English Coal Co., Inc. v. Durcholz, 1-780A179

Citation422 N.E.2d 302
Case DateJune 09, 1981
CourtCourt of Appeals of Indiana

Page 302

422 N.E.2d 302
ENGLISH COAL CO., INC., Defendant-Appellant,
v.
Robert A. DURCHOLZ, Plaintiff-Appellee.
No. 1-780A179.
Court of Appeals of Indiana, First District.
June 9, 1981.

Page 305

John D. Clouse, Michael C. Keating, Laurie A. Baiden, Evansville, for defendant-appellant.

Michael H. McDermott, McDermott, Fischer & Huebner, Jasper, for plaintiff-appellee.

RATLIFF, Judge.

STATEMENT OF CASE

English Coal Co., Inc., (English Coal) appeals from a judgment for seventy-five thousand dollars awarded to Robert C. Durcholz pursuant to an action he brought on a strip mining contract and from a negative judgment on its own counterclaim. We affirm.

FACTS

English Coal was incorporated in 1976 under the laws of New Mexico by Walter English, James Julian, and Alexander Hutchings for the purpose of holding mineral leases in New Mexico. English Coal acquired a mineral lease to a farm in Warrick County, Indiana, and advertised for a strip miner with the ability to mine 10,000 tons of coal per month. S. J. Groves & Sons Co. of Warsaw, Missouri, contemplated mining the property in partnership with English Coal and sent field engineer George Kuberra and other employees to investigate the site. They spent a week drilling to determine the amount, location, and depth of the coal. English was present during the drilling, and Kuberra helped him prepare a drilling map based on the information obtained. English had no prior experience in strip mining per se, but he had previous experience as a coal broker. Negotiations with S. J. Groves & Sons Co. did not result in a contract.

English also negotiated with Durcholz, a high school dropout and self-employed excavator who had been involved with earth moving but had never done any strip mining. On January 15, 1977, English Coal and Durcholz entered into a written contract for strip mining the coal on the farm in Warrick County. The brief final contract which was drawn up by English incorporating changes requested by Durcholz and which provided essentially that Durcholz would mine the coal and English Coal would market it appears as follows:

"OPERATING AGREEMENT

"This agreement between Robert Durcholz of Huntingburg, Indiana, hereinafter known as the Stripper and the English Coal Company, Inc. hereinafter known as the Operator, regarding the stripping of coal mining lease in Warrick County belonging to Charles McDonald. This property according to drill information indicates an average of an access (sic) 4,000 tons per acre.

"Stripper agrees to mine process and load coal into trucks and to reclaim land in compliance within the existing state reclamation guidelines established for return to row crop. Stripper will supply his own equipment and operating people, and all other necessary paraphernalia necessary to stripping operation. Stripper also agrees to open no competing operations in Indiana.

"Operator will market all coal, and payment will be made to Stripper at a rate of $8.00 per ton on any coal netting less than $14.00 at the scale; everything over $14.00 will be split between Operator and Stripper on a 50-50 basis. Scale price is derived after royalty is paid to land owner and trucking expenses deducted, which will vary with destination of coal. Formula for payment to Stripper is to be as the following examples:

Coal sold netting $11.00 at the scale, Stripper receives $8.00 per ton.

Coal sold netting $18.00 at the scale, Stripper receives $10.00 per ton.

"Payments are to be made to the Stripper within five (5) days of receipt of payment to Operator. This contract is

Page 306

for the duration necessary to mine out the McDonald lease.
 "This agreement entered into this date 15 JAN 77.
                 ------------
                 Signed by s/s Walter L. English
                 --------------------------
                 OPERATOR
                 Walter L. English, Pres.
                 English Coal Comp., Inc.
                Signed by s/s Robert A. Durcholz
                 --------------------------
                 STRIPPER
                 Robert Durcholz
                STATE OF INDIANA )
                COUNTY OF Vanderburgh ) SS:
                 ------------
                 "Before me, a Notary Public in and for said County,
                personally appeared Stripper, Robert Durcholz and Operators,
                English Coal Company, Inc., above named who acknowledged
                the signing of this Agreement.
                My Commission expires: 6-2-80 s/s George A. Howard
                 --------------------------
                 Notary Public"
                

Neither party consulted an attorney, although Durcholz discussed the contract with an officer at a local bank who suggested Durcholz get into the contract what he believed to be English's guarantee that the ninety-five acres involved contained at least four thousand tons of coal per acre. This guarantee Durcholz believed to be represented by the following provision: "This property according to drill information indicates an average of an access (sic) 4,000 tons per acre."

