Rice Energy being sued by Belmont County lessee for Breach of Contract

Started June 5, 2017 at 03:55 pm by @belmontlandowner in Belmont County, OH

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06/05/17 03:55:08PM

It appears that per a notice in the Times Leader dated 05/30 - Rice Energy is being sued for Breach of Contract by a lessee because Rice Energy (Rice Drilling) is seeking out and signing new leases with people that Rice is now claiming are 'heirs' to minerals that Rice previously signed leases to. The lessee in the lawsuit has had their royalties discontinued by Rice even though they have a Quiet Title action approved and filed with the Belmont County Court, and filed a Notice of Abandonment per the 2006 DMA.  The original lessees also effected by this are those who had regained the mineral rights to their land through a Notice of Abandonment filing per the 2006 DMA code. Most of these new found heirs reside out of state. Rice is also buying these same mineral rights if the 'heir' won't agree to lease the minerals.  The original lease appears to remain on the books, while behind the backs of lessees Rice seeks out other unsubstantiated holders to the mineral rights and signs another lease with them. I'm sure more will be to come with this as many current lessees are being impacted by this and they don't even know it as Rice is not notifying the lessee that they are doing this.

06/05/17 04:38:12PM @gh:

Can you really blame Rice for this?  They want to make sure they own leases for their properties from the right lessors.  DMA needs to be solved once and for all in Ohio so that this doesn't happen.

Sonya Frederick
06/05/17 05:56:35PM @sonya-frederick:

I don't think belmontlandowner is saying that Rice shouldn't cover their backs.  What he is saying is that Rice is holding royalty payments in escrow for months because of these claims.  AND they are going behind the backs of the landowners and buying/leasing the mineral rights from these "heirs" without letting the landowner know what is going on.  I can't speak for others who are leased with Rice, but according to our lease, this would be a breach of contract.  

Sonya Frederick
06/05/17 05:43:18PM @sonya-frederick:

Yes, there will be more.  We are in the same boat.  Can you provide a link to the notice?

06/06/17 12:36:04PM @belmontlandowner:

Sonya - it was in the Times Leader 5/30 paper edition. I don't see where the newspaper displays these notices on the web site version of the newspaper. If anyone knows where to find it on the web, can you send the link?

06/06/17 12:41:41PM @belmontlandowner:

Since this is happening to so many people, is it possible to bring a class action suit against Rice? This would help in minimizing the legal costs per lessee.

06/20/17 08:32:49PM @williet57:

wonder if someone could scan that notice that was in the Times Leader last month. Was not in the archives. Originally from St.Clairsville , live in Reynoldsburg last 25 years.We have some interest in this happening. Would appreciate if they could scan it  here in this discussion. Thanks 

Jeremiah Johnson
06/06/17 04:22:36PM @jeremiah-johnson:


it was solved once and for all. If you filed quiet title using the 89 DMA prior to the 2006 DMA act,  The 89 actions apply. After 2006 the new DMA applied.  The original post states that the 2006 DMA was followed and quiet  title action following the 2006 quide lines was filed. Now it appears Rice is deciding that they can pick and choose who they have to deal with regardless of the quiet title action.  Should be interesting. Since I am signed with Rice, and have a quiet title action under the 2006 DMA, I am quite concerned.

06/20/17 12:41:56PM @belmontlandowner:

I see that Rice is now selling to EQT. What impact will that have on those lessees who are suing Rice for Breach of Contract?

06/29/17 11:59:02AM @belmontlandowner:

I have a scanned copy of the lawsuit notice that was posted in the paper but I don't know how to scan it in to this site.  The notice was posted for six weeks beginning on 05/30 with the last notice posted on 06/18. 

06/29/17 12:11:11PM @belmontlandowner:

The lawsuit is also claiming punitive damages from Rice and the new lessees who claim they are heirs. Wonder if Rice informed all of these people that they can be sued because they are signing leases to property that has already been ruled by the courts as belonging to someone else? I'll bet not.

06/29/17 01:46:39PM @sonyafrederick:

I have photos of the publication that can easily be attached if anyone would like.  They are not the best quality, but can be read.  Let me know if anyone is interested and I will upload them tonight.

