 1959 certificate of transfer was the landowners' root of title; it made no reference to the mineral interest previously severed; the deeds in their chain of title subsequent to the root did not refer to the severed mineral interest; no preserving notice was filed; and no other exceptions in R.C. 5301.49 or R.C. 5301.53 were applicable.

{¶9} The landowners attached to their complaint the aforementioned recorded instruments. They also attached instruments recorded in 1916 which showed conveyances of the subject one-half royalty interest (which was severed and sold to Bode and Nalley in 1902). As to the Nalley interest: Nalley executed a deed in March 1916 transferring half of his interest to E.J. Wichterman, who in turn transferred half of his new interest to Clara Thompson the next day; and Nalley transferred the other half of his interest in April 1916 to A.D. McVey, who conveyed it to M.M. McMann the next day. As for Bode, he transferred his interest to Clara Thompson and E.J. Wichterman in April 1916.

{¶10} After these transactions, Wichterman, Thompson, and Mann were the owners of the subject royalty interest. In addition to naming these three people as defendants, the landowners also named Bode, Nalley, and McVey and the unknown heirs, devisees, executors, administrators, relicts, next of kin, and assigns of the six defendants. None of these defendants appeared in this action.

{¶11} A motion to intervene as defendants and counterclaimants was filed by the royalty holders, who are Appellees John L. Christman, Katherine Haselberger, and Charlotte McCoy. The trial court granted the motion to intervene, and the royalty holders filed an answer and a counterclaim seeking declaratory judgment and quiet title as to the subject royalty interest. The royalty holders explained that a 2007 recorded certificate of transfer issued by the probate court shows they inherited

145 N.E.3d 1194

the royalty interest from Nova Christman, who recorded a notice in 1977 to preserve the royalty interest he purchased in 1944 at an auditor's forfeited land sale.

{¶12} The 1944 auditor's deed shows Nova Christman purchased forfeited property in Bethel Township described as follows:

Being the 1/16 or 1/2 of the 1/8 royalty of oil and gas^{[1 ]} in the name of Ed Westerman et al, under 40 acres, Range 7 - Township 5 - Section 1, se ne (Monroe County Lease Records Vol. 38 page 318) land now owned in name of Lettie West. Any oil and gas in lines to credit of same. Listed by the Reno Oil Company. Being 1/16 or 1/2 of the 1/8 royalty of oil and gas in the name of Ed Westerman, et al, under 26 acres, Range 6 - Township 4 - Section 31, nw sw (Monroe County Lease Records - Vol. 38 page 318) land now in the name of Lettie West. Any oil and gas in lines to credit of same. Listed by the Reno Oil Company.

(Monroe County Deed Records Volume 116, Page 109.) Note this deed specifies that Lettie West owned the land burdened by the one-half royalty. And, it twice identifies Volume 38, Page 318 of the Lease Records, which is where the 1902 instrument originally conveying the subject royalty interest is recorded.²

{¶13} The notice Nova Christman caused to be recorded in February 1977 was notarized; as authority for the recording, the notice cited R.C. 5301.51 and R.C. 5301.52 (the MTA statutes providing for a preservation notice, also called a notice of claim). (Monroe County Deed Records Volume 171, Page 746.) The preservation notice (at tract 5) recited the above-quoted language of the auditor's deed (which included the volume and page of the 1902 sale of royalty and Lettie West's name as the owner of the land in 1944); it also said the subject royalty interest was acquired through the 1944 auditor's deed (which was also identified by volume and page).

{¶14} This information was all repeated in the 2007 recorded certificate of transfer (and two amended certificates recorded the same year), which shows the royalty holders received the royalty interest from the estate of Nova Christman. The royalty holders also asserted defenses such as: the MTA does not apply to extinguish mineral interests due to the enactment of the DMA; an auditor's deed creates a new and perfect title which cannot be contested after a one-year statute of limitations; and title transactions existed.

{¶15} On April 27, 2018, the royalty holders filed a motion for summary judgment arguing the landowners failed to state a claim because the provisions of the DMA control over the provisions of the MTA. They argued the MTA's concept of extinguishment cannot be used for mineral interests due to the DMA's more specific abandonment procedures (including the notice required and the ability to preserve the interest even after the 20-year period) which they urged irreconcilably conflicted with the MTA's 40-year period, lack of

145 N.E.3d...