General Trucking Corp. v. O. Gene Dishner, Dir. etc , 21 Va. App. 409 ( 1995 )

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.
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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
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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
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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
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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
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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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