UPDATED - Ohio Marketable Title Act – Supreme Court of Ohio and 7th Appellate District Case Law Recap

The Marketable Title Act (the “MTA”) is set forth in Sections 5301.47 through Section 5301.56 of the Ohio Revised Code, with Section 5301.56 covering the more specific Dormant Mineral Act.  Since 2018, the Ohio Supreme Court and the Seventh Appellate District have issued several opinions that provide guidance on the application of some specific sections of the Marketable Title Act to severed mineral interests.   The cases listed below are not an exhaustive list, but provide some key factors to keep in-mind as you apply the Marketable Title Act to your unique fact situation. 

Blackstone v. Moore, Supreme Court of Ohio, 2018-Ohio-4959

In Blackstone, the Supreme Court held a reference to an interest in a muniment of title that includes the type of interest created and to whom the interest was granted/reserved is sufficient to preserve that interest under 5301.49(A).   The court interpreted 5301.49(A) as providing a three-part test in regard to a reference contained in a muniment of title: (1) Is there an interest described within the chain of title? (2) If so, is the reference to that interest a general reference? (3) if the answers to the first two questions are yes, does the general reference contain a specific identification of a recorded title transaction?   If all three parts of the test are met, the reference will be considered specific, and the interest will be preserved under the MTA.  In this case, the Court held a one-half interest in oil and gas royalty was not extinguished under the MTA because the surface owner’s root of title contained a specific reference to this interest.  

Senterra LTD. v. Winland, Seventh Appellate District, 2019-Ohio-4387

In Senterra, the Seventh District provided insight into what qualifies as a “root of title” under R. C. 5301.47(E).  The Court held its decisions in Christman v. Wells, 7th Dist. Monroe No. 539, 1981 WL 4773 (Aug. 28, 1981), and Holdren v. Mann, 7th Dist. Monroe No. 592, 1985 WL 10385 (Feb. 13, 1985), requiring a root of title to convey fee simple title, were no longer good law since the root of title used in Blackstone did not follow this standard.  A root of title can contain a repetition of a reservation, as long as it accounts for the interest to which the person is claiming to have record marketable title and is not the severance deed for that interest.  Therefore, it appears a root of title can contain a reference to a prior mineral severance; however, if the reference is to the mineral interest being claimed, it cannot be the type of reference sufficient to preserve that interest under R. C . 5301.49.    Further, the Court provided guidance on how to establish a root of title in a title examination: by starting with the date on which title is being examined and moving chronologically backwards until a forty year period without a preserving act can be established.   An appeal of Senterra is currently pending before the Ohio Supreme Court.

Richmond Mill, Inc. v. Ferraro, Seventh Appellate District, 2019-Ohio-5249

In Richmond Mill, the Seventh District addressed R. C. 5301.51(B), which provides as follows: 

If the same record owner of any possessory interest in land has been in possession of the land continuously for a period of forty years or more, during which period no title transaction with respect to such interest appears of record in his chain of title, and no notice has been filed by him on his behalf as provided in division (A) of this section, and such possession continues to the time when marketability is being determined, the period of possession is equivalent to the filing of the notice immediately preceding the termination of the forty-year period described in division (A) of this section.

The Court held R. C. 5301.51(B) does not require an affirmative act or circumstance to suggest control over the minerals.  The relevant facts at issue in Richmond Mill were (1) a 1947 conveyance of an undivided 1/2 interest in the minerals to four partners doing business as Gamma Land Company, (2) there were no further conveyances of record by any of the 4 partners or the partnership, and (3) two of the partners are deceased.  The court held the two living partners satisfy R.C. 5301.51(B) as the same record owners (1) in continuous possession of the interest for 40 years or more, and (2) whose continuous possession has continued until the time marketability is being determined.  An appeal of Richmond Mill is currently pending before the Ohio Supreme Court.

Hartline v. Atkinson, Seventh Appellate District, 2020-Ohio-5606

In Hartline, the Seventh District solidified its holding in Warner v. Palmer, 2017-Ohio-1080, that an interest passing under the residuary clause of a last will and testament qualifies as a title transaction under the MTA.   The Court held a last will and testament is a title transaction, although the interest at issue is not specifically listed in the will or probate proceedings, i.e. it passes under the residuary clause and is not set forth in the Estate’s inventory.  Under these circumstances, the will still acts as a title transaction to pass the interest from the decedent to his or her devisees.  Pursuant to R.C. 5301.47(B) and (C), a filing in the probate court qualifies as a recording.  Therefore, the Court held, a last will and testament filed in the probate records of the county where the interest is located within forty years of the root of title, is a recorded title transaction under R.C. 5301.49(D), which prevents the interest from being extinguished under the MTA. 

Erickson v. Morrison, Supreme Court of Ohio, Slip Opinion No. 2021-Ohio-746

In Erickson, the Supreme Court provided further insight into its Blackstone holding and what constitutes a specific reference to an interest in the muniments of title under 5301.49(A).  The court applied 5301.49(A) to the language of a mineral reservation from 1926 that was repeated in the Root of Title and subsequent deeds in the chain of title.  The Court held the plain language of 5301.49(A) does not require a reference to an interest to contain the interest owner’s name to be sufficiently specific and preserved under section 5301.49(A) of the MTA.  The Court further held that the same language that was used to create the original 1926 reservation and repeated in the Root of Title and subsequent conveyances was a sufficiently specific reference to the 1926 reservation in the muniments of title.  In reaching its holding, the Court contrasted this type of specific reference that identifies a mineral reservation that can be determined and located through a reasonable title search, to the broad, boilerplate language of general references to easements, reservations, etc., that may or may not exist, contained in most surface conveyances.

In conclusion, the many facets of the MTA must be considered in evaluating whether a mineral interest has in fact been extinguished.  Although the West decision provided an affirmative answer that the MTA applies to severed mineral interests, this opened the door to many questions surrounding how we apply it in practice.  We will likely see more litigation surrounding the application of the MTA to severed mineral interests and Martin Legal Group will stay up to date on this issue and keep our clients posted.