Schubert v. Subtropolis Mining Co.

[Cite as Schubert v. Subtropolis Mining Co., 2026-Ohio-3720.] IN THE COURT OF APPEALS OF OHIO SEVENTH APPELLATE DISTRICT MAHONING COUNTY NANCY E. SCHUBERT et al., Plaintiffs-Appellants, v. SUBTROPOLIS MINING CO. AKA SUB MINING CO., Defendant-Appellee. OPINION AND JUDGMENT ENTRY Case No. 26 MA 0027 Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 2025 CV 00675 BEFORE: Carol Ann Robb, Mark A. Hanni, Katelyn Dickey, Judges. JUDGMENT: Affirmed. Atty. Matthew W. Onest, Atty. Brian A. Bixler, Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A., for Plaintiffs-Appellants and Atty. E. Carroll Thornton, Jr., Manchester Newman & Bennett, LPA, and Atty. Todd A. Long, Atty. Brian P. Barger, Eastman & Smith Ltd., for Defendant-Appellee. Dated: September 16, 2026  –2– Robb, J. {¶1} Appellants, Nancy E. Schubert, Eric M. Schubert, and William L. Conder, appeal the trial court’s February 12, 2026 judgment adopting and approving the January 22, 2026 magistrate’s decision granting Appellee, Subtropolis Mining Co., aka Sub Mining Co., summary judgment. Appellants argue the parties’ lease agreement is unenforceable and void as against public policy. For the following reasons, we affirm. Statement of the Facts and Case {¶2} Appellants filed suit against Subtropolis in March of 2025 and allege the following. Nancy E. Schubert and Eric M. Schubert, husband and wife, are owners of 92.17 acres of real property in Springfield Township, and William L. Conders owns 2.69 acres of adjacent property. Appellants acquired their interests via quit claim deeds in 2020. Appellants acquired their property subject to a 2012 lease agreement between the prior owners of the property and Subtropolis. (March 20, 2025 Complaint.) {¶3} The lease agreement generally grants Subtropolis the right to mine for limestone. Appellants claim the lease allows Subtropolis to hold the lease in perpetuity regardless of whether mining has commenced. Appellants’ sole claim for relief seeks quiet title to the property. They ask the court to deem the lease invalid because it is a perpetual no-term lease. Appellants also asked the court to award any additional relief that may be warranted, plus costs and attorney’s fees. Appellants attached copies of the quit claim deeds and a copy of the lease agreement to their complaint. (March 20, 2025 Complaint.) {¶4} Subtropolis filed an answer and counterclaim for unjust enrichment and declaratory judgment. Subtropolis asserts it paid Appellants’ predecessor in interest $9,215 in “advance royalty payments,” which were monthly payments in the amount of $97 from October 2012 to August 2020. Subtropolis then began making these monthly payments to Eric and Nancy Schubert, as subsequent owners, in September of 2020. Subtropolis contends it “unilaterally increased” its monthly payments to $485 beginning May 14, 2021. Subtropolis asserts it paid Eric and Nancy Schubert $23,571 as of March 2025. It asserts if Appellants are successful in their lawsuit and efforts to invalidate the Case No. 26 MA 0027  –3– lease, Appellants will be unjustly enriched by Subtropolis’ continued payments under the lease. (May 15, 2025 Answer & Counterclaim.) {¶5} For its second claim for relief, Subtropolis sought declaratory judgment. It asks the court to deem its lease with Appellants valid and enforceable. Subtropolis attached as exhibits a copy of the parties’ lease, a letter to Appellants’ predecessor exercising its right to lease, and Farmers National Bank records showing payments made to the property owners. (May 15, 2025 Answer & Counterclaim.) {¶6} The court set discovery and dispositive motion deadlines. The case was set for a bench trial in January of 2026. After the exchange of discovery, the parties filed competing motions for summary judgment, oppositions to one another’s motions, and replies in support. {¶7} The summary judgment motions were considered by the magistrate. The magistrate issued a decision containing findings of fact and separate conclusions of law. Under its findings of fact, the magistrate found Appellants’ parents executed the lease agreement with Subtropolis in 2012 and Nancy Schubert, Eric Schubert, and William Conder inherited their respective ownership of the property in August of 2020. The magistrate found in part that the lease “is perpetual in duration, or for so long as minerals may exist or be mined, and contains no fixed termination date.” The magistrate likewise determined the lease “does not