Opinion
20 BE 0030
03-30-2022
H. JOSEPH HAMM ET AL., Plaintiffs-Appellees, v. THE LORAIN COAL & DOCK COMPANY ET AL., Defendants-Appellants.
Atty. Erik A. Schramm, Sr., Atty. Erik A. Schramm, Jr., Atty. Kyle W. Bickford, Atty. John Estadt, Hanlon, Estadt, McCormick & Schramm Co., LPA, for Plaintiffs-Appellees and Atty. Sara Fanning, Roetzel & Andress, LPA, for Defendants-Appellants.
Civil Appeal from the Court of Common Pleas of Belmont County, Ohio Case No. 19-CV-17
JUDGMENT: Affirmed in part, Reversed in part, and Remanded
Atty. Erik A. Schramm, Sr., Atty. Erik A. Schramm, Jr., Atty. Kyle W. Bickford, Atty. John Estadt, Hanlon, Estadt, McCormick & Schramm Co., LPA, for Plaintiffs-Appellees and
Atty. Sara Fanning, Roetzel & Andress, LPA, for Defendants-Appellants.
BEFORE: Gene Donofrio, Carol Ann Robb, David A. D'Apolito, Judges.
OPINION AND JUDGMENT ENTRY
Donofrio, J.
{¶1} Defendants-appellants in this case are Thunderbird Global Development, LLC (Thunderbird); Christopher E. Banik; Frontier Group LLC; Anne D. Czarniecki; Anne D. Czarniecki Dixon, Trustee of the Helen M. Dixon Irrevocable Trust; Mary Boswell; Mark Boswell; Charlotte Moyler; James Moyler; Constance Reel Johnson; Stanley Bryce Johnson III; Anne Myers; Joseph Myers; Charlotte Kendall; Kelli A. Day; Kelli A. Day, Trustee of the Robert H. Day and Julie A. Day Family Trust; Caroline Lindeke; Albert W. Lindeke III; Catherine Daubek; Frederick Harold Stinchfield; Cheryl Stinchfield; John Harold Stinchfield; Susan Stinchfield; Jonathan Darrah; Jirapa Darrah; Kathryn Stinchfield; Taylor Saunders Stinchfield; Charles Thomas Stinchfield; Mary Godley; William Harvey Barrett Jr.; Allen Hannay; Deborah Morrison; and Robert Morrison. They are all known collectively as the Thunderbird appellants.
{¶2} The Thunderbird appellants appeal from a Belmont County Common Pleas Court judgment granting summary judgment in favor of plaintiffs-appellees, H. Joseph Hamm, D. Joyce Yazombek, Trustee of the D. Joyce Yazombek Revocable Living Trust, Joseph Hicks Jr., Maxine Hicks, David Ellison, Elizabeth Ellison, Benjamin Taylor, Stephanie Taylor, Donald Lawson Jr., Cheryl Lawson, and Alex Kolb (appellees), on appellees' claim to quiet title to the oil and gas rights underlying approximately 155 acres of property in Belmont County and denying appellants' motion for summary judgment. They also appeal from the trial court's judgments awarding damages and attorney fees against Thunderbird.
{¶3} This case involves the ownership of the oil and gas underlying approximately 155 acres of property in Belmont County. Appellees are Belmont County residents who leased their oil and gas mineral estates for development.
{¶4} On September 24, 1900, Carlos Leatherwood conveyed all "minerals, oil, gas and other substances" underlying the property to American Sheet Steel Company (the Leatherwood Conveyance). American Sheet Steel Company later changed its name to American Sheet and Tin Plate Company and then merged with the Carnegie-Illinois Steel Corporation.
{¶5} On December 16, 1937, defendant The Lorain Coal & Dock Company (Lorain Coal) obtained the mineral interest at issue by warranty deed from the Carnegie-Illinois Steel Corporation (the Carnegie Conveyance). Lorain Coal was founded in part by Edward N. Saunders.
The Saunders appellants are descendants of Edward N. Saunders. They include Judith Saunders, Edward N. Saunders V, James Saunders, and Christopher Saunders. The Saunders appellants have appealed in Case No. 20-BE-0028.
{¶6} On August 5, 1963, Lorain Coal filed a certificate of dissolution. Lorain Coal still held the mineral rights it acquired through the Carnegie Conveyance at the time of its dissolution.
{¶7} In 2018, appellees sent the dissolved Lorain Coal certified mail notices of their intent to file an abandonment claim under the 2006 Ohio Dormant Mineral Act (DMA) at its last known address. After non-delivery, appellees published notices of abandonment in the local newspaper in Belmont County. Between September 21, and October 9, 2018, appellees filed claims of abandonment with the Belmont County Recorder stating that the mineral interest from the Carnegie Conveyance had been abandoned.
