United States District Court, D. Maryland
MEMORANDUM OPINION ADDRESSING DEFENDANTS' MOTION
FOR SANCTIONS AND LEAVE TO FILE A SUPPLEMENTAL MOTION FOR
Mark Coulson United States Magistrate Judge
case is before me for all proceedings by the consent of the
parties pursuant to 28 U.S.C. § 636(c). Pending before
this Court is Defendants' Wilson Creek Energy, LLC
(“Wilson Creek”), and PBS Coals, Inc.
(“PBSC”) (collectively, the “Coal
Defendants”) Motion for Sanctions and Leave to File A
Supplemental Motion and Brief for Summary Judgment. (ECF No.
206). It is fully briefed, and no additional hearing is
Coal Defendants allege purposeful misconduct in
Plaintiffs' failure to produce certain documents
regarding their purported ownership of 426/1365ths of the
mineral rights to the property at issue as well as the value
of that interest. Specifically, the Coal Defendants argue
that Plaintiffs failed to produce three categories of
documents: (1) Carl Del Signore's Last Will and Testament
(the “Will”) until November 30, 2018 when it was
produced as an attachment to Plaintiffs' Opposition to
the Coal Defendants' Motion for Summary Judgment (ECF No.
156-29); (2) a 2016 deed concerning those mineral rights from
the Estate of Carl Del Signore to Plaintiff CDS Family Trust,
LLC (the “2016 Deed”); and (3) documents
including a Petition to Reopen and Supplemental Final
Accounting that were filed with the Garrett County
Orphan's Court concerning the previously-closed estate of
Carl Del Signore (the “Orphan's Court Estate Asset
documents”). In doing so, the Coal Defendants argue
that any appropriate relief would include, among other
things, permitting them to file a supplemental motion for
summary judgment based on judicial estoppel grounds. Each
category of documents is discussed in turn. For the reasons
below, Defendants' motion is DENIED.
first issue concerning production of the Will is easily dealt
with. Plaintiffs consistently asserted that they obtained the
426/1365th mineral rights upon the death of Carl Del Signore
by operation of law. (ECF No. 1 at 5). To the Court, this
clearly suggests a testamentary disposition, either by way of
will or as statutory devisees. This was later clarified as
“[t]he interest passed automatically upon Carl Del
Signore's death in 1985 by way of his Last Will and
Testament.” (ECF No. 156 at 11). In the Court's
view, this clarification is not inconsistent with the
position the Plaintiffs took from the outset, and its late
production suggests no motivation to withhold information
that would otherwise contradict or impeach the basis of
Plaintiffs' claim of ownership. Additionally, given that
this Court has already ruled that a claim of ownership based
solely on the Will is insufficient as a matter of law, there
is no prejudice to the Coal Defendants.
The 2016 Deed
the 2016 Deed, it is not clear to the Court when or if it was
produced by Plaintiffs in discovery. The 2016 Deed has a
Garrett County Circuit Court print date of March 7, 2017 (ECF
No. 130-24), but that does not establish who printed it or
for what purposes. Although the Coal Defendants argue that
this document was not discovered by them until they were
“in the course of investigating the subject matter
jurisdiction issues that were recently raised before the
Court, ” it was an attachment to their Motion for
Summary Judgment filed on November 1, 2018 (ECF No. 130-24),
and relied upon by the Coal Defendants as part of their
argument contesting Plaintiffs' claimed 426/1365th
interest in the mineral rights at issue. By contrast, the
subject matter jurisdiction issues were not before the Court
until March of 2019.
however, the Court must point out that Plaintiffs have never
relied upon the 2016 Deed-or any deed from Carl Del
Signore-as the basis for their claim to a 426/1365th
ownership interest in the disputed mineral rights. To the
contrary, Plaintiffs regard the 2016 Deed as “estate
housekeeping” that became necessary only upon the
required supplementation of the estate's schedule of
assets at that time. (ECF No. 209 at 7). Correspondingly, the
Coal Defendants' position is that that the 2016 Deed is
too late in any event to give the Plaintiffs standing to sue
and maintain their causes of action. (ECF No. 130 at 32-33).
