*1 the circuit court for a remand his case to new
trial. CONSOLIDATION COAL COMPANY and Pittsburgh Midway Coal Com JJ., DURHAM,
HOWE and concur. Plaintiffs, pany, Appellants, and Cross- Appellees, GREENWOOD, Judge, concurring: concur, clarify I my but write to basis for v. doing agreement I am analy- so. in with the UTAH DIVISION OF STATE LANDS dissenting opinion sis contained in the FORESTRY; Ralph Miles, AND Di Justice Durham and Chief Justice Zimmer- rector Division of State Lands and Ohms, City man in Salt Lake Forestry; Utah Board of Lands (Utah 1994),regarding the constitutional- Forestry; Department of Nat 78-8-31(6) ity of section of the Utah Code. Resources; Hansen, ural Dee Executive judicial long So as Utah’s branch has control Department of Director of Utah Natural judicial exclusively over functions thus con- Resources, Defendants, Appellees, and trolling “judicial power,” I believe the consti- Cross-Appellants. addition, my tution is satisfied. in view in majority result arrived at Ohms No. 920321. provi- is unwarranted either constitutional sions or relevant case law. Supreme Court Utah. Furthermore, given ever-expanding courts, case Utah’s Dec. load commissioner system provides flexibility manage needed efficiently
our effectively dockets within jurisdiction judicia- ry. majority opinion, Absent the Ohms I would conclude that the statute is constitu- Taysom’s
tional and affirm conviction. I reluctantly majority therefore concur in the opinion in this case.
STEWART,
Justice,
Associate Chief
concurring
the result:
I
concur
the result for the
stat-
reasons
opinion
majority
ed
City
Salt Lake
Ohms,
(Utah 1994).
court. added). process right (emphasis
that inmates have a due major- to review Id. Because the Ohms parole information the ing will board consider dur- ity heavily concluding relied Labrum in original grant parole hearing. Ohms should not be denied the benefit of his considering the issue of whether the rule should victory, retroactivity we conclude that the rule apply retroactively, this held Thus, applies set out Labrum here. because judicial integrity require considerations of us Taysom's pending claim was before this court at peti- extend benefit of our decision to Ohms, the time we decided conclude that currently tioner and to inmate who has a Taysom should denied the benefits of that pending appeal claim in the district court or on decision. See id. appeals this court or the court .... before
ZIMMERMAN, Chief Justice: Company
Consolidation Coal
Pitts-
(col-
burgh Midway
Mining Company
Coal
“Consol”)
lectively
appeal, and the
Divi-
Utah
Forestry,
sion
Lands and
*3
Forestry,
Board of State Lands and
Utah
Resources,
Department of Natural
vari-
and
employed by
ous individual
defendants
“State”)
(collectively
Utah
State of
cross-
appeal, a decision of the Seventh Judicial
Emery County.
Court
District
of
This case
proper interpretation
roy-
involves the
alty provision
a
in
coal
into
lease entered
between
State and Consol and the
royalties
under
interest due
below,
provision.
that
As discussed
this case
previously
has
this
been before
court and
was
Mining
remanded in Plateau
Co.
Forestry,
Utah Division
State Lands &
(Utah 1990).
remand,
ject
Lease was
ease,
Pittsburgh Midway Coal
in this
tiff
by the
common schools
support
Midway”).
(“Pittsburgh &
Mining Company
En-
the Utah
Congress
States
under
United
22, 1977, Consol submitted to the
On June
138, §§
Enabling
ch.
abling
Act
Act. Utah
Oil,
Gas and
Utah State Division
At all times relevant
28 Stat. 107
mine,
plan.
proposed
mine
proposed
case, the
lands were
school trust
Mine,
Emery
consisted of
Deep
known as the
managed by the Utah Division
private lands
well
state and
(the “Division”) under
Forestry
Lands and
leases,
lease number
including federal
rules,
regulations
established
policies,
*4
payable
royalty
The
rate
on this
U5287.3
Forestry
of
and
the Utah Board
State Lands
per
17.5$
was
coal ton. Consol
federal lease
“Board”).
(the
§§
Ann.
Utah Code
65A-1-
mining during
quarter
the
of
began
second
1994).1
(1993) (amended
-1-4, -4-3,
-7-1
through
to mine
1986.
1981 and continued
time,
royalties
During
paid
it
the State
originally
the
The State
issued
Lease
ton,
17.5$
view
per coal
on the basis of its
of
(“Kemmerer”)
Company
in
Kemmerer Coal
the
on
federal lease
the same
rate
The
January
twenty-year
for
term.
“rate
...
for
prevailing
mine
the
constituted
trans-
a standard lease form its
State used
of land of
character.”
federal lessees
similar
Kemmerer. That form autho-
action with
assignees
the
or its
extract
rizes
lessee
When the State issued the Lease
specified
exchange
royalties.
coal
royalty
on
government’s
rate
the federal
royalties
higher
are
at
of
These
fixed
the
15<f
15$
mining
generally
per ton.4 In
leases was
begin-
prevailing, at
per ton or the “rate
the
1976, Congress enacted the Federal Coal
payment
ning
quarter
of
for which
is
(“FCLAA”).
Leasing
Act
Amendments
made,
of
of
being
for federal lessees
land
(1976).
94-377,
The
Pub.L. No.
90 Stat.
coal
character under
leases issued
similar
secretary
inte-
FCLAA authorized
The Lease
at that time.”2
United States
royalty
prescribe
rior to
increased federal
subject
granted
in all
also indicates that it “is
newly
on
issued leases. 30 U.S.C.
rates
respects
and
the conditions of
under
§
new rates were fixed at
The
rules
existing
of
of Utah and
laws
the State
produced from
of
value of the coal
8% the
regulations
operating
and such
rules
any
underground
C.F.R.
mines.
approved
regulations as
hereafter
3473.3-2(a)(3) (1979).
adopted by
Land Board.”
the State
(a)
per
15$
lbs.
legislature
ton
extensive revi-
at
rate
1. In
made
dealing
premises and
produced
Code
with school
the leased
sions
sections
coal
from
of,
disposed
See Utah Code
and institutional
trust
lands.
or
sold or otherwise
revisions,
§§
(b)
beginning
Ann.
