GOLDEN OAK MINING COMPANY VS. LUCAS (VINA), ET AL.
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RENDERED: JUNE 17, 2011; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-002148-MR
GOLDEN OAK MINING COMPANY
v.
APPELLANT
APPEAL FROM LETCHER CIRCUIT COURT
HONORABLE SAMUEL T. WRIGHT, III, JUDGE
ACTION NO. 02-CI-00457
VINA LUCAS; DANIEL COOK;
SHERRI COOK; DAN LUCAS;
BETTY LUCAS; MACK FULTZ;
OWANA FULTZ; AND TABITHA
FULTZ
APPELLEES
OPINION
REVERSING
** ** ** ** **
BEFORE: ACREE, DIXON AND LAMBERT, JUDGES.
ACREE, JUDGE: The appellant, Golden Oak Mining Company, appeals a
judgment of the Letcher Circuit Court. Golden Oak argues that the claims of the
appellees, Vina Lucas, Daniel Cook, Sherri Cook, Dan Lucas, Betty Lucas, Mack
Fultz, Owana Fultz, and Tabitha Fultz, are barred by the statute of limitations and
that the circuit court erred by denying its motion for summary judgment and
subsequent motions for directed verdict presenting that argument.
On appellate review, we must answer two questions. First, when did the
appellees’ causes of action accrue, initiating the five-year limitations period under
Kentucky Revised Statute(s) (KRS) 413.120? Second, if accrual occurred more
than five years prior to the filing of the Complaint on February 7, 2003, did any
event toll or extend that limitations period? We conclude that the limitations
period commenced no later than 1997, and that no event resulted in a tolling or
extension of the limitations period. Therefore, it was error for the trial court to
deny Golden Oak’s motion for summary judgment and its subsequent motions for
directed verdict. For the reasons stated herein, we reverse.
Facts and procedure
Interaction among the appellees, Golden Oak, and the Kentucky Natural
Resources and Environmental Protection Cabinet, and its Department for Surface
Mining Reclamation and Enforcement (Cabinet), began in the mid-1990s. In 1993,
the Cabinet issued a permit to Golden Oak to mine the Camp Branch area of
Letcher County. In May of 1997, Golden Oak ceased mining operations and
reported the mine to state authorities as inactive. However, in that four-year
period, there was a pervasive degradation of the area residents’ well water.
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According to their testimony, each appellee recognized an adverse impact on his or
her water supply and each believed Golden Oak was to blame.
Appellee Vina Lucas testified that by 1996 her water quality had
diminished; she believed even then that Golden Oak was to blame. Appellees
Daniel and Sherri Cook testified that they lost their water on two occasions after
Golden Oak began mining; they noticed major changes in the quality of their water
in 1996 and 1997. Dan and Betty Lucas also noticed a change in their water
quality in 1996 and 1997, and Dan recognized the bad taste from having mined in
the past. Mrs. Lucas contacted Golden Oak directly and Golden Oak installed a
filter for them in 1996. Mack and Owana Fultz also indicated that their water had
changed color and taken on a bad odor by 1997. Mack Fultz indicated that the
water changed when Golden Oak began mining in the area and he complained
directly to Golden Oak. Tabitha Fultz, Mack and Owana Fultz’s daughter, also
indicated that her water was bad in 1997 and she believed Golden Oak was
responsible.
The problem was not limited to appellees’ properties. This was a
community problem, and the community problem needed a community solution.
In 1996, a large number of Camp Branch residents met with Tom Fitzgerald,
an attorney for the National Citizens’ Coal Law Project, to discuss their concerns.
Fitzgerald explained to the residents that they had “the opportunity to request an
inspection and to participate in enforcement actions of the cabinet[1] as provided in
1
The “cabinet” refers to the Kentucky Natural Resources and Environmental Protection Cabinet
and its Department for Surface Mining Reclamation and Enforcement.
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405 Kentucky Administrative Regulations (KAR) 12:030.” 405 KAR 12:010
Section 6. He recommended hiring Heim Water Consultants to assist in assessing
the problem and its source and they did so.
According to Heim’s report, “[a]n extensive field investigation was
conducted in the area of Golden Oak’s deep mine in the early part of January
1997.” Heim documented well-water degradation dating to 1994, one year after
Golden Oak commenced mining. After completing its investigation, Heim
concluded that “Golden Oak’s deep mining operation has directly affected the
water quality and quantity of water available for the residents of Camp Branch.”
On March 5, 1997, after being informed of the results of the Heim
investigation, residents of Camp Branch representing ninety-five households,
including the appellees,2 signed a handwritten petition to federal and state mining
officials that stated, “We believe that our water supplies to our homes may have
been damaged by mining activity done by Golden Oak Mining Co. . . .”
On March 25, 1997, Fitzgerald wrote a letter to state and federal surface
mining reclamation and enforcement agencies on behalf of the appellees and other
Camp Branch residents. He attached a copy of Heim’s report and a copy of the
petition from the ninety-five households.
