Hоward C. HAYES and Michael R. Hayes, Appellants, v. A.J. ASSOCIATES, INC.; Alaska Marine Lines, Inc.; Gordon S. Harang; and Eileen K. Harang, Appellees. Howard C. HAYES and Michael R. Hayes, Appellants/Cross-Appellees, v. Jim JANSEN; Lynden, Inc.; Reed Stoops; A.J. Associates, an Alaska corporation; Gordon and Eileen Harang; Arrowhead Transfer; Alaska Marine Lines, Inc.; Bank of California, a foreign corporation; and John Does 1 through 5, Appellees/Cross-Appellants.
Nos. S-6736, S-7185/7215
Supreme Court of Alaska
May 22, 1998
958 P.2d 556
James N. Reeves, Bogle & Gates, Anchorage, for Appellees/Cross-Appellants.
Lawrence Z. Ostrovsky, Assistant Attorney General, Anchorage, and Bruce M. Botelho, Attorney General, Juneau, for Amicus Curiae State of Alaska.
Before RABINOWITZ, MATTHEWS, EASTAUGH, JJ., and SHORTELL*, J., pro tem.
* Sitting by assignment made pursuant to article IV, section 16 of the Alaska Constitution.
EASTAUGH, Justice.
I. INTRODUCTION
These consolidated appeals concern eight mining claims filed by Howard Hayes and his
II. FACTS AND PROCEEDINGS
These cases concern rights to part of Alaska Tidelands Survey No. 201 (ATS 201), near downtown Juneau. The Alaska-Juneau Gold Mine operated near Gastineau Channel from 1914 until 1944. State v. A.J. Indus., Inc., 397 P.2d 280, 281 (Alaska 1964). It daily generated as much as 13,000 tons of crushed rock and mill tailings, which were dumped onto adjacent tidelands and then onto submerged lands under the channel. Id. Dumping eventually resulted in “considerable acreage of real property . . . well abovе high water,” including the property in dispute in these cases. Id. Various predecessors to the present landowners used the property from 1937 onwards.2 Three previous opinions of this court addressed disputes relating to ownership of and mineral rights to this property. Hayes v. A.J. Assocs., Inc., 846 P.2d 131 (Alaska 1993); Hayes v. Alaska Juneau Forest Indus., Inc., 748 P.2d 332 (Alaska 1988); State v. A.J. Indus., Inc., 397 P.2d 280 (Alaska 1964).
In State v. A.J. Industries, the court held that the landowners were entitled to a preference right to obtain title to nearly 100 acres of property created by the disposal of rock and mill tailings. 397 P.2d at 281, 287. The State subsequently issued a patent transferring the property to the landowners. As required by
In 1981 the landowners executed a mining lease permitting Hayes to extract merchantable ore, including gold, from the property.4 The lease expired December 31, 1981; Hayes nonetheless remained on the property and continued to mine. When negotiations for a new lease failed, Hayes staked mining claims Taku Nos. 1 and 2 on the property in 1982.5 A.J. Assocs., 846 P.2d at 132; Alaska Juneau Forest Indus., 748 P.2d at 334. The landowners filed an ejectment action as to those two claims, and Hayes counterclaimed, asserting he had acquired mineral rights from the State by staking valid claims. 748 P.2d at 334. The superior court granted summary judgment to the landowners, ruling that the tailings had not passed to the State under the Alaska Statehood Act,
Upon remand, the superior court again granted summary judgment to the landowners, concluding that because Hayes had not made his mineral locations in good faith, the locations were void. A.J. Assocs., 846 P.2d at 131. This court reversed and again remanded, holding that Hayes did not owe the landowners a duty of good faith location. Id. at 134-35.
Following this remand, the case was reassigned to Superior Court Judge Thomas M. Jahnke, who again granted summary judgment to the landowners. It ruled that Hayes‘s failure to obtain the landowners’ consent or post a surety bond made the locations for Taku Nos. 1 and 2 invalid under
In 1993 Hayes filed a tort suit against the landowners, ultimately asserting seven counts of tortious conduct by the landowners. When the landowners moved for summary judgment, the superior court found that genuine fact disputes existed with regard to Hayes‘s claims that the landowners had destroyed Hayes‘s monuments, stakes, markers, and other structures, but granted summary judgment to the landowners on Hayes‘s remaining claims. The superior court declined to dispose of two of Hayes‘s other claims via summary judgment: (1) the “claimed right to enter to stake claims” on the remaining six claims; and (2) the “claim that A.J. or its agents destroyed Hayes‘s access road to ATS 201.” The court denied all motions for reconsideration and entered a Rule 54(b) final judgment. Hayes and the landowners appeal from these rulings in S-7185 and S-7215.
