Vickers v. Capstone Holding

[Cite as Vickers v. Capstone Holding, 2025-Ohio-3172.]

IN THE COURT OF APPEALS OF OHIO

SEVENTH APPELLATE DISTRICT

JEFFERSON COUNTY

JOHN T. VICKERS et al.,

Plaintiffs-Appellees,

v.

CAPSTONE HOLDING et al.,

Defendants-Appellants.

OPINION AND JUDGMENT ENTRY

Case Nos. 24 JE 0023, 24 JE 0025

Civil Appeal from the

Court of Common Pleas of Jefferson County, Ohio

Case No. 23CV00013

BEFORE:

Carol Ann Robb, Mark A. Hanni, Katelyn Dickey, Judges.

JUDGMENT:

Affirmed.

Atty. Sara E. Fanning, RoetzeL & Andress, LPA, for John T. Vickers et al. and Atty.

Joshua E. O’Farrell, Buckingham, Doolittle &, Burroughs, LLC, for Angelo L. DiLuzio, for

Plaintiffs-Appellees,

Atty. John Kevin West, Atty. John C. Ferrell, Steptoe & Johnson PLLC, for Defendant

Gulfport Appalachia, LLC and Atty. Erik A. Schramm Sr., Atty. Erik A. Schramm Jr., Atty.

Kyle W. Bickford, Hanlon, McCormick, Schramm, Bickford & Schramm Co., LPA for

Defendant Capstone Holding Company.

Dated: September 4, 2025

–2–

Robb, P.J.

{¶1} Defendants-Appellants Capstone Holding Company and Gulfport

Appalachia, LLC appeal the judgment of the Jefferson County Common Pleas Court

entered in favor of Plaintiffs-Appellees John and Gail Vickers and Angelo DiLuzio

regarding the minerals underlying their property. The initial issues on appeal deal with a

1995 deed in which Capstone’s predecessor in title transferred the property to Appellees.

{¶2} First, Appellants argue the deed’s release clause is so broad that it bars an

action to have that same deed interpreted or enforced. However, we reject this argument

and conclude Appellees’ action based on deed interpretation and enforcement was not

barred by the release clause contained in the same deed transferring the property to

them.

{¶3} Second, Appellants argue the deed plainly created a new reservation of all

oil and gas to the grantor by “excepting and reserving all coal, oil, gas and other minerals,

mining rights and other rights and privileges heretofore conveyed” (even though there

were no prior reservations of oil and gas, only coal). They claim the phrase “heretofore

conveyed” was a mere irrelevant “false recital” while emphasizing a “subject to” clause

already served to give notice of prior encumbrances. Appellant Capstone adds an

alternative argument alleging if the language is ambiguous on whether the parties

intended to create a new mineral reservation for the deed grantor, then the extrinsic

evidence should be viewed as showing the grantor intended to transfer only the surface

to Appellees. However, the plain language of the deed and its “heretofore conveyed”

clause shows it excepted from transaction only minerals that were previously transferred

and did not create a new reservation of all minerals to the grantor (who was Capstone’s

predecessor in title).

{¶4} Lastly, Appellant Gulfport argues against the award of prejudgment interest

on the royalties it withheld. We reject Gulfport’s argument that withheld royalties were

not actually “due and payable” under the prejudgment interest statute. The clause in

Appellees’ lease allowing Gulfport to “withhold payments that would otherwise be due

and payable” until adverse title claims were fully resolved did not eliminate the statutory

right to interest on the withheld amounts.

{¶5} For the following reasons, Appellants’ arguments lack merit, and the trial

court’s judgment is affirmed.

Case Nos. 24 JE 0023, 24 JE 0025

–3–

STATEMENT OF THE CASE

{¶6} In 1992, R & F Coal Company purchased the subject 67.262 acres of

property in Jefferson County from Seaway Coal Company with no oil and gas reservation.

The prior chain of title contained certain coal reservations but no prior encumbrance of

the oil and gas or other minerals.

{¶7} In October 1995, Rich Pilney signed an auction purchase contract to

purchase the property. Specifics were added to the form contract. In the blank space

after “It is further agreed by both parties that,” the following terms were added: “all parcels

being sold by the acre, and subject to easements, restrictions, and conditions of record

and excepting any previously conveyed coal and mineral rights.”

{¶8} In the resulting December 1995 limited warranty deed, R & F Coal Company

conveyed the property to Appellee John Vickers, Appellee Angelo DiLuzio, and Rich

Pilney. (Vol. 182, P. 805). Pilney conveyed his interest to DiLuzio in 2001.

{¶9} This 1995 deed said it was “UNDER AND SUBJECT to any and all

exceptions, reservations, restrictions, easements, rights of way, highways, estates,

covenants and conditions apparent on the record or shown by instruments of record.”

{¶10} The next sentence read, “EXCEPTING AND RESERVING all coal, oil, gas

and other minerals, mining rights and other rights and privileges heretofore conveyed.”

{¶11} The deed discussed prior mining operations and included a waiver of any

claims for damages due to those activities or related subsidence. The next sentence had

the grantees acknowledge they inspected the property and concluded by stating the

grantees released R & F Coal Company (and successors and assigns) from any and all

liability or actions, present or future, arising in connection with the property.

{¶12} In 1999, R & F Coal Company merged into R & F Coal, LLC, which then

merged into Appellant Capstone Holding Company. In 2007, Capstone leased the oil and

gas under multiple holdings; the subject property was included in the leased acreage.

(Capstone Lease); (2007 Memorandum of Lease and 2008 Addendum, recorded

3/9/09).1

1 The 2007 Capstone Lease was signed by Capstone’s President John P. Dutton, who was also a witness

to the 1995 deed from R & F Coal Company to Vicker, DiLuzio, and their former co-tenant (the latter of

whom signed the auction purchase contract provided by Dutton Auction and Realty Co.). Dutton’s affidavit

said he was the senior landman at R & F Coal Company at the time of the 1995 deed.

Case Nos. 24 JE 0023, 24 JE 0025

–4–

{¶13} The rights of the lessee under the Capstone Lease were assigned multiple

times over the years. In the summer of 2018, Gulfport acquired the lessee rights under

the Capstone Lease for certain depths (600 feet above to 200 feet below “the top of the

Trenton Limestone Formation”).2

{¶14} Months prior to this (in the spring of 2018), Gulfport entered oil and gas

leases with Appellees regarding the same property. (Vickers Lease; DiLuzio Lease).

Gulfport thereafter pooled the property and formed two units (in 2020 and 2021). Gulfport

withheld royalties from Appellees under the Vickers Lease and the DiLuzio Lease due to

the Capstone Lease and Capstone’s claim of ownership of the oil and gas despite the

1995 deed from its predecessor in title to Appellees.

{¶15} In 2023, Appellees John and Gail Vickers filed a complaint against

Capstone and Gulfport. Appellee Angelo DiLuzio was originally named as a defendant,

but the trial court realigned him as a plaintiff upon joint request. (6/15/23 J.E.). Appellees

asked the court to declare the 1995 deed they received from R & F Coal Company did

not reserve any oil and gas (or other never-before-encumbered minerals), the 2007

Capstone Lease was null and void as to the oil and gas under the subject property, and

Appellees’ 2018 leases with Gulfport were the only oil and gas leases encumbering the

property. Correspondingly, they sought quiet title to the oil, gas, and other minerals

underlying the property and to any claims related to the Capstone Lease adverse to their

interest. Lastly, they asserted a breach of contract claim against Gulfport and sought an

accounting and payment of the royalties owed for the oil and gas produced from the

property plus interest.

{¶16} Appellants filed Civ.R. 12(B)(6) motions to dismiss claiming the plain

language of the deed showed R & F Coal Company retained all oil and gas under the

excepting and reserving clause and/or showed Appellee released this type of future claim.

The trial court denied the motions to dismiss. (6/15/23 J.E.).

{¶17} In subsequently answering the complaint, Appellants filed counterclaims

seeking quiet title and declarations that R & F Coal Company reserved all oil and gas

2 The party assigning those rights to Gulfport under the Capstone Lease, Ascent Resources–Utica, LLC,

was originally named a defendant in this action but was dismissed from the case by stipulation after

disclaiming any interest in the Capstone Lease as related to the subject property.

Case Nos. 24 JE 0023, 24 JE 0025

–5–

through the 1995 deed, the deed contained a release of all future claims including this

one, and the Capstone Lease was valid.

{¶18} Each Appellant thereafter filed a motion for summary judgment, arguing the

action was barred by the 1995 deed’s release clause and the deed clearly reserved the

oil and gas in any event. Appellant Capstone’s motion additionally argued if the deed’s

excepting and reserving clause was ambiguous, then the extrinsic evidence showed an

intent to transfer only the surface to Appellees.

{¶19} Appellees filed a competing summary judgment motion on these title issues

and also sought summary judgment on the amount of royalties withheld by Gulfport with

interest. On the latter topic, Gulfport argued the lease allowed the withholding of certain

costs that were not deducted from Appellees’ calculation.

