Opinion
NO. 2018-CA-001750-MR
04-10-2020
DONNIE CREECH AND AUDRI CREECH APPELLANTS v. HARLAN-CUMBERLAND COAL COMPANY, LLC APPELLEE
BRIEFS FOR APPELLANTS: Joe F. Childers Lexington, Kentucky BRIEF FOR APPELLEE: Keith A. Nagle Middlesboro, Kentucky
NOT TO BE PUBLISHED APPEAL FROM HARLAN CIRCUIT COURT
HONORABLE THOMAS M. SMITH, SPECIAL JUDGE
ACTION NO. 07-CI-00426 OPINION
AFFIRMING
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BEFORE: KRAMER, MAZE, AND L. THOMPSON, JUDGES. MAZE, JUDGE: Donnie and Audri Creech appeal from a judgment of the Harlan Circuit Court concluding that the doctrine of adverse possession extinguished their claim to a one-fifth undivided interest in the property at issue in this appeal. Finding no error in the decision of the trial court, we affirm.
The property in question is comprised of three separate tracts in Harlan County, Kentucky: Tract 1, described by deed as comprising 54 acres, is currently unimproved with the exception of a haul road; Tract 2, described by deed as comprising 29 acres, contains a portion of appellee Harlan-Cumberland Coal Company's coal preparation plant (sometimes referred to as a "coal tipple"), a clean coal stock pile, and conveyor infrastructure; and Tract 3, described by deed as 4 acres, formerly the site of coal camp houses but which is now used as a reclamation pond. Appellant Donnie Creech claimed an undivided one forty-fifth (1/45) interest in the three tracts by descent from his great grandfather, Isaac Bailey, the son of A. J. Bailey; his mother, Mary Bailey Creech King; and his uncle, Wright Bailey. His other eight forty-fifths (8/45) interest was acquired by a 1991 deed from his cousins, for the total sum of $2,500. Appellee Harlan-Cumberland is a coal mining company and the current owner of a 384-acre tract that includes part of the Creeches' claimed Tract 2, along with the preparation plant and a unit-train load-out and coal-refuse area. The subject property has been used exclusively for coal mining activities for approximately one hundred years.
In 1920, A.J. Bailey, Donnie Creech's great-great grandfather, entered into a coal lease with Highsplint Coal Company concerning Tract 2. As previously noted, Harlan-Cumberland's preparation plant sits partially on Tract 2 in the same location as the original 1919 coal tipple. The lease was for a thirty-year term and expired by its own terms on June 1, 1950. When A.J. Bailey died intestate in 1935, his interest in the property passed to his five children and their descendants. At this point, Highsplint began acquiring the property in fee simple from A.J. Bailey's various heirs by deeds dating between 1935 and 1947 and Highsplint then owned a seventy-five-percent interest in the property. Highsplint continued mining operations on the property through the 1950s and 1960s until selling it to Eastover Mining in 1970. Eastover continued full-scale mining operations, expanded the facilities, and upgraded the coal preparation plant before selling the operation to Manalapan Mining Company and Manalapan Land Company by separate deeds in 1983. Manalapan (for convenience, the trial court often referred to the related entities collectively as "Manalapan") continued the ongoing mining operations and operated the preparation plant until it sold the Highsplint coal preparation plant, unit-train load-out and coal-refuse storage area to appellee Harlan-Cumberland in 2004.
Pertinent to the claim in issue here, approximately ten years after Manalapan assumed mining operations on the property, it entered into a written agreement dated July 16, 1992, under which Donnie Creech agreed to exchange his interest in the three subject tracts for a different tract owned by Manalapan which is contiguous to other property owned by Creech. There is no dispute that the letter signed by Donnie Creech and Duane H. Bennett, then-president of Manalapan, constitutes a valid, enforceable agreement. However, Donnie Creech subsequently rejected deeds Manalapan tendered in 1995 and 2001 to effectuate that agreement. Creech contended that Manalapan's reservation of mineral rights in the deeds was not in compliance with their 1992 agreement. Nevertheless, several years after signing the agreement, Creech began timbering the 40.53 acres he was to receive under the tendered deeds, selling the timber from the tract even after rejecting the deeds. Creech also uses the 40.53 acres as a water source.