53C-1-101 to -5-104.
prevailing,
at the rate
at
new,
among
things,
independent
made,
create
other
being
quarter
payment is
for which
agency
government entitled School
within state
land of similar character
for federal lessees of
(the
and Institutional Trust Lands Administration
the United States
under coal leases issued
"Administration").
Utah Code Ann.
53C-1-
time,
higher.
is
whichever
control
Administration
vested with
201. The
managed
and is
all
lands in the state
over
trust
men-
no state leases were
3. Consol indicates that
newly
policies
pursuant
established
plan. The Lease involved in
tioned in the 1977
Institutional Trust Lands
created School and
however,
was,
present dispute
within the
Trustees.
Id.
Board of
Mine,
Emery
regardless
Deep
of whether was
plan.
in the 1977
mentioned
part,
royalty provision reads:
2.
In relevant
Lessee,
granting
in consideration of
cents-per-ton
general
Although the
federal
aforesaid, hereby
rights
privileges
15s,
a rate
federal lease carried
was
Consol's
agrees
as follows:
covenants
during
period.
17.5$ per
time
ton
relevant
17.5$-per-ton rate was
that this
quarterly,
pay
on or
To
to Lessor
SECOND:
prevailing
land
succeeding
rate for lessees of
federal
day
15th
month
before the
royalty
character.
quarter,
similar
each
began
December
the State
ble.
Id. at 726. We concluded that
leases,
audit of
including
state coal
Consol’s.
ambiguity
phrase
this case
arose
The auditors discovered that
prevailing
“rate
...
lessees
newly
rates
coal
issued federal
land
similar character.”
Id.
In other
leases had
increased to
been
8% but Consol words,
ambiguous
Lease
reported
and others had not
only in the sense
exact alternative
higher rates on their state leases.
rate was not clear on the face of the docu-
ment,
ambiguity
but this
did not make the
In October of
the Division notified
Instead,
Lease unenforceable.
Id.
we indi-
Consol that it
owed
State the difference
cated
fact finder should
re-
have
per
between
ton and
of the value of
17.5c
any ambiguity by
solved
reference to extrin-
up
all coal mined from the Lease
to that time
parties’
sic evidence of the
intent.
Id. We
and that all future
would be 8% of
remanded the case
trial
court to deter-
receiving
higher
value. After
notice of the
rate,
how “the
mine
federal rate was to
Emery
Consol continued to
be calcu-
mine the
lated,
was,
only 17.5$
Mine
what the rate
pay
per
and when it became
ton.
‘prevailing,’ if it
did.”
action, seeking
Consol filed this
a declara-
tory judgment
due un-
Because
matter had been
decided
17.5$
der
per
the Lease
coal.
ton of
It
summary judgment, the trial court
*5
based its claim the
on
terms of the Lease and
determined whether
had
an
Consol
reached
on
agreed
its assertion that the State had
to
“agreement” with the
regarding
State
the
17.5$ royalty
the
rate. The State counter-
proper interpretation
royalty provi-
claimed, asserting that the rate was 8% of
agreement
Id.
sion.
at 727.
allegedly
This
coal,
the value of the
which the
con-
royalty
set the
rate on Consol’s Lease at
represented
tended
prevailing
the
ton,
17.5$ per
corresponded
which
with the
entering
rate. The State also denied
into
paying
rate Consol was
on
federal lease
any agreement
royalty
17.5$
fix
to
the
at
rate
the same mine. Id. We remanded the case
per
Finally,
ton.
the State claimed late-
to the trial court to decide this issue on the
payment penalties and
on
the
Id.
merits.
alleged
owing.
to be
short,
questions relating
two broad
to
initially granted
The trial
summary
court
proper interpretation
the
of the alternative
judgment
ground
in favor of Consol on the
provision
rate
were to be decided on remand.
provision
facially ambigu-
rate
was
First,
rate,
prevailing
what was the
and when
similarly
ous. It ruled
in three other declar-
Second,
did it become prevailing?
did Con-
atory judgment
brought
actions
other
“agree” upon
sol and the State
interpreta-
an
State,
mining
against
companies
the
all in-
royalty
the
provision,
tion of
or is the State
volving
royalty.
the
appealed
The State
estopped
denying
from
agreement,
such an
court,
the
dismissals to
which consolidat-
17.5$
which
prevailing
under
would be the
ed the cases.
grants
We reversed the
rate for federal
of land
lessees
of similar
summary judgment and remanded the cases
character? As to the
issue
interest on the
with instructions to take further evidence on
royalties,
unpaid
the trial
was to deter-
issues,
several
as discussed below. Plateau
ap-
mine whether
interest was
We
between these
8%. The court had to choose
royalty
rate fixed
the alter
lating to the
mutually
of the facts. The
exclusive versions
Consol
provision of the Lease.
native rate
specif-
required
negate
each
reject
was not
court
court erred in
that the trial
contends
of the facts.
ic
of Consol’s version
provision alleg-
element
interpretation of this
ing the
opinion
separate
lengthy
find-
only
synopsis of
memorandum
is
as a brief
6. This
intended
ings
law.
and conclusions of
of fact
entered
The court
trial court’s decision.
Beers,
neglected
employees
See Sorenson
160 had
to inform Division
(Utah 1980).
simply
It
change
found that the
facts
FCLAA
federal
addition,
supported
position
the State’s
and that
rates.
the trial court did not
agree
the rate at
did
to set
find that Consol had
the fact that
disclosed
it
17.5<t
ton,
per
regardless
alleged
of whether the
had several' federal leases in Utah and had
agreement
agreement
as an
unsuccessfully appealed
government’s
characterized
re-
modify
agreement
interpret
adjustment
or an
royalty
those
leases to an 8%
contract.
or the fact that Consol had
issued a
been
new
federal
lease
that carried an 8%
Second,
specific
the trial court made
find-
royalty.
