Summary 2011 WY 68

Summary of Decision April 19, 2011

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Case Name: Office of State Lands and Invs. v. Mule Shoe Ranch, Inc.

Citation: 2011 WY 68

Docket Number: S-10-0181, S-10-0182

URL: http://wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=462000

Appeal from the District Court of Crook County, The Honorable Michael N. Deegan, Judge

Representing Appellants (Respondents) in Case No. S-10-0181: Bruce A. Salzburg, Wyoming Attorney General; Michael L. Hubbard, Deputy Attorney General; Bridget Hill, Senior Assistant Attorney General. Argument by Ms. Hill.

Representing Appellee (Petitioner) in Case No. S-10-0181: David M. Clark of Worrall & Greear, P.C. Worland, Wyoming.

Date of Decision: April 19, 2011

Facts: Appellee sought to exercise its preferential right to renew a state lease. A competing bid was submitted at a higher rate. The State Lands Office (Appellant) issued a decision requiring Appellee to match the higher bid in order to exercise its preferential right, and Appellee subsequently requested an administrative hearing. The Board of Land Commissioners (Board) granted summary judgment to the State Lands Office, agreeing with the director’s decision. Appellee filed for review in the district court, which reversed the Board’s decision and remanded with instructions for the State Lands Office to conduct an economic analysis to determine whether the competing bid was based on fair market value. The State Lands Office appealed to the Court and Appellee filed a cross-appeal.

Issues: Whether the district court erred in reversing the Board’s decision requiring Appellee to meet the highest bid offered in order to exercise its preferential right to renew its lease. Appellee’s cross-appeal asked whether the district court erred in remanding the case to the Board for an economic analysis and should instead have entered judgment for Appellee.

Holdings: The court considered the version of W.S. § 36-5-105(c) in effect in 2007, at the time the state lease was expiring and the applicants submitted their bids. Specifically, the Court considered the meaning of the words “by meeting the highest bid offered by another qualified applicant . . . whose bid is based on the fair market value, using the formula developed by the board pursuant to W.S. 36-5-101(b).” The Court determined that § 36-5-101(b) expressly provided that rentals must be at least the fair market value as calculated using the Board’s formula, but that it did not state rentals must be the fair market value calculated using the formula. Furthermore, while § 36-5-101(b) expressly provided that rentals must at a minimum reflect fair market value, nowhere did it suggest that there was a maximum value for bids the Board could accept.

The fair market value was the price the Board was willing to accept and an applicant was willing to pay. Here, the Board was willing to accept a higher competing bid, and the competing applicant was willing to pay the amount of its bid. The Court concluded that Appellee was required to pay that amount in order to keep the lease.

The Court found the statutory scheme in effect at the time Appellee and the competing applicant submitted their bids cannot be interpreted to mean that the Board was precluded from accepting bids higher than the minimum amount calculated by using the formula set forth in ch. 4, § 6 of its rule. The statutes and the rule clearly authorized the Board to accept the higher of two competing bids in order to carry out its statutorily prescribed duty to lease state lands in a manner inuring to the greatest benefit of the state land trust beneficiaries.

The Court found it unnecessary to address the issue presented in Appellee’s cross-appeal. The Court reversed the district court’s order and remanded the case for entry of an order affirming the Board’s decision.

J. Kite delivered the opinion for the court.