McKenzie v. Cherry River Coal
Annotate this Case
September 1995 Term
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No. 22798
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EUGENE A. MCKENZIE, MARGARET P. MCKENZIE,
THOMAS J. MCKENZIE, MARGARET E. MCKENZIE
AND BARBARA MCKENZIE,
Plaintiffs Below, Appellants
v.
CHERRY RIVER COAL & COKE COMPANY AND
ISLAND CREEK COAL COMPANY,
Defendants Below, Appellees
__________________________________________________________________
Appeal from the Circuit Court of Greenbrier County
Honorable J. Zane Summerfield, Judge
Civil Action No. 81-C-2434
AFFIRMED
__________________________________________________________________
Submitted: September 19, 1995
Filed: December 13, 1995
John H. Tinney, Esq. Dan O. Callaghan, Esq.
Carl L. Fletcher, Esq. Callaghan & Ruckman
Spilman, Thomas & Battle Summersville, West Virginia
Charleston, West Virginia Jonathan D. Schiller, Esq.
Attorneys for the Appellants David O. Bickart, Esq.
Kaye, Scholer, Fierman,
Hays & Handler
Attorneys for the Appellees
The Opinion of the Court was delivered PER CURIAM.
RETIRED JUSTICE MILLER sitting by temporary assignment.
JUSTICE ALBRIGHT did not participate.
SYLLABUS BY THE COURT
1. "'A motion for summary judgment should be granted only when it is
clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not
desirable to clarify the application of the law.' Syllabus Point 3, Aetna Casualty & Surety
Co. v. Federal Insurance Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963).
Syllabus Point 1, Andrick v. Town of Buckhannon, 187 W. Va. 706, 421 S.E.2d 247 (1992)."
Syllabus Point 1, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995).
2. "Summary judgment is appropriate if, from the totality of the evidence
presented, the record could not lead a rational trier of fact to find for the nonmoving party,
such as where the nonmoving party has failed to make a sufficient showing on an essential
element of the case that it has the burden to prove." Syllabus Point 2, Williams v. Precision
Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995).
3. "If the moving party makes a properly supported motion for summary
judgment and can show by affirmative evidence that there is no genuine issue of a material
fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate
the evidence attacked by the moving party, (2) produce additional evidence showing the
existence of a genuine issue for trial, or (3) submit an affidavit explaining why further
discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil
Procedure." Syllabus Point 3, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995).
4. "A broken covenant or condition relied upon for forfeiture must be
found not only in the instrument, by clear and definite expression, but also within the
forfeiture clause by such expression." Syllabus Point 3, Bethlehem Steel Corp. v. Shonk
Land Co., 169 W. Va. 310, 288 S.E.2d 139 (1982).
Per Curiam:
Eugene A. McKenzie, Margaret P. McKenzie, Thomas J. McKenzie, Margaret
E. McKenzie and Barbara McKenzie (hereinafter the McKenzies) appeal a summary
judgment order by the Circuit Court of Greenbrier County in favor of Cherry River Coal &
Coke Co., and Island Creek Coal Co. (hereinafter the coal companies). On appeal, the
McKenzies allege that the circuit court erred in finding that some of their claims were barred
by the statute of limitations and in finding that no dispute existed between the parties on their
other claims. Based on our de novo review, because we find no error in the circuit court's
determinations concerning the statute of limitations and the lack of a dispute, we affirm the
circuit court's decision.
The case sub judice arises from a April 24, 1962 lease wherein the McKenzies
leased certain coal lands to Cherry River for twenty years with similar options to renew
(hereinafter the lease). Island Creek, by an agreement dated August 8, 1969 with Cherry
River, became the mining agent on the leased property. On August 28, 1981, the McKenzies
filed a five-count complaint against the coal companies in the circuit court seeking the
possession of the leasehold and monetary damages. On April 24, 1985, the McKenzies
added another count alleging that the coal companies violated the lease by underpaying the
McKenzies. By orders filed on November 22, 1991, September 15, 1993, August 5, 1994
and September 6, 1994, the circuit court granted summary judgment in favor of the coal
companies, and the McKenzies appealed to this Court.
I.