Lease,
Under
Consol had the
ings
regarding
of fact
the evidence that Con-
responsibility
calculating
royalty
presented
support
alleged
sol
inter-
submitting
required royalty
information.
pretive agreement.
findings
These
are con-
In Plateau
noted:
“The
position, namely,
sistent with the State’s
plaintiffs
responsible
calculating
were
argument
the trial court understood Consol’s
royalty pay-
alternative
prevailing
accept
but
heavily
did not
it.
relies
ments ....
right
rely
The State had a
meetings
minutes
held
good
faith of its
calculating
lessees in
and 1975 well as on
discussions with Divi-
royalty
submitting
required
informa-
prior
sion officials which occurred
tion.” 802
at 727.
The FCLAA and its
opening
mine. The trial court ex-
change in federal rates
have
should
raised a
pressly
adopt
declined to
interpreta-
Consol’s
question
proper
serious
as to the
tion of Board minutes.
It found that a “clear
rate,
thus,
have
should
disclosed
reading
...
of those minutes
shows that
agents.
FCLAA to
State’s
there
no
discussion or conclusion
sum,
reached
specific
Board as
trial
court
not fail
did
any
meaning
discussions,
of’
terms in the
consider the
it
nor did
consider
Lease.7
find no
suggesting
evidence
them
agreement
relevant
to an
to modi
clearly
making
Rather,
fy
court
erred in
this deter-
the contract.
we conclude from
mination.
findings
the trial court’s
and conclusions that
binding agreement,
declined to find
court
trial
also addressed Consol’s
doing
permit
because
so would
Consol to
relating
evidence
to the discussions between
take
advantage
its failure to disclose to the
Division officials and Consol. Consol is cor-
State facts that would have raised serious
stating
rect in
trial
did not
*7
questions
position.
as to Consol’s
See 3 Cor
negate
fact
the
that
those discussions oc-
§
bin on Contracts
We find no
asserts, however,
curred.
incorrectly
Consol
error here.
court
findings
trial
failed to make
of
regarding
fact
them
Finally,
and therefore
interpretation,
must have
Consol’s
which it
fact,
failed to consider them.
In
agreed to,
the trial
claims
particularly
the State
is
court did
accept, given
address the discussions.
It found
difficult to
significant
its
diver-
discussions,
during
that
the
gence
Consol had
language
provision.
failed
from the
relevant
provision required
disclose
information to
payment
Division The
of the “rate
employees
whom
Specifically, prevailing,
with
it dealt.
beginning
quarter
at the
the
of
for
the
expressly
made,
trial court
payment
found that Consol which
being
is
for federal
Moreover,
2(a)(3).
government
do not see
only
how minutes from
The federal
had
one
meetings
readjusted
held in
newly
1973 and 1975 would be
minimum
for
rate
or
issued
persuasive,
particularly
underground
if those
even
minutes
leases in
mines —8%. The trial
exactly
they
Congress
read
as Consol
regard-
claims
do.
court found that this rate
same
was the
pass
area,
did not
the FCLAAuntil 1976. The FCLAA
less of whether the leases
canyon,
were in
result,
same
implementing regulations changed
the feder-
or
As a
mine.
Board minutes
al
redefined
pre-FCLAA
rates and
the classification of
purport
federal
from the
era that
to define
FCLAA,
passage
leases. After
of
what
"land
constitutes
of similar character” are
primary,
arguably only,
particularly
present regulatory
"characteristic” rel-
not
milieu,
useful in the
purposes
royalty
evant
of
generally only
for
federal
rates is
in which there are
two
underground.
whether
mine is
dispositive
surface
federal
rates and
"characteristic”
207(a);
See 30 U.S.C.
43 C.F.R.
3473.3-
is the nature
the mine.
of
next contends that
the trial
character.” Con-
Consol
of land of similar
lessees
necessary findings
to make
of
court failed
alleg-
the Division
interpretation, which
sol’s
Nevertheless,
attacking
other than
fact.
to, subtly
this critical
edly agreed
alters
adopt
interpre
trial court’s decision not
First,
ways.
inter-
phrase in two
Consol’s
Lease,
specify
tation of the
Consol does
only at
rate
pretation requires it to look
missing findings.
“[a]
We reiterate that
In-
paid
its lease
the same mine.
every conflicting
trial court need not resolve
paid by all
focusing
on the rates
stead
‘[njor
issue,
evidentiary
required
lessees,
highlights
primarily
federal
Consol
”
negate allegations
findings
in its
of fact.’
mine,
that
only
one
lease it held in
Richins,
Sampson
17.5$ per
had a rate of
ton.
which
Sorenson,
Ct.App.1989) (quoting
160). Rather,
P.2d
“[t]he [trial
at
court’s
interpretation also “reads out”
Consol’s
findings must be articulated with
factual]
portion
provision
rate
alternative
ulti
sufficient detail so that the basis
requires
determine and submit the
Consol to
mate
conclusion can be understood.” Reid
quarterly
prevailing rate on a
basis. Consol
Co.,
Mutual Omaha Ins.
arising
agreement allegedly
from
relies
an
(Utah 1989). We have examined the trial
between the State and Consol
discussions
findings of
court’s memorandum decision and
meetings
during
1981 and Board
1978 and
fact and find them be well-reasoned and
agreement
This purported
held before 1976.
fully supported by
It
the record.
