Hayes v. A.J. Associates, Inc.

Citations: 960 P.2d 556; 139 Oil & Gas Rep. 231; 1998 Alas. LEXIS 106; 1998 WL 257065Docket: S-6736, S-7185/7215

Court: Alaska Supreme Court; May 22, 1998; Alaska; State Supreme Court

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Consolidated appeals involve Howard and Michael Hayes challenging various legal decisions regarding eight mining claims on Alaska-Juneau Gold Mine tailings. In case S-6736, the Hayeses contest a superior court ruling that ejected them from Taku Nos. 1 and 2 due to their failure to obtain consent from landowners and lack of a surety bond. In S-7185, they appeal a partial summary judgment dismissing most tort claims against Jim Jansen and others related to the mining claims. The landowners, in S-7215, appeal a ruling denying them summary judgment on another tort claim by Hayes. The court affirms some decisions, reverses others, and remands for further proceedings.

The disputes center on Alaska Tidelands Survey No. 201 near downtown Juneau, historically linked to the Alaska-Juneau Gold Mine operational from 1914 to 1944, which generated substantial tailings that created land above high water. Previous court rulings established landowners' preference rights to this property, later confirmed by a state-issued patent that reserved mineral rights to the state. An expired mining lease allowed Hayes to extract ore, but after failed negotiations for a new lease, he staked claims in 1982, leading to the ejectment action from the landowners, who successfully argued that the tailings did not belong to the state under the Alaska Statehood Act.

In 1988, the court reversed a previous decision, determining that tailings constituted real estate that passed to the State under the Statehood Act, with minerals reserved for the State in the property transfer to landowners. Consequently, these minerals were subject to valid mining claims, and the case was sent back for further proceedings. In 1989, the Alaska Department of Natural Resources granted Hayes a production license for mineral extraction, contingent on applicable laws. Upon remand, the superior court initially ruled in favor of the landowners, invalidating Hayes's mineral locations due to a lack of good faith in their establishment. However, the court reversed this, stating Hayes did not owe a duty of good faith.

Following another remand to Superior Court Judge Thomas M. Jahnke, the trial court again favored the landowners, declaring Hayes's staking of claims Taku Nos. 1 and 2 invalid due to his failure to obtain consent from the landowners or post a surety bond, thereby labeling him a trespasser. The trial court denied Hayes's motions for reconsideration and awarded attorney’s fees to the landowners. Hayes appealed these rulings. In 1993, he filed a tort suit against the landowners alleging seven counts of tortious conduct. The superior court found genuine disputes over some claims but granted summary judgment on others. It did not rule out two specific claims regarding Hayes’s right to stake additional claims and the destruction of his access road. 

The discussion indicates that the landowners acquired ATS 201 subject to the State's reserved mineral rights, and the court determined that AS 38.05.130 and 11 AAC 96.140(10) required Hayes to obtain consent or post a bond before staking claims Taku Nos. 1 and 2 in 1982. Hayes contested this conclusion, arguing that section .130 did not apply to his initial staking activities.

Statutes and regulations dictate the processes for acquiring mineral rights on State land in Alaska, primarily based on discovery and appropriation as outlined in Alaska Const. art. VIII, § 11 and AS 38.05.185(a). Gold qualifies as a mineral subject to location under these statutes. State land remains open to mineral location unless the DNR commissioner determines that mining conflicts with significant surface uses and follows AS 38.05.300. Rights to mineral deposits on open State land can be obtained through discovery, location, and recording in accordance with AS 38.05.195, and leasehold preferences can also be acquired under AS 38.05.205(a). "State land" is comprehensively defined to include all types of land owned by the State, encompassing reserved mineral estates. Justice Rabinowitz's dissent in State v. Weidner is noted, but it did not address the implications of reservation under subsection .125(a) or the status of the State's reserved mineral interests. A 1993 Attorney General's opinion supports that all state-owned severed mineral interests are subject to location under AS 38.05.965(19) and 11 AAC 86.135. Additionally, the Alaska Land Act's definition of "land" encompasses resources, despite occasional inconsistencies in the act. Justice Rabinowitz contends that section .185 does not permit claims on lands conveyed by the State, while the State’s amicus brief asserts that when the state conveys a surface estate, it must reserve mineral rights, allowing for mineral claims on these split estate lands similar to wholly state-owned lands.