{¶8} On October 15, and 16, 2018, Thunderbird appellant Anne Czarniecki assigned a mineral interest to Thunderbird. On October 16, 2018, Czarniecki and Thunderbird, through Christopher Banik, filed claims to preserve the mineral interest. Czarniecki claimed to be an heir to Frances Hannay, who Czarniecki said held shares in Lorain Coal when the company dissolved.
{¶9} On January 14, 2019, appellees filed a complaint against Lorain Coal and Lorain Coal's former shareholders, officers, and directors, and the Thunderbird appellants. Appellees asserted claims under the DMA and the Ohio Marketable Title Act (MTA) as well as claims for tortious interference with a contract, tortious interference with a business relationship, slander of title, fraud, waiver, estoppel, laches, and abandonment. Appellees published the complaint in order to obtain service by publication. The Thunderbird appellants filed an answer and counterclaim.
{¶10} All parties filed motions for summary judgment.
{¶11} On September 13, 2019, appellees filed a motion for default judgment against Lorain Coal, including its former shareholders, officers, directors, and their heirs. On September 17, the trial court granted the motion for default judgment and ordered any right to the oil and gas interest underlying appellees' properties and claimed by Lorain Coal and its former shareholders, officers, directors, and their heirs was terminated and extinguished and title was quieted in favor of appellees. The court found that Lorain Coal and the others had failed to enter an appearance in the lawsuit.
{¶12} The Thunderbird appellants filed a motion for reconsideration, correction, and vacation of default judgment. The Saunders appellants subsequently filed a motion for clarification and relief from judgment. The trial court sustained the motions in part in an October 9, 2019 judgment entry ruling that default judgment would stand but was limited to non-answering defendants, to cut off any interest they may have, with no effect on the answering defendants.
{¶13} On October 17, 2019, the trial court entered a nunc pro tunc judgment entry, consented to by all parties. It granted default judgment against Lorain Coal and its former shareholders, officers, and directors and ordered any right to the oil and gas underlying appellees' properties claimed by the above parties was terminated and extinguished and title was quieted in favor of appellees. It also added language that the default judgment did not apply to any answering defendants (including the Thunderbird appellants) and that the case would continue as to the answering defendants.
{¶14} The trial court subsequently held a hearing on the summary judgment motions. It then denied the Thunderbird appellants' motion and granted appellees' motion. The court provided no reasons for its decision.
{¶15} The matter went to a jury trial on the issue of compensatory damages. Appellees had requested that the court bifurcate the trial on the issues of compensatory and punitive damages. The jury returned a verdict in favor of appellees and against Thunderbird awarding appellees compensatory damages in the amount of $1,390,439.36. The trial court entered judgment accordingly. The court held a hearing on July 17, 2020, on appellees' motion for attorney fees and expenses. The court awarded appellees $139,609.11 in attorney fees and expenses. Subsequently, appellees dismissed their claim for punitive damages.
{¶16} On September 15, 2020, the Thunderbird appellants filed a motion requesting a hearing on their counterclaims and a motion to set aside the award of attorney fees. The next day, the trial court sustained the motion requesting a hearing on the counterclaims. However, at the October 9 hearing on the matter, the court reversed its ruling to hold a hearing on the counterclaims and overruled the motion to set aside the attorney fees.
{¶17} The Thunderbird appellants filed a timely notice of appeal and now raise six assignments of error.
{¶18} The Thunderbird appellants' first assignment of error states:
THE TRIAL COURT ERRED IN DETERMINING THE SEVERED MINERALS WERE VESTED IN THE PLAINTIFFS UNDER O.R.C. 5301.56 OR WERE EXTINGUISHED UNDER O.R.C. 5301.47 ET SEQ.
{¶19} An appellate court reviews a summary judgment ruling de novo. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. Thus, we shall apply the same test as the trial court in determining whether summary judgment was proper.
{¶20} A court may grant summary judgment only when (1) no genuine issue of material fact exists; (2) the moving party is entitled to judgment as a matter of law; and (3) the evidence can only produce a finding that is contrary to the non-moving party. Mercer v. Halmbacher, 9th Dist. Summit No. 27799, 2015-Ohio-4167, ¶ 8; Civ.R. 56(C). The initial burden is on the party moving for summary judgment to demonstrate the absence of a genuine issue of material fact as to the essential elements of the case with evidence of the type listed in Civ.R. 56(C). Dresher v. Burt, 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996). A "material fact" depends on the substantive law of the claim being litigated. Hoyt, Inc. v. Gordon & Assoc, Inc., 104 Ohio App.3d 598, 603, 662 N.E.2d 1088 (8th Dist.1995), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
{¶21} If the moving party meets its burden, the burden shifts to the non-moving party to set forth specific facts to show that there is a genuine issue of material fact. Id.; Civ.R. 56(E). "Trial courts should award summary judgment with caution, being careful to resolve doubts and construe evidence in favor of the nonmoving party." Welco Industries, Inc. v. Applied Cos., 67 Ohio St.3d 344, 346, 617 N.E.2d 1129 (1993).
