ESTATE OF CORDELL H. MARTIN v. EAST KENTUCKY ENERGY CORPORATION; WILFORD NIECE; APPLE TREE MINING CO.; LEWIS KING; ANNA HALL; HUBERT HALL; OLEN DAVIS; BETTY DAVIS; DONNA DAVIS; RICKY DAVIS; PAULINE MCCONNELL; RAYMOND MCCONNELL; BANNER DAVIS; VIOLETTA DAVIS; REEDITH GIBSON; PAUL GIBSON; REECE DAVIS; BARCELONA DAVIS; GREG MOORE; LUCINDA MOORE; LOCIE BLAIR; HASSEL KING; BERNIECE HALL; ARCHIE HALL; AND, DOUGLAS HAYES
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RENDERED: April 9, 1999; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1996-CA-001058-MR
ESTATE OF CORDELL H. MARTIN
APPELLANT
APPEAL FROM KNOTT CIRCUIT COURT
HONORABLE JOHN DAVID CAUDILL, JUDGE
ACTION NO. 84-CI-00109
v.
EAST KENTUCKY ENERGY CORPORATION;
WILFORD NIECE; APPLE TREE MINING CO.;
LEWIS KING; ANNA HALL; HUBERT HALL;
OLEN DAVIS; BETTY DAVIS; DONNA DAVIS;
RICKY DAVIS; PAULINE MCCONNELL;
RAYMOND MCCONNELL; BANNER DAVIS;
VIOLETTA DAVIS; REEDITH GIBSON;
PAUL GIBSON; REECE DAVIS; BARCELONA
DAVIS; GREG MOORE; LUCINDA MOORE;
LOCIE BLAIR; HASSEL KING; BERNIECE
HALL; ARCHIE HALL; AND, DOUGLAS HAYES
APPELLEES
OPINION
REVERSING
** ** ** ** **
BEFORE:
GARDNER, JOHNSON, AND MILLER, JUDGES.
JOHNSON, JUDGE:
The estate of Cordell H. Martin has appealed
from the judgment of the Knott Circuit Court entered on March 8,
1996, which modified its previous order of December 28, 1989, and
ordered the estate to redeposit $85,049.39 into escrow, the sum
it determined was erroneously allowed to the Honorable Cordell
Martin (Attorney Martin) in attorney's fees.
We reverse.
This action was commenced on May 18, 1984, by Bethlehem
Mines Corporation (Bethlehem), against Wilford Niece (Niece),
doing business as Apple Tree Mining Company, and Lewis King,
Ethel King, Stumbo Davis, the heirs of Bertha Davis, Hassel King
and Della King (collectively, the King heirs).
Bethlehem claimed
to own the minerals and mining rights to a 340-acre tract of land
conveyed to its predecessor in title by James King and his wife,
Drucilla King, by two deeds executed in 1903 and 1905.
The
complaint alleged that beginning in October 1980, Niece had been
mining coal on the property under contract with the King heirs.
It sought injunctive relief, as well as damages of $1,500,000
against the defendants, the amount it claimed represented the
market value of the coal already mined and removed.
Niece and the King heirs alleged that an 1897 deed from
James King to Drucilla King created a mere life estate with a
contingent remainder to Drucilla's children by James.1
It was
their contention that the deeds executed by James and Drucilla in
the early 1900's were void as the grantors had only a life estate
in the property.
A hearing was conducted in November 1984 on
Bethlehem's motion for a temporary injunction.
The trial court
refused to enjoin Niece from further mining; however, it ordered
1
James and Drucilla had seven children, three of whom
predeceased their parents, intestate and without issue. The
remaining four children and their issue are the "Kings heirs."
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all royalties to be placed in escrow pending the outcome of the
litigation.
Evidence at the hearing established that the King
heirs had already been paid approximately $150,000 in royalties.
Subsequently, Bethlehem transferred its interest in the property
to East Kentucky Energy Corporation (East Kentucky), who was
substituted as plaintiff.
The issues of title to the mineral estate and damages
were bifurcated.
On September 8, 1988, the trial court rendered
its findings of fact, conclusions of law and judgment.