{¶20} The court granted partial summary judgment to Appellees on the title issues

(in a strongly worded opinion calling Appellants’ arguments “far-fetched and ridiculous”).

In rejecting Appellants’ contention that the 1995 deed reserved the oil and gas to the

grantor, the court concluded the excepting and reserving clause plainly applied to only

those interests previously conveyed, emphasizing the words “heretofore conveyed.” In

rejecting Appellants’ argument on the action being barred by the deed’s release clause,

the court said the clause clearly did not release R & F Coal Company and successors or

assigns from future conduct, such as the conduct of leasing the oil and gas (in the 2007

Capstone Lease). (8/20/24 J.E.).3

{¶21} Thereafter, a bench trial was held on the issue of damages owed by

Appellant Gulfport to Appellees under the Vickers Lease and the DiLuzio Lease. Adopting

the landowners’ position on the royalty calculation, the trial court found the lease language

clear (“gross at the wellhead without costs” where “gross” was specifically defined in the

lease) and the court noted it “indulged” the parties by allowing extrinsic evidence to be

presented at trial on the cost issue. In addition to ordering Gulfport to pay Appellees

future royalties without deductions for costs, the court ordered Gulfport to pay Appellees

$862,556.32 in accrued unpaid royalties from the start of production through August 1,

2024, imposing both prejudgment and postjudgment interest at the statutory rate.

3 In discussing a statute of limitations issue, the court pointed out 21 years for adverse possession had not

passed since Capstone leased the oil and gas underlying Appellees’ property. Referring to an oral

argument about 21 years passing since the 1995 deed, the trial court pointed out this was a deed

enforcement not a deed reformation action. (8/20/24 J.E.).

Case Nos. 24 JE 0023, 24 JE 0025

–6–

(10/22/24 J.E.) (also adopting Appellant’s proposed findings of fact and conclusions of

law).

{¶22} Gulfport and Capstone each filed a notice of appeal. The cases were

consolidated. Capstone’s brief sets forth one assignment of error challenging the

summary judgment by presenting three issues about the 1995 deed (plain language of

the release, plain language of the excepting and reserving clause, and extrinsic evidence

on intent to create a present reservation of oil and gas). Gulfport sets forth two

assignments of error, the first contains the two plain language arguments and the second

challenges the award of prejudgment interest.

DEED LANGUAGE

{¶23} Gulfport’s first assignment of error and Capstone’s sole assignment of error

provide, respectively:

“The trial court erred in granting summary judgment to the Surface Owners and

denying summary judgment to Gulfport.”

“The trial court erred in granting Plaintiffs-Appellees’ Motion for Summary

Judgment.”

{¶24} A court properly grants summary judgment if there are no genuine issues

as to material facts and the moving party is entitled to judgment as a matter of law. Civ.R.

56(C). Upon viewing any evidence submitted under Civ.R. 56 in the light most favorable

to the non-movant, the court must find reasonable minds can only come to a conclusion

in the movant's favor in order to grant summary judgment. Id.

{¶25} The decision to grant summary judgment is reviewed de novo. Bohlen v.

Anadarko E & P Onshore, L.L.C., 2017-Ohio-4025, ¶ 10. We also review matters of law

in a declaratory judgment action de novo. Arnott v. Arnott, 2012-Ohio-3208, ¶ 13-16.

“The construction of written contracts and instruments of conveyance is a matter of law.”

Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978), paragraph one of the

syllabus. Like other contracts and written instruments, the construction of a deed

presents a legal question reviewed de novo. Long Beach Assn., Inc. v. Jones, 82 Ohio

St.3d 574, 576 (1998).

{¶26} As explained by the Ohio Supreme Court, we are to review the contents

within “the four corners of the deed” and apply the plain and unambiguous language found

therein. LRC Realty, Inc. v. B.E.B. Props., 2020-Ohio-3196, ¶ 17.

Case Nos. 24 JE 0023, 24 JE 0025

–7–

Generally, courts presume that the intent of the parties to a contract resides

in the language they chose to employ in the agreement. Only when the

language of a contract is unclear or ambiguous, or when the circumstances

surrounding the agreement invest the language of the contract with a

special meaning will extrinsic evidence be considered in an effort to give

effect to the parties' intentions. When the terms in a contract are

unambiguous, courts will not in effect create a new contract by finding an

intent not expressed in the clear language employed by the parties.

Shifrin v. Forest City Ents., Inc., 64 Ohio St.3d 635, 638 (1992).

{¶27} The Supreme Court further notes that words or phrases should not be read

in isolation. Dominish v. Nationwide Ins. Co., 2011-Ohio-4102, ¶ 8. Common words are

given their ordinary meaning unless a “manifest absurdity” would result or the instrument

clearly evidences some other meaning. Shifrin at 638 (also stating, “If no ambiguity

appears on the face of the instrument, parol evidence cannot be considered in an effort

to demonstrate such an ambiguity.”). As repeatedly emphasized by the Supreme Court,

“If we are able to determine the intent of the parties from the plain language of the

agreement, then there is no need to interpret the contract.” Saunders v. Mortensen, 2004-

Ohio-24, ¶ 9.

{¶28} A secondary rule of contract construction construing language against the

drafter can only be applied if the contract is ambiguous and the extrinsic evidence fails to

clarify the parties’ intent or the meaning of a term. Corso v. Miser, 2020-Ohio-5293, ¶ 27-

28 (7th Dist.) (while observing parol evidence is used to interpret ambiguity not to

contradict words), citing Cadle v. D'Amico, 2016-Ohio-4747, ¶ 33 (7th Dist.) (with the

grantor of a deed generally considered the drafter). Nonetheless, as set forth above,

summary judgment evidence is construed in favor of the non-movant. Civ.R. 56(C). In

the event parol evidence can be viewed (due to the aforementioned legal finding of

ambiguity or special meaning requiring a factual determination of intent at the summary

judgment stage), then the court (without weighing the evidence) asks if reasonable minds

could differ after viewing the extrinsic evidence. Inland Refuse Transfer Co. v. Browning-

Ferris Indus. of Ohio, Inc., 15 Ohio St.3d 321, 324 (1984); see also Tera, L.L.C. v. Rice

Drilling D, L.L.C., 2024-Ohio-1945, ¶ 12, 18-19 (“whether a contract is ambiguous is a

question of law, but the resolution of an ambiguous term in a contract is a question of

fact”).

Case Nos. 24 JE 0023, 24 JE 0025

–8–

{¶29} Yet, as the Supreme Court emphasizes, a written instrument is not

ambiguous unless its terms are “susceptible to more than one reasonable interpretation.”

Corder v. Ohio Edison Co., 2024-Ohio-5432, ¶ 14. “The mere fact that a contract's text

might be subject to competing interpretations does not mean that the text is ambiguous.”

Id. If one of the competing interpretations of a term in a deed conflicts with the deed's

purpose or structure or if it strains ordinary usage, then it cannot be considered

reasonable. Id. With these premises in mind, we turn to the first issue.

Deed Issue One: Plain Language of Release Clause

{¶30} First, Appellants argue the trial court erred in failing to enforce the release

clause in the 1995 deed so as to prohibit Appellees from proceeding with this lawsuit

seeking quiet title and a declaration on the meaning of that deed. The final two clauses

of the deed state:

By accepting this deed Grantees acknowledge that mining

operations have been conducted on and under the premises and Grantees

specifically waive and release any and all claims for damages as a result of

such mining activities or related subsidence.

By accepting this deed Grantees also acknowledge that they have

inspected the premises and are acquiring the same as a result of such

inspection in its present condition and circumstance, and by accepting this

deed and as a part of the consideration for this conveyance, Grantees

covenant and agree to assume any and all risks of the premises and

Grantees, for themselves, their heirs and assigns, hereby expressly waive

all rights relative to and releases the Grantor, its successors and assigns,

from any and all liability, claims, demands, actions or causes of action,

present or future, legal or equitable, of every kind, nature and description,

arising in any manner in connection with the property or said mining

operations.

(1995 Deed from R & F Coal Company to Appellees, Vol. 182, P. 805).

{¶31} Appellants contend this unambiguous release of all causes of action arising

in any manner in connection with the property should have been enforced here because

Appellees’ cause of action arose in connection with the property in some manner. They

assert the language of the release is not limited to mining activities or even the physical

condition or circumstances of the property in 1995. They conclude the trial court’s

Case Nos. 24 JE 0023, 24 JE 0025

–9–

statement that the release would not apply to “future conduct” is contrary to the clear

release of “all . . . causes of action, present or future, legal or equitable, of every kind,

nature and description, arising in any manner in connection with the property or said

mining operations.” (Emphasis added.) Id.

{¶32} General principles of estoppel or estoppel by deed are outlined by Appellant

Capstone with an argument that Appellees are barred from denying the release within the

deed because the grantor’s successor relied on the deed in leasing the oil and gas. See,

e.g., Thompson v. McVey, 2006-Ohio-7036, ¶ 13-14 (12th Dist.). However, this cited

case then pointed out the doctrine was inapplicable where the party to the deed was not

denying statements in the deed and the estoppel doctrine would require the other’s

reliance on a misleading factual misrepresentation. Id.