STANDARD OF REVIEW
This appeal's sole issue is the appropriateness of summary judgment. "A
circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Painter v. Peavy,
192 W. Va. 189, 451 S.E.2d 755 (1994). In accord Williams v. Precision Coil, Inc., 194 W.
Va. 52, ___, 459 S.E.2d 329, 335, rehearing denied (1995). Our traditional standard for
granting summary judgment is stated in Syl. pt. 3, Aetna Casualty & Surety Co. v. Federal
Ins. Co. of N.Y., 148 W. Va. 160, 133 S.E.2d 770 (1963):
A motion for summary judgment should be granted only
when it is clear that there is no genuine issue of fact to be tried
and inquiry concerning the facts is not desirable to clarify the
application of the law.
In accord Syl. pt. 1, Williams v. Precision Coil, Inc., supra; Syl. pt. 2, Painter v. Peavy,
supra; Syl. pt. 1, Andrick v. Town of Buckhannon, 187 W. Va. 706, 421 S.E.2d 247 (1992).
Rule 56 (1978) of the W.Va.R.Civ.P. is "'designed to effect a prompt
disposition of controversies on their merits without resort to a lengthy trial,' if there
essentially 'is no real dispute as to salient facts' or if it only involves a question of law."
Williams v. Precision Coil, Inc., 194 W. Va. at ___, 459 S.E.2d at 335, quoting, Painter v.
Peavy, 192 W. Va. at ___ n.5, 451 S.E.2d at 758 n.5, quoting, Oakes v. Monongahela Power
Co., 158 W. Va. 18, 22, 207 S.E.2d 191, 194 (1974). Subsection c of Rule 56 states, in
pertinent part, that "[t]he judgment sought shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law."
Syl. pt. 2 of Williams v. Precision Coil, Inc., states:
Summary judgment is appropriate if, from the totality of the
evidence presented, the record could not lead a rational trier of
fact to find for the nonmoving party, such as where the
nonmoving party has failed to make a sufficient showing on an
essential element of the case that it has the burden to prove.
See also Syl. pt. 4, Painter v. Peavy, supra.
Syl. pt. 3, Williams v. Precision Coil, Inc., states:
If the moving party makes a properly supported motion for
summary judgment and can show by affirmative evidence that
there is no genuine issue of a material fact, the burden of
production shifts to the nonmoving party who must either
(1) rehabilitate the evidence attacked by the moving party,
(2) produce additional evidence showing the existence of a
genuine issue for trial, or (3) submit an affidavit explaining why
further discovery is necessary as provided in Rule 56(f) of the
West Virginia Rules of Civil Procedure.
According to Williams v. Precision Coil, Inc. , the function of the circuit court
at the summary judgment stage "is not 'to weigh the evidence and determine the truth of the
matter but to determine whether there is a genuine issue for trial.'" Williams v. Precision
Coil, Inc, 194 W. Va. at ___, 459 S.E.2d at 336, quoting, Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202, 212 (1986). See Syl. pt. 3, Painter
v. Peavy, supra. In addition to drawing any permissible inference from the underlying facts in the light most favorable to the party opposing summary judgment, Williams v. Precision
Coil, Inc., id., also stated:
In assessing the factual record, we must grant the nonmoving
party the benefit of inferences, as "[c]redibility determinations,
the weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a
judge[.]" Anderson, 477 U.S. at 255, 106 S. Ct. at 2513, 91 L. Ed. 2d at 216. Summary judgment should be denied "even
where there is no dispute as to the evidentiary facts in the case
but only as to the conclusions to be drawn therefrom." Pierce
v. Ford Motor Co., 190 F.2d 910, 915 (4th Cir.), cert. denied,
342 U.S. 887, 72 S. Ct. 178, 96 L. Ed. 666 (1951).
With this standard in mind we review the circuit court grant of summary
judgment. Although the case sub judice is factually complex, the following are the major
issues on which summary judgment was granted: first, when did the statute of limitations
begin to run on the various claims; second, was the lease forfeited in 1974, and third, did the
coal companies deliberately and knowingly underpaid the McKenzies for the coal mined,
processed and sold from the leasehold.
II.
FACTUAL BACKGROUND
Under the lease Cherry River was required to pay the McKenzies a royalty of
$0.15 for every long ton of coal mined, with a minimum royalty of $7,200 per year, payable
quarterly. The lease allowed a "recapture credit" whereby the lessee was permitted to credit
its minimum royalty payments against future payments for coal actually mined and shipped.
The parties agree that between 1962 and the end of 1974, the McKenzies received and cashed the minimum royalty payments due. The total amount paid amounting to over
$93,000.
