Case Title: Universal Equipment Co. v. State By and Through Dept. of Environmental Quality

Citation: 

Docket Number: 92-21

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-10-21T00:00:00Z

Document:
Universal Equipment Co. v. State By and Through Dept. of Environmental Quality1992 WY 136839 P.2d 967Case Number: 92-21Decided: 10/21/1992Supreme Court of Wyoming
UNIVERSAL EQUIPMENT 
CO., an Ohio corporation, Appellant 
(Defendant),

v.

STATE of 
Wyoming By and 
Through the DEPARTMENT OF ENVIRONMENTAL QUALITY, Appellee 
(Defendant).

Appeal from 
District Court, FremontCounty, Elizabeth A. Kail, 
J.

David D. Freudenthal of Herschler, 
Freudenthal, Salzburg, Bonds & Rideout, P.C., Cheyenne, and Michael K. 
Yarbrough of Frost and Jacobs, Columbus, Ohio, for appellant.

Joseph B. Meyer, Atty. Gen., Mary 
B. Guthrie, Steve Jones, Sr. Asst. Attys. Gen., Thomas A. Roan, Asst. Atty. 
Gen., and Joel M. Vincent of Vincent & Vincent, Riverton, for appellee.

Before MACY, C.J., and THOMAS, CARDINE, 
URBIGKIT* and GOLDEN, 
JJ.

* Chief Justice at time of oral 
argument.

MACY, Chief 
Justice.

 [¶1.]     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.

 [¶2.]     We 
affirm.

 [¶3.]     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.

 [¶4.]     AppelleeState 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.

 [¶5.]     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.

 [¶6.]     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.

 [¶7.]     ARIX moved for, and the 
district court granted, a summary judgment against Appellant for unpaid 
engineering services. To 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 postjudgment 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.

 [¶8.]     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.

 [¶9.]     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.

 [¶10.]  
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, the 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.

 [¶11.]  
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. Although Appellant felt 
that it had no obligation to demolish the buildings, it still conformed to the 
court's request to demonstrate an acceptable postmining use for the buildings. 
Appellant described the present use of the buildings as essentially being 
storage space for mining machinery waiting to be sold. Rather than using the 
buildings in the future, Appellant hoped to sell the property, including the 
buildings and facilities. Appellant declined the court's invitation to submit an 
analysis showing that the DEQ's building demolition estimates were inaccurate. 
Instead, Appellant relied upon its argument, now repeated on appeal, that the 
district court was precluded from ordering an additional bond to be posted. The 
district court found that Appellant's proposed future use for the buildings was 
insufficient and ordered Appellant to post a $4 million 
bond.

 [¶12.]  
The first issue we must consider is whether the WEQA and its rules and 
regulations grant the DEQ authority to impose reclamation and bonding 
requirements upon mine-site buildings which were built prior to the WEQA's 
enactment. Appellant contends that the WEQA's language is prospective, thus 
precluding the DEQ from imposing reclamation and bonding requirements on 
pre-WEQA facilities. As evidence that the WEQA is prospective, Appellant quotes 
Wyo. Stat. § 35-11-406(b) (Supp. 1992), which provides in pertinent part: "The 
[mining permit] application shall include a mining plan and reclamation plan 
dealing with the extent to which the mining operation will disturb or change the 
lands to be affected." (Emphasis added.)

 [¶13.]  
As with any statute, our primary consideration is discerning the 
Legislature's intent. Belle Fourche Pipeline Company v. State, 766 P.2d 537, 542 
(Wyo. 1988). 
Although this Court has not construed the particular mine reclamation provisions 
at issue in this case, we have previously interpreted other sections of the 
WEQA. People v. Platte Pipe Line Company, 649 P.2d 208 (Wyo. 1982). In Platte 
Pipe Line Company, we noted that, as an environmental statute designed to 
protect the public, the WEQA is entitled to receive a liberal construction. 
Id. at 212 (citing Woolley v. State Highway 
Commission, 387 P.2d 667, 673 (Wyo. 1963)). A liberal construction does not 
mean that we can force words out of their natural meaning but does permit us to 
give words a fair and reasonable interpretation so as to obtain the object for 
which the statute was designed. Soles v. State, 809 P.2d 772, 774 (Wyo. 
1991).

