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Sunburst Minerals LLC v. Emerald Copper Corp.

United States District Court, D. Arizona

January 31, 2019

Sunburst Minerals, LLC, Plaintiff / Counter-defendant,
v.
Emerald Copper Corp. Defendant / Counter-claimant. Claim Name Recorder's Book/Page; Fee No. BLM AMC Number

          ORDER AND OPINION

          JOHN W. SEDWICK SENIOR JUDGE

         Findings of Fact and Conclusions of Law

         I. STATEMENT OF JURISDICTION AND INTRODUCTION

         This lawsuit arises from competing assertions of the right to possess certain unpatented mining claims located near Kingman, Arizona. The lawsuit is between citizens of different states. Plaintiff / Counter-defendant Sunburst Minerals LLC (“Sunburst”) is a citizen of Arizona. Defendant / Counter-claimant Emerald Copper Corp. (“Emerald”) is a citizen of Colorado. The value of the disputed mining claims exceeds $75, 000. The court has diversity jurisdiction of the lawsuit pursuant to 28 U.S.C. § 1332.

         The case was tried to the court on November 13 and 14, 2018. The court entered pre-trial orders which narrowed the issues for trial and established legal principles applicable to this lawsuit.

         In the order at docket 112, the court explained that this lawsuit is not a quiet title action, but rather an adjudication of competing possessory claims. Noting that Emerald did not dispute that Sunburst is in possession of the disputed land and that Sunburst's claims were located first, the court held that Emerald bears the burden of proving that its mining rights are superior to those of Sunburst. The order at docket 112 also awarded judgment in favor of Sunburst as to the following: Copper Hill Mill Site Nos. 1-8, 10-12; Hermes Mill Site No. 13; Copper HilI Mill No. 1 Mill Sites Nos. 14-15; Copper Hill No. 2; Hermes; Hermes No. 2; Jimtown Copper No. 1; Valley Copper Nos. 1-3 and FDR.

         The order also said that Sunburst concedes that its Block Claims are oversize, but not sufficiently so as to indicate bad faith. However, in paragraph 2 on page 3 of docket 155, their Joint Statement of Issues, the parties jointly identified the issue of whether the Block Claims are oversize as one to be resolved at trial. The seeming discrepancy between the order and the joint statement was discussed at the pre-trial conference. After hearing from the parties, the court said that whether the Block Claims are oversize would be an issue for trial. Upon reviewing the order and Sunburst's underlying motion at docket 52, the court now recognizes that the order erred in saying Sunburst had conceded that the Block Claims are oversize. A more accurate reading of the motion is that Sunburst simply accepted for the sake of its pending summary judgment motion that Emerald was correct in asserting that the claims varied between 607 and 631 feet so that it could argue that such a modest excess was not evidence of bad faith which could invalidate the claims.

         In the order at docket 112, the court found that the affidavit of Llao David Huntzinger created a question of material fact regarding the claims staked in 2004 by Sunburst's predecessor in interest. The question is whether those claims were located and monumented in accordance with the applicable law.

         In its order at docket 127, the court ruled that Sunburst is entitled to judgment in its favor as to claims Emerald No. 1 and Emerald No. 2. In the order at docket 136, the court held that Sunburst's Block Claims are invalid to the extent that they exceed 600 feet in width, but denied Emerald's motion to declare the Block claims invalid in their entirety.

         The Sunburst claims, whose validity remained for determination at trial, were the (1) Block Claims which are Emerald 5 thru 30, (2) the 2004 Claims staked by Sunburst's predecessors-in-interest other than the Block Claims which are Emerald 21, 22, 30, 31, and 43-45, and (3) the 2016 Claims which were staked and amended by Sunburst in which are Emerald 5, 7, 9, 2B, 3A, 4A, 40, and 41.

         Pursuant to Federal Rule of Civil Procedure 52, the court sets out its findings of fact and conclusions of law below. Findings number 1 thru 25 are facts to which the parties agreed in their Joint Statement of Uncontested Facts at docket 154. The court has edited these paragraphs to correct typographical errors and to conform to drafting conventions used by the court in subsequent findings. Findings 26 thru the end are facts found by the court based on the evidence presented.

