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Hayes v. A.J. Associates, Inc. (5/22/98), 960 P 2d 556


     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska, 99501, phone
(907) 264-0608, fax (907) 264-0878.  



             THE SUPREME COURT OF THE STATE OF ALASKA


HOWARD C. HAYES and MICHAEL R.     )
HAYES,                             )  Supreme Court No. S-6736
                                   )
          Appellants,              )  Superior Court No.
                                   )    1JU-82-2048 CI
     v.                            )
                                   )
A.J. ASSOCIATES, INC.; ALASKA      )  O P I N I O N
MARINE LINES, INC.; GORDON S.      )
HARANG; and EILEEN K. HARANG,      )  [No. 4992 - May 22, 1998]
                                   )
          Appellees.               )
___________________________________)
                                   )
HOWARD C. HAYES and MICHAEL R.     )
HAYES,                             )
                                   )  Supreme Court Nos. 
          Appellants/              )  S-7185/7215
          Cross-Appellees,         )
                                   )  Superior Court No. 
     v.                            )  1JU-93-397 CI
                                   )
JIM JANSEN; LYNDEN, INC.; REED     )
STOOPS; A.J. ASSOCIATES, an Alaska )
corporation; GORDON and EILEEN     )
HARANG; ARROWHEAD TRANSFER; ALASKA )
MARINE LINES, INC.; BANK OF        )
CALIFORNIA, a foreign corporation; )
and JOHN DOES 1 through 5,         )
                                   )
          Appellees/               )
          Cross-Appellants.        )
___________________________________)    


          Appeal from the Superior Court of the State of
Alaska, First Judicial District, Juneau,
                     Thomas M. Jahnke, Judge.


          Appearances:  Henry J. Camarot, Anchorage, for
Appellants/Cross-Appellees.  James N. Reeves, Bogle & Gates,
Anchorage, for Appellees/Cross-Appellants.  Lawrence Z. Ostrovsky,
Assistant Attorney General, Anchorage, and Bruce M. Botelho,
Attorney General, Juneau, for Amicus Curiae State of Alaska.  


          Before:  Rabinowitz, Matthews, Eastaugh,
Justices, and Shortell, Justice, pro tem. [Compton, Chief Justice,
not participating.] 


          EASTAUGH, Justice.
          SHORTELL, Justice pro tem, concurring in the
result.  RABINOWITZ, Justice, joining in Part A of Justice
Shortell's concurring opinion.
          RABINOWITZ, Justice, dissenting.  
          


I.   INTRODUCTION
          These consolidated appeals concern eight mining claims
filed by Howard Hayes and his son, Michael, on Alaska-Juneau Gold
Mine tailings. [Fn. 1]  In S-6736 Hayes appeals from a superior
court order ejecting him from Taku Nos. 1 and 2 for staking those
claims without obtaining the consent of the landowners or posting
a surety bond.  In S-7185 Hayes appeals from a partial summary
judgment dismissing most of his tort claims against Jim Jansen and
others relating to the eight mining claims.  In S-7215 the
landowners appeal from an order denying them summary judgment on
another of Hayes's tort claims.  We affirm in part, reverse in
part, and remand for further proceedings.
II.  FACTS AND PROCEEDINGS
          These cases concern rights to part of Alaska Tidelands
Survey No. 201 (ATS 201), near downtown Juneau.  The Alaska-Juneau
Gold Mine operated near Gastineau Channel from 1914 until 1944. 
State v. A.J. Indus., Inc., 397 P.2d 280, 281 (Alaska 1964).  It
daily generated as much as 13,000 tons of crushed rock and mill
tailings, which were dumped onto adjacent tidelands and then onto
submerged lands under the channel.  Id.  Dumping eventually
resulted in "considerable acreage of real property . . . well above
high water,"including the property in dispute in these cases.  Id. 
Various predecessors to the present landowners used the property
from 1937 onwards. [Fn. 2]  Three previous opinions of this court
addressed disputes relating to ownership of and mineral rights to
this property.  Hayes v. A.J. Assocs., Inc., 846 P.2d 131 (Alaska
1993); Hayes v. Alaska Juneau Forest Indus., Inc., 748 P.2d 332
(Alaska 1988); State v. A.J. Indus., Inc., 397 P.2d 280 (Alaska
1964).
          In State v. A.J. Industries, the court held that the
landowners were entitled to a preference right to obtain title to
nearly 100 acres of property created by the disposal of rock and
mill tailings.  397 P.2d at 281, 287.  The State subsequently
issued a patent transferring the property to the landowners.  As
required by AS 38.05.125(a), the patent expressly reserved mineral
rights to the State. [Fn. 3]  
          In 1981 the landowners executed a mining lease permitting
Hayes to extract merchantable ore, including gold, from the
property. [Fn. 4]  The lease expired December 31, 1981; Hayes
nonetheless remained on the property and continued to mine.  When
negotiations for a new lease failed, Hayes staked mining claims
Taku Nos. 1 and 2 on the property in 1982. [Fn. 5]  A.J. Assocs.,
846 P.2d at 132; Alaska Juneau Forest Indus., 748 P.2d at 334.  The
landowners filed an ejectment action as to those two claims, and
Hayes counterclaimed, asserting he had acquired mineral rights from
the State by staking valid claims.  748 P.2d at 334.  The superior
court granted summary judgment to the landowners, ruling that the
tailings had not passed to the State under the Alaska Statehood
Act, Public Law No. 85-508, 72 Stat. 339 (1958) (see note preceding
48 U.S.C. sec. 21 (1976)).  Id.  This court reversed in 1988,
concluding that the tailings were real estate that had consequently
passed to the State under the Statehood Act.  Id. at 336.  Because
the minerals in the tailings were reserved to the State in the
patent transferring the property to the landowners, they were
subject to valid mining claims.  The case was remanded for further
proceedings.  In 1989, the Alaska Department of Natural Resources
(DNR) granted Hayes a production license authorizing "the
production of minerals for sale, subject to other applicable
statutes and regulations." 
          Upon remand, the superior court again granted summary
judgment to the landowners, concluding that because Hayes had not
made his mineral locations in good faith, the locations were void. 
A.J. Assocs., 846 P.2d at 131.  This court reversed and again
remanded, holding that Hayes did not owe the landowners a duty of
good faith location.  Id. at 134-35.  
          Following this remand, the case was reassigned to
Superior Court Judge Thomas M. Jahnke, who again granted summary
judgment to the landowners.  It ruled that Hayes's failure to
obtain the landowners' consent or post a surety bond made the
locations for Taku Nos. 1 and 2 invalid under AS 38.05.130,
rendering Hayes a trespasser who was subject to ejectment.  The
trial court denied Hayes's motions for reconsideration and Rule
60(b) relief and granted attorney's fees to the landowners.  Hayes
appeals in S-6736 from those rulings. 
          In 1993 Hayes filed a tort suit against the landowners,
ultimately asserting seven counts of tortious conduct by the
landowners.  When the landowners moved for summary judgment, the
superior court found that genuine fact disputes existed with regard
to Hayes's claims that the landowners had destroyed Hayes's
monuments, stakes, markers, and other structures, but granted
summary judgment to the landowners on Hayes's remaining claims. 
The superior court declined to dispose of two of Hayes's other
claims via summary judgment: (1) the "claimed right to enter to
stake claims"on the remaining six claims; and (2) the "claim that
A.J. or its agents destroyed Hayes's access road to ATS 201."  The
court denied all motions for reconsideration and entered a Rule
54(b) final judgment.  Hayes and the landowners appeal from these
rulings in S-7185 and S-7215.   
III. DISCUSSION
     A.   Hayes v. A.J. Associates: Effect of Hayes's Failure to
Obtain Consent or Post a Bond before Staking

          1.   Acquisition of State-held mineral interests 

          The landowners acquired ATS 201 subject to the State's
reserved mineral rights and its right to explore for and extract
those minerals.  AS 38.05.125(a); [Fn. 6] Hayes v. Alaska Juneau
Forest Indus., 748 P.2d at 337 (holding that AS 38.05.125(a)
reserved to the State the mineral rights in ATS 201).
          The superior court, in a lengthy and thoughtful
memorandum decision, held that AS 38.05.130 and 11 AAC 96.140(10)
obliged Hayes to either obtain the landowners' consent or post a
surety bond before entering in 1982 to stake Taku Nos. 1 and 2. 
The court concluded that Hayes's failure to do so invalidated those
two claims, requiring ejectment. [Fn. 7]  It implicitly reasoned
that (1) staking is "exploration,"an activity reserved by
subsection .125(a), and (2) section .130 applies to the exercise of
any right reserved under subsection .125(a). [Fn. 8]
          Hayes attacks these conclusions on various grounds. [Fn.
9]  Most fundamentally, he asserts that section .130 did not apply
to his 1982 entry to stake.  He reasons that section .130 only
imposes obligations on the exercise of rights reserved pursuant to
AS 38.05.125(a), and that the right to enter to stake a mineral
location is not a right reserved by subsection .125(a). [Fn. 10]
          We begin our analysis by recognizing that statutes and
regulations govern how others may acquire the State's mineral
rights.  Discovery and appropriation are the basis for acquiring
such rights.  Alaska Const. art. VIII, sec. 11. [Fn. 11]  Alaska
Statute 38.05.185(a) provides that the acquisition of rights in
deposits on State land of minerals subject to location is governed
by AS 38.05.185 38.05.275. [Fn. 12]  Gold is a mineral subject to
location.  1 American Law of Mining sec. 8.01[3], at 8-4 (The Rocky
Mountain Mineral Law Foundation ed., 2d ed. 1994).  Subsection
.185(a) also provides that State land "may not be closed to mining
or mineral location"unless the DNR commissioner finds that mining
would be incompatible with significant surface uses and unless AS
38.05.300 (which authorizes the commissioner to close State lands
to "mining, mineral entry or location, mineral prospecting, or
mineral leasing"under specified conditions) is also satisfied. 
Alaska Statute 38.05.185(a) thus keeps State land open to mineral
location unless the commissioner specifically closes it.  
          Under AS 38.05.195, "[r]ights to deposits of minerals
subject to AS 38.05.185-38.05.275 in or on state land that is open
to claim staking may be acquired by discovery, location and
recording."[Fn. 13]  Likewise, leasehold preferences in State
mineral lands available only for leasing may be acquired by
"discovery, location and recording . . . ."  AS 38.05.205(a). 
"State land"is broadly defined to mean "all land, including shore,
tide and submerged land or resources belonging to"the State.  AS
38.05.965(19) (emphasis added).  "State land"thus includes the
State's reserved mineral estate. [Fn. 14]  See also 11 Alaska
Administrative Code (AAC) 86.135 (1996).  The mineral estate in ATS
201 was consequently "state land."[Fn. 15] 
          Justice Rabinowitz's dissent relies on State v. Weidner,
684 P.2d 103 (Alaska 1984), but that case did not concern the
effect of the subsection .125(a) reservation, or any question
whether the State's reserved mineral interest remained state land. 
          Our interpretation here is supported by a 1993 Attorney's
General opinion: "Because the term 'state lands' is defined to
include all lands and interests in lands belonging to or acquired
by the state, AS 38.05.965(19), all state-owned severed mineral
interests, including reserved mineral interests, are subject to
location.  11 AAC 86.135."  1993 Informal Op. Att'y Gen. 563, 564.
See also Moore v. State, 553 P.2d 8, 25 (Alaska 1976), where we
stated:
               We note that sections found throughout
the Alaska Land Act utilized the word "land"in such a way that it
could only be interpreted as encompassing resources within the
scope of its meaning.  Admittedly, in certain provisions of the act
the word "land"is used in a manner inconsistent with the statutory
definition of the term.  However, instances of such inconsistencies
are few in number, and bear no special contextual significance to
AS 38.05.305.  Under the definition section of the act, statutory
definitions are to apply "unless the context otherwise requires." 
We find nothing about the context of AS 38.05.305 which would imply
that the statutory definition of the word "land"should be
disregarded.  