 [¶14.]  
To better understand whether the WEQA even applies to pre-WEQA buildings 
and facilities, it is helpful to first briefly examine the Open Cut Land 
Reclamation Act (Reclamation Act), which governed surface mining reclamation 
prior to the WEQA's enactment. 1969 Wyo. Sess. Laws ch. 192, §§ 1-14. In 1969, the 
Legislature enacted the Reclamation Act as a means of curbing economic and 
environmental damage caused by surface mining in Wyoming. Under the Reclamation Act, surface 
mining operators were required to obtain a mining permit and to post a bond with 
the Commissioner of Public Lands to ensure the availability of sufficient funds 
for the reclamation of affected lands. The Reclamation Act also established 
obligations for surface mining operators to reclaim and restore the land, but it 
was criticized as being vague and having inadequate reclamation standards. Its 
ineffectiveness ultimately led to its repeal by the Legislature in 1973. 1973 
Wyo. Sess. 
Laws ch. 250, § 3. Belle Fourche Pipeline Company, 766 P.2d  at 546. See also 
Robert E. Brown, Comment, Land Quality: The Regulation of Surface Mining 
Reclamation in Wyoming, 9 LAND & WATER L.REV. 97, 107 
(1974). 

 [¶15.]  
Repeal of the Reclamation Act did not mean that lands disturbed by 
open-cut mining could be left unreclaimed. Rather, the Legislature expanded and 
clarified the reclamation and conservation duties of surface mining operators by 
enacting the WEQA. 1973 Wyo. Sess. Laws ch. 250, § 1. In addition to 
establishing a new permitting and reclamation scheme, the WEQA contained several 
provisions which helped existing surface mining operators bridge the gap between 
the Reclamation Act and the WEQA. These provisions for existing mining 
operations provide us with valuable assistance in understanding whether the 
WEQA's reclamation requirements apply to preexisting operations or, as Appellant 
claims, to only operations conducted after the WEQA's enactment. Among those 
provisions is Wyo. Stat. § 35-11-401 (Supp. 1992), which provides in pertinent 
part:

     (a) No mining 
operation or operation by which solid minerals are intended to be extracted from 
the earth shall be commenced after the effective date of the act, except in 
accordance with its requirements. It is recognized these measures are performed 
in the public interest and constitute an expense to the operator, and while this act applies to all mining 
operations, no operator shall be compelled to perform at his own expense 
measures required under this act with respect to operations that were completed 
or substantially completed prior to the effective date of this act. . . 
.

     (b) All surface or 
underground mining operations operating at the date of enactment of this statute 
shall have a period of one (1) year within which to fulfill the requirements of 
this act. This period may be extended at the discretion of the council if the 
administrator has been unable to review and evaluate all operations that are 
presently operating under a permit issued by the state land commissioner in 
compliance with the "Open Cut Land Reclamation Act of 
1969[."]

(Emphasis 
added.)

 [¶16.]  
The obvious inference to be drawn from subsection (a) is that those 
preexisting operations not completed or substantially completed were subject to 
the WEQA's requirements. Operation is defined in Wyo. Stat. § 35-11-103(e)(viii) 
(Supp. 1992):

     (viii) "Operation" 
means all of the activities, equipment, premises, facilities, structures, roads, rights-of-way, waste 
and refuse areas excluding uranium mill tailings and mill facilities, within the 
Nuclear Regulatory Commission license area, storage and processing areas, and 
shipping areas used in the process of excavating or removing overburden and 
minerals from the affected land or for removing overburden for the purpose of 
determining the location, quality or quantity of a natural mineral deposit or 
for the reclamation of affected lands[.]