Justice Rabinowitz expresses concern that mining activities may disturb the quiet enjoyment of surface rights. The dissent's apprehensions should not affect the outcomes mandated by the mining code; they should be resolved either through a determination by the commissioner regarding the compatibility of mining with surface use under AS 38.05.185(a) or by pursuing remedies for undue interference with surface rights. The dissent references the 1981 amendment to AS 38.05.185, suggesting it limited the commissioner’s discretion regarding mineral lands under lease. However, the majority interprets the amendment as merely restricting discretion for lands where the State retains the surface estate, rendering it irrelevant to the current situation involving land conveyed by the State with a subsection .125(a) reservation. 

AS 38.05.125(a) reserves to the State its mineral rights and the right to explore these resources on granted land. The application of AS 38.05.130, which pertains to the exercise of these reserved rights, hinges on whether subsection .125(a) includes staking. While subsection .125(a) does not explicitly mention "staking" or "locating," it reserves the right to "explore." The term "explore" is interpreted using its common meaning, involving systematic searching and examination for minerals, as defined in relevant legal dictionaries and statutes. The majority concludes that "explore" does not encompass the act of staking, which is a necessary step for acquiring a mineral claim or leasehold preference. Thus, the focus of subsection .125(a) is on the State's reserved rights, not on the methods by which others might acquire those rights.

Subsection .125(a) aligns with the Alaska Statehood Act's reservation requirement, mandating the State to retain mineral rights on lands recognized as mineral-rich, thereby promoting economic self-sufficiency. This interpretation allows the State to explore without needing to stake claims for already held rights, which does not hinder prospecting practices or landowner protections under AS 38.05.130. Section .130 focuses on compensating landowners for damages during activities related to reserved rights, emphasizing that staking alone typically does not inflict financial harm. Thus, unless staking causes specific damages, the landowner cannot invoke section .130 for financial indemnification. The rights reserved under subsection .125(a) do not prevent entry for claim staking, and if landowners refuse agreements, prospective locators can still enter by posting a bond. Section .130 does not cover non-damaging activities, like aeromagnetic surveys, and does not grant landowners the authority to entirely deny access to those seeking to exercise reserved rights. However, if mining conflicts with significant surface uses, the Department of Natural Resources (DNR) has the authority to restrict mineral location under relevant statutes, effectively barring any entry for that purpose.

Landowners in Alaska have common law remedies available if staking causes damage, as affirmed by the Alaska Constitution, which prohibits unnecessary impairment of land use and ensures compensation for damages. There is no absolute right to prospect on private lands; those who cause tortious damage are required to compensate the landowner. Statutory protections exist, with trespassers liable for treble damages for unauthorized tree cutting (AS 09.45.730) or for gathering geotechnical data/minerals without consent (AS 09.45.735).

The superior court's comparison of Alaska's statutes with federal laws regarding public land conveyance was deemed unhelpful because Alaska’s regulations are clear and distinct. Specifically, the term "prospecting" is not used in Alaska's statutes AS 38.05.125(a) or .130, making federal comparisons irrelevant. Additionally, the superior court concluded that Hayes's failure to comply with 11 AAC 96.140(10), which requires good-faith attempts to negotiate with surface owners before mineral exploratory activities, does not invalidate his staking rights. Since staking alone is not classified as exploratory activity, it does not violate this regulation.

