Opinion
109,864.
03-13-2015
Willis L. ARMSTRONG and Stephanie J. Prohaska, Appellants, v. BROMLEY QUARRY & ASPHALT, INC., et al., Appellees.
Allen A. Ternent, of Ternent Law Office, of Atchison, for appellants. Patrick R. Miller, of Miller Law LLC, of Overland Park, for appellees.
Allen A. Ternent, of Ternent Law Office, of Atchison, for appellants.
Patrick R. Miller, of Miller Law LLC, of Overland Park, for appellees.
Before ARNOLD–BURGER, P.J., PIERRON and BUSER, JJ.
MEMORANDUM OPINION
PER CURIAM.
Willis Armstrong and Stephanie Prohaska (Armstrong) own land under which a limestone rock mine is located. Armstrong filed suit against Bromley Quarry & Asphalt, Inc., (Bromley Quarry) for trespassing upon the Armstrong land and mining the rock. Bromley Quarry stipulated to mining the rock but only the rock that it believes was taken between 2009 and 2011. Armstrong appeals the district court's decision, making the following assertions: (1) Armstrong should have been allowed to introduce certain maps of the mine that would show when and how much rock had been taken; (2) Bromley Quarry was a bad-faith trespasser rather than a good-faith trespasser; (3) Armstrong's recovery of damages should not have been limited to 2 years; (4) there was not substantial evidence to use a $1 per ton rather $2 per ton amount when calculating the award; and (5) there was not substantial evidence to credit Bromley Quarry 10% for waste. After a review of the record and careful consideration of the parties arguments we find that the district court erred in failing to admit the 1992 map of the mine, but we find the error harmless. We further find that the district court did not err in limiting the Armstrong recovery to the mining that took place between 2009 and 2011. And finally, we find that the district court erred in classifying Bromley Quarry as a good-faith trespasser. Instead, we find that Bromley Quarry was a bad-faith trespasser and Armstrong is entitled to enhanced value damages for the mining of 173,392 tons of rock, and we remand for purposes of determining the actual damages to be awarded. Because we have found that Armstrong is entitled to enhanced value damages, we need not address the appellants' issues regarding waste and the appropriate net profit value of a ton of rock. Affirmed in part, reversed in part, and remanded with directions to enter judgment for the plaintiffs in proportion to their ownership interest in the land.
Factual and Procedural History
Litigation with Bromley Quarry over the Armstrong land has been going on for over 20 years. Willis Armstrong filed two previous cases against Bromley Quarry: The first was filed in 1992 and the second was in 1996. The 1992 case was dismissed by stipulation of the parties because there was no proof that Bromley Quarry caused any actual damages. The 1996 case resulted in the district court denying Armstrong's request for a temporary injunction against Bromley Quarry, but the court ordered Bromley Quarry not to trespass or mine on Armstrong's land.
During the 1992 litigation, a map was created by Dunn and Stout Surveying of the mine located under the Armstrong property and property that Bromley Quarry was mining. This map was then used as the basis for Bromley Quarry's annual submission, from 2000 to 2010, with the Kansas Geological Survey and the Mine Safety and Health Administration, which tracked the annual progress of the mined rock on the land that Bromley Quarry was allowed to mine.
Bromley Quarry mined the land directly north of the Armstrong property. Along the property line dividing the two properties existed what Bromley Quarry termed the Zero Aisle. The Zero Aisle was essentially the underground haul road relied on by Bromley Quarry employees to prevent any unauthorized mining on the Armstrong property to the south. Although the Zero Aisle did cross onto the Armstrong property on the extreme northwestern portion this was primarily due to a slight miscalculation, and it is clear that Bromley Quarry believed this to be the southern most point to which it could mine. But Armstrong never gave Bromley Quarry permission to enter and cross any of the Armstrong land.
Because the haul road had deteriorated throughout the years, it was eventually relocated several times onto more of the Armstrong property: first deviating slightly to the east on the Armstrong property's western border and then dropping more into the northeastern portion of the Armstrong property.