It
dismissed the complaint after determining that the 1903 and 1905
deeds conveyed only life estates in the mineral estate, and that
Drucilla's bodily heirs took a contingent remainder interest
which vested at her death in 1936.
On appeal, this Court agreed
that the 1897 conveyance created a life estate in the grantors,
but held that the "remainder interests of [James' and Drucilla's]
three children who predeceased Drucilla without issue were vested
at their birth."
East Kentucky Energy Corporation v. Niece, Ky.
App., 774 S.W.2d 458, 461 (1989).
Since the interest of the
three children who died before James and Drucilla descended to
their parents, this Court held that the 1903 and 1905 deeds
conveyed a 3/7 interest in the mineral.
Id.
On remand, the parties resolved all remaining issues as
follows:
Niece agreed to surrender his coal lease for $34,451.60
of the funds in the escrow account.
East Kentucky negotiated
with the King heirs for the lease of their 4/7 interest in the
mineral estate.
As part of that agreement, East Kentucky agreed
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to waive its 3/7 interest in the $123,062.04 remaining in the
escrow account; however, it was also agreed that East Kentucky
would recoup its full 3/7 interest of the funds in escrow from
future royalties owed the King heirs under the lease.
The King heirs were represented throughout this
litigation by Attorney Martin, who had a contract with the King
heirs that provided he would be compensated, if the matter were
appealed, by a sum equal to 40% of the "property recovered" in
the litigation.
Attorney Martin moved the trial court to enter
an order directing the clerk to disburse to him $108,000 of the
funds in the escrow account.
Attorney Martin arrived at this
figure by adding the $124,000 remaining in the escrow account to
$160,000 (the amount received by the King heirs prior to the
establishment of the escrow account), multiplying by 40%, and
subtracting the $6,000 retainer already paid.
On December 28,
1989, the trial court entered an order directing the clerk of the
Knott Circuit Court to pay directly to Attorney Martin the sum of
$108,000 and further provided for the disbursement of the
remainder of the funds to the King heirs.
On January 3, 1990, East Kentucky moved the trial court
to vacate the December 28 order.
East Kentucky alleged that
although the parties had negotiated a settlement on the issue of
damages, not all of the King heirs had executed the coal lease.
It wanted to protect its interest in the escrow account until the
lease had been properly executed and delivered.
On January 5,
1990, Lewis King and Ethel King (two of the King heirs) also
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moved the trial court pursuant to Kentucky Rules of Civil
Procedure (CR) 59.05 to alter, amend or vacate the December 28
order.
The only ground asserted in their motion was that
Attorney Martin was "attempting to calculate fees upon monies
which his clients have no interest."
Specifically, they did not
believe Attorney Martin should receive a percentage of those fees
in the escrow account belonging to East Kentucky.
Martin responded to both motions.
Attorney
The trial court's calendar for
January 11, 1989, reveals that a hearing was conducted on the CR
59 motions and that all the attorneys were present.
On January 23, 1990, the trial court entered two
orders.
The first was an agreed order which contained the
settlement between the parties resolving all remaining issues in
which the King heirs agreed to execute a coal lease in favor of
East Kentucky and East Kentucky agreed to waive any interest in
the escrow account.
The second order entered on January 23,
1990, addressed the issue of Attorney Martin's fee.
It recited
the terms of Martin's contract and found that the King heirs had
"freely and voluntairily [sic]” entered into the contract.
It
also found that by virtue of Attorney Martin's efforts, the King
heirs received $160,000 and $125,000, which latter sum included
the entire escrow remaining after paying Niece, and concluded
that Attorney Martin was entitled to a fee of $108,000.
Finally,
it addressed East Kentucky's objection to the disbursement of the
funds in escrow and noted that by virtue of the settlement
-5-
agreement, the company had released its 3/7 interest in the
escrowed funds.
The King heirs did not seek any further relief in the
trial court for more than five years.
On September 27, 1995,
they moved the trial court to vacate its order of December 28,
1989, alleging that the trial court had never disposed of the
motion they timely filed on January 5, 1990.2
had died in the interim.