III. DISCUSSION
A. Hayes v. A.J. Associates: Effect of Hayes‘s Failure to Obtain Consent or Post a Bond before Staking
1. Acquisition of State-held mineral interests
The landowners acquired ATS 201 subject to the State‘s reserved mineral rights and its right to explore for and extract those minerals.
The superior court, in a lengthy and thoughtful memorandum decision, held that
Hayes attacks these conclusions on various grounds.9 Most fundamentally, he asserts that section .130 did not apply to his 1982 entry to stake. He reasons that section .130 only imposes obligations on the exercise of rights reserved pursuant to
We begin our analysis by recognizing that statutes and regulations govern how others may acquire the State‘s mineral rights. Discovery and appropriation are the basis for acquiring such rights. Alaska
Under
Our interpretation here is supported by a 1993 Attorney‘s General opinion: “Because the term ‘state lands’ is defined to include all lands and interests in lands belonging to or acquired by the state,
We note that sections found throughout the Alaska Land Act utilized the word “land” in such a way that it could only be interpreted as encompassing resources within the scope of its meaning. Admittedly, in certain provisions of the act the word “land” is used in a manner inconsistent with the statutory definition of the term. However, instances of such inconsistencies are few in number, and bear no special contextual significance to
AS 38.05.305 . Under the definition section of the act, statutory definitions are to apply “unless the context otherwise requires.” We find nothing about the context ofAS 38.05.305 which would imply that the statutory definition of the word “land” should be disregarded.
(Footnotes omitted.)
Justice Rabinоwitz‘s dissent argues that section .185 was not intended to allow staking of claims on lands conveyed by the State. The State‘s amicus brief states what we believe to be the proper reading of the mining code: “When the state conveys a surface estate to another party, the state is required to reserve both the minerals and the right to explore and develop them. Mineral interests on these ‘split estate’ lands are subject to the location of state mining claims in the same manner as on lands owned entirely by the state.” (Emphasis added.) See also 3 American Law of Mining § 71.03[5], at 43 (2d ed. 1984 & 1997 Supp.).
Justice Rabinowitz is concerned that location activities will interfere with quiet enjoyment of surface rights. Dissent at 578-80. Owners of surface estates must anticipate that the State‘s reserved rights might someday be exercised. The dissent‘s concerns should not alter the result required by the mining code. They should instead be addressed either by a finding by the commissioner that mining would be incompatible with surface use,
The dissent also relies upon the history of the 1981 amendment of
2. State‘s reservation of its mineral rights16
Whereas
Alaska Statute
The term “explore” is not defined in Alaska Statutes titles 27 or 38 or the State‘s mining regulations. In applying subsection .125(a), we read “explore” to have its common meaning: “to seek for or after . . . to search through or into . . . to examine minutely . . . to penetrate into or range over for purposes of geographical discovery . . . to make or conduct a systematic search. . . .” Webster‘s Third New International Dictionary (unabridged) 802 (1969). Black‘s defines “exploration” in context of mining law as “[t]he examination and investigation of land supposed to contain valuable minerals, by drilling, boring, sinking shafts, driving tunnels, and other means, for the purpose of discovering the presence of ore and its extent.” Black‘s Law Dictionary 579 (6th ed. 1990). These definitions are consistent with how “exploration” is used in Alaska Statutes titles 27 and 38. Cf.
Mineral exploration is the orderly search for previously undiscovered or unrecognized ore deposits. . . . Exploration typically involves a succession of steps, involving the application of both inductive and deductive concepts, in which the explorationist seeks first to locate and then to recognize or “prove up” a discovery of a minable deposit by utilizing known or theorized deposit models as a guide to ore deposits.
1 American Law of Mining § 1.03[1], at 1-41. We conclude that “explore” does not encompass in its common or mining usage the limited and discrete physical act of staking (placing corner monuments with an appropriate notice) carried out by Hayes in 1982.
Staking satisfies one of the requirements for acquiring a mineral claim or leasehold preference on public land. See supra, note 13. It is not surprising that subsection .125(a) says nothing of staking, given that its focus is on reserving the State‘s rights, not on how others can acquire those rights from the State.
