Court Opinion

ID: 1068142
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:28:45.85091+00
Date Added: 2024-06-11T15:21:13.140833
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Baker, Coleman and Overton
Argued at Salem, Virginia

GENERAL TRUCKING CORPORATION

v.       Record No. 1554-94-3                   OPINION BY
                                         JUDGE SAM W. COLEMAN III
O. GENE DISHNER, DIRECTOR, ETC.              DECEMBER 19, 1995

              FROM THE CIRCUIT COURT OF WISE COUNTY
                     James C. Roberson, Judge
          Henry S. Keuling-Stout for appellant.

          John B. Sternlicht, Assistant Attorney
          General (James S. Gilmore, III, Attorney
          General; Zane B. Scott, Assistant Attorney
          General; Sandra B. Riggs, Assistant Attorney
          General, on brief), for appellee.

     General Trucking Corporation obtained two surface mine

permits from the Department of Mines, Minerals and Energy, Mined

Land Reclamation Division (DMLR) and gave reclamation bonds on

these permits in the total amount of $539,000.      After issuing

Notices of Violations (NOVs) on the permits, DMLR forfeited the

entire amount of the two bonds.    General Trucking appeals the

trial court's decision affirming the forfeiture.

     Pursuant to Code § 45.1-247(A), DMLR has promulgated a

regulation establishing procedures for the forfeiture of

reclamation bonds.    General Trucking contends that DMLR did not

comply with this regulation and that, consequently, the trial

court erred by affirming the bond forfeiture.       We hold that the

forfeiture was proper and affirm the trial court's decision.
                        Facts and Proceedings

       On August 10, 1988, DMLR by letter advised General Trucking

of its decision to forfeit the reclamation bond on surface mine

permit number 1100333 (permit 333).     DMLR forfeited the total

amount of the bond, $400,000.   The reason for the forfeiture was

General Trucking's failure to abate conditions specified in two

NOVs that required General Trucking to perform certain remedial

actions on a diversion ditch and sediment ponds located on the

land covered by permit 333.   At the hearing challenging the

forfeiture, DMLR did not offer any evidence of the cost of

remedying the violations.   General Trucking, however, estimated

that the cost of remedying conditions specified in two NOVs was

less than $10,000.
       On November 2, 1988, DMLR advised General Trucking by letter

of its decision to forfeit the $139,000 reclamation bond on

surface mine permit number 1100184 (permit 184) because General

Trucking had failed to abate the conditions specified in a third

NOV.   This NOV required General Trucking to repair a highwall on

the permit area.   Once again, DMLR presented no evidence of the

cost of remedying the problems identified in the NOV.    General

Trucking estimated that the cost of remedying the problems in

this NOV would exceed $100,000.

       Ralph Tomlinson, an employee of General Trucking, testified

that General Trucking was a contract miner for Westmoreland Coal

Company.   According to Tomlinson, General Trucking could not

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abate the conditions specified in the three NOVs and continue

mining the sites because it "went broke" after Westmoreland

stopped buying its coal.    Tomlinson admitted that at the time of

the forfeiture a substantial amount of reclamation, exceeding the

amount necessary to remedy the conditions specified in the three

NOVs, needed to be done with respect to both permits.

     On July 24, 1990, DMLR entered into a letter agreement with

Westmoreland that Westmoreland would complete the reclamation on

the mine sites covered by permits 333 and 184.    In return, DMLR

agreed to pay Westmoreland the $539,000 in bond proceeds obtained

from General Trucking.
     After a formal public hearing, DMLR determined that the

forfeiture of the reclamation bonds was proper.   The trial court

affirmed DMLR's decision.
                         The Bond Forfeiture

     Regulation § 480-03-19.800.50 governs the forfeiture of

reclamation bonds.
     (a) If the permittee refuses or is unable to conduct
     reclamation of an unabated violation, fails to comply
     with the terms of the permit, or defaults on the
     conditions under which the bond was accepted, the
     Division shall take the following action to forfeit all
     or part of a bond or bonds for the permit area or a
     portion of the permit area:

     (1) Send written notification by certified mail,
     return receipt requested, to the permittee and the
     surety on the bond, if any, informing them of the
     determination to forfeit all or part of the bond,
     including the reasons for the forfeiture and the amount
     to be forfeited. The amount shall be based on the
     estimated total cost of achieving the reclamation plan
     requirements.

                                 -3-
Id. (emphasis added).   At issue in this case is the proper

interpretation of the last sentence of this regulation.    General

Trucking contends that this regulation required DMLR to estimate

the cost of remedying the conditions specified in the three NOVs.

DMLR, however, contends that it properly based the amount of

forfeiture on the estimated total cost of completing reclamation.

     The clear import of the statutory provision instructing DMLR

to establish procedures for bond forfeiture and release is to

ensure that all reclamation requirements are completed.
     The Director shall promulgate regulations . . .
     establishing procedures, conditions, criteria, and
     schedules for the forfeiture or release of performance
      bonds or deposits required under this chapter;
     however, no bond shall be fully released until all
     reclamation requirements of this chapter and the
     regulations thereunder are fully met.

