Coal firm wins suit over Natalie Mountain property
His challenge to a lawsuit upheld by the state Supreme Court, Dennis Molesevich Sr. says it's his turn to sue.
The Mount Carmel land developer and coal company owner said Northumberland County's challenge for the mineral rights to his Natalie Mountain Estates property in Mount Carmel Township cost him millions of dollars in coal sales over the past three to four years.
"The lost revenue is phenomenal," he said, estimating $45 million.
He's preparing now to sue, and says he'll ask for a jury trial. How much he'll sue for will be based on a "daily loss of income" that he'll have experts determine.
"I just want to know, why did you sue me?" he wants the county to answer.
Molesevich said that while county officials disputed the mineral rights, they had no problem collecting some $30,000 in taxes a year on the coal, even while he couldn't mine it, and another $4,000 on property taxes for the surface rights.
As Molesevich sees it, "I was paying the taxes to fight myself."
'Out of appeals'
The Supreme Court on April 16 denied the county's petition for allowance to appeal an Aug. 2 order issued by the Superior Court. That order prohibited the county from claiming any mineral rights or pursuing what it claims was as much as $1.2 million in lost coal royalties.
"They are out of appeals," Molesevich said.
His attorney, Robert Muolo, of Sunbury, agreed the complicated
case appears to be over. He reserved further comment.
Lycoming County Judge Dudley N. Anderson determined in July 2011 that the county may not make any claim to mineral rights on the land or pursue the lost tax revenue. Citing various case law, the Superior Court panel affirmed Anderson's ruling, which allows Molesevich to retain clear title to the property and bars the county from claiming any right, lien, title or interest.
Mining to begin
Other factors to consider are interest, late fees and money spent on testing, Molesevich said.
He also notes that he could have created about 20 to 25 jobs for his own company, local truckers and coal processors during the surge; now it would be more like 10, he guessed.
The legal battle
The complicated legal battle dates to 1971.
That's when Robert J. Rosini, who now lives in Hockessin, Del., acquired the surface rights for 419.22 acres of county-owned land from Circle Coal Co. that was later known as the "Colonial Moffat Tract." Over the years, Rosini sold off parcels of the property to people who built homes on the lots.
On July 20, 2006, Rosini filed a quiet title action to clear the title and make any other claims to the property extinct. By filing the action with the county Court of Common Pleas, Rosini's intention was to include both surface and mineral rights with the property when he sold it to Molesevich.
Molesevich recalled that, after the first 30 days in which anyone claiming rights to the land went by with no response, Muolo said "we better do this again." A second 30-day notice was advertised, which wasn't legally required, but again, no claims were made against the property, Molesevich said.
On the day the quiet title action was granted by the court, Rosini sold the property, with the mineral and surface rights, to Molesevich for approximately $850,000.
Molesevich went about his initial plans to develop the land for housing, but concerns of collapse from past underground mining turned his focus toward strip mining the land instead. He did water tests, obtained permits and even purchased a dragline coal excavator - which, he points out, is still sitting in Tremont.
It was nearly four years later - 1,180 days, Molesevich said - that the county suddenly sued, claiming rights to the minerals.
Not only had all that time gone by, but Molesevich said there are other ironies: in any multiple landowner situation, the consent of all parties is required before any mining can be done, so the county would have needed his OK as the surface rights owner to get the coal if it in fact had the mineral rights. Also, the land, before Molesevich's purchase, was in ownership limbo, so the county wasn't getting any revenue, even though it had rights to the land because it was a taxable estate.
The quiet title was supposed to have cleared all that up.
"When they sued, we stopped dead in the water," he said. "When the government tells me to do something - I stop."
Failed to appear
The county's case fell apart based mostly on the fact that its attorneys failed to appear in court when the quiet title action was initiated. In fact, a lawsuit was filed in July 2008 by the commissioners against attorneys Frank Konopka and Guy Schlesinger, who served as the county solicitors at the time of the title filing in 2006. The lawsuit seeks monetary damages and claims negligence on the part of both attorneys.