require the lessee to commence mining by a date certain, does not impose minimum production requirements, and does not contain a forfeiture or reversion clause for failure to mine.” It concluded the grantee had “subjective discretion” as to the “time, pace, manner, and type of development.” And the magistrate further found the lease contains no obligation to develop the premises, and it is undisputed that no development or mining operations have commenced under the lease. (January 22, 2026 Magistrate’s Decision.) {¶8} Under the conclusions of law heading, the magistrate found the court could “not rewrite a mineral lease to impose a termination date or production requirement that the parties themselves did not include.” It also states Appellants “cannot create a genuine issue of material fact on abandonment or termination based solely on nonuse.” The court concluded the lease is perpetual, and the court would not rewrite the agreement “to add a development condition not expressed by the parties.” The court also rejected any Case No. 26 MA 0027  –4– argument that an implied covenant to develop should be read into the lease. It held in part “[t]o imply a duty to commence mining would directly contradict the express perpetual nature of the Lease[,]” and Appellants took the property subject to the recorded lease. Thus, it found the lease was a valid and enforceable “perpetual mineral lease.” It rejected Appellants’ claims for relief and granted Subtropolis’ motion for summary judgment. The magistrate granted declaratory judgment in favor of Subtropolis and declared the lease valid and enforceable. (January 22, 2026 Magistrate’s Decision.) {¶9} Appellants filed objections to the magistrate’s decision. They claimed the magistrate misconstrued their claims as based on nonuse and abandonment. Instead, they insisted the lease is invalid due to its perpetual nature and since it contains no obligation to produce minerals. Appellants also object to the magistrate’s conclusion that perpetual mineral leases are permissible under Ohio law. They alleged the magistrate failed to apply the Ohio Supreme Court’s decision in Ionno v. Glen-Gery Corp., 2 Ohio St.3d 131, 135 (1983). (January 30, 2026 Objections.) {¶10} Subtropolis opposed and urged the court to overrule the objections. It urged the court to find the Ionno case is inapplicable since the parties’ lease expressly disclaims the implied covenant and states it is perpetual. (February 6, 2026 Response.) {¶11} The trial court overruled Appellants’ objections and adopted and approved the magistrate’s decision in full. (February 12, 2026 Judgment.) Appellants raise one assignment of error on appeal. Assignment of Error {¶12} Appellants’ sole assignment of error asserts: “The trial court erred in granting summary judgment to Defendant-Appellee.” {¶13} Appellants assert the trial court erred by not invalidating the lease. They contend the lease should be deemed unenforceable after its primary, ten-year term because the lease is a perpetual, non-developmental lease in violation of Ohio public policy. {¶14} Subtropolis disagrees and contends the perpetual lease is valid and enforceable because it contains an express disclaimer of the implied covenant of reasonable development. Subtropolis further asserts the lease empowers it with the sole Case No. 26 MA 0027  –5– discretion to extend the lease term. For the following reasons, we agree with Subtropolis and affirm. Summary Judgment Standard of Review {¶15} The interpretation of leases is generally a question of law for a court to decide. Courts are to employ rules of contract construction to interpret written instruments and focus on a plain reading of the words contained in the document. McGiffin v. Skurich, 2021-Ohio-2741, ¶ 20 (7th Dist.), citing Long Beach Assn., Inc. v. Jones, 82 Ohio St.3d 574, 576 (1998), and LRC Realty, Inc. v. B.E.B. Properties, 2020-Ohio-3196, ¶ 17. {¶16} We review questions of law and summary judgment decisions de novo and apply the same test as the trial court in determining whether summary judgment was proper. Cole v. Am. Industries & Resources Corp., 128 Ohio App.3d 546, 552 (7th Dist. 1998). {¶17} Pursuant to Civ.R. 56(C), summary judgment should be granted when reasonable minds could reach but one conclusion and that conclusion is adverse to the nonmoving party. The moving party has the burden of showing no issue exists as to any material fact. State v. Licsak, 41 Ohio App.2d 165 (1974); Mitseff v. Wheeler, 38 Ohio St.3d 