{¶33} Appellants emphasize, “A release is a contract that is favored by the law to

encourage the private resolution of disputes.” Lewis v. Mathes, 2005-Ohio-1975, ¶ 14

(4th Dist.). “A release of a cause of action ordinarily acts as an absolute bar to any later

action on any claim encompassed within the release.” Id., citing Haller v. Borror Corp.,

50 Ohio St.3d 10, 13 (1990).

{¶34} Appellees counter by emphasizing the “encompassed within the release”

portion of this quote.4 They point out their claims do not deal with the condition or

circumstance of the property and maintain the trial court correctly concluded the release

language did not bar a deed interpretation action. They describe Appellants’ argument

(about the release prohibiting a suit enforcing or interpreting the 1995 deed itself) as

absurd, pointing out the conduct of encumbering the oil and gas did not occur until

Capstone leased those minerals in 2007 (recorded in 2009).

4 Appellees also initially argue Gulfport cannot enforce the release because it was not a party to the deed.

However, the general third-party beneficiary law they cite does not bar a party seeking to enforce a property

right (a lessee of a lease covering certain depths) from citing portions of the deed under which his lessor is

claiming title to the minerals (in an action where the grantees in that deed were claiming the deed conveyed

all minerals to them). As explained by the Ohio Supreme Court, an oil and gas lease transfers to the lessee

a fee simple determinable in the mineral estate. Chesapeake Expl., L.L.C. v. Buell, 2015-Ohio-4551, ¶ 61

(with a reversionary interest retained by the lessor). Moreover, the release specifically covered the

“Grantor, its successors and assigns.” Regardless, Appellees do not make this argument about Capstone,

the successor (by merger) to the deed’s grantor. As Capstone is challenging the release as well, the trial

court’s decision on the release would have to be reviewed regardless of Appellees’ argument on Gulfport’s

ability to present an argument in favor of enforcing of it.

Case Nos. 24 JE 0023, 24 JE 0025

– 10 –

{¶35} In reply, Appellants suggest we should not endeavor to envision all the

future unjust actions R & F Coal Company and its successors or assigns could take in

connection with the property, asserting a clear release is binding regardless of the

resulting belief of injustice. They argue if deed grantees wish to be entitled to seek future

deed interpretation by a court (or even to legally protest the taking of the property), they

should insert language into any release of claims in order to except such future conduct

by the grantors or their successors or assigns from the ban on future actions.

{¶36} Appellants cite a case finding a “broadly worded” release clearly and

unambiguously included “any and all other claims” between the parties “past, present, or

future” because it did not “specifically exclude any type of claim.” Owens v. Bridgestone,

2020-Ohio-5156, ¶ 18 (10th Dist.) (in regards to a spoliation of evidence claim). However,

the Tenth District also observed “a person executing a broadly worded release has a duty

to investigate whether there are certain claims he or she wishes to exclude from the scope

of the release.” Id. Here, the grantee could not investigate (prior to accepting the deed)

whether the coal company grantor’s successor may (12 years later) try to interpret that

very deed as creating a new reservation of all oil and gas. Moreover, the Tenth District

warned, “releases from liability for future tortious conduct are generally disfavored by the

law and will be narrowly construed,” before concluding such releases bar future tort

liability “where the intent of the parties is stated in clear and unambiguous terms.”

(Emphasis added.) Id. at ¶ 18.

{¶37} Appellant Gulfport emphasizes the Supreme Court’s Shifrin case, cited

above for the black letter law on plain language versus ambiguity. It is claimed the

situation in the case at bar is comparable to the Court’s decision applying the plain

language of two releases while rejecting a plaintiff’s argument that “the parties would not

have agreed that Forest City was obligated to pay Shifrin's distributive share during the

interim period without providing Shifrin the means legally to enforce such payments . . .”

Shifrin, 64 Ohio St.3d at 639 (where the defendant bought out the plaintiff from their

general partnership under an auction agreement and then an agreement assigning the

partnership interest, both containing a release).5

5 In Shifrin, the release in the auction agreement was effective on consummation and released “all claims of every kind

with respect to the partnership from its inception and the Property” (with one exception); the release in the agreement

assigning the partnership interest was effective on the date of the transfer and released all “claims against the

Partnership or liability under any claims, legal or equitable, proceedings, suits, judgments, decrees, liabilities,

obligations and/or taxes, which accrue on or after the effective date hereof . . .” Shifrin, 64 Ohio St.3d at 638-639, fn.

3-4.

Case Nos. 24 JE 0023, 24 JE 0025

– 11 –

{¶38} However, the facts and arguments in that case are distinguishable. Those

releases were made after the agreement the plaintiff was attempting to apply while

proposing a calculation of the amount due. See id. at 636-637. The Supreme Court did

not hold the plaintiff was barred from asking for an interpretation of the agreements

containing the releases. Moreover, the Shifrin plaintiff was attempting to prove “latent

ambiguity” in the releases by pointing to a partial distribution paid to him for an interim

period and by presenting testimonial evidence on intent to pay him some amount during

the interim period. See id. at 637-639. In the case at bar, the trial court did not find the

release clause was ambiguous but rather found it to be plain and unambiguous in favor

of Appellees.

{¶39} In doing so, the trial court considered the language at the beginning of the

very sentence at issue in the release clause, dealing with the property’s “present condition

and circumstance.” The court concluded the subsequent reference to releasing “present

and future” claims would include future damage caused by the condition and

circumstance at the time of the deed but would not include future conduct newly inflicted

upon Appellees. Here, the future conduct was Capstone acting as a lessor and signing

the 2007 lease of the property’s oil and gas. The trial court did not create a new clause

by ignoring words used in the four corners of the deed or find the plain language was

contrary to the parties’ intention at drafting as alleged by Appellants.

{¶40} Contrary to Appellants’ argument, the release clause in the deed did not bar

a future action to interpret that very deed (such as an action seeking a declaration of

whether minerals were reserved in the same deed containing the release clause). In a

single sentence, the grantees acknowledged they were acquiring the property in its

“present condition and circumstance” after inspection, agreed to assume all risks of the

premises, and “waive[d] all rights relative to and release[d] the Grantor, its successors

and assigns, from any and all liability, claims, demands, actions or causes of action,

present or future, legal or equitable, of every kind, nature and description, arising in any

manner in connection with the property or said mining operations.” The end of the

sentence must be read in context with the other parts of the sentence and any

incorporated sentence.

{¶41} The ending phrase “or said mining operations” refers the reader to the prior

sentence: “By accepting this deed Grantees acknowledge that mining operations have

Case Nos. 24 JE 0023, 24 JE 0025

– 12 –

been conducted on and under the premises and Grantees specifically waive and release

any and all claims for damages as a result of such mining activities or related subsidence.”

{¶42} Appellants assert the second sentence in the release clause did not relate

solely to mining operations because it concludes with “in connection with the property or

said mining operations.” (Emphasis added.) (1995 Deed). Nevertheless, clearly this

does not indicate the use of the word “property” before “or said mining operations”

demonstrated the grantees can never ask for deed interpretation.

{¶43} No reasonable person could read the release (along with the overall content

of the deed) as meaning the property grantees are forever barred from arguing to a court

that the grantor or successors were acting contrary to the very deed containing the

release (such as by entering the property and camping, cutting trees, taking minerals

when none were reserved to the grantor, taking a different type of mineral than reserved,

or ignoring the deed all together and reselling the property). The court must give effect

to the language of the writing using the only reasonable interpretation that carries out the

purpose for which it was created without straining ordinary usage. See, e.g., Corder,

2024-Ohio-5432, at ¶ 14, 16 (competing interpretations do not make plain language

ambiguous if one interpretation is not reasonable). The purpose of the 1995 deed was to

convey the property to the grantees, and the release clause was speaking of claims

arising out of the property’s condition and circumstance even if they manifest in the future.

{¶44} Regardless, the cited language in the release clause did not render the

grantees and their heirs and assigns subject to the future will of the grantor and their

successors to retake the land or mine for any minerals it claims it reserved with no ability

for court interpretation of the very deed containing the release itself. Reading the release

in the deed as meaning the grantor or its successors are immune from liability for any of

their future conduct toward the property or as meaning that the grantees waived the right

to have a court interpret what was transferred by the same deed would be a “manifest

absurdity.” See Shifrin, 64 Ohio St.3d at 638.

{¶45} In fact and alternatively, Appellants’ construction of the release would make

much, if not all, of the deed essentially meaningless. See generally Saunders, 2004-

Ohio-24, at ¶ 16 (where the Supreme Court explained the intent of each portion of a

contract is gathered from a consideration of the entire contract and the court must give

effect to each provision but only if it is reasonable to do so), citing, e.g., Foster Wheeler

Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78 Ohio St.3d 353, 361,

Case Nos. 24 JE 0023, 24 JE 0025

– 13 –

363 (1997) (in applying the plain language of a construction contract, the Court reversed

the appellate court and reinstated a trial court’s summary judgment emphasizing the court

must “avoid any interpretation of one part which will annul another part”).

