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Fontanari v. Snowcap Coal Co.

2023 COA 29. No. 21CA0983. Colorado Surface Coal Mining Reclamation Act—Colorado Mined Land Reclamation Board Review—Judicial Review—Attorney Fees.

March 30, 2023

Until 1999, Snowcap Coal Company Inc. (Snowcap) operated an underground coal mine, part of which was underneath surface land owned by the Fontanari Revocable Living Trust and its trustees, Rudolph Fontanari Jr. and Ethel Fontanari (collectively, Fontanari). In 2013, Snowcap applied to the Division of Reclamation, Mining, and Safety (the Division) for partial release of its performance bond after completing certain reclamation work. Fontanari filed objections to Snowcap’s request, arguing that Snowcap’s operations had damaged his property. Inspections revealed that a substantial amount of surface water from an irrigation ditch was entering the mine through an improperly reclaimed air shaft, and Snowcap submitted a repair and reclamation plan (plan) for the air shaft. Fontanari objected, but the Division approved the plan as submitted. Fontanari then filed a letter of objection and requested a hearing before the Mined Land Reclamation Board (MLRB), which approved the plan. Fontanari filed a complaint for judicial review of the MLRB’s decision. The district court affirmed the MLRB’s ruling and subsequently awarded Snowcap approximately $125,000 in attorney fees under CRS § 34-33-128(4). The attorney fees award encompassed all the legal costs that Snowcap had incurred since Fontanari filed the objection with the Division.

On appeal, Fontanari argued that the district court lacked authority to issue an award for fees incurred during the MLRB proceedings. The district court awarded attorney fees under CRS § 34-33-128(4), which only authorizes the court to award fees in connection with judicial review, not for agency-level proceedings. In addition, Division rule 5.03.6(1) requires a petition for MLRB-issued attorney fees awards to be filed with the MLRB within 45 days of receipt of an MLRB order, and failure to do so may constitute a waiver of the right to an award. Here, Snowcap never filed a petition for an attorney fees award with the MLRB; rather, it requested fees arising from the administrative proceedings as part of its omnibus motion for fees filed in the district court. Accordingly, the court lacked authority to award fees to Snowcap for the agency phase of the proceedings.

Fontanari also contended that the district court erroneously awarded Snowcap attorney fees that it incurred during judicial review proceedings. The “just and proper” standard for awarding attorney fees under CRS § 34-33-128(4) gives courts discretion to award fees on motion of a party who asserts that the statutory criteria for a fee award have been met. To enable meaningful appellate review, courts must make detailed findings that justify the exercise of their discretion. Here, the court’s order summarily addressed the reasonableness of the fee award, but it did not construe the “just and proper” standard nor explain how it determined that a fee award was just and proper under the circumstances. Accordingly, the court erred in awarding fees.

The court of appeals further concluded that a fee award is not “just and proper” on judicial review absent a finding of bad faith. Accordingly, when reevaluating Snowcap’s motion for an award of fees and costs on remand, the district court’s findings should focus on whether Fontanari pursued judicial review of the MLRB’s decision in bad faith for the purpose of embarrassing or harassing Snowcap.

The order awarding Snowcap attorney fees accrued during the administrative proceedings and on judicial review was reversed. The case was remanded for the district court to make further findings and award Snowcap’s request for fees if, in its discretion, it determines that Fontanari acted in bad faith for the purpose of embarrassing or harassing Snowcap in seeking judicial review of the MLRB’s ruling.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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