BONNIE M. QUINN REVOC. TRUST v. SRW, INC.

• Decision Date: 07 June 2004
• Docket Number: No. 03-180.,03-180.
• Citation: 2004 WY 65,91 P.3d 146
• Parties: BONNIE M. QUINN REVOCABLE TRUST, dated March 7, 1995; and John Quinn, Jr. Revocable Trust, dated March 7, 1995, Appellants (Plaintiffs), v. SRW, INC., a Michigan Corporation; and Brenco Drilling, LLC, a Wyoming Limited Liability Company, Appellees (Defendants).
• Court: Wyoming Supreme Court

91 P.3d 146

2004 WY 65

BONNIE M. QUINN REVOCABLE TRUST, dated March 7, 1995; and John Quinn, Jr. Revocable Trust, dated March 7, 1995, Appellants (Plaintiffs), v. SRW, INC., a Michigan Corporation; and Brenco Drilling, LLC, a Wyoming Limited Liability Company, Appellees (Defendants).

No. 03-180.

Supreme Court of Wyoming.

June 7, 2004.

Representing Appellant: Dennis M. Kirven of Kirven and Kirven, P.C., Buffalo, WY. Argument by Mr. Kirven.

Representing Appellee: Kevin D. Huber and P. Craig Silva of Williams, Porter, Day and Neville, P.C., Casper, WY. Argument by Mr. Silva.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

LEHMAN, Justice.

[¶ 1] The John Quinn, Jr. Revocable Trust, dated March 7, 1995, and Bonnie M. Quinn Revocable Trust, dated March 7, 1995 (Quinn Trusts), appeal the district court order dismissing their complaint pursuant to W.R.C.P 12(b)(6) for failure to state a claim upon which relief can be granted. The Quinn Trusts argue that they are entitled to maintain a declaratory judgment action under the circumstances and that they have presented a justiciable controversy. SRW, Inc. and Brenco Drilling, LLC (SRW and Brenco) maintain that the complaint was properly dismissed because the Quinn Trusts failed to exhaust their administrative remedies. We affirm.

ISSUES

[¶ 2] The Quinn Trusts phrase the issues as:

A. Are Appellants entitled to maintain a Declaratory Judgment action to determine whether the exploration and production of coalbed methane gas requires a conditional use permit under the zoning resolution of Sheridan County, Wyoming?

B. Is the regulation of coalbed methane gas activities prohibited under W.S. § 18-5-201?

SRW and Brenco present the following issues:

1. Determining whether the exploration and production of coalbed methane gas requires a conditional use permit would bypass appropriate administrative ruling resulting in prejudging of issues when appellants have failed to seek appropriate administrative relief.

2. The Quinn Trust failed to exhaust its administrative remedies, therefore, it cannot seek relief in district court making the issue of justiciability moot, notwithstanding that, the Quinn Trust's complaint fails to present a justiciable controversy.

3. Under Wyoming law and the holding in River Springs Ltd. Liability Co. v. Board of County Commissioners the county commissioners cannot zone mining exploration.

FACTS

[¶ 3] The Quinn Trusts own real property in Sheridan County as tenants in common. This property is used primarily for agricultural purposes. Indeed, the Quinn property is zoned for agricultural use pursuant to the Sheridan County zoning resolution, which was adopted by the Board of County Commissioners for Sheridan County on May 14, 1985. The Quinn Trusts do not own the rights to the minerals underneath the Quinn property.

[¶ 4] In April of 2003, SRW and Brenco began the exploration and development of minerals underneath the Quinn property. SRW and Brenco did not seek or obtain a conditional use permit from the board of county commissioners prior to the commencement of their activities. However, their activities were pursuant to permits obtained from the Wyoming Oil and Gas Conservation Commission. SRW and Brenco have constructed roads and drill pads on the Quinn property and are drilling from the surface down to the coal seam to obtain coalbed methane gas. [¶ 5] Shortly after SRW and Brenco commenced their work, the Quinn Trusts sent a letter to SRW's attorney demanding that SRW comply with the Sheridan County zoning resolution. Specifically, the Quinn Trusts asserted that section 17 of the zoning regulation provides that "mineral exploration temporary facilities" are not permitted in any of the zoning resolution's classifications; and, as a result, such activities are only allowed if a conditional use permit is applied for and granted.¹ The Quinn Trusts therefore demanded that SRW apply for a conditional use permit before occupying or using the Quinn property for the purpose of mineral extraction. SRW did not reply to this demand because it believed that its use of the land did not require a conditional use permit. The Quinn Trusts additionally sent a letter to the county attorney asking that the zoning resolution be enforced. No action was taken on that letter.

