POLLUTION AND TRESPASS, DAMAGES: SMITH V. CARBIDE AND CHEMICALS CORP. (SC 6/21/2007)

SMITH V. CARBIDE AND CHEMICALS CORP.
TORTS:  INTENTIONAL TRESPASS, ELEMENTS, ACTUAL HARM
DAMAGES:  DIMINUTION IN PROPERTY VALUES

2005-SC-000686-CL.pdf
PUBLISHED: CERTIFYING QUESTION OF LAW FROM US 6TH CIR. CT. OF APPEALS
MAJORITY OPINION BY SCHRODER; CUNNINGHAM DISSENTS W/SEP OP; MINTON DISSENTS W/SEP OP IN WHICH LAMBERT JOINS
DATE RENDERED: 6/21/2007

SCOKY certified the law on two questions from the U.S. Sixth Circuit Court of Appeals arising from claims of groundwater contamination by property owners within ten miles of the Paducah Gaseous Diffusion Plant

Question No. 1: Is proof of actual harm required to state a claim for an intentional trespass?  Answer: No.

When the evidence was vague as to the amount of damage, but where a trespass has been committed upon the property of another, he is entitled at least to nominal damages for the violation of his rights. 

Question No. 2: If the plaintiffs can prove a diminution in their property values due to an intentional trespass, do they have a right of recovery under Kentucky law? Answer:  Cannot be answered simply yes or no as this question confuses the "right to recover" with the "measure of damages" as a substitute "for proof of actual harm".  Kentucky law allows the recovery of just compensation (not merely nominal damages) upon proof of actual injury to the real estate . Hughett, 313 Ky. at 90, 230 S.W.2d at 96.

Once the particular injury to real estate is shown, the diminution in fair market value is a recognized measure of damages.  Thus, the preliminary question in a contamination case in Kentucky is at what level does the trespass evolve from a mere stigma, or damage to the reputation of the realty, into an actual injury or harm?

To reach the question posed, the Sixth Circuit must determine whether the contaminants in this case create an actual injury – an interference with an owner’s use of the land.  Mere damage to the reputation of realty does not entitle one to recovery, as that injury is more imaginary than real. Likewise, the mere presence of contaminants may only damage the property’s reputation and not its use .  The Court of Appeals in Rockwell, 143 S .W.3d at 604, set the bar for a compensable harm in negligent trespass cases to fall at the point where the contaminants cause a health hazard.  Relying on the rationale in Wood v. Wveth-Ayerst Laboratories , 82 S.W.3d 849 (Ky. 2002), a products liability case with a question as to "harm to the person," the Rockwell court reasoned that the mere presence of PCB’s itself was not an injury, that some physical harm needed to be shown. 

SCOKY then noted it was not as forgiving in identifying actual injury to real property, whether by intentional or negligent trespass . When the intrusion is through imperceptible particles not visible to the naked eye, there may still be an actual injury.  An intrusion (or encroachment) which is an unreasonable interference with the property owner’s possessory use of his/her property is sufficient evidence of an actual injury (or damage to the property) to award actual damages.

When the parcel’s groundwater is contaminated, whether by imperceptible particles or visible particles, to the extent that it cannot be used for consumption by humans, animals, or crops, there is an actual injury.

The amount of harm, if any, to the individual parcels, and the corresponding measure of actual or compensatory damages will depend upon the proof introduced at trial – an issue of fact.

To the extent that the property owners prove actual or compensatory damages for the harm (the cost of restoring the property to the pretrespass condition), "the amount by which the injury to the property diminishes its total value operates as an upper limit on any damage recovery."  Thus, the diminution in the property’s value due to an intentional trespass is a recognized measure of damages after, or if, an actual injury has been found.

Digested by Michael Stevens

Please note: I reserve the right to delete comments that are inappropriate, offensive or off-topic.

Leave a Reply

Your email address will not be published.