Title: State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State 
ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, Slip Opinion No. 2016-
Ohio-178.] 
 
 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in an 
advance sheet of the Ohio Official Reports.  Readers are requested to 
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 
South Front Street, Columbus, Ohio 43215, of any typographical or other 
formal errors in the opinion, in order that corrections may be made before 
the opinion is published. 
 
SLIP OPINION NO. 2016-OHIO-178 
THE STATE EX REL. CLAUGUS FAMILY FARM, L.P. v. SEVENTH DISTRICT 
COURT OF APPEALS ET AL. 
HUSTACK ET AL., APPELLANTS, v. BECK ENERGY CORPORATION, APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court 
of Appeals, Slip Opinion No. 2016-Ohio-178.] 
Oil and gas leases—Class certification—Validity of leases—Covenant to 
reasonably develop the land—Delay rentals do not extend beyond the fixed 
term of a lease. 
(Nos. 2014-0423 and 2014-1933—Submitted December 15, 2015—Decided 
January 21, 2016.) 
IN MANDAMUS and PROHIBITION. 
APPEAL from the Court of Appeals for Monroe County, Nos. 12 MO 6, 13 MO 2, 
13 MO 3, and 13 MO 11, 2014-Ohio-4255. 
_____________________ 
 
 
SUPREME COURT OF OHIO 
 
2
FRENCH, J. 
{¶ 1} These consolidated actions, an original action in this court and an 
appeal of a judgment of the Seventh District Court of Appeals, address the 
interpretation of a number of nearly identical oil and gas leases.  The appeal 
challenges the Seventh District’s interpretation of the leases in a class action.  The 
original action seeks writs of prohibition and mandamus.  In the original action, 
relator, Claugus Family Farm, L.P. (“Claugus Family”), an absent and unnamed 
plaintiff in the class action, challenges the Seventh District’s order tolling the leases 
in the class action. 
{¶ 2} We affirm the judgment of the court of appeals in case No. 2014-1933, 
because the leases set forth a definite period of ten years in which development 
must occur.  We also deny a writ of mandamus or of prohibition in case No. 2014-
0423 because Claugus Family had an adequate remedy in the ordinary course of 
law by moving to intervene in the appeal and because the Seventh District did not 
patently and unambiguously lack jurisdiction to issue an order tolling the leases 
pending appeal.  Finally, we deny Beck Energy Corporation’s motions to toll the 
terms of the leases. 
Statement of Facts 
Hustack v. Beck Energy Corp., case No. 2014-1933 (“the appeal”) 
{¶ 3} In September 2011, appellants, Larry A. and Lori Hustack, along with 
Clyde A. and Molly A. Hupp, who did not remain parties to the lawsuit when the 
complaint was amended, filed suit against appellee, Beck Energy Corporation, in 
the Monroe County Court of Common Pleas.  The Hustacks are successors in 
interest to lessors who signed a lease known as a “Form G&T (83) lease” with Beck 
Energy in 2008.  The lease contains blank lines for the lessors’ names, for the period 
during which a well was to be commenced unless delay rental—that is, an amount 
paid to the landowner in lieu of development—was paid, for the amount of the 
delay rental, and for other information. 
January Term, 2016 
 