Attorney Martin
On March 1, 1996, the Knott Circuit
Court entered the order from which Attorney Martin's estate has
appealed.
It found that under the contract with the King heirs,
Attorney Martin was entitled to only 40% of 4/7 of the royalties
held in escrow and ordered that the estate redeposit the sum of
$85,049.39, plus 12% interest from the date of the order allowing
Attorney Martin to withdraw $108,000.00.
We believe it unnecessary to address the issue of the
amount Attorney Martin was entitled to receive under the terms of
his contingency fee contract with the King heirs, as it is
apparent to us that the trial court was without jurisdiction to
modify the December 28, 1989 order disbursing the escrow account.
The March 8, 1996 order reads in part as follows:
The estate of Cordell Martin was
timely named as a party to this action
premised upon the fact that certain
payments were made from the escrowed
funds herein, to Cordell Martin prior to
his death, and a timely Motion was filed
for and on behalf of certain of the
2
The Honorable John David Caudill was appointed Special
Judge in this action on August 9, 1995.
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Defendant "KING HEIRS", to vacate an
Order disbursing a portion of the
escrowed funds. However, the Court has
not entered any Order regarding that
Motion to Vacate the Order disbursing a
portion of the escrowed funds to the
Honorable Cordell Martin either prior
to, after his death, or at any time
prior hereto.
This order does not mention the trial court's order of January
23, 1990, rendered a few days after the hearing on the CR 59.05
motions.
We note at the outset that the trial court did not
expressly state in its order of January 23, 1990, that it was
denying the relief the appellees sought in their CR 59.05
motions.
Nevertheless, that order clearly addressed the
arguments raised in the post-judgment motions and resolved those
issues in Attorney Martin's favor, reiterating the attorney's
entitlement to a fee of $108,000.
The only pending matter for
the court's resolution on January 23, 1990, was the disposition
of the two motions to alter, amend or vacate the December 28
order.
There was no conceivable purpose for the order except to
address and decide the CR 59.05 motions.
Under these
circumstances, it is our opinion that the CR 59.05 motions were
necessarily disposed of by implication, thereby depriving the
Knott Circuit Court of jurisdiction to revisit the issues raised
in the motions.
See Toms v. Holmes, 294 Ky. 233, 236-237, 171
S.W.2d 245 (1943), and the cases cited therein at pp. 247-248.
Accordingly, that portion of the March 8, 1996 order
modifying the December 28, 1989 order is reversed.
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MILLER, JUDGE, CONCURS.
GARDNER, JUDGE, DISSENTS AND FILES A SEPARATE OPINION.
GARDNER, JUDGE DISSENTING.
I respectfully dissent.
The lower court properly exercised its jurisdiction in
considering the issues at bar, and justice demands that the
matter on appeal receive the full and fair appellate review of
this Court.
In reversing the March 8, 1996 order on
jurisdictional grounds, the majority by implication concludes
that the Martin estate is entitled to a fee of $108,000.
The
facts and the law do not support this conclusion.
Attorney Martin clearly was entitled to 40% of the King
heirs’ 4/7 interest in the escrow account, or a sum equaling
$22,950.51 plus interest.
By no stretch of the imagination could
Martin be entitled to 40% of the remaining 3/7 interest, since
these funds are merely an advance which will be repaid to East
Kentucky by the King heirs from future royalties.
The 3/7
interest does not represent a recovery by the King heirs from
Martin’s efforts, and accordingly the Martin estate is not
entitled to a percentage thereof.
I would affirm Special Judge
Caudill’s order modifying the December 28, 1989 order.
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF FOR APPELLEE, East
Kentucky Energy Corp.:
Hon. Del Kerwyn Martin
Hindman, KY
Hon. Steven D. Combs
Pikeville, KY
ORAL ARGUMENT FOR APPELLEE,
East Kentucky Energy Corp.:
Hon. Scott Kreutzer
Pikeville, KY
-8-
BRIEF AND ORAL ARGUMENT FOR
APPELLEES, King Heirs:
Hon. J. Thomas Hardin
Inez, KY
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