06/29/17 03:11:21PM @williet57:

can you post it here  I live in Reynoldsburg and will not get to see it,since I do not get down there very much. or I can send you my email and send to me.I think if posted here there would be other persons interested.. Thanks

Sonya Frederick
07/04/17 06:09:52AM @sonya-frederick:
Hope you can read it.
IMG_4486.JPG.jpg  •  773KB

IMG_4487.JPG.jpg  •  689KB

07/04/17 10:03:01AM @williet57:

Thanks yes I can read it.interesting. Our is in Smith Twpship where we  were dscovered to be  the mineral rights holders. Thanks again

07/04/17 09:36:58PM @belmontlandowner:
I hope you've done your homework Williet and made sure that the mineral rights you are claiming are in fact free and clear. Otherwise you may find that you could be sued by the person who has filed a Notice of Abandonment. Taking the Gas company's word for it really isn't enough.
07/05/17 08:28:49AM @williet57:

I am taking the landmans word for it.I have 16 other cousins  that are in the same lease

08/03/17 11:05:31AM @mrmojorisin:

We are part of a lease that turned into a joint effort between Gulfport (56%) Rice (44%).  We have been getting royalty payments from Gulport since April, but have yet to be given a division order from Rice.  Isn't there some timeline they are required to follow, or are they allowed to keep royalties in escrow for eternity?  More serious question is whether they are searching for former owners to sign a more favorable lease with?  What resources does one have to get some answers?

Jeremiah Johnson
08/03/17 03:12:41PM @jeremiah-johnson:

@mrmojorisin: have you called Rice and asked whats up?

08/03/17 03:20:56PM @mrmojorisin:

Not a phone call as i couldn't get to anyone that claimed to be able to help me.  I found a customer service email address and shot them an email several months ago and got the following reply "Please be advise that correspondence for XXXXXX Unit has not finalized and you will be notified when the Division Orders are prepared."  Haven't heard anything since.

Jeremiah Johnson
08/03/17 07:55:33PM @jeremiah-johnson:

all I can say is squeaky wheel gets the grease. I would be such a pain in the ass for them. No way I would be silent and let them not pay me

01/23/18 01:12:37PM @belmontlandowner:

Another court case with Rice being sued for Breach of Contract. Both cases are to be heard this year. The case referenced in the original post is to be heard in April of 2018, while the second case has a hearing scheduled for February. I'll post the outcome when it's decided. Both of these cases stem from Rice claiming that the surface owners didn't perform the necessary Due Diligence under the 2006 DMA. Both surface owners published the Notice of Abandonment in the Times Leader per the 2006 DMA statute. In our situation we did the same thing, but Rice's representative claims that we should have searched for descendants on Ancestry.com and sent certified letters to those people to see if they were heirs. Rice made this determination all on their own even before a court has decided what is reasonable diligence in seeking out a holder from over 110 years ago. In our case, the holder wasn't the land owner, but someone who bought a percentage of the mineral rights. No full name or address is listed on the mineral deed. Only first and middle initials and a last name.   

We're waiting to see how these two cases are resolved before pursuing any action with our situation. If anyone has a similar case or has resolved a similar situation, please post.

01/23/18 10:00:50PM @sonyafrederick:

We have the exact same situation as you, @belmontlandowner.  Where did you see that the hearings will be April 2018 and February?  

01/23/18 10:35:50PM @belmontlandowner:
Sonya, the cases are listed on the Belmont County courts web site. I don't want to put their names on here but I can message you the court case numbers when I get back to my office tomorrow.
Jeremiah Johnson
02/28/18 04:30:38PM @jeremiah-johnson:


could you send me the case numbers

Jeremiah Johnson
02/28/18 04:28:43PM @jeremiah-johnson:

Same is happening to me and some other folks I know.

Signed with rice, well is with gulfport. Well is in production.

02/28/18 06:20:53PM @belmontlandowner:
Sent you the court case numbers
07/11/18 12:44:48PM @belmontlandowner:

Update - Shilts v Beardmore - CASE NO. 16 MO 0003 -involves reasonable notice under the 2006 Dormant Mineral Act. Here is what the Seventh District Court of Appeals in Ohio said -

 Appellee took reasonable measures to
determine the names and addresses of the Beardmore/Moore heirs. When counsel’s
search did not reveal information regarding these heirs, it became clear that service
could not be completed through certified mail. Appellee then served notice by
publication and listed not only each of the Beardmores/Moores, but broadly included
their unknown heirs, devisees, executors, administrators, relicts, and next of kin.
Pursuant to R.C. 5301.56(E)(1), this service is sufficient. It would be absurd to
absolutely require an attempt at notice by certified mail when a reasonable search
fails to reveal addresses or even the names of potential heirs who must be served.
This record reflects that since Appellee was unable to complete service by certified
mail, service by publication, was appropriately obtained instead.

The case was appealed to the Ohio Supreme Court - case no 2018-0554 who on 07/05/2018 refused to hear the case. That means that the ruling by the Seventh District Court of Appeals stands. This means that those who followed the 2006 Dormant Mineral Act procedures and can prove that they used reasonable diligence in searching out heirs before publishing in the newspaper, have a legitimate claim to those minerals. 




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