In 2009, Bromley Quarry decided to completely relocate the haul road to run, beginning at the western border of the Armstrong property, through the middle and then in a northerly direction toward the adjacent northern property. Bromley Quarry believed it was allowed to cross the property because it was required to maintain the property and because federal regulators had approved the haul road's relocation.
In 2010, Bromley Quarry commissioned Alpha Land Surveys, Inc., to create a map of the entire mine, which included the Armstrong property. The map was completed in 2011. The map revealed that Bromley Quarry had been mining on the Armstrong property. The Bromley Quarry employees were immediately told to stop mining the Armstrong property.
The district court also determined that the only credible evidence presented was that Bromley Quarry removed 173,392 tons of rock from the Armstrong property during the 2–year statute of limitations. Based on the determination that Bromley Quarry was a good-faith trespasser, the district court used a net profit calculation of $1 per ton, entitling Armstrong to $173,392 in damages. The district court then subtracted 10% of that for waste and subtracted another 25% since Armstrong only owned a total of 75% of the land. The award amounted to a total of $117,039.60.
Additional facts will be added as necessary.
Analysis
The district court erred when it excluded Armstrong's maps, but the error was harmless.
Armstrong asserts that the district court committed trial error when it refused to allow the admission of maps created by Raymond Bretton that were based on an underlying 1992 map of the mine. According to Armstrong, the 1992 map, which was updated in 2009 and 2010 showing the same perimeter as the 1992 map, was only used to determine the perimeter of the mine for the updated map created by Bretton who also used the 2011 map Alpha Land Surveys, Inc., created for Bromley Quarry. The district court excluded the maps created by Bretton based on relevance, indicating that because the updated maps relied on a 1992 map that was created outside the statute of limitations, the updated maps were irrelevant. The district court also denied their admission for lack of foundation.
The maps appear to be demonstrative evidence that Armstrong wanted to use in order to show the district court that Bromley Quarry—based on its own maps it provided annually to the Kansas Geological Survey and the 2011 survey map provided by Alpha Land Surveys, Inc.—had mined substantially more rock between 2009 and 2011 than what it was willing to stipulate to mining during that time.
Because Armstrong only argues that the maps should have been admitted, the district court had to consider principles relating to demonstrative evidence. “Generally, in determining whether demonstrative [evidence] should be admitted, a trial court must determine whether they are relevant and whether a proper foundation has been laid.” State v. Williams, 299 Kan. 509, 563–64, 324 P .3d 1078 (2014).
First, a court must determine whether the evidence is relevant. Generally speaking, all relevant evidence is admissible. K.S.A. 60–407(f). K.S.A. 60–401(b) defines relevant evidence as “evidence having any tendency in reason to prove any material fact.” This definition encompasses two elements: a materiality element and a probative element. Standards of review for each element vary. State v. Bowen, 299 Kan. 339, 348, 323 P.3d 853 (2014).
Evidence is material when the fact it supports is in dispute or in issue in the case. In re Acquisition of Property by Eminent Domain, 299 Kan 37, 44, 320 P.3d 955 (2014). Review for materiality is de novo. Bowen, 299 Kan. at 348. Evidence is probative if it has a logical tendency to prove any material fact. State v. Lowrance, 298 Kan. 274, 289, 312 P.3d 328 (2013). An appellate court reviews the district court's assessment of the probative value of evidence under an abuse of discretion standard. State v. Huddleston, 298 Kan. 941, 959–60, 318 P.3d 140 (2014).
Raymond Bretton, a draftsman and part owner of Alpha Land Surveys, Inc., created an updated map of the mine at Armstrong's request, relying on the 1992 map created by Dunn and Stout Surveying. On Bretton's map, the 1992 map was used to establish the perimeter of the mine as it was in 1992. Bretton relied on his updated map to make area and volume calculation maps. The area and volume calculation maps were used by Servaes to determine the amount of limestone that had been removed by Bromley Quarry from the Armstrong property between 2009 and 2011.