2
Dan and Betty Lucas signed for household #55; Vina Lucas signed for household #61; Mack
and Owana Fultz signed for household #62; Daniel Cook signed for household #90. Sherri
Cook, who was married to and resided with Daniel Cook, did not sign the petition. Tabitha
Fultz, daughter of Mack and Owana Fultz, did not sign the petition but resided on her parents’
property and used the same well.
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The Cabinet then initiated an investigation and on July 29, 1997, sent a
preliminary report to Fitzgerald which stated, “based on the information obtained
at this time . . . [l]oss of groundwater quantity and quality in the Camp Branch
watershed is related to the underground mining activities of Golden Oak Mining
Company.” Fitzgerald shared this information with his clients, including
appellees.
As the Cabinet conducted its full scale investigation, newspapers around the
region began to publish articles placing the blame on Golden Oak. For example,
the Mountain Eagle published an article on May 21, 1997, titled “Resident’s Blame
Golden Oak.” On August 6, 1997, citing the July 29, 1997 letter from the Cabinet,
the same newspaper published an article titled “Regulators Say Mining Hurt
Community’s Water.”
Meanwhile, the Cabinet continued its investigation. On March 4, 1998, one
day prior to the one-year anniversary of the Camp Branch residents’ petition, the
Cabinet sent a form letter to each person who had signed that petition. In
substance, it did not differ from the July 29, 1997 letter in that it identified only the
affected watersheds but not the affected households. The March 4, 1998 letter
stated the Cabinet had “determined that the groundwater for the watersheds of
Camp Branch and parts of Stinking Branch have been impacted by the
underground mining activities of Golden Oak Mining Company.” Unlike the
earlier letter, however, this one indicated that water samples from each Camp
Branch household’s water supply would be analyzed and if any failed to comply
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with EPA standards, Golden Oak would be “required to treat or replace water to
affected Camp Branch users . . . .” (Emphasis supplied). It would be more than a
year before the Cabinet informed individual Camp Branch households of the
results.
On June 30, 1999,3 the Cabinet sent letters to each of the appellees4
informing them of its “determin[ation] that your water supply could not be
concluded to have been adversely impacted by the underground mining activities
of Golden Oak Mining Company in this area.”
A few weeks later, on July 13, 1999, a separate letter was sent to Fitzgerald
informing him “that 19 citizens in the Camp Branch investigation were impacted
by Golden Oak’s underground mining.” None of the appellees were among the
nineteen identified. Soon after receiving this letter, Fitzgerald conducted another
meeting. Sixty-six Camp Branch families attended. Fitzgerald recommended
filing a civil lawsuit, but he informed the meeting’s attendees that they would need
new representation for their private cause of action.
Eventually, twenty-nine families hired a private attorney and filed suit
against Golden Oak in 1999. Some of the original plaintiffs traveled around the
community offering other residents, including appellees, the opportunity to join the
suit as parties plaintiff. In 2002, the residents who participated in that lawsuit
3
The letter was dated June 30, 1999, and mailed for certified delivery; however, the appellees
sometimes refer to this correspondence as the “July 1999” letter since that was when they
received it.
4
See footnote 2, supra. The same appellees who signed the March 5, 1997 petition received this
letter as did the other individuals who signed the petition representing the remaining households.
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entered into a settlement agreement with Golden Oak, as a result of which $1.5
million was paid into a trust charged with the responsibility for laying a municipal
water line that could be tapped into by all Camp Branch residents.
The appellees did not join the 1999 lawsuit.
On February 7, 2003, soon after the 1999 lawsuit was settled, the appellees
instituted a separate civil action against Golden Oak.5 Golden Oak filed a motion
for summary judgment6 arguing that the claim was barred by the statute of
limitations. The circuit court denied the motion because
the statute [of limitations] did not begin to run against the
plaintiffs on their claims for damage to their water
supplies until such time as the plaintiffs knew who
caused the damage to those water supplies. Wiseman v.
Alliant Hospitals, Inc., Ky., 37 S.W.3d 709 (2000).
Because the Commonwealth of Kentucky was
investigating the cause of the water damage, it was not
until that investigation was concluded that the plaintiffs
knew who caused the damage. The agents of the
Commonwealth first reported to the residents that the
underground mining activities of the defendant had
caused widespread damage to the underground water of
Camp Branch by letter dated March 4, 1998. The Court
holds that this was the earliest date that the statute of
limitations could have begun.
(Order entered July 29, 2008; emphasis supplied).
5
The initial complaint was filed in November 2002 and named only Cook and Sons. Appellees
filed an amended complaint naming Golden Oak for the first time on February 7, 2003. The
appellees do not argue that the amended complaint related back to the date of the original
complaint.
6
Golden Oak moved alternatively to dismiss the complaint on the same grounds. However,
because it was necessary for the court to consider matters outside the pleadings, we proceed with
review from the denial of the summary judgment motion.
