WILLIAMS (W.E.) VS. TEXAS GAS TRANSMISSION, LLCAnnotate this Case
RENDERED: AUGUST 29, 2008; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
W. E. WILLIAMS
APPEAL FROM MUHLENBERG CIRCUIT COURT
HONORABLE DAVID H. JERNIGAN, JUDGE
ACTION NO. 03-CI-00609
TEXAS GAS TRANSMISSION, LLC
** ** ** ** **
BEFORE: CLAYTON AND ACREE, JUDGES; GUIDUGLI,1 SENIOR JUDGE.
CLAYTON, JUDGE: W. E. Williams (Williams) appeals from the judgment of
the Muhlenberg Circuit Court dismissing Williams’ Complaint and Petition for
Declaratory Judgment. The trial court held that Williams was equitably estopped
from asserting any claim to an interest in the 18-17/32 acres of the Bethel
Senior Judge Daniel T. Guidugli sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
formation owned and operated by Texas Gas Transmission, LLC (Texas Gas).
Furthermore, the court ordered that Williams pay all costs for the action.
Since 1969, Texas Gas has owned and operated a natural gas storage
field in Muhlenberg County, Kentucky, known as the Midland Field, which covers
roughly 22,000 acres. The field contains a natural underground rock formation,
known as the Bethel formation. Natural gas is injected into the formation and will
remain there until withdrawn. This case involves a tract within Midland Field
containing sixty-four acres, which is known as the Peveler sixty-four acres. Within
the Peveler sixty-four acres is a tract containing 18-17/32 acres. It is this acreage
that is the subject of the law suit.
Williams filed this action against Texas Gas on December 18, 2003.
Therein, he alleged, among other things, that he owned an undivided one-fourth
interest in the oil, gas, and gas storage rights beneath 18-17/32 acres located within
the Midland Field. Further, Williams asserted that Texas Gas should account to
him for its use of this acreage since 1973 or thereabouts. Williams acquired his
interest by deed, dated June 11, 1987, from Flag Drilling Co., Inc., (Flag Drilling).
Texas Gas filed an answer and counterclaim in which it denied
Williams’ claim of ownership, and if he did have an ownership interest, Texas Gas
asserted that he was prohibited from asserting the title by reason of adverse
possession by Texas Gas, by reason of champerty, or by reason of estoppel.
The parties litigated the issues in three distinct phases. Phase I
concerned the issue of Williams’ record title. On April 18, 2005, the trial court
entered a declaratory judgment that Williams, through Flag Drilling’s 1988
conveyance, held record title to one-fourth of the oil, gas, and gas storage rights in
the Bethel formation beneath the 18-17/32 acres. Additionally, the court ordered
that the action would proceed with regard to the various defenses proffered by
Texas Gas to Williams’ ownership.
Phase II concerned the issues of Texas Gas’s counterclaim. For
purposes of judicial economy, the issue of adverse possession and champerty was
tried before a Muhlenberg County jury and the issue of estoppel before the court,
sitting as a chancellor in equity. The trial took place from October 17 through
October 20, 2006. The jury denied Texas Gas’s claims as to adverse possession
and champerty with regards to the 18-17/32 acres in the Peveler tract of the Bethel
seam. After this determination, the trial judge considered the same evidence that
the jury heard to ascertain whether the disputed facts supported Texas Gas’s claim
of equitable estoppel by silence and misrepresentation.
On January 5, 2007, the trial court entered a Judgment dismissing
Williams’ complaint and petition for declaratory judgment. In addition, the trial
court’s judgment confirmed that equitable estoppel by silence and
misrepresentation had occurred and ordered Williams to pay all costs. As a result
of the court’s decision, Phase III was unnecessary. (It would have resolved the
accounting problems between the parties had they been found to be joint owners.)
In 1962, Williams was the discovering geologist of the Midland Gas
Field. Thereupon, he entered into a partnership with Mr. Charles Baker, Jr.
(Baker) for the purposes of acquiring leases and drilling for oil and gas. Williams
and Baker, in 1963, formed another company, which they titled Flag Drilling Co.,
Inc. Williams, Baker, and their spouses were the only shareholders in the
company. In 1974, Williams purchased all the Baker shares. He was the sole
shareholder from 1974 until 2002, when he sold an interest in the company to
Kelly Williams, his son.