The focus of subsection .125(a) is also consistent with its origin. Subsection .125(a) seems intended to fulfill the reservation requirement, contained in the Alaska Statehood Act,
To read subsection .125(a) in this fashion does not impair the State‘s rights because the State reserves the right to explore and does not have to stake to obtain mineral rights it already possesses. Nor does this reading significantly affect prospecting practices. It will be rare that claim location will ever be based on “immaculate” staking.17
Absent a claim the staking entry itself caused financial harm to the landowners’ estate, the type of protection contemplated by section .130 (financial indemnification) is inapplicable. As long as the landowner is financially protected against damage, the would-be explorer can enter without offending section .130.
Section .130 does not purport to protect a simple right of quiet enjoyment, but addresses only harm that can be remedied by compensation.19 A purchaser of lands sold subject to the subsection .125(a) reservation must anticipate that the reserved rights might someday be exercised. Section .130 does not allow the landowner to altogether close the land to entry by persons seeking to exercise those rights, much less prevent a prospective locator from entering the land to stake claims. Even if the landowner refuses to reach agreement, section .130 effectively allows the would-be locator to “force” entry by posting bond satisfactory to the Director of the Division of Lands. Section .130 does not purport to address staking that does not cause physical damage to the land, nor does it address harmless nonintrusive activities, such as airborne aeromagnetic surveys.
The two members of the court who would hold that section .130 does not apply to Hayes‘s 1982 staking activity do not conclude that such landowners are without remedies. If DNR finds that mining would be incompatible with significant surface uses (perhaps where the surface owner resides on a potential location site), DNR may close the land to mineral location under
In its analysis the superior court compared analogous federal statutes dealing with conveyance of public lands. In our view this analysis is not helpful, largely because we consider Alaska‘s statutory scheme sufficiently clear that little is gained by referring to dissimilar federal statutes. Thus, comparing the Stock-Raising Homestead Act,
The superior court also held that Hayes‘s failure to satisfy
The landowners argue that Hayes‘s entry also violated
This is consistent with constitutional and legislative expressions of a policy that encourages development of mineral resources. Alaska
3. Effect of failure to comply with AS 38.05.130
Alaska Statute
As seen above, section .130 protects landowners financially, but does not allow them to completely close their lands to mineral exploration. Consequently, it is enough that landowners be placed in the same position they would have enjoyed had the statute been observed, and an agreement reached or a bond posted. Indemnification, not ejectment, is the appropriate remedy for failing to reach agreement or post a bond. This result sustains the locator‘s right of entry, and preserves both the locator‘s incentive to satisfy the requirements of section .130 and the landowner‘s incentive to act reasonably during negotiations with the locator.25
The landowners argue that this court “specifically noted” Hayes‘s violation of the statute and regulation in A.J. Associates, citing to 846 P.2d at 134. The only passage on the cited page that has any potential bearing cannot fairly be read to say that we held that Hayes violated the statute and regulation. That sentence reads: “The court also pointed to Hayes’ violation of
The landowners also argue that the State, in its amicus brief, has agreed that ”
The landowners also argue that there is no personal “implicit right” to prospect or to mine that “trumps the State‘s authority to manage these resources as it sees fit.” That assertion is correct, but the State‘s policy in managing these resources is expressed in
4. Landowners’ alternative arguments for affirmance
The landowners ask us to affirm the ejectment on two alternative grounds.26
Rights to mineral deposits in submerged land are not subject to appropriation by prior discovery, location, and recording.
This position is without merit. Even though the land beneath the tailings was once submerged, the property became ordinary real estate long ago. Alaska Juneau Forest Indus., 748 P.2d at 336. Additionally, the tailings are above mean high tide. Id. at 337. The property is not in fact “submerged land.”
The landowners alternatively assert that Hayes failed to comply with the technical requirements of
5. Attorney‘s fees in the ejectment action
In 1995 the superior court awarded the landowners $60,000 in Civil Rule 82 attorney‘s fees. Hayes challenges the award.
Fees are awarded to the “prevailing party.” Alaska R. Civ. P. 82. A party does not have to prevail on all issues to be a prevailing party. Day v. Moore, 771 P.2d 436, 437 (Alaska 1989). The general rule under Civil Rule 82 is that the prevailing party is the party who has successfully prosecuted or defended against the action; it is the one who is successful on the main issue and the judgment entered. Id.
We held above that it was error to order Hayes‘s ejectment. The landowners are consequently no longer the prevailing parties in the ejectment action. See In re Application for Water Rights, 891 P.2d 981, 984 (Colo. 1995) (“In order to be the prevailing party, one must . . . achieve some of the benefits sought by the litigation.“). Consequently we vacate the fees award and remand for further proceedings.