17.5$royalty
rate until
binds the State to
necessary
negate
for the trial court to
Con-
readjustment.8
interpreta-
Under Consol’s
point by point. The
sol’s version of the case
tion,
17.5$
long
a
as it held federal lease
find
trial court needed make
those
ton,
per
state leases
bear the same
would
necessary
decision,
ings
to its
it has
rate, regardless
subsequent changes in the
done.
structure,
the rates
oth-
alleges
the trial court
lessees,
er
or the number of other federal
finding
erred in
that the State was not es-
holding-leases
that rate. The
lessees
with
topped
asserting
royalty rate.
an 8%
Lease, however,
fluctuating
provided for a
This is not
first
time we have addressed
quarterly.
redetermined
The ob-
estoppel
issue
this case.
Plateau
prevent
purpose
vious
of this
is to
plaintiffs
argued
royalty lock-in that
now
asserts.
acceptance
State’s
lower
rates
conclusion,
the trial court
vested
collecting
higher
estopped it from later
responsibility
resolving
factual
rejected
rate.
trial court
sum, “[ejstoppel
equity
In
a doctrine of
is
record,
judgment
ing the
do not find that
party
loss
purposed to rescue from
a
who
clearly
to be
in error.11
has,
fault,
without
been deluded into course
wrong
particular,
neglect
action
the trial court found that
or
of another.”
Any
“only
cor-
Id. at 697. Consol is not without fault.
action to determine the
Consol’s
resulted,
royalty
employees
part,
to talk to
of delusion in this case
at least in
rect
rate was
understanding
steps
inadequate
their
from its
to determine the
the Division
-
royalty
royalty provision without
correct
rate and its concurrent failure
meaning of the
all
making any
inquiries.”
never
to disclose
relevant
information to the
other
Consol
legal duty
sought
agents.
from the Board
State’s
Consol had
a written decision
regarding
proper royalty
prepare
rate.
and forward a certified statement
indicating
produced
coal
amount of
important,
More
the trial court found
proper royalty
compe-
find
rate.12 We
employ-
to inform
Consol had failed
Division
tent
evidence
the record to
and admissible
regarding the
ees and the Board
FCLAA
support
trial court’s determination that
earlier,
if
royalty. As
and the 8%
noted
prudence
not act with
Consol did
reasonable
appropriate
there was
doubt as
diligence
fulfilling
duty.
and due
Be-
rate,
royalty
Consol should
disclosed
have
cause Consol has failed to meet its burden of
to the Board
the existence
FCLAA
proving
pru-
it acted with reasonable
sought
and then
written
and the Division
dence,
necessary prerequisite
is a
which
Consol,
withholding
clarification.
after
infor-
estoppel,
not
we need
address the remainder
mation,
protection
to claim
is
entitled
arguments.
estoppel
of its
estoppel
Morgan,
doctrine.
under
See
(“The
equita-
at 697 n. 4
doctrine of
next contends
trial
Consol
estoppel
operate
in favor of one
ble
does
awarding prejudgment
inter
court erred
knowledge of the
facts or
who has
essential
Consol,
uncertainty
According
est.
has convenient and available means
who
determining
prevailing
feder
inherent
obtaining
knowledge.”).
such
royalty
precludes
imposition
al
It
prejudgment
interest in this case.
relies
prudence and
Consol’s claims of reasonable
Inc.,
Industries,
Bjork
primarily
April
diligence
particularly
given
due
are
tenuous
(Utah),
denied, 431
cert.
U.S.
that Consol continued to mine coal and
(1977), in
525 X, adoption article regu- rules of section 3 of the Board’s and applied court Const, X, penalties, regarding and Con- Constitution. Utah art. 3 lations Const, (current (1896) $1,473,856.09 X, in interest would have owed version at Utah art. sol (1986)). title, penalties.15 legal holds 5 The State thus trustee, lands to the school trust above, argues be- As noted State generated lands. Duchesne funds those lands, involved school trust cause Lease Comm’n, 365, County v. State Tax 104 Utah by statute and the Board was authorized (1943). 335, P.2d 140 336 compelled by state federal constitu- promulgate rates tions to its own duty fur- The has an irrevocable late-payment penalties.16 The State State prop- manage if Consol had trust lands for the sole benefit
ther
these
due,
royalties
the funds would have
“full
er
when
of the common schools and
receive
trust
deposited in one of the school
any disposition
been
of its
trust
value”
school
would have earned the same
accounts and
v. Arizona ex rel. Arizona
lands. Lassen
did
other
funds.
466,
interest rates as
trust
458,
Highway Dep’t, 385
87 S.Ct.
U.S.
significantly more
These trust funds earned
588,
(1967);17
584,
17 L.Ed.2d
Plateau
515
statutory
period
for the
than the
rate
729;
at
also
see
Radish
6%,
statutory
The
rate of
there-
question.
484,
Dep’t,
Ariz.
v. Arizona
Land
155
fore,
on
funds
fails to return “full value”
(1987)
1183,
497,
(holding un
747
1196
response,
In
the Lease.
derived from
fixing
flat
constitutional a statute
not
or
contends that Utah law did
authorize
lands),
for
leases on school trust
rate
mineral
penalties
rates or
require the Board
set
605,
2037,
aff'd, 490
104
U.S.
S.Ct.
empower
did not
the Board
and the Lease
(1989);
As
L.Ed.2d 696
Oklahoma Educ.
cf.
late-payment
penalties.
interest rates
set
(Okla.1982)
230,
Nigh,
236-37
soc.
agree
the State.
(holding
a statute establish
unconstitutional
for
chargeable
school
ing maximum rent
background,
necessary
provide
To
lands).
may not
or
The State
alter
trust
trust
briefly
governing
the law
school
review
duty,
any
abrogate
nor
it make
statehood,
this
attained
Con-
lands. When Utah
property
disposition
which conflicts
gress granted lands to the State for
duty.
this
Trustees Vincennes Univ.
En- with
common
support of the
schools. Utah
(14 How.)
Indiana,
268,
10,
14 L.Ed.
138,
6,
55 U.S.
§§
abling
ch.
Stat.