(Footnotes omitted.) 
          Justice Rabinowitz's dissent argues that section .185 was
not intended to allow staking of claims on lands conveyed by the
State.  The State's amicus brief states what we believe to be the
proper reading of the mining code:  "When the state conveys a
surface estate to another party, the state is required to reserve
both the minerals and the right to explore and develop them. 
Mineral interests on these 'split estate' lands are subject to the
location of state mining claims in the same manner as on lands
owned entirely by the state."  (Emphasis added.) See also 3
American Law of Mining sec. 71.03[5], at 43 (2d ed. 1984 & 1997
Supp.).
          Justice Rabinowitz is concerned that location activities
will interfere with quiet enjoyment of surface rights.  Dissent at
53-55.  Owners of surface estates must anticipate that the State's
reserved rights might someday be exercised.  The dissent's concerns
should not alter the result required by the mining code.  They
should instead be addressed either by a finding by the commissioner
that mining would be incompatible with surface use, AS
38.05.185(a), or by a claim for appropriate remedies for undue
interference with those rights.  
          The dissent also relies upon the history of the 1981
amendment of AS 38.05.185.  As we read that history, however, the
legislature in 1981 simply limited the commissioner's discretion in
determining what mineral lands would be exclusively subject to
entry under lease.  The dissent argues that the amendment applied
only to lands in which the State retained the surface estate.  If
so, the amendment is irrelevant here because it did not limit the
commissioner's discretion in dealing with land conveyed by the
State subject to the subsection .125(a) reservation.  The amendment
did not change the definition of "state land." 
          2.   State's reservation of its mineral rights [Fn. 16]
          Whereas AS 38.05.185-38.05.275 describe how others may
acquire the State's reserved mineral rights, AS 38.05.125(a)
describes the scope of those reserved rights.  Subsection .125(a)
reserves to the State minerals and other resources on land sold or
granted by the State.  It also reserves "the right to explore the
same"for those minerals and things, and "expressly saves and
reserves . . . the right to enter . . . upon said land . . . for
the purpose of opening, developing, drilling and working mines or
wells . . . ."  AS 38.05.125(a).
          Alaska Statute 38.05.130 concerns exercise of rights
"under the reservation as set out in AS 38.05.125 . . . ."  Whether
section .130 covers the physical act of staking, and whether
Hayes's unconsented, unbonded entry to stake in 1982 violated AS
38.05.130, depends on whether subsection .125(a) covers staking. 
Subsection .125(a) does not mention either "staking"or "locating,"
but it reserves the right to "explore."  
          The term "explore"is not defined in Alaska Statutes
titles 27 or 38 or the State's mining regulations.  In applying
subsection .125(a), we read "explore"to have its common meaning: 
"to seek for or after . . . to search through or into . . . to
examine minutely . . . to penetrate into or range over for purposes
of geographical discovery . . . to make or conduct a systematic
search . . . ."  Webster's Third New International Dictionary
(unabridged) 802 (1969).  Black's defines "exploration"in context
of mining law as "[t]he examination and investigation of land
supposed to contain valuable minerals, by drilling, boring, sinking
shafts, driving tunnels, and other means, for the purpose of
discovering the presence of ore and its extent."  Black's Law
Dictionary 579 (6th ed. 1990).  These definitions are consistent
with how "exploration"is used in Alaska Statutes titles 27 and 38. 
Cf. AS 27.05.010 (seemingly distinguishing among "exploration,
development and mining").  The American Law of Mining states: 
          Mineral exploration is the orderly search for
previously undiscovered or unrecognized ore deposits. . . .
Exploration typically involves a succession of steps, involving the
application of both inductive and deductive concepts, in which the
explorationist seeks first to locate and then to recognize or
"prove up"a discovery of a minable deposit by  utilizing known or
theorized deposit models as a guide to ore deposits.  

