Leavell v. Department of Natural Resources

• Citation: 923 N.E.2d 829
• Decision Date: 19 January 2010
• Docket Number: No. 5-08-0298.,5-08-0298.
• Parties: Eva Lovene LEAVELL, d/b/a L & L Supply Company, Plaintiff-Appellant, v. The DEPARTMENT OF NATURAL RESOURCES, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

923 N.E.2d 829

Eva Lovene LEAVELL, d/b/a L & L Supply Company, Plaintiff-Appellant, v. The DEPARTMENT OF NATURAL RESOURCES, Defendant-Appellee.

No. 5-08-0298.

Appellate Court of Illinois, Fifth District.

January 19, 2010.

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Thomas G. Maag, Wendler Law, P.C., Edwardsville, IL, for Appellant.

Lisa Madigan, Attorney General of Illinois, Michael A. Scodro, Solicitor General, Mary E. Welsh, Assistant Attorney General, Chicago, IL, for Appellee.

Justice STEWART delivered the opinion of the court:

The plaintiff, Eva Lovene Leavell, doing business as L & L Supply Company, operated approximately 90 oil wells located in Crawford County, Edwards County, Hamilton County, Wayne County, and White County, Illinois. The defendant, the Illinois Department of Natural Resources (the Department), is charged with the duty of enforcing the Illinois Oil and Gas Act (the Act) (225 ILCS 725/1 et seq. (West 2000)) and the rules, regulations, and orders promulgated pursuant to the Act. 225 ILCS 725/3 (West 2000).

This consolidated appeal involves appeals from judgments in favor of the Department in five separate cases filed in the White County circuit court. Each of the five cases involved oil wells that had been operated by Leavell and that were found to be abandoned in various administrative hearings. In each case, Leavell raised constitutional and statutory issues concerning the notice that the Department had given her of the administrative hearings that were conducted to determine whether the wells were abandoned. For the following reasons, we affirm.

I. Cause Nos. 01-MR-4, 02-MR-8, and 04-MR-5

All the cases in this consolidated appeal involve various administrative hearings that resulted in a finding that the wells Leavell operated were abandoned for various reasons. The Act requires oil wells to be plugged when they are abandoned, and it gives the Department the power to determine what constitutes an abandonment. 225 ILCS 725/19 (West 2000). Regulations established by the Department are codified in the Illinois Administrative Code (the Code). Section 240.1600 of Title 62 of the Code (62 Ill. Adm.Code § 240.1600, amended at 25 Ill. Reg. 9100-01, eff. July 9, 2001) defines abandoned wells to include wells that have not produced for more than two years and also wells that are owned by a permittee who has failed to pay an annual well fee assessment. The Act authorizes the Department to conduct hearings and to order that wells be plugged if they are determined to be abandoned. 225 ILCS 725/6(1) (West 2000). Section 240.1610 of Title 62 of the Code (62 Ill. Adm.Code § 240.1610, amended at 25 Ill. Reg. 9101-04, eff. July 9, 2001) establishes the rules for administrative hearings involving the determination of whether wells have been abandoned and should be plugged. Section 240.1610(b)(1) of Title 62 of the Code requires the Department to give the permittee written notice of these administrative hearings through personal service or by certified mail sent to the permittee's last known address. 62 Ill. Adm.Code § 240.1610(b)(1), amended at 25 Ill. Reg. 9102, eff. July 9, 2001. The notice must be mailed at least 14 days prior to the scheduled hearing date. 62 Ill. Adm. Code § 240.1610(b)(1), amended at 25 Ill. Reg. 9102, eff. July 9, 2001.

On January 31, 2001, the Department sent Leavell a notice that it intended to hold a hearing on February 14, 2001, to determine whether she had abandoned the wells she operated "due to cessation of operations for more than two (2) years (24 months)." The Department identified this proceeding as "Abandonment #AW-01-030." The notice of the hearing bears a certificate of service signed by the Department's legal counsel that certified that the notice of the hearing had been mailed to Leavell by certified mail on January 31, 2001. The post office unsuccessfully attempted to deliver the notice of the hearing to Leavell on three occasions — February 3, 2001, February 22, 2001, and March 1, 2001. After the third attempt, the postal service marked the certified mailing as "unclaimed" and returned it to the Department. The Department then re-sent the notice to Leavell by regular mail on March 16, 2001.

