Johnson v. Junior Pocahontas Coal Co., Inc.

234 S.E.2d 309, 160 W. Va. 261, 1977 W. Va. LEXIS 244

• Court: West Virginia Supreme Court
• Decided: March 29, 1977
• Docket: 13686
• Status: Published

Opinions

McGraw, Justice:

By judgment order of March 10, 1975, the Circuit Court of McDowell County sustained defendant’s motion for summary judgment and dismissed plaintiffs’ action. By order of March 26, 1975, the trial court overruled plaintiffs’ motion to set aside or to amend or alter the court’s judgment order of March 10, 1975, sustaining defendant’s motion for summary judgment, and again ordered dismissal of plaintiffs’ action. The action is before this Court on plaintiffs’ appeal from the judgments of the trial court.

Plaintiffs, Lonnie Johnson and Hattie S. Johnson, husband and wife, commenced their action against defendant, Junior Pocahontas Coal Co., Inc., for recovery of actual, punitive and treble damages claimed to have resulted to their residence property at Berwind, McDowell County, as a result of defendant’s surface mining, drilling and blasting operations near their home. Defendant’s motion for summary judgment was based on exceptions and reservations contained in the deed whereby plaintiffs acquired their residence property — exceptions and reservations allowing and permitting mining operations on and about plaintiffs’ property “without liability for damage and injury to and destruction of the surface thereof or to anything now or hereafter therein and thereon, including but not limited to buildings, structures and improvements, growing things, pipes, lines and ways, wells, springs and water courses.”

In sustaining defendant’s motion for summary judgment, the trial court found that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Rule 56(c), R.C.P.

Counsel for defendant contend (1) that the exculpatory clauses in the deeds in the chain of title to plaintiffs’ real property are enforceable by defendant and (2) that there is no dispute as to any material fact, and conclude that the trial court’s judgment granting defendant’s motion for summary judgment is to be affirmed.

Counsel for plaintiffs contend that three issues are involved: (1) whether plaintiffs are barred from maintaining their action for damages because of exculpatory clauses, regardless of defendant’s negligence in its mining operations; (2) whether the exculpatory clauses are void, unenforceable and invalid; and (3) whether genuine issues of material fact exist for resolution at a trial of the action.

By deed of June 1, 1956, New River and Pocahontas Consolidated Coal Company, owner of coal lands in McDowell County, conveyed thirteen parcels of surface lands in the town of Berwind to Paul W. Jones, Trustee, excepting and reserving the coal and the mining rights therein and thereunder. By deed of August 15, 1956, Paul W. Jones, Trustee, conveyed a parcel of surface land to plaintiffs in this action, subject to the “conditions, exceptions, reservations and limitations as contained in all prior deeds conveying the said real estate same as though they were set out herein in extenso.” By agreement of lease, dated August 18, 1961, New River and Pocahontas Consolidated Coal Company, as lessor, leased to Consolidation Coal Company, as lessee, many tracts of coal lands, including tracts in and near the town of Berwind, McDowell County, providing, among other covenants and conditions, that lessee “shall conduct its mining operations as not to violate any rights of lateral and subjacent support belonging to the owners of other estates.” By agreement of Septemer 1, 1961, the lessee, Consolidation Coal Company, entered into arrangements with Junior Pocahontas Coal Company, defendant in this action, whereby Junior Pocahontas Coal Company, as an independent contractor, would strip mine certain seams and areas of coal in and underlying the leased lands and deliver the coal to Consolidation Coal Company at a production cost of $4.15 per ton. Plaintiffs’ complaint alleges that the defendant Junior Pocahontas Coal Company, while engaged “in the business of coal mining, including strip mining and doing all acts necessary to the operation of said business, including drilling, blasting and the moving of earth, rock and debris”, did, “in a negligent, careless and reckless manner”, damage the residence property of plaintiffs and others in the area. Paragraph (8) of plaintiffs’ complaint alleges:

“As a direct and proximate result of the surface mining, drilling and blasting operations by the defendant company, and/or its negligent acts and failures to act in carrying on its surface mining, drilling and blasting operations, as aforesaid, and/or its wilful and wanton conduct in reckless disregard of the rights of others, including the plaintiffs, as aforesaid, plaintiffs’ real estate, house and other improvements thereon were greatly injured and damaged, including cracks, buckling and damages into and about its foundation, walls, ceilings, floors and windows of the dwelling house, walks and walls adjacent or near thereto, by reason of which injury and damages many portions of plaintiffs’ premises will have to be repaired, rebuilt or restored to the extent possible, and by reason of which acts and conduct of the defendant, the plaintiffs’ use and enjoyment of said property has and will in the future be greatly interfered with, and the plaintiffs’ premises and property has been caused to greatly depreciate in value all to the damage of the plaintiffs in the actual sum of, to-wit, $10,000.00.”

