Opinion
NO. 2015-CA-001248-MR
05-26-2017
ADKINS PLAINTIFFS APPELLANTS v. ROBERT GREGORY STAPLETON, CHARLES HOLBROOKS, AND GENE BLACKBURN, INDIVIDUALLY; ROBERT GREGORY STAPLETON, CHARLES HOLBROOKS, AND GENE BLACKBURN, AS AGENTS OF THE DIVISION OF MINE RECLAMATION AND ENFORCEMENT, DEPARTMENT OF NATURAL RESOURCES, KENTUCKY ENERGY AND ENVIRONMENT CABINET; AND CAMBRIAN COAL CORPORATION APPELLEES
BRIEF AND ORAL ARGUMENT FOR APPELLANTS: Ned Pillersdorf Prestonburg, Kentucky BRIEF AND ORAL ARGUMENT FOR APPELLEE, CAMBRIAN COAL CORPORATION: Susan L. Maines Lexington, Kentucky BRIEF AND ORAL ARGUMENT FOR APPELLEE, ROBERT GREGORY STAPLETON: Adam P. Collins Hindman, Kentucky BRIEF AND ORAL ARGUMENT FOR APPELLEES, CHARLES HOLBROOK AND GENE BLACKBURN: Charles Baird Pikeville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM PIKE CIRCUIT COURT
HONORABLE JOHNNY RAY HARRIS, SPECIAL JUDGE
ACTION NO. 12-CI-00684 OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, J. LAMBERT AND MAZE, JUDGES. COMBS, JUDGE: Appellants are dozens of individuals whom we have collectively designated as "the Adkins Plaintiffs," for purposes of this case. They suffered loss of personal and real property following a devastating flood in 2010 in Pike County. They appeal from an order of the Pike Circuit Court dismissing their claims of negligence against Appellees, Robert Stapleton, Gene Blackburn, and Charles Holbrook, mine inspectors for the Energy and Environmental Cabinet's Kentucky Department of Natural Resources (the Cabinet). Appellants argue that the trial court erred in holding that the doctrines of res judicata, collateral estoppel, double recovery, and accord and satisfaction barred their claims as a matter of law.
Mr. Holbrook's name appears to be misspelled in the notice of appeal. For clarity, we will refer to him as his name appears in the record.
After our review of the facts of this case - as well as the law concerning the doctrines upon which the trial court relied, we agree with the trial court that dismissal was appropriate. Therefore, we affirm.
Background
Cambrian Coal Corporation (Cambrian) operated a surface mining operation on various sites above or uphill from Appellants' homes along Harless Creek in Pike County, Kentucky. Cambrian's permit to operate in Harless Creek expired in January 2009. Nonetheless, the mine continued to operate, and Appellee Robert Stapleton, a mine inspector for the Cabinet, continued to make monthly inspections of the site. Some twenty months after expiration of the permit, the Cabinet cited Cambrian for operating without a valid permit on August 3, 2010.
Seventeen days prior to this citation, on July 17, 2010, Harless Creek and other locations in and around Pike County experienced torrential rainfall and flooding. This flooding caused Appellants varying degrees of damage and loss to their real and personal property.
In 2010, Appellants filed suit against Cambrian and one other coal company, alleging that their mining operations and failure to undertake proper reclamation above and around the Harless Creek community contributed to the flooding and resulting damage. In their Complaint, the Appellants alleged negligence and trespass based upon Cambrian's failure to abide by Kentucky statutes and regulations concerning surface mining operations. Appellants also asserted that "this non-compliance resulted in damages to [Appellants] . . . ." In support of their claims, Appellants relied on two mining experts and a property appraiser.
The parties agreed to resolve the case at binding arbitration. Pursuant to an arbitrator's opinion of March 26, 2012, the Appellants' claims against Cambrian were resolved with Cambrian's tendering payment to the Appellants in exchange for Appellants' release of Cambrian. Certain terms and documents regarding the parties' agreements and resolution of the case by way of arbitration are contained in a sealed portion of the record on appeal.
Two months after the arbitrator's opinion in the 2010 litigation, the Appellants filed suit against the Cabinet and Stapleton, alleging "claims of trespass, property damage[,] and violations of surface mining laws that were unenforced by" the Cabinet and Stapleton. The Complaint stated that the Appellants would again rely on expert testimony to establish that "the failure of the Cabinet and their agents to enforce the relevant mining laws played a substantial role in causing the property damage."