During 1963, Williams learned that the T. J. Peveler and M. L.
Peveler heirs owned the gas and oil beneath the Peveler sixty-four acre tract.
While Williams obtained the oil and gas leases from the M. L. Peveler heirs, the T.
J. Peveler heirs leased to William E. Payton and John M. Boggess. Concurrently,
Williams hired Mr. Robert Vick (Vick) to examine the title for the Peveler sixtyfour acres. Mr. Vick expressed his opinion as to the ownership interests in the
Peveler sixty-four acres in a letter dated January 24, 1964. Therein, he stated that
the T. J. Peveler and the M. L. Peveler heirs owned the oil and gas beneath this
tract. The source deed for the mineral ownership of the Peveler heirs was a deed,
dated October 16, 1911, and recorded in Deed Book 80, page 456. Mr. Vick,
however, also noted an “adverse conveyance” of a deed, ostensibly conveying the
18-17/32 acres, dated October 10, 1907, and recorded in Deed Book 85, page 581.
Regarding this deed, Vick required Williams to obtain the original deed to
ascertain whether it was of the surface or in fee and to obtain information
concerning Henry Peveler’s involvement in this conveyance. No evidence was
introduced at trial that Williams looked for the original deed, but he was on notice
that a problem might exist with the Peveler title.
Subsequently, in January 1964, Williams acquired the T. J. Peveler
heirs’ lease from Payton and Boggess, and transferred to Baker one-half of his
interest in the T. J. and M. L. Peveler heirs’ leases.
Even though Williams knew of a possible title defect concerning the
18-17/32 acres, he and Baker entered into a gas purchase contract with Texas Gas
on August 3, 1964. In the contract, they dedicated the Peveler sixty-four acres,
without exception, along with other leasehold tracts, to meet the contract’s
requirements. At this time, Williams and Baker warranted title to the gas free and
clear of any adverse claims, and on that same day granted an option to Texas Gas
to acquire the leases dedicated to the gas purchase contract. Again, they
represented that they owned the lease involved.
Moreover, on August 26, 1964, Williams and Baker filed an
application for a Certificate of Public Convenience and sent a copy to Texas Gas.
On page two of the application, Williams and Baker represented that they owned
the production and that the acreage was dedicated under the aforementioned gas
Then, in December 1964, Williams met with Gardner Stovall and his
sister, Martha Stovall Ely, who claimed to own the oil and gas beneath the
18-17/32 acres. Williams and Baker decided to purchase the interest but first
wanted an assurance as to the title. Stovall had Terry Earle (Earle) write a title
opinion for him. Earle concluded that Stovall and Ely owned one-half of the oil
and gas beneath the 18-17/32 acres by reason of the joinder of M. L. Peveler in the
deed, described to Williams by Vick, in the aforementioned original title letter
opinion, as an “adverse conveyance.” Moreover, in this second title opinion letter,
Mr. Earle, based on the lease of M. L. Peveler heirs to Williams and the recorded
gas purchase contract and option contract between Williams/Baker and Texas Gas,
required that Stovalls place Williams/Baker and Texas Gas on notice of their
Before purchasing the Stovall and Ely oil and gas interest, Williams
reviewed Earle’s title opinion. Interestingly, the Williams/Baker partnership
purchased the Stovall and Ely interest, paid them $6,500 from the partnership
account, but put the title in the name of Flag Drilling. And Williams did not
follow through with Earle’s requirement to place Texas Gas on notice of Flag
Drilling’s ownership claim.
Next, Vick issued a supplemental title opinion regarding the Peveler
sixty-four acre tract for Williams and Baker. In his title opinion, dated January 28,
1965, Mr. Vick stated that Flag Drilling owned an interest in the oil and gas
beneath the 18-17/32 acres, but the opinion specifically provided that no action
would be required until a decision was made to drill on the 18-17/32 acres.
According to undisputed evidence, no well was ever drilled there.