Hayes filеd tort claims against the landowners in 1993, asserting that they interfered with Hayes‘s rights relating to Taku Nos. 1 through 8. The superior court granted partial summary judgment to the landowners, dismissing all but two of Hayes‘s tort claims. Hayes appeals from the partial summary judgment.
In reviewing a grant of summary judgment, we must determine whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Thorstenson v. ARCO Alaska, Inc., 780 P.2d 371, 374 (Alaska 1989). We draw all reasonable inferences in favor of the non-movant. Swenson Trucking & Excavating v. Truckweld Equip. Co., 604 P.2d 1113, 1116 (Alaska 1980).
1. Relevant statutes and regulations governing rights accruing to mineral locators
Alaska Statute
A DNR regulation restricts mining on lands in which the State reserved mineral rights after their sale or lease to private parties. When Hayes staked his claims, that regulation read:
This section constitutes the commissioner‘s finding, in accordance with
AS 38.05.185(a) , that selling, leasing, or otherwise disposing of any interest in land other than a locatable mineral interest, with the mineral rights reserved to the state, creates potential use conflicts requiring that mining be allowed only under written leases. If the land remains open to location, any location made on that land after the disposal is a leasehold location.
Former
One who makes a leasehold location, by prior discovery, location, and recording, rеceives a preference right to a lease.
2. Rights conferred by Hayes‘s locations
Under the regime established by these statutes and regulations, any location made by Hayes on ATS 201 was a leasehold location. ATS 201 was conveyed to a private party. Under
Hayes next asserts that this regulation does not apply to mineral locations; in support he cites the regulation‘s language limiting its effect to “the selling, leasing, or otherwise disposing of any interest in land other than a locatable mineral interest.”
Finally, Hayes argues that the production license DNR issued to Hayes in 1989 constituted a determination that Hayes was entitled to begin production on the property. Alaska Statute
This does not follow. DNR has promulgated regulations allowing issuance of production licenses to holders of a “mining leasehold location . . . who are prepared to initiate or continue production of minerals for sale.”
Under
Hayes‘s acquisition of a production license, therefore, is not inconsistent with the conclusion that he holds no more than a leasehold location and was required to apply for and obtain a mining lease before beginning to extract minerals from the property. Indeed, DNR explicitly informed Hayes that the “license authorizes the production of minerals for sale, subject to other applicable statutes and regulations.” (Emphasis added.)
3. Claims based upon Hayes‘s right to mine
The first two counts of Hayes‘s amended complaint are based upon his alleged right to “enter . . . stake claims, develop, drill, mine, occupy and remain on [ATS 201].” Hayes claims that the landowners, both by preventing Hayes‘s entry on the land and by placing improvements upon the property, have tortiously interfered with these activities. Hayes asserts that he has consequently been prevented from mining and extracting minerals from the property.
As explained above, however, Hayes has only a preference right to a lease. He has no right to mine or extract minerals until he receives a lease. The landowners are accordingly entitled to summary judgment on those counts as a matter of law; absent a right to mine, Hayes cannot claim that the landowners owed him any right to mine. It was appropriate to grant summary judgment regarding these counts.
We partially affirm the superior court‘s summary judgment with regard to Hayes‘s request for a declaratory judgment establishing his right “to stake claims, develop, drill, mine, occupy, and remain upon the property.” As discussed above in Part III.A, Hayes may have the right to stake leasehold locations on the property; he does not possess any of the remaining rights claimed.
4. Abuse of Process
Hayes also alleges that the landowners tortiously “advised, stirred up and/or continued litigation.” The superior court found that “[n]one of the activities that have been described to support the allegations in the complaint are actionable.”
Abuse of process consists of two essential elements: ulterior purpose and a “willful act in the use of the process not proper in the regular conduct of the proceeding.” DeNardo v. Michalski, 811 P.2d 315, 317 (Alaska 1991) (citation omitted). Merely filing a suit, even for an improper purpose, is not sufficient for an abuse of process action. Id.
The landowners have acted to preserve their own claims to the surface of the property. Hayes has presented no evidence of an ulterior motive. Nor has he alleged any improper or irregular action taken by the landowners. The сourt properly granted summary judgment to the landowners.
5. Interference with prospective economic advantage
The superior court granted summary judgment to the landowners on Hayes‘s claim of interference with prospective economic advantage.