Durcholz began mining on February 1, 1977, but hit rock at each pit he opened. He borrowed $385,000 to purchase additional equipment which frequently broke down. In June 1977 Durcholz ceased operation. He had received a total of $56,455.68 from English Coal for approximately 18,442 tons of coal mined. He claimed that he should have received $123,536 for the mined coal, but English Coal deducted approximately $34,000 for funds it had expended on behalf of Durcholz for bills, equipment, and services.

Durcholz brought this action against English Coal in three counts: (1) for an accounting and damages for breach of contract, (2) for damages for breach of contract, and (3) for punitive damages for fraud. English Coal counterclaimed for (1) breach of contract, (2) negligent misrepresentation, and (3) fraud. After trial to a jury a general verdict was returned in favor of Durcholz for $75,000 and against English on its counterclaim. Judgment was entered thereon in favor of Durcholz for $75,000 plus costs. English Coal appeals and Durcholz cross-appeals.

ISSUES

In the interest of judicial economy we have reorganized the questions raised by the parties into the following issues:

I. Was it error for the trial court to deny English Coal's Motion for Summary Judgment and Striking of the Demand for Trial by Jury?

II. Was it error to admit certain testimony or parol evidence?

III. Was it error to admit evidence of English Coal's involvement in other lawsuits?

IV. Did the trial court err in failing to give several of English Coal's instructions?

V. Was the evidence sufficient to support the verdict or was the verdict contrary to law?

VI. Were the damages insufficient as a matter of law?

Issue One

English Coal argues that the trial court erred in refusing to grant its Motion for

Page 307

Summary Judgment and Striking of the Demand for Trial by Jury. The essence of appellant's specifications of error are (1) that the contract was not ambiguous, hence not in need of construction, and (2) that the fraud alleged was based on a promise to do something in the future, hence was not actionable fraud. Because no actionable fraud was shown and the contract was clear and unambiguous on its face, argues English Coal, it was entitled to summary judgment under the contract as a matter of law.

The standard of review applied by this court requires that we affirm a trial court's action if it can be sustained on any legal theory. Llewellyn v. Beasley, (1981) Ind.App., 415 N.E.2d 789. We do not presume error by the trial court, and the burden of proving that reversible error occurred is on the appellant. N. Y. Central Ry. Co. v. Milhiser, (1952) 231 Ind. 180, 106 N.E.2d 453, reh. denied 108 N.E.2d 57; American Optical Co. v. Weidenhamer, (1980) Ind.App., 404 N.E.2d 606 (transfer pending).

The test for the granting of a motion for summary judgment requires, first, that there be no genuine issue, or dispute, as to material facts in the case. See, Ind.Rules of Procedure, Trial Rule 56(C). To determine whether such issue exists, the court will accept as true all facts alleged by the nonmoving party and resolve all doubts against the moving party. Kendrick Memorial Hospital, Inc. v. Totten, (1980) Ind.App., 408 N.E.2d 130. In the instant case Durcholz alleged that English Coal, knowing full well that such representations were untrue, had guaranteed him that there was an average of 4,000 tons of coal per acre and that there would be no problem with rock, other than in one particular location, in strip mining the farm. The trial court correctly rejected appellant's contentions that these representations concerned future rather than existing facts. Summary judgment is not an appropriate means of resolving questions of credibility of evidence or its weight, American States Insurance Co. v. State ex rel. Jennings, (1972) 152 Ind.App. 422, 284 N.E.2d 873, or even conflicting inferences which may be drawn from undisputed facts. Moll v. South Central Solar Systems, Inc., (1981) Ind.App., 419 N.E.2d 154; Hayes v. Second National Bank of Richmond, (1978) Ind.App., 375 N.E.2d 647; trans. denied. Thus, even were the court to surmise that the nonmoving party were unlikely to prevail at trial, it would not be authorized to grant summary judgment. Wozniczka v. McKean, (1969) 144 Ind.App. 471, 247 N.E.2d 215, trans. denied; Barbre v. Indianapolis Water Co., (1980) Ind.App., 400 N.E.2d 1142, trans. denied. It is only after the court has determined that there is no genuine dispute as to any material fact that it will take the second step in the summary judgment proceeding and determine whether the moving party is entitled to judgment as a matter of law. See, e. g., Moll v. South Central Solar Systems, Inc., supra. Here the trial court did not err in denying summary judgment on count III of Durcholz's complaint where the facts showed a good faith dispute upon the issue of fraud.

We reach the same conclusion with regard to the trial court's denial of summary judgment on the breach of contract counts. English Coal alleges that the trial court erred in refusing to grant summary judgment in its favor on these counts because the contract was unambiguous, hence in need of no...

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