Little v. Tuscola Stone Co.

• Decision Date: 30 September 1992
• Docket Number: No. 4-91-0923,4-91-0923
• Citation: 234 Ill.App.3d 726,175 Ill.Dec. 812,600 N.E.2d 1270
• Parties: , 175 Ill.Dec. 812 Larry LITTLE and Joan Little, Plaintiffs-Appellees, v. TUSCOLA STONE COMPANY, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 1270

600 N.E.2d 1270

234 Ill.App.3d 726, 175 Ill.Dec. 812

Larry LITTLE and Joan Little, Plaintiffs-Appellees, v. TUSCOLA STONE COMPANY, Defendant-Appellant.

No. 4-91-0923.

Appellate Court of Illinois,

Fourth District.

Sept. 30, 1992.

Brian L. McPheters, Hatch, Blockman, McPheters, Fehrenbacher & Lyke, Champaign, for defendant-appellant.

J. Michael O'Byrne, Reno, O'Byrne & Kepley, P.C., Champaign, for plaintiffs-appellees.

Justice COOK delivered the opinion of the court:

Plaintiffs, Larry Little and Joan Little (the Littles), brought this action for declaratory relief, an injunction, and an accounting to recover damages occasioned by the alleged conversion by defendant, Tuscola Stone Company (Tuscola), of overburden from a quarry operated by defendant on plaintiffs' land. The trial court granted plaintiffs' motion for directed verdict on the issue of liability at the close of all the evidence. The jury returned a verdict for compensatory damages of $44,455.80 upon which the court entered judgment, and from which this appeal is taken. On appeal, Tuscola argues (1) the trial court erred in granting a directed verdict in favor of the Littles, (2) the trial court erred in two of its evidentiary rulings, and (3) the jury verdict for $44,455.80 was excessive.

On February 10, 1970, the Littles entered into an agreement entitled "LIMESTONE, DOLOMITE, STONE, SAND, AND GRAVEL AGREEMENT AND LEASE" with Tuscola's predecessors in interest for the opening of a quarry in Douglas County. The quarry was opened and subsequently Tuscola became assignee of the lease.

Prior to 1985, Larry Little was the only individual who handled the sale of dirt, also known as overburden, from the quarry. This dirt covering the limestone was 35 to 40 feet deep and had to be removed to quarry the limestone. Generally, a buyer would contact Little to purchase the dirt, pay the price set by Little, and load his own dirt for hauling. Tuscola received no proceeds from the sale of the dirt. In 1985, after the arrival of a new manager, Tuscola began selling the dirt exclusively and at the time of this trial had sold 49,342 units of dirt from the quarry. A "unit" is equal to either the weight of one ton or the volume of one cubic yard. Tuscola received $26,397.24 in total revenue for the dirt and paid the Littles $4,888.20 in royalties. When the Littles learned of this practice they immediately objected, and eventually brought this action alleging conversion of the dirt by Tuscola, claiming that the dirt belonged to them and nothing in the lease agreement gave Tuscola the right to sell the dirt from the quarry.

On appeal, Tuscola first claims that the court erred in granting plaintiffs' motion for a directed verdict. Tuscola contends that when properly construed the lease agreement gives the lessee the right to remove and sell the dirt or otherwise dispose of it without any obligation to the plaintiffs to account for the same or to pay royalties thereon. Tuscola's alternative theory is that the lease agreement gives it the right to quarry or otherwise remove and sell the dirt if it pays a royalty to the Littles.

The question before this court is one of contract construction. Ambiguous contracts, including leases, are those that are capable of more than one interpretation. (Quake Construction, Inc. v. American Airlines, Inc. (1990), 141 Ill.2d 281, 288, 152 Ill.Dec. 308, 312, 565 N.E.2d 990, 994; First National Bank v. Country Mutual Insurance Co. (1988), 175 Ill.App.3d 860, 866, 125 Ill.Dec. 363, 367, 530 N.E.2d 521, 525; Harris Trust & Savings Bank v. La Salle National Bank (1990), 208 Ill.App.3d 447, 453, 153 Ill.Dec. 450, 454, 567 N.E.2d 408, 412.) In such a case, extrinsic evidence is admissible to ascertain the parties' intent. (Quake Construction, 141 Ill.2d at 288, 152 Ill.Dec. at 312, 565 N.E.2d at 994.) However, a document is not ambiguous merely because the parties fail to agree upon its meaning. (First National Bank, 175 Ill.App.3d at 866, 125 Ill.Dec. at 367, 530 N.E.2d at 525.) In determining the intent of an unambiguous instrument, the court must consider the entire document giving words their plain and ordinary meaning. (Oldweiler v. Peoples Bank (1987), 161 Ill.App.3d 317, 321, 112 Ill.Dec. 878, 880-81, 514 N.E.2d 541, 543-44.) When interpreting an unambiguous agreement, construction of the agreement is to be decided by the court as a matter of law. The appellate court is not bound by the trial court's findings, but may independently construe the instrument unrestrained by the trial court's determination. Oldweiler, 161 Ill.App.3d at 320, 112 Ill.Dec. at 880, 514 N.E.2d at 543.