112 (1988), syllabus. {¶18} Once the moving party meets his burden, the opposing party may not rely on the allegations in his pleadings, but must set forth facts showing there is a genuine issue and produce evidence on issues that the party has the burden of proving at trial. Civ.R. 56(E); Wing v. Anchor Media, Ltd. of Texas, 59 Ohio St.3d 108 (1991), citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986). {¶19} In determining a motion for summary judgment, the trial court will construe the evidence most strongly in favor of the nonmoving party and grant summary judgment where that party fails to make a showing sufficient to establish the existence of an essential element upon which the party bears the burden of production. Id. The trial court is not permitted to weigh the evidence or choose among inferences. Instead, a court must evaluate the evidence and take all permissible inferences in favor of the nonmoving party. Courts must also resolve credibility questions in favor of the nonmoving party. Dupler v. Mansfield Journal Co., 64 Ohio St.2d 116, 121 (1980). Case No. 26 MA 0027  –6– The Lease Agreement {¶20} The parties’ “Option Lease Agreement” states it was created and executed on July 23, 2012 by and between Harold L. Conder and Susan G. Conder, Grantors, and Subtropolis Mining Co., Grantee. It states the Grantors agree to give Grantee the right to purchase “any part or all of the profitably mineable limestone underlying the parcel(s) of land owned by Grantor(s) containing approximately 96.82 acres . . . in Springfield Township, Mahoning County, Ohio.” The lease further states Grantee will notify Grantor of its decision to exercise its option by letter sent by U.S. mail. It is undisputed that Grantee complied with this section. {¶21} The lease thereafter states that upon Grantee’s election to accept the agreement, the parties agreed to additional provisions. These additional agreed-upon terms include “Mining Rights,” which state in part: “Grantee shall have the right on the subject premises to do all things reasonably necessary to search for, locate, gain access to and to effect the profitable removal of limestone from the subject premises.” {¶22} The “Mining Rights” also state: “There shall be no express or implied obligation on Grantee to develop the subject premises at any particular pace or in a particular manner, all such determinations as to the time, pace, manner, and type of development to be at Grantee’s sole subjective discretion.” {¶23} Under the heading “Advanced Royalty,” the lease further states Grantee agrees to pay Grantors as advance royalty the sum of $97 on or before the 25 th day of each month “until mining operations commence. All advanced royalties are deducted from future earned royalties.” {¶24} Under the heading “Term,” the lease also states: The Grantee shall hold these leased premises for a term of ten (10) years, from and after the date of execution of this lease agreement; or until all the limestone on or under these leased premises are no longer needed by the Grantee in connection with the mining, extracting and removing of limestone from contiguous properties of these leased premises, whichever term is the longest. {¶25} The lease further states under the heading “Right to Abandon” the Grantee is hereby given the right to abandon the premises at any time . . . and thereupon both Case No. 26 MA 0027  –7– parties shall be released from all obligations hereunder, except Grantee shall remain liable for all monies and royalties due Grantor(s) up to the time of such abandonment.” {¶26} The lease additionally contains a paragraph titled “Covenants in Writing,” which states in part: This agreement is subject to no promise, understanding, condition, agreement or circumstance except such as are expressly written in the foregoing instrument and no subsequent oral conditions, agreement, promises or waivers of the terms hereof shall be effective unless in writing and signed by both parties hereto. (March 20, 2025 Complaint, Exhibit 1.) Analysis {¶27} Because the lease never requires production, Appellants argue the lease is void as against public policy. They rely upon the Ohio Supreme Court’s decision in Ionno v. Glen-Gery Corp., 2 Ohio St.3d 131 (1983). Appellants argue the Ionno decision overruled the Ohio Supreme Court’s decisions allowing perpetual leases when the respective lease expressly and intentionally created perpetual leases. Appellants urged the trial court to find the lease was only