On May 6, 1968, a mining accident, commonly referred to as the "Hominy
Falls Disaster," occurred on the leased property. After several wrongful death actions were
brought against the McKenzies in 1969 and in 1970, the McKenzies brought a third-party
action seeking indemnification from Cherry River. Ultimately the wrongful death actions
were settled in December 1977 with Island Creek, Cherry River's sublessee, paying the
settlement.See footnote 1 In 1980, the coal companies, specifically, Island Creek, fully satisfied the
McKenzies' indemnity claim.
In January 1971, Island Creek advised the McKenzies that it was suspending
deep mining activities of the leased property. However, Island Creek continued to pay the
minimum royalty required by the lease. On November 6, 1974, the McKenzies sent Cherry
River a "Notice of Default" alleging that Cherry River had breached the lease by (1) failing
to employ competent engineers, (2) failing to post accurate maps (both of which were
allegations in the Hominey Falls Disaster litigation, see note 1), and (3), by refusing to pay
the McKenzies' costs of defending the wrongful death litigation. On November 29, 1974,
the McKenzies sent Cherry River a "Notice of Termination," which was recorded. On December 10, 1974, Cherry River sent the McKenzies a "Notice of Denial of Cancellation,"
which was also recorded. The "Notice of Denial of Cancellation" said that the McKenzies
"should do nothing to cast any cloud upon [Cherry River's] title." Nothing else occurred
about the "Notice of Termination" until the complaint was filed seven years later.
Although deep mining of the leased property ceased in 1971, between 1974 and
1982, the coal companies reprocessed "middling coal" from coal waste piles and during 1977
and 1978, a contractor for Island Creek surfaced-mined coal.See footnote 2 Throughout the period the
coal companies continued to tender the quarterly minimum royalty payments required under
the lease. After the McKenzies refused to accept the payments in late 1974, the payments
were placed into an escrow account and the coal companies continued to make payments
during the pendency of this litigation. All such royalty payments have been transferred to
the custody of the Clerk of the Circuit Court.
On August 26, 1981, the McKenzies filed a complaint against the coal
companies.See footnote 3 The complaint, which has been amended, contains six counts. Counts I, II and
III allege three separate breaches of the lease, each of which was asserted in the 1974 Notice
of Termination: failure to hire a competent mining engineer, failure to post maps, and failure to indemnify the McKenzies against the wrongful death actions. The complaint claims no
damages from these alleges breaches, but instead, seeks damages for: (1) "profits plaintiffs
lost" beginning in 1974 caused by the coal companies' failure to vacate the leased property;
(2) "grief, pain and suffering" resulting from the "refusal to honor" the Notice of
Termination; and (3) punitive damages.
Counts IV and VI of the complaint charge that after the 1974 Notice of
Termination, the coal companies unlawfully remained on the leased property and with
trespass. Counts IV and VI seek the same damages as Counts I, II and III of the complaint.
Count V alleges three different breaches of the lease based on a failure to pay in full for coal
mined: (1) "short weighing" and therefore, inadequate royalties for coal mined between
1962 and 1971; (2) lack of revenue for the "middling coal;" and (3) failure to pay adequately
for the 1977-78 surface mining on the leased property.
The circuit court entered several partial summary judgment orders until finally,
the entire case was dismissed. The first partial summary judgment order, filed on November
22, 1991, dismissed Counts I, II and III as time-barred under W. Va. Code 55-2-6 (1981)
because each alleged breach occurred before May 6, 1968, the date of the mine accident, and
were discovered by the McKenzies, at latest, in April 1971 during the wrongful death trial.
This first summary judgment order did not dismiss Counts IV and VI, the trespass and
unlawful hold over counts, and deferred ruling on Count V pending further submissions.See footnote 4
The second partial summary judgment order, filed on September 15, 1993
dismissed Counts IV and VI, finding that because the lease's forfeiture clause was invalid,
the coal companies were not trespassing and not holding over. The September 9, 1993 order
also granted summary judgment of the "short weight" component of Count V based on the
statute of limitations. Finally in 1994, based on a determination that the minimum royalty
payments exceeded the total value of the "middling coal" (order filed on August 5, 1994) and
the 1977-78 surfaced-mined coal (order filed on September 6, 1994), summary judgment was
granted to the coal companies of the remaining portions of the complaint.See footnote 5
On appeal, the McKenzies allege the following assignments of error: (1) The
circuit court erred in ruling that any of their claims were barred by the statute of limitations.