The business relationship between Williams/Baker partnership and
Texas Gas changed in 1969. At this time, Texas Gas obtained a Certificate of
Convenience and Necessity from the Federal Power Commission granting it
permission to acquire, own, and operate the Midland Field. The Williams and
Baker partnership held leases, produced, and sold gas to Texas Gas on
approximately 500 acres covered by the Certificate including the Peveler tract,
wherein lie the 18-17/32 acres, which are the subject of this action.
When negotiations were unsuccessful in obtaining these oil, gas, and
storage rights, Texas Gas filed, in October 1969, numerous condemnation suits in
Muhlenberg County Court against the T. J. Peveler heirs, the M. L. Peveler heirs,
Williams, and Baker to obtain those interests. These condemnation actions sought
to acquire the ownership interests of both the “working interest” and also the
mineral fee owner of the Bethel Seam, and any oil and gas wells located on the
surface of each contiguous tract.
As part of the process, Texas Gas hired Neal & Neal to do a
supplemental title search on the Peveler sixty-four acres. Sid Neal evaluated the
records from the first Vick opinion (January 24, 1964) and concluded that the T. J.
Peveler heirs and the M. L. Peveler heirs owned the oil and gas; the Payton,
Boggess’ estate, and Ernest Warmbrod owned a total overriding royalty interest of
3/64 x 7/8ths; and, Williams/Baker owned the 7/8ths working interests in the oil and
gas leases executed by the Peveler heirs, less the previously mentioned overriding
As part of the condemnation process, the County Commissioners
heard the case and found that the T. J. Peveler heirs, collectively, owned one-half
the minerals and one-half the royalty, found that the M. L. Peveler heirs,
collectively, owned one-half of the minerals and one-half of the royalty, and found
that Williams/Baker, collectively, owned the entire 7/8ths working interest, less the
overriding royalty interests. Nonetheless Williams and Baker remained silent
about Flag Drilling’s apparent interests.
All the parties, including Texas Gas, took exceptions to the
commissioners’ award. These exceptions were filed in the Muhlenberg Circuit
Court. In 1973, after several years of litigation, the parties held negotiations to
settle the Peveler suit as well as the other condemnation suits that Texas Gas had
filed against Williams and Baker. Although Williams is the only living person
who participated in these negotiations, letters exist that provide information about
the settlement process.
In that regard, after Williams, Baker, and their spouses agreed to settle
all issues concerning just compensation for the payment of $1,600,000, Attorney
Ridley M. Sandidge (Sandidge) wrote a letter on behalf of Texas Gas, dated June
28, 1973, to Baker and Williams’ attorney, William Donan (Donan). In the letter
was the following paragraph:
The rights and interests we are acquiring are those we
sought in the various condemnation actions. It would
also include any other similar rights and interests that
they might hold in Midland Field which have not been
covered in any condemnationaction (sic). While I know
of no such interests, and assume there are none, we
would want any such rights included in the conveyance
Donan replied by letter on July 3, 1973. In response to the above statement, he
It was our understanding that the rights and interests that
you are acquiring are those that you sought in the various
condemnation actions and did not include any other
similar rights or interests that they might hold in the
Midland field which have not been covered in any
condemnation action, nor any property that they might
acquire in the future in the Midland field.
Then, Sandidge wrote back by letter on July 5, 1973, stating in part:
1) It was definitely our understanding that we were
offering to buy their interests in the entire field. In order
to determine whether or not this presents a major
problem, I would appreciate it if you would advise me of
what interests your clients presently hold in the field that
are not subject to condemnation at this time. I know of
no such interests but your letter indicates to me that there
may be some.
In that same letter, he wrote:
In line with the above, it is my thought that your
conveyance should include a paragraph to the effect that
if any interests in the field have been omitted, you would
execute to us an appropriate instrument of conveyance.
In response, Donan wrote on July 6, 1973, stating that he had “talked to Mr.
Williams and he advised me that he and Mr. Baker do not have title to any other
property in the Midland area.” No mention was made by Williams about the
interests acquired and owned by Flag Drilling, of which he and Baker, were the
Following Donan’s assurance that Williams and Baker did not have
title to any other property in the Midland area, the parties finalized the settlement.
