Albanese v. Batman (Slip Opinion) , 148 Ohio St. 3d 85 ( 2016 )

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Albanese v. Batman, Slip Opinion No. 2016-Ohio-5814.]
NOTICE
This slip opinion is subject to formal revision before it is published in
an advance sheet of the Ohio Official Reports. Readers are requested
to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
65 South Front Street, Columbus, Ohio 43215, of any typographical or
other formal errors in the opinion, in order that corrections may be
made before the opinion is published.
SLIP OPINION NO. 2016-OHIO-5814
ALBANESE, EXR., APPELLANT, v. BATMAN ET AL., APPELLEES.
LIPPERMAN, APPELLANT, ET AL. v. BATMAN ET AL., APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Albanese v. Batman, Slip Opinion No. 2016-Ohio-5814.]
Dormant Mineral Act—R.C. 5301.56—Pursuant to Corban v. Chesapeake
Exploration, L.L.C., 2006 version of Dormant Mineral Act applies—
Failure to comply with notice and affidavit requirements in R.C.
5301.56(E)—Mineral interests not deemed abandoned.
(Nos. 2015-0120 and 2015-0121—Submitted January 6, 2016—Decided
September 15, 2016.)
APPEALS from the Court of Appeals for Belmont County, No. 14 BE 22,
2014-Ohio-5517, and No. 14 BE 2, 2014-Ohio-5500.
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SUPREME COURT OF OHIO
KENNEDY, J.
I. Introduction
{¶ 1} In these discretionary appeals from the Seventh District Court of
Appeals, we address two cases involving the application of the Ohio Dormant
Mineral Act (“ODMA”), codified in R.C. 5301.56. Appellant Wayne Lipperman
owns a parcel of real property in Belmont County, Ohio, and appellant Mark
Albanese is the executor of the estate of James Albanese III, which owns a
separate parcel of real property in Belmont County, Ohio. Appellees Nile and
Katheryn Batman claim to hold an interest in the minerals underlying the
properties owned by Lipperman and the estate of James Albanese. James
Albanese, Lipperman, and the Batmans all leased their oil and gas rights in the
properties at issue herein.
{¶ 2} James Albanese and Lipperman filed separate actions seeking to
quiet title to their respective properties, asserting that the severed mineral interests
held by the Batmans had been abandoned. They also sought to cancel any oil and
gas leases executed in relation to the Batmans’ interests in their properties. James
Albanese died in May 2013, and Mark Albanese, as the executor of the estate,
was substituted as the plaintiff in that case.
{¶ 3} Applying this court’s holding in Corban v. Chesapeake Exploration,
L.L.C., ____ Ohio St.3d ____, 2016-Ohio-5796, ___ N.E.3d ___, we hold that the
2006 version of the ODMA applies in these cases and because neither James
Albanese nor Lipperman complied with the notice and affidavit requirements in
R.C. 5301.56(E), the mineral interests are preserved in favor of their holder, the
Batmans.
{¶ 4} Therefore, we affirm the judgment of the court of appeals in both
cases, albeit for different reasons than those expressed in the court of appeals’
decisions.
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January Term, 2016
II. Facts and Procedural History
A. The Batmans’ Mineral Interest
{¶ 5} In 1952, Mayme Sulsberger died and left her interest in the mineral
rights underlying the properties at issue in this case to her daughter, Frances
Batman (“Frances”). On September 9, 1981, Frances executed an “Affidavit and
Notice of Claim of Interest in Land” that referenced mineral interests that she held
in properties in Belmont County, Ohio, and she recorded the affidavit in the office
of the Belmont County Recorder that same month. Shortly thereafter, Frances
died, and pursuant to the terms of her will, her mineral interests in the Belmont
County properties passed to her son, Nile Batman.
{¶ 6} In 1989, almost eight years after her death, Frances’s will was filed
in both the Belmont County Probate Court and the Belmont County Recorder’s
Office.
B. Lipperman’s Property
{¶ 7} Lipperman owns 41 acres of property in Pultney Township, Belmont
County, Ohio. On April 7, 2006, Lipperman leased the oil and gas rights in his
property to Reserve. In January 2007, Reserve assigned the Lipperman lease to
Equity. In May 2008, Equity assigned its deep-oil-and-gas rights from the lease
to PC Exploration, Inc., n.k.a. Phillips Exploration, Inc.