In the concluding paragraph of their complaint, plaintiffs ask for actual and compensatory, punitive and treble damages in the following language:

“WHEREFORE, the plaintiffs, Lonnie Johnson and Hattie S. Johnson, demand judgment against the defendant company, Junior Pocahontas Coal Company, Inc., for actual and compensatory damages in the sum of $10,000.00; and/or said plaintiffs demand judgment against said defendant in the sum of $5,000.00 for punitive damages; and/or said plaintiffs demand judgment against said defendant in the sum of $35,000.00 as provided by Chapter 20, Article 6, Section 30 of the Code of West Virginia, as amended, and their costs in this proceeding.”

Defendant, in its answer, denies conducting its mining operations “in a negligent, careless and reckless manner”, denies that “it used excessive amounts of explosives” in the blasting charges, and affirms that it used care in its operations and followed provisions of rules, regulations and laws relating to strip mining. Further, as an affirmative defense, defendant asserts that the exceptions and reservations contained in the deed of June 1, 1956, made by New River and Pocahontas Consolidated Coal Company to Paul W. Jones, Trustee, through which plaintiffs acquired their surface land residence property, insulate defendant from liability for any damages to plaintiffs’ property. In defendant’s brief, counsel contend:

“It is the contention of the defendant in these cases that by reason of the specific language contained in the deed from New River to Jones, Trustee, the defendant, conducting its strip-mining operations by virtue of the contract with Consolidation Coal Company, it being the Lessee of New River, that it is not liable for damage, if any, to the improvements and/or the surface of the various lands, in that the plaintiffs are bound by the conditions, etc., contained in the deed from New River to Jones, Trustee.

“It is noted that the deed from Jones, Trustee, to the various plaintiffs, conveys the surface only, setting out that it is a part of the property conveyed to Jones, Trustee, by New River and specifically making said deed subject to the conditions, restrictions, reservations and limitations as contained in all prior deeds, conveying said real estate the same as though they were set out herein in extenso.”

Further, in its brief, defendant “relies primarily” on the Court’s decision in Stamp v. Windsor Power House Coal Company, 154 W. Va. 578, 177 S.E.2d 146 (1970), quoting the syllabus of the opinion as follows:

“Where a deed conveys the coal under a tract of land, together with all the rights and privileges necessary and useful in the mining and removal of said coal, including the right of mining the same with or without leaving any support for the overylying strata, and without liability for any injury which may result to such overlying strata or to the surface, or to water courses or roads or ways by reason of the mining and removal of said coal, the grantee is not liable for damages to the surface or to structures upon the surface, which damages result from surface subsidence proximately resulting from the mining and removal of such coal.”

Plaintiffs’ brief cites and relies on Mullins v. Beatrice Pocahontas Co., 432 F.2d 314 (Cir. 4th 1970), construing and applying Virginia’s property and coal mining law in a damage action somewhat comparable to the present case. In the Mullins case, coal dust emissions from the mining operation in and near residential areas were involved. The United States Court of Appeals for the Fourth Circuit noted in its opinion that the deeds “show on their face that the company intended people to live and work in the subdivisions it created. When all provisions of the Red Jacket deeds are considered as a whole, it is plain that the parties never contemplated that the grantor through the emission of needless dust could seriously impair the rights it had granted the owners of the surface.” The Court then concluded:

“We conclude, therefore, that Pocahontas can emit only that amount of coal dust reasonably necessary to produce marketable coal. It cannot impose on these property owners the cost of its pollution if means of collecting the dust are reasonably available. Accordingly, the case presents at least these genuine issues of fact: (1) the amount of dust the plant emits; (2) the effect of this dust on the appellants’ health and property; and (3) whether the emission of the dust is reasonably necessary for the production of coal in the ordinary manner, or whether it has been caused by improper operating procedures or ineffective equipment. Summary judgment, therefore, was not appropriate.”

