Summary
observing the doctrine of res judicata provides that a judgment of a court, directly adjudicating points of law or fact, is conclusive between the same parties or their privies whether in the same matter or a separate action.
Summary of this case from Lozada v. LozadaOpinion
No. 85-124
Decided April 23, 1986.
Environmental law — Strip mining — Responsibility for reclamation violations imposed upon license owner although it was not actual operator at site — "Responsible operator" test, rejected.
APPEAL from the Court of Appeals for Muskingum County.
On March 16, 1972, appellant, Dressler Coal Company, leased a portion of land from P.D.H. Farms in order to mine coal situated thereon. On June 25, 1973, the Chief of the Division of Reclamation, Ohio Department of Natural Resources, appellee, granted appellant Strip Mine License No. B-0319 which authorized strip mining on a 24.5 acre tract in Muskingum County for a period of one year. Pursuant to this license, appellant posted a performance bond to secure compliance with strip mining laws. Appellant commenced strip mining; however, the record indicates that by October 1973, appellant had ceased actual mining operations.
Testimony elicited from the owner and president of appellant, Clarence Goss, estimated that five acres had been mined under license No. B-0319. However, the quarterly report executed and filed by Goss on September 18, 1974 indicated that fifteen acres had been "affected."
In January 1974, appellant and Muskingum Valley Augering Corporation ("MVA") entered into an agreement whereby appellant assigned its lease with P.D.H. Farms to MVA. This agreement further provided in part:
"All reclamation to permit release by both the Bonding Company and The State of Ohio, Bureau of Mines of all acres not presently released and all future reclamation required will be performed by you. This will be done at your expense except as provided below.
"Dressler Coal Corporation agrees to furnish fertilizer, lime and seed only to complete reclamation and obtain releases of bonds on land heretofore mined by Dressler Coal Corporation. Any reclamation caused by your operations will be reclaimed entirely at your expense."
The record indicates that neither P.D.H. Farms nor appellee was a party to this agreement. The record reveals that appellant never informed appellee that mining would not be undertaken pursuant to license No. B-0319. Furthermore, appellant did not attempt to have license No. B-0319 transferred to MVA.
On January 16, 1974, appellant informed appellee that it had ceased mining operations as of January 2, 1974. On March 16, 1974, appellant filed an additional request to modify its license to permit auger mining.
On March 26, 1974, appellant released P.D.H. Farms from the lease agreement with the proviso that "[t]his release does not release * * * [MVA] from * * * [its] responsibility of grading seeding P.D.H. leases stripped by Dressler Coal Corp." At the same time, P.D.H. Farms leased twenty-five acres to MVA for the purposes of mining coal. Consequently, MVA applied for and was granted its own strip mine license, No. B-0650, to mine twenty-four acres in a license area located west of the area in appellant's license No. B-0319. These two areas did not overlap except for one acre. The one acre overlap was comprised of an area which MVA "reaffected" by its own mining under its own license.
It does not appear that appellee is attempting to hold appellant liable for any mining area outside the scope of license No. B-0319.
On April 24, 1974, appellant filed a third quarter report under its license No. B-0319, reciting the acreage affected, graded and resoiled. Appellant also indicated on this report that no coal was removed during the second and third quarters of the one-year license.
Appellant's license No. B-0319 expired on June 24, 1974, and thereafter, appellant filed its final report with appellee on September 18, 1974, indicating that 23.8 acres were "affected" and that coal tonnage of 16,398.70 was removed during the fourth quarter.
The record indicates that earlier, on March 7, 1974, an inspector of the appellee made out his report which crossed off the name of appellant and substituted MVA. On April 3, 1974, a similar inspector's report was made identifying the mining operator as appellant, but stating: "A difficult area that has been taken over by a new contractor seems to be progressing better." The record also shows an inspector's report dated January 27, 1975 naming appellant as the "Company," with the comment that the reclamation due date under license No. B-0319 would be June 25, 1975.
On March 31, 1976, appellant, by Gene Sands, president of MVA, officially requested appellee to release the bond securing performance of license No. B-0319, alleging that the acreage had been reaffected by MVA's license No. B-0650. As a result, appellee released only one acre. Final reclamation of the area in license No. B-0319 was due October 22, 1977.
In 1976, appellant attempted to have the bond released as to the entire tract, but the request was disapproved upon the grounds of erosion and lack of vegetation on the area in license No. B-0319.
In May 1978, appellant filed two requests with appellee to release the performance bond, but both requests were disapproved. Consequently, appeals from disapproval of the applications to release the bond were made to the Court of Common Pleas of Franklin County and subsequently appealed to the Court of Appeals for Franklin County. The appellate court affirmed the disapprovals made by appellee. Dressler Coal Corp. v. Call (1981), 4 Ohio App.3d 81.