{¶ 8} In November 2008, the Batmans leased their oil and gas rights in
Lipperman’s property to Reserve. In January 2009, Reserve assigned the deep-
oil-and-gas rights from that lease to PC Exploration.
C. The Albanese Property
{¶ 9} The Albanese estate owns 104 acres of property in Smith Township,
Belmont County, Ohio. In 2011, James Albanese leased oil and gas rights
underlying his property to Hess Ohio Developments, L.L.C.
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{¶ 10} In October 2008, the Batmans leased their oil and gas rights from
their mineral interests that underlie the Albanese property to Mason Dixon
Energy, Inc. Mason Dixon Energy subsequently assigned its rights under the
Batman lease to Hess Ohio Developments.
D. Litigation
{¶ 11} On January 20, 2012, James Albanese filed a quiet-title action
against the Batmans, Mason Dixon Energy, and Hess Ohio Developments. On
February 15, 2012, Lipperman filed a quiet-title action against the Batmans,
Reserve, Equity, PC Exploration, and XTO Energy, Inc. (a parent company of
Phillips Exploration). Lipperman and James Albanese sought to have the mineral
interests underlying their properties that were held by the Batmans deemed
abandoned and sought the cancellation of oil and gas leases (or assignment of
those leases) entered into by the Batmans with the energy companies.
{¶ 12} Hess Ohio Developments filed a motion for summary judgment in
the Albanese case, and Reserve and Equity filed a motion for summary judgment
in the Lipperman case. Holding that the 20-year look-back period under the 1989
ODMA is a rolling period,1 the trial court held that the 1981 filing of Frances’s
affidavit and the 1989 filing of Frances’s will in Ohio both qualified as saving
events under the 1989 ODMA, thereby preserving the Batmans’ mineral interest,
as well as the leases (and assignment of leases) made therefrom, in both cases.
1
In Albanese v. Batman, the court of appeals described “rolling” versus “fixed” with regard to the
look-back period in the 1989 version of the ODMA as follows:
There are two views about the look-back period in the 1989 version of the
[ODMA]. One view is that it is a rolling period. In generic terms, if the look-back
period is rolling and there is a 20 year period where there is no savings event then
the mineral interest is abandoned. The other view is that the look-back period is
fixed. If it is fixed then the look-back period is twenty years preceding the
enactment of the statute plus the three year grace period. Under Ohio’s statute this
would mean from March 22, 1969 (twenty years prior to the date of enactment) to
March 22, 1992 (the end of the three year grace period).
2014-Ohio-5517, ¶ 23.
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January Term, 2016
Therefore, the trial court granted summary judgment in favor of the energy
companies in both cases.
{¶ 13} Mark Albanese, as executor, and Lipperman appealed from their
respective cases. In each appeal, the court of appeals held that the trial court erred
in holding that the 20-year look-back period is a rolling period. Instead, the court
of appeals held that the 20-year look-back period under the 1989 ODMA is a
fixed period from March 22, 1969, through March 22, 1989 (20 years before the
effective date of the 1989 ODMA through the effective date of the 1989 ODMA),
that is extended to March 22, 1992, by the statute’s three-year grace period. In
each case, the court of appeals held that the 1981 filing of Frances Batman’s
affidavit was a saving event under the 1989 ODMA that operated to preserve the
severed mineral rights in Frances, and subsequently the Batmans, because it
occurred within the 20 years prior to March 22, 1989. Consequently, neither
opinion considered whether the filing of Frances’s will was a saving event under
the 1989 ODMA.
{¶ 14} Mark Albanese and Lipperman appealed to this court; Mark
Albanese’s case was assigned case No. 2015-0120, and Lipperman’s case was
assigned case No. 2015-0121. Each argued in his first proposition of law that the
look-back period of the 1989 ODMA was a rolling period and in his second
proposition of law that the recording of an out-of-state will is not a saving event.
Lipperman argued in a third proposition of law that XTO Energy and Phillips
Exploration have no standing to appear in case No. 2015-0121.
{¶ 15} We accepted both cases but held proposition of law No. 1 in each
case for our decision in case No. 2014-0803, Walker v. Shondrick-Nau. 143 Ohio
St.3d 1403, 2015-Ohio-2747, 34 N.E.3d 131.