The elements of that tort are: (1) the existence of a prospective business relationship between the plaintiff and a third party; (2) knowledge by the defendant of the prospective relationship, and intent to prevent its fruition; (3) conduct by the defendant interfering with the relationship; (4) failure of the prospective relationship to culminate in pecuniary benefit to the plaintiff; (5) causation of the plaintiff‘s damages by the defendant‘s conduct; and (6) absence of privilege or justification for the defendant‘s action. Oaksmith v. Brusich, 774 P.2d 191, 197-98 (Alaska 1989).
The superior court determined that Hayes‘s alleged damages were not caused by the landowners’ conduct. The court found that Hayes unreasonably failed to apply for a mining lease, and that any lost economic opportunity resulted from this failure. This was error. Hayes presented evidence that his lease application was rejected as a result of his dispute with the landowners. DNR
A.J. Industries . . . [is] protesting the issuance of a lease to you and assert[s] that your claims conflict with their Alaska Timber #1-4 claims. . . .
Under authorities granted to me by
A.S. 38.05.205 and11 AAC 86.305(F) , this letter constitutes my decision not to adjudicate the conflict between the Taku #1-4 claims and Alaska Timber #1-4 claims. The parties are advised to resolve this conflict themselves. As such, your lease application is rejected, a new application may be submitted after resolution of this conflict.
Drawing all inferences in favor of Hayes, this letter creates a genuine issue of material fact as to whether Hayes applied for a lease, and whether any failure to pursue a lease was unreasonable.
We nonetheless affirm the superior court‘s judgment on an alternative ground. “This court is not bound by the reasoning articulated by the trial court and can affirm a grant of summary judgment on alternative grounds.” Wright v. State, 824 P.2d 718, 720 (Alaska 1992). Hayes submitted evidence of a single prospective business relationship, with an Australian company, based upon his mining locations. A representative of the company affied that in 1989 it and “other investors elected not to go forward because of the pending lawsuit.” Therefore, any tortious conduct by the landowners that interfered with that business relationship must have taken place no later than 1989. The applicable limitations period is two years.
C. Jansen v. Hayes: The Propriety of Denying Summary Judgment to the Landowners
The landowners also moved for summary judgment with respect to Hayes‘s claims that the landowners tortiously destroyed monuments, markers, other items owned by Hayes, and an access road he constructed. The trial court found that genuine issues of material fact required a trial regarding those tort claims. It consequently denied the landowners’ motion for summary judgment.
The landowners argue in their cross-appeal that they were entitled to summary judgment on these causes of action. They contend that an independent contractor, Knik Construction, removed Hayes‘s stakes and monuments and destroyed the access road. Knik Construction is not a party to this case, and the landowners contend that they cannot be held liable for its actions.
The general rule is that a principal is not liable for torts committed by an independent contractor. Sievers v. McClure, 746 P.2d 885, 889 n. 6 (Alaska 1987); Restatement (Second) of Torts § 409 (1965). However, the employer of an independent contractor may be liable for harm caused by acts or omissions committed by the independent contractor pursuant to the employer‘s orders or instructions. Moloso v. State, 693 P.2d 836, 840 n. 3 (Alaska 1985); Restatement (Second) of Torts § 410 (1965). Hayes presented evidence sufficient to create a genuine issue of material fact as to whether Knik Construction was acting under Jansen‘s direction when it destroyed Hayes‘s property.
Accordingly, we conclude that the trial court did not err in denying summary judgment to the landowners on these tort claims.
IV. CONCLUSION
Four justices have participated in the decision of this case. Three justices agree with Part III.A.1 of this opinion and hold that the state‘s mineral interest in lands on which the surface estate has been conveyed to a third party is “state land.” The court is evenly divided regarding the discussion in Part III.A.2 about whether
Accordingly, the judgment of the superior court is AFFIRMED in part, REVERSED in part, VACATED in part, and REMANDED for further proceedings.
SHORTELL, J. pro tem, concurring in the result.
RABINOWITZ, Justice, joining in Part A of Justice Shortell‘s concurring opinion.
Because I disagree with the conclusion that
A. Hayes Was Required to Comply with AS 38.05.130 before He Staked His Claims.
Alaska Statute
Rights may not be exercised by the state, its lessees, successors or assigns under the reservation as set out in
AS 38.05.125 until the state, its lessees, successors, or assigns make provision to pay the owner of the land full payment for all damages sustained by the owner, by reason of entering upon the land. If the owner for any cause refuses or neglects to settle the damages, [the mineral claimant] may enter upon the land in the exercise of the reserved rights after posting a surety bond . . . sufficient . . . to secure to the owner payment for damages. . . .