The landowners' claim that Hayes violated AS 09.45.060, which restricts entry onto land without legal authority, hinges on whether Hayes's staking was authorized under AS 38.05.125(a). It is argued that his authority derives from AS 38.05.185, which maintains access to state lands for mineral location unless otherwise withdrawn. This aligns with Alaska's constitutional and legislative policies promoting mineral resource development and reflects the long-established principle that the mineral estate is dominant over the surface estate, permitting reasonable surface use for mineral extraction. Surface owners cannot completely deny access to the mineral estate, even if they are entitled to compensation for any harm caused.

Failure to comply with Alaska Statute 38.05.130 does not explicitly invalidate a claim or prescribe ejectment as a remedy. The statute aims to protect landowners financially without completely barring mineral exploration. The proper remedy for non-compliance is indemnification, placing landowners in a position they would have been in had the statutory requirements been met, rather than ejectment, which undermines the locator's right of entry and the incentive for compliance. The court clarified that previous references to violations by Hayes were not definitive holdings and emphasized that the State's amicus brief does not assert that staking alone requires a bond. Additionally, the landowners' claim regarding rights to mineral deposits in submerged land lacks merit, as Hayes did not infringe upon state policies when staking his claims.

The property in question, previously submerged, is now classified as ordinary real estate and is above mean high tide, thus not submerged land under AS 38.05.965(21). The landowners claim Hayes did not meet the technical requirements of AS 38.05.195 for locating a claim, but this does not invalidate locator rights if the commissioner is satisfied with the locator's compliance under the circumstances, as outlined in AS 38.05.185(b). Consequently, the summary judgment cannot be upheld based on Hayes's alleged statutory failures.

In a separate matter, the superior court awarded the landowners $60,000 in attorney's fees under Civil Rule 82, which defines the 'prevailing party' as one who successfully prosecutes or defends against the main issue. Since it was determined that ordering Hayes's ejectment was erroneous, the landowners are no longer considered the prevailing parties, leading to the vacation of the fees award and a remand for further proceedings.

Hayes filed tort claims against the landowners in 1993 regarding interference with his rights to claims Taku Nos. 1 through 8. The superior court granted partial summary judgment, dismissing most of Hayes's claims. In reviewing this decision, the existence of a genuine issue of material fact and the moving party's entitlement to judgment as a matter of law must be assessed, with all reasonable inferences drawn in favor of the non-movant.

Regarding mineral locator rights, AS 38.05.185 establishes the framework for acquiring mineral interests from the State. The Department of Natural Resources (DNR) can restrict mineral location, and certain regulations stipulate that if mineral rights are reserved to the state after land disposal, mining can only occur under written leases. This creates leasehold locations, granting preference rights to those who stake claims under prior discovery and recording. Applicants must acquire a lease from DNR to commence mining operations, as minerals cannot be mined or marketed without a lease, except for limited sampling purposes.

If the Department of Natural Resources (DNR) rejects a lease application, the location in question becomes void. Under the applicable statutes and regulations, Hayes's locations on ATS 201 are classified as leasehold locations since ATS 201 was conveyed to a private party with restrictions imposed by DNR for mining under lease only. Consequently, Hayes is entitled only to a preference right to a lease and cannot conduct mining activities until he has applied for and obtained this lease from DNR.

Hayes presents three main arguments against this interpretation, all of which lack merit. First, he contends that 11 AAC 86.135(b) does not pertain to his locations, asserting that the State's conveyance to landholders did not involve the sale or lease of any land interest, thus exempting it from this regulation. However, the record indicates that the State granted the property subject to a mineral reservation, making the regulation applicable.

Second, Hayes argues that the regulation is irrelevant to mineral locations, citing language that limits its applicability. This language refers to the interest conveyed by the State to the landowners, not to the mineral locator's interest, affirming that the regulation does apply to ATS 201, as the State conveyed a fee interest while reserving mineral rights.