1 American Law of Mining sec. 1.03[1], at 1-41.  We conclude that
"explore"does not encompass in its common or mining usage the
limited and discrete physical act of staking (placing corner
monuments with an appropriate notice) carried out by Hayes in 1982.
          Staking satisfies one of the requirements for acquiring
a mineral claim or leasehold preference on public land.  See supra,
note 13.  It is not surprising that subsection .125(a) says nothing
of staking, given that its focus is on reserving the State's
rights, not on how others can acquire those rights from the State. 
          The focus of subsection .125(a) is also consistent with
its origin.  Subsection .125(a) seems intended to fulfill the
reservation requirement, contained in the Alaska Statehood Act, Act
of July 7, 1958, Public Law No. 85-508, 72 Stat. 339 sec. 6(i), as
amended 48 U.S.C. sec. 21 (1988), which was a condition of the
federal
transfer of vast amounts of land to Alaska upon statehood.  See
Trustees for Alaska v. State, 736 P.2d 324, 326 (Alaska 1987). 
Subsection 6(i) of the Statehood Act required the State to reserve
its mineral rights in lands known to be mineral in character.  Id.
at 341.  In requiring that reservation, Congress was concerned with
ensuring that the State reserved the rights that would make it
economically self-sufficient, see id. at 335, and not with how
persons might enter onto those lands in seeking to acquire rights
from the State through the process of claim or leasehold location. 
          To read subsection .125(a) in this fashion does not
impair the State's rights because the State reserves the right to
explore and does not have to stake to obtain mineral rights it
already possesses.  Nor does this reading significantly affect
prospecting practices.  It will be rare that claim location will
ever be based on "immaculate"staking. [Fn. 17]         
          From a practical standpoint, this interpretation of
subsection .125(a) does not lessen the protection AS 38.05.130
gives the owners of lands, such as ATS 201, that are subject to the
subsection .125(a) reservation.  Section .130 is concerned
exclusively with compensating the landowner for damages resulting
from entries during exercise of rights reserved under subsection
.125(a).  Exploration, including discovery of locatable minerals,
is the prospecting activity that is predictably most damaging to
the surface estate.  Staking, as such, requires acts (placing
corner markings and posting notice) that are unlikely to damage the
surface estate.  Also, often any successful exploration which is
part of the location process will be relatively contemporaneous
with staking, and the mandatory agreement or bond covering
exploration will encompass all aspects of the prospector's
activities, including staking.  That, however, is not the situation
here, where the landowners contend that the limited act of staking
alone, without more, violates section .130, and do not assert that
Hayes did anything other than enter for the limited purpose of
staking. [Fn. 18] 
          Absent a claim the staking entry itself caused financial
harm to the landowners' estate, the type of protection contemplated
by section .130 (financial indemnification) is inapplicable.  As
long as the landowner is financially protected against damage, the
would-be explorer can enter without offending section .130.  
          Section .130 does not purport to protect a simple right
of quiet enjoyment, but addresses only harm that can be remedied by
compensation. [Fn. 19]  A purchaser of lands sold subject to the
subsection .125(a) reservation must anticipate that the reserved
rights might someday be exercised.  Section .130 does not allow the
landowner to altogether close the land to entry by persons seeking
to exercise those rights, much less prevent a prospective locator
from entering the land to stake claims.  Even if the landowner
refuses to reach agreement, section .130 effectively allows the
would-be locator to "force"entry by posting bond satisfactory to
the Director of the Division of Lands.  Section .130 does not
purport to address staking that does not cause physical damage to
the land, nor does it address harmless nonintrusive activities,
such as airborne aeromagnetic surveys.  
          The two members of the court who would hold that section
.130 does not apply to Hayes's 1982 staking activity do not
conclude that such landowners are without remedies.  If DNR finds
that mining would be incompatible with significant surface uses
(perhaps where the surface owner resides on a potential location
site), DNR may close the land to mineral location under AS
38.05.185(a) and AS 38.05.300.  Such closure would prevent any
entry for purpose of mineral location.  To the extent staking
actually causes damage, the landowner has access to common law
remedies.  The Alaska Constitution confirms that the State's
reservation of access to resources "shall not unnecessarily impair
the owner's use, prevent the control of trespass, or preclude
compensation for damages."  Alaska Const. art. VIII, sec. 9.  There
is
no absolute privilege to enter to prospect on such lands.  A person
tortiously causing damage must make the landowner whole.  The
landowner also has some statutory protection. A trespasser who
intentionally cuts trees without consent may be liable for treble
damages.  AS 09.45.730.  Likewise, AS 09.45.735 permits treble
damages against one who intentionally trespasses "to gather
geotechnical data or take mineral resources . . . ."[Fn. 20]
          In its analysis the superior court compared analogous
federal statutes dealing with conveyance of public lands.  In our
view this analysis is not helpful, largely because we consider
Alaska's statutory scheme sufficiently clear that little is gained
by referring to dissimilar federal statutes.  Thus, comparing the
Stock-Raising Homestead Act, 43 U.S.C. sec. 299 (1988), with the
Agricultural Entry Act of 1914, 30 U.S.C. sec. 121-22 (1988),
provides
little guidance as to the purpose and scope of AS 38.05.125(a) and
.130, or their relationship with AS 38.05.185(a).  Also, both
federal acts refer to "prospecting,"a term not used in subsection
.125(a) or section .130.  The federal statutes are also more
explicit than AS 38.05.125(a).  Comparing the two federal acts does
not help determine whether AS 38.05.130 applies to staking
unaccompanied by exploration or discovery.  Further, as the State's
amicus brief notes, few cases interpreting the federal surface
damage statutes have dealt with similar facts.
          The superior court also held that Hayes's failure to
satisfy 11 AAC 96.140(10) invalidated his asserted leaseholds. 
That regulation requires that a locator make good-faith attempts to
agree with the surface owner or post bond before conducting
"mineral exploratory activity"on land in which the State has
reserved a mineral interest. [Fn. 21]  The act of staking, without
more, is not "mineral exploratory activity."  A locator who stakes
without consent, therefore, does not necessarily violate this
regulation.  There is no claim Hayes conducted unauthorized
exploratory activities before he staked in 1982.  Therefore, two
members of the court are of the opinion that 11 AAC 96.140(10) does
not apply.
          The landowners argue that Hayes's entry also violated AS
09.45.060, which prohibits a person from entering upon land "except
in cases where entry is given by law."[Fn. 22]  If Hayes's 1982
staking entry was not pursuant to rights reserved under AS
38.05.125(a), under what authority did Hayes enter ATS 201?  In our
view that authority is found in AS 38.05.185, which maintains the
availability of "state lands,"and thus ATS 201, to mineral
location unless withdrawn by the commissioner.  
          This is consistent with constitutional and legislative
expressions of a policy that encourages development of mineral
resources.  Alaska Const. art. VIII, sec.sec. 11, 12; AS 38.05.185,
.195, .205, .300.  It is also consistent with long-standing
practice in
Alaska, and other western states, of encouraging prospecting on
public lands.  Rickert v. Thompson, 8 Alaska 398, 415 (1933),
aff'd, 72 F.2d 807 (9th Cir. 1934).  It has long been recognized in
the western states that the mineral estate is dominant to the
surface estate.  Norken Corp. v. McGhan, 823 P.2d 622, 628 (Alaska
1991) ("[T]he mineral estate is the dominant estate, carrying with
it the right to make such use of the surface as is reasonably
necessary to remove the minerals"); John F. Welborn, New Rights of
Surface Owners: Changes in the Dominant/Servient Relationship
between the Mineral and Surface Estates, 40 Rocky Mtn. Min. L.
Inst. sec. 22.02 (1994).  Even assuming that rights of surface
owners
are either dominant or require full compensation when harmed by
exercise of rights of access to the reserved mineral estate, the
owner of the surface estate cannot altogether deny access to the
mineral estate.  Cf. Norken Corp., 823 P.2d at 628 n.5.
          3.   Effect of failure to comply with AS 38.05.130
          Alaska Statute 38.05.130 contains no explicit remedy for
its violation, and says nothing about invalidating a claim staked
in violation of the statute. [Fn. 23]  Nor does the regulation
specify or imply a remedy of invalidation or ejectment.  11 AAC
96.140(10).  Any judicially implied remedy must be consistent with
the purpose of the statute.  We conclude that it was error to grant
the remedy ordered by the superior court, ejectment. [Fn. 24]
          As seen above, section .130 protects landowners
financially, but does not allow them to completely close their
lands to mineral exploration.  Consequently, it is enough that 
landowners be placed in the same position they would have enjoyed
had the statute been observed, and an agreement reached or a bond
posted.  Indemnification, not ejectment, is the appropriate remedy
for failing to reach agreement or post a bond.   This result
sustains the locator's right of entry, and preserves both the
locator's incentive to satisfy the requirements of section .130 and
the landowner's incentive to act reasonably during negotiations
with the locator. [Fn. 25]  
          The landowners argue that this court "specifically noted"
Hayes's violation of the statute and regulation in A.J. Associates,
citing to 846 P.2d at 134.  The only passage on the cited page that
has any potential bearing cannot fairly be read to say that we held
that Hayes violated the statue and regulation.  That sentence
reads:  "The court also pointed to Hayes' violation of AS 38.05.130
and 11 AAC 96.140(10) which require posting of a bond to protect
the owner of the surface estate prior to mining-related activity." 
The quoted sentence simply restated the conclusion of the superior
court (the "court"), and did not purport to be our holding on that
question.  Indeed, it was not necessary for us to decide there
whether Hayes violated the statute or regulation.  
          The landowners also argue that the State, in its amicus
brief, has agreed that "AS 38.05.130 and 11 AAC 96.140(10) require
'a damage agreement . . . or surety bond prior to entry onto the
land in order to stake a valid location.'"  We do not read the
State's amicus brief so broadly.  The full sentence that the
landowners quote in part reads as follows:  "Since AS 38.05.130 and
11 AAC 96.140(10) [require] a damage agreement or surety bond prior
to mineral exploratory activity, it is consistent to therefore
interpret AS 38.05.130 and 11 AAC 96.140(10) as requiring a damage
agreement or surety bond prior to entry onto the land in order to
stake a valid location."  (Emphasis added.)  The State's amicus
brief gives examples of mineral exploratory activities that do not
involve entry or cause no additional disturbance to the land.  "In
the preceding examples the mineral exploratory activities are not
subject to AS 38.05.130."  The State further observes that "the
fact that exploration came before staking, does not ipso facto mean
that staking requires a bond."  In context, the State seems to
recognize that normally some mineral exploratory activity precedes
a valid location, and that entry for the purpose of staking
requires a damage agreement or surety bond because any exploratory
activity preceding the staking will normally require an agreement
or bond.  The State does not seem to assert that staking, without
more, falls within section .130.  
          The landowners also argue that there is no personal
"implicit right"to prospect or to mine that "trumps the State's
authority to manage these resources as it sees fit."  That
assertion is correct, but the State's policy in managing these
resources is expressed in AS 38.05.185, .195, .250, .300, and
article VIII, sections 11 and 12 of the Alaska Constitution.  Hayes
did not violate this policy when he entered to stake these two
claims in 1982.  
          4.   Landowners' alternative arguments for affirmance
          The landowners ask us to affirm the ejectment on two
alternative grounds. [Fn. 26]    
          Rights to mineral deposits in submerged land are not
subject to appropriation by prior discovery, location, and
recording.  AS 38.05.205, .250.  Arguing that the property was
"submerged land,"the landowners assert that Hayes acquired no
rights through staking his claims, and is therefore subject to
ejectment.  
          This position is without merit.  Even though the land
beneath the tailings was once submerged, the property became
ordinary real estate long ago.  Alaska Juneau Forest Indus., 748
P.2d at 336.  Additionally, the tailings are above mean high tide. 
Id. at 337.  The property is not in fact "submerged land."  AS
38.05.965(21). [Fn. 27]
          The landowners alternatively assert that Hayes failed to
comply with the technical requirements of AS 38.05.195 for locating
a claim.  Such alleged failures do not necessarily invalidate a
locator's rights.  Alaska Statute 38.05.185(b) explicitly states as
much, as long as "it appears to the satisfaction of the
commissioner that the mining lessee or the locator complied as
nearly as possible under the circumstances of the case, and that no
conflicting rights are asserted by any other person."   We cannot
affirm the summary judgment on the theory Hayes did not fulfill the
statutory requirements for locating a mining leasehold.
          5.   Attorney's fees in the ejectment action
          In 1995 the superior court awarded the landowners $60,000
in Civil Rule 82 attorney's fees.  Hayes challenges the award.  
          Fees are awarded to the "prevailing party."  Alaska R.
Civ. P. 82.  A party does not have to prevail on all issues to be
a prevailing party.  Day v. Moore, 771 P.2d 436, 437 (Alaska 1989). 
The general rule under Civil Rule 82 is that the prevailing party
is the party who has successfully prosecuted or defended against
the action; it is the one who is successful on the main issue and
the judgment entered.  Id. 
          We held above that it was error to order Hayes's
ejectment.  The landowners are consequently no longer the
prevailing parties in the ejectment action.  See In re Application
for Water Rights, 891 P.2d 981, 984 (Colo. 1995) ("In order to be
the prevailing party, one must . . . achieve some of the benefits
sought by the litigation.").  Consequently we vacate the fees award
and remand for further proceedings.  
     B.   Hayes v. Jansen Appeal: The Propriety of the Landowners'
Summary Judgment
          Hayes filed tort claims against the landowners in 1993,
asserting that they interfered with Hayes's rights relating to Taku
Nos. 1 through 8.  The superior court granted partial summary
judgment to the landowners, dismissing all but two of Hayes's tort
claims.  Hayes appeals from the partial summary judgment. 
          In reviewing a grant of summary judgment, we must
determine whether a genuine issue of material fact exists and
whether the moving party is entitled to judgment as a matter of
law.  Thorstenson v. ARCO Alaska, Inc., 780 P.2d 371, 374 (Alaska
1989).  We draw all reasonable inferences in favor of the non-
movant.  Swenson Trucking & Excavating v. Truckweld Equip. Co., 604
P.2d 1113, 1116 (Alaska 1980).  
          1.   Relevant statutes and regulations governing rights
accruing to mineral locators 
          Alaska Statute 38.05.185 establishes the basic framework
for acquisition of rights to mineral interests held by the State. 
That statute further allows DNR to restrict the acquisition of
those rights.  See supra note 12.  DNR thus may either close land
to mineral location or restrict state land to mining under lease.
          A DNR regulation restricts mining on lands in which the
State reserved mineral rights after their sale or lease to private
parties.  When Hayes staked his claims, that regulation read:
          This section constitutes the commissioner's
finding, in accordance with AS 38.05.185(a), that selling, leasing,
or otherwise disposing of any interest in land other than a
locatable mineral interest, with the mineral rights reserved to the
state, creates potential use conflicts requiring that mining be
allowed only under written leases.  If the land remains open to
location, any location made on that land after the disposal is a
leasehold location.
Former 11 AAC 86.135(b) (am. 5/18/90). [Fn. 28]  Any location made
upon lands conveyed to a private party, with a mineral interest
reserved to the State, is thus a "leasehold location."
          One who makes a leasehold location, by prior discovery,
location, and recording, receives a preference right to a lease. 
AS 38.05.205; 11 AAC 86.300 (1996).  Under 11 AAC 86.305, the
holder of such a preference right is required to apply for a lease
from DNR in order to begin mining operations.  By statute,
"[m]inerals may not be mined and marketed or used until a lease is
issued, except for limited amounts necessary for sampling or
testing."  AS 38.05.205.  If DNR rejects the lease application, the
location is void. [Fn. 29]  11 AAC 86.305(d) (1996). 
          2.   Rights conferred by Hayes's locations
          Under the regime established by these statutes and
regulations, any location made by Hayes on ATS 201 was a leasehold
location.  ATS 201 was conveyed to a private party.  Under 11 AAC
86.135(b) and AS 38.05.185(a), DNR restricted the property to
mining under lease only.  Hayes's location, therefore, was a
leasehold location.  As such, it entitled him only to a preference
right to a lease; Hayes had no right to conduct mining activities
until he applied for and received such a lease from DNR.  Hayes
raises three major arguments to the contrary; none is convincing. 
          He first argues that 11 AAC 86.135(b) does not apply to
his locations.  He suggests that by conveying the property to the
landholders, the State did not sell, lease, or otherwise dispose of
any interest in land, and that 11 AAC 86.135(b) hence did not
restrict the property to mining under lease.  The record indicates
otherwise.  The State's patent granted the property, subject to the
State's mineral reservation, to the landowners, their heirs and
assigns, in exchange for "good and valuable consideration."  The
property was conveyed by the State to the landowners, and 11 AAC
86.135(b) squarely applies.
          Hayes next asserts that this regulation does not apply to
mineral locations; in support he cites the regulation's language
limiting its effect to "the selling, leasing, or otherwise
disposing of any interest in land other than a locatable mineral
interest."  11 AAC 86.135(b) (1985).  The quoted language plainly
refers to the interest conveyed by the State to the landowners, not
the interest claimed by the mineral locator.  When the State
explicitly conveys a mineral interest to a private party, 11 AAC
86.135(b) does not apply.  When the State conveys any other
interest in land, the regulation applies.  In this case the
interest sold by the State to the landowners was not the mineral
interest, but was instead a fee interest subject to the State's
statutory reservation of mineral rights.  Therefore, the regulation
applies to ATS 201. [Fn. 30]  
           Finally, Hayes argues that the production license DNR
issued to Hayes in 1989 constituted a determination that Hayes was
entitled to begin production on the property.  Alaska Statute
38.05.207 mandates that "[a]n application for a production license
shall be filed with the commissioner when a locator of a mining
claim under AS 38.05.195 or a lessee of a mining location under AS
38.05.205 is prepared to produce minerals for sale in commercial
quantities."  Hayes correctly points out that the statute requires
a production license only for mining lessees and holders of mining
claims.  Hayes argues that because he was not a lessee when he
received the license, DNR must have concluded that he held a mining
claim rather than a leasehold location, and is not required to
apply for a lease in order to mine. 
          This does not follow.  DNR has promulgated regulations
allowing issuance of production licenses to holders of a "mining
leasehold location . . . who are prepared to initiate or continue
production of minerals for sale."  11 AAC 86.700(a).  The parties
do not contend, nor does the statutory language suggest, that DNR
cannot allow leasehold locators to apply for a production license
and a lease simultaneously once they are prepared to mine.  While
AS 38.05.207 does not require holders of a leasehold location to
apply for a production permit, neither does it forbid them from
doing so.
          Under 11 AAC 86.700(a), DNR will accept applications for
production licenses from holders of leasehold locations.  The
requirements for issuance of a production license are set out in 11
AAC 86.700(c); a license will be granted if a "leasehold location
has been discovered, located, filed, and maintained in accordance
with AS 38.05.185-38.05.280; or . . . a state mining lease has been
issued."  11 AAC 86.700(c)(4)(A) & (B) (emphasis added).  DNR need
not determine that the holder of a leasehold location is entitled
to mine, under lease or otherwise, before it grants a permit.  11
AAC 86.700(c).
          Hayes's acquisition of a production license, therefore,
is not inconsistent with the conclusion that he holds no more than
a leasehold location and was required to apply for and obtain a
mining lease before beginning to extract minerals from the
property.  Indeed, DNR explicitly informed Hayes that the "license
authorizes the production of minerals for sale, subject to other
applicable statutes and regulations."  (Emphasis added.)
          We hold that any locations staked by Hayes were leasehold
locations entitling him to no more than a preference right to a
lease. [Fn. 31]  
          3.   Claims based upon Hayes's right to mine
          The first two counts of Hayes's amended complaint are
based upon his alleged right to "enter . . . stake claims, develop,
drill, mine, occupy and remain on [ATS 201]."  Hayes claims that
the landowners, both by preventing Hayes's entry on the land and by
placing improvements upon the property, have tortiously interfered
with these activities.  Hayes asserts that he has consequently been
prevented from mining and extracting minerals from the property.  
          As explained above, however, Hayes has only a preference
right to a lease.  He has no right to mine or extract minerals
until he receives a lease.  The landowners are accordingly entitled
to summary judgment on those counts as a matter of law; absent a
right to mine, Hayes cannot claim that the landowners owed him any
right to mine.  It was appropriate to grant summary judgment
regarding these counts.
          We partially affirm the superior court's summary judgment
with regard to Hayes's request for a declaratory judgment
establishing his right "to stake claims, develop, drill, mine,
occupy, and remain upon the property."  As discussed above in Part
III.A, Hayes may have the right to stake leasehold locations on the
property; he does not possess any of the remaining rights claimed.
          4.   Abuse of Process 
          Hayes also alleges that the landowners tortiously
"advised, stirred up and/or continued litigation."  The superior
court found that "[n]one of the activities that have been described
to support the allegations in the complaint are actionable."  
          Abuse of process consists of two essential elements:
ulterior purpose and a "willful act in the use of the process not
proper in the regular conduct of the proceeding."  DeNardo v.
Michalski, 811 P.2d 315, 317 (Alaska 1991) (citation omitted). 
Merely filing a suit, even for an improper purpose, is not 
sufficient for an abuse of process action.  Id.  
          The landowners have acted to preserve their own claims to
the surface of the property.  Hayes has presented no evidence of an
ulterior motive.  Nor has he alleged any improper or irregular
action taken by the landowners.  The court properly granted summary
judgment to the landowners. 
          5.   Interference with prospective economic advantage
          The superior court granted summary judgment to the
landowners on Hayes's claim of interference with prospective
economic advantage.  
          The elements of that tort are:  (1) the existence of a
prospective business relationship between the plaintiff and a third
party; (2) knowledge by the defendant of the prospective
relationship, and intent to prevent its fruition; (3) conduct by
the defendant interfering with the relationship; (4) failure of the
prospective relationship to culminate in pecuniary benefit to the
plaintiff; (5) causation of the plaintiff's damages by the
defendant's conduct; and (6) absence of privilege or justification
for the defendant's action.  Oaksmith v. Brusich, 774 P.2d 191,
197-98 (Alaska 1989).
          The superior court determined that Hayes's alleged
damages were not caused by the landowners' conduct.  The court
found that Hayes unreasonably failed to apply for a mining lease,
and that any lost economic opportunity resulted from this failure. 
This was error.  Hayes presented evidence that his lease
application was rejected as a result of his dispute with the
landowners.  DNR explained its refusal to issue Hayes a lease as
follows:
          A.J. Industries . . . [is] protesting the
issuance of a lease to you and assert[s] that your claims conflict
with their Alaska Timber #1-4 claims . . . .