Hayes staked his claims without first obtaining the consent of the landowners or posting a bond complying with the requirements of
Justice Eastaugh concludes that staking of claims is not the exercise of a right covered by subsection .125(a). The right to explore, in his view, does not include staking. In the absence of a statutory definition of the word “explore,” he reads that word not to cover unconsented entry and staking of claims by gold seekers on land owned by private citizens. In his view, “explore” does not “encompass in its common or mining usage the limited and discrete physical act of staking.” Maj. op. at 564. I disagree with this interpretation of the statute.2
It can hardly be denied that subsection .125(a) was intended by its drafters to be comprehensive in scope. It covers all title transfers of state land to holders of private
By such a comprehensive grant of power, the legislature intended to preserve the rights of mineral claimants to extensive and potentially disastrous exploitation of surface landowners’ property. Knowing the potential for harm to the surface estate, the legislature was careful to limit uses under subsection .125(a) to those that are “reasonably necessary.” By doing so, it attempted to strike a balance between the competing rights of landowners and mineral claimants.
I have no quarrel with the proposition that the reservation of rights in section .125 establishes mineral rights as the “dominant estate” consistent with long-standing mining-law doctrine. See Norken Corp. v. McGahan, 823 P.2d 622, 628 (Alaska 1991). However, I believe that our interpretation of section .125 should also recognize another well-established principle that balances the rights of owners of dominant and servient estates
Our interpretation of sections .125 and .130 should take into account these two related principles: (1) that the mineral estate is dominant and (2) that its dominance is subject to the rule of reasonable accommodation. Subsection .125(a) complies with these rules by allowing the owner of reserved mineral rights “all rights and power in, to, and over said land . . . reasonably necessary or convenient to render beneficial and efficient the complete enjoyment of the property and rights hereby expressly reserved.”
Section .125 covers all aspects of mining from exploration through development. It specifically reserves to the state and its successors the right “to explore,” “to enter,” “to erect, construct, maintain, and use” all necessary buildings, machinery, and roads, “to remain” on the property for all purposes relating to exercise of the reserved rights, and “to occupy” the property. It also reserves “all rights and power” over the land that are reasonably necessary. The breadth and completeness of the rights reserved and activities authorized demonstrate an intent to cover all activities related to finding, developing, and working mineral properties. There is littlе reason to conclude that staking should be excluded from its protective scope.
By exempting from the reach of the statute an essential step on the path from exploration to development, Justice Eastaugh‘s opinion is at odds with legislative intent as manifested in the statutory language.4 I cannot agree that absence of the word “staking” from section .125, the language of that section in its entirety, or dictionary or mining-text discussions of the word “explore”5 reasonably lead to the conclusion that “staking” is an isolated mining activity not covered by the statute.
In fact, the description of “mineral exploration” given in an authoritative mining-law text indicates that staking should be included within the scope of sections .125 and .130. According to American Law of Mining:
Exploration typically involves a succession of steps . . . in which the explorationist seeks first to locate and then to recognize or “prove up” a discovery of a minable deposit. . . .
American Law of Mining § 1.03[1], at 1-41 (Rocky Mtn. Min. L. Found. ed., 1994).
Hayes could neither “locate” nor “prove up” his claim without staking. Location, to be valid, requires both discovery6 and the marking of boundaries and posting of location notice (staking). See
Recognizing staking to be one of the essential steps of mineral exploration is fully consistent with common or mining usage, with
B. By Violating Section .130, Hayes Did Not Necessarily Forfeit His Right to Develop His Claim.
Justice Eastaugh concludes that even if Hayes violated subsection .125(a) the remedy of ejectment or invalidation of his claim would not be appropriate. As he says:
[S]ection .130 protects landowners financially, but does not allow them to completely close their lands to mineral exploration. Consequently, it is enough that landowners be placed in the same position they would have enjoyed had the statute been observed, and an agreement reached or a bond posted. Indemnification, not ejectment, is the appropriate remedy for failing to reach agreement or post a bond. This result sustains the locator‘s right of entry, and preserves both the locator‘s incentive to satisfy the requirements of section .130 and the landowner‘s incentive to act reasonably during negotiations with the locator.
Maj. op. at 567.
I agree with this analysis as it applies to the facts of this case. The next logical step, therefore, should be a remand for further proceedings to determine how to indemnify
I would, therefore, affirm thе trial court‘s decision finding that Hayes violated the provisions of
RABINOWITZ, Justice, dissenting.