(Emphasis added.) In this case, the 
facilities and structures were constructed prior to the WEQA's enactment, but 
the operation as a whole was not completed or substantially completed prior to 
the WEQA's effective date, July 1, 1973. United States Steel operated the mine 
prior to the WEQA's enactment and continued to actively mine iron ore at the 
site until 1983. Since the buildings were part of the mining operation and the 
operation was not completed or substantially completed prior to the WEQA's 
effective date, we conclude that the buildings are subject to the WEQA's 
requirements.

 [¶17.]  
Section 35-11-401(b)'s one-year grace period merely reinforces the idea 
that the WEQA applies to preexisting operations. It would be illogical to grant 
operators a grace period for complying with the WEQA if the WEQA applied only to 
operations conducted after its enactment. The purpose of a grace period is, 
presumably, to temper the severity of adapting to new requirements. If the WEQA 
only applied to prospective mining operations, existing operators would be in 
the same position as new operators and would have no need for a grace 
period.

 [¶18.]  
Appellant does not really contest the WEQA's application to pre-WEQA 
operations but argues that the WEQA's reclamation and bonding requirements are 
prospective even if other WEQA aspects may apply. Appellant's interpretation 
appears to contradict the very purpose of the WEQA. The WEQA is designed to 
"enable the state to prevent, reduce and eliminate pollution; to preserve, and 
enhance the air, water and reclaim the land of Wyoming; to plan the development, use, 
reclamation, preservation and enhancement of the air, land and water resources 
of the state." Wyo. Stat. § 35-11-102 (1988). If we adopt 
Appellant's interpretation of the WEQA as not requiring reclamation of 
preexisting operations, Appellant could leave the buildings as empty shells if 
it so desired. Such a result would be inconsistent with the Legislature's stated 
intent to either reclaim or develop the land.

 [¶19.]  
In addition to the general statutory purpose language, the WEQA contains 
specific evidence of the Legislature's intent to apply the reclamation 
requirements to preexisting operations which were not completed or substantially 
completed prior to its enactment. Wyo. Stat. § 35-11-402(a)(vii) (Supp. 1991)3 provided:

     (a) The council shall, 
upon recommendation by the advisory board, establish rules and regulations 
pursuant to the following reclamation standards for the affected areas, 
including but not limited to:

. . . .

     (vii) In administering 
established rules and regulations on such standards the administrator and 
advisory board shall consider all the facts and circumstances bearing upon any 
reclamation plan. In consideration of reclamation plans for any mining operation 
that is presently being conducted in the state under a permit issued by the 
state land commission under the "Open Cut Land Reclamation Act of 1969[,"] 
particular attention shall be paid to:

     (A) The social and 
economic value of the product mined;

     (B) The technological 
availability for economic feasibility of reclaiming the affected 
area[.]

 [¶20.]  
Section 35-11-402(a)(vii) fully indicated that the Legislature intended 
to require reclamation of some preexisting operations. When considering a 
reclamation plan for an operation presently being conducted under a Reclamation 
Act permit, the administrator must pay particular attention to certain social, 
economic, and technological variables. This added attention is paid only to 
reclamation plans submitted by Reclamation Act permittees. It would be illogical 
to make special concessions for those reclamation plans which concern operations 
being conducted after the WEQA's enactment. Presumably, the added considerations 
in § 35-11-402(a)(vii) were meant to reduce the harshness of complying with the 
WEQA's new reclamation requirements. If the reclamation plans referenced in § 
35-11-402(a)(vii) did not apply to preexisting operations and applied only to 
new operations, no need to grant special consideration to Reclamation Act 
permittees would exist because the reclamation burdens would be the same as 
those of any new operator. Section 35-11-402(a)(vii)'s language reinforced this 
interpretation. That paragraph discussed the reclamation plan for any mining 
operation "presently being conducted" and the economic feasibility of reclaiming 
the "affected area." Both phrases apply to operations already in existence at 
the time the WEQA was enacted.