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The case proceeded to trial and the statute of limitations issue was raised on
motion for directed verdict at the close of the appellees’ case, and by oral and
written motions after the close of the entire case. For the reasons set forth herein,
we conclude there was no genuine issue of material fact regarding the accrual of
appellees’ causes of action and Golden Oak was entitled to summary judgment as a
matter of law; therefore, we need only address Golden Oak’s arguments, and the
appellees’ counterarguments, that are related to the statute of limitations.
Standard of review
The standard of review on appeal when a trial court denies a motion for
summary judgment is de novo. Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App.
1996); Kentucky Rules of Civil Procedure (CR) 56.03. “The trial court must view
the evidence in the light most favorable to the nonmoving party, and summary
judgment should be granted only if it appears impossible that the nonmoving party
will be able to produce evidence at trial warranting a judgment in his favor.”
Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) (citing Steelvest, Inc.
v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480-82 (Ky. 1991)). “The
moving party bears the initial burden of showing that no genuine issue of material
fact exists, and then the burden shifts to the party opposing summary judgment to
present ‘at least some affirmative evidence showing that there is a genuine issue of
material fact for trial.’” Id. at 436 (citing Steelvest, 807 S.W.2d at 482). The trial
court “must examine the evidence, not to decide any issue of fact, but to discover if
a real issue exists.” Steelvest, 807 S.W.2d at 480. The word “impossible,” as set
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forth in the standard for summary judgment, is meant to be “used in a practical
sense, not in an absolute sense.” Lewis, 56 S.W.3d at 436 (citing Perkins v.
Hausladen, 828 S.W.2d 652, 654 (Ky.1992)). “Because summary judgment
involves only legal questions and the existence of any disputed material issues of
fact, an appellate court need not defer to the trial court's decision and will review
the issue de novo.” Id. at 436.
Statute of limitations; accrual of causes of action
The appellees’ causes of action included a statutory claim pursuant to KRS
350.250(3) and common law causes of action for nuisance and trespass. The
parties agree that KRS 413.120 provides a five-year statute of limitations
applicable to both the statutory and common law claims. KRS 413.120(2), (4).
According to Kentucky caselaw, a cause of action accrues, and the
limitations period begins to run, when “the plaintiff discovers or in the exercise of
reasonable diligence should have discovered not only that he has been injured but
also that his injury may have been caused by the defendant’s conduct.” Louisville
Trust Co. v. Johns-Manville Products Corp., 580 S.W.2d 497, 501 (Ky. 1979)
(quoting Raymond v. Eli Lily & Co., 117 N.H. 164, 371 A.2d 170, 174 (N.H.
1977)). Golden Oak argues that appellees knew they had been injured and also
that their injury may have been caused by Golden Oak’s conduct more than five
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years before their civil suit named it as a defendant, i.e., before February 7, 1998.
We agree.
The circuit court found that the appellees did not “kn[o]w who caused the
damage to th[eir] water supplies” until the Cabinet “first reported to the residents
that the underground mining activities of the defendant had caused widespread
damage to the underground water of Camp Branch by letter dated March 4, 1998.”
This finding is clearly erroneous.
As more completely set forth above, on July 29, 1997, the Cabinet had
already reported to appellees through their attorney its conclusion that the loss of
water quality and quantity in the Camp Branch watershed was “related to the
underground mining activities of Golden Oak Mining Company.” Furthermore,
the record is replete with evidence that every one of the appellees, even prior to
receipt of that letter, had formed a belief that such was the case and had signed a
petition saying so. Under Louisville Trust Co. v. Johns-Manville, the appellees’
causes of action could not have accrued later than 1997. Because they did not file
their complaint against Golden Oak until February 7, 2003, their claim was barred
by the applicable statute of limitations, KRS 413.120(2) and (4).
The appellees counterargue, however, that the discovery rule, estoppel and
other legal principles affected the accrual of the cause of action, or suspended the
running of the statute of limitations. Therefore, we address those
counterarguments.
Discovery rule inapplicable
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In its order denying summary judgment, the circuit court also misinterpreted
Wiseman v. Alliant Hospitals, Inc., 37 S.W.3d 709 (Ky. 2000), which is
inapplicable to the case now before this Court. Wiseman was a medical
malpractice case in which the Supreme Court said “[t]he nature of the tort and the
character of the injury” had much to do with the decision. Wiseman, 37 S.W.3d at
713. The patient, Wiseman, was experiencing “medically unexplainable pain
following an invasive surgery.” Id. “[A]ll subsequent medical examiners
throughout the [seven] years [following her surgery] were indefinitive as to the
origin of her pain and attributed it to a tailbone injury.” Id. at 711-12. There was
never a question that Wiseman was experiencing harm, but “[h]arm could result
from a successful operation where a communicated, calculated risk simply turns
out poorly for the patient, although the medical treatment met the highest medical
standards. . . . In such case, there would be no ‘injury,’ despite the existence of
‘harm.’” Id. at 712. Because of “[t]he fiduciary relationship between” Wiseman
and her doctor, said the Court, she had “the right to rely on the physician’s
knowledge and skill” when a non-tortious explanation was offered to explain her
harm. Id. at 713.
