Universal Equipment Co. v. State Ex Rel. Department of Environmental Quality

839 P.2d 967, 1992 Wyo. LEXIS 152, 1992 WL 296184
CourtWyoming Supreme Court
DecidedOctober 21, 1992
Docket92-21
StatusPublished
Cited by3 cases

This text of 839 P.2d 967 (Universal Equipment Co. v. State Ex Rel. Department of Environmental Quality) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Universal Equipment Co. v. State Ex Rel. Department of Environmental Quality, 839 P.2d 967, 1992 Wyo. LEXIS 152, 1992 WL 296184 (Wyo. 1992).

Opinions

MACY, Chief Justice.

Appellant Universal Equipment Co. challenges the district court’s order requiring it to post an additional performance bond to ensure reclamation of its mine-site buildings and facilities. Appellant contends that the Wyoming Environmental Quality Act (WEQA) does not authorize the Department of Environmental Quality (DEQ) to impose reclamation and bonding requirements for buildings and facilities which were built before the WEQA was enacted. We affirm.

Appellant raises the following issues:

1. Whether buildings and facilities that existed within a mine permit under the Open Cut [Land] Reclamation Act of 1969 are subject to additional reclamation and bonding requirements under the Environmental Quality Act of 1973 by virtue of converting the original permit to a permit under the EQA of 1973.
2. Whether entry of an order by the District Court directing the payment of reclamation bond proceeds pursuant to a contract which authorized such payments only upon the completion of all reclamation, precluded the Court from later determining that reclamation was not complete and directing the posting of additional bond.

Appellee State of Wyoming restates the issues as:

I. Whether the district court correctly determined that buildings and structures at the Atlantic City Mine are subject to the reclamation and bonding requirements of the Wyoming Environmental Quality Act.
II. Whether the district court has determined that reclamation at the Atlantic City mine is complete.

United States Steel Corporation owned and operated an iron ore mine located near Atlantic City in Fremont County, Wyoming, for many years, first pursuant to a permit issued under the authority of the Open Cut Land Reclamation Act and then, starting in November 1974, under the authority of a WEQA permit. After receiving its WEQA permit, United States Steel continued to operate the mine for several more years until it finally ceased active mining in 1983. Rather than reclaim the mine itself, United States Steel sold the mine and transferred its mining permit to Appellant in January 1985. By accepting the transfer of United States Steel’s mining permit, Appellant obtained salvage rights to the on-site mining equipment and materials and assumed responsibility for reclaiming the mine site. As part of the permit transfer, Appellant was required to submit a new reclamation plan and to post a reclamation performance bond of slightly more than $1.8 million.

Beginning in 1985, Appellant contracted with various companies to perform different aspects of the reclamation project, such as engineering and construction. Reclamation activities continued from 1985 until the spring of 1989, when a dispute arose between one of these companies, ARIX Corporation, and Appellant regarding Appellant’s failure to pay ARIX for its engineering services. ARIX filed a breach-of-contract action, naming both Appellant and the State of Wyoming, by and through the DEQ, as defendants.

ARIX moved for, and the district court granted, a summary judgment against Appellant for unpaid engineering services. [969]*969To satisfy its judgment, ARIX applied for a writ of postjudgment garnishment against Appellant’s reclamation performance bond being held by the DEQ. The State resisted ARIX’s motion for a postjudgment garnishment, contending that it could not allow garnishment of the bond until additional reclamation had been completed. In conjunction with its answer resisting a post-judgment garnishment, the State petitioned the district court for a declaratory judgment to determine the responsibilities between the three parties and, of particular importance to this appeal, to determine Appellant’s obligation to demolish or make some acceptable use of the mine’s buildings and facilities as part of its reclamation effort.

ARIX filed a motion requesting the court to separate its garnishment action from the DEQ’s petition for a declaratory judgment. The district court granted ARIX’s motion to separate and, in an order entered on May 21, 1990, found that the funds held by the DEQ were not subject to garnishment. In that same order, the district court found that a contract existed between the DEQ and Appellant regarding Appellant’s performance bond. The court based its conclusion that a contract existed upon a series of letters exchanged between Appellant and the DEQ in which Appellant agreed to convert its $300,0001 reclamation bond from an irrevocable letter of credit to cash and to release the funds to the State subject to specific conditions. Appellant’s release of the funds was expressly conditioned upon the State using the money, first, to pay for any remaining engineering and construction work done on the reclamation project; second, to pay any amounts owing on construction services; third, to pay ARIX for engineering services; and, finally, to return any excess funds to Appellant. The district court specifically enforced that part of the contract which required the DEQ to pay the amount owed by Appellant to ARIX for engineering services.

On April 27, 1990, the court held a hearing on the DEQ’s petition for a declaratory judgment, with the significant issue being whether the DEQ could require Appellant to post a sufficient performance bond to ensure the costs of demolishing and removing the mine’s buildings and facilities. In a declaratory judgment and order for a reclamation performance bond, the district court found that the DEQ could require Appellant to provide additional bonding for Appellant’s remaining reclamation obligations, including demolition of the on-site structures. The court ordered Appellant to submit a detailed plan within sixty days, indicating which buildings it intended to demolish and the proposed future use for those buildings it intended to retain, or, in the alternative, to post a $4 million reclamation performance bond with the DEQ. Under either option, the order required that a bond of approximately $386,000 be posted to ensure revegetation of the land which had not been reclaimed as well as certain less costly contingency items, such as repairing drainage structures and dust control. However, if Appellant chose to post the $4 million bond, the $386,000 would be included in the $4 million.

The DEQ’s method of estimating the costs of demolishing the mine’s buildings was less than precise. Mark Moxley, a district supervisor for the DEQ’s Land Quality Division, testified that he reached an estimate of Appellant’s demolition costs by averaging the costs of demolishing the buildings on five trona mining operations with comparably sized structures. Mr. Moxley felt that his estimate of $3 million was within “20 or 30 percent” of the actual costs of demolishing the buildings at the mine site. In its order requiring Appellant to either post a $4 million bond2 or propose a beneficial use for any retained buildings, [970]*970the court acknowledged Appellant’s contention that some of the reclamation costs were unnecessarily high. To accommodate Appellant’s objections, the court granted Appellant sixty days to provide a detailed cost analysis showing that the actual reclamation costs would be lower than those estimated by the DEQ.

Appellant’s response to the court’s order claimed that any obligations concerning the buildings were controlled by its permit and reclamation plan, neither of which required it to demolish the buildings.

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Bluebook (online)
839 P.2d 967, 1992 Wyo. LEXIS 152, 1992 WL 296184, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-equipment-co-v-state-ex-rel-department-of-environmental-wyo-1992.