At the bench trial, Bromley Quarry objected to the admission of Bretton's updated map of the mine and his volume and area calculation maps. Its objection was for lack of relevance and foundation. The district court agreed; sustaining the objection because the underlying 1992 map was created outside the statute of limitations and for the lack of foundation.
Whether Bretton relied on the 1992 map or the updated 2009 map to establish the perimeter of the mine on the Armstrong property is not important. It is clear, from the 2009 map that the perimeter of the mine on the Armstrong property had not changed since 1992. In other words, according to Bromley Quarry's own maps, the perimeter of the mine on the Armstrong property remained the same from 1992 to 2009. It was not until the survey map conducted by Alpha Land Surveys, Inc., in 2011 that it was revealed the perimeter of the mine on the Armstrong property had substantially changed. This would suggest, as circumstantial evidence, that Bromley Quarry had in fact removed more rock than stipulated to from the Armstrong property between 2009 and 2011.
We find that the district court erred when it excluded the maps created by Bretton for lack of relevance. The maps were material because they supported the disputed fact that Bromley Quarry removed more rock from the Armstrong property between 2009 and 2011 than what Bromley Quarry was willing to stipulate to mining. The maps are probative because they have some logical tendency to prove that Bromley Quarry had mined more rock between 2009 and 2011. Thus, the maps were relevant.
As to the issue of foundation of the 1992 map and the subsequent 2009 map, which is merely an updated 1992 map and showed no change to the perimeter of the mine on the Armstrong property, Donald Stout testified that he was a licensed surveyor in Kansas and that the 1992 map was created by him. However, he was not able to testify as to how he created the 1992 map because he had not been listed as an expert witness. But, despite Bromley Quarry's assertion, there was no testimony that the 1992 map was unreliable or inaccurate. Thus, it appears that a proper foundation was laid for the 1992 and subsequent 2009 maps.
However, even if the district court should have admitted the maps created by Bretton, there was still substantial competent evidence to support the district court's conclusion that only 173,392 tons of rock had been removed between 2009 and 2011 from the Armstrong property.
William Falk was the supervisor of Bromley Quarry from 2003 or 2004 until 2009. During his time as superintendent, the trucks used for mining needed at least a 15–foot ceiling for loading. Alpha Land Surveys, Inc., created a map showing the ceiling height of the disputed portion of the mine under the Armstrong property. In the nonshaded area, the ceiling height measurements were less than 15 feet, which suggests, based on Falk's testimony, that those areas were mined before 2003 or 2004. The map also showed the amount of rock removed during that time from the area that allowed space for the taller trucks, which totaled 173,392 tons.
Although Servaes testified, on direct examination, that more rock had been removed from the north central and northwestern portion of the Armstrong property, between 2009 and 2011, on cross-examination Servaes admitted that he could not definitively confirm that the rock was removed during that period. In addition, comparing the 2009 maps used by Bromley Quarry that were filed with the Kansas Geological Survey and the 2011 Alpha Land Surveys, Inc., map—essentially what Bretton did with the maps he created for Armstrong—only provides circumstantial evidence that more rock was mined between 2009 and 2011.
Thus, it appears that more evidence was presented by Bromley Quarry to support the conclusion that only 173,392 tons of rock was removed from the Armstrong property between 2009 and 2011. Therefore, even though the district court erred when it excluded the maps created by Bretton, that error was harmless because there was substantial competent evidence to support the district court's ultimate conclusion that only 173,392 tons of rock was removed during the given timeframe.
The district court did not err in finding that Armstrong was limited to a 2–year period of recovery.
Armstrong contends that the district court erred when it found that the statute of limitations and repose applied to the case, which limited the recovery to the 2 years prior to the filing of the lawsuit.