         II. FINDINGS OF FACT

         1. Sunburst claims an interest in unpatented lode claims and mill sites in Mohave County, Arizona (“the Sunburst Claims”), commonly known as the Emerald Isle Mine. These clams are:

Claim Name
Recorder's Book/Page; Fee No.
BLM AMC Number
Emerald 5
5282/274 (Amended 2016040406)
364265
Emerald 6
5283/275
364266
Emerald 7
5282/276 (Amended 2016040407)
364267
Emerald 8
5282/277
364268
Emerald 9
5282/278 (Amended 2016040408)
364269
Emerald 10
5282/279
364270
Emerald 11
5282/280
364271
Emerald 12
5282/281
364272
Emerald 13
5282/282
364273
Emerald 14
5282/283
364274
Emerald 15
5282/284
364275
Emerald 16
5282/285
364276
Emerald 17
5282/286
364277
Emerald 18
5282/287
364278
Emerald 19
5282/288
364279
Emerald 20
5282/289
364280
Emerald #21
5349/445-446
364620
Emerald #22
5349/447-448
364621
Emerald #30
5349//463-464
364622
Emerald 31
5349/465-466
364623
Emerald #43
5349/489-490
364624
Emerald 44
5349/491-492
364625
Emerald #45
5349/493-494
364626
Emerald 2B
2016040403
439433
Emerald 3A
2016040404
439434
Emerald 4A
2016040405
439435
Emerald 40
2016040409
439436
Emerald 41
2016040410
439437

         2. Matt Garlinghouse (“Garlinghouse”) is the Managing Member of Grand View Ventures, LLC, a California limited liability company, which is a Member of Sunburst Minerals, LLC, an Arizona limited liability company (“Sunburst”).

         3. Garlinghouse has been responsible for the management and maintenance of the Sunburst Claims since Sunburst acquired its interest in the Mining Claims on June 22, 2015, via a trustee sale.

         4. Sunburst acquired its interest in Sierra Resources mining claims through foreclosure of a loan made by Grand View to Sierra in connection with Sierra's bankruptcy.

         5. Emerald Copper filed a request to begin exploratory drilling operations on a portion of the ground covering the Sunburst Claims on March 25, 2015.

         6. Emerald filed a Notice of Intent (NOI) to do exploration drilling with the Bureau of Land Management (“BLM”) Kingman office; the NOI was approved by the BLM Kingman office. Drilling took place while Sierra owned the claims at issue.

         7. Emerald Copper installed a chain and lock on the primary road access to the Mining Claims.

         8. Sunburst paid the annual claim maintenance fees for the Sunburst Claims, as have Sunburst's predecessors-in-interest.

         9. The unpatented mining claims BT Nos. 1-18 held by Emerald Copper were staked in January 2012, and then again in September 2012. BT Nos. 1-18 cover the same areas as Emerald 2B, 3A, 4A, and 5-20.

         10. The following claims are referred to herein as the Block Claims: Emerald 5 thru 20.

         11. The following unpatented mining claims are referred to herein as the 2004 claims: [left blank in original]

         12. The following unpatented mining claims are referred to herein as the 2004 Claims: Emerald #21, Emerald #22, Emerald #30, Emerald 31, Emerald #43, Emerald 44, and Emerald #45.

         13. Location notices for the Block Claims and 2004 Claims were recorded in Mohave County Recorders Office in 2004 and 2005.

         14. Sunburst and its predecessors in interest have maintained the 2004 Claims and the Block Claims in the years since they were located by filing the annual claim maintenance payments with the BLM.

         15. Llao David Huntzinger (“Huntzinger”) began working for Emerald Isle Mine in November 2004.

         16. Huntzinger was hired by Joe Sawyer in November 2004 and worked at Emerald Isle Mine until some time in 2005 and intermittently thereafter.

         17. Huntzinger is not a licensed surveyor or mineral surveyor.

         18. Huntzinger's duties and responsibilities while working at the Emerald Isle Mine between November 2004 and 2005 included performing maintenance at the heap leach/PLS pond and the open pit, and checking monitor wells at the property.

         19. The monitor wells checked by Huntzinger were located on private property to the south of the Emerald Isle Mine and an area east of the open pit but west of the road that circled the open pit.

         20. During that time Huntzinger was not tasked with conducting a survey at the Emerald Isle Mine.

         21. In June 2016, T. Robert Breen (“Breen”), acting on behalf of Sunburst, staked the following unpatented mining claims: Emerald 2B, Emerald 3A, Emerald 4A, Emerald 40, and Emerald 41.

         22. In June 2016, Breen, acting on behalf of Sunburst, amended unpatented mining claims Emerald 5, Emerald 7, and Emerald 9.

         23. Breen amended the unpatented mining claims Emerald 5, Emerald 7, and Emerald 9 to clarify that these unpatented mining claims did not take in ground ...


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