{¶22} The trial court simply granted appellees' motion for summary judgment and denied the Thunderbird appellants' motion without giving any basis for its decision. Thus, we have no way of knowing whether the trial court relied on the DMA, the MTA, or both in reaching its decision.
{¶23} As to the DMA, the Thunderbird appellants argue the issue is whether Anne Czarniecki is a "holder" under R.C. 5301.56(A)(1). If she was a holder, then her assignment to Thunderbird was effective and her claim to preserve stopped the severed oil and gas rights from vesting in the surface owners. The Thunderbird appellants claim that Czarniecki's affidavit demonstrates the line of heirship from her great-grandfather, Edward Johnson, to her. They claim that when Lorain Coal dissolved in 1963, this triggered the distribution of its assets, including the mineral interest, to its shareholders pursuant to its Amended Articles of Incorporation.
{¶24} The Amended Articles of Incorporation state:
In the event of any liquidation, dissolution or winding up of the company, either voluntary or involuntary, or a sale of the assets of the Company, the holders of the Preferred Shares shall be entitled to receive in respect thereof, $50.00 per share plus a sum equal to the amount of all accumulated and unpaid dividends thereon, whether such dividends shall have been earned or not; after such payment to the holders of the Preferred Shares, the remaining assets and funds of the Company shall be distributed pro rata among the holders of the Common Shares.(Emphasis added; Banik Aff.).
{¶25} The Thunderbird appellants argue that the dissolution in 1963 triggered the distribution of Lorain Coal's assets to its shareholders. They admit that nothing was recorded with the Belmont County Recorder, but argue this does not mean a distribution did not take place. They claim when the dissolution occurred, the shareholders were vested with a right to the assets. In this manner, the Thunderbird appellants argue, Frances Hannay, who they claim held shares of Lorain Coal when it dissolved, was vested with a property right to a portion of the mineral interest held by Lorain Coal. And Czarniecki then derived her right to the mineral interest as Hannay's successor. Appellants argue that Czarniecki and Thunderbird were both holders whose claims to preserve stopped the severed minerals from vesting in appellees.
{¶26} The DMA provides that "[a]ny mineral interest held by any person, other than the owner of the surface of the lands subject to the interest, shall be deemed abandoned and vested in the owner of the surface of the lands subject to the interest if the requirements established in division (E) of this section are satisfied" and no savings events occur. R.C. 5301.56(B). "If a holder or a holder's successors or assignees claim that the mineral interest that is the subject of a notice under division (E) of this section has not been abandoned, the holder or the holder's successors or assignees, not later than sixty days after the date on which the notice was served or published, as applicable, shall file" either a claim to preserve or an affidavit in compliance with the statute. R.C. 5301.56(H)(1)(a)(b). A timely claim to preserve by any holder preserves the rights of all holders of a mineral interest in the same land. R.C. 5301.56(C)(2).
{¶27} The Thunderbird appellants assert the trial court must have found that Czarniecki is not a holder. If she is not a holder, they argue that the abandonment still fails for a lack of notice.
{¶28} "A corporation in Ohio continues to exist after a certificate of dissolution has been filed and continues to exist until it has been completely liquidated." Commonwealth Tel. Co. v. Bowers, 174 Ohio St. 141, 143, 187 N.E.2d 30 (1962). Even years after the articles of incorporation have been cancelled, a corporation can still inherit property. N. Kenova Dev. Co. v. Wilson, 4th Dist. Lawrence No. 08CA6, 2008-Ohio-6269, ¶ 21, citing McFeely v. Gervin, 5th Dist. Stark No. CA-8382, 1991 WL 200303 (Sept. 23, 1991). The corporation can exist as a de jure corporation for the purpose of winding up corporate affairs. Id. A defunct corporation continues on for the purpose of winding up its affairs and consequently can sue or be sued. Land O'Lakes, Inc. v. Nationwide Tanks, Inc., 12th Dist. Butler No. CA2005-11-486, 2006-Ohio-4327, ¶ 40. "'Any claim existing (not yet sued upon) or action or proceeding (already commenced) pending by or against the (dissolved) corporation or (any claim not yet sued upon or action or proceeding) which would have accrued against it (had dissolution not occurred) may be prosecuted to judgment, with right of appeal as in other cases * * *.'" Id. at ¶ 39, quoting Chadwick v. Air Reduction Co. (N.D.Ohio 1965), 239 F.Supp. 247, 251.
{¶29} R.C. 1701.88(F) provides:
If any property right of a corporation is discovered after the winding up of the corporation, any member or members of the board of directors that wound up the affairs of the corporation, or a receiver appointed by the court, may enforce the property right, collect and divide the assets discovered among the persons entitled to those assets, and prosecute actions or proceedings in the corporate name of the corporation.
