Felton Oil Co., L.L.C. v. Gee

• Decision Date: 20 May 2004
• Docket Number: No. 03-747.,03-747.
• Citation: 182 S.W.3d 72
• Parties: FELTON OIL COMPANY, L.L.C., and the State of Arkansas v. Horace and Louise GEE.
• Court: Arkansas Supreme Court

Page 72

182 S.W.3d 72

FELTON OIL COMPANY, L.L.C., and the State of Arkansas v. Horace and Louise GEE.

No. 03-747.

Supreme Court of Arkansas.

May 20, 2004.

COPYRIGHT MATERIAL OMITTED

Ian W. Vickery, El Dorado, for appellant Felton Oil Company, L.L.C.

Mike Beebe, Att'y Gen., by: Charles L. Moulton, Senior Ass't Att'y Gen., Little Rock, for appellant State of Arkansas.

McMath Woods P.A., by: Samuel E. Ledbetter, Little Rock, for appellees.

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by: Derrick W. Smith and Walter G. Wright, Jr., Little Rock, for amicus curiae Arkansas Oil Marketers Association.

ROBERT L. BROWN, Justice.

Appellants Felton Oil Co., LLC, and the State of Arkansas appeal from the circuit court's judgment and order awarding the appellees, Horace and Louise Gee, temporary property damages in the amount of $180,000 and discomfort, disruption, and inconvenience damages in the amount of $25,000. The damages stemmed from the migration of petroleum products onto the Gees' property from Felton Oil's property via a leak in certain piping from an underground storage tank through a diesel pump. The State of Arkansas intervened in the matter to protect its interest in the Arkansas Petroleum Storage Tank Trust Fund. We affirm the judgment.

Liability was conceded by Felton Oil. The only issue for the jury to decide was the amount of damages. The facts, as are pertinent, were presented to the venire by the circuit court:

[T]his case is Horace and Louise Gee versus Felton Oil Company, State of Arkansas is an Intervenor. This case involves pollution to property. The Plaintiffs, Horace and Louise Gee live next door to the Conoco convenience store that is located on the southwest corner of Highways 167 and 278 in Hampton, Arkansas. Mr. and Mrs. Gees' property faces Highway 278, which the old Highway 4 and is adjacent to the Conoco store. The Defendant, Felton Oil Company, owns the Conoco store. Felton Oil stores gasoline and diesel fuel in an underground storage tank system at the Conoco station. A leak, primarily consisting of diesel fuel, has occurred from this underground storage tank and migrated onto the Gees' property. The Gees are claiming damages to their property in the form of the cost of cleaning up this pollution beyond what has already been done.

The Attorney General of Arkansas has intervened in this case in order to protect the interests of the Petroleum Storage Tank Trust Fund, which acts as a fund to pay claims for property damages resulting from releases from underground storage tank systems and for costs of cleanup for restoration.

The Gees claim that while the Defendant has performed certain measures designed to restore their property and remove the contamination, additional restoration work is needed. The Gees may claim other damages. Felton Oil has admitted liability in this case and the sole issue for you to determine is what, if any, damages the Gees have suffered.

I. Felton Oil

Felton Oil argues, as its sole point, that the circuit court erred in instructing the jury on damages for discomfort, disruption, and inconvenience, which resulted in the award of $25,000. It contends that it operated a gas station, which had a lawful use and purpose and was not a nuisance per se. It further asserts that while there was an accident on its property which caused the Gees damage, Felton Oil did not use or occupy its property so as to cause the Gees any nuisance, annoyance, or disturbance. Felton Oil argues, in addition, that the recovery for temporary damages for nuisance should be lost rental value which fairly compensates a landowner for the loss of the full use and enjoyment of their property and not separate damages for discomfort, disruption, and inconvenience.

We begin by responding to the Gees' argument that this point is not preserved for our review. According to the Gees, Felton Oil did not move for a directed verdict at the close of all the evidence, which is required under Arkansas Rule of Civil Procedure 50(e) to preserve for our review any question relating to sufficiency of the evidence.

Here, however, the record reflects that while Felton Oil did not renew its motion for directed verdict at the close of all the evidence and thus did not preserve a sufficiency-of-the-evidence issue, it did object to the instruction that permitted damages based on inconvenience and annoyance. Felton Oil further objected on the basis that there was insufficient evidence to allow an instruction on nuisance and, as a consequence, any damages derived from nuisance. The objection was made prior to the time that the court instructed the jury on the law and dealt with both the instruction itself and the evidentiary basis to support the instruction. We conclude that the objection to the instruction was sufficient to preserve the issue of disruption damages for our review. See Ark. R. Civ. P. 51. See, e.g., St. Paul Fire & Marine Ins. Co. v. Griffin Constr. Co., 338 Ark. 289, 993 S.W.2d 485 (1999).