Lastly, Hayes claims that a production license issued to him in 1989 indicated he could begin production without a lease. While he notes that a production license is required for mining lessees or claim holders, this reasoning is flawed. DNR's regulations allow for the issuance of production licenses to holders of leasehold locations prepared to commence or continue production. The statutes do not prohibit leasehold locators from applying for both a production license and a lease concurrently when ready to mine. According to DNR regulations, a production license can be granted if the leasehold location has been properly established and maintained, or if a state mining lease has been issued.

DNR is not required to verify a leaseholder's entitlement to mine before issuing a permit, as per 11 AAC 86.700(c). Hayes's acquisition of a production license does not contradict the conclusion that he only holds a leasehold location and must obtain a mining lease to extract minerals. DNR clarified that the license allows mineral production subject to other laws. Consequently, any locations staked by Hayes are leasehold locations granting him only a preference right to a lease.

In Hayes's amended complaint, the first two counts assert his right to enter and mine ATS 201, claiming tortious interference by landowners who blocked his access and made improvements on the property. However, Hayes's preference right to a lease does not grant him mining rights until a lease is obtained. The landowners are thus entitled to summary judgment on these counts, as Hayes lacks the right to mine, negating any claim against the landowners. The court partially affirmed the judgment, stating Hayes may stake leasehold locations but lacks the other claimed rights.

Regarding Hayes's abuse of process claim, the court found no actionable behavior by the landowners, who acted to protect their surface rights. The elements required for an abuse of process claim—an ulterior purpose and improper action—were not established, leading to summary judgment in favor of the landowners.

Finally, the superior court also granted summary judgment on Hayes's claim of interference with prospective economic advantage. The court determined that Hayes did not sufficiently demonstrate that his alleged damages were caused by the landowners' actions, failing to meet the elements required for this tort.

Hayes's failure to apply for a mining lease was deemed unreasonable by the court, attributing lost economic opportunities to this failure. However, Hayes provided evidence that his application was rejected due to a dispute with landowners, supported by a letter from the Department of Natural Resources (DNR) stating that a conflicting claim by A.J. Industries led to the rejection. The DNR advised Hayes to resolve the conflict before reapplying. This letter raised a genuine issue of material fact regarding Hayes's application and the reasonableness of his actions. Despite this, the superior court's judgment was affirmed on alternate grounds, as the court can uphold a summary judgment for different reasons than those stated by the trial court.

Hayes' evidence indicated a prospective business relationship with an Australian company, which was abandoned due to a pending lawsuit, establishing that any interference occurred by 1989. Given the two-year statute of limitations under AS 09.10.070, Hayes's tort action filed in 1993 was time-barred. The landowners sought summary judgment against Hayes’s claims of tortious destruction of his property, but the trial court found genuine issues of material fact, denying the landowners' motion. The landowners argued they were not liable for actions taken by Knik Construction, the independent contractor responsible for the alleged destruction. However, since there was sufficient evidence suggesting Knik was acting under the landowners’ direction, the trial court's denial of summary judgment was upheld. Four justices participated in the decision.

Three justices concur with Part III.A.1, affirming that the state's mineral interest in lands, even when the surface estate is owned by a third party, qualifies as "state land." The court is split on the applicability of AS 38.05.130 to Hayes's staking activities discussed in Part III.A.2, but the superior court's determination that section .130 applies is upheld. Three justices also agree on the consequences of non-compliance with AS 38.05.130 outlined in Part III.A.3, directing the superior court to establish an appropriate indemnification amount and process, which may involve a petition to the Division of Mining regarding the sufficiency of a surety bond. In Part III.A.4, three justices reject alternative arguments from the landowners for affirmance, and in Part III.A.5, they vacate the attorney's fees awarded in the ejectment action.

All justices affirm the partial summary judgment favoring the landowners concerning most of Hayes's tort claims in Part III.B. Three justices agree with the denial of summary judgment on Hayes's property destruction tort claims in Part III.C. Consequently, the superior court's judgment is affirmed in part, reversed in part, vacated in part, and remanded for further proceedings. Justice Shortell concurs with the result but expresses disagreement regarding the interpretation of AS 38.05.130's coverage of Hayes's actions related to boundary staking. He ultimately agrees that ejectment is an inappropriate remedy in this case.

