Ark Land Co. v. Harper

• Court: West Virginia Supreme Court
• Writing for the Court: DAVIS, Justice
• Citation: Ark Land Co. v. Harper, 215 W.Va. 331, 599 S.E.2d 754 (W. Va. 2004)
• Decision Date: 07 May 2004
• Docket Number: No. 31549.,31549.
• Parties: ARK LAND COMPANY, a Delaware Corporation, Plaintiff Below, Appellee, v. Rhonda Gail HARPER, Edward A. Caudill, Rose M. Thompson, Edith D. Kitchen, Therman R. Caudill, John A. Caudill, Jr., Tammy Willis, and Lucille M. Miller, Defendants Below, Appellants.

599 S.E.2d 754

215 W.Va. 331

ARK LAND COMPANY, a Delaware Corporation, Plaintiff Below, Appellee, v. Rhonda Gail HARPER, Edward A. Caudill, Rose M. Thompson, Edith D. Kitchen, Therman R. Caudill, John A. Caudill, Jr., Tammy Willis, and Lucille M. Miller, Defendants Below, Appellants.

No. 31549.

Supreme Court of Appeals of West Virginia.

Submitted March 31, 2004.

Decided May 7, 2004.

Concurring and Dissenting Opinion of Chief Justice Maynard July 2, 2004.

John W. Barrett, Charleston, John F. Loehr, Charlottesville, VA, for Appellants.

John Philip Melick, Jackson Kelley, PLLC, Charleston, for Appellee.

DAVIS, Justice:

This is an appeal by Rhonda Gail Harper, Edward Caudill, Rose M. Thompson, Edith D. Kitchen, Therman R. Caudill, John A. Caudill, Jr., Tammy Willis, and Lucille M. Miller (hereinafter collectively identified as the "Caudill heirs"), appellants/defendants below, from an order of the Circuit Court of Lincoln County. The circuit court's order authorized a partition and sale of real property jointly owned by the Caudill heirs and Ark Land Company (hereinafter referred to as "Ark Land"), appellee/plaintiff below. Here, the Caudill heirs contend that the legal precedents of this Court warrant partitioning the property in kind, not a sale. After a careful review of the briefs and record in this case, we agree with the Caudill heirs and reverse the circuit court.

I. FACTUAL AND PROCEDURAL HISTORY

This is a dispute involving approximately 75 acres of land situate in Lincoln County, West Virginia. The record indicates that "[t]he Caudill family has owned the land for nearly 100 years." The property "consists of a farmhouse, constructed around 1920, several small barns, and a garden[.]" Prior to 2001, the property was owned exclusively by the Caudill family. However, in 2001 Ark Land acquired a 67.5% undivided interest in the land by purchasing the property interests of several Caudill family members. Ark Land attempted to purchase the remaining property interests held by the Caudill heirs, but they refused to sell. Ark Land sought to purchase all of the property for the express purpose of extracting coal by surface mining.

After the Caudill heirs refused to sell their interest in the land, Ark Land filed a complaint in the Circuit Court of Lincoln County in October of 2001.¹ Ark Land filed the complaint seeking to have the land partitioned and sold. The circuit court appointed three commissioners, pursuant to W. Va.Code § 37-4-3 (1957) (Repl. Vol. 1997), to conduct an evidentiary hearing. The commissioners subsequently filed a report on August 19, 2002, wherein they concluded that the property could not be conveniently partitioned in kind.

The Caudill heirs objected to the report filed by the commissioners.² The circuit court held a de novo review that involved testimony from lay and expert witnesses. On October 30, 2002, the circuit court entered an order directing the partition and sale of the property. On January 7, 2003 the circuit court entered an "agreed order" that permitted the property to be sold, with a deposit of $50,000 being made, pending an appeal by the Caudill heirs.³ The circuit court entered an order on February 5, 2003, certifying that its October 30, 2002, order was a final order under Rule 54(b) of the West Virginia Rules of Civil Procedure. From this ruling the Caudill heirs appealed.

II. STANDARD OF REVIEW

This matter was prosecuted as a bench trial.⁴ In that regard, our standard of review was set out in syllabus point 1 of Public Citizen, Inc. v. First National Bank in Fairmont, 198 W.Va. 329, 480 S.E.2d 538 (1996), as follows:

In reviewing challenges to the findings and conclusions of the circuit court made after a bench trial, a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review.

This Court has also made clear that,

[t]he deference accorded to a circuit court sitting as factfinder may evaporate if upon review of its findings the appellate court determines that: (1) a relevant factor that should have been given significant weight is not considered; (2) all proper factors, and no improper factors, are considered, but the circuit court in weighing those factors commits an error of judgment; or (3) the circuit court failed to exercise any discretion at all in issuing its decision.

Syl. pt. 1, Brown v. Gobble, 196 W.Va. 559, 474 S.E.2d 489 (1996). With due consideration for these standards, we proceed to analyze the issue presented for review.