Neither side, therefore, relies upon the 2016 Deed to support
their respective positions. Further, far from the 2016 Deed
being “fatal to [Plaintiffs'] claims in this
case” as claimed by the Coal Defendants (ECF No. 206-1
at 6), it is the absence of a timely deed-something
Plaintiffs have never claimed they have-that the Court relied
upon in finding that Plaintiffs cannot recover based on their
purported 426/1365th mineral interest. Therefore, the Court
does not find that the lack of its earlier production
provides a sufficient basis for sanctions. While Plaintiffs
might be criticized for their failure to investigate the
Orphan's Court file and produce the 2016 Deed if, in
fact, they did not, its lack of production does not suggest a
conscious effort by Plaintiffs to thwart discovery.
The Orphan's Court Estate Asset Documents:
October 25, 2016, during the pendency of this litigation, the
personal representatives of the Estate of Carl Del Signore
(who died in 1985) filed a petition to re-open the estate for
the purpose of adding his 426/1365th interest in the mineral
rights to 907.1 acres known as “Mount Cynthia, ”
which includes the 29.7-acre parcel central to this case.
This interest had apparently been left out of the original
listing of estate property. Additionally, the personal
representatives included an updated accounting for the
estate. Both filings represent the value of the mineral
interest as zero. These documents were not produced by
Plaintiffs in discovery. According to the Coal Defendants,
Plaintiffs' failure to produce these documents is worthy
of sanctions because this zero-dollar valuation obviously
contradicts Plaintiffs' assertions in the present case
that the allegedly wrongfully-mined coal has significant
value, and these documents would have supported an assertion
of judicial estoppel so as to bar the present suit.
counter that the original failure to include the mineral
interest in the estate listing of property was an oversight,
and that the personal representatives were statutorily
required to update the estate record once the oversight was
discovered as to the “market value as of the date of
death of the decedent, or the revised market value”
pursuant to Md. Code Ann., Trusts and Estates § 7-203.
By way of affidavit of the counsel who assisted in this
supplementation, Plaintiffs further assert that the valuation
of the mineral interest for estate purposes was made as of
the time of decedent's death (1985), at which time the
state of the available technology and market conditions were
such that the minerals could not have been extracted
efficiently so as to render them valueless in 1985.
Specifically, counsel notes:
At the time of Carl Del Signore's death [in 1985], all
interested parties were under the belief and assumption that,
by the date of death standards, all minable coal had been
removed and oil and gas that may be present in the parcel had
no value. Because of the lack of technological advancements
and simplicity of equipment and mineral extraction methods in
use and available in 1985, the date of death value stated in
the Petition to Reopen was believed to be reasonable.
(ECF No. 209-4 at 2). Thus, Plaintiffs argue that the
documents are irrelevant to the current dispute, particularly
with regard to discovery requests seeking Plaintiffs'
basis for valuing the interest more than twenty-five years
later at the time of the allegedly wrongful mining.
Court agrees with Plaintiffs, and further declines to find
that the documents support a claim of judicial estoppel.
Judicial estoppel is an “equitable doctrine that exists
to prevent litigants from playing ‘fast and loose'
with the courts-to deter improper manipulation of the
judiciary.” Folio v. City of Clarksburg,
W.Va., 134 F.3d 1211, 1217 (4th Cir. 1998). “As an
equitable doctrine, judicial estoppel is invoked in the
discretion of the district court and with the recognition
that each application must be decided on its own specific
facts and circumstances.” King v. Herbert J. Thomas
Mem'l Hosp., 159 F.3d 192, 196 (4th Cir. 1998). The
United States Court of Appeals for the Fourth Circuit has
adopted a four-part test to determine when judicial estoppel
should apply: (1) the party to be estopped must be advancing
an assertion that is inconsistent with a position taken
during previous litigation; (2) the position must be one of
fact, rather than of law or legal theory; (3) the prior
position must have been accepted by the court in the first
proceeding; and (4) the party to be estopped must have acted
intentionally, not inadvertently. Havird Oil Co. v.
Marathon Oil Co., 149 F.3d 283, 292 (4th Cir. 1998).
While each factor must be satisfied in order to support
application of ...