          Under authorities granted to me by A.S.
38.05.205 and 11 AAC 86.305(F), this letter constitutes my decision
not to adjudicate the conflict between the Taku #1-4 claims and
Alaska Timber #1-4 claims.  The parties are advised to resolve this
conflict themselves.  As such, your lease application is rejected,
a new application may be submitted after resolution of this
conflict. 
Drawing all inferences in favor of Hayes, this letter creates a
genuine issue of material fact as to whether Hayes applied for a
lease, and whether any failure to pursue a lease was unreasonable. 
          We nonetheless affirm the superior court's judgment on an
alternative ground. "This court is not bound by the reasoning
articulated by the trial court and can affirm a grant of summary
judgment on alternative grounds."  Wright v. State, 824 P.2d 718,
720 (Alaska 1992).  Hayes submitted evidence of a single
prospective business relationship, with an Australian company,
based upon his mining locations.  A representative of the company
affied that in 1989 it and "other investors elected not to go
forward because of the pending lawsuit."  Therefore, any tortious
conduct by the landowners that interfered with that business
relationship must have taken place no later than 1989.  The
applicable limitations period is two years.  AS 09.10.070; see
Blake v. Gilbert, 702 P.2d 631, 639 (Alaska 1985), overruled on
other grounds, Bibo v. Jeffrey's Restaurant, 770 P.2d 290, 296 n.9
(Alaska 1989).  Hayes did not file his tort action until 1993.  His
action was consequently time-barred. 
     C.   Jansen v. Hayes:  The Propriety of Denying Summary
Judgment to the Landowners

          The landowners also moved for summary judgment with
respect to Hayes's claims that the landowners tortiously destroyed
monuments, markers, other items owned by Hayes, and an access road
he constructed.  The trial court found that genuine issues of
material fact required a trial regarding those tort claims.  It
consequently denied the landowners' motion for summary judgment.  
          The landowners argue in their cross-appeal that they were
entitled to summary judgment on these causes of action.  They
contend that an independent contractor, Knik Construction, removed
Hayes's stakes and monuments and destroyed the access road.  Knik
Construction is not a party to this case, and the landowners
contend that they cannot be held liable for its actions.
          The general rule is that a principal is not liable for
torts committed by an independent contractor.  Sievers v. McClure,
746 P.2d 885, 889 n.6 (Alaska 1987); Restatement (Second) of Torts
sec. 409 (1965).  However, the employer of an independent
contractor
may be liable for harm caused by acts or omissions committed by the
independent contractor pursuant to the employer's orders or
instructions.  Moloso v. State, 693 P.2d 836, 840 n.3 (Alaska
1985); Restatement (Second) of Torts sec. 410 (1965).  Hayes
presented
evidence sufficient to create a genuine issue of material fact as
to whether Knik Construction was acting under Jansen's direction
when it destroyed Hayes's property.
          Accordingly, we conclude that the trial court did not err
in denying summary judgment to the landowners on these tort claims. 
IV.  CONCLUSION
          Four justices have participated in the decision of this
case.  Three justices agree with Part III.A.1 of this opinion and
hold that the state's mineral interest in lands on which the
surface estate has been conveyed to a third party is "state land." 
The court is evenly divided regarding the discussion in Part
III.A.2 about whether AS 38.05.130 applies to Hayes's staking
activity.  The superior court's conclusion that section .130
governs the staking activity is therefore affirmed.  Three justices
agree with the result reached in Part III.A.3 concerning the effect
of failure to comply with AS 38.05.130.  Accordingly, the superior
court on remand should determine an appropriate amount and means of
indemnification pursuant to section .130.  The superior court may
require the parties to petition the director of the Division of
Mining to determine the sufficiency of a surety bond as to form,
amount, and security pursuant to section .130.  Three justices
agree with Part III.A.4, which rejects the landowners' alternative
arguments for affirmance.  Three justices agree with Part III.A.5,
which vacates the award of attorney's fees in the ejectment action. 
All justices agree with the result of Part III.B, which affirms
partial summary judgment in favor of the landowners as to all but
two of Hayes's tort claims.  Three justices agree with Part III.C.,
which affirms the trial court's denial of summary judgment as to
the Hayes's tort claims for the destruction of property.  
          Accordingly, the judgment of the superior court is
AFFIRMED in part, REVERSED in part, VACATED in part, and REMANDED
for further proceedings.

SHORTELL, Justice pro tem, concurring in the result.  RABINOWITZ,
Justice, joining in Part A of Justice Shortell's concurring
opinion.
          Because I disagree with the conclusion that AS 38.05.130
does not cover Hayes's acts establishing the boundaries of his
claims, I write separately on that issue.  However, I agree with
Justice Eastaugh's alternative conclusion that summary ejectment or
invalidation of Hayes's claims would be an inappropriate remedy in
this case.  Thus, although I disagree with one aspect of Justice
Eastaugh's opinion, I agree that the judgment granting ejectment
should be reversed. [Fn. 1]
     A.   Hayes Was Required to Comply with AS 38.05.130 before He
          Staked His Claims.