Prior to receiving the return receipt for the certified mailing of the notice sent to Leavell, on February 14, 2001, the Department conducted the administrative hearing in Abandonment #AW-01-030 to determine whether the oil wells operated by Leavell were abandoned. The administrative hearing was attended only by the hearing officer and a representative of the Department. At the hearing, the Department produced the notice of hearing addressed to Leavell but did not produce the return receipt or other evidence that Leavell had received the notice of the hearing.

At the hearing, the Department maintained that Leavell had abandoned her oil wells due to nonproduction for more than two years and due to Leavell's failure to place the wells on temporary abandonment status. The Department requested a finding from the administrative hearing officer that the wells were abandoned and an order directing that the wells be plugged in accordance with the Act. The Department presented testimony and evidence to the hearing officer in support of its position. At the conclusion of the hearing, the hearing officer declared the wells to be abandoned. On March 19, 2001, the hearing officer submitted proposed findings of fact, conclusions of law, and recommendations. The hearing officer's proposed findings included the following: "Notice of this hearing was properly served upon Eva Lovene Leavell, d/b/a L & L Supply Company, by mailing a copy thereof, by certified mail, to the last known address of Eva Lovene Leavell, d/b/a L & L Supply Company." The director of the Department's Office of Mines and Minerals signed a final administrative decision on March 19, 2001, declaring the wells to be abandoned and ordering Leavell to plug the wells within 30 days. The Department sent Leavell a copy of the final administrative order by certified mail on March 19, 2001.

On April 26, 2001, Leavell filed a complaint for the judicial review of the administrative decision. In re Abandonment of Wells Located in Illinois by Eva Lovene Leavell, d/b/a L & L Supply Company, Permittee # 1031, No. 01-MR-4 (Cir. Ct. White Co.) (No. 01-MR-4). Leavell alleged in her complaint that she did not receive the notice of the administrative hearing and that she was unaware that the hearing would take place. Leavell's complaint was superceded by an amended complaint that alleged that the Department did not have jurisdiction to issue the final administrative decision because Leavell did not have proper notice of the administrative hearing and that the inadequate notice of the hearing denied her due process right to notice and an opportunity to be heard.

On November 3, 2001, the Department filed a motion to dismiss Leavell's amended complaint pursuant to section 2-619 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619 (West 2000)). The Department argued in its motion that Leavell failed to provide for the issuance of a summons within 35 days of the administrative decision, in accordance with section 3-103 of the Illinois Administrative Review Law (735 ILCS 5/3-103 (West 2000)). On February 22, 2002, the circuit court granted the Department's motion to dismiss without ruling on Leavell's due process argument, and Leavell appealed the circuit court's dismissal.

While that appeal was pending, on March 28, 2002, the Department sent Leavell another notice of another administrative hearing to inform her that the Department intended to hold an administrative hearing on April 16, 2002, to determine whether she had abandoned the same wells "due to failure to pay FY2002 annual well fees." The Department identified this proceeding as "Abandonment #AW-02-072." The notice of this hearing bears a certificate of service signed by the Department's legal counsel that certified that the notice of the hearing had been mailed to Leavell by certified mail on March 28, 2002, to her last known address. On April 14, 2002, the post office marked the certified letter containing the notice of the hearing as "unclaimed" and returned it to the Department. The Department did not receive the returned, unclaimed notice of hearing until April 22, 2002, after the administrative hearing had taken place. The Department re-sent the notice by first-class mail on April 23, 2002.

The administrative hearing in Abandonment # AW-02-072 took place on April 16, 2002, and Leavell did not attend the hearing. On April 22, 2002, the Department entered a final administrative decision, finding that the wells were abandoned due to Leavell's failure to pay the annual well fees and ordering Leavell to plug the wells within 30 days from the date of the decision. On the same day, the Department's attorney sent Leavell a copy of the final decision to her last known address by certified mail. The post office marked the certified mailing of the administrative decision as "unclaimed" on May 12, 2002, and returned it to the Department. The Department received the unclaimed certified mailing on May 20, 2002. On May 21, 2002, the Department sent Leavell a copy of the administrative decision by first-class mail to the same address.

On June 18, 2002, Leavell filed a complaint for the judicial review of this second final administrative decision. In re Abandonment of Wells Located in Illinois by Eva Lovene Leavell, d/b/a L & L Supply Company, Permittee # 1031, No. 02-MR-8 (Cir. Ct. White Co.) (No. 02-MR-8). Leavell alleged in her complaint that she again did not receive proper notice of the administrative hearing. Leavell alleged that the Department did not mail the notice of the hearing until April 29, 2002, seven days after the date of the final administrative decision, and did not mail her a copy of the administrative decision until ...