The fact of Wiseman’s “injury [as contrasted with her harm] was not readily
apparent until the discovery of the piece of uterine probe” that had been left in her
body during the surgery. Id. The legal error in finding Wiseman’s claim barred by
the statute of limitations was, in the Supreme Court’s opinion, that the trial court
“erroneously equated ‘harm’ with ‘injury.’” Id. With that determination,
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Kentucky joined the “‘Discovery of injury’ jurisdictions [that] have concluded that
the statute of limitations does not begin to run even though a harmful condition is
known to a plaintiff so long as its negligent cause and its deleterious effect are not
discovered.” Id. at 712.
The appellees’ claim is not one to which the discovery rule concepts of
Wiseman apply. In Wiseman, there was the possibility that the harm visited upon
the plaintiff could have resulted from her surgeon’s negligence, but it also could
have resulted from a successful operation. Not so in the case sub judice. To
paraphrase Wiseman to fit the facts of our case, “[h]arm [to the water supply] could
[not] result from a successful [mining] operation” and, therefore, unlike Wiseman,
there is no “distinction between ‘discovery of harm’ and ‘discovery of injury.’”
Id. at 712.
Our Supreme Court recently revisited the discovery rule in Fluke Corp. v.
LeMaster, 306 S.W.3d 55 (Ky. 2010), emphasizing the limited circumstances
under which the rule may be applied, stating
We . . . refuse to extend application of the discovery rule
to cases not involving latent injuries, latent illnesses, or
professional malpractice . . . . [T]he discovery rule is
available only in cases where the fact of injury or
offending instrumentality is not immediately evident or
discoverable with the exercise of reasonable diligence,
such as in cases of medical malpractice or latent injuries
or illnesses.
306 S.W.3d at 56, 60; see also id. at 60 n.7 (citing cases illustrating the rule’s
limited application); and Rockwell Int’l Corp. v. Wilhite, 143 S.W.3d 604, 613
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(Ky. App. 2003)(“[O]ur research has not revealed nor have we been cited to any
Kentucky case applying the ‘discovery rule’ in a property damage action.”). The
appellees’ causes of action were not based on latent injuries, latent illnesses, or
professional malpractice, thereby making the discovery rule inapplicable.
The trial court should have applied Louisville Trust Co. v. Johns-Manville to
the uncontroverted facts relating to the accrual of the appellees’ causes of action
instead of applying Wiseman.
Certainty of Golden Oak’s conduct as cause unnecessary
The appellees argue, and the circuit court agreed, that they could only
suspect that Golden Oak’s conduct caused their injury and that was not enough for
the accrual of their cause of action. But, indeed, it is. Our Supreme Court recently
quoted McLain v. Dana Corp., 16 S.W.3d 320 (Ky. App. 2000), in which we said,
Under Kentucky law, the discovery rule provides that a
cause of action accrues when the injury is, or should have
been, discovered. However, the discovery rule does not
operate to toll the statute of limitations to allow an
injured plaintiff to discover the identity of the wrongdoer
unless there is fraudulent concealment or a
misrepresentation by the defendant of his role in causing
the plaintiff's injuries. A person who has knowledge of
an injury is put on ‘notice to investigate’ and discover,
within the statutory time constraints, the identity of the
tortfeasor. Application of the discovery rule under
circumstances as in the case sub judice would defeat the
very purpose of the limitations. As one court observed,
‘logic dictates that such an exception is capable of
swallowing the rule.’
Fluke, 306 S.W.3d at 60 n.7 (quoting McLain, 16 S.W.3d at 326 (quoting Simmons
v. South Central Skyworker’s, Inc., 936 F.2d 268, 269 (6th Cir. 1991))). Under
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Kentucky law then, appellees are mistaken that they could rest upon their rights
until a governmental agency substantiated their suspicions that Golden Oak’s
conduct caused their injury.
Furthermore, this argument is illogical and therefore all the more
unpersuasive. Appellees assert they could not sue Golden Oak on mere suspicion;
rather, they had to know Golden Oak was the cause of their injury. Then they
assert their cause of action did not accrue until July 1999. But that was the month
the Cabinet sent a letter excluding the appellees from the list of 19 households
whose water supplies had been affected by Golden Oak. If we carry through with
the appellees’ logic, the government’s failure to conclude that Golden Oak caused
their water quality problems should have made them less suspicious of Golden Oak
in 1999 than they were in 1997, not more confident that Golden Oak was to blame.
Accrual unaffected by Cabinet’s investigation
Citing Vanhoose v. Commonwealth, 995 S.W.2d 389 (Ky. App. 1999),
appellees argue that the running of the limitations period was tolled until the
Cabinet completed its investigation. Appellees misread Vanhoose.