On November 19, 1982, appellee issued Notices of Violation Nos. 2047 and 2048 against license No. B-0319 to appellant. The notices cited erosion and lack of vegetation on the area in license No. B-0319, and mandated compliance to rectify the matter by appellant by February 17, 1983. Appellant appealed the notices separately to the chief of the appellee-division ("chief"), and on February 14, 1983, a hearing was held before an officer of the appellee, from whom the matter was transferred by operation of law to the Reclamation Board of Review ("board").
On March 19, 1984, the board made its finding, and order, and held that since appellant was the licensee on the land affected by license No. B-0319, and that since appellee continued to look to appellant for compliance with the reclamation, appellant was therefore responsible for the alleged substandard reclamation (the subject of notices of violation Nos. 2047 and 2048), even though the bulk of the mining undertaken in the area in license No. B-0319 was done by MVA, a third party. In support of its position, the board relied on the case of Wilson Farms Coal Co. (1980), 2 IBSMA 118, 87 I.D. 245.
On July 10, 1984, the board denied appellant's second appeal which concerned the chief's denial to extend the abatement time for the two notices of violation. In relying in full on the findings of fact and recommendations of the hearing officer, the board, sua sponte and without a hearing, dismissed the appeal with respect to the request for extension of abatement time. The hearing officer's report concluded that this appeal was barred by the doctrine of res judicata because appellant could have, but failed, to request an extension of abatement time; and that the board's decision of March 19, 1984 necessarily considered this factor as part of appellee's prima facie case.
Appellant then perfected appeals of both decisions made by the board to the court of appeals. The causes were consolidated for disposition, and subsequently, the appellate court affirmed with respect to both decisions rendered by the board. The court of appeals held that the findings and conclusions made by the board were supported by the evidence, and that appellant had failed to demonstrate its claim of substantial prejudice. The appellate court found that while appellee was aware of the agreement between MVA and appellant, whereby MVA assumed responsibility for completing the tasks required under license No. B-0319, the court found that appellee continued to look to appellant as the responsible party for activities or omissions carried out under appellant's strip mining license No. B-0319. The court of appeals further held that the second appeal brought by appellant to the board was correctly determined to be res judicata, and that the board's decisions were neither arbitrary, capricious, nor inconsistent with law.
The cause is now before this court upon the allowance of a motion to certify the record.
Stubbins, Phillips Co., L.P.A., Brent A. Stubbins and Mark W. Stubbins, for appellant.
Anthony J. Celebrezze, Jr., attorney general, and Bryan F. Zima, for appellee.
In the cause sub judice, there is little doubt that appellant made an agreement with MVA, whereby MVA would continue the mining operations and perform reclamation activities under the license No. B-0319 procured by appellant. Nevertheless, the crucial question posed in this cause is whether appellant should be held responsible for the alleged reclamation violations committed by MVA under appellant's license No. B-0319.
Appellant contends that responsibility for reclamation violations must be imposed upon the "operator" who actually committed the alleged violations. Appellant argues that the board erred in not adopting the "responsible operator" test formulated in Affinity Mining Co., Keystone No. 5 Mine (1973), 2 IBMA 57, 80 I.D. 229; Armco Steel Corp. (1976), 6 IBMA 64, 83 I.D. 77, and applied in Bituminous Coal Operators' Assn. v. Hathaway (W.D. Va. 1975), 406 F. Supp. 371; and thus hold MVA accountable for the alleged reclamation violations, since MVA performed the reclamation activities under appellant's strip mining license No. B-0319.
According to appellant, the test of who is a "responsible operator" is whether the operator is in a realistic position to prevent or abate the violation of the applicable strip mining laws with a minimum of due diligence. Armco, supra. Appellant also relies on Marco, Inc. (1981), 3 IBSMA 128, 88 I.D. 500, for the proposition that although a mining company may be the "permittee," if said permittee relinquishes its license to mine, undertakes no actual mining operations, and has no legal rights in the license area mined by the successor mine operator, then the permittee should not be held accountable for any reclamation violations committed by the successor mine operator.
After careful consideration and analysis of the cases heretofore cited, we decline to adopt the "responsible operator" test urged by appellant, and find the Wilson Farms Coal Co. case to be more persuasive under the facts of the instant cause.
In Wikson Farms Coal Co., supra, the Interior Board of Surface Mining and Reclamation Appeals found the holder of a surface mine permit to be responsible for violations committed on the permit area by another company to which the permittee had leased its mining rights, and transferred under such lease all obligations and responsibilities of the permittee, including compliance with state and federal laws. In reviewing the instant cause, we find that appellant continued to file documents ( i.e., quarterly reports of mining activities and the "Operator's Request to Amend Mining and Reclamation Plan") with appellee subsequent to appellant's private agreement with MVA. All of these documents were signed by Clarence Goss, the president of appellant. Assuming that appellee was fully aware of the fact that appellant made an agreement with MVA, whereby MVA continued to mine under appellant's license No. B-0319, it does not appear that appellant attempted to apprise appellee that it was transferring the rights and responsibilities under license No. B-0319 to MVA. In any event, we believe that there is sufficient credible evidence to indicate that appellee continued to view appellant as the responsible party for any and all activities carried out pursuant to license No. B-0319. The record clearly shows this to be the case, since appellant was listed as the "company" under license No. B-0319 in virtually all the "Inspector's Field Operation Report(s)" completed by the agents of the appellee.