Turning to the merits, the instruction at issue provided:

Defendant Felton Oil Company has admitted liability in this case. It is for you to determine the amount of money which will reasonably and fairly compensate the Plaintiffs for any of the following elements of damage sustained, which you find were proximately caused by the fault of Defendant Felton Oil Company.

First, the reasonable expense of any necessary repairs to any property that was damaged;

Second, any discomfort, disruption, or inconvenience during any necessary repair to any damaged property.

Whether either of these elements of damage has been proved by the evidence, and the extent of such damage, is for you to determine.

The Gees maintain that this instruction was permissible for the case at hand because of Restatement (Second) of Torts § 929 (1979), and that the damages awarded for injury to their property need not have anything to do with the law of nuisance but only with harm to their land.

Section 929 of the Restatement (Second) of Torts reads:

(1) If one is entitled to a judgment for harm to land resulting from a past invasion and not amounting to a total destruction of value, the damages include compensation for

(a) the difference between the value of the land before the harm and the value after the harm, or at his election in an appropriate case, the cost of restoration that has been or may be reasonably incurred,

(b) the loss of use of the land, and

(c) discomfort and annoyance to him as an occupant.

(2) If a thing attached to the land but severable from it is damaged, he may at his election recover the loss in value to the thing instead of the damage to the land as a whole.

Restatement (Second) of Torts § 929 (1979) (emphasis added). Thus, under the terms of this section, the landowner may elect restoration costs as the measure of damages for harm to land. One comment to the Restatement regarding subsection (1)(c), reads:

e. Discomfort and other bodily and mental harms. Discomfort and annoyance to an occupant of the land and to the members of the household are distinct grounds of compensation for which in ordinary cases the person in possession is allowed to recover in addition to the harm to his proprietary interests....

Restatement (Second) of Torts § 929, comment e (1979) (emphasis added).

This court has previously cited to § 929 of the Restatement (Second) of Torts. See Worthington v. Roberts, 304 Ark. 551, 803 S.W.2d 906 (1991). In Worthington, which concerned damage to the landowner's ornamental trees, we said with respect to the instruction given by the trial court:

Whether AMI 2222 or an instruction on cost of restoration is to be given will depend on the evidence. The evidence here justified the giving of an instruction allowing reasonable replacement cost of the destroyed trees or other reasonable cost of restoring the property, as nearly as possible, to its condition prior to the alleged tortious act.

304 Ark. at 558, 803 S.W.2d at 910. While not instructive on the precise issue presented in the instant case, the Worthington case does demonstrate that this court has approved an instruction fashioned in part on § 929 in the past.

A review of the Gees' complaints reveals that in their allegation of negligence, they asserted that they had suffered damages, which included

(c) Loss of use and enjoyment, fear and fright, loss of peace of mind and impact to plaintiffs' quiet use and enjoyment of their property; [and]

(d) Disruption and inconvenience to quality of life[.]

We conclude that both of these assertions fall within the ambit of damages contemplated by subsection (1)(c) of § 929.

While Felton Oil claims that the court instructed the jury on nuisance, we disagree. Though the circuit court did refer to the instruction "based on nuisance damages," in a later comment, the court clarified its position on the matter:

THE COURT: All right. Now, the Court did not give [sic] use and enjoyment instruction, I struck that from the instruction, I just allowed the instruction on discomfort, disruption and inconvenience during the period that repairs were being, the property was being restored.

A review of the jury instruction actually given by the circuit court reveals that the court modified AMI Civ. 2222. The Note on Use for that instruction provides that the model instruction cannot be used as written and must be completed by selecting the appropriate elements of damage from among AMI 2223 through 2229. In the case at hand, the circuit court selected AMI Civ. 2224 as the first element of damage, which provides the reasonable expense of necessary repairs to any property that was damaged. The court then created its own instruction for the second element based on § 929. This was not error. This court has held that AMI instructions are to be used as a rule and that non-AMI instructions should only be used "when an AMI instruction cannot be modified." Tyson Foods, Inc. v. Davis, 347 Ark. 566, 586...