In Vanhoose, the Cabinet assessed a civil penalty against a mine operator on
September 19, 1996. If it had become necessary for the Cabinet to file a civil
action to enforce the civil penalty, it would have had five years from that date to do
so. KRS 413.120(3) (limitations period applicable to “[a]n action for a penalty or
forfeiture when no time is fixed by the statute” is five years); Vanhoose, 995
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S.W.2d at 392 (“parties . . . agree that any enforcement action filed by the Cabinet
would be subject to KRS 413.120(3)”).
But Vanhoose was not an enforcement action; it was the mine operator’s
appeal of the assessment of the penalty. Consequently, we properly rejected the
mine operator’s argument that the limitations period should be measured from “the
date of the alleged violation, March 24, 1987, when the notices of non-compliance
were issued.” That was eight years before the penalty even existed.
Appellees here argue that we should follow Vanhoose and measure the
limitations period from the date the Cabinet completed its administrative
investigation. If this case had been brought to enforce a penalty the Cabinet
assessed against Golden Oak, we would do so. But that is not this case.
The claims appellees brought and the Cabinet’s regulatory responsibilities
under the statute are entirely independent of one another. While it is true the
regulatory scheme allows private citizens to participate in the administrative
process, KRS 350.465(2)(c) and 405 KAR 12:030, it is also true that KRS
350.250(3) creates a private right of action for any person adversely affected by
mine operators violating any provision of Chapter 350, and authorizes “injunctive
relief or . . . damages or both (including reasonable attorney and expert witness
fees).” KRS 350.250(3). There is no requirement that administrative remedies
first be exhausted. Any doubt as to that point is eliminated by considering KRS
350.421(1) which states that
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Nothing in this chapter shall be construed as
affecting in any way the right of any person to enforce or
protect, under applicable law, his interest in water
resources affected by . . . an underground coal mine.
KRS 350.421(1). We construe this language as supporting Golden Oak’s argument
that the Commonwealth’s investigation had no effect upon the civil action, either
in terms of the liability that may exist, or the point in time the cause of action
accrued, or on the running of the statute of limitations.
In summary, we find that the appellees’ causes of action (statutory under
KRS 350.250(3) and common law nuisance and trespass) accrued in 1997 and
were unaffected for any of the reasons argued by appellees.
Statutory and equitable estoppel inapplicable
Appellees next argue that Golden Oak was estopped from asserting
the statute of limitations as a defense. The argument relies both on statutory
estoppel and equitable estoppel.
Statutory estoppel is provided for in KRS 413.190(2), referred to generally
as the “tolling statute” which states:
[w]hen a cause of action mentioned in KRS 413.090 to
413.160 accrues against a resident of this state,[7] and he
by absconding or concealing himself or by any other
indirect means obstructs the prosecution of the action, the
time of the continuance of the absence from the state or
obstruction shall not be computed as any part of the
period within which the action shall be commenced.
7
Golden Oak is a Delaware corporation. While this may present an issue of residency under
KRS 413.190(2), Golden Oak does not argue that 413.190(2) is inapplicable to them.
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Appellees correctly argue that even if this statute did not require application of
estoppel to this case, equitable estoppel would. See Fluke, 306 S.W.3d at 61, n.9
(statutory estoppel as set forth in KRS 413.190(2) was not applicable, but the court
nonetheless considered the applicability of equitable estoppel). The “tolling statute
is simply a recognition in law of an equitable estoppel or estoppel in pais to
prevent fraudulent or inequitable application of a statute of limitation.” Munday v.
Mayfair Diagnostic Laboratory, 831 S.W.2d 912, 914 (Ky. 1992). Therefore, in
order to better understand the requirements of statutory estoppel, we will consider
it in the context of its forebear, equitable estoppel.
“Under Kentucky law, equitable estoppel requires both a material
misrepresentation by one party and reliance by the other party.” Fluke, 306
S.W.2d at 62.
The essential elements of equitable estoppel are[:] (1)
conduct which amounts to a false representation of
concealment of material facts, or, at least, which is
calculated to convey the impression that the facts are
otherwise than, and inconsistent with, those which the
party subsequently attempts to assert; (2) the intention, or
at least the expectation, that such conduct shall be acted
upon by, or influence, the other party or other persons;
and (3) knowledge, actual or constructive, of the real
facts. And, broadly speaking, as related to the party
claiming estoppel, the essential elements are (1) lack of
knowledge and of the means of knowledge of the truth as
to the facts in question; (2) reliance, in good faith, upon
the conduct or statements of the party to be estopped; and
(3) action or inaction based thereon of such a character as
to change the position or status of the party claiming the
estoppel, to his injury, detriment, or prejudice.
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Id. at 63 (quoting Sebastian-Voor Props., LLC v. Lexington-Fayette Urban County
Gov’t, 265 S.W.3d 190, 194-95 (Ky. 2008)).
As with equitable estoppel, the party seeking statutory estoppel must show
affirmative acts of fraud or misrepresentations by the defendant. Munday, 831
S.W.2d at 914. Under the general rule, “the concealment . . . must represent an
‘affirmative act’ and ‘cannot be assumed’— i.e., it must be active, not passive.”