When the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. The district court is required to resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the party against whom the ruling is sought. When opposing a motion for summary judgment, an adverse party must come forward with evidence to establish a dispute as to a material fact. In order to preclude summary judgment, the facts subject to the dispute must be material to the conclusive issues in the case. On appeal, the same rules apply; summary judgment must be denied if reasonable minds could differ as to the conclusions drawn from the evidence. Stanley Bank v. Parish, 298 Kan. 755, 759, 317 P.3d 750 (2014).
According to K.S.A. 60–513(a)(1), a lawsuit alleging trespass must be brought within 2 years. However, under K.S.A. 60–513(b), the 2–year limitation
“shall not be deemed to have accrued until the act giving rise to the cause of action first causes substantial injury, or, if the fact of the injury is not reasonably ascertainable until some time after the initial act, then the period of limitation shall not commence until the fact of injury becomes reasonably ascertainable to the injured party, but in no event shall an action be commenced more than 10 years beyond the time of the act giving rise to the cause of action.”
“[T]he term ‘reasonably ascertainable’ ... suggests an objective standard based upon an examination of the surrounding circumstances.” P. W.P. v. L.S., 266 Kan. 417, 425, 969 P.2d 896 (1998). “Inherent in ‘to ascertain* is ‘to investigate.’ “ Davidson v. Denning, 259 Kan. 659, 675, 914 P.2d 936 (1996).
“When reason exists to suspect a negligent act and when information exists from which negligence can be determined, the limitations period will start. [Citation omitted.] In other words, ‘Kansas' “fact of injury” standard postpones the running of the limitations period until the time the plaintiff is able to determine that [his or her] injury may be caused by some act of the defendant.’ [Citation omitted.]” Michaelis v. Farrell, 48 Kan.App.2d 624, 631, 296 P.3d 439 (2013).
“ ‘The true test to determine when an action accrues is that point in time at which the plaintiff could first have filed and prosecuted his action to a successful conclusion.’ [Citation omitted .]” KPERS v. Reimer & Koger Assocs., Inc., 262 Kan. 110, 116, 936 P.2d 714 (1997).
In Willis Armstrong's deposition, as well as later at trial, he admitted that he was suspicious for years that Bromley Quarry was mining on his property. He also testified that he, his sister, and Stephanie Prohaska could feel blasting on the property within the 3 to 5 years before filing the lawsuit. The explosions were so violent that dishes would shake off of the wall. Armstrong did obtain maps of the mine from the Kansas Geological Survey, which showed that there had been no mining on the Armstrong property. However, he never attempted to get his own survey or inspection of his property, he never had cores drilled, and did not ask any government agency for help during the time when his suspicions arose, although he did consider it.
Given Armstrong's undisputed strong suspicion that Bromley Quarry was mining the Armstrong property, as soon as Armstrong or Prohaska heard blasting on the property, they could have filed a trespass claim. Moreover, the trespass was reasonably ascertainable had Armstrong or Prohaska conducted a survey of the Armstrong property. Because the standard is objective rather than subjective, it does not matter what Armstrong actually did to investigate; it is whether the trespass was reasonably ascertainable. In this case, the trespass was reasonably ascertainable through at least one avenue.
Armstrong attempts to rely on the argument that Bromley Quarry's actions constituted a continuous trespass, which tolls the statute of limitations until the trespass is complete. See Dexter v. Brake, 46 Kan.App.2d 1020, 1029, 269 P.3d 846 (2012). In Dexter, the producer argued that the statute of limitations had been triggered when the lease agreement had been terminated in 2004. The lessors did not file their lawsuit until 2006. The producer continued to work the land between 2004 and 2006. However, the district court did not determine that the lease was cancelled until 2006, just before the lessors filed their lawsuit. At that time, the producer's status as a trespasser became apparent. Because the producer continued to produce oil on the property from 2004 to 2006, despite the termination of the lease, this court determined that the producer's actions constituted a continuing trespass. 46 Kan.App.2d at 1028–30.
In this case, Armstrong suspected that the Armstrong land was being trespassed upon by Bromley Quarry well before this lawsuit was filed and could have reasonably ascertained whether a trespass was taking place. A property owner should not be allowed to let a suspected and reasonably ascertainable trespass continue when he or she could put a stop to it by filing suit.