{¶46} In sum, a plain reading of the deed and its release clause (with language

about waiving and releasing all causes of action, present or future, of every kind arising

in any manner in connection with the property) does not release the grantor from future

acts taken against the property in contravention of the grantees’ rights under the deed.

(Whether those acts were performed in contravention of the grantees’ rights under the

deed is the next question.) Consequently, the trial court did not err in holding the release

clause in the deed did not bar this action seeking to apply or interpret the deed.

Deed Issue Two: Plain Language of Excepting and Reserving Clause

{¶47} After setting forth the property description and prior instrument reference,

the 1995 deed stated:

UNDER AND SUBJECT to any and all exceptions, reservations,

restrictions, easements, rights of way, highways, estates, covenants and

conditions apparent on the record or shown by instruments of record.

EXCEPTING AND RESERVING all coal, oil, gas and other minerals,

mining rights and other rights and privileges heretofore conveyed.

(1995 Deed from R & F Coal Company to Appellees, Vol. 182, P. 805).

{¶48} Appellees’ lawsuit was based on the position that this excepting and

reserving clause did not constitute a present exception of all minerals in favor of the

grantor (i.e., it was not a new mineral reservation). Their summary judgment motion

asserted the language unambiguously granted them all minerals that were not conveyed

prior to the 1995 deed. As recited by Appellees, heretofore means “before this time” and

conveyed means transferred, citing Black’s Law Dictionary (11th Ed. 2019).

{¶49} The trial court agreed with Appellees’ plain language argument and rejected

the opposing legal contention of Appellants Capstone and Gulfport, which claimed the

deed excepted and reserved all oil and gas whether or not it had been previously

conveyed. The court found the deed unambiguously reserved “only those interests

previously conveyed and existing” because the phrase “heretofore conveyed” clearly

limited the mineral reservation, rendering the excepting and reserving clause only

applicable to “all coal, oil, gas and other minerals, mining rights and other rights and

privileges” that had in fact been heretofore conveyed.

Case Nos. 24 JE 0023, 24 JE 0025

– 14 –

{¶50} On appeal, Appellants maintain the excepting and reserving clause

unambiguously constituted a new reservation of all of the oil and gas underlying the

property. In doing so, they claim this construction is the only way to give meaning to both

the subject and the excepting and reserving clauses, citing Sunoco, Inc. v. Toledo Edison

Co., 2011-Ohio-2720, ¶ 54 (where possible, give effect to every contract provision; if a

construction of a “doubtful” provision would render a clause meaningless and another

construction would give the clause meaning, then the latter construction prevails).

Appellants point out a subject to clause protects the grantor’s warranty of title by giving

general notice that the deed is subject to instruments of record, citing Miller v. Lowery,

468 So.2d 865, 867 (Miss. 1985) (where the subject to clause merely protected the

grantor’s warranty of title and did not reserve the minerals without words of exception or

reservation). They conclude the trial court’s decision rendered the excepting and

reserving clause superfluous or partially repetitive, believing the court essentially

“lumped” it together with the subject to clause, which already served to give notice to

protect the grantor’s warranty of title as to prior conveyances of record.6

{¶51} Emphasizing the presence of these two deed clauses here, Appellant

Gulfport observes this court has pointed to the absence of two separate clauses when

considering whether deed language merely provided notice of a prior reservation. Corso,

2020-Ohio-5293, at ¶ 34 (7th Dist.) (“There is not a separate sentence that the grantor

was reserving and excepting the minerals for himself. And then, a separate sentence

giving notice of the prior coal conveyance.”). In Corso, the issue was whether the

excepting and reserving clause was a new reservation of oil and gas where it applied to

“all coal and minerals underlying the same with the right to mine and remove the same

as shown in the deed to Henry Wick, wherein said coal was conveyed . . .” Id. at ¶ 29-38

(considering the use of the term “minerals” at the time). We opined the language was

ambiguous because the “as shown in” phrase could “modify/limit the coal and minerals

when no minerals were conveyed in the Wick Coal Deed . . .” Id. at ¶ 38 (we then found

the extrinsic evidence did not clarify the intent, which allowed the invocation of the

6 Later, Capstone makes an alternative argument on ambiguous language allowing a review of extrinsic

evidence (in the form of affidavits on the intent of R & F Coal representatives). In that section, Capstone

reiterates the claim of a “duplicative coal exception” if the “heretofore conveyed” language in the excepting

and reserving clause is read to cover only prior mineral conveyances (due to the subject to clause giving

notice of prior recorded conveyances). We note the parties do not dispute what the conveyances prior to

the 1995 deed included.

Case Nos. 24 JE 0023, 24 JE 0025

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construction against the grantor rule, resulting in the language being construed against

the grantor as reserving no oil and gas).

{¶52} First, we note Appellant Gulfport (the party citing this case) is not arguing

the deed was ambiguous. Appellant Capstone does set forth an alternative extrinsic

evidence argument, which is addressed in the next section. However, Capstone’s brief

(filed three weeks after Gulfport’s brief) avoids citing Corso. This is likely because other

statements in Corso are unfavorable to Appellants’ plain language argument.

{¶53} Specifically, the Corso case observed the dispositive deed did not use

phraseology such as “heretofore sold and conveyed” (as was used in a prior deed). Id.

at ¶ 37-38. We described such phrase as “limiting language” and thereby suggested the

use of that phrase would have plainly limited the reservation to minerals already

conveyed. Id.

{¶54} Moreover, our court subsequently ruled on a deed containing the

“previously conveyed” phrase (which phrase is not argued to be distinct from the

“heretofore conveyed” phrase used here). Kocher v. Ascent Resources-Utica, LLC, 2023-

Ohio-3592 (7th Dist.). Appellees cited Kocher as precedential to the trial court and

continue to maintain their reliance on it. In arguing the phrase does not limit the rights

excepted and reserved but rather was an erroneous recital of a conveyance that did not

occur in the past, Appellants ask us to refrain from applying our Kocher holding.

{¶55} In Kocher, an estate deeded its one-tenth share of property to a coal

company in 1957; no minerals were reserved in this deed (from executor Rembish for the

estate of Belon). Id. at ¶ 29-31 (the coal company was granted the remaining shares of

the property in deeds “excepting and reserving all minerals except Vein Number Eight”).

In 2000, the coal company conveyed portions of the property to different grantees in

deeds containing the following clause: “EXCEPTING AND RESERVING all coal, oil, gas,

mineral rights and mining rights previously conveyed.” Id. at ¶ 33-36 (one deed

additionally said, “EXCLUDING all coal, oil, gas and mineral rights previously conveyed”).

{¶56} The coal company argued these deeds “included clear and unambiguous

new reservations of mineral rights” in its favor as the grantor (so as to retain any minerals

not previously conveyed), while the other side argued the grantees in the 2000 deeds

acquired all minerals not conveyed prior to the 2000 deeds. Id. at ¶ 44 (in an action

seeking quiet title under the Marketable Title Act). As to the former Rembish/Belon

interest, the trial court opined: “The ‘EXCEPTING AND RESERVING all coal, oil, gas,

Case Nos. 24 JE 0023, 24 JE 0025

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mineral rights previously conveyed language’ asserted by Bedway as a claim to

ownership of the Belon interest does not clearly except or reserve any oil and gas

minerals actually owned by Bedway Coal from the subject transactions. Whatever interest

Bedway had to the Belon interest was conveyed to the Defendants and/or their

predecessors in interest.” Id. at ¶ 44-45.

{¶57} In the Kocher appeal, it was argued the trial court erred in finding the 2000

deeds did not create reservations in favor of the coal company. Id. at ¶ 60-61 (addressing

the 1/10 interest conveyed to the coal company by the Rembish/Belon deed wherein no

minerals had been reserved by the grantor). We held:

The inclusion of the words “previously conveyed” makes it abundantly clear

[the coal company] was not creating a new reservation in its favor, but was

instead acknowledging and repeating that previous rights had been

excepted. This conclusion is consistent with a plain reading of the language

employed in the deed, and there is no ambiguity in this regard.

Kocher, 2023-Ohio-3592, at ¶ 64 (7th Dist.). We therefore affirmed the trial court’s

conclusion that the coal company reserved no minerals to itself in the 2000 deeds by

“excepting and reserving all coal, oil, gas, mineral rights, and mining rights previously

conveyed.” Id. at ¶ 63, 65.

{¶58} Appellants present various contentions attempting to distinguish Kocher

from the case at bar. For instance, Appellant Capstone asks to distinguish Kocher based

on their extrinsic evidence for an ambiguous deed (discussed in the next section);

however, rules for evaluating an ambiguity were irrelevant and never reached in Kocher

as we found the deed language clear as a matter of law.

{¶59} Both Appellants claim Kocher is distinguishable because there was no

release in that case. However, the release clause is a discrete issue argued in this case,

briefed separately and analyzed above; the release argument is not related to the

ascertainment of the meaning of the excepting and reserving clause.

