Following up on its recent decision in M&H P’Ship v. Hines, Ohio’s Seventh District Court of Appeals has offered further guidance on the term “holder” as used in the Ohio Dormant Mineral Act (ODMA)—finding that heirs of the record holder of a dormant mineral interest are “holders” for purposes of the statute, even if they did not acquire their interest through a chain of title of conveyances or probate estates that specifically transmitted the dormant mineral interest. See Warner v. Palmer (March 22, 2017).

In Palmer, the surface owner argued that heirs of the now-deceased record holders of the dormant mineral interest did not have standing to challenge its notice of abandonment. Under the ODMA, only the “holder or a holder’s successors or assignees” are permitted to record a claim to preserve dormant mineral interests in response to a notice of abandonment. And the word “heir” is omitted from the statute, the surface owner noted. Moreover, in this particular case, the record showed that the dormant mineral interest was omitted from the record holders’ estate inventories. According to the surface owner, these facts established that the heirs were neither the record holders of the dormant mineral interest nor “successors or assignees” of the record holders.

The court disagreed with the surface owner. Quoting Black’s Law Dictionary, the court held that an heir is a “holder” because “his rights can ‘succeed to the rights of’ the record holder.” Moreover, the fact that the dormant mineral interest was not listed during an estate administration had no bearing on whether the heirs were “holders” under the ODMA. “A person does not lose an inherited mineral interest under probate law merely because it was not listed during an estate administration.” The court, citing the Supreme Court of Ohio, noted that “presumably the surface owner can challenge the accuracy of the mineral-interest holder’s claim. But that is outside the operation of the [ODMA], which addresses only whether a surface owner can employ the act’s provision to deem the mineral interest abandoned, reunite the mineral rights with the surface rights, and vest them in the surface owner.”

The court also reversed the trial court’s application of the Ohio Marketable Title Act to extinguish the dormant mineral interest and vest the interest in the surface owner. It found that the trial court had incorrectly applied that statute too and therefore remanded the case for further proceedings.

[Note: The court cited Vorys attorney James (“Jay”) A. Carr II’s article, A Practitioner’s Guide to the Ohio Marketable Title Act , 7 Appalachian Nat. Resources L.J. 25 (2011-2013).]