          Alaska Statute 38.05.130 provides, in pertinent part:
          Rights may not be exercised by the state, its
lessees, successors or assigns under the reservation as set out in
AS 38.05.125 until the state, its lessees, successors, or assigns
make provision to pay the owner of the land full payment for all
damages sustained by the owner, by reason of entering upon the
land.  If the owner for any cause refuses or neglects to settle the
damages, [the mineral claimant] may enter upon the land in the
exercise of the reserved rights after posting a surety bond . . .
sufficient . . . to secure to the owner payment for damages . . .
.

          Hayes staked his claims without first obtaining the
consent of the landowners or posting a bond complying with the
requirements of AS 38.05.130.  If these acts were in the exercise
of "[r]ights . . . as set out in AS 38.05.125,"Hayes violated the
protective requirements of section .130, and he should suffer the
consequences of his unlawful acts.
          Justice Eastaugh concludes that staking of claims is not
the exercise of a right covered by subsection .125(a).  The right
to explore, in his view, does not include staking.  In the absence
of a statutory definition of the word "explore,"he reads that word
not to cover unconsented entry and staking of claims by gold
seekers on land owned by private citizens.  In his view, "explore"
does not "encompass in its common or mining usage the limited and
discrete physical act of staking."  Op. at 16.  I disagree with
this interpretation of the statute. [Fn. 2]
          It can hardly be denied that subsection .125(a) was
intended by its drafters to be comprehensive in scope.  It covers
all title transfers of state land to holders of private interests. 
AS 38.05.125(a).  All mineral, geothermal, and fossil resources are
reserved to the state or its successors, who are given the right to
explore, enter, develop, and remove the reserved resources.  Id. 
It further grants the state or its successors the right to build,
use, and maintain all facilities deemed necessary for extraction of
the resources sought.  Id.  However, the statute also limits use of
the property entered by mineral claimants; that use must be
"reasonably necessary or convenient to render beneficial and
efficient the complete enjoyment of the property and the rights
hereby expressly reserved."  Id. (emphasis added).
          By such a comprehensive grant of power, the legislature
intended to preserve the rights of mineral claimants to extensive
and potentially disastrous exploitation of surface landowners'
property.  Knowing the potential for harm to the surface estate,
the legislature was careful to limit uses under subsection .125(a)
to those that are "reasonably necessary."  By doing so, it
attempted to strike a balance between the competing rights of
landowners and mineral claimants.
          I have no quarrel with the proposition that the
reservation of rights in section .125 establishes mineral rights 
as the "dominant estate"consistent with long-standing mining-law
doctrine.  See Norken Corp. v. McGahan, 823 P.2d 622, 628 (Alaska
1991).  However, I believe that our interpretation of section .125
should also recognize another well-established principle that
balances the rights of owners of dominant and servient estates by
limiting mineral developers to those uses that are "reasonably
necessary."  Id. [Fn. 3]
          Our interpretation of sections .125 and .130 should take
into account these two related principles:  (1) that the mineral
estate is dominant and (2) that its dominance is subject to the
rule of reasonable accommodation.  Subsection .125(a) complies with
these rules by allowing the owner of reserved mineral rights "all
rights and power in, to, and over said land . . . reasonably
necessary or convenient to render beneficial and efficient the
complete enjoyment of the property and rights hereby expressly
reserved."
          Section .125 covers all aspects of mining from
exploration through development.  It specifically reserves to the
state and its successors the right "to explore,""to enter,""to
erect, construct, maintain, and use"all necessary buildings,
machinery, and roads, "to remain"on the property for all purposes
relating to exercise of the reserved rights, and "to occupy"the
property.  It also reserves "all rights and power"over the land
that are reasonably necessary.  The breadth and completeness of the
rights reserved and activities authorized demonstrate an intent to
cover all activities related to finding, developing, and working
mineral properties.  There is little reason to conclude that
staking should be excluded from its protective scope.
          By exempting from the reach of the statute an essential
step on the path from exploration to development, Justice
Eastaugh's opinion is at odds with legislative intent as manifested
in the statutory language. [Fn. 4]  I cannot agree that absence of
the word "staking"from section .125, the language of that section
in its entirety, or dictionary or mining-text discussions of the
word "explore"[Fn. 5] reasonably lead to the conclusion that
"staking"is an isolated mining activity not covered by the
statute.
          In fact, the description of "mineral exploration"given
in an authoritative mining-law text indicates that staking should
be included within the scope of sections .125 and .130.  According
to American Law of Mining:
          Exploration typically involves a succession of
steps . . . in which the explorationist seeks first to locate and
then to recognize or "prove up"a discovery of a minable
deposit. . . .

American Law of Mining sec. 1.03[1], at 1-41 (Rocky Mtn. Min. L.
Found. ed., 1994). 
          Hayes could neither "locate"nor "prove up"his claim
without staking.  Location, to be valid, requires both discovery
[Fn. 6] and the marking of boundaries and posting of location
notice (staking).  See 11 Alaska Administrative Code (AAC)
86.135(a); 11 AAC 86.205; 11 AAC 86.210.  Therefore, when Hayes
entered or remained on the property and staked his claim, he was
taking one of the "succession of steps"by which he sought, in the
words of American Law of Mining, "first to locate and then to
recognize or 'prove up' a discovery of a minable deposit."  
          Recognizing staking to be one of the essential steps of
mineral exploration is fully consistent with common or mining
usage, with article VIII, section 11 of the Alaska Constitution,
and with Alaska statutes governing the rights and duties of
landowners and appropriators of state-reserved mineral interests.
Thus, I conclude that staking should be included in the rights
reserved by AS 38.05.125(a).  This right may not be exercised by
Hayes until he makes provision to pay the landowners full payment
for all damages sustained by reason of Hayes's entry onto their
land, or until he posts a surety bond sufficient to protect the
landowners' interests.  AS 38.05.130.  Hayes violated section .130
when he remained on the property and staked without first obtaining
the landowners' consent or the requisite bond. [Fn. 7]
     B.   By Violating Section .130, Hayes Did Not Necessarily
Forfeit His Right to Develop His Claim.

          Justice Eastaugh concludes that even if Hayes violated
subsection .125(a) the remedy of ejectment or invalidation of his
claim would not be appropriate.  As he says:
          [S]ection .130 protects landowners
financially, but does not allow them to completely close their
lands to mineral exploration. Consequently, it is enough that
landowners be placed in the same position they would have enjoyed
had the statute been observed, and an  agreement reached or a bond
posted. Indemnification, not ejectment, is the appropriate remedy
for failing to reach agreement or post a bond.  This result
sustains the locator's right of entry, and preserves both the
locator's incentive to satisfy the requirements of section .130 and
the landowner's incentive to act reasonably during negotiations
with the locator.

Op. at 24-25.

          I agree with this analysis as it applies to the facts of
this case.  The next logical step, therefore, should be a remand
for further proceedings to determine how to indemnify the landowner
for damage that has occurred from Hayes's acts or any reasonably
foreseeable damage that might occur from re-entry on the property
and re-staking of the Hayes claims.
          I would, therefore, affirm the trial court's decision
finding that Hayes violated the provisions of AS 38.05.130. 
However, I would reverse its summary decision to invalidate all of
Hayes's rights to pursue his mining claims.  I would remand for
further proceedings to determine the consequences of Hayes's
violation of AS 38.05.130 and for any other proceedings that are
consistent with the principles set out in these opinions.  I
therefore concur in all aspects of Justice Eastaugh's opinion
except Part III.A.2.

RABINOWITZ, Justice, dissenting.
          The court's opinion opens up all privately-held land in
Alaska that was once owned by the state to forced-entry staking-
and-location mining.  It denies landowners the right to bar
unauthorized entry onto their land and it eviscerates the
protections afforded by the mining code's bonding requirements.  I
dissent.
          The primary fault in the court's opinion is its
assumption that the legislature has authorized claim staking of the 
state's reserved mineral interests on privately-owned lands. 
Pursuant to the Statehood Act and AS 38.05.125, the state reserves
mineral rights in itself whenever it conveys land to a private
party.  In 1981, the legislature amended AS 38.05.185 to make
staking the presumptive means of acquiring the state's mineral
interests on "state land."  The court concludes that because the
state retains the mineral rights when it sells land to a private
party, such land remains "state land"for purposes of the staking
authorization provided for in AS 38.05.185.  Op. at 12-13.  Even
land where a private party has built a home or business is open to
forced-entry mining under the court's construction of Alaska's
mining code.  I reject this approach.  Legislative history, the
mining code, and this court's precedent amply demonstrate that land
that has been transferred to a private party is not "state land"
for purposes of section .185's authorization of claim staking.
          Alaska Statute 38.05.185(a) states in relevant part:
          State land may not be closed to mining or
mineral location except as provided in AS 38.05.300 and unless the
commissioner makes a finding that mining would be incompatible with
significant surface uses on the state land.  State land may not be
restricted to mining under lease unless the commissioner determines
that potential use conflicts on the state land require that mining
be allowed only under written leases . . . .