In 2007, the Creeches instituted this action against Manalapan Mining seeking damages for ouster and profits from the use of the property. Three years later in 2010, they amended their complaint to add Harlan-Cumberland. A partial judgment entered in 2014 determined that Donnie Creech and his wife Audri owned an undivided one-fifth interest in the three tracts, but reserved ruling on the issues of damages, adverse possession, statute of limitations, and enforceability of the 1992 agreement between Creech and Manalapan. After a two-day trial in November 2017, the trial court entered the April 2018 judgment at issue in this appeal, concluding: 1) that Eastover Mining, succeeded by Manalapan and later Harlan-Cumberland, had actual and exclusive possession, use, and control of the subject property to the exclusion of Creech and his predecessors in title; 2) that the coal companies' exclusive possession and control constituted an ouster under Kentucky law; 3) that the ouster had been effective at least since Eastover Mining acquired the property in 1970; 4) that the Creeches' claims are barred by the fifteen-year statute of limitations set out in Kentucky Revised Statute (KRS) 413.010; and 5) that the 1992 agreement with Manalapan did not serve to toll the statute of limitations. In reaching its findings and conclusions, the trial court emphasized that the critical issue was "whether [the mining companies'] possession and use was 'adverse' to [Donnie Creech] and his ancestors."
We review the issues advanced in this appeal under the well-established standard that "the trial court's finding of facts shall not be set aside unless clearly erroneous." White Log Jellico Coal Co., Inc. v. Zipp, 32 S.W.3d 92, 94 (Ky. App. 2000) (citing Kentucky Rule of Civil Procedure (CR) 52.01 and Croley v. Alsip, 602 S.W.2d 418, 419 (Ky. 1980)). Where, as here, the trial court entered findings following a bench trial, its findings "may not be set aside unless clearly erroneous with due regard being given to the opportunity of the trial judge to consider the credibility of the witnesses." Lawson v. Loid, 896 S.W.2d 1, 3 (Ky. 1995) (citing CR 52.01). The practical application of this standard was clearly and succinctly stated by this Court in Gosney v. Glenn:
[A]ppellate review of the trial court's findings of fact is governed by the rule that such findings shall not be set aside unless clearly erroneous. A factual finding is not clearly erroneous if it is supported by substantial evidence. Substantial evidence is evidence, when taken alone or in light of all the evidence, has sufficient probative value to induce conviction in the mind of a reasonable person. The trial court's conclusions of law,
however, are subject to independent de novo appellate determination.163 S.W.3d 894, 898 (Ky. App. 2005) (citations omitted). With these principles in mind, we turn to an examination of the doctrines of adverse possession and ouster.
Our analysis begins with the following statement from White Log Jellico Coal concerning the proof necessary to establish adverse possession and ouster:
In order to prevail on a claim of adverse possession against a joint tenant, it is necessary for the claimant to demonstrate that an "ouster" as occurred. Wood v. Wingfield, Ky., 816 S.W.2d 899, 903 (1991). An "ouster" can only be effectuated by proving the same elements necessary for adverse possession; that is, the "possession must be of such an actual, open, notorious, exclusive and hostile character as amounts to an ouster of the other tenants." Id.32 S.W.3d at 96 (emphasis added). As noted by the trial court, resolution of the ouster issue was critical to its determination that the mining operations on the property were adverse to the interests of Creech and his predecessors in title. And, like the trial court, we are convinced that substantial evidence supports the conclusion that they were.
To support its decision that adverse possession had extinguished the Creeches' interest in the property, the trial court cited evidence that
Eastover, Manalapan, and [Harlan-Cumberland] have had the complete and exclusive use, possession, and control of this property, at least from 1970, and the companies'
use and possession has been (i) actual, (ii) open and notorious, (iii) continuous, (iv) exclusive, and (v) hostile to the world, including the Plaintiff and his ancestors.Notably, the trial court explicitly enumerated the evidence it relied upon in determining that the clear and convincing standard required to prove adverse possession had been met: testimony from Shelby Wilson, former superintendent and mine manager from Eastover; George Smith, mining engineer for Eastover and Manalapan; Darrell Cohelia, coal miner and resident of the Highsplint Community; as well as maps showing the extent of the mining activities on the property. Wilson and Smith both testified that Eastover did not pay royalties to Creech's predecessors or anyone else, mining the property as a single fee simple interest. In addition, Smith explained that maps tendered by Creech did not support his claim because they failed to display a name as owner of the tract. Smith stated that engineers would give no weight to such maps as evidence of title. The trial court also emphasized the fact that no rent, royalty, or similar payment for use of the property had been paid to Creech or his predecessors.
