Hazard Coal Corporation v. Eileen Knight

Kentucky Supreme Court·Decided September 21, 2010·No. 2008 SC 000735·Unknown

Opinion

RENDERED : SEPTEMBER 23, 2010 TO BE PUBLISHED

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HAZARD COAL CORPORATION ; WHITAKER APPELLANTS COAL CORPORATION ; PERRY COUNTY COAL CORPORATION ; LOCUST GROVE, INC . ; AND TECO COAL CORPORATION

ON REVIEW FROM COURT OF APPEALS V. CASE NO . 2007-CA-001712-MR PERRY CIRCUIT COURT NO. 02-CI-00499

LARRY J . KNIGHT AND EILEEN KNIGHT, APPELLEES AND, LARRY E . KNIGHT AND MARY KNIGHT

OPINION OF THE COURT BY JUSTICE VENTERS REVERSING

Appellants Hazard Coal Corporation, Whitaker Coal Corporation, Perry County Coal Corporation, Locust Grove, Inc., and TECO Coal Corporation appeal from a decision of the Court of Appeals that reversed a judgment of the Perry Circuit Court on the grounds that the Perry Circuit Court improperly conducted a bench trial in contravention of Appellees' (Larry J . Knight, Eileen Knight, Larry E. Knight, and Mary Knight) demand for a jury trial in the proceedings . For the reasons explained below, we agree with the Court of Appeals' conclusion that Appellees had not waived their right to a jury trial. However, we further determine that Appellants were entitled to summary judgment dismissing Appellees' complaint. Accordingly, we reverse the Court of Appeals and remand the case to the Perry Circuit Court for entry of summary judgment in favor of Appellants, and dismissal of Appellees' claims .

I. FACTUAL AND PROCEDURAL BACKGROUND Appellees are the owners of two contiguous tracts of surface property located on Fourseam Branch in Perry County. Appellants collectively are the owners of the minerals underlying the tracts and all of the rights and privileges thereunto granted by way of a severance deed filed in 1910 (hereinafter "Severance Deed") which severed the coal, minerals, and mineral products from the surface property.

In connection with their coal mining operations in the area, Appellants use and maintain a three-mile long coal haul road, part of which runs across the surface property owned by Appellees. The road runs from Kentucky Highway 1096 to the Davidson Branch facility, which is a site used by Appellants for moving their coal through the distribution chain. This facility includes a tipple, coal processing machinery, and a unit train loading facility to load coal onto railroad cars. It is undisputed that, in order to transport coal into the facility, Appellants use the road to haul coal mined from other, non- adjacent mineral tracts in the area; to haul supplies into the facility; and to haul refuse out of the facility. It is the use of the road for these purposes, as opposed to its use to transport coal extracted from beneath Appellees' tracts or to remove coal as necessary from adjacent tracts that is the basis of this dispute.

Believing that Appellants were impermissibly using the coal haul road, on September 30, 2002, Appellees filed a complaint in Perry Circuit Court alleging trespass by Appellants . More specifically, Appellees alleged that Appellants :

wrongfully entered upon and mined coal and hauled other coal across plaintiff[s]' land, hauled rock, sludge, and waste from other land across plaintiffs' land, and erected power lines upon and across plaintiffs' land, otherwise used and utilized plaintiffs' land, or caused others to do so, from plaintiffs' land . . . excavated the land and destroyed and removed timber there from, all owned by the plaintiffs, without right, title, claim, interest or authority, and without consent or permission from the plaintiffs, and thereby damaged, destroyed and wasted said land .'

In addition, Appellants specifically demanded a jury trial upon all issues .

In their respective answers, Appellants denied trespassing upon Appellees' surface property and asserted that they had the right to use the road in the manner complained of pursuant to the rights and privileges granted to them in the Severance Deed. Among other things, Appellants also pled as an affirmative defense an easement by prescription entitling them to employ the road as used. Like Appellees, all of Appellants except for Hazard Coal Corporation demanded a jury trial in their initial pleading.

The trial court denied the parties' motions for summary judgment, and a jury trial was scheduled . However, at a pretrial conference a few days before the scheduled trial date, the trial court sua sponte announced that it would conduct a bench trial on all issues except damages because a jury would be unable to understand the case . Appellees did not thereafter challenge the trial ' Only the claim relating to the coal haul road is before us.

court's decision to have a bench trial . They appeared for the bench trial, announced ready, and fully participated in the proceeding .

Following the bench trial the trial court found "by a preponderance of evidence" that Hazard Coal had a prescriptive easement encompassing the coal haul road . Because of its ruling upon the prescriptive easement issue, the trial court found it unnecessary to address Appellants' argument that the Severance Deed conferred them with the right to use the road . In their motion to alter, amend, or vacate, the Appellees argued, among other things, that the trial court denied them the jury trial upon all issues which they had demanded in their complaint. The motion was denied.

On appeal, the Court of Appeals determined that the trial court had improperly denied the Appellants' right to trial by jury. Therefore it did not reach the merits of the prescriptive easement issue; nor, did it address the parties' competing interpretations of the Severance Deed's language .

We granted discretionary review to examine whether a party, after demanding a jury trial, may waive that right merely by failing to object to the trial court's sua sponte declaration that it would hear the case by bench trial. Upon review, we agree with Appellees that the failure to conduct a jury trial was error. However, we further conclude that Appellants were entitled to summary judgment upon their claim that the Severance Deed entitles them to use the road to transport coal mined from non-adjacent tracts to the Davidson Branch facility and to, transport refuse away from the facility.

II . APPELLEES DID NOT WAIVE THEIR RIGHT TO A JURY TRIAL Appellants first contend that the Court of Appeals erred in its conclusion that Appellees did not waive their right to a jury trial after initially demanding one in their original complaint. They argue that waiver of that right occurred when Appellees did not object to the trial court's announcement that it would cancel the jury trial and have a bench trial, and thereafter acquiesced to the bench trial by appearing, announcing ready, and fully participating in that proceeding. They contend that Appellees would have welcomed a favorable verdict at the bench trial, but only after losing at trial, did they object and seek a "second bite at the apple ."

A. The Trial Court's Ruling Ajury trial was initially scheduled for February 24, 2006 . However, during a pretrial conference on February 20, 2006, the trial court announced, sua sponte, that it would conduct a bench trial on all issues except damages . The court explained :

[T]here is no way that a jury can understand that part of it to even answer the questions, you all have not been able to even formulate the questions for them to answer. Therefore what I am going to do is this ; I am going to have Friday a bench trial on the issue of whether or not that deed . . . construction of the deed. I'm gonna hear all evidence on the use . . . . Then I'm gonna decide whether or not . . . the actions of the company have . . . violated . . . the conditions of the deed . . . . I've got to hear all the facts and then I've got to apply the facts to my construction of the deed. I do not think a jury can do that. You all have convinced me of that . . . .

Then if I decide one way then we will have a jury trial on damages ;

if I decide the other way we won't . . . .

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