{¶30} In this case, the Thunderbird appellants could have sought to have the court appoint a receiver to handle proceedings in the name of Lorain Coal. They did not do so.
{¶31} As appellees point out, there is no evidence of any transfer of the Carnegie Conveyance from Lorain Coal to anyone before, during, or after its dissolution. Based on the lack of evidence, Lorain Coal was still the record holder of the Carnegie Conveyance when appellees published the notices of abandonment and filed affidavits of abandonment with the Belmont County Recorder stating that the mineral interests from the Carnegie Conveyance had been abandoned.
{¶32} Although Lorain Coal is the record holder, there could possibly still exist other holders under the DMA. As to whether Czarniecki is a holder, we must consider the DMA and the evidence of record.
{¶33} The DMA defines a "holder" as "the record holder of a mineral interest, and any person who derives the person's rights from, or has a common source with, the record holder and whose claim does not indicate, expressly or by clear implication, that it is adverse to the interest of the record holder." R.C. 5301.56(A)(1). A holder can stop an abandonment by filing a claim to preserve. R.C. 5301.56(C)(1). This court elaborated on the definition of "holder" stating:
The DMA specifically states a person need not be a record holder to qualify as a holder. A person who has a common source with the record holder (if his claim does not indicate it is adverse to the record holder's interest) is statutorily defined as a holder. Furthermore, a person who derives her rights from the record holder can file a claim to preserve and successfully preserve the mineral interest (if her claim does not indicate it is adverse to the record holder's interest). A person who derives her rights from the record holder is herself a holder under the plain terms of the statute.Jefferis Real Estate Oil & Gas Holdings, LLC v. Schaffner Law Offices, LP.A., 7th Dist. Belmont No. 17 BE 0042, 2018-Ohio-3733, ¶ 31.
{¶34} The only evidence to suggest that Czarniecki was a holder is her own affidavit. Czarniecki averred that her great-grandfather was Edward Johnson, who was one of the owners of Lorain Coal. (Czarniecki Aff. ¶ 1). She further averred that Johnson died in 1936 and that under the residuary clause of his will, his wife (Czarniecki's grandmother), Frances Hannay, inherited a one-third share of Johnson's interest in Lorain Coal. (Czarniecki Aff. ¶ 2). Czarniecki next averred that Hannay died in 1993, leaving her residuary estate to Helen Dixon (Czarniecki's mother). (Czarniecki Aff. ¶ 3). She then averred that Dixon established a trust and a will placing her residual assets into the trust. (Czarniecki Aff. ¶ 5). Czarniecki averred that Dixon died in 2013, and that she is both a trustee of and beneficiary of Dixon's trust. (Czarniecki Aff. ¶¶ 6, 7).
{¶35} Several pieces of evidence are missing, however. There is no evidence that Hannay owned stock in Lorain Coal when it was dissolved in 1963. There is no evidence that Hannay owned any stock or mineral interests that had belonged to Lorain Coal at the time she passed away in 1993. There is no evidence that Dixon owned any stock or mineral interests that had belonged to Lorain Coal when she passed away in 2013. And there is no evidence any stock or mineral interests passed to Czarniecki when Dixon passed away. Without some evidence of this purported ownership, the Thunderbird appellants cannot rely on Czarniecki's notice of preservation to preserve their rights under the DMA.
{¶36} Moreover, as appellees point out, there is evidence that when Lorain Coal dissolved, the shareholders returned their shares in order to receive a cash distribution.
Therefore, after July 7, 1969, there were no longer any shares of stock in Lorain Coal for anyone to inherit. The shares of Lorain Coal were liquidated by that date and Lorain Coal distributed cash in exchange for the shares of stock. (Defendants Judith M. Saunders, Edward N. Saunders V, James R.K. Saunders, and Christopher Saunders' Responses and Objections to Plaintiffs' First request for Production of Documents, attached as Exhibit C to the Affidavit of Attorney Kyle Bickford, "Eighth & Final Liquidating Distribution").
{¶37} The Thunderbird appellants also argue that appellees presented no evidence that they attempted to locate Lorain Coal's shareholders or their heirs even though they knew the corporation was dissolved and would not receive their certified mail notice of abandonment. They assert that appellees' search was limited to Belmont County records. (Schramm Jr. Aff. ¶ 23). The Thunderbird appellants argue appellees should have searched the Franklin County records because Lorain Coal was located in Franklin County, not Belmont County. Had they done so, the Thunderbird appellants assert, appellees would have discovered the estate of Stanley B. Johnson (son and heir of founder Edward Johnson). (Bickford Aff.).
