Simballa v. Ohio Dept. of Natural Resources, Div. of Oil & Gas Resources Mgt.

2024 Ohio 5888
CourtOhio Court of Appeals
DecidedDecember 17, 2024
Docket23AP-695
StatusPublished

This text of 2024 Ohio 5888 (Simballa v. Ohio Dept. of Natural Resources, Div. of Oil & Gas Resources Mgt.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Simballa v. Ohio Dept. of Natural Resources, Div. of Oil & Gas Resources Mgt., 2024 Ohio 5888 (Ohio Ct. App. 2024).

Opinion

[Cite as Simballa v. Ohio Dept. of Natural Resources, Div. of Oil & Gas Resources Mgt., 2024-Ohio-5888.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Kevin J. Simballa, :

Appellant-Appellant, : No. 23AP-695 v. : (C.P.C. No. 22CV-989)

Ohio Department of Natural : (REGULAR CALENDAR) Resources, Division of Oil and Gas Resources Management et al., :

Appellees-Appellees. :

D E C I S I O N

Rendered on December 17, 2024

On brief: Krugliak, Wilkins, Griffiths & Doughtery Co., L.P.A. and Matthew W. Onest, for appellant. Argued: Matthew W. Onest.

On brief: Dave Yost, Attorney General, Gene Park, and Brian A. Ball, for appellee State of Ohio. Argued: Brian A. Ball.

On brief: Vorys, Sater, Seymour and Pease LLP, Gregory D. Russell, Thomas H. Fusonie, and Christopher A. LaRocco, for appellee Hilcorp Energy Company. Argued: Thomas H. Fusonie.

APPEAL from the Franklin County Court of Common Pleas

BEATTY BLUNT, J.

{¶ 1} Appellant Kevin J. Simballa appeals the October 31, 2023 decision of the Franklin County Court of Common Pleas, which affirmed the February 10, 2022 order of the Ohio Oil and Gas Commission (“Commission”). The Commission’s order dismissed Simballa’s administrative appeal of the November 30, 2021 Chief’s Order 2021-192 (“Chief’s Order”) to Hilcorp Energy Co. (“Hilcorp”) as untimely. No. 23AP-695 2

{¶ 2} Simballa owns a 38-acre piece of property in Columbiana County, and also owns the mineral rights to that property. In 2012, Simballa leased those mineral rights to Hilcorp’s predecessor-in-interest at a rate of $6,000 per acre plus 20 percent of gross royalties, and Hilcorp assumed that lease in 2013. But Hilcorp permitted that lease to lapse, and subsequently refused to renew it. A letter from Simballa to Hilcorp indicated that Simballa remained willing to lease those rights to Hilcorp “under the same terms as the lease which Hilcorp had acquired, and which Hilcorp opted to let lapse.” (Emphasis sic.) (June 15, 2021 Letter, Attached as Ex. B to Simballa’s appeal of the Chief’s Order.) Instead, Hilcorp responded with a “take-it-or-leave-it” counteroffer stating that it was willing to agree to an 18 month lease of the mineral rights for “the requested 20% gross royalty and a onetime consideration of $10,000.00.” (Emphasis sic.) (June 22, 2021 Letter, Attached as Ex. B to Simballa’s appeal of the Chief’s Order.) Hilcorp gave Simballa 3 days to accept the offer, and if he failed to accept it by that deadline, Hilcorp stated it “will pursue the unitization process.” Id. {¶ 3} Simballa did not accept the counteroffer, and on July 1, 2021 Hilcorp applied to the Commission to conduct unit operations. Following a hearing on September 29, 2021, Hilcorp obtained the Chief’s Order, under which Simballa’s mineral rights were forcibly pooled into the “Elkrun Wertz Northeast Unit” (“Unit”) and Hilcorp was authorized to conduct drilling operations in that Unit. (Nov. 30, 2021 Order by the Chief No. 2021-192.) {¶ 4} The Chief’s Order is dated November 30, 2021. It was issued exclusively to Hilcorp and established that Hilcorp and the other property owners from whom it had obtained mineral rights were primarily responsible for the costs of operations. It also provided that “unleased mineral owners” would receive “a monthly cash payment equal to a one-eighth (1/8) share of the gross proceeds from production * * * based on the unit participation of each unleased mineral owner’s tract,” id. at ¶ 9c, and that once Hilcorp recovered 200 percent of the cost of drilling an initial well, “each unleased mineral owner shall receive a monthly cash payment equal to a seven-eighths (7/8) share of net proceeds from production (for that well) * * * based on the unit participation of each unleased mineral owner’s tract.” Id. at ¶ 9d. Simballa was the only identified “unleased mineral owner” named by the order, id. at Exhibit A, but these terms were apparently unsatisfactory to him. No. 23AP-695 3