On July 10, 1973, Williams, Baker, and their spouses, assigned to Texas Gas their
entire interests in twelve separate parcels of land, including the Peveler sixty-four
acres. The assignment included the following language:
It is further understood and agreed that it is in the
intention of the parties hereto that all the rights and
interests sought to be condemned in said actions are
It is understood and agreed that this assignment is made
in settlement of and includes all interests of First Parties
which Second Party is now seeking to condemn in its
petitions and condemnation actions now pending in the
Muhlenberg Circuit Court, Greenville, Kentucky, at
Docket numbers set out above.
No mention is made of the allegedly outstanding interest of Flag Drilling nor does
it have any exception regarding the 18-17/32 acres. Thus, by the early 1970’s,
Texas Gas believed that it had acquired all the interests in the Bethel Formation
beneath the Peveler tract, and the entire Midland Field.
Three years later, Williams, after he had received his portion of the
settlement, contacted Bill Jenkins, now deceased, at Texas Gas and asserted Flag
Drilling’s claim. George W. Thompson (Thompson), now deceased, the land
manager for Texas Gas, advised Williams that, in his opinion, Flag Drilling only
had the surface interest.
To bolster this position, Texas Gas’s land files contained the 1964
opinion letter of Vick wherein he opined that the Peveler heirs had reserved the
“coal and mineral rights” in the October 16, 1911 deed, recorded in Deed Book 80,
page 456. Furthermore, Texas Gas also had in its files another opinion letter from
Russell C. Jones, Esq., dated December 17, 1963, wherein opined that the heirs of
T. J. and M. L. Peveler had the right to lease the Peveler sixty-four acres.
Ultimately, after an exchange of correspondence, Texas Gas,
believing that it held title to the acreage in question, wrote Williams to contact
Sandidge on this matter. No evidence was introduced that Flag Drilling contacted
Texas Gas again about this issue.
Nine years later (June 1988) Flag Drilling conveyed its interest in the
18-17/32 acres to Williams and the Baker heirs. Following this conveyance, Vick,
on behalf of Williams and the Baker heirs, asked Texas Gas for the basis of its
position that his clients had no interest in the 18-17/32 acres. Ralph Wible
(Wible), an attorney for Texas Gas, replied to Vick in a letter, dated August 2,
1988, that Williams and the Baker heirs were estopped from asserting their claim.
Williams received a copy of this letter from Vick.
Williams next communicated with Texas Gas in 2000 when his
attorney asked them to check the title. Finally, in 2003, Williams asked for rent
from Texas Gas in the sum of $264,000,000. Upon not receiving this payment,
Williams filed this action.
1) EQUITABLE ESTOPPEL BY SILENCE
The common law principle of equitable estoppel is firmly established
in Kentucky law. Electric and Water Plant Bd. Of City of Frankfort v. Suburban
Acres Development, Inc., 513 S.W.2d 489 (Ky. 1974). In Gray v. Jackson
Purchase Production Credit Association, 691 S.W.2d 904, 906 (Ky. App. 1985),
this Court set out the elements of estoppel as follows:
1) Conduct, including acts, language and silence,
amounting to a representation or concealment of material
2) the estopped party is aware of these facts;
3) these facts are unknown to the other party;
4) the estopped party must act with the intention or
expectation his conduct will be acted upon; and
5) the other party in fact relied on this conduct to his
We will examine each of these elements individually.
First, we must ascertain whether Williams acted in such a way, either
through spoken acts or silence, and that these actions amounted to a representation
or concealment of material facts as to Flag Drilling’s ownership (ultimately
Williams and the Baker heirs’ ownership) to the oil and mineral rights under the
land in controversy. The record contains numerous examples of tacit
misrepresentation or silence on the part of Williams. We will list some of these
examples from the facts explicated above:
• Even though Williams knew of the adverse title claim of
the Stovalls on the property in question and even after the
title opinion letter from Vick, he did not apprise Texas
Gas about the adverse claim to the property.
• When he and Baker entered into a gas purchase contract
on August 3, 1964, covering the entire 64 acres without
exception, they warranted title to the gas free and clear
from any adverse claims.