{¶38} Pursuant to R.C. 5301.56(E)(1), before a mineral interest becomes vested in the surface owner, the surface owner shall:
Serve notice by certified mail, return receipt requested, to each holder or each holder's successors or assignees, at the last known address of each, of the owner's intent to declare the mineral interest abandoned. If service of notice cannot be completed to any holder, the owner shall publish notice of the owner's intent to declare the mineral interest abandoned at least once in a newspaper of general circulation in each county in which the land that is subject to the interest is located. The notice shall contain all of the information specified in division (F) of this section.
{¶39} The Ohio Supreme Court has stated that a surface owner need not specifically identify by name every holder before using notice by publication. Gerrity v. Chervenak, 162 Ohio St.3d 694, 2020-Ohio-6705, 166 N.E.3d 1230, ¶ 19. The court observed that, "[construing the Dormant Mineral Act as ineffective unless the surface owner identifies every mineral-interest holder, including every successor or assignee of a record holder, would negate the express legislative purpose of the act." Id. at ¶ 21.
{¶40} As to what constitutes a reasonable search under R.C. 5301.56(E)(1), this court has stated:
We have made it abundantly clear that what constitutes reasonable due diligence will depend on the facts and circumstances of each case. We again decline to establish a bright-line rule requiring a specific search process, and reaffirm that what constitutes reasonable due diligence will depend on the facts and circumstances of each case. We emphasize that R.C. 5301.56(E)(1) makes it clear that since notice by publication is a last resort, a sincere, diligent effort by the researcher is required before service by publication is appropriate.Fonzi v. Miller, 7th Dist. Monroe No. 19 MO 0011, 2020-Ohio-3739, 155 N.E.3d 986, ¶ 34, appeal allowed, 160 Ohio St.3d 1407, 2020-Ohio-4574, 153 N.E.3d 105.
{¶41} Without establishing a strict rule, the Court outlined reasonable steps a surface owner should take before resorting to notice by publication:
[T]he surface owner must consult the public-property records in the county in which the surface property is located to determine whether a saving event has occurred. If no saving event is evident, the surface owner must also consult the chain of title to determine the record holder or record holders of the mineral interest-the starting point for determining who the surface owner must attempt to notify pursuant to R.C. 5301.56(E)(1). In addition to property records in the county in which the land that is subject to the mineral interest is located, a reasonable search for holders of a severed mineral interest will generally also include a search of court records, including probate records, in that county.Gerrity at ¶ 35.
{¶42} Appellees do not dispute that their search efforts were limited to Belmont County records. (Schramm Jr. Aff. ¶ 23). Attorney Erik Schramm Jr. averred that there was nothing of record in Belmont County indicating that anyone other than Lorain Coal held an interest in the Carnegie Conveyance. (Schramm Jr. Aff. ¶ 19-20). Attorney Bryan Conaway also averred that a search of Belmont County records did not reveal any transfers or assignments of the Carnegie Conveyance from Lorain Coal. (Conaway Aff. ¶ 12-13, 16-19).
{¶43} Appellees' search in Belmont County was reasonable under the circumstances. They searched both the property records and court records in the county where the property is located. There was no evidence of any conveyance of the Carnegie Conveyance nor was there any evidence of a transfer of anything from Lorain Coal. Additionally, Lorain Coal is a corporation. Appellees would not search for a corporation's heirs as it would if the record holder had been an individual.
{¶44} Appellees attempted to serve a notice of abandonment to Lorain Coal at its last known address. When that attempt failed, appellees conducted a reasonable search for holders in Belmont County where the property is located. Thereafter, they published the notices of abandonment. Thus, appellees followed the statutory process for notice.
{¶45} Given the above, summary judgment was proper under the DMA as no holder filed a claim to preserve. Because summary judgment was proper under the DMA, our inquiry ends here. We need not examine the Thunderbird appellants' MTA argument.
{¶46} Accordingly, the Thunderbird appellants' first assignment of error is without merit and is overruled.
{¶47} The Thunderbird appellants' second assignment of error states:
THE TRIAL COURT ERRED BY DETERMINING THAT THE PLAINTIFFS OWN THE MINERALS WITHOUT DETERMINING HOW OR WHEN THEY ACQUIRED THE MINERALS AND BY ADVISING THE JURY OF SUCH OWNERSHIP WITHOUT GUIDANCE AS TO WHEN OR HOW TITLE TRANSFERRED.
{¶48} In this assignment of error, the Thunderbird appellants argue that the trial court did not allow for evidence as to how and when appellees acquired the mineral interest at issue. Instead, the court simply instructed the jury that appellees owned the minerals.
