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CONFLICTS IN MINERAL DEVELOPMENTCOAL RIGHTS V. GAS RIGHTSA CASE STUDYAmerican Energy Corporation, et al.v.Charles Datkuliak, et al.Monroe County Ohio Case Number: 2007-152
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1. 32nd Mineral Law Conference Energy & Mineral Law Foundation CONFLICTS IN MINERAL DEVELOPMENT
2. CONFLICTS IN MINERAL DEVELOPMENT
COAL RIGHTS V. GAS RIGHTS
A CASE STUDY
American Energy Corporation, et al.
v.
Charles Datkuliak, et al.
Monroe County Ohio Case Number: 2007-152 & 153
On appeal
Seventh District Court of Appeals, Ohio Case Number: 07 MO 03
3. THE FACTS 1922 Coal Severance Deed
Coal severance deed granted:
A. The right to mine “all” coal
B. Without reservation or liability for damages to surface or improvements upon the surface
C. The right and privilege to use necessary surface over coal to construct and maintain air shafts to ventilate mines
4. THE FACTS
1922 Coal Severance Deed
Reserved
The Grantors stated they:
“reserve unto themselves and their heirs
and assigns the right to drill and operate
through said vein of coal for oil and gas
and any and all other minerals.”
5. THE FACTS
6. THE FACTS 1989
Datkuliaks – successor grantors of surface estate-leased to Oxford Oil the right to drill and operate a gas well.
11. THE LAWSUITS One day later – instead of a compulsory Counter-Claim, Defendants filed a Complaint with a single count for Declaratory Judgment on the rights of the Parties
12. TRIAL COURT DECISION Matter of Deed Construction Key rulings:
?Deed language is clear and unambiguous
?Allowed Court to construe as a matter of law
13. TRIAL COURT DECISION
Key rulings:
?Deed language constitutes a complete and clear waiver
“without reservation or liability for damage that may arise by reason of mining said coal or the operation of said mine or mines to the surface or to the improvements upon the surface over said coal…”
?Damages were contemplated by the parties
14. TRIAL COURT DECISION Key rulings:
?Waiver of damages:
“does not conflict with right to drill for gas”
?Continued use of gas well:
“interferes with right to mine ALL coal and effectively sterilizes coal”
?Right to mine ALL coal coupled with Waiver of damages grants “enormous entitlement” to mine coal.
15. TRIAL COURT DECISION Key rulings:
?Construe as a matter of law
?Clear and unambiguous – deed is conclusively presumed to express intent of parties
?No extrinsic evidence may be admitted
?Language in deed is dispositive of all questions of intent
16. TRIAL COURT DECISION Reservation v. Exception
?In this case the Datkuliaks only had a reservation which allowed them “to drill and operate through said vein of coal”
?Coal owned by Plaintiffs
?Reservation – they did not keep title to any coal
?Exception – You except out a portion of what is granted – i.e. you may except or keep ownership in the coal around the well
17. TRIAL COURT DECISION ?Clear right to mine all coal
?Gas well sterilizes coal
?Reservation does not diminish ability to mine all coal
Defendants ordered to:
“immediately plug and cap the gas well at issue to assure their well does not interfere with Plaintiffs’ mining and Defendants are further prohibited from interfering with Plaintiffs’ right to safely mine all of its said coal.”
The End! – not quite
18. ON APPEAL Datkuliaks raise several issues:
?Trial Court erred by determining right to mine coal is paramount to right to operate gas well
?Trial Court erred by refusing expert testimony
?Order to plug and cap without compensation is an unconstitutional taking without due process
19. CURRENT STATUS ?Well is capped and plugged at the Datkuliak’s expense
?MSHA approval pending
?No decision on Appeal
20. APPLICABLE CASE LAW
21. APPLICABLE CASE LAW
22. APPLICABLE CASE LAW
23. APPLICABLE CASE LAW
24. Applicable Case Law
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