 [¶21.]  
Appellant also argues that the WEQA's bonding provisions provide evidence 
that the WEQA is not applicable to preexisting facilities. The WEQA's primary 
bonding provision is Wyo. Stat. § 35-11-417 (Supp. 1992), which provides in 
pertinent part:

     (a) The purpose of any 
bond required to be filed with the administrator by the operator shall be to 
assure that the operator shall faithfully perform all requirements of this act 
and comply with all rules and regulations of the board made in accordance with 
the provisions of this act.

. . . .

     (c) The amount of any 
bond to be filed with the administrator prior to commencing any mining shall 
be:

     (i) For an initial 
bond the amount equal to the estimated cost of reclaiming the affected land 
disturbed and restoring, as defined in W.S. 35-11-103(f)(iii), any groundwater 
disturbed by in situ mining during the first year of operation under each 
permit. . ..

     (ii) For renewal bonds 
the amount equal to the estimated cost of reclaiming the land to be disturbed 
during the renewal period, and the estimated cost of completing reclamation of 
unreleased lands and groundwater disturbed during prior periods of time. The 
estimated cost shall be based on the operator's cost estimate, which shall 
include any changes in the actual or estimated cost of reclamation of unreleased 
affected lands, plus the administrator's estimate of the additional cost to the 
state of bringing in personnel and equipment should the operator fail or the 
site be abandoned.

 [¶22.]  
Other bonding provisions include Wyo. Stat. § 35-11-403(a)(ii) (Supp. 
1992) which authorizes the Land Quality Division's administrator "[t]o fix the 
amount of, collect, maintain and otherwise comply with the statutory performance 
bond requirement set out in W.S. 35-11-417." See also Wyo. Stat. § 
35-11-110(a)(ii) (Supp. 1992).

 [¶23.]  
In our view, both § 35-11-403(a)(ii) and § 35-11-417(c)(ii) authorize the 
administrator to require a bond to ensure the reclamation of pre-WEQA buildings 
and facilities. As Appellant accurately points out, the statute does not refer 
to determining a bond amount on the basis of the costs of demolishing buildings 
which predate the WEQA. However, to be consistent with the rest of the WEQA, the 
broad statutory language must be read as allowing such a bond to be required. 
The WEQA clearly contemplated the reclamation of those operations not completed 
or substantially completed prior to the WEQA's enactment. If the WEQA were 
designed, at least in part, to reclaim preexisting operations, that goal would 
be severely impeded by the lack of a bonding requirement. Performance bonds 
provide an incentive for operators to complete reclamation and also provide 
financing for reclamation costs in forfeiture cases. Essentially, the bonding 
requirement is what makes the reclamation system work, so it would have been 
incongruous for the Legislature to require reclamation but not bonding for 
pre-WEQA operations.

 [¶24.]  
Having determined that the WEQA's reclamation and bonding requirements 
apply to preexisting operations, we must now examine the duty imposed by the 
WEQA upon operators to reclaim their buildings and structures. The WEQA's sole 
reference to buildings is in § 35-11-406(b)(iv), which requires the reclamation 
plan to include the "[m]ethod of disposal of buildings and structures erected 
during the operation." The Land Quality Division's rules and regulations offer 
further insight into what an operator is required to do with mine-site buildings 
and structures. Prior to September 1986, the rules and regulations stated in 
pertinent part:

     b. In addition to that 
information required by W.S. 35-11-406(b), each application for a mining permit 
shall contain:

. . . .

     (3) A plan whereby the 
operator will reclaim the affected lands to the proposed postmining land use in 
accordance with Chapter IV, Section 2a. which shall 
include:

. . . .

