Placer Coal, Inc. v. Rhondale Coal Services Co.

684 S.W.2d 25, 39 U.C.C. Rep. Serv. (West) 1697, 1984 Ky. App. LEXIS 615
CourtCourt of Appeals of Kentucky
DecidedNovember 9, 1984
StatusPublished
Cited by2 cases

This text of 684 S.W.2d 25 (Placer Coal, Inc. v. Rhondale Coal Services Co.) 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
Placer Coal, Inc. v. Rhondale Coal Services Co., 684 S.W.2d 25, 39 U.C.C. Rep. Serv. (West) 1697, 1984 Ky. App. LEXIS 615 (Ky. Ct. App. 1984).

Opinions

CLAYTON, Judge.

Placer Coal, Incorporated (Placer) appeals from a judgment of the Boyd Circuit Court awarding Dennis Dean Coal Company (Dennis Dean) $31,310.02 and Prichard Energy, Inc. (Prichard) $19,177.41 as damages for coal wrongfully attached.

The major issue on appeal is whether the trial court erred in finding that title to the coal attached had reverted to Dennis Dean and Prichard prior to the time of attachment. Placer contends it did not and argues that the appellees’ failure to retake possession of the coal within ten days of its delivery to Placer, as provided under KRS 355.2-702, prevented them from regaining title. Dennis Dean and Prichard counter with KRS 355.2-401(4), arguing that the buyer of the coal, Rhondale Coal Services Company, Inc., elected not to retain the coal under KRS 355.2-401(4) by its refusal to make payment and its release of its interest in the coal. Such a refusal to retain the coal would by operation of law automatically revest title in Dennis Dean and Prichard as sellers so that Placer’s attachment to secure the debts of Rhondale Coal Services would be wrongful. After a thorough review of the parties’ arguments and authorities, we conclude that title did indeed return to the sellers prior to the time of attachment so as to render the attachment wrongful.

Placer operates a coal processing plant, commonly referred to as a “tipple,” on the [27]*27Big Sandy River in Boyd County, Kentucky. In August of 1981, Rhondale Coal Services Company, Inc. (Rhondale) entered into a contract with Placer whereby Rhon-dale, as coal buyer, would deliver coal purchased from local coal suppliers such as Dennis Dean and Prichard to the loading dock at Placer to be processed and loaded onto barges of the coal purchasers Rhon-dale located. In exchange for its services, Placer was to receive $2.00 per ton. During the month of August, 12,272.3 tons of coal were delivered to Placer’s dock on the Big Sandy pursuant to the terms of this contract. From September 1 through September 15 of that year, another 1,865.14 tons of coal was processed by Placer pursuant to Rhondale’s request. As a result of Placer’s loading and processing of this coal, Rhondale was indebted to Placer in the amount of $24,544.60 for the August shipments and $3,731.30 for the September shipments.

Placer was not, however, Rhondale’s only creditor at this time. Dennis Dean, a coal producer company organized as a partnership operating in Grayson, Kentucky, was owed $31,310.02. From August 24, 1981, through September 3, 1981, Dennis Dean delivered to Rhondale on credit forty-one loads of coal F.O.B. at the coal loading facility of Placer on the Big Sandy River for a stated delivery price of $24.50 per ton. Shortly after delivery Roger Griffith, president of Rhondale, telephoned Ed Rat-cliff, a partner in Dennis Dean, and informed him that due to nonpayment from one of Rhondale’s customers, Rhondale would be unable to pay Dennis Dean the $31,310.02 owed it for the forty-one truck loads. Griffith further advised Ratcliff that Rhondale was releasing its interest in the coal and that Dennis Dean could take possession of the coal at the tipple. Though the parties’ testimony regarding the exact date of this conversation is uncertain, it apparently took place within two weeks after September 3, the last delivery date for the Dennis Dean coal. Immediately after his conversation with Griffith, Rat-cliff visited Leonard Womble, mine manager for Placer, at Placer’s loading dock. During their meeting at the dock, Ratcliff told Womble of Rhondale’s release and requested permission to remove the coal after offering to pay Placer’s tippling fee. Womble refused to permit the removal of the coal.

During this same time period, Prichard, a Kentucky corporation engaged in mining and stripping coal, delivered 804.47 tons of coal in the name of Rhondale to Placer’s dock. Rhondale was to have paid Prichard $23.75 per ton on September 11, 1981. On September 12, Herb Prichard, part owner and an officer of Prichard Energy, was advised that Rhondale would be unable to pay for the 807.47 tons it had purchased on credit. A meeting between Herb Prichard and Roger Griffith was then held at a local restaurant on September 14. At that time Griffith released any interest Rhondale claimed in the coal and told Prichard to take it back if he wanted it. Two days later, on the 16th, Prichard went to the loading dock and spoke with Keith Pettit, Placer’s dock manager, about securing the return of the coal and paying the processing fee Rhondale owed Placer. Pettit informed him that a written release from Rhondale would be necessary before he could permit Prichard to take the coal. From the 16th through the 24th, Prichard unsuccessfully attempted to contact Womble by phone. On September 24, Prichard returned to the dock with a written release but was told that the coal was “tied up in court.” A writ of attachment had been issued earlier that day.

In Ashland, Kentucky, on September 18, 1981, a meeting between Griffith and Womble took place at the law offices of Van Antwerp, Hughes, Monge & Jones. Present at that meeting were Carl D. Edwards, Jr. and Greg Monge, local attorneys previously involved at different times in representing the interests of Rhondale, Dennis Dean and Placer. At the meeting Womble requested that Griffith assign Rhondale’s interest in the coal in order that Placer might attempt to sell it and thus recoup its losses. As Roger Griffith recalls their conversation, he informed Worn-[28]*28ble that assignment was not possible as he had released his interest in the coal back to Prichard and Dennis Dean. As Womble recalls the discussion, Griffith refused to assign his company’s interest in the coal, but made no mention of the releases. Womble steadfastly denies any knowledge of the dealings of Rhondale and its sellers throughout this entire time period prior to issuance of the order of attachment on September 24, 1981. While he admits being contacted by Ratcliff concerning the release to Dennis Dean, he apparently did not consider himself thereby put on notice of such a release, nor obligated to inquire about it, absent direct contact from Rhon-dale.

On September 28, 1981, Placer filed a complaint against Rhondale in Boyd Circuit Court requesting judgment for $24,544.60 and a prejudgment attachment of the approximately 1,600 tons of coal in Placer’s possession. Later, on September 28, Dennis Dean filed its intervening complaint seeking damages of $31,310.02 against either Rhondale or Placer and in the alternative return of the coal in Placer’s possession.

Finally, Prichard Energy intervened on October 8 demanding damages of $20,-994.22 from either Rhondale or Placer. Trial was subsequently held on January 6, 1983, the court stating that the only issue to be tried was the ownership of the coal. At the time of trial, a full and final compromise and release was filed in open court by which Placer Coal released all claims for loading fees against Rhondale in exchange for $12,500, and release of all Rhondale’s claims to the coal stockpiled at the Placer dock. This compromise and release was immediately challenged by Placer’s counsel who moved that it be set aside. At the time the above-mentioned judgment was entered, no ruling on that motion had been rendered.

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684 S.W.2d 25, 39 U.C.C. Rep. Serv. (West) 1697, 1984 Ky. App. LEXIS 615, Counsel Stack Legal Research, https://law.counselstack.com/opinion/placer-coal-inc-v-rhondale-coal-services-co-kyctapp-1984.