Client Alert: Ohio Supreme Court Issues Decision in West v. Bode Concerning Application of Marketable Title Act to Severed Mineral Interests

On December 2, 2020, the Ohio Supreme Court issued its decision in West v. Bode, 2020-Ohio-5473, concerning whether the Marketable Title Act (MTA) can operate independent of the Ohio Dormant Mineral Act (DMA) to extinguish ownership of previously severed oil and gas interests.

On discretionary appeal from the Seventh District, West v. Bode involved competing claims by surface owners claiming extinguishment of oil and gas interests by operation of the MTA, and the heirs of royalty interest holders arguing that the more specific provisions of the DMA should exclusively govern the parties’ claims to “abandoned” oil and gas interests. The Seventh District’s decision reversed the trial court’s grant of summary judgment to the royalty interest holders based exclusively upon an application of the DMA to the interest at issue, finding that the MTA and DMA are “co-extensive alternatives whose applicability in a particular case depends on the time passed and the nature of the items existing in the pertinent records.”

On review, in a 4-3 decision, the Ohio Supreme Court determined that despite having similar functions, the MTA and DMA contemplate different “savings events” and applicable “look back” periods to be applied, thereby affecting mineral interests differently, and therefore the two statutes do not irreconcilably conflict. Further, there is nothing in the statutory language of either act to preclude a mineral interest holder from ensuring compliance with both the DMA and MTA. As a result, the Court’s opinion affirmed the Seventh District’s decision.

To view the Court’s opinion, click here.

The Ohio Supreme Court’s decision in this case will undoubtedly have a major impact on claims between surface owners and mineral interest holders, competing to establish their rights to valuable interests. Likewise, lessees, title companies, and producers should follow these developments closely as their leasehold assets and bargained-for rights to explore and develop oil and gas may be placed in jeopardy as a result.

Attorney Alex Quay is a Partner in Brouse McDowell’s Litigation and Real Estate Practice Groups. Alex has experience counseling clients in matters involving business and commercial litigation, real estate transactions, title insurance, construction, zoning, and disputes concerning ownership of oil, gas, and mineral rights. He can be reached by phone at (330) 434-4730, or by email at aquay@brouse.com.