     (h) A plan for the 
disposal of buildings and structures in accordance with the requirements of 
Chapter IV, Section 2.k.

Chapter II, Section 2.b(3)(h) 
(1985).

k. Disposal of buildings and 
structures.

     (1) All buildings and 
structures must be removed or dismantled unless it can be demonstrated to the 
administrator's satisfaction that the buildings or structures will be of 
beneficial use in accomplishing the proposed use of the land after reclamation 
or for environmental monitoring.

Chapter IV, Section 2.k(1) (1985). 
The rules and regulations regarding disposal of buildings were modified in 
September 1986 to require that mining permit applications 
include:

     (H) A plan for the 
disposal of buildings and structures erected, used or modified by the 
applicant in accordance with the requirements of Chapter IV, Section 
2.(k).

Chapter II, Section 2(b)(iii)(H) 
(1986) (emphasis added).

(k) Disposal of buildings and 
structures.

     (i) All buildings and 
structures constructed, used or 
improved by the operator must be removed or dismantled unless it can be 
demonstrated to the administrator's satisfaction that the buildings or 
structures will be of beneficial use in accomplishing the proposed use of the 
land after reclamation or for environmental monitoring.

Chapter IV, Section 2(k)(i) (1986) 
(emphasis added).

 [¶25.]  
Some dispute between the parties exists concerning which version of the 
rules and regulations applies. In its brief, the State relies upon the more 
recent language, while Appellant contends that the older language should apply. 
The newer language is applicable to all mining operations "commenced or 
conducted" after the effective date of the rules and regulations. Chapter I, 
Section 3(a) (1986). Since active mining ceased in 1983, the determination of 
which version applies depends upon whether Appellant's reclamation efforts 
constitute mining operations. We perceive no need to decide this question 
because, pursuant to either version of the rules and regulations, mine operators 
are required to remove or dismantle the buildings unless they will be put to a 
beneficial use consistent with the proposed use of the land. The language added 
in 1986 merely limits the buildings which must be dismantled, a concept which 
would appear, if anything, to potentially benefit, not hinder, Appellant. Thus, 
we conclude that the WEQA, as supplemented by the Land Quality Division's rules 
and regulations, requires Appellant to either reclaim the buildings or put them 
to a beneficial use.

 [¶26.]  
The only question remaining is whether Appellant could be required to 
post a bond for the buildings' demolition if the DEQ consistently approved 
reclamation plans for the mine site which did not require the operator to remove 
or demolish the buildings. Appellant maintains that, by excluding reclamation 
and removal of the buildings from the bond and the reclamation plans between 
1973 and 1989, the DEQ demonstrated its long-standing interpretation of the WEQA 
as not requiring pre-WEQA buildings to be reclaimed. Appellant urges this Court 
to defer to the agency's long-standing interpretation. WYMO Fuels, Inc. v. 
Edwards, 723 P.2d 1230, 1237 (Wyo. 1986). Contrary to Appellant's claim, we 
do not think that the DEQ interpreted the statute as excluding reclamation and 
bonding requirements for the buildings. Instead, we detect a pattern of 
carelessness by the DEQ in approving reclamation plans which did not 
specifically state what would be done with the buildings once mining 
ceased.

 [¶27.]  
United States Steel, Appellant's predecessor, only briefly mentioned the 
mine's buildings in its first reclamation plan submitted in 
1974:

     The buildings 
associated with operations are all located on fee ground owned by U.S. Steel and 
are of substantial construction. It is possible that beneficial use can be made 
of these buildings following completion of operations. Those buildings for which 
there is no beneficial use will be dismantled and salvaged. Since buildings and 
ground are both owned by United States Steel, final disposition decisions should 
remain with United States Steel.