3
{¶ 4} The complaint sought a judgment declaring that the Form G&T (83) 
leases were void as against public policy and to quiet title.  A subsequently amended 
complaint asserted claims on behalf of a class of over 400 Monroe County 
landowners (“the landowners”) who had signed Form G&T (83) leases with Beck 
Energy.1 
{¶ 5} In February 2012, the landowners moved for summary judgment.  In 
July 2012, the trial court granted summary judgment to the named plaintiffs, finding 
that the Form G&T (83) leases were void because they were leases in perpetuity in 
violation of Ohio public policy.  Beck Energy appealed that judgment. 
{¶ 6} The landowners then filed a motion for class certification under 
Civ.R. 23(B)(2).  On October 1, 2012, Beck Energy moved to toll the operation of 
the original leases.  In February 2013, the trial court granted class certification 
under Civ.R. 23(B)(2), noting that 415 landowners in Monroe County and 200 to 
300 landowners in other counties were affected. 
{¶ 7} Beck Energy appealed the order certifying the class, and the court of 
appeals remanded for the trial court to define the class more clearly.  The trial court 
redefined the class as all Ohio lessors subject to a Form G&T (83) lease with Beck 
Energy on whose land no preparations for drilling had occurred.  The court also 
applied its entry granting summary judgment to all members of the class as it 
existed on September 29, 2011, the date an amended complaint asserted class 
claims.  Beck Energy again appealed the class certification, but that appeal was 
unsuccessful, and Beck Energy has not sought further review of that issue.  Hupp 
v. Beck Energy Corp., 2014-Ohio-4255, 20 N.E.3d 732, ¶ 76 (7th Dist.). 
{¶ 8} In June 2013, the landowners unsuccessfully sought the trial court’s 
approval of notice to the class and Beck Energy’s list of the class of lessors. 
                                          
 
1 After the landowners filed the complaint, Beck Energy assigned certain mineral rights to XTO 
Energy, Inc.  Beck Energy retained a royalty interest in the leases and agreed to defend title to the 
leases against any claims. 
SUPREME COURT OF OHIO 
 
4
{¶ 9} In July 2013, on Beck Energy’s motion, the trial court tolled the leases 
of only the named plaintiffs pending the outcome of Beck Energy’s appeal on the 
merits.  Beck Energy appealed the tolling order. 
{¶ 10} The Seventh District issued an order on September 26, 2013, 
modifying the trial court’s tolling order to include all class members as of October 
1, 2012, the date Beck Energy first moved to toll the terms of the leases. 
{¶ 11} Exactly one year later, on September 26, 2014, the Seventh District 
held that the trial court had misinterpreted the lease provisions and Ohio case law 
and had erred in concluding that the Form G&T (83) lease was a perpetual lease 
that was void ab initio as against public policy.  2014-Ohio-4255, 20 N.E.3d 732, 
¶ 104.  The lease, according to the Seventh District, has a primary term of a definite 
duration and a secondary term that extends the lease if certain conditions are met, 
but allows the payment of delay-rental provisions only during the primary term.  In 
addition, the Seventh District held that the trial court erred in concluding that the 
lease was subject to implied covenants and that Beck Energy had breached the 
implied covenant to develop.  Id. at ¶ 122. 
{¶ 12} The parties stipulated to tolling the leases between Beck Energy and 
the class pending a timely appeal to this court.  The landowners then sought review 
of the Seventh District’s judgment regarding the validity of the lease as well as the 
tolling of the leases of the unnamed class members.  On January 28, 2015, we 
granted jurisdiction on only the following two propositions of law, see Hupp v. 
Beck Energy Corp., 141 Ohio St.3d 1454, 2015-Ohio-239, 23 N.E.3d 1196: 
 
[I.] An oil and gas lease which can be maintained 
indefinitely without development is a perpetual lease that is void as 
against public policy.  That a lease purports to establish a fixed term 
is of no consequence if the duration of that term can be extended 
without development. 
January Term, 2016 
 
5
[II.]  Where the express terms of an oil and gas lease 
effectively allow the lessee to postpone development indefinitely, 
and any stated time limits can be unilaterally extended by the lessee 
in perpetuity without any development, the lease is subject to an 
implied covenant of reasonable development notwithstanding a 
general disclaimer of all implied covenants. 
 