Hayes was required to comply with AS 38.05.130 prior to staking his claims. This statute mandates that rights related to land cannot be exercised without compensating the landowner for damages, which Hayes failed to do by not securing consent or posting a bond. Justice Eastaugh interprets that staking does not fall under the right to "explore," arguing that "explore" excludes unconsented entry and staking. However, there is disagreement on this interpretation, with the assertion that staking should indeed be considered an exercise of rights under the statute.

The statute AS 38.05.125(a) is intended to comprehensively govern title transfers of state land to private interest holders, specifically reserving all mineral, geothermal, and fossil resources for the state or its successors. These reserved rights include the authority to explore, enter, develop, and remove resources, along with the ability to construct necessary facilities for extraction. However, the statute limits the use of the land by mineral claimants to activities that are "reasonably necessary or convenient" for the complete enjoyment of the reserved rights, reflecting a legislative intent to balance the rights of mineral claimants with those of surface landowners. The statute recognizes mineral rights as the dominant estate while also adhering to the principle of reasonable accommodation, thus allowing mineral developers only those uses that are essential. It encompasses all aspects of mining from exploration to development, explicitly granting rights to erect necessary infrastructure and occupy the land. The comprehensive nature of these rights indicates that staking, a crucial step in the mining process, should not be excluded from the statute's protective scope. The absence of the term "staking" does not imply it is not covered, as established mining law supports its inclusion under the definitions of mineral exploration.

Exploration in mining involves a series of steps to locate and validate a minable deposit, which includes staking a claim. For a claim to be valid, it must be both discovered and marked with boundaries, as mandated by Alaska law. Hayes attempted to stake his claim but failed to obtain the necessary consent from landowners or post a bond to cover potential damages, violating AS 38.05.130. Despite this violation, the court determined that Hayes did not forfeit his right to develop his claim; instead, the remedy should be indemnification for the landowners rather than ejectment or invalidation of Hayes's claim. This approach maintains the rights of both the locator and the landowners, encouraging reasonable negotiations. The trial court’s finding of Hayes's violation is affirmed, but the summary decision to invalidate all of Hayes's rights is reversed. The case is remanded for further proceedings to assess indemnification for damages caused by Hayes’s actions. Justice Rabinowitz dissents, expressing concern that the ruling permits forced entry onto privately-held land in Alaska for mining purposes.

Landowners are denied the right to prevent unauthorized entry onto their land, undermining the protections of the mining code's bonding requirements. The court's opinion erroneously assumes that the legislature permits claim staking of the state's reserved mineral interests on privately-owned lands. According to the Statehood Act and AS 38.05.125, the state retains mineral rights when conveying land to private parties. The 1981 amendment to AS 38.05.185 established staking as the presumptive method for acquiring state mineral interests on "state land." The court interprets that since the state retains mineral rights after selling land, such land remains "state land" for staking purposes. This interpretation implies that even private properties, where homes or businesses are built, are subject to forced-entry mining, which is rejected in the dissent. Legislative history, the mining code, and court precedent indicate that land transferred to private parties is not considered "state land" for staking under section .185. The dissent agrees that section .185 allows claim staking but only on state-held lands. The legislative history reveals that the staking provision was meant for state-held surface lands only. The 1981 amendment stemmed from an Attorney General's opinion stating that mineral deposits on state lands must be mined under written leases, applicable to all lands known to contain minerals at the time of the state’s acquisition from the federal government. Prior to 1981, the state believed the leasing requirement applied only to lands transferred to others, not to state lands, aligning with the historical perspective of early Department of Natural Resources officials.