valid for the first term option, i.e., the ten-year term, since the second perpetual term is void as against public policy. (November 12, 2025 Motion for Summary Judgment.) {¶28} In their reply in support of summary judgment, Appellants argued the lease is void because it does not have a defined ending; it is a perpetual lease that does not require the production of minerals; and it allows the lease to go on indefinitely even if Subtropolis ceased making advanced royalty payments. Appellants argued the cases relied on by Subtropolis were distinguishable since they predated Ionno and did not involve leases for mineral right production, but involved gas storage and another had an annual renewal clause. (December 3, 2025 Reply.) {¶29} Subtropolis also moved for summary judgment in its favor and sought a declaration the lease was valid and enforceable. It argued in part the lease expressly states it contains “no express or implied . . . obligation to develop the premises at any particular pace or in a particular manner.” Instead, Subtropolis asserts the lease gives it the “sole subjective discretion” regarding the timing and manner of limestone mining Case No. 26 MA 0027  –8– operations. And because the parties’ lease contains these provisions, Subtropolis urged the trial court to hold the implied covenant of reasonable development and the Ionno case are inapplicable. Subtropolis urged the trial court to dismiss Appellants’ quiet title action and grant it summary judgment. (November 5, 2025 Motion for Summary Judgment.) Implied Covenant to Develop the Land {¶30} As argued by Appellants, Ionno held in part “that absent express provisions to the contrary, a mineral lease includes an implied covenant to reasonably develop the land.” Ionno v. Glen-Gery Corp., 2 Ohio St.3d 131, 132 (1983). {¶31} When analyzing whether to recognize an implied covenant to explore further, the Ohio Supreme Court in Alford v. Collins-McGregor Operating Co., 2018-Ohio- 8, ¶13, recognized and explained its prior decision in Ionno. Id. at 20. Alford explained: [P]arties can prevent application of the implied covenant of reasonable development by including in the lease “express provisions to the contrary.” Beer v. Griffith, 61 Ohio St.2d 119, 399 N.E.2d 1227 (1980), paragraph two of the syllabus. For example, the parties can include a general disclaimer of implied covenants. E.g., State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, 145 Ohio St.3d 180, 2016- Ohio-178, 47 N.E.3d 836, ¶ 32-33 (holding that the parties' disclaimer prevented application of an implied covenant). The parties can also describe the development of the land sought by the parties in the terms of the lease itself. See Ionno v. Glen–Gery Corp., 2 Ohio St.3d 131, 133, 443 N.E.2d 504 (1983) (“Thus, where a lease fails to contain any specific reference to the timeliness of development, the law will infer a duty to operate with reasonable diligence”); see also Kachelmacher v. Laird, 92 Ohio St. 324, 110 N.E. 933 (1915), paragraph one of the syllabus (“There can be no implied covenants in a contract in relation to any matter that is specifically covered by the written terms of the contract itself”). {¶32} Alford further held “under Ohio law concerning oil and gas leases, there is no implied covenant to explore further separate and apart from the implied covenant of reasonable development.” Id. at ¶ 25. Because the lease at issue in Alford did not contain Case No. 26 MA 0027  –9– a disclaimer of implied covenants, the court found the lease at issue there was subject to it. Id. at ¶ 14. {¶33} The implied covenant to develop only applies when a lease agreement does not address the timing of development. Id. at ¶ 14. Thus, when a lease explicitly disclaims the implied covenant of reasonable development and bestows one party with the sole authority or discretion to decide when to develop or mine the land, the implied covenant to develop the land is inapplicable. Id. While distinguishable, a review of the Alford decision supports the trial court’s decision. {¶34} Here, the parties’ lease explicitly states it contains no covenants in writing. Separately, the lease states Subtropolis, as Grantee, has no implied obligation to develop the premises at any pace or manner. Instead, the lease provides, “all such determinations as to the time, pace, manner, and type of development is to be at Grantee’s sole subjective discretion.” In light of this language adopted by the parties, coupled with the foregoing