Act
(1852).
accordance with the mandate
accepted the
conditions
State,
value,
through its
full
obligations
grant
of this
of federal lands
to obtain
Hanna,
charged by
ed)
July
present,
the rates
(quoting
Role
Precedent
John
Decision,
367,
delinquent
at
2 Vill.L.Rev.
were
times
in Judicial
State on
(1957)).
expansive reading
Judge Bench’s
high
Under
as 15%.
however,
Menzies,
court would be bound
precedents,
our
but also
to follow not
own
Although
argument might
an
be made
16.
response, we
appeals.
those of the court
penalty
analyzing
rate
and the
the interest
issue
Judge
simply
note
Bench misreads Menzies
differently,
nor the
has
neither Consol
issue
understanding of stare decisis is
and that his
do so.
We therefore decline to
elected
do.
any support
in case law in academic
without
by deci-
This court is never bound
literature.
Arizona, 424
Co. v.
In Alamo Land
Cattle
17.
appeals
and does
need
sions
910,
(1976),
47 L.Ed.2d
U.S.
96 S.Ct.
overruling
any particular
hurdles
overcome
Supreme
held
a state
Court
United States
them.
lands for
than
its school trust
less
could
lease
history
briefly
of the Board's
15.We
review
According to the Court:
full value.
payment penalties. Effective November
late
receive,
at the time of
trust
is to
[T]he
disposition
per
month
an interest
of 1.5%
land,
the then
interest in
charged
royalties.
Decem-
past due
Effective
particular
interest which
31, 1983,
full value of the
per
an interest rate
1.5% month
ber
Thus,
being
of trust
dispensed....
if the lease
past
royalties, together with
charged
due
substantially
less
lands
rental of
July
calls
penalty.
late
Effective
fee
6%
value,
is null
then fair rental
than
land's
charged
adjustable
interest rate based
charged
and void....
Revenue
the Internal
at
royalties.
S.Ct.
plus
past
From
on all
due
Service
*12
officers,
manage the
agencies
regulations governing
and
must
trust
and
leases
mineral
profitable with
“prudent
lands in the most
and
the State:
possible.”
v. Utah State
law,
manner
Colman
Except
provided by
as otherwise
Bd.,
781,
14,
Land
17 Utah 2d
403 P.2d
783
regu-
State Land Board shall
rules and
(1965).18
responsibili-
To fulfill its duties and
prescribe the
application,
lations
form of
ties,
legislature
rental,
lease,
established
Board of
the form
the annual
gave
power
it
and au-
State Lands and
the amount of the
basis
and the
lands,
thority
policy
upon
to set
for all state
includ-
computed,
which the
shall be
ing school trust
Code Ann.
lands. See Utah
and such other details as it
deem
1988).19
(1987)
65-1-1,
necessary
§§
-14
(repealed
in the interest
the State.
(1987)
§Ann.
(emphasis
Utah
65-1-23
Code
authority
to
The Board’s
vel non
set inter-
1988).
added) (repealed
law is
Our case
penalties
royalty pay-
and
est rates
on late
legislature
give
clear that the
intended to
law,
question
ments is a
review
particularly
Board
wide
area
discretion
v. ANR
for correctness. See Bennlon
Prod.
McKnight
of state
As we
lands.
noted
v.
(Utah
343,
1991);
346
Ward v.
Board,
238,
14
Land
Utah 2d
(Utah 1990).
757,
City, 798 P.2d
Richfield
(Utah 1963):
726, 731
above,
As noted
power
Board
full
au-
Land
has
and
authority
promulgate
lacked the
Board
to
thority
prescribe necessary
proper
to
and
penalties
interest rates and
for leases and
regulations
pur-
accomplish
rules and
to
its
governed by
instead asserts that this case is
objectives
poses
and
as set
stat-
out
agree
section 15-1-1. We
with Consol inso-
provisions
.... The
govern-
ute
of the [act
far as
contends that under
decision in
our
clearly
lands]
state
indicate that
Faber,
Land Co. v.
SCM
Watkins &
Legislature had in mind the distinction
(Utah 1986),
apply
section 15-1-1 would
positive
between
mandate
Board
authority
if the Board
set
lacked
permissive right
and a
to take
ac-
certain
conclude, however,
penalties.
rates
We
tions in its discretion.
authority.
the Board
had such
Moreover,
government
charged
entity
executing the
responsibilities
with
State’s
case,
allAt
times relevant
to this
lands,
trustee of school trust
had
Board
had broad discretionary
Board
over
powers
implied
reasonably
“such
as [were]
lands,
governance
including
of all state
necessary” to effectuate its constitutional
particular,
legis-
trust lands.20 In
school
prudently
mandate to obtain full value and to
power
lature vested the Board with the
profitably manage
school trust
lands.
regulations
“make and enforce rules and
Bennion,
350;
See
819 P.2d at
Williams
provisions
inconsistent with the
of this act for
Comm’n,
41,
Public Serv.
the same into effect.” Utah Code
carrying
1988).
(1987)
1988).
(repealed
Ann.
65-1-97
Fur-
ther, the
provisions specifi-
Code contained
discretionary
The Board utilized its
au-
cally authorizing the
make
thority
promulgate
Board to
rules
regulations
rules and
purposes,
18. Given the
20.Although
trust’s
the courts have
the Board was authorized
statute
scrupulously guarded against attempts
dispose
lands,
policy
including
to set
for all state
school
See, e.g.,
of trust assets for less than full value.
lands, prior to
trust
1988 the Code did
con-
Dep't,
Kadish v.