In regard to the lack of royalty payments, the trial court rejected the Creeches' contention that the coal companies' use of the property was somehow permissive, citing the absence of tangible proof of any royalty payment after 1926, as well as Creech's admission that his family had never been paid for the surface use of the property (including wheelage or rent for the use of the coal tipple/preparation plant site). The trial court deemed untenable any suggestion that Creech and his predecessors were not "on notice" of the coal companies' claim to the property "in light of the Defendant's open and obvious use of the property, and Donnie Creech's own testimony that he had encouraged his grandmother and great uncle to 'do something' about the lack of royalty payment, to no apparent avail."
Despite the Creeches' arguments to the contrary, we are convinced that none of the trial court's factual findings can be labeled clearly erroneous as they are supported by clear and convincing evidence of "sufficient probative value to induce conviction in the mind of a reasonable person." Gosney, 163 S.W.3d at 898. The Creeches' reliance upon other conflicting evidence is unavailing given the deference this Court must accord the trial court's opportunity to consider the credibility of the witnesses. Lawson, supra. Thus, our task in this case is to determine whether the trial court's factual findings support its legal conclusions.
The conclusion central to this appeal is that the coal companies' actual and exclusive use, possession, and control of the property constituted an ouster under Kentucky law and that the ouster had been effective at least since the time Eastover Mining acquired the property in 1970. The application of the legal concept of ouster to Creech and his predecessors-in-title is thus the primary focus of our review.
Fortunately, we are guided in this analysis by settled caselaw establishing the type of conduct deemed sufficient to put a joint owner on notice that a co-tenant's possession of property is adverse to his co-owner's interests. In other words, "to oust his cotenants [a joint owner's] possession must not only be of the adverse character required by law as against strangers, but such as to bring home to his cotenants notice that he is holding and claiming adversely to them." Moore v. Gaines, 308 Ky. 223, 229, 213 S.W.2d 990, 993 (1948) (quoting Wilcox v. Sams, 213 Ky. 696, 281 S.W. 832, 833 (1926)). Moore also instructs that "the required notice may be actual or constructive and may be inferred or imputed from the acts and conduct of the one in actual possession." Id. (quoting Wilcox, 281 S.W. at 833).
Importantly, Moore reiterates the well-settled principle that the statute of limitations will not begin to run in favor of a co-tenant in possession until notice of his adverse holding is brought home to his co-owners, underscoring the presumption that a joint tenant holds common property "for the joint use and benefit of himself and cotenants." Id. at 994 (emphasis added). Appellee's successful rebuttal of that presumption proves fatal to the Creeches' claim.
As the trial court correctly found, the Creeches produced absolutely no evidence that the coal companies' possession and use of the disputed property was intended to benefit Creech or his predecessors in any way. There was no evidence of a royalty payment after 1926. Neither was there evidence of any recognition of the existence of co-tenants in the 1970 sale to Eastover or thereafter. These are not actions of a joint tenant holding property for the joint benefit of himself and his co-tenants. Thus, we are in complete accord with the trial court's conclusion that the statute of limitations commenced to run against Creech's predecessors by at least 1970, well prior to his acquisition of title to the subject property.
Finally, we concur in the trial court's assessment that the 1992 agreement between Manalapan and Creech could not serve to revive a statute of limitations which had already expired. The letter agreement cannot be construed to be a "new acknowledgement of an old obligation" to pay anything to Creech in terms of rents, royalties, or damages. A fair reading of the agreement confirms that it is simply a contract to swap whatever interest Creech might retain in Tracts 1, 2, and 3 for other property owned by Manalapan - nothing more. See Cox v. Monday, 264 Ky. 805, 95 S.W.2d 785 (1936).
Because we discern absolutely no basis for disturbing the thorough and well-reasoned judgment of the Harlan Circuit Court, it is in all respects affirmed.
ALL CONCUR. BRIEFS FOR APPELLANTS: Joe F. Childers
Lexington, Kentucky BRIEF FOR APPELLEE: Keith A. Nagle
Middlesboro, Kentucky