United States District Court, D. Maryland
MEMORANDUM OPINION ADDRESSING THE LIABILITY OF
DEFENDANTS CORSA COAL CORP. AND WILSON CREEK ENERGY,
Mark Coulson United States Magistrate Judge.
core, this case involves an allegation that Defendants
wrongfully mined coal from an area where they did not own the
necessary mineral rights. The case is before me for all
proceedings by the consent of the parties pursuant to 28
U.S.C. § 636(c). Now pending before this Court are five
motions for summary judgment (ECF Nos. 125, 157, 158, 129,
and 130) by various plaintiffs and defendants. This
memorandum only concerns ECF No. 130 as it relates to
Defendants' Corsa Coal Corp. (“Corsa Coal”)
and Wilson Creek Energy, LLC (“Wilson Creek”)
(who, together with Defendant PBS Coals, Inc.
(“PBSC”) are sometimes collectively referred to
as the “Coal Defendants”). The Court has also
reviewed Plaintiffs' opposition and the Coal
Defendants' reply. (ECF Nos. 156 and 164). No. hearing is
necessary for the Court to dispose of the portion addressed
below. For the following reasons, ECF No. 130, is
GRANTED in part as to Corsa Coal (all
counts) and Wilson Creek (those counts based on successor or
corporate affiliation imputed liability only, but not those
based on direct liability). The Court reserves judgment on
the remainder of the motion for after the March 18, 2019
one hundred years of conveyances now culminate in this
dispute to determine who ultimately owns the mining rights to
a disputed parcel in Garrett County, Maryland. (See
ECF No. 80). Plaintiffs allege that they own all rights
to the parcel except for a 939/1365 interest in the
Kittanning seam or vein of coal. (Id. at
¶¶ 12-13). The Defendants Mr. and Mrs. Martin,
(“the Martins”), assert ownership over all
mineral rights in the disputed parcel, and leased those
rights to Defendant WPO, Inc. (“WPO”) for
extracting coal and other minerals. (Id. at ¶
19). In January 2011, PBSC entered into an agreement to
purchase WPO's rights under the lease. (Id. at
¶ 23). From 2011 to 2013, PBSC and WPO mined coal from
the parcel. (Id. at ¶¶ 25-26). In 2013,
PBSC assigned the lease rights back to WPO and placed an
order to purchase approximately 30, 000 tons of coal mined by
WPO. (Id. at ¶ 28). In 2014, Corsa Coal
purchased PBSC, which continues to exist as a wholly-owned
subsidiary of Corsa Coal. (Id. at ¶ 29).
Plaintiffs filed this instant suit seeking damages and other
relief based on the coal mined from the disputed parcel
during the relevant period.
Second Amended Complaint includes counts for: (1) declaratory
judgment as to ownership interests within the disputed
parcel; (2) trespass against the Martins, WPO, Jeffrey Rose
and Debbie Rose as operators and agents of WPO (“the
Roses”), and PBSC for allegedly entering the
Plaintiffs' property and wrongfully removing coal; (3)
unjust enrichment against all Defendants for profits alleged
to have resulted from the mining; (4) conversion against all
Defendants for extracting coal that Plaintiffs' claim
ownership over; (5) accounting of Defendants' expenses,
costs, and profits from the alleged conduct; (6) aiding and
abetting against the Coal Defendants' for assisting in
WPO's alleged trespass and against the Roses for filing
mining permit applications for WPO and PBSC despite
Plaintiffs' purported ownership; and (7) a claim for past
due payments arising from a prior trespass by Mr.
addition to the five pending motions for summary judgment,
there have been several other substantive motions filed, many
with overlapping or interconnected legal issues.
(See ECF Nos. 136, 139 and 150). The Court initially
asked the parties to determine the most efficient schedule to
consider all outstanding issues within this case. No.
consensus was reached. (See ECF Nos. 182-84).
Therefore, the Court has attempted to address the outstanding
legal issues in a manner that maximizes efficiency for the
parties and the Court. As such, the Court now addresses
Plaintiffs' theories of recovery against Defendants Corsa
Coal and Wilson Creek.