155 Ariz.
Land
Arizona
specific
tain
discussions as to the
duties
Board’s
(1987), aff'd,
Further, majority’s I concur in the if the did not determination even Lease contain express subjecting royal- that the is entitled to additional trust, dissent, however, took ties from I terms of the Consol the Lease Consol. from of, to, subject govern majority’s notice law conclusion section 15-1-1 ing responsi lands and trust in in apply school trust does not this case and its decision of State. v. unilaterally modify bilities See ASARCO Kad Board allow the ish, 605, 109 2037, 104 490 U.S. S.Ct. L.Ed.2d interest rate amounts owed under its ex- (1989). short, has isting reserved contracts. power of to enforce the terms the Lease Statutory Prejudgment regulations Interest and to make other rules duty its furtherance of constitutional to man clearly The trial court was correct age school trust lands. awarding prejudgment pursuant interest above, consistently On the basis hold that the section 15-1-1. This has we statute regulations prescribing interpreted specify prejudgment Board’s rules in- been penalties payments specified terest late rates and interest rate where it is not regulations change remedy provides, 23. Consol’s claim contract but what the law will recognize terms the Lease also provide of fails light to the State in Consol's breach. provid- fundamental difference between interest duty See id. Consol’s contractual was to deter- provided ed for ages: contract and interest dam- royalties timely mine and submit its aon basis. statutory duty The State's constitutional and A distinction exists between interest stated royalties manage to then take those them paid of a contract before terms to be its prudently profitably. breached by way breach and interest recoverable failing perform contract duties under the breach, although damages after the term contract, prevented the State invest- indiscriminately "interest” often used to de- is ing money in the state trust school funds and scribe both amounts. Contractual interest is thereby fulfilling duty. properly The State is the creature of contract and is recoverable "whole,” is, entitled made to be to recover provided by When the its terms. what it would have made in interest on the however, violated, agreement is the non-de- unpaid royalties royalties if Consol had faulting wrong party has sustained a for which timely in a manner. way gives damages, him law redress cases, many including, in interest retention example, recognized 24. For in Plateau Min due on funds breach. power Co. that the State had the to audit the (1988) (footnotes Damages § 22 Am.Jur.2d plaintiffs books and records of the to determine omitted). breached contract when it compliance, though language even there was no proper failed to and submit calculate issue, that effect the Lease. P.2d at quarterly aon basis. The therefore, necessarily remedy not what is See, present e.g., Prod. case.2 On basis the same Lone Mountain contract. facts, Pipeline appeals 984 F.2d relevant the court of deter- Co. v. Natural Gas (10th Cir.1992); 1551, 1561 mined, existing authority, Nielsen O’Reil in accordance with (Utah 1992) (section ly, 848 P.2d 669-70 in- prejudgment that section 15-1-1 controls legal prejudgment establishes 15-1-1 terest when contract silent. The claim); interest in breach of contract SCM appeals pertinent part: stated Faber, Land Co. v. Watkins ruled Land trial court that the State 1986) (Utah (section governs 15-1-1 108-09 unilaterally no prejudgment rate on interest interest change applicable rate of contract); specified by Lig no rate is where impose penalties not in the mentioned (Utah n. 14 Berg, nell v. noted, agree. previously lease. As 1979) (same); Trucking, Mont Inc. v. Entra prejudg- Utah the rate of law establishes Indus., (Utah Ct.App. da P.2d “[ejxcept parties ment interest to a when 1990) (Utah provides law that section 15-1-1 agree specified lawful contract on a rate.” governs when all contracts Ann. 15-1-1 Trail Code rate); Breuer-Harrison, specified have agree Mountain and the Division did not (Utah Combe, Inc. v. 731-32 specified on a rate of inter- (section governs pre Ct.App.1990) est, imposition penalties nor to the judgment contract interest where does royalties. payment rate); Ringwood late Foreign specify interest Works, Inc., Auto *15 Mountain, Trail P.2d at 1273. There- 884 Rollins, (same); Ct.App.1990) em v. Price-Or fore, only applicable is section Gunnell, 475, (Utah & P.2d 482 Broim 784 generally, prejudgment interest but there (same); Ct.App.1989) v. Mason Western jurisdiction specific holding in case this 984, 2 Mortgage Corp., Loan 754 P.2d 987 n. applicable precise 15-1-1 is section (Utah (same); Olson, Ct.App.1988) v. Davies in being interpreted lease this case. (Utah 264, Ct.App.1987) 270 (same).1 ap- By transferring the Trail Mountain appeals, peal the court of this court autho- Appeals recently ad-
The Utah Court of appeals court to address and rized the of very presented in dressed the issue here question, which it has now done answer the v. Trail Mountain Coal Co. Division State of existing authority. with See Forestry, P.2d In in accordance Lands & 884 1265 Assoc., fact, companion Trail A.L. Williams & 739 Mountain is case Conder v. mining companies, including dicta 1. Chief Justice Zimmerman’s individualized 2. Several attacking Mountain, well-established line of cases is entered with the and Trail into leases suggests that unfounded. Justice Zimmerman using lease of State Lands the same Division goods were the sale audit, because the contracts for of Following the Division of State form. an (mineral rights), they are not or a "loan forbear companies they Lands notified these misapprehends the ance." Justice Zimmerman compa- underpaid royalties. mining their purpose in of section 15-1-1 separate declaratory judgment brought ac- nies designed Prejudgment terest. interest is to com tions, seeking rights their determinations of itself, nonbreaching pensate party that finds obligations cases, agreement. under lease all In breach, loaning by position virtue in the of of granted in the trial court relief favor by money forbearing or what is owed breach mining companies. appealed rul- The State Damages § ing party. 82 See 22 Am.Jur.2d ings. and re- This consolidated cases (1988); Drywall, v. also L & A Inc. Whitmore see take versed and remanded for the trial court to 626, (Utah 1980) (pre 630 Constr. agree- interpretation of the lease evidence on represents judgment on amount ment, among things. other See Plateau damages party's or due to failure awarded as Forestry, v. 802 Co. Division State Lands of contract); Fitzger delay paying under (Utah 1990). Following a re- P.2d 720 trial on 301, Critchfield, Ct. v. 304 ald mand, the trial court ruled in favor of the State. (prejudgment that interest App.1987) interest is separate ap- Trail Consol and Mountain filed from debt became on overdue debt date owed peals. court transferred Trail Mountain’s This Therefore, entry judgment). be overdue until appeals appeal pursuant 42 to the court of to rule royalties by Con- underpayment cause sol, Appellate Procedure but Utah Rules position of loan found itself in the State appeal. retained Consol’s forbearing money it owed. or 530 (when
634,
(Utah Ct.App.1987)
disposition
case is
of its school trust
lands.” The
court,
however,
supreme
ap-
majority,
support
transferred from
court of
cases cited
peals
supreme
“court’s shoes for all
“full
get
stands
notion that
State must
case”).
purposes pertinent
value” at the
it enters
time
into a contract
event,
pub-
disposition
Trail Mountain was decided
for the
school trust
For
lands.
appellate
example,
opinion by
lished
an
court of this
Land &
Alamo
Cattle Co.