• On that same day, Williams and Baker granted Texas
Gas an option to acquire the leases dedicated to the
purchase contract and represented that they owned the
leases subject to the option.
• Then, after purchase of the Stovalls’ interest for $6,500
in December 1965, which was placed under the
ownership of Flag Drilling but paid with checks drawn
on the Williams and Baker partnership accounts,
Williams did not put Texas Gas on notice of Flag
Drilling’s ownership interest, as advised in the Earle title
• In 1969, Texas Gas instituted condemnation proceedings
in Muhlenberg County Court for the acreage for the
Midland Field including the Peveler sixty-four acre tract.
Following several years of negotiation, the parties
entered into serious negotiations about the property.
Williams stood by while the M. L. Peveler heirs were
paid a settlement on the basis that they owned one-half
the oil and gas, and gas storage rights, in the Bethel
Formation beneath the 18-17/32 acres, when they knew
the M. L. Peveler heirs did not own it.
• At this same time, as outlined in the facts, in perhaps the
most egregious example of “silence” or
misrepresentation in this case, Donan, Williams’
attorney, assured Texas Gas in a letter dated July 6, 1973,
that Williams and Baker did not have title to any other
property in the Midland area. In fact, Williams never
mentioned the interests acquired and owned by Flag
Drilling, of which he and Baker were the sole
Texas Gas contends that not only did Williams have an affirmative
duty to advise it of Flag Drilling’s acquisition of the mineral rights of the 18-17/32
acres in controversy but also that, in the interests of equity, Williams should not
conceal this information. Thus, even without listing every example in the record, it
is apparent that Williams, despite his knowledge, concealed and misrepresented
pertinent facts about the ownership of the 18-17/32 acres in question. It was not
until three years after the 1973 settlement that Williams brought Flag Drilling’s
interest to the attention of Texas Gas.
The second element for equitable estoppel is that the estopped party
must be aware of the facts. The evidence is undisputed that Williams had
knowledge regarding the oil and gas mineral ownership of the property. He
The third element involves whether or not Texas Gas was aware of the
Flag Drilling/Williams interest in the oil and gas rights of the 18-17/32 acres. In
the late 1960’s and early 1970’s Texas Gas acquired what it believed to be all the
interests in the Bethel Formation beneath the Peveler Tract. As noted, on several
occasions, when Texas Gas so opined or was assured of their ownership, Williams
either was silent or concealed the information about Flag Drilling’s interest.
Moreover, during this time, while Texas Gas was draining the gas under Flag
Drilling’s interest, Flag Drilling made no complaint about it during the
condemnation proceedings. When finally, in 1973, Williams contacted Bill
Jenkins, now deceased, at Texas Gas, about Flag Drilling’s interest, Texas Gas
believed it held the title, and Williams was mistaken. Texas Gas was not aware of
Flag Drilling’s ownership interest in this property.
The final element of equitable estoppel is whether or not the other
party in fact relied on this conduct to his detriment. Here, Texas Gas purchased the
Peveler sixty-four acres, paying Williams and Baker $1,600,000 for their interest
in various leases, including the Peveler sixty-four acres. Additionally, Williams
and Baker retained the commissioners’ award as part of the settlement. Now,
Williams is asking for over $200,000,000 for the use of “his property.” Texas Gas
also paid the M.L. Peveler heirs $20,250. Hence, clearly Texas Gas relied upon
the affirmative statements and conduct of Williams, and his silent refusal to notify
Texas Gas, to its prejudice. Unquestionably, Texas Gas’s actions during the
proceedings are illustrative of its determination to acquire the land in a proper
fashion and that it would have acted differently had it known about Flag Drilling’s
Williams strongly asserts that because Texas Gas could have
determined legal title to the property by examining the county real estate records, it
is not entitled to the defense of equitable estoppel by silence. See Cox v.
Simmerman, 243 Ky. 474, 48 S.W.2d 1078 (Ky. App. 1932). That case, however,
is not applicable here. Kentucky recognizes an exception to the equitable estoppel
rule. Estoppel will apply when a party remains silent under circumstances where
the transaction affecting the party’s property is deemed consummated in the party’s
presence and the other party, who is dealing with the property, is ignorant of the
existence of the first party’s interest, and acts on the assumption it does not exist.