State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, case 
No. 2014-0423 (“the original action”) 
{¶ 13} Claugus Family, which was not a named plaintiff in the appeal, owns 
a tract of land in Monroe County.  A prior owner of the land had signed a Form 
G&T (83) lease with Beck Energy.  According to Claugus Family, during the first 
ten years of the lease on its property, no well was drilled, no oil or gas was 
produced, Beck Energy did not search for oil or gas, and Beck Energy expressed 
no intent regarding future production.  Claugus Family claims that the lease expired 
on February 3, 2014. 
{¶ 14} On September 30, 2013, in anticipation of the expiration of the Beck 
Energy lease, Claugus Family signed an oil and gas lease with Gulfport Energy 
Corporation (“Gulfport”) for the same property.  The Gulfport lease allowed 90 
days for Gulfport to review the title to the property for defects and 180 days for 
Claugus Family to cure any title defects.  Claugus Family asserts that Gulfport, 
upon being told of the tolling order in the appeal, informed Claugus Family that the 
tolling order was a title defect. 
{¶ 15} Claugus Family then filed a complaint in this court naming the 
Seventh District Court of Appeals and three judges on that court as respondents.  
Beck Energy has been granted leave to intervene in the action. 
{¶ 16} Claugus Family asserts that the order in the appeal tolled its lease 
with Beck Energy retroactively to October 1, 2012, without notice.  Claugus Family 
SUPREME COURT OF OHIO 
 
6
claims that the tolling order negatively affected the value of its property, violated 
its right to due process, and violated the rights of other landowners and that it might 
expose the landowners to liability for breach of contract.  Claugus Family claims 
that it had or has no plain and adequate remedy in the ordinary course of law. 
{¶ 17} Claugus Family requests an order prohibiting the enforcement of 
portions of the September 2013 tolling order and an order vacating the order to the 
extent that it applies to Claugus Family as an unnamed class member.  Beck Energy, 
on the other hand, claims that Claugus Family breached its lease by entering into 
the Gulfport lease because the Beck Energy lease prohibited the lessor from 
entering into any other oil and gas lease while the lease was in effect. 
{¶ 18} On September 3, 2014, we granted an alternative writ and scheduled 
submission of evidence and briefing in the original action.  140 Ohio St.3d 1409, 
2014-Ohio-3785, 15 N.E.3d 879.  On February 3, 2015, we consolidated the 
original action and the appeal for oral argument and decision.  141 Ohio St.3d 1461, 
2015-Ohio-370, 24 N.E.3d 1180. 
Analysis 
Hustack v. Beck Energy Corp., case No. 2014-1933—the appeal 
{¶ 19} The landowners challenge two holdings of the Seventh District 
Court of Appeals regarding the Form G&T (83) leases.  In their first proposition of 
law, the landowners assert that the Form G&T (83) lease can be maintained 
indefinitely without developing the land and is therefore a perpetual lease that is 
void as against public policy.  In the second proposition of law, the landowners 
challenge the Seventh District’s refusal to hold that the lease was subject to an 
implied covenant of reasonable development.  For the following reasons, we affirm 
the judgment of the Seventh District. 
Is the Form G&T (83) oil and gas lease void as against public policy? 
{¶ 20} As we have recently stated, the language of a granting clause 
determines the nature of an oil and gas lease and its effect on the parties’ property 
January Term, 2016 
 
7
interest in the oil and gas.  Chesapeake Exploration, L.L.C. v. Buell, ___ Ohio St.3d 
___, 2015-Ohio-4551, ___N.E.3d ___, ¶ 48.  An oil and gas lease typically includes 
a primary term, which sets forth the duration of the lease, and a secondary term, 
which allows the lease to be extended under certain described conditions.  Id. at  
¶ 77.  If the conditions of the secondary term are not met, “ ‘the lease terminates by 
the express terms of the contract * * * and by operation of law and revests the leased 
estate in the lessor.’ ”  Id., quoting Am. Energy Servs., Inc. v. Lekan, 75 Ohio 
App.3d 205, 212, 598 N.E.2d 1315 (5th Dist.1992). 
{¶ 21} Long-term leases of mineral rights under which there is no 
development of the land are void as against public policy.  Ionno v. Glen-Gery 
Corp., 2 Ohio St.3d 131, 134, 443 N.E.2d 504 (1983).  When a lease does not 
require development within a definite period, a court will impose an implied 
covenant to reasonably develop, absent express provisions to the contrary.  Id. at 
132-133. 
{¶ 22} The mineral lease in Ionno contained no time period in which mining 
operations had to commence, and the mining company had paid advance royalties 
for 19 years without developing the land.  We stated that paying royalties could not 
be viewed “as a substitute for timely development” of the land.  Id. at 134.  We 
concluded, “To hold otherwise would be to reward mere speculation without 
development [and] would allow a lessee to encumber a lessor’s property in 
perpetuity merely by paying an annual sum.”  Id. 
{¶ 23} The Form G&T (83) lease states as follows:  
 