caselaw, the parties chose to disclaim the implied covenant of development. {¶35} Unlike Ionno, the lease here disclaims all implied covenants. “Where the lease specifies that no implied covenant shall be read into the agreement, an implied covenant to develop under Ionno cannot be imposed.” (Citations omitted.) Hupp v. Beck Energy Corp., 2014-Ohio-4255, ¶ 115 (7th Dist.), aff'd sub nom. State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, 2016-Ohio-178; accord Bentley v. Beck Energy Corp., 2015-Ohio-1375, ¶ 24 (7th Dist.). Perpetual Lease Term {¶36} Appellants also urge us to find the parties’ lease agreement is void as against public policy since Ohio courts do not allow perpetual mineral leases, which do not require the production of minerals or rent payment. {¶37} “Perpetual leases are not favored by the law and an intention to create such a perpetuity must be clearly shown. A lease will not be construed to create a right to perpetual renewal unless the language employed clearly indicates that it was the intention of the parties to do so.” Hallock v. Kintzler, 142 Ohio St. 287 (1943), syllabus. {¶38} The Hallock Court further explained: “In attempting to construe [the term of a] lease it is necessary to keep in mind the fundamental rule that perpetual leases are not favored and that general covenants as to [the] right of renewal are therefore usually Case No. 26 MA 0027  – 10 – limited to a single renewal unless an intention to create a perpetuity is clearly shown.” Id. at 289. Hallock found the lease at issue before it did not contain a clear intention to create a perpetual lease. Instead, the lease language provided for a one-year lease term with the general option to renew on an annual basis. Id. {¶39} In Myers v. E. Ohio Gas Co., 51 Ohio St.2d 121, 125 (1977), the Ohio Supreme Court considered whether a gas storage agreement for a primary ten-year term, followed by an uncertain term conditioned upon the occurrence of an event within the lessee's control, gave rise to a tenancy at the will of either party after the expiration of the primary term. {¶40} The lease term in Myers was for “a term of ten years, and so much longer . . . as gas is being produced, stored, withdrawn or held in storage by the lessee.” Id. at 127. Myers did not involve an argument about the right to a perpetual contract. Instead, the issue concerned which party had the authority to terminate the lease. When considering the contractual language, the Supreme Court concluded the lease granted only the lessee the right to terminate at will once the primary 10-year term expired. Thus, the agreement was “clearly terminable at the will of the lessee only,” and the court enforced it according to express terms. Id. {¶41} To the extent Appellants contend Ionno overruled the Ohio Supreme Court’s prior decisions in Myers and Hallock, we disagree. There is no discussion of either case in Ionno. Further, neither presented the same issue on appeal, and this district has since relied on both Myers and Hallock. See Hupp at ¶ 82. {¶42} In President & Trustees of Ohio Univ. v. Athens Livestock Sales, 115 Ohio App. 21, 22-23 (4th Dist. 1961), the Fourth District considered whether a lease granted a right of perpetual renewal. The lease provided for an initial, three-year term “and thereafter on a year to year basis until terminated by the lessees by one month's notice in writing to the lessors thirty days prior to [the renewal date].” Id. The Fourth District emphasized perpetual leases are disfavored and leases will be construed to avoid the right to perpetually renew, if possible. Nevertheless, upon construing the unambiguous lease language, it found the parties agreed to a covenant for permanent renewals. Id. at 23. Thus, despite the disfavor under the law, the court found it was bound to apply the parties’ agreement as written. Id. Case No. 26 MA 0027  – 11 – {¶43} As stated, the parties’ lease in this case states the following under the heading “Term:” The Grantee shall hold these leased premises for a term of ten (10) years, from and after the date of execution of this lease agreement; or until all the limestone on or under these leased premises are no longer needed by the Grantee in connection with the mining, extracting and removing of limestone from contiguous properties of these leased premises, whichever term is the longest. (Emphasis added.) {¶44} Upon reading the agreement as a whole and based on the plain language used, the lease could exist into