The lease reads, in pertinent part, as follows: "Lessor * * * does hereby grant, lease, let and convey to Lessee, the exclusive right of entering into and upon lands hereinafter described, for the purposes of mining, quarrying, or otherwise removing limestone, dolomite, stone, gravel, sand, or a combination thereof, and any part or portion of any earth, rock or other strata that may be attached to, combined with, constituting a part of, or anything that might be in the way of, said limestone, dolomite, stone, sand, or a combination thereof, that may be or shall be removed from said lands * * *."

The parties do not dispute that the lease allows Tuscola to "remove" the dirt from the ground in its attempt to reach the limestone, dolomite, stone, sand, or a combination thereof. However, the parties differ regarding the meaning of "removal" of the dirt. Tuscola contends the lease allows it to remove the dirt and sell it. The Littles contend that Tuscola may only remove and reposition the dirt from the top of the limestone. According to the Littles, the dirt belongs to them and may not be sold by Tuscola.

We find this lease to be unambiguous, and consequently we hold that no evidence need have been taken by the circuit court. On its face the lease grants Tuscola only the right to remove the dirt, i.e., relocate it on the Littles' property, in order for it to reach the limestone, dolomite, stone, gravel, sand, or combination thereof. The lease also gives Tuscola the right to remove limestone but that right is certainly not a right to keep it, use it, or own it without paying for it. The only right to deal with removed limestone is set out in the subsequent provision dealing with royalties. This construction is consistent with the construction given the lease by the parties. During the first 15 years of the lease (from 1970 to 1985), only Larry Little sold dirt derived from his property. We find that because the lease did not give Tuscola the right to remove and use the overburden from the Littles' land, the lease shows an intent to deny that right to Tuscola. (Grove v. Winter (1990), 197 Ill.App.3d 406, 409, 143 Ill.Dec. 787, 789, 554 N.E.2d 722, 724.) The parties may have viewed the overburden as a nuisance, something to be disposed of to get to the valuable limestone underneath. Still, nothing in the lease gives Tuscola any right to sell the dirt and retain the proceeds.

Tuscola's alternative theory, that it can sell the dirt from the quarry as long as it pays a royalty to the Littles, arises out of its interpretation of the royalty provision within the lease. The royalty provision reads, in pertinent part, as follows:

"Lessee does hereby agree to pay to Lessor for all useable limestone, dolomite, stone, gravel, sand or combination thereof, 5cents per ton royalty for such material actually sold and removed from the premises, said royalty * * * shall, except as provided below, constitute the entire compensation and rentals due the Lessor for the use of said premises and material removed therefrom * * *."

Tuscola maintains that the royalty provision indicates that it may remove any material from the premises provided it pays a royalty, and that it did pay a royalty for the dirt ($4,888.20). The Littles contend that the royalty payments cover only the specified materials, the limestone, dolomite, stone, gravel, and sand. We hold that the royalty provision means what it says. As written, the royalty provision applies only to "limestone, dolomite, stone, gravel, sand or combination thereof." Consequently, we hold that the royalty provision does not give Tuscola the right to sell the dirt.

Tuscola next argues that the trial court erred in several of its evidentiary rulings. Although a contract or lease may appear unambiguous on its face, a trial court may still admit relevant evidence regarding the existence of an ambiguity at the time of execution of the contract or lease. URS Corp. v. Ash (1981), 101 Ill.App.3d 229, 235, 56 Ill.Dec. 749, 754, 427 N.E.2d 1295, 1300.

The first evidentiary issue raised by Tuscola is that the trial court erred in limiting its direct examination of Raymond Lee, who represented the Littles in the negotiation of the lease. At trial Lee affirmed that the language of the lease reflected the intent of the parties. He testified that the ...