Armstrong v. Bromley Quarry & Asphalt, Inc.

Supreme Court of Kansas·Decided September 9, 2016·No. 109864·Published

Opinion

IN THE SUPREME COURT OF THE STATE OF KANSAS

No. 109,864

WILLIS L. ARMSTRONG and STEPHANIE J. PROHASKA, Appellants,

v.

BROMLEY QUARRY & ASPHALT, INC., et al., Appellees.

SYLLABUS BY THE COURT

1. Generally, a trespasser is one who enters the premises of another without any right, lawful authority, or express or implied invitation or license. Trespass requires an intention to enter upon the particular piece of land in question, irrespective of whether the actor knows or should know that he or she is not entitled to enter.

2. Conversion is the unauthorized assumption or exercise of the right of ownership over goods or personal chattels belonging to another to the exclusion of the other's rights.

3. Trespass and conversion are subject to a two-year statute of limitations under K.S.A. 60-513(a)(1) and (2). Generally speaking, this limitations period commences when "the fact of injury becomes reasonably ascertainable to the injured party" as provided in K.S.A. 60-513(b). But K.S.A. 60-513(b) also contains a statute of repose, which provides that any tolling of the statute cannot exceed 10 years "beyond the time of the act giving rise to the cause of action."

1 4. When the circumstances of a tort action involve both a trespass onto another's property and conversion of natural resources from that property, Kansas law authorizes different damage awards for the conversion depending on the willfulness of the trespasser's conduct. When acting in good faith, the trespasser may deduct operating expenses and the mineral rights holder is entitled only to net profit damages. But when the trespasser acts in bad faith, the holder receives enhanced value damages, which means no expenses are deducted. The burden of proof is on the trespasser to establish good faith.

5. To demonstrate a good-faith trespass, the trespasser must prove an honest and reasonable belief in the superiority of the trespasser's legal title to the property in question.

Review of the judgment of the Court of Appeals in an unpublished opinion filed March 13, 2015. Appeal from Atchison District Court; ROBERT J. BEDNAR, judge. Opinion filed September 9, 2016. Judgment of the Court of Appeals affirming in part, reversing in part, and remanding to the district court is affirmed in part and reversed in part. Judgment of the district court is affirmed in part, reversed in part, and remanded with directions.

Allen A. Ternent, of Ternent Law Office, of Atchison, argued the cause and was on the brief for appellants.

Patrick R. Miller, of Miller Law LLC, of Overland Park, argued the cause and was on the brief for appellees.

2 The opinion of the court was delivered by

BILES, J.: This is a civil trespass and conversion case in which plaintiffs seek monetary damages for the unauthorized subsurface mining of 855,500 tons of limestone. Bromley Quarry & Asphalt, Inc., admits it extracted some rock but disputes the extent of its liability. We must decide: (1) if the statute of limitations began to run because the conversion was reasonably ascertainable by the plaintiffs more than two years prior to the lawsuit's filing; (2) whether the district court properly excluded from evidence certain survey maps argued to be relevant to the damages claim; and (3) whether Bromley Quarry proved it was a good-faith trespasser, allowing it to deduct its operating expenses in calculating the damages award. The lower courts' rulings on these last two questions conflict.

We hold that the lower courts erred by relying on an incomplete summary judgment record to determine when the statute of limitations began running on the plaintiffs' claims. This decision necessarily requires reversing the order restricting the damages computation to a two-year period starting from the lawsuit's filing. And since the statute of limitations period remains in question, the evidentiary ruling regarding the survey maps also needs to be reconsidered on remand with due regard given to the Court of Appeals' analysis as to that ruling.

We affirm the Court of Appeals decision that Bromley Quarry did not prove it was a good-faith trespasser and therefore is liable for $1,733,920 as the enhanced value of the rock it admits taking during the two years immediately preceding the lawsuit. Armstrong v. Bromley Quarry & Asphalt, Inc., No. 109,864, 2015 WL 1310066, at *9 (Kan. App. 2015) (unpublished opinion). The case is remanded for further proceedings.

3 FACTUAL AND PROCEDURAL BACKGROUND

Bromley Quarry operated an underground limestone mine abutting the plaintiffs' property. The main entrance is on company land. The area in controversy is directly east of Bromley Quarry's property and jointly owned by Willis L. Armstrong and Stephanie J. Prohaska (collectively "Armstrong"). A separate tract owned by the Prohaska family lies directly north of Armstrong's property. During the relevant times, Bromley Quarry actively mined the Prohaska family property under a lease agreement. Bromley Quarry once had a lease for the Armstrong property, but it was terminated in 1996 after disputes arose.

In 1992, Armstrong sued, alleging Bromley Quarry was not paying for all the rock mined. In 1996, while the first suit was pending, Armstrong brought an action against Bromley Quarry again, this time for access to the mine to ascertain whether it was encroaching on the Armstrong property. Access was not granted, but the court ordered Bromley Quarry not to trespass or mine the Armstrong property.

The 1992 lawsuit was dismissed with prejudice by agreement in 1999. The stipulation of dismissal recites that Armstrong "cannot prove that any actual damages were caused to them by [Bromley Quarry], based on the 1992 Survey map." It further states Bromley Quarry "agrees and affirms that [it] conducted no mining on [Armstrong's] property, since the time of the prior court orders in this matter in 1992 and further affirms that the map made in 1992 accurately represents the condition and status of the mine on [Armstrong's] property."

Various maps depicting the mine's supposed status over the years figure prominently in this lawsuit. Bromley Quarry had a practice of commissioning surveys detailing its mining activities. Dunn and Stout Surveying created such a map in 1981, 4 which was updated over the years including in 1992. Dunn and Stout's 1992 update is the "1992 Survey map" referenced in the 1999 stipulation.

After 1992, Dunn and Stout no longer performed survey updates, so Bromley Quarry's employees began doing it. From 2000 to 2010, the company filed updated maps with the Kansas Geological Survey and the federal Mine Safety and Health Administration. These maps, last revised in 2009 and 2010, depict the rock now at issue as being in place under Armstrong's property. In other words, the maps prepared by Bromley Quarry showed no mining activity in the area in controversy.

In 2010, Bromley Quarry commissioned an outside firm to create a new map. In approximately March 2011, while their work was still in progress, the surveyors showed Barbara Bromley, Bromley Quarry's sole shareholder, the mine's actual perimeter.

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