The district court did err in finding Bromley Quarry was a good-faith trespasser.
Armstrong argues that the district court erred when it determined that Bromley Quarry was a good-faith trespasser. Armstrong argues that because Bromley Quarry was a bad-faith trespasser, the district court should have used the enhanced value of the rock to calculate damages. Whether a trespasser is a good-faith or a bad-faith trespasser is a mixed question of fact and law. Dexter, 46 Kan.App.2d at 1040.
When reviewing a mixed question of fact and law, an appellate court applies a bifurcated review standard. The court's factual findings are generally reviewed under the substantial competent evidence standard. Its conclusions of law based on those facts are subject to unlimited review. Gannon v. State, 298 Kan. 1107, 1175–76, 319 P.3d 1196 (2014).
According to this court,
“[a] good-faith trespasser is an individual who has an honest and reasonable belief in the superiority of his or her title. [Citation omitted.] Because the minerals are still owned by the mineral interest owner, if a producer lawfully extracts the minerals and delivers them to the mineral owner, justice requires the mineral owner to reimburse the producer for a proportionate share of the expenses of extraction; otherwise the mineral owner would be unjustly enriched at the producer's expense. [Citation omitted.] So a good-faith trespasser is allowed to offset the costs of drilling and operating the wells against the proceeds of the sale of the oil and gas. [Citation omitted.] These are referred to as net profit damages. [Citations omitted.]” Dexter, 46 Kan.App.2d at 1040–41.
On the other hand,
“[a] bad-faith trespasser is a converter of the oil and gas produced. A simplistic way of viewing the distinction is to say that a good-faith trespasser reasonably believes he or she is right, while a bad-faith trespasser knows he or she is wrong. [Citation omitted.] Bad-faith trespassers are held strictly accountable for their misappropriation of another's property and are liable to the rightful owner for the entire enhanced value of the oil and gas produced at the surface. In other words, the bad-faith trespasser is not allowed to offset the costs of drilling and operating the wells against the proceeds from the sale of the oil and gas. [Citation omitted.] These are referred to as enhanced value damages. ” 46 Kan.App.2d at 1041.
Although Dexter is a case that solely pertains to discussion of good-faith and bad-faith trespassers in the extraction of oil and gas, the parties do not argue, and there is no reason to believe, that Dexter does not also apply to cases that deal with the extraction of rock from mines.
The district court determined that Bromley Quarry was a good-faith trespasser because the evidence indicated that Bromley Quarry did not know that it was on the Armstrong property when it was mining the rock and mistakenly or negligently believed that it was on property it was allowed to be on when mining the rock. Because of this evidence, the district court found that Bromley Quarry “believed in the superiority of their right and title to be on the property, but only through negligence or an innocent mistake they ended up on the property of the Plaintiffs.”
There was some evidence submitted through the testimony of Barbara Bromley to support the factual finding that at least she was unaware, at the time the company was mining on the Armstrong property, that it was trespassing onto the Armstrong property and extracting rock. But was there substantial evidence to support the district court's finding that Bromley Quarry was a good-faith trespasser who reasonably believed in the superiority of its title? To answer that question we further examine the evidence necessary for a trespasser to be awarded the more favorable status of good-faith trespasser.
First, the burden of proof is on the trespasser to show that the trespass was done in good faith. 1 Williams & Meyers, Oil and Gas Law, § 226.3, p. 394.17 (2014). According to Anderson, Dzienkowski, Lowe, Peroni, Pierce & Smith, Hemingway Oil and Gas Law and Taxation § 4.2, p. 157 (4th ed.2004), in order
“[t]o satisfy the good faith test the person must not only have actually held the belief, but there must be adequate support for the belief. A person may not keep himself ignorant and then claim to be in good faith; the reliance must be reasonable.”