When Appellant acquired the mine in 
1985, the DEQ required a new reclamation plan as a condition of the permit 
transfer. In November 1985, Appellant complied with the DEQ's condition by 
submitting a proposed reclamation plan which identified certain buildings to be 
removed and others to remain. Appellant subsequently submitted a proposed permit 
revision application and reclamation plan which suggested disposing of the 
buildings in the same manner as the first plan but added: "The use of the 
facilities to remain has not yet been determined." Appellant's final, approved 
reclamation plan dealt with the buildings by proposing to "[m]aintain [the 
facilities] as is for future commercial/industrial use." An internal DEQ 
memorandum written to the file said: "The mine facilities area will be left 
intact in hopes of serving a future industrial or commercial 
use."

 [¶28.]  
The trial court found that Appellant's approved reclamation plan assumed 
that the buildings remaining in the permit area would not be demolished but 
instead would be put to commercial use. We agree with the trial court's 
assessment. Both United States Steel's and Appellant's reclamation plans 
indicated an intent to put the buildings to future beneficial use. The internal 
memorandum evidences the DEQ's belief that the buildings would be put to a 
beneficial postmining use and that they did not need to be reclaimed. Thus, we 
conclude that the DEQ's long-standing failure to include the costs of building 
demolition in the mine's bonding and reclamation requirements was due to an 
assumption that the buildings would be put to beneficial use, not that the 
buildings did not have to be reclaimed.

 [¶29.]  
We recognize the perception that it is manifestly unfair for the DEQ to 
require a reclamation bond of approximately $1.8 million, to reduce that bond to 
$300,000 after Appellant partially reclaimed the mine, and then to increase the 
bond to $4 million. The perception of injustice is not entirely accurate. After 
the DEQ became concerned that Appellant might abandon the mine's buildings, the 
DEQ sought a declaratory judgment to determine Appellant's obligation to reclaim 
the buildings or put them to a beneficial use. The court's declaratory judgment 
allowed Appellant to remove the buildings from the WEQA's reclamation and 
bonding provisions by providing a detailed plan for the buildings' future use. 
Appellant did not provide an adequate plan explaining the buildings' future use. 
The failure to supply an adequate plan meant that Appellant was required to post 
a $4 million bond. A $4 million bond appears inequitable especially in light of 
Mr. Moxley's testimony that his estimate was within "20 or 30 percent" of the 
actual demolition costs; i.e., perhaps a million dollars off. Although $4 
million is obviously somewhat speculative, the court's declaratory judgment 
stated: "[Appellant] has the right to initially establish the amount of the 
reclamation performance bond by competent engineering analysis, the report of 
which is subject to review and approval by the Land Quality Administrator." 
Appellant chose not to submit a proposed bond amount. Even though we may be 
frustrated by the high bonding requirement, it was Appellant's responsibility to 
provide the court with a more accurate estimate, and it chose not to provide 
such an estimate.

 [¶30.]  
In its second issue, Appellant contends that the district court was 
precluded from determining that reclamation at the mine was not complete. 
Appellant's argument is related to ARIX's summary judgment against Appellant for 
engineering services. After obtaining its summary judgment against Appellant, 
ARIX sought to garnish Appellant's reclamation bond being held by the DEQ. The 
district court found that the bond was not subject to garnishment. However, the 
court did find that a contract existed between the DEQ and Appellant regarding 
Appellant's reclamation bond and that, pursuant to the contract, the DEQ was 
required to pay ARIX the amount owed to it by Appellant. The contract between 
the DEQ and Appellant consisted of a series of letters between the two in which 
Appellant agreed to convert the form of its reclamation bond from an irrevocable 
letter of credit to cash and to release the funds to the DEQ subject to certain 
conditions. Among the conditions was the proviso that the DEQ would pay ARIX for 
engineering services only after it paid the costs of any remaining reclamation 
work. The district court ordered the DEQ to specifically perform that part of 
the contract which required that ARIX be paid the money owed to it by Appellant. 
Appellant now argues that, by ordering the payment of the past due amounts to 
ARIX, the trial court must necessarily have found that all reclamation had been 
completed because ARIX was to be paid only after all reclamation was 
completed.