(2) The circuit court erred in failing to find a forfeiture of the lease; and (3) The circuit court erred in ruling that no genuine issue of material fact existed concerning the surfaced-mined
and the "middling" coal.
III.
DISCUSSION
A.
Statute of Limitations
W. Va. Code 55-2-6 (1923) provides a ten-year period in which to bring an
action based on a contract. W. Va. Code 55-2-6 (1923) states, pertinent part:
Every action to recover money, which is founded upon an
award, or on any contract other than a judgment or
recognizance, shall be brought within the following number of
years next after the right to bring the same shall have accrued,
that is to say: . . . if it be upon any other contract in writing
under seal, within ten years; if it be upon an award, or upon a
contract in writing, signed by the party to be charged thereby, or
by his agent, but not under seal, within ten years. . . .
(Emphasis added.)
Although the parties agree that the ten-year statute of limitations applies, they
dispute when this ten-year period began to run. The McKenzies maintain that the statute of
limitations began to run in December 1974 when the coal companies refused to recognize
the lease's termination and vacate the leased property. The coal companies maintain that the
statute of limitations began to run when the McKenzies learned of the alleged contract
breaches and not at some later artificial date when the McKenzies sought to terminate the
lease.
The complaint in Counts I, II and III alleges that the lease was breached by the
coal companies' failure, first, "to indemnify" the McKenzies in the wrongful death action, second "to keep employed a competent engineer," and third, "to keep posted correct, accurate
and complete maps," respectively. On March 16, 1970, the coal companies refused the
McKenzies' demand "to indemnify" them in the wrongful death action. Thomas McKenzie
testified that he learned of the coal companies' failure to employ a competent engineer during
the April 1971 trial of the wrongful death action. Mr. McKenzie stated that he knew no map
was posted on the date of the mining accident, May 6, 1968. Thus the McKenzies knew of
the breaches related to mining accident in 1970 (indemnify), April 1971 (engineer), and May
1968 (map).
Count V of the Complaint seeks damages from a short weighing of the coal
mined, an alleged 22.5 percent discrepancy, and resultant a reduced royalty payment for coal
mined before 1971. In 1967, Thomas McKenzie sent three letters objecting to the tonnage
reports filed by Cherry River; his July 26, 1967 letter ended with a request for "prompt
payment."See footnote 6
The McKenzies allege that these claims only "accrued" when Island Creek
began "holding over" on December 12, 1974. Thus the McKenzies argue that their complaint is timely because it was filed within ten years of the date on which they allege the lease
terminated. In support of their argument, the only authority they cite is Winer v. Edison
Bros. Stores Pension Plan, 593 F.2d 307 (8th Cir. 1979), an ERISA case in which the Court
of Appeals held that forfeiture of pension rights did not occur upon an employee's
misconduct or discharge but occurred when a pension committee declares the forfeiture by
denying the employee's pension claim. However, the appeals court's decision was based on
an interpretation of the vested pension rights under ERISA § 203(a), 29 U.S.C. § 1053(a).
Given the specific question of Winder v. Edison Bros. Stores Pension Plan concerning the
vesting of pension rights, we find that the ERISA case has little persuasive value in
determining when a coal lease is forfeitured.
The McKenzies' argue that the statute of limitations for breaches of a lease
only begins to run when a forfeiture is "declared." Under this theory, a problem discovered
in the first year of a twenty year lease, which is used to declare a forfeiture in the twentieth
year of lease, would not have to be litigated for another ten years. This theory, if adopted,
would extend the ten-year statute of limitations to the term of the lease (or last day when a
forfeiture could be declared) plus ten years.
We have constantly held that the statute of limitations begins to run when the
breach of the contract occurs or when the act breaching the contract becomes know. The
statute of limitations does not begin to run when a party to the contract declares a forfeiture.
Such an expansion of the statute of limitations as urged by the McKenzies is not within the
plain language of the statute which allows ten years for an action to be brought "after the right to bring the same shall have accrued." Neither is such expansion consistent with the
spirit or the purpose of setting barriers to stale claims that could have been the subject of
more timely litigation. See supra pp. 9-10 for text of W. Va. Code 55-2-6 (1923), the
applicable statute of limitations. In Donley v. Bracken, 192 W. Va. 383, 452 S.E.2d 699
(1994), we discussed when the right to suit "accrued" under W. Va. Code 55-2-15 (1923),
the statute of limitations for infants and insane persons. In Donley v. Bracken, 192 W. Va.