{¶60} Appellants also suggest the case at hand may be distinguished from Kocher

because the subject to clause here already contained notice that title was subject to

instruments of record. However, there is no indication the deeds in Kocher lacked a

subject to clause with notice the title was subject to recorded agreements. Moreover, a

broad subject to clause (stating the grant is subject to all prior agreements or instruments

of record or listing some examples that may or may not exist) does not necessarily mean

Case Nos. 24 JE 0023, 24 JE 0025

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the subsequent use of an excepting and reserving clause must be a new reservation of

rights to the grantor because it may be partially redundant. Appellants cite no law stating

otherwise and rely on the general contract principle of giving meaning to each clause “if

possible.” See Sunoco, 2011-Ohio-2720, at ¶ 54.

{¶61} Appellants then propose our Kocher case should not be followed because

it does not discuss the “false recital” deed principle. Under this doctrine, they assert an

erroneous recitation of past conveyances that did not in fact occur does not limit the scope

of the rights excepted or reserved (where it is merely an extraneous description).

Appellant Gulfport provides a case review of three out-of-state cases on the topic, and

Appellant Capstone relies on one of those cases as well.

{¶62} Appellees respond by asking us to maintain and apply our on-point Kocher

holding without resort to the out-of-state case law relied on by Appellants. Even assuming

Ohio courts would utilize the “false recital” legal principle from those cases, the deed

language to which the law was applied in those out-of-state cases is sufficiently

distinguishable from the language at issue here.

{¶63} In the Pich case cited by Gulfport, a 1943 deed conveyed land “Save and

Except an undivided three-fourths of the oil, gas and other minerals in, on and under said

land, which have been heretofore reserved.” Pich v. Lankford, 157 Tex. 335, 337 (1957).

The next deed, in 1947, conveyed the land “Save and Except an undivided three-fourths

of the oil, gas and other minerals in and under the Southwest Quarter thereof, and an

undivided one-fourth of the minerals in and under the remainder of said survey, which

minerals do not belong to the grantors herein.” Id. However, it was later determined no

minerals had been reserved prior to the 1943 deed (only part of the royalty). The Texas

Supreme Court concluded the 3/4 interest of the minerals in place was excluded from the

grants in both deeds regardless of the false recitals after the exceptions. Id. at 342 (in

favor of Pich, who obtained the grantor’s interest in each deed). In finding no ambiguity,

the court reasoned:

The deeds do not except from the grants only such royalty interests or

interests in the minerals as ‘have heretofore been reserved’ or that ‘do not

belong to the grantors herein’; they except an undivided three-fourths (3/4)

interest in the minerals in place in plain and unambiguous language. The

quoted phrases are but recitals which purport to state why the exceptions

are made. The chain of title conclusively negatives the recitals. It shows

Case Nos. 24 JE 0023, 24 JE 0025

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they are false. The giving of a false reason for an exception from a grant

does not operate to alter or cut down the interest or estate excepted, nor

does it operate to pass the excepted interest or estate to the grantee.

Id. at 339-340, citing, e.g., Roberts v. Robertson, 53 Vt. 690 (1881) (where the deed said

the grantor was “reserving lots sold, Nos. 1, 2, 3, . . . 32, 33” but where lots 32 and 33

had not been sold, the grantor’s false recital describing why lots 32 and 33 were reserved

did not eliminate them from the grant).

{¶64} In the Roberts case cited by Pich, the Vermont Supreme Court explained

what is sometimes called the false recital doctrine: “In all cases the inquiry is, Is there a

grant of a specific thing? if so, the addition of an untrue circumstance attending it, shall

not defeat the grant. The description, so far as it is false, is treated as applicable to no

subject at all; so far as it is true, as applicable to one subject only.” Roberts at 693.

Notably, however, that court then specifically observed if the deed said, “I except all the

lots heretofore sold,” then the reserving clause would have applied to only the lots

previously sold. Id.

{¶65} In other words, a phrase constructed in a manner similar to the case at bar

was opined to be a limitation, not an exception of all lots with an ignorable false recital

that all listed lots had been sold. Id. We also point out the Pich case quoted the example

phrase “except all lots heretofore conveyed” (provided by the Roberts case) while

contrasting the language in its case “except . . . minerals in, on and under said land, which

have been heretofore reserved.” Pich at 340. The word “which” and the comma

preceding such word are distinctive and important.

{¶66} Deed language “excepting and reserving all oil and gas heretofore

conveyed” is different from the language “excepting and reserving all oil and gas, which

have been heretofore conveyed.” The latter grammatical clause (set off by a comma and

introduced by the word “which”) is the recital of reasons (and under the false recital

doctrine, whether those reasons are false or not does not inure to the benefit of the

grantee). Distinctly, the former grammatical phrase is not a mere recital of reasons but

is a limitation on the excepting and reserving clause.

{¶67} “Nonrestrictive clauses describe part of a sentence, but are not essential to

the meaning of the sentence (versus restrictive clauses that are necessary to understand

the sentence).” Gateway Park, L.L.C. v. Ferrous Realty Ltd., 2008-Ohio-6161, ¶ 39 (8th

Dist.), citing Wydick, Plain English for Lawyers, at 91 (4th Ed. 1998). Accordingly, the

Case Nos. 24 JE 0023, 24 JE 0025

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Eighth District found plain language in a deed by reading the reservation after omitting

the nonrestrictive clause (set off by commas and beginning with the word “which”), finding

that clause merely described the retained land. Id. at 39-41.

{¶68} Grammatically, a writer is instructed to “[u]se which to introduce clauses

containing supplemental information, i.e., clauses that are set off by commas and could

be eliminated without changing the meaning of the sentence.” Supreme Court of Ohio’s

Writing Manual, at 121 (3d Ed. 2024) (while an adjective clause containing essential

information about the preceding noun cannot be eliminated without changing the meaning

of the sentence and would be preceded by “that” with no comma). The grammar situation

in the case at bar, involving the lack of the word “which” and the lack of a comma to set

off the clause “heretofore conveyed” from the nouns (the various minerals), is akin to

using “that were” between the noun and the adjectival phrase (i.e., “excepting and

reserving the minerals that were heretofore conveyed”). This analysis supports the

position of Appellees.

{¶69} Nevertheless, we review the other two out-of-state cases cited by

Appellants. In the case cited by both Gulfport and Capstone, the original grantor executed

a mineral right and royalty deed in favor of his relatives in June 1942. Oldham v. Fortner,

221 Miss. 732, 735 (1954). In August 1942, he conveyed the land to the plaintiff’s

predecessor-in-title in a deed stating, “except all minerals and mineral rights, heretofore

sold and conveyed . . .” Id. Years later, the plaintiff sought to have the June mineral deed

declared void in order to obtain the minerals under the August property deed by asserting

only the previously conveyed minerals were excepted from the August property deed. Id.

at 735-737. The Mississippi Supreme Court disagreed and concluded the exception of

all minerals from the August property deed was a valid exception regardless of (and was

not dependent on) the validity of a prior conveyance. Id. at 740, 743.

{¶70} The court explained: “in general a grantor who makes a reservation or an

exception in his deed does not part with the title to that which is thus excepted or reserved,

and where not already outstanding in another necessarily remains with the grantor; and

such an exception or reservation will be good as to property recited to have been

previously sold or conveyed, although the recital is false.” Id. at 743. The court pointed

out the grantee of the August property deed received what he bargained for regardless

of whether the recital was true (and the minerals were conveyed to the grantor’s relative)

or false (and remained with the grantor due to some issue with the prior conveyance). Id.

Case Nos. 24 JE 0023, 24 JE 0025

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{¶71} Although the Oldham deed did not use the word “which” before the

“heretofore sold and conveyed” phrase, a comma was used to set off the phrase from the

noun so that it did not limit the reservation (but instead provided reasons for it, which may

or may not be true). We note even if a jurist was inclined to disregard the comma as

meaningful, this out-of-state case would conflict with our Kocher case, and it is our own

case law that has precedential value here.

{¶72} In the third out-of-state case cited by Gulfport, the federal government

granted a land patent reserving all coal and the right to mine coal. Cantley v. Hubbard,

623 So.2d 1079, 1080 (Ala.1993) (the first private landowner conveyed the property in a

1925 deed excepting all coal and the right to mine explaining the coal was owned by the

U.S.). In 1929, the next landowner conveyed the property in a deed stating, “All mineral

reserved to the United States.” The heirs of the 1929 deed grantees claimed they owned

all minerals except coal because the United States did not own any other minerals. Id.

{¶73} However, the Alabama Supreme Court ruled in favor of the heirs of the 1929

deed grantors, stating the language plainly reserved all minerals to the grantor regardless

of an erroneous recitation of fact (on the prior status of all minerals). Id. at 1081-1082,

citing Turner v. Lassiter, 484 So.2d 378, 379 (Ala. 1985) (where a deed said “except all

oil, gas and minerals, one-half of which have been reserved by prior owners and one-half

of which the undersigned expressly reserves unto himself, his heirs and assigns,” the

court held all minerals were clearly excepted and the phrase about prior owners was

“merely a recitation of fact, which may or may not have been erroneous”).