{¶49} They contend that the jury returned a verdict against them for damages for slander of title, tortious interference with a contract, and tortious interference with a business relationship without any information as to whether appellees owned the minerals when the alleged slander of title and tortious interference occurred. They claim the acts asserted in the complaint that would constitute slander of title and tortious interference occurred before appellees acquired the minerals. They point out that the complaint states that Czarniecki and Banik filed the quitclaim deed and claims to preserve on October 15, and 16, 2018, and appellees did not file their notices of failure to file until November 2, and 8, 2018. They assert that an abandonment does not vest a severed mineral interest in the surface owner until the recording of the notice of failure with the county recorder. Citing, R.C. 5301.56(H)(2). Therefore, the Thunderbird appellants argue that appellees did not own the mineral interest when they filed the claims to preserve. And it follows, therefore, that the complaint did not state a claim for tortious interference with a contract, tortious interference with a business relationship, or slander of title for which relief could be granted.
{¶50} On appeal, we review a trial court's decision to admit or exclude evidence for an abuse of discretion. Taylor-Stephens v. Rite Aid of Ohio, 8th Dist. Cuyahoga No. 106324, 2018-Ohio-4714, ¶ 24. Abuse of discretion implies that the trial court's attitude was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
{¶51} The acts alleged in the complaint to constitute tortious interference with a contract, tortious interference with a business relationship, and slander of title are the filing of the two claims to preserve by Czarniecki and Banik and the filing of the quitclaim deed by Czarniecki.
{¶52} The Thunderbird appellants are correct that the trial court did not allow any evidence as to how and when appellees acquired the mineral rights at issue; it simply instructed the jury that appellees owned the minerals. (Jury Trial Tr. 74, 130, 237, 272). And the trial court made this determination on summary judgment without giving its reasons.
{¶53} Appellees are correct that the evidence demonstrated that had Czarniecki and Banik not filed the quitclaim deed and claims to preserve, then appellees would have received payments on their oil and gas contracts.
{¶54} Appellee Hamm testified the only reason he did not get paid for his second leasing bonus and his sale was because of the documents filed by the Thunderbird appellants. (Jury Trial Tr. 138-139). His second bonus was to be for $8,360 per acre, totaling approximately $1,200,000. (Jury Trial Tr. 103). Hamm further testified that he had a deal in place to sell 40 of his 144 acres to American Mineral Solutions (American Mineral) for $480,000 but that Thunderbird filed notices to preserve on his minerals. (Jury Trial Tr. 107-019). This caused American Mineral to terminate the deal. (Jury Trial Tr. 109). Moreover, American Mineral's senior land agent Benjamin Findon testified that American Mineral was ready to finalize a purchase deal with appellees but that the documents filed by the Thunderbird appellants stopped the purchase. (Jury Trial Tr. 196-197). Findon further testified that had the Thunderbird appellants not filed claims to preserve, American Mineral would have paid appellee Hamm $12,000 per acre or $480,000 total. (Jury Trial Tr. 200).
{¶55} Other landowners also testified as to their losses. Darla Yazombek testified that she lost $5,863.50. (Jury Trial Tr. 146). David Ellison testified that he lost $14,861. (Jury Trial Tr. 154). Alex Kolb testified that he lost $12,390. (Jury Trial Tr. 169-170).
{¶56} "Relevant evidence" is "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Evid.R. 401. Generally, all relevant evidence is admissible. Evid.R. 402. Evidence of when title passed to the mineral interest was clearly relevant in this case.
{¶57} The trial court should have allowed the Thunderbird appellants to present evidence of when title passed to the mineral interests at issue. They jury was only instructed that appellees owned the mineral interest. They were not permitted to hear evidence that title was disputed and that the DMA was utilized to have the interest deemed abandoned and vested in appellees.
{¶58} Dormant minerals do not automatically pass by operation of law. Corban v. Chesapeake Expl., LLC, 149 Ohio St.3d 512, 2016-Ohio-5796, 76 N.E.3d 1089, ¶ 31. A surface owner seeking to claim dormant mineral rights and merge them with the surface estate is required to follow the statutory notice and recording procedures set forth in the DMA. Id. "Immediately after the notice of failure to file a mineral interest is recorded, the mineral interest shall vest in the owner of the surface of the lands formerly subject to the interest, * * *." R.C. 5301.56(H)(2). Thus, at the time Czarniecki and Banik filed the relevant documents, appellees were not yet the record holders of the mineral interests.
{¶59} This information is relevant in the jury's determination of whether Thunderbird committed slander of title, tortious interference with a contract, and tortious interference with a business relationship. The trial court abused its discretion in not permitting Thunderbird to present evidence as to when and how appellees acquired title to the mineral interests.
{¶60} Accordingly, the Thunderbird appellants' second assignment of error has merit and is sustained.
{¶61} The Thunderbird appellants' third assignment of error states:
THE TRIAL COURT ERRED IN GRANTING DEFAULT JUDGMENT QUIETING TITLE TO THE MINERALS IN THE PLAINTIFFS CONTRARY TO THE PROVISION OF O.R.C. 5301.56(C)(2) THAT A CLAIM TO PRESERVE PRESERVES THE RIGHTS OF ALL HOLDERS AND WITHOUT DETERMINING HOW PLAINTIFFS ACQUIRED THE MINERALS.
