Hall v. Rowe

439 S.W.3d 183, 2014 WL 3882947, 2014 Ky. App. LEXIS 135
CourtCourt of Appeals of Kentucky
DecidedAugust 8, 2014
DocketNos. 2011-CA-001946-MR, 2011-CA-001995-MR, 2011-CA-001996-MR
StatusPublished
Cited by10 cases

This text of 439 S.W.3d 183 (Hall v. Rowe) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hall v. Rowe, 439 S.W.3d 183, 2014 WL 3882947, 2014 Ky. App. LEXIS 135 (Ky. Ct. App. 2014).

Opinion

OPINION

VANMETER, Judge:

Ned Hall and Mary Hall appeal from the Floyd Circuit Court’s order denying their motion to alter, amend, or vacate the jury verdict and judgment entered against them for breach of a coal mining lease with Cornelius Rowe. Rowe likewise cross-appeals from the court’s order denying his motion to alter, amend or vacate the verdict and judgment entered against him in the same case. For the following reasons, we reverse the judgment and remand this case to the trial court.

In September 2007, Ned and Mary Hall filed a complaint in the Floyd Circuit Court against Rowe and his company, Ro-Co Resources, Inc., alleging damages resulting from Rowe’s breach of a July 3, 2006 lease agreement between the parties. The Halls alleged that Rowe breached certain terms of the lease by underpaying royalties and failing to provide required documentation. They requested monetary damages and a declaration that the lease was null and void. Rowe filed a counterclaim against the Halls, alleging that Ned Hall interfered with his mining operations and sought monetary damages for tortious interference with the business relationship, other related torts, and breach of the lease.

The case proceeded to trial in August 2011. Ned Hall testified that the parties entered into the lease for mining a coal seam, the “Elk Horn # 3 seam,” located on property owned by the Halls. Hall [185]*185claimed that while the mining was ongoing, he did not receive documentation noting the price Rowe received for coal sold from the property, nor did he receive weigh tickets denoting the amount of coal mihed from the seam. He fui'thei’ testified that he was only paid $1.00 per ton for coal sold from the property, despite the $8.00 per ton royalty required by the lease agreement.1 Hall sent Rowe a default letter in July 2007, informing Rowe that he was in default of the lease due to failure to pay the correct lease royalty and failure to provide the documentation required by the lease, but Rowe never corrected the default. Mary Hall did not appear or participate in the trial.

Rowe testified that he had incurred damages due to his inability to mine approximately 41,000 tons of coal which he needed to supply a coal sales agreemeht with Koch Carbon. Rowe claijried that he asked Dekalb, the permittee on the surface mining permit, to amend the permit to include the area necessary to recover the 41,000 tons. Ned Hall, acting as vice-president of Dekalb, refused to amend the permit to include the additional acreage. Additionally, Rowe testified that Ned Pall removed Rowe’s contract miner, Bubba Coal, from the mining perthit, and blocked the access road to the mine. Rowe admitted that he only paid the Halls either $1.00 per ton or $2.25 per ton for the coal mined from the property, but claimed this was because the coal was dirty and contained impurities. He also ackhowle4ged that he did not provide the Halls with the truck weight tickets as required by the lease.

Prior to the case being submitted to the jury, counsel for the parties discussed proposed jury instructions with the trial judge. Hall objected to the instructions on two grounds: first, he objected to the instruction regarding Rowe’s damages due to insufficient proof; second, he claimed the instructions should include an instruction asking the jury to determine which party breached the lease first. Both of Hall’s objections were overruled, and the case was submitted to the jury.

The jury ultimately found that both parties breached the lease, and returned a verdict in favor of the Halls in the amount of $59,150 for unpaid royalties, and for Rowe in the amount of $318,000 for Hall’s interference with Rowe’s mining operations. The trial court entered a judgment awarding Rowe $318,000 in consequential damages, together with costs and post-judgment interest at 12% per annum. The trial court entered judgment awarding the Halls $59,150 plus costs, 8% pre-judgment interest dating from February 29, 2008 until the date of the judgment, and 12% post-judgment interest. Each party then filed a motion to alter, amend or vacate the judgment. Both motions were denied, and this appeal and cross-appeal follow.

On appeal, the Halls make three arguments. First, they claim the jury should have been instructed to determine which party was first to breach the lease, arguing that once one party breaches a contract, [186]*186the second party’s obligation to perform is extinguished. Second, the Halls maintain that the damages awarded to Rowe were unsupported by the evidence since Hall cannot be personally liable for his actions undertaken as an agent of his employer, Dekalb. Third, the Halls argue that the judgment against Mary Hall was improper because Rowe presented no evidence that she interfered with Rowe’s mining business.

In Rowe’s cross-appeal, he makes two arguments. He first argues that the Halls presented insufficient evidence to support the damages they were awarded. Then, he claims the Halls are not entitled to prejudgment interest because they did not include a demand for it in their complaint.

In general, a trial court has unlimited power to alter, amend, or vacate its judgments pursuant to CR2 59.05. Bowling v. Kentucky Dep’t. of Corr., 301 S.W.3d 478, 483 (Ky.2009). The Supreme Court of Kentucky has limited the grounds for relief under CR 59.05 to those established by its federal counterpart, Federal Rule of Civil Procedure 59(e). Id.

There are four basic grounds upon which a Rule 59(e) motion may be granted. First, the movant may demonstrate that the motion is necessary to correct manifest errors of law or fact upon which the judgment is based. Second, the motion may be granted so that the moving party may present newly discovered or previously unavailable evidence. Third, the motion will be granted if necessary to prevent manifest injustice. Serious misconduct of counsel may justify relief under this theory. Fourth, a Rule 59(e) motion may be justified by an intervening change in controlling law.

Id. (internal footnote omitted). A trial court’s ruling on a CR 59.05 motion to alter, amend or vacate is reviewed under an abuse of discretion standard. Id. “The test for abuse of discretion is whether the trial judge’s decision was arbitrary, unreasonable, unfair or unsupported by sound legal principles.” Woodard v. Commonwealth, 147 S.W.3d 63, 67 (Ky.2004) (quotations and citation omitted).

The Halls first argue the jury should have been instructed to determine which party breached the lease first. The Halls assert that if Rowe was first to breach the lease, then their duty to perform under the lease was extinguished and they cannot be held liable for a subsequent breach of the lease.

Regarding jury instructions, this court has held the following:

Appellate review of jury instructions is a matter of law and, thus, de novo. “Instructions must be based upon the evidence and they must properly and intelligibly state the law.” An instruction’s function is “ ‘only to state what the jury must believe from the evidence ... in order to return a verdict in favor of the party who bears the burden of proof[.]’ ”

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Cite This Page — Counsel Stack

Bluebook (online)
439 S.W.3d 183, 2014 WL 3882947, 2014 Ky. App. LEXIS 135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hall-v-rowe-kyctapp-2014.