387, 452 S.E.2d at 703, quoting U.S. v. Kubrick, 444 U.S. 111, 117, 100 S. Ct. 352, 356, 62 L. Ed. 2d 259, 266 (1979), we said:
The general purpose of statute of limitations is to encourage
presentation of claims within a reasonable time. The United
States Supreme Court stated in United States v. Kubrick, 444 U.S. 111, 117, 100 S. Ct. 352, 356, 62 L. Ed. 2d 259, 266 (1979),
that such statutes:
"represent a pervasive legislative judgment that it is
unjust to fail to put the adversary on notice to defend
within a specified period of time and that 'the right to be
free of stale claims in time comes to prevail over the
right to prosecute them.' Railroad Telegraphers v.
Railway Express Agency, 321 U.S. 342, 349[, 64 S. Ct.
582, 586, 88 L. Ed. 788, 792] (1944). . . . [A]lthough
affording plaintiffs what the legislature deems a
reasonable time to present their claims, . . . [these
statutes] protect defendants and the courts from having
to deal with cases in which the search for truth may be
seriously impaired by the loss of evidence, whether by
death or disappearance of witnesses, fading memories,
disappearance of documents, or otherwise."
In the case sub judice, the acts complained of in Counts I, II, III and part of V
of the complaint arose and were known to the McKenzies for more than ten years before they filed their complaint. The attempt to disguise these stale matters as arising when a
forfeiture is declared was correctly rejected by the circuit court. (See infra section III.B. for
a discussion of the forfeiture provision.) We note that the damages which the McKenzies
claim for these stale acts result from the alleged forfeiture and do not flow from the
complained of acts. See Syl. pt. 2, Mullins v. Green, 145 W. Va. 469, 115 S.E.2d 320, 325
(1960); Syl. pt. 2, State v. Bonham, 119 W. Va. 280, 193 S.E. 340 (1937). Merely calling
these counts of the complaint "holdovers counts" does not change the nature of the alleged
acts or suspend the running of the statute of limitations until a separate action, such as the
refusal to vacate the leasehold, occurs. Because the McKenzies' "right to bring the" action
on Counts I, II, III and V in part, was known to them in April 1971, at the latest, we find this
part of the complaint filed on August 28, 1981 is barred by the statute of limitations and
therefore, affirm the circuit court.
B.
Forfeiture
Counts IV and VI of the complaint are grounded on a forfeiture of the lease,
which is based on the November 6, 1974 notice of default and the November 29, 1974
"Notice of Termination" that were sent to the coal companies. The circuit court in its order
filed on September 15, 1993 found that no forfeiture occurred and granted summary
judgment to the coal companies on Counts IV and VI of the complaint.See footnote 7
It is well recognized in West Virginia jurisprudence that the law does not favor
the forfeiture of estates. Easley Coal Co. v. Brush Creek Coal Co., 91 W. Va. 291, 296, 112 S.E. 512, 514 (1922) stated:
Forfeitures of estates are not favored in law. The right to
forfeit must be clearly stipulated for in terms, else it does not
exist. Every breach of a covenant or condition does not confer
it upon the injured party.
The forfeiture provision of the lease in this case is general and does not "give
the right of forfeiture in terms so clear and explicit as to leave no room for any other
construction," a requirement for forfeiture under Bethlehem Steel Corp. v. Shonk Land Co.,
169 W. Va. 310, 315, 288 S.E.2d 136, 142 (1982), quoting, Easley Coal Co. v. Brush Creek
Coal Co., 91 W. Va. at 297, 112 S.E. at 512. In Bethlehem Steel Corp. v. Shonk Land Co.,
169 W. Va. at 314-315, 288 S.E.2d at 142, we found the legal principles about forfeiture
clear in both federal and West Virginia law and quoted the following from Easley Coal Co.
v. Brush Creek Coal Co., 91 W. Va. at 296-97, 112 S.E. at 514-15:
Every breach of a covenant or condition does not confer it [the
right to forfeit] upon the injured party. It never does, unless it
is so provided in the instrument. Such breaches are usually
compensable in damages, and, if a forfeiture has not been
stipulated for, it is presumed the injured party intended to be
content with such right as is conferred by ordinary remedies.