The court concludes that this text authorizes Hayes to stake mining
claims on A.J. Associates' property.  Op. at 12-13, 23.  I agree
that section .185 authorizes claim staking, but not on private
lands.
          The legislative history behind section .185's staking
provision indicates that it was only intended to apply to state-
held surface lands.  The statutory language quoted in the previous
paragraph was added to the mining code in 1981 as a result of a
controversy generated earlier that year by an Attorney General's
opinion.  See infra pp. 50-51.  The Attorney General determined
that section 6(i) of the Statehood Act requires that mineral
deposits in state mineral lands be mined only under written leases. 
See 1981 Formal Op. Att'y Gen. 113, at 117 (hereinafter 1981 AG's
Opinion).  In other words, the lease requirement applies to all
lands known to have minerals at the time they were granted to the
state by the federal government.  See Trustees for Alaska v. State,
736 P.2d 324, 340-42 (Alaska 1987).
          Prior to 1981, the state understood the leasing
requirement as only applying to lands which the state had
subsequently transferred to others.  It did not contemplate that a
lease was required to mine on state lands.  The standard view was
summed up by Commissioner Phil Holdsworth, the first commissioner
of the Department of Natural Resources.  He believed that under
section 6(i), "the usual mining rights contingent upon discovery
and appropriation [i.e., staking] will apply on State public domain
lands . . . ."  However, "[m]ineral deposits which have been
reserved to the State in the conveyance of lands [in accordance
with AS 38.05.125] 'shall be subject to lease by the State as the
State legislature may direct.'"  Phil R. Holdsworth, Presentation
to the Fourth Annual Mining, Mineral, and Petroleum Conference,
Anchorage, Alaska, April 4, 1959 (quoting in part to section 6(i)
of the Statehood Act of 1958, Pub. L. No. 85-508, 72 Stat. 339),
quoted in 1981 AG's Opinion, supra, at 154-55.  In other words, it
was believed that staking was allowed on all surface lands owned by
the state.  But to mine the state's reserved rights in lands which
had been conveyed to private parties, the miner would first have to
acquire a lease, "as the State legislature may direct."  Id.
          The 1981 Attorney General's Opinion unsettled this
understanding by construing the lease requirements as also applying
to lands whose surface was owned by the state.  As a consequence,
the validity of mining claims that had been staked on state lands
was thrown into question.  Miners protested this change in the law
and sought relief from the legislature.  David Heatwole, the
President of the Alaska Miner's Association, warned miners of the
threat to their claims posed by the extension of the leasing
requirement.  In a letter to the membership, he argued that the
section 6(i) leasing requirement "applies only to land on which
surface rights have been sold by the state."  He noted that
application of a leasing system to state lands would mean "loss of
rights to acquire mineral rights by discovery and location"and
"loss of rights to self initiate a mining investment."  David
Heatwole, Letter to Membership of Alaska Miner's Association,
available in Legislative Research Agency, Response to
Representative Charles Anderson's Mineral Leasing Research Request
#81-39, Feb. 28, 1981.
          The section .185 staking provision was added to the
mining code in direct response to this controversy.  The
legislature sought to restore the status quo as it had existed
prior to 1981.  In the hearings before the House Resources
Committee on the seminal bill (House Bill 350, 12th Leg., 1st Sess.
(1981)), Representative Rick Halford, the bill's prime sponsor,
testified that it was intended to allow miners to continue mining
despite the new requirements imposed by the Attorney General's
Opinion.  See Hearing on H.B. 350 Before the House Resources Comm.,
12th Alaska Leg., 1st Sess., Tape 17 side B No. 1671 (April 30,
1981) (statement of Rep. Rick Halford).  Bob Maynard, the Assistant
Attorney General who authored the 1981 Attorney General's Opinion,
testified that the purpose of the bill was to alleviate problems
that were created for miners by the opinion.  Id. at No. 1572.  In
other words, the staking provision was intended to allow staking-
and-location mining to continue where it had previously been
authorized, on state-owned surface lands.  To this end, the
legislature amended section .185 to permit staking on "state land."
          The court relies on the definition section of the mining
code to conclude that "state land"includes privately-owned surface
lands if the state has retained the mineral rights.  Op. at 12-13. 
I do not believe the cryptic reference to "resources"in AS
38.05.965(19) is sufficient to impose the regulatory regime
intended for state-held surface land onto privately-held lands. 
The word "land"is commonly understood to mean the surface, not the
minerals buried underneath it.  The legislative history of section
.185 leaves no doubt that when the legislature authorized staking
on all "state land,"it had this common definition in mind, not the
counterintuitive definition embraced by the court.  The staking
provision of section .185 relied on by the court was intended only
to alleviate the problems created by the 1981 Attorney General's
Opinion.  The legislature sought to allow staking to continue where
it had previously been permitted, on state-owned surface lands.
          The notion that the word "land"as used in the code means
surface land is consistent with the decision of this court in State
v. Weidner, 684 P.2d 103 (Alaska 1984).  There we had occasion to
interpret AS 38.05.300, which prohibits the closure of parcels of
"state land"larger than 640 acres to multiple purpose use. 
Section .300 is part of Chapter 5 of Title 38, and thus falls
within the sweep of the statutory definition of "state land"relied
on by the court in the instant case.  In Weidner, a unanimous court
determined that "state land"refers only to "retained state land." 
Id. at 111 (emphasis in original).  Whenever the state sells
surface land, the mineral interest remains in the state pursuant to
AS 38.05.125.  In Weidner, however, the classification of state
surface land for disposal, without any conveyance of the mineral
estate, was adequate to terminate the status of the land as "state
land."  The Weidner court had no difficulty concluding that when
the surface estate is sold, "the land ceases to be state land." 
Id. at 112. [Fn. 1]
          Pursuant to AS 38.05.125, the state reserves the mineral
interest whenever it conveys land to another party.  Under the
court's interpretation of the mining code, any lands which have
ever passed through state ownership are open to third-party
staking-and-location mining.  It does not matter that the land is
now the site of a private home or business or is put to some other
private use.  Anyone who has the inclination to do so may now enter
onto private property and set up monuments and markers and
establish a mining claim.  If a homeowner's lot has previously been
owned by the state, the homeowner will have no power to prevent a
miner from setting up his monuments and markers in her front yard.
          Alaska Statute 38.05.130 at least requires a miner to
post a damage bond before engaging in forced-entry mining on a
private party's property.  The court's opinion acknowledges this
requirement only to eviscerate it.  The court holds that even if a
miner fails to post a bond, he cannot be ejected from the property. 
Op. at 24-25.  Instead, the court holds that the landowner may only
seek post-hoc indemnification.  This ruling renders a nullity the
assurance of payment afforded by the bonding requirement.  The code
specifically provides that "[mining] rights may not be exercised
. . . until"a bond is posted.  AS 38.05.130.  If the miner can
begin digging or drilling without posting a bond, the private
landowner is left completely unprotected in the event that the
miner turns out to be judgment proof, or if the damages exceed the
miner's resources. [Fn. 2]
          One cannot overemphasize the deleterious consequences of
the court's opinion.  Any real property that was once in state
ownership is now subject to staking-and-location mining.  A miner
can now stake claims, by erecting stone or post monuments, in the
front yard of a private homeowner and dig up the owner's flower
beds in pursuit of minerals.  Land that has been purchased by a
conservation group and set aside for environmental preservation can
be mined.  A private business can be forced to stay its use of its
own land in order to accommodate mining.  There is nothing that a
private landowner can do to stop forced-entry mining of his
property.  Given that the right to exclude is a fundamental
component of property rights, and the high value Alaskans place on
the rights of quiet enjoyment and privacy, I believe that
legislative review of the provisions of Alaska's mining code in
light of the court's opinion is essential. [Fn. 3]




                            FOOTNOTES


Footnote 1:

     Both Hayeses are parties to these appeals.  For convenience we
refer to Howard Hayes and Michael Hayes in the singular as "Hayes"
except when context requires specificity.  


Footnote 2:

      A.J. Associates, Alaska Marine Lines, Inc., Gordon S. Harang,
and Eileen S. Harang are successors in interest to A.J. Industries
and A.J. Forest Industries.  See Hayes v. A.J. Assocs., Inc., 846
P.2d 131, 132 (Alaska 1993).

          Hayes sued A.J. Associates, Alaska Marine Lines, Inc.,
the Harangs, Jim Jansen, Lynden, Inc., Reed Stoops, Arrowhead
Transfer, and Bank of California in Hayes v. Jansen, No. 1JU-93-
0397 Ci (Alaska Super., June 16, 1994).  Lynden, Inc. and Arrowhead
Transfer have ownership interests in the property.  Jim Jansen is
president of Lynden Inc.  Reed Stoops is president of A.J.
Associates.  Bank of California had an ownership interest in the
property at potentially pertinent times.   We refer to all parties
adverse to Hayes as "the landowners." 


Footnote 3:

     The patent reserved to the State, "its lessees, successors,
and assigns forever, all oils, gases, coal, ores, minerals,
fissionable materials, and fossils of every name, kind or
description,"as well as "the right to explore"the property for
such materials and "the right to enter . . . upon said lands, or
any part or parts thereof, at any and all times for the purpose of
opening, developing, drilling and working mines or wells on these
or other lands, and taking out and removing therefrom all such
. . . ores, minerals . . . ." 


Footnote 4:

     Howard Hayes began to recover gold from the tailings in about
1954.  His son Michael later joined these efforts.  


Footnote 5:

     Hayes staked two adjacent claims, Taku Nos. 3 and 4, in 1987. 
Hayes also acquired four other claims on ATS 201, Taku Nos. 5-8. 
These claims had been staked by a third party in 1988.  They are
coextensive with Taku Nos. 1-4. 


Footnote 6:

     AS 38.05.125(a) provides:

          Each contract for the sale, lease or grant of
state land, and each deed to state land, properties or interest in
state land, made under AS 38.05.045-38.05.120, 38.05.321,
38.05.810-38.05.821, AS 38.08, or AS 38.50 except as provided in AS
38.50.050 is subject to the following reservations: "The party of
the first part, Alaska, hereby expressly saves, excepts and
reserves out of the grant hereby made, unto itself, its lessees,
successors, and assigns forever, all oils, gases, coal, ores,
minerals, fissionable materials, geothermal resources, and fossils
of every name, kind or description, and which may be in or upon
said land above described, or any part thereof, and the right to
explore the same for such oils, gases, coal, ores, minerals,
fissionable materials, geothermal resources, and fossils, and it
also hereby expressly saves and reserves out of the grant hereby
made, unto itself, its lessees, successors, and assigns forever,
the right to enter by itself, its or their agents, attorneys, and
servants upon said land, or any part or parts thereof, at any and
all times for the purpose of opening, developing, drilling, and
working mines or wells on these or other land and taking out and
removing therefrom all such oils, gases, coal, ores, minerals,
fissionable materials, geothermal resources, and fossils, and to
that end it further expressly reserves out of the grant hereby
made, unto itself, its lessees, successors, and assigns forever,
the right by its or their agents, servants and attorneys at any and
all times to erect, construct, maintain, and use all such
buildings, machinery, roads, pipelines, powerlines, and railroads,
sink such shafts, drill such wells, remove such soil, and to remain
on said land or any part thereof for the foregoing purposes and to
occupy as much of said land as may be necessary or convenient for
such purposes hereby expressly reserving to itself, its lessees,
successors, and assigns, as aforesaid, generally all rights and
power in, to, and over said land, whether herein expressed or not,
reasonably necessary or convenient to render beneficial and
efficient the complete enjoyment of the property and rights hereby
expressly reserved."

          The subsection .125(a) reservation is mandated under the
terms of section 6(i) of the Alaska Statehood Act as to lands known
to contain valuable minerals at the time of state selection. 
Section 6(i) provides in relevant part:  

          The grants of mineral lands to the State of
Alaska under subsections (a) and (b) of this section are made upon
the express conditions that all sales, grants, deeds, or patents
for any of the mineral lands so granted shall be subject to and
contain a reservation to the state of all the minerals in the lands
so sold, granted, deeded, or patented, together with the right to
prospect for, mine, and remove the same.  Mineral deposits in such
lands shall be subject to lease by the state as the state
legislature may direct: Provided, that any lands or minerals
hereafter disposed of contrary to the provisions of this section
shall be forfeited to the United States by appropriate proceedings
instituted by the attorney general for that purpose in the United
States District Court for the District of Alaska.  

See Trustees for Alaska v. State, 736 P.2d 324, 331-42 (Alaska
1987) (discussing history and purpose of the reservation of mineral
rights to the State).   


Footnote 7:

     Superior Court Judges Walter L. Carpeneti and Thomas E. Schulz
had previously concluded that Hayes was required to comply with AS
38.05.130 before entering the land to stake these two claims, but
failed to do so.