In McDonald v. Burke, 288 S.W.2d 363, 368 (Ky. App. 1956) the Court, citing
Virginia Iron, Coal & Coke Company v. Campbell, 32 Ky. L. Rptr. 40, 105 S.W.
129 (Ky. App. 1907), stated that “[c]onstructive notice does not necessarily
prevent a party from relying upon estoppel.” See also United Fuel Gas Co. v.
Jude, 355 S.W.2d 664 (Ky. 1962). In other words, Texas Gas completed the
transaction with Williams because it relied upon the prior actions of Williams and
the written representation of Williams’ lawyer that he and Baker owned no other
interests in the Midland area. Essentially, standing by and watching the purchaser
pay the wrong person is sufficient conduct to obviate the constructive notice rule.
Another issue proffered by Williams is that the statute of limitations
bars the use of equitable estoppel by silence. Kentucky courts are diligent in
barring stale claims arising out of transactions or occurrences that have occurred in
the distant past. Munday v. Mayfair Diagnostic Laboratory, 831 S.W.2d 912, 914
(Ky. 1992), citing Armstrong v. Logsdon, 469 S.W.2d 342-43 (Ky. 1971). Yet,
notwithstanding the policy to enforce the statute of limitations, there are exceptions
to the rule. For example, an estoppel may arise to prevent a party from relying on
a statute of limitation by virtue of a false representation or fraudulent concealment.
Resthaven Memorial Cemetery, Inc. v. Volk, 286 Ky. 291, 150 S.W.2d 908 (Ky.
App. 1941). Generally, although proof of fraud requires a showing of an
affirmative act by the party charged, silence under circumstances entailing a
legally required duty to disclose may be sufficient to justify an equitable tolling of
the statute. Munday, 831 S.W.2d at 914. These cases are referring to the statute of
limitations being tolled for a party bringing an action.
Winkle v. Jones, 265 S.W.2d 792 (Ky. 1954), overruled by Armstrong
v. Logsdon, 469 S.W.2d 342 (Ky. 1971), was the first case in which the limitation
problem was discussed as it applied to a counterclaim in a tort action. Therein, the
Court held that the counterclaim was subject to the same limitations as the filing
that governed the original petition. But noting that cases in other jurisdictions have
affirmed the broad proposition that if a counterclaim is not barred at the
commencement of the action in which it is pleaded, it is not thereafter barred by
the lapse of the limitation period prior to the time it is pleaded, the Court overruled
Winkle. Armstrong, 469 S.W.2d at 344. Therefore, justice seems to dictate in
cases where the counterclaim arises from the same action as the claim, the
counterclaim would be no more stale than the complaint. Id.
Thus, the above discussed cases show that estoppel may prevent a
party from relying on the statute of limitations because of a false representation or
fraudulent concealment. And in cases where the counterclaim arises out of the
same incident as the claim, the statute of limitations defense for a counter claim
has been allowed. Here, Texas Gas is not bringing an action nor seeking damages
from Williams. Its goal is to defend itself against Williams’ claim. In Winkle, the
Court observed that “it is . . . well established in this state that the statute of
limitations was not intended to bar the use of the defendant’s claim as a matter of
pure defense.” Winkle, overruled on other grounds, 265 S.W.2d at 793. The Court
further instructed that, “in the instant case, the appellee had the right to take full
advantage of his cause of action, if any, insofar as it constituted a defense but he is
denied the right to affirmatively recover damages on account of it.” Id. This
reasoning was later confirmed in Harvey Coal Corporation v. Smith, 268 S.W.2d
634 (Ky. 1954), overruled on other grounds, Armstrong, 469 S.W.2d 342 (Ky.
