United Mine Workers of America v. State of Utah
| Decision Date | 07 May 1998 |
| Docket Number | No. 2:96 CV 0695K.,2:96 CV 0695K. |
| Parties | UNITED MINE WORKERS OF AMERICA, DISTRICT NO. 22 and Michael Svetich, Maurice Brown, Charles Byrge, and J.R. Scott, Plaintiffs, v. STATE OF UTAH, the School and Institutional Trust Lands Administration, John Does I through XX and State Agencies I through XX, Defendants. |
| Court | U.S. District Court — District of Utah |
Robert B. Sykes, James D. Vilos, Sykes & Vilos, Salt Lake City, UT, Kerry L. Chlarson, Sandy, UT, for Plaintiffs.
Valden P. Livingston, Reed M. Stringham, III, Utah Attorney General's Office, Salt Lake City, UT, for Defendants.
Gayle F. McKeachnie, McKeachnie & Allred, Vernal, UT, Clark A. McClellan, McKeachnie Allred & McClellan, Vernal, UT, for Amicus.
This matter is before the court on Defendants' Motion to Dismiss and Plaintiffs' Motion for Partial Summary Judgment. This matter came on for hearing on March 3, 1998. The plaintiffs were represented by James D. Vilos and Kerry L. Chlarson. The defendants were represented by Valden P. Livingston. The Utah State Board of Education appeared Amicus Curiae and was represented by Gayle F. McKeachnie. Oral argument was heard and the court took the matter under advisement. The court has carefully considered all pleadings, memoranda, and other materials submitted by the parties. The court has further considered the law and facts relevant to the parties' motions. Now being fully advised the court enters the following memorandum and order.
This matter arises out of a long and complicated history beginning before Utah became a state of the United States of America. In 1894 Utah received lands under the Utah Enabling Act of July 16, 1894, Ch. 138, 28 Stat. 110 § 12, (the "Utah Enabling Act"), for the purpose of constructing a miners' hospital. The Utah Enabling Act reads in pertinent part as follows:
... the following grants of land are hereby made to the State, for the purposes indicated, namely:
For the establishment of permanent water reservoirs for irrigating purposes, five hundred thousand acres; for the establishment and maintenance of an insane asylum, one hundred thousand acres; for the establishment and maintenance of a school of mines in connection with the university, one hundred thousand acres; for the establishment and maintenance of a deaf and dumb asylum, one hundred thousand acres; for the establishment and maintenance of a reform school, one hundred thousand acres; for establishment and maintenance of State normal schools, one hundred thousand acres; for establishment and maintenance of an institution for the blind; one hundred thousand acres; for a miners' hospital for disabled miners, fifty thousand acres. The United States penitentiary near Salt Lake City and all lands and appurtenances connected therewith and set apart and reserved therefor are hereby granted to the State of Utah. The said State of Utah shall not be entitled to any further or other grants of land for any purpose than as expressly provided in this Act; and the lands granted by this section shall be held, appropriated, and disposed of exclusively for the purposes herein mentioned, in such manner as the legislature of the State may provide.
(emphasis added). In 1896, on January 4, Utah became a state of the United States of America. See Act of January 4, 1896, No. 9, 29 Stat. at Large 876. On February 20, 1929, an additional 50,000 acres was given to the State of Utah for a miners' hospital. See 45 Statutes at Large 1252 (1927-1929). This additional 50,000 acres was given to the State due to the fact that all other land grants under the Utah Enabling Act had been for 100,000 acres and the State requested an additional 50,000 acres due to the belief that 50,000 acres was not sufficient to carry out the purpose of the grant. See 53 Cong. Rec. 1794, 3600 (1929) (statements of Rep. Colton).
The State of Utah has never used the money from the land grant specifically for a separate stand alone miners' hospital. However, in 1959 the State transferred all proceeds from the land to the University of Utah for the purpose of establishing a rehabilitation center. Utah Code Ann. §§ 53B-17-201 and 202 (1953, enacted by L.1987) provides as follows:
There is appropriated to the University of Utah all funds, assets and revenues which have been, or will be, derived from the sale or other disposition of those lands conveyed to the state of Utah by those certain federal grants for a Miners' Hospital for Disabled Miners contained in Section 12 of the Enabling Act and in Chapter 280, Public Laws of the Seventieth Congress, 2nd Session (Act of February 20, 1929) which funds, assets and revenues now are, or in the future will be, in the custody and control of the Board of State Lands.