The broken covenant or condition relied upon for forfeiture
must be found not only in the instrument, by clear and definite
expression, but also within the forfeiture clause, by such expression. A covenant or condition merely implied, or an
express one not clearly within the forfeiture clause, will not
sustain a claim of forfeiture by reason of its breach. Peerless
Carbon Black Co. v. Gillespie, 87 W. Va. 441, 105 S.E. 517. .
. . (Emphasis in Bethlehem Steel Corp. v. Shonk Land Co.)
Syl. pt. 3 of Bethlehem Steel Corp. v. Shonk Land Co., supra states:
A broken covenant or condition relied upon for forfeiture must
be found not only in the instrument, by clear and definite
expression, but also within the forfeiture clause by such
expression.
See Easley Coal Co. v. Brush Creek Coal Co., supra.
In the case sub judice, the termination clause of the lease was similar to the
forfeiture provision quoted in Bethlehem Steel Corp. v. Shonk Land Co., 169 W. Va. at 316,
288 S.E.2d at 143, which we found to be "[a] catchall, dragnet forfeiture clause for breach
of any contractual covenant [that] is inadequate."See footnote 8 Because the lease's forfeiture provision
does not give "clear and definite express" to which broken covenant or condition may be
used to declare a forfeiture, we find the lease's forfeiture clause inadequate to declare a forfeiture.See footnote 9 See Christian Land Corp. v. C. & C. Co., 188 W. Va. 26, 29, 422 S.E.2d 503,
507 (1992) (per curiam) (holding that a "catchall, dragnet forfeiture clause for breach of any
contractual covenant is inadequate" and will not terminate a lease).See footnote 10
Finally, we recognize that a forfeiture is not available when monetary damages
can make whole the party to be benefited by the forfeiture. Syl. pt. 2 of Bethlehem Steel Co.
v. Shonk Land Co., supra, states:
Equity will relieve from a forfeiture when a party benefited by
the forfeiture can be made whole by monetary damages.
We need not address the available of monetary damages in the case sub judice because those
claims are barred by the statute of limitations.
Because principles of equity, fairness and conscionability prevent the alleged
forfeiture, we find that the circuit court correctly granted summary judgment on Counts IV
and VI of the complaint.
C.
Coal Mined in the 1970's
Finally, the McKenzies alleges that summary judgment should not have been
granted on their allegations concerning the middling coal and the surface-mined coal. The
McKenzies argue that the circuit court's judgment of these issues is based on the incorrect
assumption that the lease remained in effect and that the royalty payments were owed and
paid. Given our determination that the lease was not forfeited but remained in effect, the
circuit court's assumptions concerning the royalty payments are correct.
The McKenzies also argue that these royalty payments do not cover the coal
left "unmined" on the leased property. This argument is raised for the first time on appeal
and we decline to address this new argument. See note 4 discussing new arguments on
appeal.
Finally the McKenzies allege that material issues remain concerning the
amount of the middling and surface-mined coal. However, the exact amount of the middling
and surface-mined coal is not material because the McKenzies stated that "it cannot be said
that the amount [owed for the middling and surface-mined coal] exceeds the amount of
'recapture credit' to which the defendants are apparently entitled under the terms of the lease.
. . ." Based on this calculation, the McKenzies did not oppose the coal companies' motion for summary judgment and are bound by their admission. Syl. pt. 4 of State v. McWilliams,
177 W. Va. 369, 352 S.E.2d 120 (1986) states:
A judicial admission is a statement of fact made by a party in
the course of the litigation for the purpose of withdrawing the
fact from the realm of dispute.
Given the McKenzies' admission, we find their final assignment of error to be without merit.
For the above stated reasons, the decision of the Circuit Court of Roane
County is affirmed.
Affirmed.