STANDARD OF REVIEW
Rule of Civil Procedure 56(a) requires the Court to
“grant summary judgment if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” The moving
party can do so by demonstrating the absence of any genuine
dispute of material fact or by showing an absence of evidence
to support the non-moving party's case. Celotex Corp.
v. Catrett, 477 U.S. 317, 323-25 (1986). A dispute as to
a material fact “is genuine if the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” J.E. Dunn Const. Co. v. S.R.P.
Dev. Ltd. P'ship, 115 F.Supp.35 593, 600 (D. Md.
2015) (quoting Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)).
nonmoving party “opposing a properly supported motion
for summary judgment ‘may not rest upon the mere
allegations or denials of [his] pleadings,' but rather
must ‘set forth specific facts showing that there is a
genuine issue for trial.'” Bouchat v. Baltimore
Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (citations omitted). The court is “required to
view the facts and draw reasonable inferences in the light
most favorable to” the nonmoving party. Iko v.
Shreve, 535 F.3d 225, 230 (4th Cir. 2008) (citing
Scott v. Harris, 550 U.S. 372, 377 (2007)). However,
the Court must also “abide by the ‘affirmative
obligation of the trial judge to prevent factually
unsupported claims and defenses from proceeding to
trial.'” Heckman v. Ryder Truck Rental,
Inc., 962 F.Supp.2d 792, 799-800 (D. Md. 2013) (quoting
Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir.
1993)). Consequently, a party cannot create a genuine dispute
of material fact through mere speculation or compilation of
inferences. See Deans v. CSX Transp., Inc., 152 F.3d
326, 330-31 (4th Cir. 1998).
Coal and Wilson Creek argue that summary judgment is
appropriate because Plaintiffs cannot substantiate any of the
counts against them, based either on successor/corporate
affiliation imputed liability for the actions of PBSC or
direct liability for Corsa Coal's and Wilson Creek's
own actions. (ECF No. 131-1 at 22). As discussed more fully
below, as to Corsa Coal, the Court agrees. As to Wilson
Creek, the Court agrees that it has no successor/corporate
affiliation imputed liability, but, pending the results of
the upcoming hearing, denies Wilson Creek's motion for
theories based on any direct liability for its own actions at
Successor in Interest/Corporate Affiliation
advance a theories of imputed liability against both Corsa
Coal and Wilson Creek for the actions of PBSC based on them
being successors in interest and/or corporate affiliates. A
corporation that “acquires the assets of another
corporation does not take the liabilities” unless:
“(1) the successor expressly or impliedly agrees to
assume the liabilities of the predecessor; (2) the
transaction may be considered a de facto merger; (3) the
successor may be considered a mere continuation of the
predecessor; or (4) the transaction is fraudulent.”
United States v. Carolina Transformer Co., 978 F.2d
832, 838 (4th Cir. 1992) (internal quotations omitted). The
“mere continuation” exception applies when there
is a transfer of assets between multiple corporations that
essentially results in one remaining successor corporation.
Id. The doctrine exists “to prevent a
situation whereby the specific purpose of acquiring assets is
to place those assets out of reach of the predecessor's
creditors.” Baltimore Luggage Co. v. Holtzman,
80 Md.App. 282, 297 (1989). In short, it prevents a
corporation from escaping liability if it “goes through
a mere change in form without a significant change in
Coal Defendants argue that successor in interest liability is
inapplicable in that Corsa Coal never acquired PBSC's
assets. Furthermore, Defendants stress that Plaintiffs'
basis stems from an incorrect belief that the entities
merged. (ECF No. 130-26 at ¶ 5). The Coal Defendants
also point to the facts that: (1) PBSC entered into the Coal
Purchase Agreement with WPO in March of 2013 (ECF No. 130-3
at ¶ 29); (2) Corsa Coal acquired the issued and
outstanding capital stock of PBSC under a Share Purchase
Agreement executed in July of 2014 (Id. at ¶
22); and (3) since July 2014, PBSC has continued to operate
as a separate and distinct corporation. (Id. at 24).
PBSC's independence is further supported through
corporate minutes, public filings, the testimony of Corsa