In this case, there is no dispute that Bromley Quarry was a trespasser. As early as 1996 Bromley Quarry was specifically ordered not to trespass onto the Armstrong property and mine any rock. So there could be no question that it had no right to be on the property and it had no reason to believe it had a right to be on the Armstrong property, nor did it have any reason to believe it could mine rock from the Armstrong property. This is unlike Dexter, in which the producer reasonably believed he could still extract oil and gas from the property on which he trespassed due to the entirety clause in the existing oil and gas lease. The producer had a reasonable belief that he was entitled to be on the property at issue. See Dexter, 46 Kan.App.2d at 1043. Bromley Quarry recognized that it had no right to remove rock from the Armstrong property. Likewise, it had no belief in the superiority of its title on the Armstrong property.
In addition, once Bromley Quarry established the Zero Aisle, it was well aware that any mining south of the Zero Aisle would be outside the established property line. The Zero Aisle was clearly marked. Drivers were told, at least up to 2006, not to go south of the Zero Aisle. In 2009–2010, the haul road was relocated south of the Zero Aisle. It is unreasonable to believe that Bromley Quarry was unaware it was mining south of the Zero Aisle, which it knew to be on the Armstrong property. This was a savvy business enterprise that was required to map its progress and report it annually to the Kansas Geological Survey. In addition, if the disputed area of property was mined prior to 2009, as Bromley Quarry argues, certainly it would have realized it was on Armstrong property when, prior to 2009, its excavation activity reached the existing Armstrong mine. Bromley Quarry also clearly knew that the new haul road was located on Armstrong property, significantly south of the Zero Aisle. Bromley Quarry argues, in support of the district court's statute of limitations finding, that “[h]ad Plaintiff's bothered to inspect the property years ago, it would have been obvious that rock was missing from their property.” It is logical to conclude that if Plaintiffs should have known, the professional corporation responsible for mining the land and mapping its progress reasonably should have known.
Moreover, when Bromley Quarry allegedly discovered for the first time that it had trespassed and mined from the Armstrong property, it had no intention of ever telling Armstrong that it had done so, further supporting a lack of good faith. This was unlike the producer in Dexter, a good-faith trespasser, who continued to openly pay royalties to the owner of the land upon which he trespassed. Dexter, 46 Kan.App.2d at 1043.
Bromley Quarry counters that it paid royalties on the rock mined from the Armstrong property to the Prohaska family that owned the tract to the north of the Armstrong properly because it believed the rock was removed from the Prohaska property. Had Bromley Quarry been a “ ‘bad faith trespasser’ it would not have compensated Prohaska for royalties on the rock.” We find that such a conclusion is not quite so clear. Barbara Bromley testified at trial that she paid royalties to the Prohaskas for the rock stockpiled because she could not separate which rock came from the Armstrong tract and which rock came from the Prohaska tract. She indicated that the way rock is mined is “sometimes ... 32 rooms across in a sweeping manner,” so there would be no way to tell where the rock came from when it came to paying royalties. Bromley Quarry had a lease with Prohaska for 25 cents per ton, specifically excluding waste. It had no lease with Armstrong. So even if mining was occurring on the Armstrong property, Bromley Quarry would still be required to pay a royalty to the Prohaska property since both were being mined at the same time and could not be separated.
We find that there was not substantial evidence to support the district court's legal finding that Bromley Quarry was a good-faith trespasser. To the contrary, there was substantial evidence to support a legal finding that it was a bad-faith trespasser. Thus, the district court erred. As a bad-faith trespasser, the district court should have used enhanced value damages to calculate the award. Based on the undisputed evidence that the average retail sales price of quarried rock was $10 per ton, the total enhanced value of the rock was $1,733,920.
Because we have found that Bromley Quarry was bad-faith trespasser and Armstrong is entitled to enhanced value damages for all rock mined, we do not need to address the final two issues of waste and the appropriate net profit amount.
Affirmed in part, reversed in part, and remanded for an order awarding damages to Willis Armstrong and Stephanie Prohaska based upon their ownership interest in the land and 173,392 tons of rock removed at a rate of $10 per ton.