 [¶31.]  
Appellant's argument is inconsistent with the trial court's subsequent 
declaratory judgment, in which the court stated: 

     By its Order for 
Specific Performance of Contract dated May 21, 1990, by which the [DEQ] was 
ordered to pay $99,201.85 to ARIX Corporation (the project engineer) to complete 
payment for its engineering services, the Court did not make findings regarding 
the obligations of [Appellant] for final reclamation of the Atlantic City Iron 
Mine as governed by Permit to Mine Number 231C; instead, the Court reserved such 
determinations for further order in this case.

Consistent with the foregoing 
finding, the court required Appellant to post a bond to ensure the completion of 
several additional items, such as revegetation and drainage control. The 
combination of the court's specific statement regarding Appellant's reclamation 
obligations and its order for Appellant to post a bond for additional 
reclamation leads to the inescapable conclusion that the court's order for 
specific performance was not a determination that all reclamation had been 
completed.

 [¶32.]  
In a related argument, Appellant claims that, pursuant to the doctrine of 
equitable estoppel, the DEQ is estopped from requesting any additional 
reclamation activity. Appellant's argument for invoking the doctrine of 
equitable estoppel is twofold: First, the DEQ consistently represented to 
Appellant that the $300,000 bond would be sufficient to complete all remaining 
reclamation activities. Appellant relied upon this representation when it 
changed its irrevocable letter of credit to cash and gave the funds to the DEQ. 
Second, when the district court ordered the DEQ to pay ARIX, it necessarily 
determined that all reclamation activities had been completed. According to 
Appellant, the DEQ's failure to appeal the district court's order represented to 
Appellant that all reclamation activities had been completed and that the DEQ 
should now be estopped from asserting otherwise.

 [¶33.]  
To support its claim of equitable estoppel against the DEQ, Appellant 
relies upon this Court's statement in Seaman v. Big Horn Canal Association, 29 
Wyo. 391, 398, 213 P. 938 (1923): "[O]ne who by his acts or representations 
intentionally or through culpable negligence induces another to believe certain 
facts to exist, and the latter, not knowing the facts, acts on such belief to 
his substantial prejudice, the former is, in equity, estopped to deny the 
existence of such fact." In more recent cases, we have said that equitable 
estoppel requires some misrepresentation and is generally applied to prevent 
fraud, either constructive or actual. B & W Glass, Inc. v. Weather Shield 
Mfg., Inc., 829 P.2d 809, 813 (Wyo. 1992); 
Squaw Mountain Cattle Company v. Bowen, 804 P.2d 1292, 1297 (Wyo. 1991). Equitable 
estoppel against a governmental agency requires even more egregious 
conduct.

     Equitable estoppel 
should not be invoked against a government or public agency functioning in its 
governmental capacity, except in rare and unusual circumstances and may not be 
invoked where it would serve to defeat the effective operation of a policy 
adopted to protect the public.

Big Piney Oil & Gas Company v. 
Wyoming Oil and Gas Conservation Commission, 715 P.2d 557, 560 (Wyo. 1986), 
quoted in State ex rel. Wyoming Workers' Compensation Division v. Rivera, 796 P.2d 447, 450 (Wyo. 1990), and in Sare v. Sheridan County Board of County 
Commissioners, 784 P.2d 593, 595 (Wyo. 1989).

 [¶34.]  
In this case, the DEQ was functioning within its governmental capacity of 
ensuring the mine's reclamation. We discern no rare and unusual circumstances 
which support invoking equitable estoppel against the DEQ. When the DEQ reduced 
Appellant's reclamation bond to $300,000, it obviously considered that amount as 
being sufficient to complete the remaining reclamation requirements at the mine. 
In the ensuing letters between Appellant and the DEQ in which Appellant agreed 
to release its funds to the DEQ, both parties assumed that $300,000 would 
satisfy the additional reclamation costs. We can find no evidence in the record, 
and Appellant offers no evidence, to indicate that the DEQ misrepresented the 
reclamation costs.