2.  This lease shall continue in force and the rights granted 
hereunder be quietly enjoyed by the Lessee for a term of ten years 
and so much longer thereafter as oil and gas or their constituents are 
produced or are capable of being produced on the premises in paying 
quantities, in the judgment of the Lessee, or as the premises shall be 
SUPREME COURT OF OHIO 
 
8
operated by the Lessee in the search for oil or gas and as provided 
in paragraph 7 following. 
 
The Form G&T (83) lease required Beck Energy to commence a well on the leased 
premises within a certain time or pay a certain delay rental to the landowners, which 
the parties agreed was to be 12 months and $1 to $5 an acre per year, respectively. 
 
3.  This lease, however, shall become null and void and all 
rights of either party hereunder shall cease and terminate unless, 
within ___ months from the date hereof, a well shall be commenced 
on the premises, or unless the Lessee shall thereafter pay a delay 
rental of ___ Dollars each year, payments to be made quarterly until 
the commencement of a well.  A well shall be deemed commenced 
when preparations for drilling have been commenced. 
  
{¶ 24} The landowners argue that the Form G&T (83) lease does not state 
that development must commence during the primary term and thus that it is a 
perpetual lease similar to the one in Ionno.  The landowners note that the lease does 
not use the words “primary term” or “secondary term.”  They argue that after the 
initial ten years, Beck Energy could extend the lease even if it had not developed 
for oil and gas, by subjectively determining that oil or gas could be produced in 
paying quantities and then continuing to pay delay rentals.  While the language in 
the Form G&T (83) lease is not identical to leases in the case law, it is similar 
enough to justify its application here. 
{¶ 25} Delay-rental provisions have been interpreted to apply only during 
the primary term of a lease.  In Brown v. Fowler, 65 Ohio St. 507, 63 N.E. 76 
(1902), the lease stated that the lessees held the land for 2 years and as long 
thereafter as oil or gas was found in paying quantities not exceeding 25 years from 
January Term, 2016 
 
9
the date that the lease was signed.  The lease also stated that if no well was drilled 
within 12 months, the lease terminated unless delay rentals were paid.  This court 
held that payment of the delay rental could not extend the lease beyond the fixed 
term of 2 years.  Id. at 522.  Accord Jacobs v. CNG Transm. Corp., 332 F.Supp.2d 
759, 786 (W.D.Pa.2004) (provision obligating the lessee to pay rental or develop 
the leasehold is understood to be operative only during the primary term). 
{¶ 26} Thus, under paragraphs 2 and 3 of the Form G&T (83) lease, the 
delay rental must be paid beginning one year after the lease is signed if no well is 
commenced in that year and payments may continue only until the tenth year of the 
lease. 
{¶ 27} The phrase “capable of being produced,” which is used in the 
provision under which the duration of the lease can be extended, does not extend 
the time during which the delay rentals can be paid.  Courts that have addressed 
similar language have done so only when referring to whether a well, rather than 
undeveloped land, is capable of producing.  Morrison v. Petro Evaluation Servs., 
Inc., 5th Dist. Morrow No. 2004 CA 0004, 2005-Ohio-5640, ¶ 39-40; Anadarko 
Petroleum Corp. v. Thompson, 94 S.W.3d 550, 558 (Tex.2003); Hunthauser 
Holdings, L.L.C. v. Loesch, D.Kan. No. Civ.A. 00-1154-MLB, 2003 WL 21981961 
(June 10, 2003).  And Beck Energy acknowledges that oil and gas are not “capable 
of being produced” if no well exists. 
{¶ 28} Nor does the phrase “in the judgment of Lessee” permit the lease to 
continue indefinitely at Beck Energy’s discretion without development of oil and 
gas.  That phrase also applies to production from a well, not to the possibility of 
production from the land.  Beck Energy, although it asserts that “paying quantities” 
are properly viewed from the lessee’s perspective, also agrees that the phrase refers 
to its judgment regarding the capability to produce once a well has been drilled. 
{¶ 29} The landowners also argue that paragraphs 7 and 8 of the lease allow 
the “indefinite extension of the Lease without any drilling.”  But neither paragraph 
SUPREME COURT OF OHIO 
 