I. The Exculpatory Clauses

As above stated, defendant, in its answer to the complaint and in its brief, strongly relies for its defense on exculpatory clauses embracing the exceptions and reservations in the deed of June 1, 1956, from New River and Pocahontas Consolidated Coal Company to Paul W. Jones, Trustee. In their brief and arguments plaintiffs devote much time and attention to minimizing and dissolving the defense of the exculpatory clauses as interposed by defendant. It is apparent that all parties to the action consider the exculpatory clauses to be of significant weight. Paragraphs First and Fifth of the exceptions and reservations in the deed are as follows:

“FIRST: All coal, oil, gas, other minerals and mineral substances in and under the described and conveyed real estate, with all necessary or convenient mining, production, transportation and utility rights, rights-of-way and easements for the mining, production and transportation thereof, together with the right to haul and transport coal oil, gas, other minerals and mineral substances but not upon and over, the surface of the real estate herein described and hereby conveyed from any and all other lands wherever situate, and the right to mine, produce, remove and carry away all and the entire amount and body of the coal, oil, gas, other minerals and mineral substances in and from and adjacent to the described and conveyed real estate, without liability for damage and injury to and destruction of the surface thereof or to anything now or hereafter therein and thereon, including but not limited to buildings, structures and improvements, growing things, pipes, lines and ways, wells, springs and water courses.”

“FIFTH: The right to construct, maintain, use and operate, adjacent to and within the vicinity of the described and conveyed real estate, coal tipples, loading facilities, preparation and cleaning plants and facilities, coke and by-product structures and facilities, gob and refuse dumps and piles, whether burning or not, pumps and drains and all other mining plant, appurtenances and operations, without liability for damage or injury to and destruction of said real estate and anything now or hereafter therein and thereon, including but not limited to buildings, structures and improvements, trees and other growing things and property, arising out of or resulting from, including without limitation, noise, vibration, smoke, dust, fumes, noxious gases, air pollution, stream pollution, water stagnation, erosion, deposits of waste, silt, coal dust and other substances, discharge of mine waters through natural or artificial courses and channels, and diversion of waters and streams.”

The deed of August 15, 1956, whereby plaintiffs acquired their surface land residence property, is made subject to the “conditions, restrictions, exceptions, reservations and limitations” in the above-referenced deed of June 1, 1956. The deed of June 1, 1956, retaining the minerals and mining rights but conveying the surface lands, provided that the surface lands so conveyed “shall be used for residential and gardening purposes only.” In the agreement of lease, dated August 18, 1961, whereby the owner of the minerals leased to Consolidation Coal Company tracts of coal land in and near the town of Berwind, the lessee was required to leave sufficient coal in place to support existing buildings of others on the surface lands. Later the lessee entered into an agreement with Junior Pocahontas Coal Company, defendant in this action, for strip mining certain seams of coal, subject to “rights, terms, conditions, provisions, restrictions and stipulations contained in the papers under which Consolidation (the lessee) is in possession of the property known as the Berwind property.”

The record affirms that the surface land acquired by plaintiffs was for many years devoted to residence uses, that plaintiffs resided thereon, that plaintiffs paid a valuable consideration for the property, that the coal severance deed provided the surface land areas were to “be used for residential and gardening purposes only”, and that the coal lease and mining contract emanating from the severance deed transaction contained indemnity provisions recognizing protective considerations incident to possible claims for damages to the surface land residence properties. The exceptions and reservations in the coal severance deed manifest the intent to mine and remove coal from beneath the surface land areas and, at the same time, the transaction obviously comtemplated continued use of the surface lands for residential and gardening purposes.

The Court cannot foresee what evidence may be offered by plaintiffs at a trial in support of the allegations in their complaint. They charge that defendant “conducted and performed its said surface mining, drilling and blasting operations in a negligent, careless and reckless manner ... in failing to follow and obey rules, principles, regulations, provisions and/or laws ... as the same pertain to strip mining and blasting operations.” Further, the complaint charges that the “acts and conduct of the defendant company ... in mining, drilling and blasting, as aforesaid, were wilful, wanton and in reckless disregard of the rights of plaintiffs.” The allegations in paragraph (8) of the complaint, as above quoted, may, on presentation of evidence, show a nuisance situation somewhat comparable to the conditions indicated in Mullins v. Beatrice Pocahontas Co., supra. While the exculpatory clauses in this case, obviously considered important by plaintiffs and defendant, may conceivably insulate defendant from some tort liabilities, the clauses may not be raised as a complete shield from all liabilities which may be indicated by evidence showing defendant’s violations of rules, regulations and laws, its wilful, wanton and reckless actions and conduct, or its creation of hazardous or nuisance conditions incident to its strip mining operations causing the injuries and damages set forth in plaintiffs’ complaint. 41 Am. Jur. 2d, Independent Contractors, §§ 34, 41, 45 (1968).

II. The Independent Contractor

On review of the trial court’s dismissal of plaintiffs’ action on motion for summary judgment because of the finding that there was no genuine issue as to any material fact for jury trial, and despite the basic emphasis placed by counsel on the importance of the exculpatory clauses, the Court may not disregard other obvious issues manifest in the record. Plaintiffs elected to commence their action against a single defendant, an independent contractor directly charged with the injuries and damages to their residence property. The Court is obliged to consider whether the complaint and answer, the two pleadings in the record, present any genuine issues of material facts for trial, apart from and independent of the exculpatory clauses.