The court‘s opinion opens up all privately-held land in Alaska that was once owned by the state to forced-entry staking-and-location mining. It denies landowners the right to bar unauthorized entry onto their land and it eviscerates the protections afforded by the mining code‘s bonding requirements. I dissent.
The primary fault in the court‘s opinion is its assumption that the legislature has authorized claim staking of the state‘s reserved mineral interests on privately-owned lands. Pursuant to the Statehood Act and
Alaska Statute
State land may not be closed to mining or mineral location except as provided in
AS 38.05.300 and unless the commissioner makes a finding that mining would be incompatible with significant surface uses on the state land. State land may not be restricted to mining under lease unless the commissioner determines that potential use conflicts on the state land require that mining be allowed only under written leases. . . .
The court concludes that this text authorizes Hayes to stake mining claims on A.J. Associates’ property. Maj. op. at 562-563, 566-567. I agree that section .185 authorizes claim staking, but not on private lands.
The legislative history behind section .185‘s staking provision indicates that it was only intended to apply to state-held surface lands. The statutory language quoted in the previous paragraph was added to the mining code in 1981 as a result of a controversy generated earlier that year by an Attorney General‘s opinion. See infra pp. 576-577. The Attorney General determined that section 6(i) of the Statehood Act requires that mineral deposits in state mineral lands be mined only under written leases. See 1981 Formal Op. Att‘y Gen. 113, at 117 (hereinafter 1981 AG‘s Opinion). In other words, the lease requirement applies to all lands known to have minerals at the time they were granted to the state by the federal government. See Trustees for Alaska v. State, 736 P.2d 324, 340-42 (Alaska 1987).
Prior to 1981, the state understood the leasing requirement as only applying to lands which the state had subsequently transferred to others. It did not contemplate that a lease was required to mine on state lands. The standard view was summed up by Commissioner Phil Holdsworth, the first commissioner of the Department of Natural Resources. He believed that under section 6(i), “the usual mining rights contingent upon discovery and appropriation [i.e., staking] will apply on State public domain lands. . . .” However, “[m]ineral deposits which have been reserved to the State in the conveyance
The 1981 Attorney General‘s Opinion unsettled this understanding by construing the lease requirements as also applying to lands whose surface was owned by the state. As a consequence, the validity of mining claims that had been staked on state lands was thrown into question. Miners protested this change in the law and sought relief from the legislature. David Heatwole, the President of the Alaska Miner‘s Association, warned miners of the threat to their claims posed by the extension of the leasing requirement. In a letter to the membership, he argued that the section 6(i) leasing requirement “applies only to land on which surface rights have been sold by the state.” He noted that application of a leasing system to state lands would mean “loss of rights to acquire mineral rights by discovery and location” and “loss of rights to self initiate a mining investment.” David Heatwole, Letter to Membership of Alaska Miner‘s Association, available in Legislative Research Agency, Response to Representative Charles Anderson‘s Mineral Leasing Research Request # 81-39, Fеb. 28, 1981.
The section .185 staking provision was added to the mining code in direct response to this controversy. The legislature sought to restore the status quo as it had existed prior to 1981. In the hearings before the House Resources Committee on the seminal bill (
The court relies on the definition section of the mining code to conclude that “state land” includes privately-owned surface lands if the state has retained the mineral rights. Maj. op. at 562-563. I do not believe the cryptic reference to “resources” in
The notion that the word “land” as used in the code means surface land is consistent with the decision of this court in State v. Weidner, 684 P.2d 103 (Alaska 1984). There we had occasion to interpret
Pursuant to
Alaska Statute
One cannot overemphasize the deleterious consequences of the court‘s opinion. Any real property that was once in state ownership is now subject to staking-and-location mining. A miner can now stake claims, by erecting stone or post monuments, in the front yard of a private homeowner and dig up the owner‘s flower beds in pursuit of minerals. Land that has been purchased by a conservation group and set aside for environmental preservation can be mined. A private business can be forced to stay its use of its own land in order to accommodate mining. There is nothing that a private landowner can do to stop forced-entry mining of his property. Given that the right to exclude is a fundamental component of property rights, and the high value Alaskans
Notes
To stop our plans now to accommodate mining will be extremely difficult. . . . Taku smokery will be damaged due to our inability to vacate our facility. Our construction mobilization expenses for Knik are committed. Arrowhead will be committed to a builder. Our cost of capital will be tied up.