III. DISCUSSION

The dispositive issue is whether the evidence supported the circuit court's conclusion that the property could not be conveniently partitioned in kind, thus warranting a partition by sale. During the proceeding before the circuit court, the Caudill heirs presented expert testimony by Gary F. Acord, a mining engineer. Mr. Acord testified that the property could be partitioned in kind. Specifically, Mr. Acord testified that lands surrounding the family home did not have coal deposits and could therefore be partitioned from the remaining lands. On the other hand, Ark Land presented expert testimony which indicated that such a partition would entail several million dollars in additional costs in order to mine for coal.

We note at the outset that "[p]artition means the division of the land held in cotenancy into the cotenants' respective fractional shares. If the land cannot be fairly divided, then the entire estate may be sold and the proceeds appropriately divided." 7 Powell on Real Property, § 50.07[1] (2004). It has been observed that, "[i]n the United States, partition was established by statute in each of the individual states. Unlike the partition in kind which existed under early common law, the forced judicial sale was an American innovation." Phyliss Craig-Taylor, Through a Colored Looking Glass: A View of Judicial Partition, Family Land Loss, and Rule Setting, 78 Wash. U.L.Q. 737, 752 (2000). This Court has recognized that, by virtue of W. Va.Code § 37-4-1 et seq., "[t]he common law right to compel partition has been expanded by [statute] to include partition by sale." Syl. pt. 2, in part, Consolidated Gas Supply Corp. v. Riley, 161 W.Va. 782, 247 S.E.2d 712 (1978).⁵See also Syl. pt. 1, Croston v. Male, 56 W.Va. 205, 49 S.E. 136 (1904) ("But for the statute authorizing it, a sale of real estate could not be decreed in a suit for partition thereof.").

Partition by sale, when it is not voluntary by all parties, can be a harsh result for the cotenant(s) who opposes the sale. This is because "`[a] particular piece of real estate cannot be replaced by any sum of money, however large; and one who wants a particular estate for a specific use, if deprived of his rights, cannot be said to receive an exact equivalent or complete indemnity by the payment of a sum of money.'" Wight v. Ingram-Day Lumber Co., 195 Miss. 823, 17 So.2d 196, 198 (1944) (quoting Lynch v. Union Inst. for Savings, 159 Mass. 306, 34 N.E. 364, 364-365 (1893)). Consequently, "[p]artition in kind ... is the preferred method of partition because it leaves cotenants holding the same estates as before and does not force a sale on unwilling cotenants." Powell, § 50.07[4][a]. The laws in all jurisdictions "appear to reflect this longstanding principle by providing a presumption of severance of common ownership in real property by partition in-kind[.]" Craig-Taylor, 78 Wash. U.L.Q. at 753. "Thus, partitioning sale statutes should be construed narrowly and used sparingly because they interfere with property rights." John G. Casagrande, Jr., Acquiring Property Through Forced Partitioning Sales: Abuses and Remedies, 27 Boston C.L. Rev. 755, 775 (1986). See also Syllabus, in part, Smith v. Greene, 76 W.Va. 276, 85 S.E. 537 (1915) ("The right to a partition of real estate in kind, as required at the common law, cannot be denied, where demanded, unless it affirmatively appears upon the record that such partition cannot conveniently be made[.]").

In syllabus point 3 of Consolidated Gas Supply Corp., this Court set out the following standard of proof that must be established to overcome the presumption of partition in kind:

By virtue of W. Va.Code § 37-4-3, a party desiring to compel partition through sale is required to demonstrate [(1)] that the property cannot be conveniently partitioned in kind, [(2)] that the interests of one or more of the parties will be promoted by the sale, and [(3)] that the interests of the other parties will not be prejudiced by the sale.[⁶]

(Footnote added). In its lengthy order requiring partition and sale, the circuit court addressed each of the three factors in Consolidated Gas Supply Corp. as follows:

(14) That upon the Court's review and consideration of the entire record, even after the [Caudill heirs'] expert witness testified, the Court has determined that it is clearly evident that the subject property's nature, character, and amount are such that it cannot be conveniently, (that is "practically or justly") partitioned, or divided by allotment among its owners. Moreover, it is just and necessary to conclude that such a proposal as has been made by the [Caudill heirs], that of allotting the manor house and the surrounding "bottom land" unto the [Caudill heirs], cannot be affected without undeniably prejudicing [Ark Land's] interests, in violation of the mandatory provisions of Code § 37-4-3; and,

(15) That while its uniform topography superficially suggests a division-in-kind, as proposed by Mr. Acord, the access road, the bottom lands and the relatively flat home site is, in fact, integral to establishing the fair market value of the subject property in its entirety, as its highest and best use as mining property, as shown by the uncontroverted testimony of [Ark

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