1971). Similarly, at bar, Texas Gas is not seeking damages based on Williams’
actions, but it is seeking to bar Williams’ claim to the M. L. Peveler lease, based
on estoppel, for his failure to disclose his ownership and affirmatively stating,
through his attorney, that he owned no other interest in the Midland Field. As
summarized, succinctly by the Court, in Liter v. Hoagland, 305 Ky. 329, 204
S.W.2d 219-20 (Ky. 1947):
The purpose of statutes of limitations is to bar
actions rather than to suppress defenses. Such statutes, as
a general rule, are not applicable to defenses but are only
applicable against assertions of affirmative relief. Thus,
so long as the courts will hear the plaintiff’s case, time
will not bar the defense which might be urged thereto and
which grew out of the transaction connected with the
Thus, we hold that the statute of limitations is not a bar to an affirmative
defense of equitable estoppel.
2) EFFICACY OF FINDINGS OF FACTS AND CONCLUSIONS OF LAW
Williams argues that the trial court’s adoption of Texas Gas’s
Findings of Fact and Conclusion of Law was an abdication of the trial court
judge’s fact-finding and decision-making responsibilities under Kentucky Civil
Rules of Procedure (CR) 52.01. Furthermore, Williams makes the novel and
interesting suggestion that this Court review the video and make its own Findings
Williams cites Bingham v. Bingham, 628 S.W.2d 628 (Ky. 1982) for
the proposition that the trial court judge abdicated his responsibilities herein. A
careful reading of Bingham provides the following language: “[h]owever, the
delegation of the clerical task of drafting proposed findings of fact and conclusions
of law under the proper circumstances does not violate the trial court's
responsibility.” Id. Therein, the Court provides a template for ascertaining the
efficacy of a judge’s examination of the submitted Findings of Fact:
Careful scrutiny of the record reveals that the court
was thoroughly familiar with the proceedings and facts of
this case. The record indicates the trial judge prudently
examined the proposed findings and conclusions and
made several additions and corrections to reflect his
decision in the case.
Id. at 629. Additionally, the Kentucky Supreme Court has held that it was not
error for a trial judge to adopt findings of fact without change or correction.
Prater v. Cabinet for Human Resources, Com. of Ky., 954 S.W.2d 954 (Ky. 1997).
Simply put, the judge in the case at bar did not mechanically adopt the
proposed findings of fact and conclusions of law. Indeed, Williams in his twentyseven page January 16, 2007, Motion to Alter, Amend or Vacate and Make
Additional Findings of Fact, lists twelve differences between the submitted
Findings of Facts and the trial judge’s findings. Furthermore, no where does
Williams demonstrate that the decision-making process was not appropriately
handled by the trial judge or that he did not perform the requisite deliberations for
these findings and conclusions. Moreover, our review of the record shows that the
trial judge heard, read, and reviewed evidence in this case that supported his
findings of fact and conclusions of law. Notwithstanding the voluminous,
technical, and contentious record, the trial judge exhibited thoughtful, considerate,
and pain-staking attention in this action. Hence, we find that the trial judge did
meet his responsibilities under CR 52.01.
Furthermore, some cases used by Williams to bolster his position are
not actually on point. These cases were remanded to the trial court because of a
lack of any written findings of fact. Standard Farm Stores v. Dixon, 339 S.W.2d
440 (Ky. 1960); Elkins v. Elkins, 359 S.W.2d 620 (Ky. 1962); Skelton v. Roberts,
673 S.W.2d 733 (Ky. App. 1984). And while, G.R.M. v. W.M.S, 618 S.W.2d 181
(Ky. App. 1981), a termination of parental rights case, did send the case back for
the judge to make findings of fact and conclusions of law, a more recent case has
been decided by the Kentucky Supreme Court on this matter. In Prater, the judge
adopted the Cabinet’s proposed findings without correction or change, the
Supreme Court held it was not error to adopt findings of fact which were merely
drafted by someone else. Prater, 954 S.W.2d at 956. Again, the Court noted that
the underlying principle of CR 52.01 places the burden on the trial judge to find
the facts and make legal conclusions based on those facts. But the trial judge
cannot delegate the fact-finding responsibility. Here, Judge Jernigan did not
abdicate this responsibility. Bingham, 628 S.W.2d at 629.