Emberton v. GMRI, Inc., 299 S.W.3d 565, 573 (Ky. 2009) (quoting Adams v. Ison,
249 S.W.2d 791, 793 (Ky. 1952)). For this reason,
the statute’s reference to “other indirect means” of
obstruction of an action still requires an act or conduct
that remains “affirmatively fraudulent”: “The ‘other
indirect means’ of obstruction . . . must consist of some
act or conduct which in point of fact misleads or deceives
plaintiff and obstructs or prevents him from instituting
his suit while he may do so.”
Emberton, 299 S.W.3d at 573 (quoting Adams, 249 S.W.2d at 792).
“[T]he most commonly recognized exception to the affirmative act
requirement applies where a party remains silent when the duty to speak or
disclose is imposed by law upon that person.” Id. at 574 (internal quotations
omitted). However, simply remaining silent is not enough. The silence, or failure
to report, must be relied upon by the injured party and prevent them from
commencing the action.
In Munday, the court considered this exception to determine whether failing
to comply with the reporting requirements of the assumed-name statute was
sufficient to justify estoppel. Id. at 913. The assumed-name statute requires the
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filing of a certificate of assumed name when conducting business under that name.
Id. at 912. The court held that the failure to file a certificate of assumed name was
grounds for the application of estoppel under KRS 413.190(2). Id. at 913-16. In
doing so, the court “reiterat[ed] that the purpose of the assumed[-]name statute is
to inform members of the public, including appellants, of the identity of persons
doing business under an assumed name.” Id. at 915. The court reasoned that the
violation resulted in the deprivation of information “essential to the
commencement of the litigation.” Id. Therefore, failure to comply was sufficient
to justify estoppel under the statute. Id.
In Harralson v. Monger, the court considered whether a failure to report
complete and truthful information regarding vehicle collisions was grounds for
estoppel under KRS 413.190(2). 206 S.W.3d 336 (Ky. 2006). Jacobs, one of the
drivers in the six-vehicle accident, indicated in his report that Monger was to
blame. Id. at 337-38. As a result, he was not named as a defendant and Harralson
sued Monger instead. Id. The court found that “the purpose of [the reporting
statute] was to provide a means for injured parties to seek compensation. The duty
of Jacobs to provide complete and truthful information for the accident report was
highlighted because of the fact that he was the only person who spoke to the officer
making the report.” Id. at 339.8 His failure to report resulted in Harralson’s failure
to commence an action against him. Id. If he had reported the incident accurately,
8
Monger was unable to make a report because she was taken to the hospital for a brain injury.
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he “would have undoubtedly been named as a defendant within the time limit.” Id.
Therefore, he was estopped from relying on the statute of limitations.
In Emberton v. GMRI, Inc., a restaurant actively concealed from the health
department investigators and plaintiff the facts that one of its employees carried the
hepatitis A virus and had never received proper hygiene training for food handlers.
Emberton, 299 S.W.3d at 570. The Supreme Court found such behavior constituted
the kind of “affirmatively fraudulent” behavior sufficient to toll the statute of
limitations under KRS 413.190(2). Two factors were necessary to the holding in
Emberton: “GMRI’s active concealment and the sparse knowledge available to
Emberton.” Id. at 575 (emphasis supplied).
The court’s reasoning in Munday, Harralson, and Emberton reveals that
simply having a duty to report does not mean a party will be estopped from
asserting the statute of limitations defense in every case where a failure to report
occurs. Instead, a case-by-case determination must be made to determine if the
failure to report tips the scale in favor of estoppel. See Harralson, 206 S.W.3d at
340 (noting that, under the facts, when the statute of limitations is “weighed
against the problems created by either silence, half-truths, or material omissions,
the scale clearly favors . . . tolling”). This conclusion is in line with principles of
equitable estoppel which require that failure to commence the action is the result
from reasonable reliance on the action of the wrongdoer. See Fluke, 306 S.W.3d at
65 (“Kentucky law has not previously held that such failure [to report] excuses a
plaintiff’s duty to exercise due diligence to investigate or constitutes fraudulent
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concealment sufficient to invoke equitable estoppel.”). That is not the situation
here.
With these concepts in mind, we turn to the appellees’ assertion that Golden
Oak was estopped from asserting the statute of limitations defense. As we do so,
however, we remain mindful that an injured person always has a duty to diligently
investigate his injury and its possible cause within the statutory timeframe. “Given
this duty . . . delaying the accrual of the cause of action or tolling the running of the
statute of limitations . . . is reserved for truly exceptional circumstances . . . .”
Fluke, 306 S.W.3d at 67.
The appellees argue that Golden Oak misled the cabinet on two occasions.
First, they allege Golden Oak misrepresented their intentions to the Cabinet on
their mining permit application by not indicating that they would engage in the
pulling of pillars supporting the ceiling of the mine. Second, they claim a letter
from Golden Oak to the Cabinet in 1997 erroneously indicated that “all the
complaints from the petition [were] resolved and [new] complaints [were] being
handled with equal diligence.”