Arizona,
jurisdiction,
part
and it is now
of our common
U.S.
S.Ct.
stated,
(1976),
Supreme
law.
this court
Until altered
the L.Ed.2d
Court
legislature,
appraised
it is the
that must be
“Full
law
followed
value is to be determined
jurisdiction by judges, practitioners,
disposition
in this
and measured at the times of the
interests,
public.
respective
and the
and if the State
respective
receives those values at
those
course,
power
Of
has the
this court
to alter
times,
Enabling
the demands of the
are
Act
by overruling
the common law
Trail Moun-
met.” Id. at
96 S.Ct.
918. A contract
However,
and the
therein.
tain
cases cited
value
less than fair
is to be considered
overruling
existing case
law should not
simply
304-05,
“null and void.” Id. at
Menzies,
lightly.
be done
235 Utah
S.Ct. at 917.
(Mar.
Adv.Rep.
WL
1994).
case,
present
To overrule the rule of law
In the
no
estab-
there has been
cases,
allegation
lished
earlier
this court should ex-
prop-
that Consol leased the trust
plain
how it came to
“clearly
convinced
[1]
erty
for less than
full
value.
fact,
originally
actually
that the rule was
erroneous
lease
or is
included
escalator
longer
changing
no
sound
because
condi-
insure that
received full value
tions and
[2]
that more
good
than harm
will
the duration of the lease.
require-
precedent.”
departing
come
from
ment
receive full
value at
Hanna,
(quoting John
The Role
time of
disposition
Precedent
of the State’s interest
Decision,
Judicial
cry
authorizing
Vill.L.Rev.
367 is a far
the State unilat-
(1957)).
disagreement
erally
Mere
modify
existing
the com-
material terms of its
’
*16
“certainly
satisfy
mon law
not
does
contracts.
by
Menzies
none
the cases cited
requirements
overruling prior majority
careful
was the state allowed to
enforce
Deseelhorst,
and,
time,
case law.” White
contract
vary
at the same
its
(Utah 1994)
1371,
(Zimmerman, C.J.,
1377
terms.
concurring). This court must therefore ei-
support
conclusion that
its
the Board
or,
existing precedent
very
ther follow
in a
modify
contract,
unilaterally
can
an existing
disciplined way,
existing precedent
overrule
majority
*17
Mountain,
appeals ex-
the court of
where
267,
Ashby,
387
ing McCulloch
N.M.
pressly held:
(1963)).
as follows:
Crowther held
statutory
rule-
grant of
regulations “may not con-
Nor does the
Administrative
Board,
Act,
making
to the State Land
design of an
and when
flict with the
(1986),
duty
in Utah Code Ann.
65-1-23
they do the court has a
to invalidate
found
them_
change
Furthermore,
the material
adminis-
allow the Board
when an
by subsequent
rule.
lease
a statute and
terms
trative official misconstrues
65-1-23 authorizes
scope of a While section
regulation beyond
a
issues
by
statute,
Board,
provided
“[e]xcept as otherwise
it is
excess
administrative
law,”
regulations
rules and
to establish
authority granted.” Travelers Indem. Co.
Barnes,
prescribing
application,
form of
552 P.2d
[191
278]
Colo.
lease,
(Colo.1976).
re-
form
the amount of
prerogative
is the
It
case,
arbitrary
by the Board
majority's analysis of
entitled to the
interest set
3.
this
Under the
majority
majori-
high
can be entitled
to what
State
defines as
at
as
as 22 to
Under
rates
24%.
majority
"full value.” The
defines
analysis,
ty's
this case must be remanded
own
rate the State would have
“full value”
of "full value” in the context of
a determination
money
Consol been
earned had
owed
trust funds
the interest earned
other state
a
similar to other state trust
in manner
invested
funds. The
period
question.
during the
law,
not,
a
State is
as matter of
forth,
nothing
Burnham,
445, 449,
says
permitting
so
about
State v.
Utah
retroactively
(1935) (“It
existing
the Board to
alter
general
is a
rule of
the “other
leases. Nor does
details” lan-
statutory
construction
where two stat
guage
something
contemplate
signifi-
subject-matter,
utes treat
the same
the one
generally pre-
cant as a
from the
deviation
general
[specific]
provi
and the other
in its
vailing statutory interest scheme. As al-
sions,
controls.”);
[specific]
ac
noted,
ready
Code Ann.
Utah
Gardner,
1207, 1209
cord Cannon v.
(1992)
statutory
establishes
rate for
(Utah 1980); Floyd
Surgical
v. Western
As
prejudgment
cases
interest
where the
soc.,
(Utah Ct.App.1989).
specify parties were on the issue silent cause Justice, herein; HALL, participate did not interest, by exist- prejudgment as indicated BENCH, Judge, Appeals sat. Court Mountain, including authority, sec- Trail Justice, STEWART, incorporated by operation of 15-1-1 was Associate does tion Chief in the contract.6 This participate law into the herein. penal- material in it set the
contract ty charged was to be if became Consol royalty payments. At delinquent 15-1-1, specified by section interest $460,725.38 in owe the would interest, according unpaid prejudgment but majority, under Board’s later- in- promulgated governing prejudgment rule terest, $1,473,856.09 in would owe majority al- interest. has
prejudgment
State,
through the Division
lowed the
case,
only damages
“for
recoverable
Assuming,
conceding,
can
but not
that the state
obligation
money
pay
is the
constitutionally impair obligations
like the one in
breach of
due,
case,
legal
given only
thereon at
ruling
interest
such
can be
the instant
See,
damages
technically
award-
e.g.,
interest is
prospective application.