Staking was initially thought to be permissible on all state-owned surface lands; however, to mine mineral rights on lands conveyed to private parties, miners were required to obtain a lease. This understanding was disrupted by a 1981 Attorney General's Opinion, which extended lease requirements to state-owned surface lands, thereby questioning the validity of existing mining claims. Miners, represented by David Heatwole of the Alaska Miner's Association, protested this interpretation, warning that it threatened their rights to acquire mineral rights through discovery and location. In response, the Alaska legislature introduced section .185 to the mining code via House Bill 350, aiming to restore previous conditions by allowing staking on state-owned lands, as it had been before the Attorney General's Opinion. Representative Rick Halford and Assistant Attorney General Bob Maynard confirmed that the intent of the bill was to alleviate issues for miners and ensure continued staking on state lands. The court's interpretation of "state land" included privately-owned surface lands where the state retained mineral rights, but this was contested. The legislative history indicated that "land" referred to the surface, not the underlying minerals, aligning with prior court interpretations. Ultimately, the amendments to section .185 were designed solely to mitigate problems arising from the 1981 opinion and reaffirm the right to stake claims on state-owned surface lands.

Section .300 of Chapter 5 of Title 38 defines "state land" as only "retained state land," based on the Weidner decision. The court stated that when the state sells surface land, the mineral interests remain with the state under AS 38.05.125. The classification of state surface land for disposal, without transferring the mineral estate, ends its status as "state land." Consequently, any land that has ever been state-owned is subject to third-party mining claims, regardless of its current private use. 

Homeowners cannot prevent miners from staking claims on their property, even if it was formerly state land. Although AS 38.05.130 requires miners to post a damage bond before mining, the court ruled that failure to do so does not allow landowners to eject the miner; instead, they can only seek post-hoc indemnification, negating the protective intent of the bond. This decision leaves private landowners vulnerable, especially if the miner cannot cover damages. 

The implications are significant: former state lands can be mined regardless of their current use, affecting private properties, conservation areas, and businesses. The ruling undermines the fundamental property right to exclude others from one’s land, prompting a call for legislative review of Alaska's mining code in response to these court interpretations.

Hayes initiated a lawsuit against multiple parties, including A.J. Associates, Alaska Marine Lines, Inc., and others, in the case of Hayes v. Jansen (Alaska Super. June 16, 1994). Key individuals involved include Jim Jansen, president of Lynden, Inc., and Reed Stoops, president of A.J. Associates. The Bank of California also held an ownership interest in the property at relevant times. The opposing parties are collectively referred to as "the landowners." 

The state retains rights to all minerals and resources on the property, as outlined in a patent that reserves these rights for the state and its successors, allowing exploration and extraction. Howard Hayes began recovering gold from tailings around 1954, with his son Michael later joining. Hayes staked two claims, Taku Nos. 3 and 4, in 1987, and later acquired four additional claims (Taku Nos. 5-8) in 1988 that overlapped with earlier claims staked by a third party.

Under Alaska Statute 38.05.125(a), any contracts or deeds related to state land are subject to reservations of all minerals and the right to explore and extract them. This reservation is mandated by section 6(i) of the Alaska Statehood Act, ensuring that all mineral rights remain with the state upon the sale or grant of mineral lands.

Mineral deposits on specified lands can be leased by the state as directed by the legislature. Any lands or minerals disposed of in violation of this provision may be forfeited to the United States, with proceedings initiated by the attorney general in the U.S. District Court for Alaska. Legal precedents, such as *Trustees for Alaska v. State*, clarify the history and purpose of reserving mineral rights to the state. Superior Court judges previously determined that Hayes did not comply with AS 38.05.130 before staking claims, which mandates compensation for landowners for damages incurred due to state or lessee actions. If damages are not settled, the state or lessees may enter the land after posting a surety bond to secure payment for damages and may seek legal proceedings to determine damages.

The court rejected Hayes's argument regarding the landowners' standing to seek ejectment, affirming a prior ruling that the landowners had standing, which is treated as final law of the case. This approach aligns with precedents that establish unchallenged trial court rulings as binding in subsequent appeals. The current issue involves statutory interpretation and is subject to independent review.