{¶62} The Thunderbird appellants state that a week before appellees began service by publication in the local newspaper, they furnished appellees with the complete family trees of Edward Johnson, Frances Johnson (Hannay), and Stanley B. Johnson, which included the names of all of the Johnson heirs. Yet none of these names appeared in the notice published by appellees.
{¶63} The Thunderbird appellants argue that pursuant to Civ.R. 4.4, the notice was required to include the name and last known address of the Johnson heirs. They further argue that appellees could not serve the dissolved Lorain Coal or its deceased shareholders by publication since they did not exist at the time. For these reasons, the Thunderbird appellants argue that the trial court improperly granted default judgment against all non-answering defendants.
{¶64} The Thunderbird appellants, however, do not have standing to raise this issue.
{¶65} In order to have standing, a party, in an individual or representative capacity, has to have some real interest in the action. Youngstown Edn. Assn. v. Kimble, 7th Dist. Mahoning Nos. 16 MA 0013, 16 MA 0014, 2016-Ohio-1481, ¶ 12 citing State ex rel. Dallman v. Court of Common Pleas, 35 Ohio St.2d 176, 298 N.E.2d 515 (1973). Standing is a jurisdictional requirement. Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 22.
{¶66} The concept of standing is addressed by Ohio's Rules of Civil Procedure. Civ.R. 17(A) requires that an action be brought "in the name of a real party in interest." This means one who is "directly benefited or injured by the outcome of the case rather than merely having an interest in the action itself." State ex rel. Sinay v. Sodders, 80 Ohio St.3d 224, 226, 685 N.E.2d 754 (1997).
{¶67} In this case, on September 17, 2019, the trial court initially issued a default judgment against all defendants in this action. It stated that any interest derived from Lorain Coal adverse to appellees' ownership in the disputed mineral interest was extinguished and title was quieted in appellees. Upon motions filed by the Thunderbird appellants and the Saunders appellants, the court issued a nunc pro tunc judgment entry on October 17, 2019. It provided that its previous order was to have no effect on the answering defendants and that the matter would proceed as to all answering defendants. Thus, the judgment entry quieting title in appellees did not apply to the Thunderbird appellants and the matter continued as to them (and as to the Saunders appellants).
{¶68} Thus, the Thunderbird appellants do not have standing to appeal the default judgment rendered against the non-answering defendants.
{¶69} Accordingly, the Thunderbird appellants' third assignment of error is without merit and is overruled.
{¶70} The Thunderbird appellants' fourth assignment of error states:
THE TRIAL COURT ERRED IN DETERMINING THAT FILING A QUITCLAIM DEED AND A CLAIM TO PRESERVE UNDER O.R.C. 5301.56 IS SLANDER OF TITLE OR TORTIOUS INTERFERENCE.
{¶71} The Thunderbird appellants contend here that it was error for the trial court to consider the filing of a quitclaim deed and a claim to preserve as acts of slander of title, tortious interference with a contract, and tortious interference with a business relationship. They argue that because a quitclaim deed only transfers title to any interest a person actually has, without warranting that the transferor actually has title to any interest, the filing of a quitclaim deed cannot constitute a slander of title. Likewise, they assert that the filing of a claim to preserve by someone believing they acquired an interest in severed minerals in response to the surface owner's notice of abandonment is not a slander of title or tortious interference.
{¶72} The Thunderbird appellants' argument here is flawed. The trial court did not rule on these issues. The trial court instructed the jury as to the elements of slander of title, tortious interference with a contract, and tortious interference with a business relationship. (Jury Trial Tr. 304-308). It was the jury who determined that appellees prevailed on these claims. So the Thunderbird appellants' assertion that the trial court determined these claims is incorrect.
{¶73} But we have already determined that the jury's verdict on the slander of title, tortious interference with a contract, and tortious interference with a business relationship claims must be reversed because the trial court excluded relevant evidence of when and how title to the minerals passed to appellees. Thus, this matter will be remanded for a new trial on these claims.
{¶74} Accordingly, the Thunderbird appellants' fourth assignment of error is without merit and is overruled.
{¶75} The Thunderbird appellants' fifth assignment of error states:
THE TRIAL COURT ERRED IN AWARDING ATTOREY FEES TO PLAINTIFFS WITHOUT A DETERMINATION THAT THUNDERBIRD GLOBAL DEVELOPMENT, LLC, WAS SUBJECT TO PUNITIVE DAMAGES.
