Monday, July 22, 2013

Ohio Supreme Court Limits Class Action Suits

The Ohio Supreme Court in Stammco, L.L.C., v. United Tel. Co. of Ohio has rejected a proposed class action lawsuit against a telephone company and in doing so, tightened restrictions on class action lawsuits.  The Ohio Employer Law Blog has a good summary of the decision and its implications for Ohio employers:

“Stamcco is a huge victory for Ohio businesses. It is now that much harder to establish a class action, confirming that Ohio’s class-action rules fall in line with their federal counterparts.”

Friday, July 5, 2013

The Ohio Dormant Mineral Act

Increasing oil and gas discoveries in Ohio has led more and more property owners to search for profitable minerals on their land. However, surface landowners are often surprised to learn that they cannot drill on their property because another individual or entity owns the rights to the gas, oil, coal, or other minerals beneath the surface. Even though the property is undeveloped, the surface property owner cannot extract the minerals from the land – or lease the drilling rights – unless he or she also holds the underground rights.

The Ohio Dormant Mineral Act provides specific procedures for property owners to claim another landowner’s mineral rights to these undeveloped underground resources.

If you are a surface owner seeking to obtain rights in sub-surface resources, you are required to: 1) notify the mineral rights holder of your intent to declare his or her interest abandoned, and 2) 30 to 60 days later, file an affidavit of abandonment with the county recorder’s office. If the mineral rights owner does not act, the law considers his or her rights abandoned, and you will take possession of the underground mineral interest.

If you are the mineral rights owner, you have two options to preserve the interest. You can: 1) file a claim with the county recorder to preserve the interest, or 2) file an affidavit that identifies one of several specific events (such as the production of minerals or a title transaction) that has occurred on the land within the previous 20 years. These actions demonstrate to the property owner that the mineral rights have not been abandoned.

Regardless of whether you own the surface rights or the mineral rights, following the proper procedural steps are essential to preserving your rights, and it is advisable to consult an attorney before proceeding.

Tuesday, July 2, 2013

Indemnification in Property Management Agreements

An important part of a management agreement between property owners and property managers is the indemnification clause, in which the owner protects the manager from certain types of liabilities. In the sample clause below, the owner indemnifies the manager against all claims except for five specific exclusions:

Owner shall indemnify and hold harmless Manager against any and all claims made against Manager arising out of the management, ownership, leasing, supervision or operation of the Property by Manager, except for claims arising from or related to (i) the gross negligence of Manager or its officers, agents, or employees; (ii) wrongful willful acts of Managers or its officers, agents or employees; (iii) acts or omissions of Manager or its officers, agents or employees which are outside of the scope of authority established by this Agreement or which are in breach of the obligations of Manager under this Agreement; (iv) misapplication of funds by Manager, its officers, agents or employees; or (v) fraud of Manager, its officers, agents or employees.

However, if the manager allegedly violates the Fair Housing Act, both the owner and manager may be sued by the aggrieved renter. While such actions may be considered gross negligence under the contract, it is wise to explicitly include a clause in the agreement of this type: “Manager will manage the property in full compliance with the requirements of the Fair Housing Act, and Manager is authorized to take those steps deemed appropriate to effectuate the purposes of the Act.”

Since Ohio courts look to the plain language of indemnification clauses (see Stambaugh v. T.C. Wood Realty, Inc., 2010-Ohio-3763 (Ohio Ct. App. 2010)), it is important for property owners to consult an attorney to ensure that they are properly protected by the management agreement.