Article VIII, section 11 of the Alaska Constitution establishes that discovery and appropriation are foundational for mineral rights reserved to the state, specifying that prior discovery and proper filing create a right to such minerals. Definitions and requirements regarding discovery of valuable minerals are outlined in 11 AAC 86.105 and 11 AAC 86.200, emphasizing the need for a reasonable expectation of developing a profitable mine.

Mining claim locations are not finalized until locatable minerals are discovered within the claim's boundaries, as defined in 11 AAC 86.105. AS 38.05.185(a) states that the acquisition and retention of mineral rights on state land, originally locatable under U.S. mining laws as of January 3, 1959, are governed by AS 38.05.185-38.05.275. These statutes do not alter the laws regarding mineral deposits owned by other entities. The director, with the commissioner's approval, identifies lands where minerals may only be extracted through leases and areas that are closed to mining, consistent with AS 38.05.300's stipulations. State lands cannot be closed to mining unless the commissioner finds that mining conflicts with significant surface uses. Restrictions on mining under lease require a determination by the commissioner that conflicts necessitate such a restriction or that the land had mineral character at the time of selection. Compliance with land classification orders and land use plans under AS 38.05.300 is mandatory for these determinations.

DNR regulations detail the technical requirements for discovery, claim location, and recording, including staking procedures outlined in 11 AAC 86.200-225. Staking involves marking the claim's corners and posting a notice on the northeast monument. A dissenting opinion by Justice Rabinowitz suggests that the court's reliance on the mining code's definition implies that 'state land' includes privately-owned surface lands when the state retains mineral rights. However, the opinion clarifies that privately owned surfaces are not considered 'state land' despite the state's reserved mineral rights under AS 38.05.125(a). The 1959 Alaska Lands Act and its 1961 amendments stipulate that reserved mineral rights on conveyed lands can only be accessed through leases. The 1961 amendments expanded the director's authority to designate lands where minerals must be mined under lease, encompassing previously enumerated lands. The court's opinion notes that two justices agree that AS 38.05.130 and 11 AAC 96.140(10) did not apply to Hayes's 1982 staking activities.

Justice Rabinowitz and Justice Shortell opine that Hayes's staking on ATS 201 qualifies as "exploration," thus falling under AS 38.05.130 and 11 AAC 96.140. The court affirms the superior court's ruling that these regulations apply to Hayes's activities. The State's amicus brief suggests scenarios where staking may be the only physical entry after land sale, implying these are uncommon. It is acknowledged that a subsequent locator can adopt a prior locator's discoveries. The trial court assumed exploration occurred during Hayes's lease. According to 11 AAC 96.140(11), any entry on lands under mineral permits or claims must avoid unnecessary interference with the rights of the current holder. The justices who disagree argue that a locator cannot freely enter lands subject to subsection .125(a) for exploration or staking. They leave open the question of whether unauthorized entry could conflict with the surface estate's existing use. The superior court will further evaluate this on remand. Although a locator can force entry under section .130, this must be done in line with the statute, which assumes a bond will protect landowners; if a bond is deemed insufficient, entry may be denied. The dissent acknowledges that mining or exploration could cause significant damage to a surface owner. There's no claim that Hayes's staking caused notable damages to the landowners. Additionally, 11 AAC 96.140(10) requires good-faith efforts to settle any potential damages with the surface owner before engaging in mineral exploratory activities. If no agreement is reached, operations may only begin with director approval after ensuring adequate compensation for potential damages. Finally, AS 09.45.060 mandates that entry onto land must be lawful and peaceable.

Legislative intent concerning the invalidation of mining claims requires explicit provision for such a remedy in case of non-compliance with statutory requirements, as seen in AS 27.10.140, which voids placer mining claims located in violation of the law. Justice Matthews and the author concluded that Hayes’s entry did not contravene AS 38.05.130 or 11 AAC 96.140(10), leading to the determination that the superior court incorrectly ruled Hayes’s unconsented, unbonded entry warranted his ejectment and invalidated his priority in leasing rights. The court did not address whether ejectment could be the sole remedy for a locator’s violation of section .130 when the locator is unbonded and unable to indemnify the landowner for damages. 