The Appellants later amended their Complaint to include Cabinet mine inspectors and Appellees Gene Blackburn and Charles Holbrook as defendants. The Complaint also made a demand for mandamus relief to compel the Cabinet to enforce relevant statutes and regulations concerning Cambrian's mining operation. This demand caused Cambrian to seek and to receive leave to intervene in the case. The Cabinet also sought dismissal of the claims against it based upon the defense of sovereign immunity. Following an opinion of this Court, the Appellants and the Cabinet entered an Agreed Order of Settlement on June 4, 2015. However, Appellants' case against Stapleton, Blackburn, and Holbrook proceeded.
Stapleton, Blackburn, and Holbrook later filed cross-claims against Cambrian asserting common law indemnity.
Dep't of Nat. Res., Ky. Energy and Envtl. Cabinet v. Adkins, 2013 WL 5524138, 2012-CA-001310-MR (Ky. App. Oct. 4, 2013).
Cambrian, Stapleton, Blackburn, and Holbrook filed a joint motion to dismiss on the grounds that the Appellants' second lawsuit violated the doctrines of res judicata, accord and satisfaction, and the general policy against double recovery. The trial court granted this motion in a July 31, 2015, order which dismissed the Appellants' claims with prejudice. The trial court concluded that each of the grounds propounded by the Appellees provided "an independent basis for dismissal" of the Appellants' suit against the mine inspectors. More specifically, the trial court concluded that Appellants were engaging in piecemeal litigation; that the issues and damages were the same in both cases, ergo implicating res judicata; that Cambrian's payment of the settlement in the 2010 litigation constituted accord and satisfaction; and that the damages sought by the Appellants, if awarded, would constitute an impermissible double recovery on the same loss. This appeal follows.
Standard of Review
Appellants challenge the trial court's dismissal of their claims. When ruling upon a motion to dismiss, a trial court is not required to make any factual findings. Benningfield v. Pettit Envtl., Inc., 183 S.W.3d 567, 570 (Ky. App. 2005) (citing James v. Wilson, 95 S.W.3d 875, 884 (Ky. App. 2002)). Therefore, the issues that the Appellants raise are purely matters of law, and our review is de novo. Id., citing Revenue Cabinet v. Hubbard, 37 S.W.3d 717, 719 (Ky. 2000).
Analysis
A trial court should not grant a motion to dismiss "unless it appears the pleading party would not be entitled to relief under any set of facts which could be proved in support of his claim." Pari-Mutuel Clerks' Union of Ky., Local 541, SEIU, AFL-CIO v. Ky. Jockey Club, 551 S.W.2d 801, 803 (Ky. 1977). Like the trial court, we must view the Appellants' allegations as true, liberally construing them "in a light most favorable to the plaintiff . . . ." Gall v. Scroggy, 725 S.W.2d 867, 869 (Ky. App. 1987). Therefore, it is our task to review the Appellants' allegations in this case, to assume that they are true, and to determine whether any or all of the grounds upon which the trial court relied served as a proper basis for dismissal of Appellants' claims.
"The doctrine of res judicata 'stands for the principle that once the rights of the parties have been finally determined, litigation should end.'" Coomer v. CSX Transp., Inc., 319 S.W.3d 366, 371 (Ky. 2010) (quoting Slone v. R & S Mining, Inc., 74 S.W.3d 259, 261 (Ky. 2002)). The doctrine "operates to bar repetitious suits involving the same cause of action." Id. (quoting Yeoman v. Commonwealth, Health Policy Bd., 983 S.W.2d 459, 464 (Ky. 1998)).
The rule is elementary that, when a matter is in litigation, parties are required to bring forward their whole case; and 'the plea of res judicata applies not only to the points upon which the court was required by the parties to form an opinion and pronounce judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.Newman v. Newman, 451 S.W.2d 417, 419 (Ky. 1970) (quoting Combs v. Prestonsburg Water Co., 84 S.W.2d 15, 18 (Ky. 1935)). (Emphasis added).
According to Yeoman, it is axiomatic that the Appellants had a duty to present their whole case when they filed suit in 2010. The lack of a valid mining permit was known. The identity of the mining inspectors who were clearly derelict in their duties was certainly discoverable. Stapleton, Blackburn, and Holbrook, as Cabinet officials, were intimately involved with the tragic loss in the case from the inception and even before the occurrence itself. Thus, the opportunity - indeed the duty - to litigate any claim against them was part and parcel of the proceedings that preceded the filing of the 2010 Complaint.