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III. Analysis
A. The 2006 Version of the ODMA Applies
{¶ 16} Because James Albanese and Lipperman filed their complaints
after June 30, 2006, our holding in Corban v. Chesapeake Exploration, L.L.C.,
____ Ohio St.3d ____, 2016-Ohio-5796, __ N.E.3d __, is dispositive of both
appeals and renders moot the issues raised in proposition of law Nos. 1 and 2.
{¶ 17} Both James Albanese’s and Lipperman’s complaints were
predicated upon the 1989 ODMA, and in resolving the matters, both the trial court
and the court of appeals applied the 1989 ODMA. In Corban, however, this court
was presented with the following state-law question certified by a federal court:
“Does the 2006 version or the 1989 version of the ODMA apply to claims
asserted after 2006 alleging that the rights to oil, gas, and other minerals
automatically vested in the surface land holder prior to the 2006 amendments as a
result of abandonment?” Id. at ¶ 1. We answered that the 2006 version of the
ODMA applies to claims asserted after June 30, 2006, because the 1989 version
of the ODMA was not self-executing.
{¶ 18} Under the 1989 version of the ODMA, a severed mineral interest
was “deemed abandoned and vested in the owner of the surface” if none of the
following applied: (1) the mineral interest was in coal or was coal-related, (2) the
mineral interest was held by the United States, the state, or any other political
body described in the statute, or (3) a saving event occurred within the statutorily
provided 20-year period. Sub.S.B. No. 223, 142 Ohio Laws, Part I, 981, 985-988
(“S.B. 223”). Because “deemed” means only that the mineral interest is presumed
abandoned, judicial action, typically by way of a quiet-title action, was required
by the surface owner for a conclusive determination that the mineral interest was
abandoned and vested in the surface owner. Corban at ¶ 25.
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January Term, 2016
{¶ 19} The 2006 version of the ODMA2 adds additional requirements. It
provides, in R.C. 5301.56(E):
Before a mineral interest becomes vested under division (B)
of this section in the owner of the surface of the lands subject to the
interest, the owner of the surface of the lands subject to the interest
shall do both of the following:
(1) Serve notice by certified mail, return receipt requested, to
each holder or each holder’s successors or assignees, at the last
known address of each, of the owner’s intent to declare the mineral
interest abandoned. If service of notice cannot be completed to any
holder, the owner shall publish notice of the owner’s intent to declare
the mineral interest abandoned at least once in a newspaper of
general circulation in each county in which the land that is subject to
the interest is located. The notice shall contain all of the information
specified in division (F) of this section.
(2) At least thirty, but not later than sixty days after the date
on which the notice required under division (E)(1) of this section is
served or published, as applicable, file in the office of the county
recorder of each county in which the surface of the land that is
subject to the interest is located an affidavit of abandonment that
contains all of the information specified in division (G) of this
section.
(Emphasis added.)
2
The ODMA was amended again in 2014, 2013 Sub.H.B. No. 72, but the relevant language
remains the same.
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{¶ 20} Therefore, under the 2006 ODMA, in order for a severed mineral
interest to be deemed abandoned and vested in the surface owner (1) the mineral
interest cannot be in coal, (2) the mineral interest cannot be held by certain
entities, (3) no saving event can have occurred during the relevant period, and (4)
the surface owner “shall” have served notice and filed the required affidavit. Use
of the word “shall” means that the notice and affidavit obligations are mandatory,
so a surface owner’s failure to provide notice to the mineral-rights holder would
render further analysis under the ODMA unnecessary. The mineral rights cannot
be deemed abandoned if the mineral-rights holder has not been provided notice.
{¶ 21} This result is confirmed by looking at other parts of the ODMA.
For example, the statutorily provided 20-year period looks back 20 years from the
date of the service of notice required by R.C. 5301.56(E) to determine whether a
saving event occurred that would preclude abandonment of the severed mineral
interest. R.C. 5301.56(B)(3). Absent service of the notice, there is no date from
which the look back can occur. Also, the 2006 ODMA specifically provides that
notice and an affidavit are required before the mineral interest becomes “vested”
in the surface owner. R.C. 5301.56(E). Accordingly, the surface owner’s service
of the notice and filing of the affidavit are required under the 2006 ODMA, and if
those requirements are not met, the severed mineral interest cannot be deemed
abandoned and instead remains with the mineral-interest holder.
{¶ 22} Therefore, because neither Lipperman nor James Albanese
complied with the statutory notice and affidavit provisions found in R.C.
