The Ohio Court of Appeals for the Seventh District recently affirmed the entry of default judgment on a Marketable Title Act claim in 4 Quarters, LLC v. Hunter, finding that the due diligence to locate heirs was sufficient and service by publication was appropriate.

In this case, the defaulted defendant sought to vacate the judgment entered against him (which reunited the severed oil and gas estate with the surface estate), claiming the trial court erroneously permitted service by publication and claiming the plaintiff failed to exercise reasonable diligence in attempting to locate the heirs. The trial court denied the motion and the defendant appealed. Ultimately, the appellate court affirmed the lower court’s decision.

Plaintiffs’ search was proper and service by publication was permitted

drilling rig representing marketable title act claims in ohio

The Court of Appeals set out the framework one needs to follow in order to show due diligence in efforts to locate heirs, including citing an Ohio Supreme Court decision (Sizemore v. Smith from 1983) and several decisions from the Seventh District. Essentially, there is no formulaic checklist that must be followed in every case and due diligence decisions in the Dormant Mineral Act context are applicable to Marketable Title Act cases.

In reviewing the evidence of the search conducted here, the Court of Appeals noted that although the affidavit filed by the plaintiff used the term “plaintiff” but was signed by counsel, it was not an error. And in looking at the actual search that was conducted, a search of the Belmont County, Ohio, records (deed records, lease records and probate records) was sufficient given the property was located in Belmont County.

The defendant claimed the search should have included records from Marshall County, West Virginia, (immediately across the Ohio River from Belmont County, Ohio) because a deed was notarized in Marshall County and a marriage and death record existed there for someone in the chain of title. Unfortunately for the defendant, he failed to provide evidence that the marriage and death records would have led to him being identified. Without that connection, the Court of Appeals refused to require a search of records outside Belmont County.

The Court of Appeals did note its prior Fonzi decision (about the need to search records outside Ohio) was on appeal to the Ohio Supreme Court. Regardless, the facts in this case were distinguishable from Fonzi because there was no evidence presented that the relevant individuals actually resided in Marshall County. Plus, the fact that the two counties are adjoining played into the Court’s conclusion that having something notarized in Marshall County was not unusual: “the mere fact that they had a document notarized there, given the extremely close proximity of that county with the place of their known residence, is of no special significance.”

Thus, as the search for heirs was not improper, service by publication was permitted because no heirs were identified who could have been served any other way.

The deed relied upon by the defendant was ambiguous as to the interest conveyed and his argument against the MTA application failed

Even if the trial court had vacated the judgment, the defendant would not have prevailed for two reasons. First, the defendant’s claim required a determination of whether the deed at issue created a reservation or exception. After explaining the difference between the two, including that words of inheritance are required for a reservation to create more than a life estate, the Court of Appeals concluded it lacked sufficient information in the record to determine what was created here.

Second, even if the record was clear as to the interest created, the only argument the defendant advanced to defend against the Marketable Title Act claim was that the Dormant Mineral Act was a more specific statute and should prevail. But, the Ohio Supreme Court rejected that argument in its West v. Bode decision from 2020. Thus, the defaulting defendant failed.

Takeaways

If you are looking to assert (or are defending) a Dormant Mineral Act or Marketable Title Act claim, this case would be worth a read as to what one must do to identify the heirs. The case also has a good discussion of the differences between reservations and exceptions, including noting a reservation requires words of inheritance to create something other than a life estate.

Photo of Jeremy Mercer Jeremy Mercer

Jeremy is an experienced commercial litigator who, for more than a decade, has focused on energy, with an emphasis on oil and gas litigation. His extensive experience in the shale and hydraulic fracturing arena spans the Commonwealth of Pennsylvania and includes work in…

Jeremy is an experienced commercial litigator who, for more than a decade, has focused on energy, with an emphasis on oil and gas litigation. His extensive experience in the shale and hydraulic fracturing arena spans the Commonwealth of Pennsylvania and includes work in administrative proceedings, state trial and appellate courts, and federal trial and appellate courts.