A summary judgment can be affirmed on different grounds than those found by the trial court, as established in Wright v. State. The definition of "lands beneath navigable waters" from the federal Submerged Lands Act is irrelevant in this context. In 1996, amendments clarified that a commissioner’s finding about potential use conflicts necessitates mining only under written leases. Hayes contended that DNR did not make a necessary determination to restrict mining under AS 38.05.185(a), but the statute indicates that only a determination of potential use conflicts is required.

Hayes previously argued in the superior court that DNR had no discretion to deny a lease to a valid mining location holder, equating possession of a valid location to a right to mine; however, he did not pursue this argument on appeal, thus waiving it. He also suggested that 11 AAC 86.135(b) should not apply to the property as it is "tide and submerged land," but the regulations and statutes do not support this distinction. 

The superior court identified a genuine issue regarding landowners' consent to the staking of Taku Nos. 3 through 8, indicating these may be valid locations, while it deemed Taku Nos. 1 and 2 invalid based on ejectment. The court held that consent was unnecessary for the 1982 staking entries and that ejectment was not the appropriate remedy for Hayes's violation of AS 38.05.130. If Hayes satisfies other requirements for valid location, Taku Nos. 1 through 8 are deemed valid leasehold locations. Additionally, the analysis of Hayes's tort action issues and the consideration of his actions beyond mere staking, including his unauthorized presence and establishment of claim boundaries, are acknowledged.

Hayes seeks damages against landowners for the destruction of his mining claim-related structures, asserting that his staking activities are significant enough to warrant a tort claim. The characterization of his staking as "immaculate" may suggest it is a unique case with limited implications for landowners and mineral claimants, but broader implications of statutory interpretations are acknowledged. Legal precedents emphasize the necessity of accommodating both surface and mineral estate rights, highlighting the importance of cooperation between owners. The mining laws favor bona fide locators, allowing for a balance between competing rights while upholding the mineral estate's dominance. Definitions of "explore" cited in the opinion are deemed inadequate for supporting its conclusion. Hayes asserts he discovered his claims prior to staking them, but discovery does not end the exploration process, and staking could be viewed as development under relevant statutes. The trial court correctly noted that Hayes violated specific regulations, while the mining code clarifies that "land" refers to the surface, with the minerals owned by the state.

Section .130 identifies the private owner of the surface estate as "the owner of the land," indicating a clear separation between surface and mineral estates. A.J. Associates faces significant threats to its commercial ventures due to Hayes's activities, having already invested $100,000 in preliminary engineering for a joint venture, secured a $565,000 bond for infrastructure improvements, and witnessed a third party enter a $1.2 million contract for a boat terminal on the property. A.J. Associates emphasizes the challenges of halting their plans for mining accommodations, citing potential damage to their operations and financial commitments. They assert that Hayes would need to post a bond exceeding $10 million to cover the costs resulting from operational delays, a sum he is unlikely to provide. The court's decision to forgo the bonding requirement risks leaving A.J. Associates with unrecoverable damages.

Furthermore, there is agreement with the superior court's interpretation that "exploration" in section .125(a) includes staking activities. However, there is disagreement with the conclusion that staking is not covered under the protective provisions of section .130. It is argued that the comprehensive reservation under section .125(a) does include staking, which the court implicitly acknowledges by referencing the American Law of Mining's definition of exploration. Thus, protections in section .130 should apply to staking activities, which cannot proceed until indemnification provisions are satisfied. Additionally, failing to negotiate an indemnification agreement before staking on a private landowner's estate is deemed a violation of 11 AAC 96.140(10). The court's decision to provide an ejectment remedy for Hayes's violations is viewed as appropriate based on the rights of surface estate owners under the relevant statutes.