Footnote 8:

     AS 38.05.130 provides:  

          Damages and posting of bond.  Rights may not
be exercised by the state, its lessees, successors or assigns under
the reservation as set out in AS 38.05.125 until the state, its
lessees, successors, or assigns make provision to pay the owner of
the land full payment for all damages sustained by the owner, by
reason of entering upon the land.  If the owner for any cause
refuses or neglects to settle the damages, the state, its lessees,
successors, assigns, or an applicant for a lease or contract from
the state for the purpose of prospecting for valuable minerals, or
option, contract or lease for mining coal or lease for extracting
geothermal resources, petroleum or natural gas, may enter upon the
land in the exercise of the reserved rights after posting a surety
bond determined by the director, after notice and an opportunity to
be heard, to be sufficient as to form, amount, and security to
secure to the owner payment for damages, and may institute legal
proceedings in a court where the land is located, as may be
necessary to determine the damages which the owner may suffer.


Footnote 9:

     We do not consider Hayes's opening argument that the
landowners lack standing to seek ejectment because they have no
interest in the minerals Hayes seeks to mine.  In a decision issued
prior to Hayes's last appeal, the superior court held that the
landowners had standing to seek ejectment.  Because Hayes did not
appeal that ruling, we choose to treat it as final and as law of
the case as to the ejectment action.  Cf. Austin v. Fulton Ins.
Co., 498 P.2d 702, 704 (Alaska 1972) (stating that trial court
holding not disputed in appellant's prior appeal would be law of
the case in a subsequent appeal between the same parties).  But cf.
Siggelkow v. State, 731 P.2d 57, 59 n.1 (Alaska 1987) (holding law
of case did not preclude consideration of issue of jurisdiction not
raised by appellant in his prior appeal); Wolff v. Arctic Bowl,
Inc., 560 P.2d 758, 763 (Alaska 1977) (holding law of the case did
not preclude consideration of issue raised in prior unsuccessful
petition for review that did not determine the merits of the
issue). 


Footnote 10:

     This issue turns on statutory interpretation and is subject to
our independent review.  Sauve v. Winfree, 907 P.2d 7, 9 (Alaska
1995); Hood v. State, 574 P.2d 811, 813 (Alaska 1978).


Footnote 11:

          Article VIII, section 11 of the Alaska Constitution
provides in part that "Discovery and appropriation shall be the
basis for establishing a right"in minerals reserved to the State
and subject to location.  It also provides that "[p]rior discovery,
location, and filing, as prescribed by law, shall establish a prior
right"to "minerals reserved to the State which, upon the date of
ratification of this constitution . . . were subject to location
under the federal mining laws."

          11 AAC 86.105 provides:       "DISCOVERY DEFINED.  'Discovery'
means a finding of valuable mineral as would justify an ordinarily
prudent person in expending further time, labor, and money upon the
property with a reasonable expectation of developing a paying
mine."

          11 AAC 86.200 provides: "          DISCOVERY REQUIRED.  No mining
claim location is complete until after the discovery, as defined in
11 AAC 86.105, of locatable minerals within the limits of the
claim."


Footnote 12:

     AS 38.05.185(a) provides: 

               (a)  The acquisition and continuance of
rights in and to deposits on state land of minerals, which on
January 3, 1959, were subject to location under the mining laws of
the United States, shall be governed by AS 38.05.185-38.05.275. 
Nothing in AS 38.05.185 -38.05.275 affects the law pertaining to
the acquisition of rights to mineral deposits owned by any other
person or government.  The director, with the approval of the
commissioner, shall determine that land from which mineral deposits
may be mined only under lease, and, subject to the limitations of
AS 38.05.300, that land that shall be closed to mining.  State land
may not be closed to mining or mineral location except as provided
in AS 38.05.300 and unless the commissioner makes a finding that
mining would be incompatible with significant surface uses on the
state land. State land may not be restricted to mining under lease
unless the commissioner determines that potential use conflicts on
the state land require that mining be allowed only under written
leases issued under AS 38.05.205 or the commissioner has determined
that the land was mineral in character at the time of state
selection.  The determinations required under this subsection shall
be made in compliance with land classification orders and land use
plans developed under AS 38.05.300.


Footnote 13:

     DNR regulations in force at pertinent times described the
technical requirements for discovery, location, and recording.  11
AAC 86.200-.225 (1996).   "Staking"is accomplished by placing
stone or post monuments at the four corners of the claim or
leasehold location, 11 AAC 86.205, with a notice on the northeast
monument, 11 AAC 86.210. 


Footnote 14:

     It is apparently this sentence to which the dissenting opinion
of Justice Rabinowitz refers in stating at page 52 that "[T]he
court relies on the definition section of the mining code to
conclude that 'state land' includes privately-owned surface lands
if the state has retained the mineral rights."   We draw no  such
conclusion in that sentence or elsewhere in this opinion. 
Privately owned surface lands are not "state land"even though the
State has reserved mineral rights in them under AS 38.05.125(a). 
That reservation clearly does not make the surface estate "state
land."


Footnote 15:

     It is interesting to look at the 1959 Alaska Lands Act in
conjunction with the 1961 Amendments.  Article IX of the 1959 Act
expressly covered reserved mineral rights by stating that on lands
conveyed to others in which mineral rights were reserved to the
State, the right to mine and remove the minerals could only be
acquired by lease.  Article IX was amended in 1961; the legislature
delegated authority to the director to determine "those lands which
mineral deposits may only be mined under lease."  Article IX, ch.
3, SLA 1961.  The term "[t]hose lands"encompasses all lands
previously enumerated in Article IX before amendment, including
"lands which have been sold . . . reserving such minerals to Alaska
. . . ."  See AS 38.05.185(a).  


Footnote 16:

     Two members of the court, Justice Matthews and the author,
join in the analysis contained in Part III.A.2 of this opinion, and
are of the opinion that AS 38.05.130 and 11 AAC 96.140(10) did not
apply to Hayes's staking activity in 1982.  Two other members,
Justice Rabinowitz and Justice Shortell, conclude in their separate
opinions that Hayes's staking activity on ATS 201 constituted
"exploration"and was therefore subject to AS 38.05.130 and 11 AAC
96.140(10).  Given this two-two split, this court affirms the
superior court's conclusion that the statute and regulation applied
to Hayes's staking activity.


Footnote 17:

     The State in its amicus brief has hypothesized several
situations in which the only physical entry following sale to the
landowner would be for the exclusive purpose of staking.  The State
appears to imply that such situations would be relatively rare. 
See Babcock v. O'Lanagan, 7 Alaska 171, 176 (1924) ("It is
undisputed that a subsequent locator can adopt the discoveries of
a prior locator.").


Footnote 18:

     The trial court appears to have assumed that any exploration
had occurred while Hayes was the lessee of the landowners.  See
A.J. Assocs., 846 P.2d at 134.


Footnote 19:

     See 11 AAC 96.140(11), which provides:

          entry on all lands under mineral permit, oil
and gas exploration license, lease, or claim, by other than the
holder of the permit, oil and gas exploration license, lease, or
claim, or the holder's authorized representative, shall be made in
a manner that will prevent unnecessary or unreasonable interference
with the rights of the permittee, licensee, lessee, or claimant.


Footnote 20:

     The two members of the court who believe section .130 to be
inapplicable here emphasize that a would-be locator of minerals
under lands subject to the subsection .125(a) reservation may not
enter the surface estate with impunity either to explore for
minerals or for the limited purpose of staking.  We leave open any
question whether an unconsented entry in a given case may be
sufficiently inconsistent with existing use of the surface estate
that it cannot be deemed a valid exercise of the State's reserved
rights.  Cf. the dissenting opinion of Justice Rabinowitz at 55. 
Whether the unconsented entry to erect monuments in a homeowner's
flower beds falls in such a category remains to be seen.  That is
not the fact situation here.  It will be for the superior court on
remand to consider the extent to which this proposition may have
any bearing.

          Even though the would-be locator can "force"entry to
carry out activities subject to section .130, it can only do so in
accordance with that statute.  The statute presumes that a bond
will adequately protect the landowner.  If, in a given case, the
director determines that no bond could protect the owner, entry
would be denied. 

          The dissenting opinion assumes mining or even exploration
could cause a surface owner to suffer substantial damages.  Dissent
at 54 n.2.   The sufficiency of any  bond required for Hayes to
exercise his rights is in the first instance a matter for the
director under section .130.  We note that there is no claim that
Hayes's mere act of staking caused the landowners any significant
damages. 




Footnote 21:

     11 AAC 96.140(10) provides:   

          no person may engage in mineral exploratory
activity on land, the surface of which has been granted, licensed,
or leased, by the State of Alaska, or on land for which the state
has received the reserved interest of the United States until
good-faith attempts have been made to agree with the surface owner,
licensee, or lessee on settlement for damages which may be caused
by such activity. If agreement cannot be reached, or the lease, oil
and gas exploration license, or surface owner cannot be found
within a reasonable time, operations may be commenced on the land
only with specific approval of the director, and after making
adequate provision for full payment of any damages which the owner
may suffer.


Footnote 22:

     AS 09.45.060 provides:  "A person may not enter upon any land,
tenement, or other real property except in cases where entry is
given by law.  In those cases the entry may not be made with force
but only in a peaceable manner."



Footnote 23:

     When the legislature intends that invalidation of a mining
claim be a remedy for failure to comply with statutory
requirements, it has specifically so provided.  E.g., AS 27.10.140
(placer mining claim location in violation of law is void). 


Footnote 24:

     Because Justice Matthews and the author conclude that Hayes's
entry did not violate AS 38.05.130 or 11 AAC 96.140(10), they
necessarily also conclude for that reason that the superior court
erred in holding that Hayes's unconsented, unbonded entry required
his ejectment and invalidated his right to priority in obtaining a
lease for either location.  


Footnote 25:

     We need not decide here whether ejectment might be the only
effective remedy following a violation of section .130 by a locator
who was both unbonded and unable to indemnify the landowner for
damage caused by the entry.


Footnote 26:

     We can affirm a summary judgment on grounds different than
those found by the trial court.  Wright v. State, 824 P.2d 718, 720
(Alaska 1992).


Footnote 27:

     We see no reason to rely on the definition of "lands beneath
navigable waters,"found in the federal Submerged Lands Act,
codified at 43 U.S.C. sec. 1301(a)(3) (1986).  That term has no
bearing here.  


Footnote 28:

     This subsection was amended in 1996 to read:

          This section constitutes the commissioner's
finding, in accordance with AS 38.05.185(a), that selling or
leasing of land other than a locatable mineral interest, with the
mineral rights reserved to the state, creates potential use
conflicts requiring that mining be allowed only under written
leases.  If the land remains open to location, any location made on
that land after such a sale or lease is a leasehold location.

11 AAC 86.135(b) (1996).

          Hayes argues briefly that DNR did not make the
determination required to restrict mining under AS 38.05.185(a). 
While a specific finding of incompatibility is required to close
land to mining, the statute makes it clear that in order to
restrict land to mining under lease, the commissioner need only
determine that "potential use conflicts on the state land"so
require.  11 AAC 86.135(b) explicitly reflects this determination. 