The letter concludes by noting that if Hayes is to compensate A.J. Associates for all costs that would result from a stay of its operations, he will have to post “a bond in excess of $10,000,000.” It is fairly apparent from the record that Hayes could not produce such a sum. By dispensing with the bonding requirement, the court‘s opinion virtually guarantees that A.J. Associates will suffer substantial damages that it will never be reimbursed for if it is forced to accommodate mining on its property.
As a matter of statutory interpretation, I conclude that the comprehensive reservation provisions of section .125(a) (particulary the right at any time to enter upon the surface estate of private lands for the purpose of exploring and opening the state‘s reserved minerals estate) encompass staking activities. The court‘s opinion implicitly recognizes this view in its adoption of the definition of staking found in the American Law of Mining where it is stated:
Exploration typically involves a succession of steps, involving the application of both inductive and deductive concepts, in which the explorationist seeks first to locate and then. . . .
American Law of Mining § 1.03[1], at 1-41 (Rocky Mtn. Min. L. Found. ed., 1994).
It follows that the protections provided for in section .130 apply to staking activities exercised under the rights granted pursuant to section .125(a) (for a right reserved under section .125(a) may not be exercised until the indemnification provisions of section .130 are satisfied). Additionally, the staking of a private landowner‘s surface estate without making a good faith effort to reach an indemnification agreement constitutes a violation of
Lastly, I disagree with the court‘s observation that the superior court inappropriately fashioned an ejectment remedy for Hayes‘s violations of section .130 and
Each contract for the sale, lease or grant of state land, and each deed to state land, properties or interest in state land, made under
The subsection .125(a) reservation is mandated under the terms of section 6(i) of the Alaska Statehood Act as to lands known to contain valuable minerals at the time of state selection. Section 6(i) provides in relevant part:
The grants of mineral lands to the State of Alaska under subsections (a) and (b) of this section are made upon the express conditions that all sales, grants, deeds, or patents for any of the mineral lands so granted shall be subject to and contain a reservation to the state of all the minerals in the lands so sold, granted, deeded, or patented, together with the right to prospect for, mine, and remove the same. Mineral deposits in such lands shall be subject to lease by the state as the state legislature may direct: Provided, that any lands or minerals hereafter disposed of contrary to the provisions of this section shall be forfeited to the United States by appropriate proceedings instituted by the attorney general for that purpose in the United States District Court for the District of Alaska.
See Trustees for Alaska v. State, 736 P.2d 324, 331-42 (Alaska 1987) (discussing history and purpose of the reservation of mineral rights to the State). Hayes claims he discovered his claims before he staked them, at a time when he was validly on the property as a lessee. However, discovery does not necessarily terminate the process of exploration. See Converse v. Udall, 399 F.2d 616, 620-21 (9th Cir. 1968) (indicating that some further exploration may occur after discovery). And, if discovery were to terminate the exploration process, staking should be considered to be development, which is also covered byDamages and posting of bond. Rights may not be exercised by the state, its lessees, successors or assigns under the reservation as set out in
(a) The acquisition and continuance of rights in and to deposits on state land of minerals, which on January 3, 1959, were subject to location under the mining laws of the United States, shall be governed by
entry on all lands under mineral permit, oil and gas exploration license, lease, or claim, by other than the holder of the permit, oil and gas exploration license, lease, or claim, or the holder‘s authorized representative, shall be made in a manner that will prevent unnecessary or unreasonable interference with the rights of the permittee, licensee, lessee, or claimant.
Even though the would-be locator can “force” entry to carry out activities subject to section .130, it can only do so in accordance with that statute. The statute presumes that a bond will adequately protect the landowner. If, in a given case, the director determines that no bond could protect the owner, entry would be denied.
The dissenting opinion assumes mining or even exploration could cause a surface owner to suffer substantial damages. Dissent at 578 n. 2. The sufficiency of any bond required for Hayes to exercise his rights is in the first instance a matter for the director under section .130. We note that there is no claim that Hayes‘s mere act of staking caused the landowners any significant damages.
no person may engage in mineral exploratory activity on land, the surface of which has been granted, licensed, or leased, by the State of Alaska, or on land for which the stаte has received the reserved interest of the United States until good-faith attempts have been made to agree with the surface owner, licensee, or lessee on settlement for damages which may be caused by such activity. If agreement cannot be reached, or the lease, oil and gas exploration license, or surface owner cannot be found within a reasonable time, operations may be commenced on the land only with specific approval of the director, and after making adequate provision for full payment of any damages which the owner may suffer.
This section constitutes the commissioner‘s finding, in accordance with
Hayes argues briefly that DNR did not make the determination required to restrict mining under