{¶ 5} It is undisputed that Simballa had a right to appeal the Chief’s Order to the Oil and Gas Commission under R.C. 1509.36, which states “[t]he appeal shall be filed with the commission within thirty days after the date upon which the person to whom the order was issued received the order and, for all other persons adversely affected by the order, within thirty days after the date of the order complained of.” The Chief’s Order was issued Tuesday, November 30, 2021, but Simballa did not mail his appeal to the Commission until December 30, 2021, and it was not delivered to the Commission until at least December 31, 2021, when USPS tracking information suggests it was picked up by an authorized person at the postal facility. Moreover, the Commission was apparently closed that day, and the Commission did not actually note the filing of Simballa’s appeal until Monday, January 3, 2022. {¶ 6} As result, both the appellee and intervenor Hilcorp argued that the appeal had to be dismissed for lack of jurisdiction, contending that Simballa was not “the person to whom the order was issued,” but was simply a person “adversely affected by the order.” For this reason, they argued that Simballa’s appeal was required to be filed no later than Thursday, December 30, 2021, and the fact that the appeal was not mailed until the following day meant that the Commission lacked jurisdiction to entertain it. On February 10, 2022 the Commission agreed: Hilcorp is the one Order Recipient. Appellant is properly classed [under R.C. 1509.36] as a person adversely affected by the Order. As a person adversely affected by the Order, Appellant has thirty days after the issuance of the order complained to perfect his appeal to the Commission.

***

It is not contested that the Order was issued on November 30, 2021 and Appellant, who is a person adversely affected by this Order, received notice of the Order. Thirty days after November 30, 2021 is December 30, 2021, which is the last date Appellant could have timely filed his appeal as an adversely affected person. It is also not contested that Appellant’s Notice of Appeal was filed on January 3, 2022. Hence, Appellant’s Notice of Appeal was filed four days beyond the mandatory time limit imposed by Ohio law. That means Appellant missed the statutory deadline set out in R.C. 1509.36. Consequently the Commission lacks jurisdiction to hear this appeal. Since the General Assembly, by statute, has No. 23AP-695 4

limited the time to file an appeal to thirty days, the Commission has no discretion to extend that time period or to accept an appeal filed more than thirty days after issuance of the Chief’s Order.

Appellants attempts to defend his untimely filing with a claim that a representative of the Division provided verbal instructions on the appeal process that he claims now support a claim of equitable estoppel. The Commission is not persuaded by this claim. Parties before the Commission are bound by a uniform set of laws and rules of practice and the Commission does not possess the authority to expand its jurisdiction based on the comments of an individual unaffiliated with the Commission. The Commission also notes that estoppel does not apply against the state.

Jurisdiction is not a matter of choice; but rather is an expression of the power and authority of a body to act. If the Commission’s jurisdiction has not been properly invoked, the Commission simply is without authority to act. The Commission finds that Appellant’s Notice of Appeal, is untimely under O.R.C. §1509.36 and will not invoke this Commission’s jurisdiction.

(Emphasis sic.) (Ex.

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Bluebook (online)
2024 Ohio 5888, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simballa-v-ohio-dept-of-natural-resources-div-of-oil-gas-resources-ohioctapp-2024.