Smith v. Freeport Kaolin Co.

687 F. Supp. 1550, 1988 U.S. Dist. LEXIS 4913, 1988 WL 55189
CourtDistrict Court, M.D. Georgia
DecidedMay 27, 1988
DocketCiv. A. 84-241-1-MAC (WDO)
StatusPublished
Cited by2 cases

This text of 687 F. Supp. 1550 (Smith v. Freeport Kaolin Co.) is published on Counsel Stack Legal Research, covering District Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Freeport Kaolin Co., 687 F. Supp. 1550, 1988 U.S. Dist. LEXIS 4913, 1988 WL 55189 (M.D. Ga. 1988).

Opinion

ORDER

OWENS, Chief Judge.

This matter is before the court on the parties’ cross motions for partial summary judgment. The focus of this dispute is a mining lease originally executed in September of 1945 between landowner Mr. I.B. Stinson, predecessor in interest of plaintiff Helen Stinson Smith, and Owen and Shepherd, an entity composed of two individuals, Mr. S.R. Owen and Mr. C.M. Shepherd. Defendant Freeport Kaolin Company, and subsequently defendant Engelhard Corporation, eventually acquired the mining rights described in the lease, and both corporations have conducted mining operations on the property described therein. This instant disagreement centers on a provision in the lease establishing the amount of royalties due the lessor, now Mrs. Smith. The parties agree that, at least initially, the interpretation of the lease is a question of law properly ruled upon by this court. To further such interpretation, the parties have submitted well-prepared pleadings. Having read and considered those materials, this court now makes the following findings of fact and conclusions of law.

Findings of Fact

1. In a lease recorded in Book 77, Page 133, in the Office of the Clerk of the Superior Court of Wilkinson County, Georgia, I.B. Stinson conveyed certain mining rights to Owen and Shepherd. 1 The disputed provision of this lease states as follows:

The party of the second part [Owen and Shepherd] agrees to pay to the party of the first part [I.B. Stinson], his heirs and assigns, the sum of .15 cents for each and every ton of said bauxite, clay or other ore moved from said lands said ton to weight (sic) 2240 pounds, said weight shall be ascertained from the records of the railroad companies shipping said material. ...

Exhibit B to Plaintiff’s Memorandum in Support of Motion for Partial Summary *1552 Judgment, Docket No. 82; see also Exhibits A and B to Exhibit 1 attached to Brief in Support of Defendant Freeport Kaolin Company’s Motion for Partial Summary Judgment, Docket No. 84. 2

2. Owen and Shepherd executed a number of leases containing language identical to the provision in the Stinson lease. See Exhibit E attached to Plaintiff Smith’s Reply Brief in Support of Motion for Partial Summary Judgment, Docket No. 90.

3. Owen and Shepherd executed a sublease on or about September 29, 1945, conveying the kaolin mining rights on the Stinson property to P.W. Martin Gordon Clays. See Exhibit C to Exhibit 1 attached to Defendant Freeport Kaolin Company’s Motion for Partial Summary Judgment. This contract, which had a term of twenty-five years with an option provision for an additional five years, provided that the subtenant pay “the sum of twenty cents (20c) for each ton of 2240 pounds of refined clay and bauxite (railroad weight) removed from said land by [subtenant].” No mining occurred pursuant to the sublease, and it expired by its own terms no later than September of 1975.

4. George F. Stinson and Anita M. Stin-son inured to the interests of the original landowner and lessor, Mr. I.B. Stinson. Plaintiff Helen Stinson Smith has succeeded George and Anita Stinson and is the holder of record title to the property at issue in this case.

5. Defendant Freeport Kaolin Company succeeded to the mining rights originally belonging to Owen and Shepherd and conducted mining operations on the Stinson property beginning in 1977 and continuing until 1985. In 1985, defendants Freeport and Engelhard entered into an agreement by which Freeport assigned to Engelhard its interest in the Stinson property. Defendant Engelhard conducted mining operations in the property until 1986. 3

. 6. From the inception of mining in 1977 until and through January of 1982, Freeport made monthly royalty payments to George F. Stinson and his successors, Mrs. Anita M. Stinson and Mrs. Helen Stinson Smith. 4 Included with the monthly payments transmitted to the various payees were explanatory letters indicating that the payments were based upon the total number of “long tons (2240 pounds per ton) of refined clay removed.” Exhibits G1-G53 to Exhibit 1 attached to Motion of Defendant Freeport Kaolin Company for Partial Summary Judgment, Docket No. 83. These checks have been cashed, and they amount to $45,244.92.

Following the installation of new equipment which accurately measured the amount of dry crude kaolin pumped by pipelines from the Stinson property, Freeport in a letter to plaintiff offered to pay royalties on the basis of crude or unrefined kaolin transported through the pipeline, and, in fact, Freeport tendered subsequent payments to plaintiff based thereupon. Id. at G-63 and at Exhibit H. This offer to pay royalties based upon crude tonnage alerted plaintiff to the fact that she and her predecessors had been receiving royalty payments based upon refined tonnage, and it caused plaintiff to question the propriety of such payments. The dispute which ensued resulted in this lawsuit, and the royalty payments by both Freeport and Engelhard since December of 1982 have not been cashed but have been paid into the court. Id. at Exhibit 1, p. 13.

*1553 7. “Crude kaolin as mined and removed from the ground contains approximately 22% moisture by weight. It takes at least 1.5 tons of dry crude kaolin to produce 1 ton of refined kaolin.” Id. at Exhibit 1, p. 12, and at Exhibit 2, p. 3. “The railroad weight of refined kaolin which is shipped to the customer can be converted to wet crude tons of clay by mathematical calculation....” Exhibit C, p. 5, attached to Plaintiff Smith’s Reply Brief in Support of Motion for Partial Summary Judgment, Docket No. 90.

Conclusions of Law

1. “The construction of the provisions of this lease, as with other contracts, is generally one for the court to determine as a matter of law.” Peachtree on Peachtree Investors v. Reed Drugs, 251 Ga. 692, 694, 308 S.E.2d 825, 828 (1983), citing O.C.G.A. § 13-2-1. 5 As such, the interpretation of this written contract regarding the mining of certain materials from the Stinson property is “properly subject to disposition by summary judgment.” Sims’ Crane Service, Inc. v. Reliance Insurance Company, 514 F.Supp. 1033, 1036 (S.D.Ga.1981), aff'd 667 F.2d 30 (11th Cir.1982).

2. “Under Georgia law whether a contract is ambiguous is to be determined by the court.” Kaiser Aluminum & Chemical v. Ingersoll-Rand Co., 519 F.Supp. 60, 71 (S.D.Ga.1981), citing Stone Mountain Scenic Railroad, Inc. v. Stone Mountain Memorial Association, 230 Ga.

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687 F. Supp. 1550, 1988 U.S. Dist. LEXIS 4913, 1988 WL 55189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-freeport-kaolin-co-gamd-1988.