{¶74} The clause in Cantley is not comparable to the clause at issue in the case

at bar. Also, the Turner example cited by the Cantley Court reinforces the effect of a

comma followed by the word “which” on the application of the false recital doctrine.

Essentially, Cantley opined “All minerals reserved to the United States” was equivalent to

“All minerals reserved, which have been heretofore reserved to the United States.” (That

is, the Cantley phrase was not equivalent to “reserving all minerals heretofore conveyed

to the United States” or “reserving all minerals that were heretofore conveyed to the

United States.”)

{¶75} In sum, the out-of-state cases relied on by Appellants cited a legal principle

of false recital in cases applying it to deed language that is not akin to the deed language

in our Kocher case or to the deed language in the case at bar (which is akin to our Kocher

case). Using ordinary grammar rules and a common sense reading, a reasonable person

Case Nos. 24 JE 0023, 24 JE 0025

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could only read the deed as excepting only the minerals “heretofore conveyed” (i.e., “that

were heretofore conveyed”). As explained above, the quoted phrase was a limitation on

the nouns in the excepting and reserving clause; it was a grammatical restrictive clause

(describing what was excepted) rather than a non-restrictive clause (explaining only why

the noun was excepted). Contrary to Appellant’s position the trial court did not rewrite the

contract or render a clause meaningless; rather, it is Appellants’ interpretation that asks

us to add words and/or punctuation to convert a restrictive clause into a non-restrictive

clause. “The mere fact that a contract's text might be subject to competing interpretations

does not mean that the text is ambiguous” or that the plaintiffs’ reading is not plain.

Corder, 2024-Ohio-5432, at ¶ 14. Appellants construction “strains ordinary usage” and

thus would not be considered reasonable. See id.

{¶76} We maintain our holding in Kocher and reject Appellants’ argument that the

false recital doctrine applies to reserve all minerals to the grantor of the 1995 deed.

Accordingly, we affirm the trial court’s August 20, 2024 decision granting summary

judgment to Appellees on the title issues. We therefore need not dispositively resolve

Capstone’s alternative ambiguity argument reviewed next for thoroughness.

Deed Issue Three: Extrinsic Evidence on Intent to Reserve Oil & Gas

{¶77} An alternative issue presented in Appellant Capstone’s brief points to

extrinsic evidence in the event we conclude the 1995 deed language was ambiguous.

As set forth in the general section reviewing deed construction law, parol/extrinsic

evidence can be viewed only if the deed language is ambiguous or circumstances

surrounding its execution give special meaning to language. Shifrin, 64 Ohio St.3d at

638. Capstone incorporates some arguments set forth above on a “duplicative coal

exception” if the “heretofore conveyed” language in the excepting and reserving clause

cover only prior mineral conveyances (due to the subject to clause giving notice of prior

recorded conveyances, as discussed above). Capstone then argues if we find ambiguity

on whether the deed created a new mineral reservation, then the extrinsic evidence on

the intent of the parties to the deed conclusively shows Capstone’s predecessor-in-title

(R & F Coal Company) intended to reserve the oil and gas when selling the property to

Appellees, citing the affidavits of the president and the senior landman at R & F Coal

Company at the time of deed execution.

{¶78} Those affiants said R & F Coal Company’s standard practice on the sale

and auction of its property was to retain any and all minerals, including oil and gas. The

Case Nos. 24 JE 0023, 24 JE 0025

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president additionally said during his tenure any property auctioned after mining involved

a sale of the surface with an intent to retain all minerals, including oil and gas; the landman

said any property sold while he was so employed, was intended to be a sale of the surface

with a retention of all minerals including oil and gas. Both then specifically claimed the

intent of the deed from R & F Coal Company was to convey only the surface to Appellees.

(D. Michael Jamison Affidavit, who signed the 1995 deed as president of R & F Coal,

which merged into a similarly named company and then into Capstone); (John P. Dutton

Affidavit, current president at Capstone and former senior landman at R & F Coal, who

witnessed the 1995 deed).

{¶79} Capstone claims Appellees failed to meet their reciprocal summary

judgment burden to show a different intent, while noting a deed is only construed against

the drafter if the extrinsic evidence fails to clarify the meaning. Corso, 2020-Ohio-5293,

at ¶ 28 (7th Dist.), citing Cadle, 2016-Ohio-4747, at ¶ 33 (7th Dist.). In contending

Appellees failed to present evidence on the intent of the deed grantees (Rich Pilney,

Anthony DiLuzio, and John Vickers), Capstone cites to the depositions of Mr. and Mrs.

Vickers. As Appellees counter, Mr. Vickers had been diagnosed with a cognitive

impairment, and his wife did not meet him until more than 15 years after the 1995 deed.

{¶80} Capstone also cites the deposition of Mr. DiLuzio where he testified he did

not research the title to the property prior to the auction and did not know why the October

1995 auction purchase agreement (in the blank after the typed clause “It is further agreed

by both parties that”) added the following language: “all parcels being sold by the acre,

and subject to easements, restrictions, and conditions of record and excepting any

previously conveyed coal and mineral rights.”

{¶81} When asked if he had discussions with anyone from the auction company

(Dutton) about the mineral rights, Mr. DiLuzio said, “No. Not that I remember. No.” He

noted his wife and Mr. Pilney were standing next to him at the time; Rich Pilney was the

purchaser who signed the auction purchase agreement.

{¶82} Appellees point out this does not show an intent to purchase only the

surface. They urge the lack of discussion supports their position, as there would have

been a discussion if the coal company intended to sell only the surface in spite of the

language of the auction purchase contract. As Appellees emphasize, the auction

purchase contract was the basis for the deed at issue. It discussed what would become

Case Nos. 24 JE 0023, 24 JE 0025

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the subject to clause and then clearly stated, “excepting and reserving any previously

sold and conveyed coal and mineral rights.”

{¶83} Capstone does not argue this language from the auction purchase contract

had a meaning different than claimed by Appellees. Nor is there a cited explanation as

to the auction event (or as to Capstone’s auction agent selling the property in a contract

with this language). The argument in Capstone’s initial brief seemingly ignores the

auction and the resulting auction purchase contract.

{¶84} Yet, Capstone’s reply brief then opposes reliance on this contract by citing

the doctrine of merger by deed (and making various irrelevant observations about the

agreement). They cite a Supreme Court case holding: “Where a deed is delivered and

accepted without qualification pursuant to agreement, no cause of action upon the prior

agreement thereafter exists.” Fuller v. Drenberg, 3 Ohio St.2d 109 (1965), syllabus.

{¶85} Nevertheless, Appellees’ cause of action was not based on the prior

agreement; it was based on the plain language of the 1995 deed. Oddly, it was

Capstone’s initial brief that raised the alternative argument of ambiguity, recognizing the

parol evidence rule would not bar extrinsic evidence if the deed language was unclear,

but then later essentially argues certain extrinsic evidence is precluded from being viewed

in ascertaining intent even though it was the precursor to the deed at issue.

{¶86} The merger by deed doctrine is an instrument construction principle based

on the integration rule of contracts, which is derived from the parol evidence rule and the

general theory of ascertaining contractual intent. V.T. Larney, Ltd. v. Locust St. Invest.

Co., LP, 2019-Ohio-496, ¶ 28 (7th Dist.); see also Olenchick v. Scramling, 2020-Ohio-

4111, ¶ 43 (11th Dist.), citing Newman v. Group One, 2005-Ohio-1582, ¶13 (4th Dist.);

Brown v. Ward, 2019-Ohio-4848, ¶ 29 (5th Dist.). Pursuant to the parol evidence rule, a

final integrated contract cannot be modified, contradicted, or supplemented by prior

written agreements (or by prior or contemporaneous oral agreements). Galmish v.

Cicchini, 90 Ohio St.3d 22, 27 (2000) (unless to show fraud, mistake, or other invalidating

cause). This rule protects the integrity of written contracts by ensuring stability,

predictability, and enforceability of finalized written agreements. Id.

{¶87} Conversely, if the parol evidence prohibition is being lifted because a final

contract at issue is unclear, then the parol evidence tenets are inapplicable as they apply

to unambiguous writings. See generally Ed Schory & Sons, Inc. v. Soc. Natl. Bank, 75

Ohio St.3d 433, 440 (1996) (“the parol evidence rule will not be overcome by merely

Case Nos. 24 JE 0023, 24 JE 0025

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alleging that a statement or agreement made prior to an unambiguous written contract is

different from that which is contained in the contract”). In other words, if the deed is

ambiguous and the parol evidence bar is thus inapplicable, the agreement precipitating

the deed can be evaluated in ascertaining intent of the parties to the deed. See, e.g.,

Miller Lakes Community Servs. Assn., Inc. v. Schmitt, 2016-Ohio-339, ¶ 62 (9th Dist.)

