Harrod Concrete & Stone Co. v. Crutcher
458 S.W.3d 290
| Ky. | 2015Background
- Crutcher owners of 36 unimproved acres border Harrod Concrete's 500-acre limestone quarry; Harrod mined 164,000 tons from 300 feet beneath Crutcher land in 2002.
- 2010 Franklin Circuit Court awarded Crutchers $36,000 compensatory and $902,000 punitive; trial court reduced punitive to $144,000.
- Court of Appeals partially reversed; the Kentucky Supreme Court granted discretionary review and reversed the Court of Appeals.
- This is a mineral trespass-like case: subsurface resources are converted to personal property, with surface damage potentially minimal.
- Kentucky now adopts a net value rule for innocent mineral trespass, while willful trespass yields no removal-cost deduction and punitive damages are not awarded; remand for new trial with proper instructions.
- Evidence showed Harrod lacked a certified boundary survey through 2002, relied on approximate plans, and only created a correlation grid in 2003, supporting a willful trespass finding for remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Damages framework for innocent mineral trespass | Crutcher favored the royalty/modified-royalty approach | Harrod argued for non-net-value measures | Adopt net value rule for innocent trespass damages |
| Willful vs. innocent trespass standard | Willfulness supports punitive measures | Willfulness should justify existing punitive framework | Willful trespass do not permit punitive damages; damages are FMV without removal costs |
| Scope of punitive damages after remand | Punitive damages may be recoverable separately | Punitive damages not appropriate where FMV-based willfulness applies | No separate punitive damages on remand; willful award (FMV) suffices |
| Use of expert testimony on royalty/market data | Expert data reliable for royalty/market value | Survey data may be unscientific | Court did not abuse discretion; data reasonably relied upon by experts |
| Application to limestone and boundary practices | Limitation distinctions are inappropriate here | Geology matters; limestone may be distinct | No cognizable legal distinction; apply mineral trespass framework; remand for new trial |
Key Cases Cited
- Sandy River Cannel Coal Co. v. White House Cannel Coal Co., 72 S.W. 298 (Ky.1903) (measures for innocent vs willful trespass; value of coal as usual royalty when not willful)
- North Jellico Coal Co. v. Helton, 187 Ky. 394, 219 S.W. 185 (1920) (innocent trespass royalty vs. value at time of severance for willful trespass)
- Hughett v. Caldwell County, 230 S.W.2d 92 (Ky.1950) (net value vs. royalty; economics of mineral damages; owner in position to mine affects measure)
- Swiss Oil Corp. v. Hupp, 253 Ky. 552, 69 S.W.2d 1039 (Ky.1934) (modified royalty approach; policy considerations in mineral trespass damages)
- Rudy v. Ellis, 314 Ky. 524, 236 S.W.2d 466 (Ky.1951) (deviations from Swiss Oil; debate on net value applicability)
- Delta Drilling Co. v. Arnett, 186 F.2d 481 (6th Cir.1950) (federal precedent influencing Kentucky mineral trespass damages)
- Joyce v. Zachary, 434 S.W.2d 659 (Ky.1968) (reasonableness of mining expenses in net value framework)
- North East Coal Co. v. Blevins, 277 S.W.2d 45 (Ky.1955) (innocent trespass damages measured by royalty value in absence of mining ability)
- Sandy River Cannel Coal Co. v. White House Cannel Coal Co. (duplicate), 72 S.W. 298 (Ky.1903) (see above)