We will presume that the applicable mining statutes imposed a duty upon
Golden Oak to include accurate information on its permit application. Yet, if
Golden Oak misrepresented the intended nature and scope of its mining activities
to the Cabinet, that in no way affected the accrual of appellees’ cause of action.
The appellees were still aware that Golden Oak was mining under Camp Branch.
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If anything, the representations appellees claim were false merely hinder discovery
of how appellees were injured, but not who injured them.
Similarly, Golden Oak’s 1997 letter to the Cabinet, which the appellees
claim misrepresented that “all the complaints from the [March 5, 1997] petition
were] resolved,” did nothing to obstruct the appellees’ discovery of their claim.
Furthermore, presuming the representation to the Cabinet was false, did the
appellees not know the truth? If so, how could it be said that appellees relied on
the misrepresentation in good faith?
The fact is that the evidence appellees rely on to save them from the
operation of the statute of limitations actually highlighted Golden Oak’s
culpability. In any event, Golden Oak’s representations that it had fixed or would
fix the problem is insufficient to trigger application of KRS 413.190(2).
Addressing this very issue in the context of that statute, our Supreme Court said
that “[m]ere statements by a defendant that it would fix the problem does not rise
to the level of the statute [KRS 413.190(2)].” Davis v. All Care Medical, Inc., 986
S.W.2d 902, 906 (Ky. 1999).
Considering Emberton, the most recent case on the issue and one heavily
relied upon by appellees, it is easy to see why the statute is inapplicable to the case
sub judice. Golden Oak did not “actively conceal” its connection with the loss in
water quality and the knowledge available to the appellees was in no way “sparse.”
Neither statutory estoppel under KRS 413.190(2) nor common law equitable
estoppel is applicable to this case.
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Continuing trespass or temporary nuisance
Appellees also argue that their common law claims of nuisance and trespass9
were continuing, or temporary, in nature rather than permanent. Therefore, goes
the argument, a new cause of action accrued each day the nuisance or trespass was
not abated. We do not agree.
“[L]anguage used in some of our [appellate court] opinions has
contributed to the confusion” about continuing versus permanent trespass and
nuisance. Lynn Min. Co. v. Kelly, 394 S.W.2d 755, 757 n.1 (Ky. 1965). Among
the confusing opinions predating Lynn Mining is Fergerson v. Utilities Elkhorn
Coal Co., 313 S.W.2d 395 (Ky. 1958), which identified our “rather unusual rule
for defining whether a structure is permanent or temporary.” Ferguson, 313
S.W.2d at 400 (emphasis supplied).
[I]f the structure is one which may not be readily
remedied, removed or abated, at reasonable expense, or is
of durable character intended to last indefinitely, it is
permanent and only one recovery may be had for all
damages sustained. If, however, it can be changed or
repaired or remedied at reasonable expense, it is
temporary, and, if it is temporary, the harm is then a
9
The only “real and reasonable difference . . . between a nuisance and a continuing trespass [is
that o]ne is simply more visible and tangible than the other.” Bartman v. Shobe, 353 S.W.2d
550, 555 (Ky. 1962). Therefore, our analysis draws from both types of cases and is applicable to
both of appellees’ common law causes of action.
-23-
continuing one and recovery may be had for the injuries
as they occur.
Id. (emphasis supplied).
Kentucky has taken various approaches to the lack of clarity in this
jurisprudence and the application of the five-year statute of limitations to it. Some
cases focus on the cost of the remedy. For example, an oft-quoted explanation is
this: “A ‘temporary’ as opposed to a ‘permanent’ nuisance is a continuing one
which ‘results from some improper installation or method of operation which can
be remedied at reasonable expense.’” Radcliff Homes, Inc. v. Jackson, 766
S.W.2d 63, 66 n.3 (Ky. App. 1989) (quoting Lynn Mining, 394 S.W.2d at 757,
759) (emphasis in original).10
Others, as indicated above, couched the analysis in terms of the nature of the
“structure” causing the trespass. However, in Wimmer v. City of Ft. Thomas, 733
S.W.2d 759 (Ky. App. 1987), we acknowledged that the “[o]ffending structures
[referring to a mine operated in violation of regulations] causing continuing
trespasses and recurring damages are not susceptible to a simplistic application of
the five-year limit.” Wimmer, 733 S.W.2d at 760 (emphasis supplied).
10
When it codified “the common law of nuisance as existing in the Commonwealth on May 24,
1991[,]” KRS 411.500, the Legislature included this concept as part of its definition of a
permanent nuisance. “A permanent nuisance shall be any private nuisance that: (a) Cannot be
corrected or abated at reasonable expense to the owner.” KRS 411.530(1)(a). Any private
nuisance that was not a permanent nuisance was defined as temporary. KRS 411.540(1).
