Client Alert: Sharp v. Miller - Due Diligence Requirement for Surface Owners Seeking Abandonment of Mineral Interests Under Ohio's Dormant Mineral Act
By Hanne-Lore M. Gambrell & J. Alex Quay on December 10, 2018
On November 26, 2018, the 7th District Court of Appeals of Ohio issued a decision in Sharp v Miller, providing additional guidance as to what qualifies as “reasonable due diligence” required by the 2006 Dormant Mineral Act (R.C. 5301.56) to identify record mineral holders and/or their heirs before employing notice by newspaper publication to start the “60 day clock” during which the mineral holders may file a claim to preserve their interest. R.C. 5301.56(E)(1) allows notice by publication when notice cannot be completed through certified mail. Notice by certified mail is not required when a reasonable search fails to reveal the names or addresses of potential heirs who must be served. Shilts v. Beardmore, 7th Dist. No. 16 MO 0003, 2018-Ohio-863, ¶ 15. In Sharp, the Court concluded that Shilts v Beardmore did not establish a bright-line rule or definition of reasonable due diligence; rather, the reasonable due diligence standard “relies on the reasonableness of any party’s actions,” which will be considered by the court on the facts and circumstances in each individual case.
In Sharp, Appellant Sharp asserted that the lower court improperly found that Appellees, the Millers, used reasonable due diligence when researching potential heirs before employing service by newspaper publication because Sharp did not conduct an internet search in conjunction with his public records searches for the names and addresses of the mineral holder heirs. This argument was based on the fact that in Shilts, the Court expressly identified certain search efforts (probate records, public records, Ohio Department of Natural Resources (“ODNR”) records, and an internet search) that satisfied the reasonable due diligence standard. However, the Court found that an internet search is not always required, and that in this case, there was no evidence that an internet search would have revealed any potential heirs since there was very little information available for Appellant to use as a basis of an internet search.
Although the court did not provide a bright line rule, the decision provides some additional clarity as to how the Seventh District will review surface holders’ efforts in attempting to locate mineral holder heirs as a part of their notice requirement under the statute.