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Harvey v. Sines

Court of Special Appeals of Maryland

June 2, 2016

MARY HARVEY, et al.
v.
JOSEPH SINES, et al.

Krauser, C.J., Berger, Zarnoch, Robert A., (Retired, Specially Assigned), JJ. [*]

OPINION

Zarnoch, J.

The opening of the Marcellus Shale in the late-2000s spawned a resurgence in natural resource extraction across the Northeast and Mid-Atlantic regions, including Western Maryland. In 2010, the General Assembly enacted the Maryland Dormant Mineral Interests Act, now codified at Section 15-1201, et seq. of the Environment Article ("Env."), Maryland Code (1982, 2014 Repl. Vol.), to allow surface owners to terminate severed mineral interests that had gone unused for twenty years or more.

Toward the end of 2014, Joseph L. Sines and Sandra S. Sines ("the Sineses"), appellees, brought an action in the Circuit Court for Garrett County to terminate an undivided half-mineral interest owned by the descendants of Henry B. Harvey-Mary Harvey and Patricia Sue Lannom née Harvey ("the Harveys"), appellants. After the parties filed cross-motions for summary judgment, and without a hearing, the court found no material facts in dispute, and entered an order terminating the mineral interest of the Harveys.

The Harveys appealed to this Court and present the following question for our review, which we have rephrased:

Whether the Dormant Mineral Interests Act is unconstitutional under Article 24 of the Maryland Declaration of Rights and Article III, Section 40 of the Maryland Constitution?[1]

We hold that the Maryland Dormant Mineral Interests Act is constitutional because it does not retroactively impair vested rights, nor does it take property without just compensation. We affirm the decision of the circuit court.

BACKGROUND

A. The Maryland Dormant Mineral Interests Act[2]

The General Assembly passed the Maryland Dormant Mineral Interests Act ("the Act") by a unanimous vote in each house during the 2010 legislative session.[3] See 2010 Laws, ch. 268 (S.B. 288), ch. 269 (H.B. 320). The Act created a new cause of action, allowing a surface owner of real property subject to a mineral interest to terminate a dormant mineral interest.[4] Env. § 15-1203(a)(1). The action is "in the nature of and require[s] the same notice as is required in an action to quiet title as set forth in § 14-108 of the Real Property Article."[5] Env. § 15-1203(b)(1). "A court order that terminates a mineral interest merges the terminated mineral interest, including express and implied appurtenant surface rights and obligations, with the surface estate in shares proportionate to the ownership of the surface estate, subject to existing liens for taxes or assessments." Env. § 15-1203(d)(2).

The Act defines a dormant mineral interest as one that "is unused for a period of 20 or more years preceding the commencement of termination of the mineral interest." Env. § 15-1203(a)(2)(i). Additionally, notice of the mineral interest must not have been recorded during the period of 20 or more years preceding the commencement of the action to terminate the mineral interest. Env. § 15-1203(a)(2)(ii). Several actions constitute "use" of the mineral interest by an owner. These include: (i) active mineral exploration or exploitation; (ii) payment of taxes on a separate assessment of the mineral interest; (iii) recordation of an instrument that evidences the continued existence of the mineral interest; and (iv) recordation of a judgment or decree that makes a specific reference to the mineral interest.[6] Env. § 15-1203(c)(1). An owner of a mineral interest may record, at any time, a notice of intent to preserve the mineral interest or a part of a mineral interest. Env. § 15-1204(a)(1)

After a petition to terminate a dormant mineral interest has been filed, an owner of the mineral interest can still "record a late notice of intent to preserve the mineral interest as a condition of dismissal of the action, if the owner of the mineral interest pays the litigation expenses incurred by the surface owner of the real property that is subject to the mineral interest." Env. § 15-1205(b). However, the Act precludes an owner of a mineral interest that has been unused for a period of 40 years or more preceding the commencement of the action from filing a late notice of intent to preserve the mineral interest. Env. § 15-1205(c). The Standing Committee on Rules of Practice and Procedure adopted rules to aid the implementation of the Act.[7] See Md. Rules 12-701, et seq.

The Act's stated purpose "is to make uniform the law governing dormant mineral interests among the states." Env. § 15-1202(b). In that vein, Act was patterned on the Uniform Dormant Mineral Interests Act, which in turn was designed "to enable and encourage marketability of real property and to mitigate the adverse effect of dormant mineral interests on the full use and development of both surface estate and mineral interests in real property." Uniform Law Commission, Uniform Dormant Mineral Interests Acts § 1(a). The uniform act also provides that it "shall be construed to effectuate its purpose to provide a means for termination of dormant mineral interests that impair marketability of real property." Id. § 1(b). The Attorney General, in a letter to Governor Martin O'Malley, dated May 3, 2010, approved of the constitutionality of the statute.

B. The Sineses' Property

The Sineses are the surface owners of approximately twenty acres in Garrett County, and own an undivided one-half interest in the minerals beneath the property. On November 20, 2014, the Sineses filed a petition in the circuit court to terminate any dormant mineral rights mineral rights on their property. They identified the Harveys as potential owners of a portion of the mineral interest, as descendants of Henry B. Harvey who purchased a one-half interest in ...


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