County Commissioner Vinny Clausi said the lawsuit against the attorneys was put on hold until the suit involving Molesevich was settled.
Molesevich remembers being asked in court whether Konopka or Schlesinger had ever done work for him. He believes the suggestion was that those involved with the sale and purchase conspired with the attorneys to have the land sold without any objection from the county over the mineral rights.
"I've been in business 40 years; I can make money a lot of different ways," Molesevich said this week. "I don't have to steal it."
Also complicating the case was the fact that the county prothonotary didn't stamp the docket for a transfer of county land on the property sale, which Anderson, the Lycoming County judge, ruled on Jan. 28, 2011, to mean it was not a valid or legal document.
After Anderson's ruling, which set the clock back and gave the county the opportunity to file the proper paperwork for an appeal, Molesevich and Muolo filed to strike the county's answer because it was too late. Muolo said a court order had been issued May 18, 2006, requesting the county file an answer to the quiet title issue within 30 days. But Muolo said an answer was never filed.
Meanwhile, attorney Richard T. Abell of the law firm Powell, Trachtman, Logan, Carrle and Lombardo, P.C., King of Prussia, representing the county, said the county never received a notice to defend itself in the quiet title transaction.
Still, Anderson ruled that the county's Feb. 25, 2011 "instant motion" for consideration was too late.
"For lack and promptness and reasonable explanation, the court will not reconsider the order of May 18, 2006," he wrote.
The court also considered the significant investment Molesevich made in the property during the time the commissioners failed to respond, according to court documents.
Northumberland County Judge Charles Saylor heard arguments in the case in October 2010 before recusing himself from further involvement because of a potential conflict of interest. Saylor issued an order stating Molesevich was a "longtime" client of the law firm Saylor worked for before his election to the bench. The two other county judges - Robert B. Sacavage and William H. Wiest - also recused themselves due to potential conflicts.
County tab: $199,956
Molesevich said there was a "truckload" of money spent by both sides in the case. He said he hasn't added up his total, and that he'd likely be embarrassed to admit how much it is.
As for the county, the total as of this week is $199,956, according to county Controller Tony Phillips.
Clausi, who wasn't in office when the case was initiated by former commissioners Frank Sawicki, Kurt Masser and Samuel Deitrick, agrees the lawsuit is a "done deal." He reiterated this week his previous stance that the county should not have pursued the case as far as it did.
"Mr. Molesevich asked us to negotiate, and I went to Kurt Masser and Frank Sawicki about negotiating the coal royalty rate. But they told me no and said we should move forward with the case," he said.
Later, despite Clausi's objection to appeal the Superior Court's ruling, county solicitor Frank Garrigan said current fellow Commissioners Stephen Bridy and Richard Shoch agreed to file an appeal with the Supreme Court.
Sawicki, Deitrick and Masser, who is now a state representative for the 107th Legislative District, said they didn't want to comment about the case when contacted this week.
Clausi maintains the county lost because Konopka and Schlesinger failed to appear in court in 2006 to defend the county.
"I don't blame Molesevich for feeling the way he does and fighting the case. In my opinion, he abided by the law from day one," Clausi said. "I believe we should go after Konopka and Schlesinger" to recoup the loss, he said.
Konopka declined comment when asked this week to respond to Clausi's criticism. Efforts to reach Schlesinger were unsuccessful.
'Hurt' financially, personally
Molesevich still wonders what the county's motive was in trying to stop him from mining the property.
"It hurt my company and my family and a lot of people around me," he said. "Why would you sue me? I'm already paying you and you can't take a pound (of coal) out without my say-so," he continued, referencing the need for all parties to approve mineral extraction. "Why would you do that?"
He said he expects battles among business competitors, but not from the government, especially local government. That hurt personally, he said, considering his investments in economic development in the county.
Otherwise, Molesevich has tried to maintain a sense of humor despite the fact that things haven't gone as planned since his land purchase almost seven years ago.
"All I've taken off that property is a 9-point buck," he said.