Differences are readily noted between the arguments advanced and the authorities cited by counsel in their briefs with emphasis on the exculpatory clauses and the issues and principles of law which may control the determination and disposition of the action now before the Court. In the Mullins case, supra, it appears that the plaintiffs owned their property subject to mineral severance deeds which vested in the defendant, Beatrice Pocahontas Company, coal mining and removal rights. In the Stamp case, supra, it appears that plaintiffs owned their property subject to a coal severance deed which vested in the defendant, Windsor Power House Coal Company, coal mining and removal rights. In the present litigation it appears that New River and Pocahontas Consolidated Coal Company owns the coal and, as lessor, has leased certain coal mining and removal rights to Consolidation Coal Company, as lessee. The lessee has entered into an agreement whereby the defendant, Junior Pocahontas Coal Company, as an independent contractor, agrees to strip mine certain seams of coal and to deliver the coal to lessee at a fixed production cost per ton. Under the strip mining agreement, Junior Pocahontas Coal Company owns and holds no estate or interest in the coal properties embraced in lessee’s leasehold estate. The independent contractor is obliged to furnish the equipment and workmen to remove the coal and deliver it to lessor. The independent contractor does not own the coal in place or as removed. The situation is somewhat comparable to the gas well drilling arrangements in McCoy, Hall and Arbogast v. Cohen, 149 W. Va. 197, 140 S.E.2d 427 (1965). Other illustrations are noted in 41 Am. Jur. 2d, Independent Contractors, § 9 (1968). While privity of estate may exist between the owner of the coal and the lessee, only privity of contract exists between the lessee and the independent contractor. In 20 Am. Jur. 2d, Covenants, Conditions, and Restrictions, § 34, the distinction is well stated as follows:

“A distinction is made between privity of contract and privity of estate, and the rule is that privity of contract alone is insufficient to carry the benefit of a covenant to subsequent owners of the property. Similarly, a difference is indicated between the benefit and the burden with respect to the necessity for privity of estate. Thus, while the benefit, upon a transfer of land, will pass with the property to which it is incident, the burden or liability will be confined to the original covenantor, unless the relation of privity of estate exists or is created between the covenantor and the conven antee at the time when the covenant is made.”

In the agreement of September 1, 1961, between the lessee, Consolidation Coal Company, and the independent contractor, defendant in this action, Article Eleven provides:

“It is understood and agreed by and between the parties hereto that the operations of Junior, as herein contemplated, shall be conducted in a manner consistent with and subject to the rights terms, conditions, provisions, restrictions and stipulations contained in the papers under which Consolidation is in possession of the property known as Berwind property. All royalties on the coal to be mined hereunder shall be borne by Consolidation.”

Those provisions constitute contract language in the agreement between the lessee and the independent contractor by which the parties agree to be bound. The language is not intended to insulate and does not legally insulate the independent contractor’s strip mining operations from tort liability to third parties. Nor does the language in the independent contractor’s agreement insulate the defendant’s strip mining operations from tort liabiity to plaintiffs who own their nearby surface land residence property under a deed limited by conditions, exceptions and reservations constituting the exculpatory clauses on which defendant bases its defense to plaintiffs’ action for damages. These plaintiffs, and other surface land residence property owners similarly situated who have actions pending in the trial court, are not parties bound, obligated or limited by the terms and provisions of the independent contractor’s agreement. When a plaintiff, so situated, is satisfied as to the responsibility and the solvency of the independent contractor, he may elect not to look beyond the independent contractor, the immediate cause of his complaint, to other parties to whom liability may attach for the damages he may claim.

In Aetna Casualty & Surety Co. v. Federal Insurance Co., 148 W. Va. 160, 133 S.E.2d 770 (1963), cited by both plaintiffs and defendant in their briefs, the Court held, in point 6 of the syllabus, that

“A party who moves for summary judgment has the burden of showing that there is no genuine issue of fact and any doubt as to the existence of such issue is resolved against the movant for such judgment.”

In view of the allegations in plaintiffs’ complaint and the defenses interposed in defendant’s answer thereto, it appears that a broad spectrum of issues of fact as to tort liability of defendant remains for resolution in the trial court. Rule 56, R.C.P. With genuine issues of material facts remaining for consideration and determination, it is apparent that the trial court erred in granting defendant’s motion for summary judgment and dismissing plaintiffs’ action. The judgments of the Circuit Court of McDowell County, entered on March 10, 1975, and March 26, 1975, are reversed and this cause is remanded for further development and proceedings consistent with the foregoing opinion.

Reversed and remanded.