Code § 45.1-247(A) (emphasis added).    Consistent with this

statutory mandate, DMLR's regulations provide that the bonds

shall "[b]e based on, but not limited to, the estimated cost of

reclamation submitted by the permit applicant."   Coal Surface

Mining Reclamations Regulation § 480-03-19.800.14(a)(4).

Moreover, the regulations provide:
     (b) In the event forfeiture of the bond is required by
     this Section, the Division shall:

                              . . . .

     (2) Use funds collected from bond forfeiture to
     complete the reclamation plan on the permit area.

                              . . . .

     [d](2) In the event the amount of performance bond
     forfeited was more than the amount necessary to
     complete reclamation, the unused funds shall be

                                -4-
     returned by the Division to the party from whom they
     were collected."

Coal Surface Mining Reclamations Regulation § 480-03-19.800.50.

Therefore, Code § 45.1-247(A) and the regulations promulgated

thereunder are remedial in nature, and we must liberally construe

the authority granted to forfeit reclamation bonds to achieve the

purpose of the act.   See Carmel v. City of Hampton, 241 Va. 457,

460, 403 S.E.2d 335, 337 (1991) (stating that remedial statutes

should be interpreted liberally).
     This Court will not disturb an agency's interpretation of

its regulations unless that interpretation is arbitrary and

capricious.   Virginia Real Estate Bd. v. Clay, 9 Va. App. 152,

161, 384 S.E.2d 622, 627 (1989).     DMLR contends that under

Regulation § 480-03-19.800.50 the amount to be forfeited is based

on the cost of completing reclamation rather than the cost of

remedying specific violations.    This interpretation is consistent

with the regulation's language.    The regulation states that DMLR

shall determine the amount to be forfeited on the basis of "the

estimated total cost of achieving the reclamation plan
requirements."   (emphasis added).      This language makes clear that

the purpose of the forfeiture is to ensure the "total cost" of

completing reclamation rather than the cost of remedying

individual violations.

     Furthermore, DMLR's interpretation is consistent with the

regulation providing for the initial bond determination.      The

initial bond determination is "based on, but not limited to, the

                                  -5-
estimated cost of reclamation."    Coal Surface Mining Reclamations

Regulation § 480-03-19.800.14.(a)(4) (emphasis added).

Regulation § 480-03-19.800.50, however, makes clear that the

amount of forfeiture is limited to the estimated cost of

reclamation.

     Most importantly, the agency's interpretation, with its

focus on the cost of completing reclamation, is consistent with

the remedial purpose of Code § 45.1-247.   Therefore, we conclude

that DMLR's interpretation of Regulation § 480-03-19.800.50 is

neither arbitrary nor capricious, but rather, is consistent with

the regulation's language, as well as with Code § 45.1-247.
     In the present case, the evidence showed that General

Trucking was "broke" and could not complete reclamation.   Ralph

Tomlinson testified that General Trucking had no money because

Westmoreland was not buying its coal.   Furthermore, Tomlinson

admitted that at the time the NOVs were issued, most of the

reclamation had yet to be completed.    DMLR could, therefore,

reasonably conclude that the entire amount of the bonds on

permits 333 and 184 was needed to assure completion of the

reclamation plan requirements.    In fact, the trial court reached

the same conclusion in holding that the initial bond

determination in this case was "essentially the same

determination as `the estimated total cost of achieving the

reclamation plan requirements' referred to in the bond forfeiture

regulation."   It is clear from the record that DMLR's objective

                                  -6-
in forfeiting the total amount of the bonds was to ensure the

completion of the reclamation on the land covered by permits 333

and 184.   Code § 45.1-247(A) grants DMLR the authority and

responsibility to ensure that the reclamation requirements are

satisfied, and this Court will not "substitute its own

independent judgment for that of the body entrusted by the

Legislature with the administrative function."   Virginia ABC

Comm'n v. York St. Inn, Inc., 220 Va. 310, 315, 257 S.E.2d 851,

855 (1979) (quoting Schmidt v. Board of Adjustment, 88 A.2d 607,
615 (N.J. 1952)).   We, therefore, hold that DMLR conducted the

bond forfeiture in accordance with Code § 45.1-247(A), as well as

Regulation § 480-03-19.800.50.
                        Unused Bond Proceeds

     Under Regulation § 480-03-19.800.50(d)(2), General Trucking

is entitled to any forfeited proceeds that are not used to

complete reclamation.   After the forfeiture, Westmoreland assumed

responsibility for the reclamation on the land covered by permits

333 and 184.   In return, DMLR paid to Westmoreland the forfeited

bond proceeds.   The record, however, does not indicate whether

the entire $539,000 was required to complete reclamation.     DMLR

must account for the forfeited proceeds and the extent to which

they were expended to complete the reasonable costs of

reclamation.   Accordingly, we affirm DMLR's bond forfeiture, and

we remand the case to the trial court with instructions that the

court direct the matter to DMLR in order that DMLR can, after the

                                 -7-
reclamation is completed, account for the forfeited bond proceeds

and determine whether the entire amount forfeited was necessary

to complete the reclamation plan.

     For these reasons, we affirm the bond forfeiture and remand

for further proceedings consistent with this opinion.

                                           Affirmed and remanded.

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