Marketable Title Act and Dormant Minerals Act Afford Separate Paths to Extinguish Mineral Rights

A recent decision by Ohio’s Fifth District Court of Appeals upheld a Trial Court decision, finding that the Marketable Title Act (“MTA”) was applicable to severed oil and gas rights and that the Appellants’ interests had been extinguished by operation of law based upon the MTA.  See Cain v. Horn, 2020-Ohio-3171.

The dispute in Cain arose from disputed ownership of oil and gas rights related to approximately 110 acres of real property.   On December 27, 1926, Clara Burrett and Claude Burrett transferred their interest in fifty (50) acres of the property at issue to Viola Romans via a Warranty Deed (the “Warranty Deed”), which was recorded on February 24, 1927.   The Warranty Deed specifically reserved a one-half interest in the Burretts in all of the oil and gas underlying the fifty acre tract (“Burrett Reservation”).

Appellees obtained ownership of the property by virtue of two survivorship warranty deeds, recorded in 2002 and 2003.  Appellees initially filed an action to quiet title under the DMA and were unsuccessful upon the Appellants’ filing of a Claim to Preserve Mineral Interests pursuant to R.C. 5301.56.   Subsequently, Appellees filed a new action against Appellants seeking to quiet title to the oil and gas rights under the MTA.

The Trial Court found in favor of the Appellees and ruled that the Burrett Reservation was automatically extinguished by the MTA because that interest was not reflected in an instrument after the root of title under the MTA.  The Fifth District upheld the Trial Court’s decision and further held that the MTA and DMA are separate and distinct statutes, and that a determination under one is not dispositive of the other.

Cain provides a useful reminder of two of the separate and distinct ways in which mineral interests can be extinguished and the differences between them.