Do landmen need to be licensed real estate brokers in Ohio?: a breakdown of the facts and procedural history of Dundics v. Eric Petroleum Corp., 2017-Ohio-640

1. Dundics v. Eric Petroleum Corp., 2017-Ohio-640
What Happened?
Thomas Dundics and IBIS Land Group entered into an agreement with Eric Petroleum
Corp. and Bruce Broker to work on negotiating and obtaining oil & gas leases from
property owners. They claimed that they received some compensation for their
services but that they did not receive everything they were owed.
What is the Issue?
Under O.R.C. 4735.21, no person or organization may bring a lawsuit for the collection
of compensation for the performance of acts mentioned in O.R.C. 4735.01 without
alleging and proving that they are licensed as a real estate broker.
What did the Trial Court Say?
The Court dismissed the case because Thomas Dundics and IBIS Land Group did not
allege in their complaint, as required under O.R.C. 4735.21, that they are licensed as
real estate brokers.
What did the Appellate Court Say?
The Appellate Court reviewed the complaint to determine if the dismissal was
appropriate and looked at whether oil and gas leases should be considered interests in
real estate. It affirmed the trial court’s decision, holding that “[w]hether described as
licenses, leases, fee simple determinable estates, or something else, any instrument
affecting oil & gas necessarily affects the surface rights as well, either in terms of the
right to access the surface for transportation, drilling, etc. because it affects the value
of the surface rights, it falls under the definition of ‘real estate’” under O.R.C.
4735.01(B).
What Happened During the Oral Argument in Front of the Supreme Court of
Ohio? on May 8, 2018
The attorney for Dundics argued that an oil & gas lease is not a transaction of an
interest in land because the word “land” under O.R.C. 4735.01(B) is undefined and
should be limited to surface estates. The attorney for Eric Petroleum suggested that
landmen should work on getting an exception through legislative means.
The oral arguments can be watched at: http://www.ohiochannel.org/video/case-no-
2017-0448-dundics-v-eric-petroleum-corp

2. O.R.C. 4735.01 Real Estate Broker Definitions
(A) "Real estate broker" includes any person, partnership, association, limited liability
company, limited liability partnership, or corporation, foreign or domestic, who for
another, whether pursuant to a power of attorney or otherwise, and who for a fee,
commission, or other valuable consideration, or with the intention, or in the
expectation, or upon the promise of receiving or collecting a fee, commission, or other
valuable consideration does any of the following:
(1) Sells, exchanges, purchases, rents, or leases, or negotiates the sale, exchange,
purchase, rental, or leasing of any real estate;
(2) Offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or
leasing of any real estate;
(7) Directs or assists in the procuring of prospects or the negotiation of any
transaction, other than mortgage financing, which does or is calculated to result in the
sale, exchange, leasing, or renting of any real estate;
(B) "Real estate" includes leaseholds as well as any and every interest or estate in
land situated in this state, whether corporeal or incorporeal, whether freehold or
nonfreehold, and the improvements on the land, but does not include cemetery
interment rights.

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