However, we are not bound by these definitions. The Legislature specifically stated that the
statutory cause of action “shall not be construed as repealing any of the statutes or common law
of the Commonwealth relating to nuisance, nor shall be construed to abridge any other rights or
remedies available for personal or property damage, but shall be held and construed as ancillary
and supplemental thereto.” KRS 411.570. Since the claims were not brought under the statutory
scheme and since no party relies in any way on these statutes, we consider only the common law.
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Nevertheless in Wimmer, we “succinctly put [forth] these [five] guidelines[,]”
including the guideline that fits the circumstances of this case: “(4) If the offending
structure is permanent but unlawfully built or negligent, only a one-time recovery
brought within five years from the date the cause of action accrued is allowed if it
be shown that the structure cannot be remedied at an expense reasonable in relation
to the damage.” Id. at 760-61.11 The offending structure in this case is a mine
which appellees claim was unlawfully or negligently built or operated. Applying
Wimmer then, the appellees’ causes of action for nuisance and trespass would not
have been timely filed.
However, the focus of the inquiry has sometimes shifted away from the
nature of the structure in favor of a focus on the tortious conduct, particularly
when the structure involved is a mine. Sometimes, “[t]he mines themselves do not
constitute permanent nuisances, in the sense of an expensive permanent structure,
as was the case in Kentucky West Virginia Gas Company v. Matny, Ky. 279
S.W.2d 805 [(1955)].” West Ky. Coal Co. v. Rudd, 328 S.W.2d 156, 160 (Ky.
1959). In Rudd, it was “the method of operation that constitutes the nuisance.”
Id.; see also Rockwell Int’l Corp. v. Wilhite, 143 S.W.3d 604 at 611)(“Court [in
11
Each of the five guidelines in Wimmer references negligence. We are aware that our Supreme
Court, in declining to adopt the tort of continuing negligence and differentiating that tort from
nuisance, repeated what it said twenty years before Wimmer: “‘The injection of the concept of
negligence into various aspects of the law of nuisance has caused endless and unnecessary
difficulties. . . .’ This continues to be an accurate statement of the law and again, we choose not
to interject negligence into nuisance cases.” Davis v. All Care Medical, Inc., 986 S.W.2d 902,
906 (Ky. 1999) (quoting Lynn Mining, 394 S.W.2d at 758). However, because Wimmer’s
guidelines can be read and applied irrespective of those references to negligence, and because we
have relied on those guidelines subsequent to Davis (see Rockwell Int’l Corp. v. Wilhite, 143
S.W.3d 604 at 610 (quoting all five guidelines)), we continue to consider Wimmer as providing
some precedential authority.
-25-
Rudd] pointed out that it was the method of operation that constituted the nuisance
rather than the mines themselves.”). Because appellees rely heavily on Rudd, we
carefully consider its applicability to the case before us.
In Rudd, the Court determined that the dumping into a stream of coal slack
and other deleterious substances by multiple mining companies constituted a
continuing nuisance. Focusing on the mining companies’ “method of operation,”
the Court noted two factors that are not present in the case before us. First, the
mining companies “continued the condition” of polluting the stream, Rudd, 328
S.W.2d at 160, and second, the nuisance would end “if continued pollution by the
appellants should cease.” Id. at 159. These two factors were critical in the
determination that the nuisance or trespass was continuing. Id. at 160.
These factors are conspicuously absent in the case now before us. Golden
Oak ceased mining activity in 1997 – more than five years before appellees
asserted a claim against it. This nuisance or trespass was permanent; whatever
Golden Oak did that precipitated it, or whatever structure Golden Oak was
responsible for creating, was complete in itself when mining ceased. Its effect,
however, can only be said to have created a permanent condition.
Other widely accepted authority reinforces this conclusion. “A continuing
trespass occurs when there is some continuing or ongoing tortious activity
attributable to the defendant, while a permanent trespass occurs when the
defendant’s tortious act has been fully accomplished.” 75 Am. Jur. 2d Trespass §
-26-
19 (2010) (emphases supplied). Any tortious activity attributable to Golden Oak
had ended by 1997.
Appellees’ various arguments that the nuisance or trespass they suffered was
continuing because it was not permanent – i.e., it was a temporary nuisance – are
unavailing. We cannot agree that the nuisance or trespass here was temporary.
Conclusion
Our de novo review yields the conclusion that there were no genuine issues
of material fact regarding when the appellees’ causes of action accrued. It could
not have been later than 1997, more than five years before they brought their civil
action against Golden Oak on February 7, 2003. Furthermore, the discovery rule is
inapplicable to the facts of this case as are the concepts of statutory and equitable
estoppel. Because the alleged nuisance or trespass committed by Golden Oak was
permanent and discovered or discoverable more than five years before appellees
brought their civil action against Golden Oak, those claims were also barred by the
five-year statute of limitations.
For the reasons stated, the Letcher Circuit Court should have granted Golden
Oak’s motion for summary judgment on limitations grounds. Therefore, we
reverse.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Barry M. Miller
Elizabeth S. Feamster
Lexington, Kentucky
Joe F. Childers
Lexington, Kentucky
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