Earlier this year, Ohio's Court of Appeals for the Seventh District weighed in on the question of whether "other minerals" in a deed included oil and gas. The answer is, essentially, it depends.
The presumption under Ohio law is that "other minerals" in deeds does include oil and gas, but that presumption can be overcome. In reaching that conclusion in O'Brandovich v. Hess Ohio Devs., LLC, the Court of Appeals walked through and provided the rationale behind the facts and outcomes of what it viewed as the major cases developing the presumption
- Detlor v. Holland
- Gordon v. Carter Oil, Co.
- Hardesty v. Harrison
- Jividen v. New Pittsburg Coal Co.
- Muffley v. M.B. Operating Co., Inc.
- Wiseman v. Cambria Products Co.
- Coldwell v. Moore
- Sheba v. Kautz; and
- Corso v. Miser
"It is clear from this line of cases that we are now to begin our analysis with a presumption that the phrase 'other minerals' includes oil and gas interests," the court noted. "With that in mind, it must then be determined if the deed demonstrates whether the parties intended to include oil and gas interests. If the deed is ambiguous, then the parties are permitted to introduce extrinsic evidence to demonstrate the parties' intent."
When looking at the deed language to determine whether the presumption is overcome, the courts are to consider whether the instrument "includes language that may be relevant to the extraction of oil and gas." The Court of Appeals also noted, though, that "[i]f oil and gas was not commonly being produced at the time the deed was written, we cannot presume it was intended to include these minerals."
The Court of Appeals explained that "[o]nce production [of oil and gas] in Ohio became fairly commonplace, however, we may expect some reference to oil and gas when using the general language 'other minerals.' This has come to mean that, in Ohio, we start with the presumption that the general phrase may include oil and gas rights so long as the language can be reasonably seen to include these minerals in some way and other language in the deed does not exclude these minerals."
Ultimately, the Court of Appeals concluded the deed language before it was not ambiguous and did not overcome the presumption. Thus, in this case, "other minerals" did include oil and gas.
After the above decision was issued, the appellant therein filed a motion to certify a conflict to the Ohio Supreme Court, contending that the O'Brandovich decision conflicted with the Muffley decision. Ultimately, the Court of Appeals denied the motion, concluding that because this case and the Muffley case were decided on different facts, there was no conflict.
In reaching that conclusion, the Court of Appeals noted that the Muffley case had a record that showed "'beyond dispute' that drilling for oil and gas had been conducted for decades within the locality, Tuscarawas County, at the time the deed was executed. ... Given that level of activity, the Muffley court held that the parties would have been expected to make some reference to oil and gas if those rights were intended to be included as 'other minerals' in a deed reservation."
Unlike in Muffley, the Court of Appeals noted the record before it "was devoid of any evidence concerning whether the drilling within the locality, Jefferson County and its immediate vicinity was commonplace at the time the deed was executed. ... As evidence pertaining to the prevalence of oil and gas drilling was not within the record, our Opinion focused on the deed itself, particularly the easement language."
Thus, the Court of Appeals explained that there is a sliding scale of oil and gas production over time, and the current case and the Muffley case simply were not at the same place on that scale. "The language at issue in our Opinion merely acknowledges that there is some middle ground between Muffley and Detlor. ... In other words, neither Detlor nor Muffley are in conflict with one another or with the instant case because even though some drilling for oil and gas was taking place, it does not mean that this drilling had risen to the level of 'commonplace' as in Muffley. In reading each of these cases as a group, we can see that there has been a progression in drilling activity and that there is an area or time between the two extremes where oil and gas drilling may not be unusual but it has not become a full-blown industry within the area."
The Court of Appeals also took the opportunity to summarize its holding in the underlying decision:
- Begin with a presumption that "other minerals" includes oil and gas and then
- Determine whether the parties actually intended it to include oil and gas, which includes reviewing the instrument language and "whether there is evidence of the level of oil and gas production within the locality during the relevant time period."
This case serves as reminder that when reviewing title or otherwise trying to determine oil and gas ownership, the actual language of the deeds at issue should always be the starting point. And, in many cases, that language also is the stopping point. One thing to keep in mind, though, the presumption in Ohio is not universal. For example, just across the border in Pennsylvania, the presumption (rebuttable) is that "minerals" in private deeds does not include oil and gas.
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