[¶ 6] On April 25, 2003, the Quinn Trusts filed this action. The Quinn Trusts sought a declaration under the Uniform Declaratory Judgments Act that the zoning resolution required SRW and Brenco to apply for and obtain a conditional use permit for each drill site located on the Quinn property. The Quinn Trusts also requested that the court issue an injunction prohibiting SRW and Brenco from continuing mineral extraction activity on the Quinn Trusts' property without a conditional use permit. The Quinn Trusts additionally asked that the court determine that state or federal law concerning coalbed methane drilling does not preempt the board of county commissioners from regulating mineral exploration in this manner.

[¶ 7] SRW and Brenco did not file an answer but instead filed a motion to dismiss under W.R.C.P. 12(b)(6). SRW and Brenco alleged that the Quinn Trusts were not entitled to relief under the Uniform Declaratory Judgments Act because, among other things, the zoning regulation did not apply to their drilling activities and the Quinn Trusts failed to exhaust their administrative remedies. They further alleged that under Wyo. Stat. Ann. § 18-5-201 (LexisNexis 2003) their drilling activities are not subject to regulation. The court granted the motion on July 30, 2003, dismissing the Quinn Trusts' complaint for failure to state a claim upon which relief can be granted. The Quinn Trusts appeal.

STANDARD OF REVIEW

[¶ 8] Our well-known standard of review for motions to dismiss applies.

When claims are dismissed under W.R.C.P. 12(b)(6), this court accepts the facts stated in the complaint as true and views them in the light most favorable to the plaintiff. Such a dismissal will be sustained only when it is certain from the face of the complaint that the plaintiff cannot assert any facts that would entitle him to relief. Story v. State, 2001 WY 3, ¶ 19, 15 P.3d 1066, ¶ 19 (Wyo.2001). Dismissal is a drastic remedy and is sparingly granted; nevertheless, we will sustain a W.R.C.P. 12(b)(6) dismissal when it is certain from the face of the complaint that the plaintiff cannot assert any set of facts that would entitle that plaintiff to relief. Robinson v. Pacificorp, 10 P.3d 1133, 1135-36 (Wyo.2000).

Manion v. Chase Manhattan Mortgage Corp., 2002 WY 49, ¶ 6, 43 P.3d 576, ¶ 6 (Wyo.2002) (quoting Van Riper v. Oedekoven, 2001 WY 58, ¶ 24, 26 P.3d 325, ¶ 24 (Wyo.2001)).

DISCUSSION

[¶ 9] We begin with the question of whether the Quinn Trusts can maintain their suit in light of their failure to seek administrative relief. The Quinn Trusts argue that the Uniform Declaratory Judgments Act was specifically designed for this type of action and that the act should be liberally construed to serve its purpose.² In making this argument they claim that this action could resolve uncertainty created by the zoning resolution. As such, they argue that they were not required to pursue administrative remedies in order to maintain their declaratory judgment action. We disagree.

[¶ 10] The purpose of declaratory judgment actions is, as the Quinn Trusts assert, to settle disputes and terminate controversy concerning the legal rights and duties of the parties without requiring that one party commit a wrong. Hirschfield v. Board of County Comm'rs, 944 P.2d 1139, 1142 (Wyo.1997). Additionally, as the Quinn Trusts assert, Wyoming's declaratory judgments act is remedial and should be liberally construed and administered. Id.; see Wyo. Stat. Ann. § 1-37-114 (LexisNexis 2003). Nevertheless, there remains the prerequisite that the party seeking declaratory relief present the court with an actual controversy. Hirschfield, at 1142. In addition,

there is a restriction on the availability of a declaratory judgment action with reference to its applicability to administrative matters. Where the action would result in a prejudging of issues that should be decided in the first instance by an administrative body, it should not lie. This is because, if it be otherwise, all decisions by the several agencies could be bypassed, and the district court would be administering the activities of the executive branch of the government. This restriction on the scope of declaratory judgments is akin to the requirement that administrative remedies must be exhausted before judicial relief is available.

Rocky Mountain Oil and Gas Ass'n v. State, 645 P.2d 1163, 1168 (Wyo.1982) (citations omitted).

[¶ 11] In this case it is apparent that the Quinn Trusts did not seek any type of administrative relief. The only action the Quinn Trusts took prior to filing suit was to write two letters, one to SRW and one to the county attorney. The Quinn Trusts took no action to seek relief with the body that has the duty of administering the zoning resolution, the board of county commissioners. As a result, that body never had an opportunity to address the matter. The Quinn Trusts seem to argue that they should be excused from this requirement because the zoning resolution does not specifically give them a mechanism to get in front of the zoning board, i.e. there is not a specific form for them to use to ask the zoning authority to enforce the zoning resolution.

[¶ 12] A somewhat similar argument was made and rejected in State ex rel. Baker v. Strange, 960 P.2d 1016 (Wyo.1998). In that case, the Bakers were landowners across the alley from Bob Lewis. Strange, the building inspector, issued Lewis a building permit to construct a building on his lot. After the structure was framed, the Bakers concluded that the structure violated sections of the applicable zoning ordinance. The Bakers then wrote a letter to Strange asking that he enforce the...