10 
is applicable unless drilling has occurred.  Paragraph 7 states that the lease 
terminates after the plugging of a well that is dry, unless Beck drills another well 
within a year or resumes paying delay rentals at the end of that year.  Paragraph 8 
addresses a producing well that stops producing or whose products cannot be 
marketed.  Because delay rentals can be paid only during the first ten years of the 
lease, the lease cannot be extended indefinitely. 
{¶ 30} For all these reasons, we conclude that the Form G&T (83) lease 
cannot be extended beyond the ten years set forth in the primary term without 
development of oil or gas.  The lease is not void as against public policy. 
Is the Form G&T (83) oil and gas lease subject to an implied covenant of 
reasonable development? 
{¶ 31} Courts have sometimes imposed upon the parties to oil and gas 
leases an implied covenant to develop in a reasonable period of time, but only when 
the lease fails to refer specifically to the timeliness of development.  We will not 
impose an implied covenant to develop when the lease requires that development 
must commence within a certain period or when the lease specifies that no implied 
covenant shall be read into the agreement.  Ionno, 2 Ohio St.3d at 132, 443 N.E.2d 
504 (implied covenant to reasonably develop the land imposed in lease); Beer v. 
Griffith, 61 Ohio St.2d 119, 399 N.E.2d 1227 (1980), paragraph two of the syllabus 
(“Absent express provisions to the contrary, an oil and gas lease includes an implied 
covenant to reasonably develop the land”); Harris v. Ohio Oil Co., 57 Ohio St. 118, 
128, 48 N.E. 502 (1897) (“The implied covenant [of reasonable development] 
arises only when the lease is silent on the subject”). 
{¶ 32} The Form G&T (83) lease at issue here requires that development 
commence within ten years, and thus it is not a lease in perpetuity like the lease at 
issue in Ionno.  In addition, there is specific language in the lease that disclaims any 
implied covenants. 
January Term, 2016 
 
11 
{¶ 33} For these reasons, we hold that the Seventh District correctly held 
that the leases preclude the imposition of an implied covenant to develop within the 
primary term of the lease. 
State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, case 
No. 2014-0423—the original action 
{¶ 34} In the original action, Claugus Family seeks a writ of prohibition to 
permanently enjoin the Seventh District from enforcing its order tolling the leases 
as to Claugus Family and a writ of mandamus directing the Seventh District to 
vacate the tolling order as to Claugus Family. 
{¶ 35} To be entitled to a writ of prohibition, Claugus Family must establish 
that (1) the court of appeals is about to exercise or has exercised judicial power, (2) 
the exercise of that power is unauthorized by law, and (3) denying the writ would 
result in injury for which no other adequate remedy exists in the ordinary course of 
law.  State ex rel. Bell v. Pfeiffer, 131 Ohio St.3d 114, 2012-Ohio-54, 961 N.E.2d 
181, ¶ 18.  Even if Claugus Family has an adequate remedy in the ordinary course 
of law, it may be entitled to a writ if the court of appeals “patently and 
unambiguously” lacked jurisdiction.  Chesapeake Exploration, L.L.C. v. Oil & Gas 
Comm., 135 Ohio St.3d 204, 2013-Ohio-224, 985 N.E.2d 480, ¶ 11. 
{¶ 36} Similarly, to be entitled to extraordinary relief in mandamus, 
Claugus Family must establish a clear legal right to the requested relief, a clear 
legal duty on the part of the court of appeals to provide it, and the lack of an 
adequate remedy in the ordinary course of law.  State ex rel. Waters v. Spaeth, 131 
Ohio St.3d 55, 2012-Ohio-69, 960 N.E.2d 452, ¶ 6.  Claugus Family must prove 
that it is entitled to the writ by clear and convincing evidence.  Id. at ¶ 13. 
{¶ 37} We conclude that Claugus Family is not entitled to a writ of 
mandamus or of prohibition.  First, it had an adequate remedy in the ordinary course 
of law by moving to intervene in the appeal.  State ex rel. Denton v. Bedinghaus, 
98 Ohio St.3d 298, 2003-Ohio-861, 784 N.E.2d 99, ¶ 28 (intervention in an action 
SUPREME COURT OF OHIO 
 
