Continental Coal, Inc. v. Missouri Land Reclamation Commission

150 S.W.3d 371, 2004 Mo. App. LEXIS 1925, 2004 WL 2851771
CourtMissouri Court of Appeals
DecidedDecember 14, 2004
DocketWD 63936
StatusPublished
Cited by7 cases

This text of 150 S.W.3d 371 (Continental Coal, Inc. v. Missouri Land Reclamation Commission) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Continental Coal, Inc. v. Missouri Land Reclamation Commission, 150 S.W.3d 371, 2004 Mo. App. LEXIS 1925, 2004 WL 2851771 (Mo. Ct. App. 2004).

Opinion

THOMAS H. NEWTON, Judge.

This appeal stems from administrative proceedings involving the issuance of a permit to mine coal. Appellant Continental Coal, Inc. (CCI) contends that the director of the Missouri Land Reclamation Commission (LRC) improperly issued a permit that allows Oswego Coal Company, Inc. (Oswego) to mine certain coal reserves in Bates County known collectively as the Hume Mine. CCI contends that it holds an interest in the pertinent mining leases as a creditor of a previous leaseholder, Midwest Coal, L.L.C. (Midwest Coal). CCI contends that Midwest Coal fraudulently conveyed the leases to an affiliated company, Midwest Coal Resources (Midwest Resources), which then assigned the leases to Oswego.

After the director issued the mining permit to Oswego, CCI sought administrative review of the director’s decision before the LRC. The LRC upheld the director’s decision. CCI then sought judicial review of the LRC’s decision in the circuit court. The circuit court “affirmed” the LRC’s decision and dismissed CCI’s petition for review based upon CCI’s purported lack of standing. CCI appeals. We agree that CCI lacks standing and affirm the judgment of the circuit court.

I. Factual and ProceduRal Background

CCI’s claim pertains to seven leases that comprise the surface and mineral estates within an area of Bates County known as the Hume Mine. At one time, Midwest Resources held six of these leases and Midwest Coal held the seventh lease. 1 Midwest Coal and Midwest Resources are affiliated companies. Midwest Coal is a coal company started by Michael G. King and Stephen S. Stipanovich in 1997. Midwest Resources is a coal company started by King and Stipanovich in 1999. King and Stipanovich own both companies. From May 1998 until May 2002, Midwest *374 Coal had the right to supply coal to the city of Independence under a written contract (the coal supply contract). The city holds a perfected security interest in the Hume Mine leases.

A. Midwest Resources’ Permit Application

In 2000, Midwest Resources applied for a permit to mine coal at the Hume Mine under Missouri’s Surface Coal Mining Law (SCML). See generally § 444.800 through § 444.970. 2 The LRC is the state agency responsible for administering the SCML. See § 444.800.4 (directing the LRC to “rigidly enforce this law and to adopt whatever rules and regulations necessary to accomplish [the stated statutory] purposes.... ”). Under the supervision of the LRC director, the Land Reclamation Program (LRP) staff implements the SCML on behalf of the LRC. One of the director’s duties is to review applications for surface coal mining permits. When he has received a complete permit application and reclamation plan, the director must grant, require modification of, or deny the application for a permit. See § 444.835.1.

The LRP staff reviewed Midwest Resources’ permit application for the Hume Mine and discovered problems that could have prevented Midwest Resources from obtaining the permit. In March 2002, Midwest Resources decided to transfer its permit application to Oswego and applied to the LRP to do so. Consistent with its decision to transfer the permit application, Midwest Resources assigned the Hume Mine leases to Oswego in May 2002. Midwest Coal also assigned the coal supply contract to Oswego. In both instances, the city consented to these transfers.

The parties previously stipulated that “[ajlmost all sections of the permit application submitted by Midwest Resources remained unchanged for the permit application transfer to Oswego” except that “new pages of Section One, specifically concerning Oswego Coal were submitted for review for the permit application transfer. Section One includes information required by 10 CSR 40-6-030(3), Right of Entry and Operation Information.” The parties further stipulated that Midwest Resources had included with its request for the permit application transfer written, executed assignments of the seven Hume Mine leases.

B. Oswego’s Permit Application

On June 5, 2002, the director approved Midwest Resources’ request to transfer its permit application to Oswego and the LRP staff reviewed Oswego’s permit application. As the review of Oswego’s permit application neared completion in June 2002, the director received a letter from CCI’s president, Philip E. Tearney, notifying the director that CCI had a potential property interest in the coal reserves covered by the leases and that CCI had state court litigation pending concerning this interest, a case styled GE Capital Corporation v. Midwest Coal, LLC (the GE Capital litigation), which was filed in St. Louis County Circuit Court on May 6, 2002.

Mr. Tearney’s letter indicated that CCI was acquiring loan documents from GE Capital, that Midwest Coal was the borrower under these loan documents, that King and Stipanovich were guarantors of the loan under these documents, and that the loan documents included a security agreement covering Midwest Coal’s assets. Mr. Tearney explained that Midwest Coal, as well as King and Stipanovich, had defaulted on the loan and that GE previously had filed the GE Capital Litigation for breach of promissory note and breach of personal guaranties.

*375 Mr. Tearney informed the director that CCI intended “to continue to pursue and possibly expand the scope of the Lawsuit to encompass the [coal] Reserves” and further informed him that CCI had “been advised” that King and Stipanovich “were and are the sole owners of the entity that owned the Reserves at the time the Lawsuit was commenced,” that “the Reserves may have been transferred during the pen-dency of the Lawsuit for an amount that was less than fair and adequate under the circumstances” and that “as a result of such transfer, the guarantors may have diminished their personal estates to the detriment of creditors generally and [CCI] specifically.”

Mr. Tearney concluded by requesting that the LRP “take all steps necessary to assure that the above referenced assets are not diminished in value prior to a resolution of the foregoing process.”

Counsel for the director responded to Mr. Tearney’s letter by requesting copies of the loan documents listed in Mr. Tear-ney’s letter as well as a copy of the petition in the GE Capital litigation. Counsel for the director then asked:

Is Continental Coal asserting that Midwest Coal no longer owns the coal leases it has on the Tiger Mine so it cannot transfer said leases to Oswego Coal Company? Or, is this simply a matter in which Continental Coal will need to be listed as a controller on the permit to mine coal at the Tiger Mine that is being drafted for Oswego Coal Company[?]

Meanwhile, the LRP obtained copies of the U.C.C. filings between Midwest Coal and GE, which were filed on December 31, 2001. The LRP did not find in these filings any mention of the leases that make up the Hume Mine. The LRP also obtained copies of the U.C.C. filing between Midwest Coal and the city, which was filed on August 24, 2000.

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150 S.W.3d 371, 2004 Mo. App. LEXIS 1925, 2004 WL 2851771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-coal-inc-v-missouri-land-reclamation-commission-moctapp-2004.