 [¶35.]  
Appellant's second ground for equitable estoppel is that, by not 
appealing the trial court's order for specific performance, the DEQ represented 
to Appellant that all reclamation activities had been completed. Appellant's 
contention that the DEQ's failure to appeal constituted a representation to 
Appellant seems tenuous at best and certainly does not give rise to grounds for 
equitable estoppel.

 [¶36.]  
Affirmed.

FOOTNOTES

 1 As 
previously noted, Appellant posted a bond of approximately $1.8 million when it 
received United States Steel's mining permit. At the time ARIX filed its 
complaint, the DEQ had reduced Appellant's bond to $300.000 in recognition of 
Appellant's partial reclamation of the mine site.

2 Apparently, the $4 million figure 
was composed of the $3 million for demolition costs plus other additional 
reclamation work and a fifteen percent contingency fee to cover site security 
and unforeseen expenses.

3 Amended by 1992 Wyo. Sess. Laws ch. 60, § 
3 effective April 1, 1992.

 URBIGKIT, Justice, concurring in part and 
dissenting in part.

 [¶37.]  
It is recognized that stream pollution problems are potentially involved 
in this appeal. In consideration of the present partial performance status of 
the reclamation activities, forcefully discussed in current news reports, the 
need for urgency in our appellate decision is apparent.

 [¶38.]  
In recognizing that need, I concur with the court's decision in general 
direction, but dissent in part with concern that we ask for the impossible 
which, if true, will not be achieved. I also dissent because no proper basis is 
presented to require the bond at the amount stated for building removal and 
structure site renovation or that a bond should presently be required to remove 
the structures constituting office and processing 
facilities.

 [¶39.]  
It seems completely clear that a use for the buildings has been 
considered and may probably be pursued by a reasonably early date. Under that 
circumstance, a punitive bond in the amount provided is not justified by 
anything found in the Department of Environmental Quality rules, regulations or 
executed agreements entered into by the department with either the predecessor, 
United States Steel Corporation, or the present appellant. There is a punitive, 
perspective imposition, unexpectedly created, for this major cost responsibility 
to appellant. Hercules Powder Co. v. State Bd. of Equalization, 66 Wyo. 268, 208 P.2d 1096 
(1949). See also People v. Platte Pipe Line Co., 649 P.2d 208 (Wyo. 
1982).

 [¶40.]  
I generally agree with the direction of the decision that appellant 
retains a reclamation maintenance responsibility for areas of dams, ponds and 
other facilities originally involved in mining where stream damage may occur 
from moisture flow. The $386,000 bond for revegetation and other restorative 
activities is justified, but I would not go further to require the total bond of 
$4 million. If we do, it is as likely as not that even a $386,000 bond will be 
an unrealistic expectation.

 [¶41.]  
I join in affirming the decision of the trial court, except with the 
administrative agency's increase of the reclamation bond to a sufficient total 
covering the cost of building demolition and site renovation. It is concluded 
that the additional imposition by the agency is unauthorized, Roberts Const. Co. 
v. Vondriska, 547 P.2d 1171 (Wyo. 1976), and this court's decision in 
approval cannot be factually and legally supported in this appellate record. 
Platte Pipe Line Co., 649 P.2d 208; Holding's Little America v. Board of County 
Com'rs of Laramie County, 670 P.2d 699 (Wyo. 1983), appeal after remand 712 P.2d 331 (Wyo. 1985); Rocky Mountain Oil and Gas Ass'n v. State Bd. of Equalization, 
749 P.2d 221 (Wyo. 1987).

 [¶42.]  
Consequently, I concur in the requirement for the general reclamation 
bond and dissent to the additional inclusion of the building structure 
demolition and site renovation costs.