12 
against a child-support obligor was an adequate remedy in the ordinary course of 
law for a bailor seeking release of funds that had been confiscated by a court to pay 
the obligor’s child-support arrearages); State ex rel. Gaydosh v. Twinsburg, 93 Ohio 
St.3d 576, 578, 757 N.E.2d 357 (2001) (intervention in a declaratory-judgment 
action is an adequate remedy in the ordinary course of law that precludes the 
issuance of a writ of mandamus); State ex rel. Bennett v. Lime, 55 Ohio St.2d 62, 
63, 378 N.E.2d 152 (1978) (court may deny a writ of mandamus when parties could 
have intervened in a previously filed declaratory-judgment action). 
{¶ 38} The Seventh District issued the tolling order in the appeal on 
September 26, 2013.  Claugus Family admitted that its counsel found out about the 
order sometime in October 2013.  The Seventh District did not issue its decision on 
the merits of the appeal until September 26, 2014.  Claugus Family could have 
moved to intervene in the appeal when it learned of the tolling order or in the next 
11 months.  Claugus Family thus had an adequate remedy in the ordinary course of 
law. 
{¶ 39} Second, the Seventh District had jurisdiction to issue an order to 
maintain the status quo during the course of the appeal, and the tolling order did 
that.  Indeed, Claugus Family does not argue that the Seventh District lacked 
jurisdiction to issue the order, let alone that it patently and unambiguously lacked 
such jurisdiction. 
{¶ 40} For these reasons, we deny both writs. 
Motion for a tolling order 
{¶ 41} Finally, Beck Energy has filed a motion in each case to toll the terms 
of the Form G&T (83) leases as to all members of the class.  Having held that the 
leases are valid, we deny the motions for a tolling order. 
 
 
January Term, 2016 
 
13 
Conclusion 
{¶ 42} Because the Form G&T (83) lease sets forth a definite period during 
which development must occur, we affirm the judgment of the Seventh District 
Court of Appeals in case No. 2014-1933. 
{¶ 43} We deny writs of mandamus and prohibition in case No. 2014-0423 
because Claugus Family had an adequate remedy in the ordinary course of law by 
moving to intervene in the appeal and because the court of appeals did not patently 
and unambiguously lack jurisdiction to issue an order tolling the leases. 
{¶ 44} Finally, we deny Beck Energy’s motions to toll the terms of the 
leases. 
Writs and motions denied 
 and judgment affirmed. 
O’CONNOR, C.J., and LANZINGER, KENNEDY, and O’NEILL, JJ., concur. 
PFEIFER and O’DONNELL, JJ., concur in part and dissent in part. 
_________________ 
PFEIFER, J., concurring in part and dissenting in part. 
{¶ 45} I concur in the portion of the majority opinion that addresses the 
validity of the leases.  They are not perpetual.  I dissent from everything else.  
Over the years, I have been generous with criticism of various legal analyses of my 
colleagues; spirited dissent is a well-understood, constructive part of deciding 
important matters in a court of last resort.  I have been more circumspect with 
respect to our trial courts, which often have to render quick decisions on complex 
matters without the benefit of colleagues to help them thread the various legal 
needles.  Today I take aim below as well. 
{¶ 46} This case is an all-too-real modern Jarndyce and Jarndyce.  The 
attorney for Claugus Family Farm, L.P. (“Claugus”) ably and successfully argued 
before this court that the Beck Energy leases were valid.  He did so while sitting at 
the same table as an attorney who argued that the Beck Energy leases were 
SUPREME COURT OF OHIO 
 