Footnote 29:

     Hayes argued in the superior court that DNR lacked discretion
to deny a lease to the holder of a valid mining location, and that
therefore his possession of such a valid location was tantamount to
a right to mine.  Hayes does not make that argument on appeal, and
has therefore waived it.  See Katmailand, Inc. v. Lake & Peninsula
Borough, 904 P.2d 397, 402 n.7 (Alaska 1995).  


Footnote 30:

     Hayes also argues that 11 AAC 86.135(b) does not apply to the
property because it qualifies as "tide and submerged land."  The
regulations and the statute contain no language that might make
this distinction relevant to the application of the leasing
restriction.  


Footnote 31:

     The superior court found there was a genuine issue of material
fact whether the landowners consented to the staking of Taku Nos.
3 through 8.  It accordingly held that these might be valid
locations.  It relied upon the ejectment action to hold that Taku
Nos. 1 and 2 were invalid.  We have held that consent was
unnecessary for the 1982 staking entries, and that ejectment would
not be the appropriate remedy for Hayes's violation of AS
38.05.130.  Assuming Hayes can meet the other requirements for
valid location, Taku Nos. 1 through 8 are valid leasehold
locations.

                     FOOTNOTES (Concurrence)


Footnote 1:

     I also agree with Justice Eastaugh's analysis of all issues arising out of Hayes's tort
action.


Footnote 2:

     I also disagree that Hayes's only act under consideration here is "the limited physical
act of staking."  Hayes also remained on the landowners' property without consent,
established the boundaries of his claim, and then staked it.  Apparently, Hayes considers his
activity to have been substantial enough to justify a tort claim for damages against the
landowners, in the language of his amended complaint, for destruction of his "claim
monuments, stands, markers, foundations, structures, and mountings for the structures
incidental to the staking of said mining claims."  In characterizing Hayes's acts as
"immaculate"staking (Op. at 17), Justice Eastaugh may be suggesting that this is a one-of-a-
kind case and therefore limited in its consequences for landowners and mineral claimants.  I
believe that there are much wider implications to his interpretation of the statutes and
regulations at issue here.


Footnote 3:

     In Norken we recognized that the rights of the mineral estate "'are to be exercised with
due regard for the rights of the owner of the servient estate.'"  Norken, 823 P.2d at 628
(quoting Getty Oil Co. v. Jones, 470 S.W.2d 618, 621 (Tex. 1971)).  The purpose of the
doctrine of reasonable use is to effect an "accommodation"between the surface and the
mineral estates.  Id.; see also Spurlock v. Santa Fe Pac. R.R., 694 P.2d 299, 309 (Ariz. App.
1984) ("We recognize that in order for both the surface and mineral estates to co-exist and
retain their individual value, some accommodation between the respective owners is
necessary."); Hunt Oil Co. v. Kerbaugh, 283 N.W.2d 131, 135-36 (N.D. 1979); Getty Oil Co.
v. Jones, 470 S.W.2d 618, 621 (Tex. 1971); Flying Diamond Corp. v. Rust, 551 P.2d 509,
511 (Utah 1976).  Accommodation is necessary for more than just economic reasons.  As one
commentator has said: "'All too often . . . the ever-present shotgun in the hands of the
surface occupant becomes the center of attention. That shotgun is still there today, and the
value of cooperation and of being a good citizen is as important as it ever was.'"  John F.
Welborn, New Rights of Surface Owners: Changes in the Dominant/Servient Relationship
Between the Mineral and Surface Estates, 40 Rocky Mtn. Min. L. Inst. sec. 22.01 (1994)
(quoting John C. Lacy, Conflicting Surface Interests: Shotgun Diplomacy Revisited, 22 Rocky
Mtn. Min. L. Rev. 731, 733 (1976)).  AS 38.05.130 codifies this necessary accommodation
between landowner and mineral claimant.


Footnote 4:

     Mining laws are construed liberally for the benefit of a bona fide locator.  See Rickert
v. Thompson, 8 Alaska 398, 415 (1933), aff'd, 72 F.2d 807 (9th Cir. 1934).  This rule of
interpretation is not violated if the statute is interpreted, as it should be, to balance the rights
of competing interests while preserving the mineral estate's dominant status.


Footnote 5:

     The definitions of "explore"in Webster's International Dictionary and Black's Law
Dictionary quoted in Justice Eastaugh's opinion are too general to be helpful.  Op. at 16. 
Neither of these definitions provides any substantial support for the opinion's ultimate
conclusion.


Footnote 6:

     Hayes claims he discovered his claims before he staked them, at a time when he was
validly on the property as a lessee. However, discovery does not necessarily terminate the
process of exploration.  See Converse v. Udall, 399 F.2d 616, 620-25 (9th Cir. 1968)
(indicating that some further exploration may occur after discovery).  And, if discovery were
to terminate the exploration process, staking should be considered to be development, which
is also covered by AS 38.05.125.


Footnote 7:

     Hayes also violated 11 AAC 96.140(10), as the trial court correctly decided.




                       FOOTNOTES (Dissent)


Footnote 1:

     The mining code itself reflects the legislature's understanding that "land"denotes the
surface, not the minerals.  For example, AS 38.05.130 regulates the exercise of the state's
reserved mineral rights on private land.  The minerals in question in that statute are owned by
the state.  Nevertheless, where section .130 refers to the private owner of the surface estate,
it describes him as "the owner of the land."  See AS 38.05.130, lines 3-4.  The ownership
of the surface and mineral estates is clearly separated, and the statute distinctly refers to the
surface estate as "the land."


Footnote 2:

     This concern is not merely hypothetical.  In this case, several of A.J. Associates'
commercial ventures are threatened by Hayes's activities.  The company has already spent
$100,000 on preliminary engineering for a joint venture with Arrowhead Transfer and Alaska
Marine Lines; it has negotiated and signed a $565,000 bond with the city of Juneau,
committing itself to add additional infrastructure to the property; and a third party has
purchased part of the land and entered into a $1.2 million contract to build a boat terminal on
it.  As A.J. Associates has noted in a letter to DNR:

          To stop our plans now to accommodate mining will be extremely
difficult . . . . Taku smokery will be damaged due to our inability to vacate our facility.  Our
construction mobilization expenses for Knik are committed.  Arrowhead will be committed to
a builder.  Our cost of capital will be tied up.

          The letter concludes by noting that if Hayes is to compensate A.J. Associates
for all costs that would result from a stay of its operations, he will have to post "a bond in
excess of $10,000,000."  It is fairly apparent from the record that Hayes could not produce
such a sum.  By dispensing with the bonding requirement, the court's opinion virtually
guarantees that A.J. Associates will suffer substantial damages that it will never be
reimbursed for if it is forced to accommodate mining on its property.


Footnote 3:

     Alternatively, I wish to express my agreement with the superior court's conclusion that
"exploration,"as used in section .125(a), includes staking.  The focus of my disagreement
with the court's construction is with its conclusion that staking does not fall within the rights
reserved under section .125(a) and therefore is not an activity encompassed within the
protective provisions of section .130.

          As a matter of statutory interpretation, I conclude that the comprehensive
reservation provisions of section .125(a) (particulary the right at any time to enter upon the
surface estate of private lands for the purpose of exploring and opening the state's reserved
minerals estate) encompass staking activities.  The court's opinion implicitly recognizes this
view in its adoption of the definition of staking found in the American Law of Mining where
it is stated:

          Exploration typically involves a succession of steps, involving the
application of both inductive and deductive concepts, in which the explorationist seeks to
locate and then . . . .

American Law of Mining sec. 1.03[1], at 1-41 (Rocky Mtn. Min. L. Found. ed., 1994).

          It follows that the protections provided for in section .130 apply to staking
activities exercised under the rights granted pursuant to section .125(a) (for a right reserved
under section .125(a) may not be exercised until the indemnification provisions of section
.130 are satisfied).  Additionally, the staking of a private landowner's surface estate without
making a good faith effort to reach an indemnification agreement constitutes a violation of 11
AAC 96.140(10).

          Lastly, I disagree with the court's observation that the superior court
inappropriately fashioned an ejectment remedy for Hayes's violations of section .130 and 11
AAC 96.140(10).  In my view the superior court's remedy was appropriate given the rights
accorded the surface estate owners under section .130 and 11 AAC 96.140(10).


           In the Supreme Court of the State of Alaska



Howard C. Hayes and Michael R. Hayes,           )
                                )        Supreme Court No. S-06736
                          Appellant,            )Trial Court Case # 1JU-82-02048CI
                   v.           )                     
                                )                     
                                )
A.J. Associates, Inc., et al    )                     
                                )                     
                          Appellee.             )            
                                )
Howard and Michael Hayes,       )
                                )     Supreme Court No. S-07185/S7215
                           Appellants/Cross-Appellee,  )Trial Court Case # 1JU-93-00397CI
                                )                     
                   v.           )                 Order
                                )     Withdraw an Opinion and Reissue
Jim Jansen, et al.,             )                     
                                )                     
                           Appellees/Cross-Appellants. )Date of Order: 5/22/98
                                )
_______________________________________)

     Before:     Matthews, Chief Justice, Eastaugh, Justice, Rabinowitz, Senior Justice, Pro Tem,
and Shortell,  Justice, Pro Tem, [Compton, Fabe, and Bryner, Justices, not participating].

     Upon consideration of the petition for rehearing filed by Hayes and the petition for rehearing
filed by A.J. Associates et al. and the parties' responses to those petitions,

     IT IS ORDERED:

     1.   Hayes's petition for rehearing is denied.

     2.   A.J. Associates' petition for rehearing is denied. Justice Rabinowitz dissents in part from
this aspect of this order.  He would grant A.J. Associates' petition for rehearing, except with respect
to Part III.C of the opinion.  As to that part of the opinion, he agrees to deny A.J. Associates' petition.

 Supreme Court Order
Hayes v. A. J. Associates, Inc., etal
Page 2


     3.   The court sua sponte, to clarify the procedural history, substitutes the following
sentence for the present first sentence of the last paragraph on page 5 of the opinion: "Following this
remand, the case was reassigned to Superior Court Judge Thomas M. Jahnke, who again granted
summary judgment to the landowners." 


     4.   The court sua sponte, to clarify the instructions for the superior court on remand, inserts
the following sentence after the first incomplete sentence on the first line of page 39 of the opinion:
"The superior court may require the parties to petition the director of the Division of Mining to
determine the sufficiency of a surety bond as to form, amount, and security pursuant to section .130."

     5.   Opinion No. 4930 is WITHDRAWN and reissued with these changes as Opinion No.
4992.


                    Entered by direction of the court.

                                                Clerk of the Appellate Courts


                                                                                                                                                         Cheryl Jones, Deputy Clerk

cc:                 Supreme Court Justices
                    Trial Court Judge Jahnke
                    Trial Court Appeals Clerk
                    Publishers

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