(prior agreement can be part of extrinsic evidence when interpreting ambiguous deed

language); see also Miller v. Cloud, 2016-Ohio-5390, ¶ 76 (7th Dist.) (merger by deed

doctrine does not apply and the sales contract can be viewed after parol evidence bar is

lifted, in a case where mutual mistake threshold was met), citing Osborne, Inc. v. Medina

Supply Co., 1999 WL 1260865 (9th Dist. Dec. 22, 1999) (“Medina Supply does not seek

to enforce the lease and option agreements that were previously entered into by the

parties. Rather, the documents are offered as proof of the parties' intentions regarding

the creation of an easement. The documents serve merely as parol evidence of the

mutual mistake of the parties with regard to the boundaries of the easement. Therefore,

the merger of deeds doctrine is inapplicable”).

{¶88} In any event, Capstone’s initial brief did not make an argument that merger

by deed barred certain extrinsic evidence from being viewed in the event the excepting

and reserving clause was found to be ambiguous.7 Notably, the trial court specifically

utilized the auction purchase agreement in the judgment entry when assuming for the

sake of argument that the deed’s language was unclear and entertaining Capstone’s

alternate ambiguity argument on parol evidence. (8/20/24 J.E. at 3). Clearly then, this

argument should have been directly addressed to this court in Capstone’s initial briefing

on the extrinsic evidence, rather than in a reply brief. See, e.g., Trinity Financial Servs.,

LLC v. D'Apolito, 2024-Ohio-825, ¶ 50 (7th Dist.) (raising new arguments in a reply brief

would deprive the opponent of the right to respond).

{¶89} Returning to the extrinsic evidence cited by the parties here, even if the

deed were considered ambiguous, it would not entitle Capstone to summary judgment as

7 Capstone’s initial brief mentioned the doctrine of “estoppel by deed” as prohibiting Appellees from

disclaiming the truth of the statements in the deed (which is sometimes analyzed as a concept similar to

merger by deed); however, it was under the release section of Capstone’s brief (not the excepting and

reserving section) and was only set forth to criticize the trial court’s reading of the plain language of the

deed’s release clause.

Case Nos. 24 JE 0023, 24 JE 0025

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argued in the initial brief, as the claims of their affiants are in conflict with the plain

language of the auction purchase agreement.

{¶90} In arguing the extrinsic evidence conclusively establishes their

predecessor’s intent to exclude all minerals from the grant of the land and entitled

Capstone to summary judgment, Capstone’s brief does not alternatively argue if we

disagree, then they would be entitled to trial on the parties’ intent because reasonable

minds could differ. This appeared to be due to Capstone’s recitation of the rule for

construing the deed against the grantor (who is generally presumed to be the drafter but

who was also actually the drafter in this case). Corso, 2020-Ohio-5293, at ¶ 28 (7th Dist.),

citing Cadle, 2016-Ohio-4747, at ¶ 33 (7th Dist.) (if parol evidence can be viewed due to

a legal finding of ambiguity but it fails to clarify the parties’ intent and the meaning of a

term, only then may a secondary rule of construction be applied whereby the language is

construed against the drafter, with the grantor of a deed generally considered the drafter).

Subsequently, in the reply brief, Capstone attempts to add another alternative argument,

claiming even if the extrinsic evidence does not conclusively establish the intent to create

a new mineral reservation, reasonable minds could differ and a trial should ensue (thus

alternatively seeking a different remedy than in the initial brief). Again, arguments against

the trial court’s decision cannot be reserved for the reply brief. This was not a mere

response to an argument in Appellees’ brief but constituted an alteration of the disposition

sought.

{¶91} Regardless, under the plain language section above, we concluded the

deed language unambiguously conveyed to the grantees all minerals that were not

already conveyed.

PREJUDGMENT INTEREST

{¶92} Lastly, on an issue not affecting Capstone, Appellant Gulfport’s final

assignment of error contends:

“The trial court erred in assessing prejudgment interest against Gulfport.”

{¶93} Gulfport withheld the subject royalty payments from Appellees due to

Capstone’s adverse title claim to the oil and gas. In protesting prejudgment interest,

Gulfport cites to following clause in Appellees’ lease with Gulfport:

TITLE: If Lessee receives evidence that Lessor does not have title to all or

any part of the rights herein leases, Lessee may immediately withhold

Case Nos. 24 JE 0023, 24 JE 0025

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payments that would be otherwise due and payable hereunder to Lessor

until the adverse claim is fully resolved.

(Vickers Lease; DiLuzio Lease).

{¶94} During the summary judgment proceedings, Gulfport complained

Appellees’ royalty calculation failed to deduct certain costs and failed to include a

breakdown of the specifics of the computation. In so complaining and seeking further

discovery, Gulfport generally concluded, “The Court should not award damages and

prejudgment interest to Plaintiffs based purely on their say-so . . .” (S.J. Opp. 7). At that

point, Gulfport did not point to the title clause in their own lease as a bar to prejudgment

interest (or claim Appellees were not entitled to prejudgment interest if they established

damages).

{¶95} The trial court entered summary judgment in favor of Appellees and against

Capstone and Gulfport on the title issues by holding Appellees owned the oil and gas

underlying the property. Due to the dispute over the allocation of costs in calculating the

royalty, the court denied Appellees’ request for summary judgment on damages. A bench

trial between Appellees and Gulfport proceeded to resolve the dispute over the precise

amount of royalties Gulfport owed Appellees under their leases. Before announcing

judgment, the court allowed post-trial briefing.

{¶96} Appellees’ post-trial brief set forth its calculation of unpaid accrued royalties

without the disputed costs ($862,556.32) and sought statutory pre-judgment interest.

They attached a royalty calculation exhibit showing the interest on amounts due from

when production began in 2021 through August 1, 2024 ($64,959.47).

{¶97} Gulfport’s post-trial brief sought to reduce the amount of royalties owed by

certain costs (an issue not raised on appeal), attaching an exhibit showing a

correspondingly lower amount of royalties (approximately $768,277). This exhibit

included prejudgment interest on those royalties.

{¶98} A footnote in Gulfport’s post-trial brief pointed out the calculation was

provided due to the partial summary judgment on title but noted an appeal would be taken

from that prior decision. Next, the footnote stated, “Gulfport is providing a calculation of

prejudgment interest but denies that prejudgment interest is appropriate in this case

because the Leases provide that Gulfport ‘may immediately withhold payments that would

be otherwise due and payable hereunder to Lessor’ until an adverse claim to title is

resolved.”

Case Nos. 24 JE 0023, 24 JE 0025

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{¶99} As requested by Appellees, the trial court ordered Gulfport to pay

prejudgment interest at the statutory rate (on the $862,556.32 in accrued unpaid royalties

from the start of production through August 1, 2024). In discussing prejudgment interest,

the court first generally stated Appellees were entitled to prejudgment interest because

liability was based on a written instrument. Additionally, the trial court opined Gulfport

took bad faith positions in this case and suggested Gulfport violated a duty of good faith

implied in the payment withholding clause of the lease. The court concluded Gulfport was

not entitled to keep the profit from interest on royalties belonging to Appellees.

{¶100} On appeal, there is no dispute over the calculation of prejudgment interest;

the dispute is over the entitlement to it. Initially, Gulfport takes issue with the statements

about bad faith. Appellees respond by complaining Gulfport did not simply learn of an

adverse claim here but created the dispute by leasing the minerals from Appellees in

2018 and obtaining the Capstone Lease around the same time. Yet, Capstone created

the claim by leasing the oil and gas in 2007 to a non-party (and thereafter recording it).

Gulfport obtained certain lessee rights in the Capstone Lease years after Capstone

executed the lease.

{¶101} Appellees also criticize Gulfport for taking a strong position against them

instead of remaining neutral on Capstone’s ownership claim or entering a provisional

lease with Appellees, pointing out Gulfport would owe less royalties under the Capstone

Lease than under Gulfport’s lease with Appellees. Again, Gulfport was not just the lessee

in Appellee’s lease but had certain lessee rights under the Capstone Lease. Gulfport thus

urges the act of defending its lease rights, even assuming a motivation of a lower royalty

obligation, is not bad faith.

{¶102} It must be noted, rather than focusing on Gulfport’s motives for entering or

defending leases, the trial court’s bad faith findings focused on its negative opinion about

the merits of Gulfport’s argument on costs to be deducted from royalties and of the merits

of the adverse title claim at issue (previously describing as ridiculous Appellants’

arguments on the release and the “heretofore conveyed” language). Gulfport points out

Appellees did not make a claim for breach of implied covenant of good faith and bad faith

is not an element for statutory contract prejudgment interest. Relying on the payment

withholding clause of its lease with Appellees, it is urged Gulfport’s good or bad faith was

irrelevant because an adverse title claim affecting the payee of royalty payments was

being asserted by Capstone, the successor of the grantor to the deed under which

Case Nos. 24 JE 0023, 24 JE 0025

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Appellees obtained the property, and Gulfport would have been remiss in not withholding

payments in case Capstone’s claim prevailed.

