Damages: Compensatory damages, willful trespass; Cruther v. Harrod Concrete, Published COAKY, 3/22/2013

CRUTCHER (B. TODD), ET AL.
VS.
HARROD CONCRETE AND STONE CO.
OPINION AFFIRMING IN PART, REVERSING AND VACATING IN PART, AND REMANDING
NICKELL (PRESIDING JUDGE)
COMBS (CONCURS) AND MOORE (CONCURS)
2010-CA-001750-MR
2010-CA-001801-MR
TO BE PUBLISHED
FRANKLIN

 

NICKELL, JUDGE: This appeal determines the measure of damages for underground removal of limestone by a willful trespasser. We write on a clean slate. For the following reasons, we affirm in part, reverse in part and remand for further proceedings consistent with this opinion.

Compensation is always the aim of the law. It is ‘the bottom principle of the law of damages. To restore the party injured, as near as may be, to his former position is the purpose of allowing a money equivalent of his property which has been taken, injured, or destroyed.’  Hughett, 313 Ky. at 91, 230 S.W.2d at 96 (quoting Cincinnati, N. O. & T. P. Ry. Co. v. Falconer, 30 Ky.L.Rptr. 152, 97 S.W. 727, 728 (1906)). As has been stated more recently, “[t]he object of compensatory damages is to make the injured party whole to the extent that it is possible to measure his injury in terms of money.” Ky. Cent. Ins. Co. v. Schneider, 15 S.W.3d 373, 374 (Ky. 2000) (citing 22 Am.Jur.2d Damages § 26 (1988)). Because Harrod admits the encroachment and the unauthorized removal of 164,000 tons of limestone from Crutcher’s land, the crux of this appeal is what amount of money will fairly compensate Crutcher for the trespass to its property and the limestone removed from its land.

Throughout the pendency of this case, Crutcher vigorously urged the trial court to measure compensatory damages for a willful encroachment and taking of limestone by the value of the material at the time of removal—without reduction for the expense of mining—coincidentally, the same measure that would apply to the removal of coal. Griffith v. Clark Mfg. Co., 212 Ky. 498, 279 S.W. 971, 972 (1926). “Where the trespass is willful, and not the result of an honest mistake, the measure of damages is the value of the coal mined at the time and place of its severance, without deducting the expense of severing it.” North Jellico Coal Co. v. Helton, 187 Ky. 394, 219 S.W. 185 (1920). Where the taking is due to an honest mistake, the owner is entitled to recover the value of the coal “in place”. Griffith, 279 S.W. at 972. A similar measure has been applied to the taking of fluorspar. Hughett v. Caldwell County, 313 Ky. 85, 92, 230 S.W.2d 92, 96-97 (1950). Consistent with this approach and citing Griffith as authority, Crutcher further contended that any evidence of the value of its land, its “condition, nature, accessibility or use[,]” or “the ability or inability . . . to remove marketable stone from said property” was irrelevant and should be excluded from trial.

With equal vigor, Harrod argued Kentucky courts have held limestone is not a mineral, Little v. Carter, 408 S.W.2d 207, 209 (Ky. 1966), and therefore, the measure of damages could not be the formula applied to the taking of valuable coal, Kentucky’s state mineral. KRS2 2.094. Harrod asserted the proper measure of recovery was the difference in the fair market value (FMV) of Crutcher’s land immediately before and after the encroachment/removal—the traditional measure of damages applied in non-coal/non-mineral cases. Ellison v. R & B Contracting, Inc., 32 S.W.3d 66, 69 (Ky. 2000) (Kentucky courts have affirmed two types of damages in injury-to-property cases: for permanent injury, “the amount by which the fair market value of the property decreased immediately prior to and after the trespass”; and for temporary injury, “the cost to return [the property] to its original state.”).

Errors require us to reverse those portions of the trial dealing with the measure of damages. While jurors were not required to explain how they calculated the damages awarded, it appears they may have given Crutcher the full FMV of its land plus a royalty as compensatory damages, and then awarded Crutcher the market value of the limestone in punitive damages. Such a result is inconsistent with the law for the reasons that follow. Therefore, reversal, vacation and remand on the issue of damages, both compensatory and punitive, is necessary.

Our decision leaves intact, however, two of the jury’s findings— chiefly, that Harrod committed a trespass and that it occurred with reckless disregard—both of which are supported by sufficient evidence. Harrod admitted encroaching upon Crutcher’s land and removing 164,000 tons of limestone without authority. While Harrod maintained the encroachment was an honest mistake, there was sufficient evidence to lead jurors to believe otherwise, including the lack of a boundary survey for at least six years5 despite Harrod’s request for a proposal for such a survey in 1996 from HMB Professional Engineers, a company whose forte appears to be mapping underground progression of mining activity—not surface boundaries. Pursuant to Sandlin v. Webb, 240 S.W.2d 69, 70 (Ky. 1951),

An intentional or reckless omission to ascertain the rights or the boundaries of land of his victim, for the purpose of maintaining ignorance regarding them, or a reckless disregard of them, is as fatal to the claim of a trespasser to limit the recovery of damages against him to the lower measure, as is an intentional or willful trespass or taking.

(quoting Central Coal & Coke Co. v. Penny, 173 F. 340, 345 (8th Cir. 1909)). Continuing to mine for several years without knowing its precise underground

location in relation to the surface was careless, unreasonable and reckless— especially since there was evidence indicating this was not Harrod’s first encroachment. A reasonable landowner would confirm the breadth of its holdings —both for itself and for all the world to see. Harrod did at least part of this by posting No Trespassing signs and maintaining them for several years, although it could not be certain those signs were accurately placed since they were posted long before Harrod obtained a survey of its surface boundary lines. Under the evidence developed, jurors properly found Harrod committed an intentional trespass. Thus, we affirm the trial court’s denial of a directed verdict and the jury’s verdict on these two points.

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