Appellants argue that the identity of these inspectors was not known until well into the litigation. However, they ignore the rule of Yeoman mandating that "exercising reasonable diligence" would have resulted in their necessary and proper inclusion in the lawsuit. Id. Even if they had not been identified until well into the litigation, they could have - and should have - been added by way of the filing of an Amended Complaint. However, leave to amend was not even sought. Therefore, we are persuaded that the Pike Circuit Court correctly determined that the doctrine of res judicata does indeed bar re-litigation of this matter with respect to these Appellees.
We need not address the remaining grounds for the trial court's dismissal of these Appellees, and we shall refrain from doing so as the doctrine of res judicata is dispositive of the matter.
We affirm the July 3, 2015, order of the Pike Circuit Court.
J. LAMBERT, JUDGE, CONCURS.
MAZE, JUDGE, DISSENTS BY SEPARATE OPINION.
MAZE, JUDGE, DISSENTING: I must respectfully dissent. It is my belief that the 2012 suit at the heart of this case does not constitute impermissible piecemeal litigation justifying dismissal.
I understand that the general policy against piecemeal litigation, as a subsidiary of the doctrine of res judicata, "rest[s] on the foundation that issues which have been once litigated cannot be the subject matter of later action[,]" and that "[b]oth rules are necessary in the administration of justice." Egbert v. Curtis, 695 S.W.2d 123, 124 (Ky. App. 1985) (citing Hays v. Sturgill, 302 Ky. 31, 193 S.W.2d 648 (Ky. 1946)). However, whether a party has split his causes of action is but "one aspect to be considered when determining whether there is identity of the causes of action[]" for purposes of claim preclusion analysis. Coomer, 319 S.W.3d at 371, n 9; see also Egbert, 695 S.W.2d at 124. Hence, that a party has engaged in piecemeal litigation is not solely dispositive, as it is a factor in but one element of claim preclusion.
At least one element of claim preclusion is, in fact, missing: identity of parties. The inspectors were not parties to the 2010 litigation. My distinguished colleagues contend that they could and should have been, had Appellants exercised due diligence. However, this Court's understanding of what Appellants did and did not know about the degree of the inspectors' culpability during 2010 is foggy, at best. It seems unclear from the record and conflicting arguments on the subject whether Appellants did know or should have known they had grounds for suit against the Cabinet and its inspectors before the 2010 suit settled. It must be remembered that this case is postured before us in such a manner that it requires our assumption that Appellants' allegations and assertions are true. Assuming as true that Appellants did not know, and could not have known, the inspectors' broader role in the event giving rise to this case until after the 2010 litigation, they are entitled to proceed with their 2012 suit, and dismissal is inappropriate.
My colleagues quite rightfully focus their majority opinion upon the question of claim preclusion. It is the closest legal question among many in this complex case. As I have stated, I would resolve that question in Appellants' favor, despite the fact that their chosen method of litigation leaves much to be desired in the way of judicial economy and expediency. However, I must also state my belief that, had the majority opinion gone on to discuss the other grounds the trial court cited in its order dismissing, we would have found those grounds wanting, as well.
As the majority opinion does not address itself to the trial court's other grounds for dismissal, I will not devote too much time to them. However, I must point out the most surprising of the five: accord and satisfaction. Among the statutory elements necessary to a successful defense of accord and satisfaction is that the person against whom a current claim is asserted "tendered an instrument to the claimant as full satisfaction of the claim..." brought in a prior suit. KRS 355.3-3.11(a). It is abundantly evident that the inspectors were not parties in the 2010 case, and that they could not, therefore, tender payment in that case. Frankly, I am astonished this trial court held that the inspectors were entitled to dismissal on the grounds of accord and satisfaction. --------
In sum, I would affirm in part, reverse in part, and remand to the trial court for further proceedings with the understanding and the instruction that the Appellants' damages would be reduced by the amount they received in the 2010 litigation. BRIEF AND ORAL ARGUMENT
FOR APPELLANTS: Ned Pillersdorf
Prestonburg, Kentucky BRIEF AND ORAL ARGUMENT
FOR APPELLEE, CAMBRIAN
COAL CORPORATION: Susan L. Maines
Lexington, Kentucky BRIEF AND ORAL ARGUMENT
FOR APPELLEE, ROBERT
GREGORY STAPLETON: Adam P. Collins
Hindman, Kentucky BRIEF AND ORAL ARGUMENT
FOR APPELLEES, CHARLES
HOLBROOK AND
GENE BLACKBURN: Charles Baird
Pikeville, Kentucky