Regarding Williams’ novel suggestion that the Court of Appeals
review the video tape of the trial and make its own findings, we remind the
appellant that the Court of Appeals does not make findings. Indeed, when an
Appellate Court reviews the record, it always gives deference to the trial court's
factual findings and ruling. The rationale for this judicial process is that a trial
court is in the best position to evaluate the evidence, and videotapes are no
substitute for conducting a four-day trial and overseeing the course of the five-year
3) CLEAR AND CONVINCING EVIDENCE STANDARD
First, we begin by noting that the case was tried by the circuit court
sitting without a jury. Hence, it is before this Court upon the trial court's findings
of fact and conclusions of law and upon the record made in the trial court.
Accordingly, our appellate review of the trial court's findings of fact is governed
by the rule that such findings shall not be set aside unless clearly erroneous. A
factual finding is not clearly erroneous if it is supported by substantial evidence.
Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998);
Uninsured Employers' Fund v. Garland, 805 S.W.2d 116, 117 (Ky. 1991).
Substantial evidence is evidence, when taken alone or in light of all the evidence,
has sufficient probative value to induce conviction in the mind of a reasonable
person. Golightly, 976 S.W.2d at 414; CR 52.01; Largent v. Largent, 643 S.W.2d
261 (Ky. 1982).
Williams’ assertion that the trier of fact used the “preponderance of
the evidence” standard rather than the required “clear and convincing” evidence
standard is merely assertion. He provides nothing to support it. Furthermore,
when Williams presents six propositions upon which he bases his contention that
Judge Jernigan’s findings of fact were erroneous, he does not cite to the record or
provide any evidence to support this claim. The record shows that Judge Jernigan
was aware of the “clear and convincing” evidentiary standard in the case.
Because substantial evidence on the record supports the trial court's
findings of fact and Williams has not demonstrated that the findings are clearly
erroneous, we uphold the findings of fact and conclusions of law. See CR 52.01.
Consequently, we must reject Williams’ contention that Texas Gas did not
establish equitable estoppel by clear and convincing evidence.
Finally, Williams disputes the trial court’s authority to assess him
with the costs of the action. Costs are allowed as a matter of course to the
prevailing party by CR 54.04. Williams claims that he was the prevailing party
because he convinced the trial court that he held record title. This reasoning is
analogous to plaintiffs, in a negligence action who succeed in obtaining a liability
verdict against a defendant but are not awarded damages, believing that they have
prevailed for the purposes of awarding costs. Such a judgment is, in effect,
meaningless unless it is accompanied by an award of damages. Therefore, a
plaintiff who proves liability but receives no damages has not succeeded in her
ultimate goal and purpose for filing suit. Lewis v. Grange Mutual Casualty Co., 11
S.W.3d 591 (Ky. App. 2000). For the same reason, Williams is not considered to
have prevailed because he was successful in defeating Texas Gas’s adverse
possession claim. Ultimately, Texas Gas was successful when it succeeded on its
equitable estoppel defense. Lewis v. Charolais Corporation, 19 S.W.3d 671 (Ky.
Significantly, trial courts have great discretion regarding the issue of
awarding of costs. The rule itself states “[i]n the event of a partial judgment or a
judgment in which neither party prevails entirely against the other, costs shall be
borne as directed by the trial court.” CR 54.04(1). While Williams may certainly
disagree with the court’s decision, he must show an abuse of discretion to reverse
the trial court’s decision regarding costs. Lewis, 19 S.W.3d. at 677. Thus, we
uphold the trial court’s decision regarding costs.
Equity will not permit a person in the position of Williams to act in
this manner. Insofar as pertinent here, this concept is well analyzed in 28 Am. Jur.
2d Equitable Estoppel, § 28 (2000):
Equitable estoppel is a judicial remedy by which a
party may be precluded by its own act or omission from
asserting a right to which it otherwise would have been
entitled, or pleading or proving an otherwise important
Consequently, in its broadest sense, equitable estoppel in this case prevents
Williams from asserting a legal claim to the pertinent 18-17/32 acres because his
prior conduct was inconsistent with this claim. Based on fair dealing, good faith,
and justice, we affirm the trial court’s decision because without it an injustice
BRIEFS AND ORAL ARGUMENT
BRIEF AND ORAL ARGUMENT
Daniel N. Thomas