5301.56(E), the severed mineral rights never vested in them, but remain with the
Batmans. Because the 2006 version of the ODMA applies in these cases and
Lipperman and James Albanese failed to comply with R.C. 5301.56(B) and (E),
the first and second propositions of law are moot.
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January Term, 2016
B. Standing
{¶ 23} Lipperman’s third proposition of law asserts that “XTO Energy,
Inc. and Phillips Exploration, Inc., have no standing to appear in this case.” Not
only does that proposition of law misconstrue the doctrine of standing by
attempting to apply it to a defendant’s participation in an action, but the argument
Lipperman makes under that proposition of law in his merit brief is not properly
before the court, because he did not raise it in his memorandum in support of
jurisdiction.
{¶ 24} Standing relates to a party’s right to make a legal claim or seek
judicial enforcement of a legal duty or right. Ohio Pyro, Inc. v. Ohio Dept. of
Commerce, 115 Ohio St. 3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 27, citing
Black’s Law Dictionary 1442 (8th Ed.2004). Standing to sue is necessary for
invoking the jurisdiction of the common pleas court. Fed. Home Loan Mtge.
Corp. v. Schwartzwald, 134 Ohio St. 3d 13, 2012-Ohio-5017, 979 N.E.2d 1214,
¶ 24. To have standing, the party bringing the action must assert a personal stake
in the outcome of the action. Bank of Am., N.A. v. Kuchta, 141 Ohio St. 3d 75,
2014-Ohio-4275, 21 N.E.3d 1040, ¶ 23. A plaintiff establishes standing by
showing that she suffered an injury that is fairly traceable to the defendant’s
conduct and that is likely to be redressed by the requested relief. Moore v.
Middletown, 133 Ohio St. 3d 55, 2012-Ohio-3897, 975 N.E.2d 977, ¶ 22.
{¶ 25} Lipperman—the plaintiff in one of the quiet-title actions here—
contends that certain named defendants lack “standing to appear in this case.”
Reserve Energy Exploration Company, Equity Oil & Gas Funds, XTO Energy,
Inc., and Phillips Exploration, Inc., are parties to this action because Lipperman
named them as defendants in his quiet-title complaint; they have not asserted a
claim for affirmative relief. Accordingly, the doctrine of standing does not apply
to Reserve, Equity, XTO, and Phillips. And when Lipperman appealed the trial
court’s entry of summary judgment, XTO and Phillips became appellees—and
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were entitled to participate in the appellate process—because they were parties in
the trial court and because they were among the defendants in whose favor the
trial court granted summary judgment. See In re Vacation of Twp. Rd. 114,
Hancock Cty., 6 Ohio App. 2d 73, 77, 216 N.E.2d 768 (3d Dist.1966) (“in every
appeal, unless otherwise prescribed, the adversary parties in the original
proceedings who are not parties appellant automatically become parties
appellee”).
{¶ 26} Furthermore, Lipperman’s third proposition of law fails for another
reason. In his merit brief, Lipperman’s argument under his third proposition of
law differs substantially from the argument he raised in his memorandum in
support of jurisdiction. In his memorandum in support of jurisdiction, he simply
stated that XTO and Phillips lack standing because prior to oral argument in the
court of appeals, they filed a release of any interest in the lease entered into by
appellees Nile and Katheryn Batman. Now Lipperman focuses on Reserve and
Equity, not on XTO and Phillips. And instead of relying on the purported release,
Lipperman now primarily argues that pursuant to Civ.R. 56(B), Reserve and
Equity were not entitled either to move for summary judgment or to oppose
Lipperman’s motion for summary judgment in the trial court because “[n]o claim
was asserted against Reserve Energy or Equity Oil and Gas with regard to the
ownership of the oil and gas underlying the property.”3 Because Lipperman did
not raise that argument in his memorandum in support of jurisdiction, it is not
properly before this court. See In re Timken Mercy Med. Ctr., 61 Ohio St. 3d 81,
87, 572 N.E.2d 673 (1991). Therefore, we reject Lipperman’s third proposition of
law.
3
The final sentence of Lipperman’s argument under his third proposition of law in his merit brief
does state, “In addition, since the initiation of this litigation, both Reserve Energy and XTO
released their leasehold interests in the subject real estate before the hearing before the Court of
Appeals, and failed to disclose that fact to the Court or opposing counsel.”