perpetuity. This is how both parties allege the agreement should be read. While not favored, Subtropolis contends this reading and result are permissible under Ohio law. It contends the lease allows it to indefinitely hold the lease while paying its advance royalty payments to Appellants. {¶45} Appellants, on the other hand, urge us to find the lease agreement is void as against public policy because it does not require Subtropolis to develop the land and allows Subtropolis to maintain its lease on the limestone underlying the property into perpetuity with zero requirement to produce minerals. {¶46} When reviewing contractual language, the goal is to give effect to the parties’ intentions, which are presumed to reside in the plain language of the agreement. Kelly v. Med. Life Ins. Co., 31 Ohio St.3d 130, 132 (1987). Further, an agreement must be read as a whole and words or phrases should not be read in isolation. Dominish v. Nationwide Ins. Co., 2011-Ohio-4102, ¶ 8. Common, undefined words in a written instrument “will be given their ordinary meaning unless manifest absurdity results, or some other meaning is clearly evidenced from the face or overall contents of the instrument.” Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978), paragraph two of the syllabus. {¶47} According to its terms, the lease Term is the longer of ten years or until all the limestone under the property is no longer needed by Subtropolis in connection with mining or excavation of limestone. Thus, Subtropolis has the authority under the plain Case No. 26 MA 0027  – 12 – language to continue or terminate the lease after the expiration of the first, ten-year term. Appellants have no power or authority to terminate. {¶48} The lease also provides under the “Mining Rights” section that Subtropolis has no obligation to develop the premises, and it has discretion as to the pace and timing of development. The parties’ lease likewise provides Subtropolis the right to abandon the premises at any time. The lease does not give Appellants any similar discretion. {¶49} Although perpetual leases are generally disfavored as against public policy, Bohlen v. Anadarko E & P Onshore, LLC, 2014-Ohio-5819, ¶ 18 (4th Dist.), aff'd sub nom. Bohlen v. Anadarko E & P Onshore, L.L.C., 2017-Ohio-4025, courts nevertheless have a duty to apply the express terms of an agreement adopted by the parties. When a writing demonstrates the parties’ clear intent to create a perpetual lease, courts should uphold the same as valid and enforceable. {¶50} The parties’ lease agreement unequivocally states the lease term will be for a period of ten years or “until all the limestone on or under these leased premises are no longer needed by the Grantee in connection with the mining, extracting and removing of limestone from contiguous properties of these leased premises, whichever term is the longest.” Thus, consistent with Subtropolis’ argument, the lease is perpetual, and Subtropolis alone has the option to continue or terminate the parties’ lease. {¶51} The language of the agreement could have been improved by the inclusion of words such as forever, in perpetuity, or other words clearly denoting an intent to create a perpetual lease term. However, when considering the instrument as a whole, it is evident the parties created a perpetual lease subject only to Subtropolis’ discretion. President & Trustees of Ohio Univ. v. Athens Livestock Sales at ¶ 24, citing Geyer v. Lietzan, 230 Ind. 404, 409 (1952). Accordingly, we affirm the grant of summary judgment in Subtropolis’ favor. {¶52} Last, to the extent Appellants raise an argument about forfeiture as an available remedy, we decline to address this aspect of their argument since it has no practical effect on the controversy and is moot. Cain Ridge Beef Farm, LLC v. Stubbins, Watson, Bryan & Witucky, LPA, 2023-Ohio-4727, ¶ 52 (7th Dist.); App.R. (A)(1)(c). Case No. 26 MA 0027  – 13 – Conclusion {¶53} In light of the foregoing, Appellants’ sole assigned error lacks merit. The trial court’s decision is affirmed. Hanni, J., concurs. Dickey, J. concurs. Case No. 26 MA 0027 [Cite as Schubert v. Subtropolis Mining Co., 2026-Ohio-3720.] For the reasons stated in the Opinion rendered herein, the assignment of error is overruled and it is the final judgment and order of this Court that the judgment of the Court of Common Pleas of Mahoning County, Ohio, is affirmed. Costs to be taxed against the Appellant. 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.