Footnote: 1
See Burdette v. Maust Coal & Coke Corp., 159 W. Va. 335, 222 S.E.2d 393 (1976)
(per curiam) reversing the judgment below and granting the widows of the miners involved
in the Hominy Falls Disaster a new trial. Among the issues discussed in Burdette v. Maust
Coal & Coke Corp. were allegations about the negligence of Maust's engineer and
deficiencies on the mining map of the leased property. Maust was a wholly owned
subsidiary of Cherry River.Footnote: 2
According to the circuit court, "middling coal" is "coal or fuel removed from a refuse
pile by re-cleaning it."Footnote: 3
In its June 28, 1993 opinion that was attached to its summary judgment order filed
on September 15, 1994, the circuit court said: "There are indications in the record that at
least a part of that delay was a conscious strategy on the part of the lessors whereby they
intentionally waited until after the litigation arising out of the 'Hominy Falls Disaster' had
been concluded before attempting to pursue other remedies."Footnote: 4
The first summary judgment order, which was filed on November 22, 1991 by Judge
Summerfield, was based on remarks made during a hearing on November 13, 1989 by Judge
Charles M. Lobban. After Judge Lobban withdrew, the case was assigned to Judge
Summerfield, who after reviewing the matter entered summary judgment on Counts I, II and
III based on the statute of limitations.Footnote: 5
In the Supplemental Response of Plaintiffs to Defendants' Motion for Summary
Judgment, filed in circuit court on July 25, 1994, counsel for the McKenzies reported that
because the recaptured credit exceeded the amounts owed for surfaced-mined coal and
"middling" coal (two parts of Count V of the Complaint), "the McKenzies cannot now in
bona fides further oppose defendants' Motion for Summary Judgment" of those two aspects
of Count V of the Complaint. Although the McKenzies agreed that the recaptured credit
exceeded the value of the surfaced-mined and the "middling" coal, they continued to dispute
that how much coal was surfaced-mined and how much "middling" coal was reprocessed.
Footnote: 6
On appeal, the McKenzies allege that included in this issue is a question about coal
left by the lessors which should have been mined under the lease. However, the question of
unmined coal was not presented to the circuit court and we decline to address this issue for
the first time on appeal. See Whitlow v. Bd. of Educ. of Kanawha County, 190 W. Va. 223,
226, 438 S.E.2d 15, 18 (1993); Shrewsbury v. Humphrey, 183 W. Va. 291, 395 S.E.2d 535
(1990); Cline v. Roark, 179 W. Va. 482, 370 S.E.2d 138 (1988). We, also, decline to
address the McKenzies' allegation that the coal companies "abandoned" the lease because
the abandonment issue was not presented below. See Berry Energy Consultants and
Managers, Inc. v. Bennett, 175 W. Va. 92, 331 S.E.2d 823 (1985).Footnote: 7
We note that the alleged forfeiture in late 1974 was claimed to be the trigger event
for the running of the statute of limitations for Counts I, II, III and V (the short weigh claim)
of the complaint. If no forfeiture occurred, then the damages alleged for these claims, did
not occur. See section III.A. discussing these counts of the complaint.Footnote: 8
The forfeiture clause of the lease states, in pertinent part:
. . . [I]f the Lessee shall fail to keep, observe or perform any of
the covenants, agreement or conditions. . . then and in any such
case Lessors may, at their option, forthwith declare. . . this
Agreement and Lease forfeited. . . .
The lease further provides:
. . . [T]hat in the event of a forfeiture . . ., then all machinery,
rails, ties and other property attached in any way to the land
shall immediately become the absolute property of the Lessors
and the same shall be credited on any claim or claims of the
Lessors against Lessee. . .Footnote: 9
The McKenzies also failed to comply with the lease's notice requirement for
declaring a forfeiture. The lease provides for either a 30-day notice or a 60-day notice with
the right by Cherry River to cure the alleged defect within those time periods before the right
of cancellation could exist. The Notice of Default given on November 6, 1974, followed by
a Notice of Termination on November 29, 1974, did not comply with either time requirement
of the lease.
The breaches that the McKenzies maintain underlying the forfeiture (see
section III.A for Counts I, II and III of the complaint) accrued more that ten years before the
McKenzies sought judicial intervention on the issue of forfeiture. These stale claims are
barred under the statute of limitations (see section III.A) and the doctrine of laches. See
Laurie v. Thomas, 170 W. Va. 276, 294 S.E.2d 78 (1982) discussing the application of the
doctrine of laches in an equity case.Footnote: 10
The McKenzies did not reject Cherry River's 1982 renewal notice declaring that they
had exercised their renewal option. In Bethlehem Steel Corp. v. Shonk Land Co., 169 W.
Va. at 318-19, 288 S.E.2d at 144, this Court found that the conduct, which did not justify a
forfeiture, did justify the lessors' refusal to permit renewal of the lease. The circuit court
found in the case sub judice that Cherry River's renewal notice was "ample and adequate"
and the lease was validly renewed and in effect.
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