{¶103} In any case, Appellees counter by emphasizing the automatic statutory

entitlement to prejudgment interest for “due and payable” royalties. They also suggest

that regardless of the findings on the title clause having an implied covenant of good faith

regarding the merits of the adverse title claim, the trial court’s observations would still be

relevant to its discretion in making a factual determination on the date the payments

became due and payable.

{¶104} By law, “the creditor is entitled” to statutory interest “when money becomes

due and payable upon any . . . instrument of writing” that does not contain a different rate.

R.C. 1343.03(A). This division does not require a finding on “good faith” before awarding

prejudgment interest. Royal Elec. Constr. Corp. v. Ohio State Univ., 73 Ohio St.3d 110,

115 (1995) (as distinguished from division (C) for prejudgment interest on tort claims).

{¶105} In applying R.C. 1343.03(A), the Supreme Court has concluded, “The

award of prejudgment interest is compensation to the plaintiff for the period of time

between accrual of the claim and judgment, regardless of whether the judgment is based

on a claim which was liquidated or unliquidated and even if the sum due was not capable

of ascertainment until determined by the court.” Royal Elec. Constr. Corp. v. Ohio State

Univ., 73 Ohio St.3d 110 (1995), syllabus. Prejudgment interest has been enshrined

legislatively as it “encourages prompt settlement and discourages defendants from

opposing and prolonging, between injury and judgment, legitimate claims. [It] does not

punish the party responsible for the underlying damages . . . but, rather, it acts as

compensation and serves ultimately to make the aggrieved party whole.” Id. at 116-117.

{¶106} The point of allowing prejudgment interest on amounts due and payable

under a writing is not only because of the loss suffered by the party who is deprived of

investing their own money but also because of the gain obtained by the party who withheld

the money. See Landis v. Grange Mut. Ins. Co., 82 Ohio St.3d 339, 341-342 (1998),

citing Hogg v. Zanesville Canal & Mfg. Co., 5 Ohio 410, 424 (1832). Under R.C. 1343.03,

“a court need only ask one question: Has the aggrieved party been fully compensated?”

Royal Elec. at 116.

{¶107} The right to prejudgment interest on money due and payable under a

written instrument is a matter of law as it is automatically pursuant to R.C. 1343.03(A).

Nonetheless, it has been observed, “Under R.C. 1343.03(A), a trial court has

Case Nos. 24 JE 0023, 24 JE 0025

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discretionary review over when the interest is to accrue . . . broad discretion is granted to

the trial court to determine the accrual date of the prejudgment interest under R.C.

1343.03(A).” Handel's Ents., Inc. v. Wood, 2005-Ohio-6922, ¶ 89, 91 (7th Dist.) (applying

an abuse of discretion standard), citing Landis at 342 (“Whether the prejudgment interest

in this case should be calculated from the date coverage was demanded or denied, from

the date of the accident, from the date at which arbitration of damages would have ended

if Grange had not denied benefits, or some other time based on when Grange should

have paid Landis is for the trial court to determine.”).

{¶108} In accordance, the Supreme Court pointed out it has “specifically and

clearly declined to establish a bright-line rule regarding the accrual date of prejudgment

interest but rather left such a determination to the trial courts on a case-by-case basis.”

Miller v. Gunckle, 2002-Ohio-4932, fn.4, citing Landis at 342. An abuse of discretion is

more than an error in judgment but requires a finding that the trial court's attitude was

unreasonable, arbitrary, or unconscionable. Berk v. Matthews, 53 Ohio St.3d 161, 169

(1990). “[W]hen applying this standard, an appellate court is not free to substitute its

judgment for that of the trial judge.” Id. The trial court’s decision was clearly reasonable

under the totality of the circumstances existing in this case.

{¶109} Contrary to Appellees’ assertion that we apply an abuse of discretion

review, Appellant Gulfport argues it is presenting a question of law as to whether a

payment can statutorily be considered due and payable under a writing if the owing party

refrained from making the payment due to the writing’s title clause allowing the

withholding of royalties “otherwise due and payable” if the owing party receives notice of

an adverse title claim. In other words: Does a lessor who signs a lease with a title clause

temporarily waiving the immediate ability to receive each payment due and payable under

the lease, thereby legally waive the right to statutory prejudgment interest for each

payment withheld under that clause?8

{¶110} Under Gulfport’s reasoning, the title clause meant no royalties were “due

and payable” for purposes of the prejudgment interest statute because the invocation of

8 We note Gulfport did not place the royalties in escrow or deposit them with the trial court, as often

procedurally recited in case law, and Gulfport does not claim they did not use or benefit from the withheld

funds remaining in their coffers. We also note a payment withholding clause has been used historically to

avoid double liability, to avoid a conversion action, or even to avoid now-defunct issues with lease forfeiture;

these purposes do not conflict with the principles behind nevertheless being liable for prejudgment interest

on the withheld money.

Case Nos. 24 JE 0023, 24 JE 0025

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the payment withholding provision in the clause caused the otherwise due and payable

royalties to lose their statutory due and payable status (until a judgment finally resolved

Capstone’s adverse claim to ownership of the oil and gas).

{¶111} A contractual waiver of a statutory right should not be implied. See

generally Cheatham I.R.A. v. Huntington Natl. Bank, 2019-Ohio-3342, ¶ 30 (where the

Ohio Supreme Court held, “Parties to a contract may include terms in derogation of

common law, . . . but the intent to do so must be clearly indicated”); Royal Elec., 73 Ohio

St.3d at 116 (in a contract case, speaking of the common law right to prejudgment

interest); see also HHS Technology Group Holdings, LLC v. State, 707 S.W.3d 788, 798-

800 (Mo.App. 2025) (where the prejudgment interest statute’s “due and payable”

language prevailed even though the payment “holdbacks” were contractually permitted,

with the court opining, “If the [contracting parties] had agreed on a zero percent interest

rate in the event of non-payment, they would have done so explicitly and clearly”).

{¶112} For instance, to avoid Ohio’s automatic statutory prejudgment interest on

money that becomes due and payable under an oil and gas lease, the title clause should

say the lessee “may withhold royalties without obligation to pay interest” or something to

that effect. Grissoms, LLC v. Antero Resources Corp., 2024 WL 2952369, *3 (S.D.Ohio

June 11, 2024) (applying this plain language of Noble and Monroe County leases as a

valid contractual waiver of the statutory and common law rights to prejudgment interest).

Compare HHS Technology Group, 707 S.W.3d at 799-800 (granting prejudgment interest

where the contract’s payment withholding clause and damage clause did not mention

interest; rejecting the argument that a separate price clause waived statutory prejudgment

interest by disallowing “other additional costs, including but not limited to . . . interest”).

{¶113} In an Ohio appellate case, a contractor failed to pay a subcontractor under

a contract with a payment withholding clause (applicable if there was defective or

questionable work). Guenther Plumbing & Heating v. B.C. & G. Weithman, 1995 WL

577831 (3d Dist.). The subcontractor filed a breach of contract action, a jury found the

subcontractor was not liable for the defect the contractor had to fix, and the trial court

awarded prejudgment interest. The appellate court agreed the subcontractor was

permitted to recover prejudgment interest despite the payment withholding clause and

the disputed debt. Id.

{¶114} The clause allowing Gulfport to withhold the landowners’ royalties in the

event of an adverse claim against the landowners’ title to the oil and gas specifically

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recognizes those payments were “otherwise due and payable.” Although the lease clause

may allow due and payable royalties to be withheld in certain situations, the title clause’s

use of the word “otherwise” does not redefine the payments into those not due and

payable for purposes of statutory prejudgment interest. Accordingly, Gulfport’s final

assignment of error is overruled.

CONCLUSION

{¶115} Contrary to the first argument set forth by Appellants Gulfport and

Capstone, Appellees’ action based on deed interpretation and enforcement was not

barred by the release clause in the deed transferring the property to Appellees. Contrary

to Appellants’ next argument, the plain language of the deed excepted only those

minerals that were “heretofore conveyed” and did not create a new reservation of all

minerals to the grantor (Capstone’s predecessor in title). Finally, Appellant Gulfport’s

prejudgment interest argument is overruled. The title clause allowing payment withholding

in the event of an adverse title claim did not counter Appellees’ statutory entitlement to

interest on the withheld royalties.

{¶116} For the foregoing reasons, the trial court’s judgment is affirmed.

Hanni, J., concurs.

Dickey, J., concurs.

Case Nos. 24 JE 0023, 24 JE 0025

[Cite as Vickers v. Capstone Holding, 2025-Ohio-3172.]

For the reasons stated in the Opinion rendered herein, the assignments of error

are overruled and it is the final judgment and order of this Court that the judgment of the

Court of Common Pleas of Jefferson County, Ohio, is affirmed. Costs to be taxed against

the Appellants.

A certified copy of this opinion and judgment entry shall constitute the mandate in

this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a

certified copy be sent by the clerk to the trial court to carry this judgment into execution.

NOTICE TO COUNSEL

This document constitutes a final judgment entry.