14 
perpetual and therefore invalid.  Meanwhile, Beck Energy’s attorney argued that 
Claugus’s interests, as an unnamed class member, were skillfully and properly 
represented by the Hupps’ attorney, who was arguing directly contrary to Claugus’s 
expressed interests.  Because a class was certified and the leases tolled, Claugus 
estimates that it will lose hundreds of thousands of dollars based on losing the lease 
it negotiated with Gulfport.  We have no way of knowing the total extent of the 
economic carnage wrought on the 700 or so other landowners in Monroe County 
and elsewhere in southeastern Ohio that are affected by this decision.  The ultimate 
irony, which you might think would only happen in a fictional case, is that the 
Hupps, the lead plaintiffs in the class-action case, are no longer party to the suit.  
It’s as if the Hupps’ attorney, whose ridiculous argument that the leases were 
perpetual, made the argument just so he could initiate a Civ.R. 23(B)(2) suit, 
thereby adding significant numbers to his oil and gas client base.  It is as if the 
Hupps and Beck Energy were part of a scheme to extend the Beck leases by 
subterfuge—by making a specious argument about the validity of the leases and 
tolling them—instead of extending the leases the old-fashioned way, by working 
the land that is the subject of the leases.  Beck Energy becomes the undisputed 
winner of this case, whether by hook or by crook, because it assigned the disputed 
leases to XTO Energy for $84 million.  Claugus and other unnamed parties seeking 
relief from this court were told below that they should have intervened in the 
Seventh District—and that remains the best option they have—to have intervened 
when they did not have notice.  It is laughable.  Jarndyce indeed. 
{¶ 47} “Unorthodox” does not adequately describe what happened in the 
courts below.  The trial court certified the class after deciding, on summary 
judgment, that the Beck Energy leases were invalid.  Not to be outdone, on 
September 26, 2013, the court of appeals, instead of decertifying the class as 
requested by Beck Energy, tolled all Beck Energy leases for both the named and 
unnamed plaintiffs as of October 1, 2012.  This reversed the trial court, which 
January Term, 2016 
 
15 
though it unreasonably certified the class, at least had the sense to realize that 
parties with notice of the suit should be treated differently from those without 
notice.  The court of appeals then ruled in Hupp v. Beck Energy Corp., 2014-Ohio-
4255, 20 N.E.3d 732, ¶ 76 (7th Dist.), determining that the Beck Energy leases are 
not perpetual, but nevertheless continued the tolling for both named and unnamed 
plaintiffs until such date as this court accepted jurisdiction.  It is as if everyone 
associated with this case is determined to extend the leases for the benefit of Beck 
Energy and to the detriment of Claugus. 
{¶ 48} Moreover, the requirements of Civ.R. 23 on joinder are not met.  The 
class is not so large that joinder of all parties is impracticable.  The questions of law 
are not common to all parties.  At least one party, Claugus, believed its lease with 
Beck Energy was valid and was prepared to abide by its terms.  As noted above, 
the class argued before this court that the Beck Energy leases were perpetual and, 
therefore, invalid.  How can the class properly protect Claugus and other unnamed, 
unnotified parties who may believe in the validity of their own leases?  Given that, 
how can the class be certified?  This opposing point of view by unnamed proposed 
plaintiffs, who lacked notice, means that Civ.R. 23(A)(2), (3), and (4) could not 
possibly be met.  Unfortunately, the trial court did not even inquire into this issue.  
Furthermore, it is clear that the certification of the class resulted in the denial of 
due process to Claugus (no notice and no opportunity to opt out) and adversely 
affected the property and contract rights of Claugus and other similarly situated 
unnamed class members.  On this basis alone, this court should grant the writs and 
relief sought by Claugus. 
{¶ 49} A postscript in keeping with the trials and tribulations of Jarndyce 
and Jarndyce.  When the attorney for the named, but no longer present, plaintiffs 
filed this action in September 2011, West Texas Intermediate oil was $85.62 per 
barrel.  When tolling began in October 2012, the price was $89.52; when the trial 
court granted class certification, it was $95.30; when the Seventh District issued 
SUPREME COURT OF OHIO 
 