{¶76} Prior to the damages trial, appellees moved to bifurcate the issue of compensatory damages from the issue of punitive damages, which the court agreed to do. Consequently, the jury trial was on the issues of slander of title, tortious interference with a contract, tortious interference with a business relationship, and compensatory damages only. After the jury returned a compensatory damage award, the court held a hearing on appellees' request for attorney's fees. The court awarded appellees $139,609.11 in attorney's fees, which it stated were "awarded by virtue of the compensatory damages judgment against Defendant Thunderbird Global Development, LLC." (July 27, 2020 JE). Appellees later dismissed their claim for punitive damages.
{¶77} The Thunderbird appellants now argue that because there were no punitive damages in this case, the award of attorney fees was improper. Appellees, however, argue that because the jury awarded compensatory damages on their slander of title claim, attorney fees were warranted.
{¶78} Because we have already determined that the jury verdict must be reversed, the award of attorney fees must also be reversed as the attorney fees award was based on the jury's award of damages.
{¶79} Accordingly, the Thunderbird appellants' fifth assignment of error has merit and is sustained.
{¶80} The Thunderbird appellants' sixth assignment of error states:
THE TRIAL COURT ERRED IN NOT HOLDING A HEARING ON THE COUNTERCLAIMS, NOT RULING ON THE COUNTERCLAIMS AND NOT PERMITTING EVIDENCE TO BE PRESENTED ON THE COUNTERCLAIMS.
{¶81} In their final assignment of error, the Thunderbird appellants assert that they and appellees filed their summary judgment motions on the complaint. They point out that no request for summary judgment was made on the counterclaims and the court never held a hearing on the counterclaims. They argue the trial court should have allowed evidence on the counterclaims and then ruled on them.
{¶82} In their answer and counterclaim, the Thunderbird appellants raised counterclaims for (1) a declaratory judgment that they own the disputed mineral rights; (2) fraud; (3) slander of title; (4) wrongfully attempting to acquire title; (5) attempting to divest them of their mineral rights; and (6) collecting signing bonuses that belong to them. In their motion for summary judgment, the Thunderbird appellants sought summary judgment on appellees' complaint only.
{¶83} But appellees, in their motion for summary judgment, in addition to requesting summary judgment on their complaint, asserted: "Defendants are not entitled to judgment as a matter of law on the claims set forth in their Counterclaim." (Oct. 4, 2019 Motion for Summary Judgment). And the trial court in granting summary judgment in favor of appellees simply stated: "Plaintiffs' Motion for Summary Judgment is sustained and granted[.]" (Nov. 18, 2019 JE). Because the trial court did not elaborate in its judgment entry and simply granted appellees' motion, we can conclude that the court granted the motion in whole. Thus, it granted appellees summary judgment on the Thunderbird appellants' counterclaims as well.
{¶84} And as appellees point out, the Thunderbird appellants' counterclaims were entirely reliant on the Thunderbird appellants establishing ownership of the oil and gas rights. Once the trial court granted summary judgment in favor of appellees finding that they held title to the disputed mineral rights, the Thunderbird appellants' counterclaims were in effect also ruled upon. Each of the Thunderbird appellants' counterclaims asserted that they own the disputed mineral rights.
{¶85} Accordingly, the Thunderbird appellants' sixth assignment of error is without merit and is overruled.
{¶86} For the reasons stated above, the trial court's judgment awarding summary judgment in favor of appellees is hereby affirmed. The jury's verdict and court's judgment awarding compensatory damages on the slander of title, tortious interference with a contract, and tortious interference with a business relationship claims is reversed. Likewise, the court's award of attorney fees is reversed. The matter is remanded for a new trial on the slander of title, tortious interference with a contract, and tortious interference with a business relationship claims and on the issue of attorney fees if warranted. At the new trial, Thunderbird shall be permitted to introduce evidence as to when and how appellees acquired title to the mineral interest.
Robb, J., concurs.
D'Apolito, J., concurs.
For the reasons stated in the Opinion rendered herein, the Thunderbird appellants' first, third, fourth, and sixth assignments of error are overruled. The Thunderbird appellants' second and fifth assignments of error are sustained. It is the final judgment and order of this Court that the judgment of the Court of Common Pleas of Belmont County, Ohio, that granted summary judgment in favor of appellees is affirmed. The jury's verdict and trial court's judgment awarding compensatory damages on the slander of title, tortious interference with a contract, and tortious interference with a business relationship claims is hereby reversed. The judgment awarding attorney fees is also reversed. The matter is hereby remanded for further proceedings pursuant to law and consistent with this opinion. On remand, a new trial is ordered on the slander of title, tortious interference with a contract, and tortious interference with a business relationship claims and on the issue of attorney fees if warranted. At the new trial, Thunderbird shall be permitted to introduce evidence as to when and how appellees acquired title to the mineral interest. Costs to be taxed against the appellees.
A certified copy of this opinion and judgment entry shall constitute the mandate in this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a certified copy be sent by the clerk to the trial court to carry this judgment into execution.
NOTICE TO COUNSEL
This document constitutes a final judgment entry.