WELCH – A North Carolina timber company says a mining company has reneged on the terms of a lease.
Timber Resources LLC filed its complaint August 27 in McDowell Circuit Court against Blue Bear Mining Inc.
According to the complaint, the companies entered into a surface lease agreement involving two tracts of land in McDowell County on June 22, 2023. The combined parcels include about 125 acres.
Blue Bear was to pay royalties on the sale of the coal from the property, pay certain unpaid wages of Timber Resources and was to pay certain other debts of Timber Resources that were due and owing on the date of the lease, according to the complaint. These payments made by Blue Bear on behalf of Timber Resources were permitted to be deducted from the royalty payments owed to Timber Resources from the sale of the mined coal.
But Timber Resources says Blue Bear has not made the required payments.
And because much of the consideration to be paid to Timber Resources was to come from the sale of mined coal, the lease includes a covenant that says Blue Bear agreed to “commence and diligently develop and prosecute mining operations within a reasonable time and in a reasonable and skillful manner.”
Timber Resources says Blue Bear has yet to make any effort to mine and put to market the coal from the leased properties.
And as part of the agreement regarding one of the tracts, Timber Resources was required to get consent from Pocahontas Surface Interests LLC before leasing the rights to Blue Bear. PSIL agreed to the lease if Blue Bear agreed to pay PSIL $100,000 in two installments of $50,000.
The complaint says those payments have not been made, nullifying the lease of that tract. That means Timber Resources still is the permit holder.
“Despite not having permits, Blue Bear has conducted certain operations at the site, including drilling, boring and/or certain surface work on the leased premises,” the complaint states. “These activities have led to various fines and citations being issued by the West Virginia Department of Environmental Protection and the Mine Safety and Health Administration to Timber.”
Timber Resources also says it has learned Blue Bear removed two truckloads of coal from the site “despite not having proper permits nor fulfilling its obligations under the lease or the consent.”
Timber Resources accuses Blue Bear of breach of contract and conversion.
It seems compensatory damages and other relief, including an order enjoining Blue Bear from entering the property.
Timber Resources is being represented by Michael P. Leahey of Tucker Arensberg PC in Pittsburgh. The case has been assigned to Circuit Judge Edward Kornish.
According to Secretary of State filings, the owners of Blue Bear Mining are Sean Conlon, Robin Jones and Patrick McGrath. The trio also owns Panther Enterprises and Panther Resources, both of which are registered in West Virginia. Conlon is listed as president of the three mining companies, while Jones is listed as incorporator and McGrath is treasurer.
Last month, McDowell Circuit Judge Rudolph Murensky II entered a final judgment order for $31 million against Stephen Moscicki and Panther Enterprises Inc. in favor of Geoff Coady, Montito Resources Corporation and Grag LLC.
Records show James Phillips runs Blue Bear Mining operations. Last year, he filed a lawsuit against Coady and Montito in which the jury ruled in favor of Coady.
McDowell Circuit Court case number 24-C-43