16AAm.Jur.2d
rate. The
(1979) (statute tending
delay
22 Am.Jur.2d
payment.”
ed for the
Law 689
Constitutional
damage
type
Damages §
has
obligations,
This
impair contractual
if assumed
pre-
valid,
consistently
courts as
given
been defined
our
not be
effect so
retroactive
See,
Drywall,
e.g.,
A
Inc.
judgment interest.
L &
impair
already
existence without
contracts
Constitution).
Constr.
violating
v. Whitmore
1980);
Critchfield,
Fitzgerald v.
(Utah Ct.App.1987).
attempts
operation
majority
to avoid
6. The
by claiming
there is a distinc-
section
7.When,
was amended to
provided section 15-1-1
in this case between "interest
tion
10%,
damages."
from 6 to
provided
increase
contract and
*19
expressly provided that
legislature
majority
State is entitled
contracts entered
damages
does not affect
expectancy
that the State
amendment
—the
15-1-1(3).
§Ann.
unpaid
1981. Utah Code
into before
have made
interest on
"would
recognized
legislature apparently
royalties in a
Consol had
if
constitutionally modify
then
majority may
contracts
timely
could
manner.” Whatever
type
damages applicable in
in existence.
to call the
choose
The trial court
notes
requirement
of the Lease.
pretation
with the
modification
is inconsistent
(iv)
estopped;
State is not
estoppel
estopped]
State is not
and there would be no
this case would have no substantial adverse
substantial
public policy.”
adverse effect on
public policy.
effect on
Id.; see also Utah State Univ. v. Sutro &
Co.,
(Utah 1982).
646 P.2d
See
attempts
portray
each of these
generally
Kirkpatrick,
United States v.
estoppel arguments
raising
legal
both
(9 Wheat.) 720, 735-37,
U.S.
L.Ed.
examination, however,
Upon
factual issues.
(1824) (discussing reasons for denying equi-
it appears
primarily
that
arguing
Consol is
table
government).
defenses
actions
that
the trial court
in finding
erred
Moreover,
prerequisite
as a
finding
to a
Consol did not meet its
proving
burden of
injustice,
party asserting
estoppel must
estoppel against
the State. Consol’s
show that it acted with
prudence
“reasonable
potential legal question relating
estoppel
is
diligence”
in relying on
rep-
the State’s
public policy argument. Nevertheless,
Morgan
resentations.
v. argument
we do not reach this
because we
Lands,
(Utah
1976).9
dispose
estoppel
issue on other
grounds.
Because we find
dispositive,
the issue
We review a trial
findings
court’s
of fact
first address Consol’s assertion that it acted
clearly
under the
erroneous standard. Utah
prudence
diligence.
reasonable
and due
52(a). Consol,
R.Civ.P.
party
as the
chal-
argues
It
that it
reasonably
acted
in deter-
lenging
findings,
heavy
those
has the
burden mining
appropriate
relying
rate and in
marshaling
all
support
the evidence in
alleged
the State’s
representations.
It con-
the trial
findings
court’s
showing
then
tends that the
alternative rate
findings
those
are
compe-
not based on
ambiguous and
sought
therefore it
clarifica-
tent, admissible evidence. Cambelt Int’l
regarding
tion
proper
rate from Division
Dalton,
(Utah
Corp.
personnel.
above,
As discussed
per-
Division
1987). Consol has not met its burden of
sonnel told Consol that under the alternative
marshaling the
showing
facts or of
that the
provision,
pay
it should
the same rate it
clearly
trial court
deciding
erred in
paying
government
federal
under its
estopped.
State was not
lease at the same mine.10 Consol
had a federal lease at the same mine which at
briefly
applicable
review
law.
all relevant times
royalty.
carried a
It
17.5c
equitable
estoppel
doctrine of
has three
“
argues that the
represented
to it that
‘(1)
predicates:
admission,
factual
state
rate for the federal
ment,
17.5c
lease
or act inconsistent with the claim after-
represented
same mine
(2)
“prevailing”
asserted,
wards
party
action
the other
being paid by
“federal lessees of land of
admission,
statement,
the faith of such
or
(3)
similar
act,
character under coal
leases issued
injury
party
to such other
result
time,”
the United States at
required
allowing
party
the first
to contradict
by the Lease.
repudiate
admission, statement,
or
such
”
act.’
Plateau
Notes
notes
the lease between
as to
very
so
alter the common law. At the
subject
Consol and the
is
State
to the laws
minimum, Trail Mountain must be treated Utah in
signed.
existence when
lease was
persuasive authority.
as
The failure to ad-
Consol,
majority essentially points
The
at
existing precedent
“produce
dress
will
unac-
claiming that
it should have known it was
ceptable indeterminacy in the law and ...
taking
subject
requirement
a lease
undermine
its
confidence
institutions.”
that the
full
any
State receive
value for
dis
Thurman,
(Utah
P.2d 1256
State
846
position
majority
of its trust
lands. The
1993).
however,
ignores,
the fact that section 15-1-1
majority
give
The
lip
does
even
was
signed.
service
also
effect when the lease was
Trail
majority’s
analysis,
Mountain and
cases cited there- Consistent with the
own
Instead,
majority
in.
strains to
the lease
avoid the
between Consol and the
is
State
by
governed
operation
engaging
of section 15-1-1
in a
section 15-1-1. See Lone
Mountain,
1561; Nielsen,
analysis
rather
tortured
of the State’s re-