16 
the tolling order in September 2013, it was $106.31; in September 2014, when the 
Seventh District decided the Hupp case, oil was at $93.35; when this court accepted 
jurisdiction of the appeal in January 2015, oil stood at $47.60; and today as we 
decide this case, the price is hovering below $30 per barrel.  See 
http://www.indexmundi.com/commodities/?commodity=crude-oil-west-texas-
intermediate&months=120 (accessed Jan. 19, 2016).  Natural gas prices have also 
crashed 
during 
the 
course 
of 
this 
litigation. 
 
See 
http://www.indexmundi.com/commodities/?commodity=natural-
gas&months=120 (accessed Jan. 19, 2016).  Although the true cost of 
production for eastern Ohio shale oil and gas is unknowable by this court, it is 
generally regarded to be significantly above current market prices. 
{¶ 50} Who are the winners in this case?  As noted, the undisputed winner 
is Beck Energy, which presciently unloaded its leases to XTO Energy for $89 
million at a time when prices were significantly higher than they are now.  It is 
possible that XTO Energy will be able to develop some of the leased properties, 
whether to block competitors or because of proximity to previously installed 
pipelines.  For many of the unnamed class plaintiffs, the future is cloudy at best, 
though a winning scenario is difficult to imagine.  We know that none of them will 
be able, based on today’s market prices, to lease their property to Gulfport or other 
oil and gas producers for the $7,000 per acre that Claugus had negotiated.  And we 
know that they won’t be able to do that because of a specious argument made by a 
lawyer in Akron, Ohio, who took a swing for the bleachers on behalf of over 700 
property owners without their knowledge or consent. 
{¶ 51} We all have regrets, usually because of something we did wrong, 
something we could and should have done differently.  In this case, the landowner 
families affected regret that the courts of Ohio did not protect them from the 
machinations of a lawyer who did not even represent them.  They will drink their 
January Term, 2016 
 
17 
morning coffee, dreaming of what might have been, of what this court could and 
should have done. 
O’DONNELL, J., concurs in the foregoing opinion. 
_____________________ 
Critchfield, Critchfield & Johnston, Ltd., Daniel H. Plumly, and Andrew P. 
Lycans, for relator in case No. 2014-0423. 
Michael DeWine, Attorney General, and Sarah Pierce and Tiffany Carwile, 
Assistant Attorneys General, for respondents in case No. 2014-0423. 
Slater & Zurz, L.L.P., Richard V. Zurz Jr., and Mark A. Ropchock, for 
appellants in case No. 2014-1933. 
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A., Scott M. 
Zurakowski, William G. Williams, Gregory W. Watts, and Aletha M. Carver, for 
appellee in case No. 2014-1933 and intervening respondent in case No. 2014-0423. 
Reed Smith, L.L.P., and Kevin C. Abbott; and Brouse McDowell, L.P.A., 
and Clair E. Dickinson, in support of respondents in case No. 2014-0423 and urging 
affirmance in case No. 2014-1933 for amicus curiae XTO Energy, Inc. 
Vorys, Sater, Seymour & Pease, L.L.P., John K. Keller, and Timothy B. 
McGranor in support of respondents in case No. 2014-0423 and urging affirmance 
in case No. 2014-1933 for amici curiae Ohio Oil and Gas Association, Enervest, 
Ltd., Artex Oil Company, Artex Energz Group, L.L.C., Sierra Buckeye, L.L.C., 
Eclipse Resources Corporation, and Hilcorp Energy Company. 
Burleson, L.L.P., Kevin L. Colosimo, Kristin M. McCormish, Michael 
Vennum, and Daniel P. Craig, in support of intervening respondent in case No. 
2014-0423. 
_____________________