The funds, assets and revenues shall be used for the construction, equipment, furnishings, and operation, or either or any of the same, on the campus of the university of a rehabilitation building, either as a separate structure or as an integrated unit in the University of Utah Medical Center.
Id. Although the rehabilitation center does treat disabled miners free of charge, it is not a miners' hospital per se and it treats a variety of other people as well.
The plaintiffs in this action are comprised of the United Mine Workers of America (District 22) which is comprised of and represents many of Utah's disabled miners. The individually named plaintiffs are all people who have disabilities caused by their employment as miners. The physical ailments suffered by these individuals include silicosis industrial bronchitis, asbestosis and pneumoconiosis. All of these ailments are unique to the mining industry or disproportionately found among miners. In their Complaint, the plaintiffs have alleged one cause of action for Breach of Trust. The plaintiffs allege that the Utah Enabling Act created a trust with the State as trustee and the disabled miners as beneficiaries. They argue that as trustee, the State has diverted the trust corpus and trust revenue to purposes other than the intended purpose, that is to build a hospital for disabled miners, and that the disabled miners, as beneficiaries have the right to seek the enforcement of the trust. They further allege that the defendants have caused or permitted to be caused, waste upon the assets of the trust in that they have failed to select the lands granted to the state in a timely manner and have not selected all 100,000 acres. The defendants have further failed to account for and apply net income from the miners' hospital trust lands to the maintenance of a miners' hospital for disabled miners and have failed to manage the lands and revenues generated from the lands in the most prudent and profitable manner possible, including, but not limited to the practice of passively selecting lands only when private individuals or entities came to the defendants and requested that they select some land so they could purchase it. Based on these allegations, the plaintiffs further allege that the defendants have willfully and maliciously breached their duty of trust in that they never used any of the funds to support a miners' hospital. Further, plaintiffs allege that the defendants willfully and maliciously used those funds in a manner that is inconsistent with the best interests of the trust beneficiaries.
The plaintiffs request that this court enter judgment in their favor ruling that the State has violated its trust duties to the beneficiaries, compelling the State to produce a complete and accurate accounting of the trust corpus, and requiring the State to deposit all amounts of money from the sale of the trust lands, together with interest from the date of sale, into a common fund, from which a miners' hospital shall be established and maintained. Further, the plaintiffs request that this court enter judgment compelling the State to deposit additional funds as are necessary to construct and maintain a miners' hospital for disabled miners as a damage for failure to do so previously. Defendants move this court to dismiss the complaint against them in its entirety on the grounds that plaintiffs have failed to state a claim for which relief can be granted.
A complaint will not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Shoultz v. Monfort of Colorado, Inc., 754 F.2d 318 (10th Cir.1985), citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957) (footnote omitted). For purposes of considering a motion to dismiss, the court is to accept all of the factual allegations in the plaintiffs' complaint as true and ask whether, in these circumstances, dismissal of the complaint is appropriate. See Berkovitz v. United States, 486 U.S. 531, 540, 108 S.Ct. 1954, 1961, 100 L.Ed.2d 531 (1988). Legal conclusions, deductions, and opinions couched as facts are, however, not given such a presumption. Mitchell v. King, 537 F.2d 385 (10th Cir.1976); Swanson v. Bixler, 750 F.2d 810 (10th Cir.1984).
The central issue that must be addressed is whether or not the Utah Enabling Act creates a trust with the State as the trustee, and disabled mine workers as the beneficiaries. A trust is defined as
... a fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it.
Restatement (Second) Trusts § 2 (1959). As stated above, in order for a trust to exist, there must be a manifestation of an intention to create the trust. In this case, Congress must have intended the Utah Enabling Act to create a trust, with ...
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