The Inspector's Field Operation Report prepared in March 1974 listed MVA as the "company" under license No. B-0319; however, this was obviously done in error since all subsequent Inspector's Field Operation Reports listed appellant as the "company" under license No. B-0319.
As appellee points out, Marco, Inc., supra, is readily distinguishable from the cause sub judice. Unlike appellant herein, Marco, Inc. never undertook any mining operations under its license, and did not continue to take administrative actions under color of the license that were consistent with mining. In fact, Marco, Inc. undertook all the administrative steps necessary to relinquish its permit rights using the appropriate state form to accomplish this end.
Therefore, we affirm the decisions below holding that appellant is legally responsible for the notices of reclamation violations alleged to have occurred in the area in license No. B-0319.
With respect to the second appeal attempted by appellant where it requested an extension of abatement time before the board, we affirm the appellate court's decision that said second appeal was res judicata.
Appellant contends that the board's sua sponte dismissal of the second appeal, without a hearing, amounts to an unconstitutional deprivation of due process. Appellant further contends that a party need not file written objections to the hearing officer's report and recommendation in order to preserve its rights to an appeal on the merits.
We believe that appellant's arguments in this regard are unpersuasive. As set forth in the hearing officer's report and recommendation:
"* * * The doctrine of res judicata provides that the judgment of a court of concurrent jurisdiction directly upon points of law or fact is conclusive between the same parties, or their privies, on the same matter in a separate action. Columbus v. Union Cemetery Association [(1976), 45 Ohio St.2d 47 (74 O.O.2d 79)]. Where this doctrine applies it will preclude subsequent litigation not only as to matters actually determined, but also as to any other matters which could have been determined. Charles A. Burton, Inc. v. Durkee [(1954), 162 Ohio St. 433 (55 O.O. 247)]; 1B Moore's Federal Practice, Sec. [ sic Par.] 0.405 (1), at pp. 621-624 (1965).
"At the outset, it is important to note that the doctrine of res judicata applies to administrative proceedings. [See] Math [sic Naff] v. Sohio, 527 F. Supp. 160 [, 163, at fn. 2] (S.D. Ohio 1980).
"* * *
"For res judicata to apply, the first and second suit must be between the same parties or their privies and must be based upon the same cause of action. Trautwein v. Sorgenfrie [sic Sorgenfrei] [(1979), 58 Ohio St.2d 493 (12 O.O.3d 403).]
"* * *
"In the first suit, Appellant had the opportunity to raise issues regarding the abatement action and time required by notices of violation 2047 and 2048. I am aware that the actual denials of the request for extension of abatement time in question in case number RBR-4-83-007 were issued after the hearing of the first suit. However, issues regarding the reasonableness of the abatement time could have been raised in the first suit. Moreover, the Board in upholding notices of violation 2047 and 2048, necessarily considered the abatement action as part of the Division's prima facie case. (See Decision of Board, item 7, Appendix 3.)"
Item 7 of the Reclamation Board of Review's findings and order in the first appeal states:
"7) The Board finds violations of the reclamation requirements as the testimony of Inspector Arnold and the exhibits admitted into evidence clearly show substantial erosion, with rills and gullies in excess of nine inches deep on the affected area. Rule 1501:13-7-06(A) provides that if the permittee fails to complete any phase of reclamation within the time required by the mining and reclamation plan, the Chief shall issue a notice of violation setting forth the nature of the failure, the remedial action required, and a reasonable time for completion of the reclamation phase. The Board, therefore, finds the existence of violations of reclamation requirements cited in NOV #2047 and #2048."
Hence, since the issue in the second appeal requesting an extension of abatement time was necessarily before the board in the first appeal determined by it, the doctrine of res judicata dispenses with the requirement of a de novo hearing on this issue. Thus, we need not rule upon appellant's due process and procedural arguments in this vein.
Therefore, based on the foregoing, the judgment of the court of appeals holding that the decisions rendered by the Reclamation Board of Review were neither arbitrary, capricious nor inconsistent with law, is hereby affirmed.
Judgment affirmed.
CELEBREZZE, C.J., SWEENEY, WISE, HOLMES, C. BROWN, DOUGLAS and WRIGHT, JJ., concur.
WISE, J., of the Fifth Appellate District, sitting for LOCHER, J.