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January Term, 2016
IV. Conclusion
{¶ 27} This court’s decision in Corban, __ Ohio St.3d __, 2016-Ohio-
5796, __ N.E.3d __, is controlling in these cases. James Albanese and Lipperman
filed their complaints after June 30, 2006, so pursuant to Corban, the 2006
version of the ODMA applied to their cases. In order for a severed mineral
interest to be deemed abandoned and vested in the surface owner under the 2006
version of the ODMA, the owner of the surface rights must comply with R.C.
5301.56(E), which requires the surface owner to serve the mineral-interest holder
with notice of the owner’s intent to declare the mineral interest abandoned and to
file an affidavit of abandonment in the county recorder’s office in the county in
which the property is located. Because neither Lipperman nor James Albanese
complied with these requirements, the severed interests in the oil and gas that
underlie their properties held by the Batmans are preserved.
{¶ 28} Therefore, we affirm the judgments of the court of appeals, albeit
for different reasons than those stated in the court of appeals’ opinions.
Judgments affirmed.
O’CONNOR, C.J., and O’DONNELL, LANZINGER, and FRENCH, JJ., concur.
PFEIFER, J., concurs in judgment only, with an opinion joined by O’NEILL,
J.
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PFEIFER, J., concurring in judgment only.
{¶ 29} I concur in the judgment of the majority but disagree with how it
got there. The majority opinion is based upon this court’s decision in Corban v.
Chesapeake Exploration, L.L.C., __ Ohio St.3d __, 2016-Ohio-5796, __ N.E.3d
__. I dissented from the portion of the judgment in Corban that the majority
relies on in this case. In Corban, I would have held that former R.C. 5301.56, the
1989 version of the Ohio Dormant Mineral Act, Sub.S.B. No. 223, 142 Ohio
Laws, Part I, 981 (“1989 ODMA”), automatically reunited mineral rights and
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surface rights in the owner of the surface property in the absence of any saving
event in any 20-year period within the 1989 ODMA’s purview. The lead opinion
in Corban states that the ODMA is not self-executing, that instead, “the surface
holder was required to bring a quiet title action seeking a decree that the mineral
rights had been abandoned in order to merge those rights into the surface estate.”
Lead opinion at ¶ 40. Regardless, even under my interpretation of the 1989
ODMA, the interests of appellees Nile and Katheryn Batman were preserved by
two saving events: the 1981 recording of Frances Batman’s “Affidavit and Notice
of Claim of Interest in Land” and the 1989 filing of Frances Batman’s will in the
Belmont County Probate Court and the Belmont County Recorder’s Office. Thus,
there was no 20-year period during the purview of the 1989 ODMA without some
preservation of the Batman interest, and therefore, there was no reunification of
the mineral rights with the surface rights.
{¶ 30} We learned in oral argument that the root of the Batman interest
came from bartering undertaken by Nile Batman’s great-great-grandfather, a
dentist who traded dental care for interests in his patients’ mineral rights; he put
them in dentures and they gave him indentures. Hopefully, there were no hard
fillings. Now his patience with those mineral rights has paid off for his progeny,
a crowning achievement, even if the prices for the commodities involved have
receded somewhat from their crest. Somewhere, the good doctor is smiling,
knowing that ancient fees owed for drilling and extractions have been paid many
times over by fees paid for drilling and extraction. He wouldn’t care that the 1989
ODMA has been rendered toothless.
O’NEILL, J., concurs in the foregoing opinion.
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Lancione, Lloyd & Hoffman Law Offices Co., L.P.A., Richard L.
Lancione, and Tracey Lancione Lloyd, for appellants in both cases.
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January Term, 2016
Geiger, Teeple, Robinson & McElwee, P.L.L.C., and Bruce E. Smith, for
appellees Nile E. and Katheryn Batman in both cases.
Kincaid, Taylor & Geyer, Scott D. Eickelberger, William J. Taylor, David
J. Tarbert, and Ryan H. Linn, for appellee Hess Ohio Developments, L.L.C., in
case No. 2015-0120.
Steptoe & Johnson, P.L.L.C., Lyle B. Brown, and J. Kevin West, for
appellees Equity Oil & Gas Funds, Inc., and Reserve Energy Exploration
Company, in case No. 2015-0121.
Zeiger, Tigges & Little, L.L.P., Marion H. Little Jr., and Christopher J.
Hogan, for appellees XTO Energy, Inc., and Phillips Exploration, Inc., in case No.
2015-0121.
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