Oxford Mining Co. v. Ohio Gathering Co.
| Decision Date | 30 March 2020 |
| Docket Number | Case No. 19 BE 0016 |
| Citation | 2020 Ohio 1363 |
| Parties | OXFORD MINING COMPANY, LLC, Plaintiff-Appellee/Cross-Appellant, v. OHIO GATHERING COMPANY, LLC, Defendant- Appellant/Cross-Appellee. |
| Court | Ohio Court of Appeals |
OPINION AND JUDGMENT ENTRY
Atty. Thomas R Lucchesi, Atty Dante A. Marinucci, Atty. Anthony B. Ponikvar, Atty. Brittany N. Lockyer, Baker & Hostetler LLP, 127 Public Square, Suite 2000, Cleveland, Ohio 44114 for Plaintiff-Appellee/Cross-Appellant and Atty. Kevin L. Colosimo, Atty. Christopher W. Rogers, Frost Brown Todd LLC, Union Trust Building, 501 Grant Street, Suite 800, Pittsburgh, Pennsylvania 15219 for Defendant-Appellant/ Cross-Appellee
{¶1} Defendant-Appellant Ohio Gathering Company LLC has filed an appeal from the decision of the Belmont County Common Pleas Court entering summary judgment on liability (for the claims for declaratory relief and trespass) and thereafter entering judgment on the jury's damage award. Plaintiff-Appellee Oxford Mining Company LLC has filed a cross-appeal from the judgment on damages.
{¶2} The trial court found Oxford Mining had a superior property interest due to its prior coal rights and Ohio Gathering therefore trespassed by building a pipeline in a manner that rendered the coal inaccessible. Ohio Gathering claims that, although it had prior notice of Oxford Mining's general coal rights, it lacked record notice or actual notice of Oxford Mining's right to surface mine. We find there was sufficient record notice and, even if record notice is found to be lacking for certain parcels, Ohio Gathering had actual notice of Oxford Mining's first-in-time strip mining rights. Accordingly, the trial court properly granted summary judgment on liability.
{¶3} As for the trial on damages, Ohio Gathering challenges the court's refusal to provide a jury instruction on mitigation of damages. In the cross-appeal, Oxford Mining contests the trial court's refusal to instruct the jury on punitive damages. These opposing damages arguments are overruled. For the following reasons, the trial court's judgments are affirmed.
{¶4} Oxford Mining obtained coal and mining rights for eight parcels in Belmont County and planned to strip and then highwall mine its coal. The coal leases provided the right to strip mine. Instead of recording the full lease, a memorandum of lease was recorded for each lease but did not specifically mention surface or strip mining. For instance, on December 28, 2011, Oxford Mining recorded a memorandum of coal sublease from Marietta Coal Company for parcels E through H, which recited the sublease was for a term of 10 years to be extended as long as "active mining" was being conducted and thereafter as long as reasonably necessary to complete reclamation. The unrecorded sublease granted Oxford Mining the right to mine by any method including the methods of strip mining and highwall mining.
{¶5} On March 9, 2012, Oxford Mining was granted a coal lease for parcel A from Eagle Creek Farm Properties Inc. and for parcels B, C, and D from K & S Shugert Farms Family Limited Partnership. The memorandum of lease for each property was recorded on March 29, 2012 and disclosed that Oxford had the right to the number 8 coal seam and all overlying seams (plus all limestone) with the right to mine for a term of 15 years for "active mining purposes" and thereafter so long as reasonably necessary to complete reclamation and obtain a release of the reclamation bond. Both unrecorded leases specified the right to mine by strip mining, auger mining, high wall mining, or any other method whether now known or later developed.
{¶6} Oxford Mining had already received the coal for parcels B and C from Marietta Coal Company as evidenced by a memorandum of lease recorded on December 28, 2011 (the same day as the sublease for other parcels). Marietta Coal received coal interests from Consolidated Coal in an assignment of leases recorded in 2002 (effective 1996).
{¶7} On September 9, 2013, a memorandum of lease was recorded showing Consolidated Coal transferred coal under parcels D through H to Oxford Mining. The unrecorded lease transferred the number 8 coal seam to Oxford Mining with the right to mine by any method including surface or highwall mining. The chain of title showed Consolidated Coal received its interests from Seaway Coal Company via a 1974 recorded memorandum of lease which disclosed the right to strip mine.
{¶8} After Oxford Mining recorded these coal rights, Ohio Gathering bought pipeline easements through the same parcels from the following landowners: (1) Eagle Creek Farm (parcel A), executed April 9, 2014, recorded May 12, 2014; (2) K & S Shugert Farms (parcels B through D), executed April 8, 2014, recorded May 12, 2014; and (3) Robert Shugert (parcels E through H), executed March 25, 2014, recorded May 29, 2014. The easements also granted Ohio Gathering the right to change the location of an installed pipeline "arising from any condition or event beyond its control, such as mining activities."
{¶9} Before purchasing these pipeline easements, Ohio Gathering was informed by Oxford Mining that various proposed routes for the pipeline (named "Coal Run III") would negatively affect its mining operations (as evidenced by emails exchanged in 2012 and 2013). Pipeline construction began on the subject property in July 2014. When Oxford Mining's president saw the pipeline location, he unsuccessfully asked Ohio Gathering to discontinue construction. The pipeline was placed into service in August 2014.
{¶10} In 2017, Oxford Mining recorded a memorandum of lease from Robert Shugert pertaining to parcels E through H which specified that the lease granted the right to remove all coal "by the strip mining method" among other methods. An affidavit attested that this lease was not necessary to mine the coal as Oxford Mining already had rights, including strip mining rights, for these parcels (through instruments from Seaway to Consolidated, Consolidated to Marietta, Marietta to Oxford, and Consolidated to Oxford). Oxford Mining then applied for a mining permit in 2017 which was approved in 2018.
{¶11} On December 14, 2017, Oxford Mining filed a complaint against Ohio Gathering, which was amended on March 14, 2018. The complaint sought a declaratory judgment on the competing property interests, arguing the pipeline deprived Oxford Mining of its right to mine significant areas of the property which "sterilized" the coal and damaged Oxford Mining. The complaint also set forth claims for trespass and nuisance. Both sides filed summary judgment motions.
{¶12} Oxford Mining filed a motion for partial summary judgment asking for a declaratory judgment that its property rights were superior to the rights of Ohio Gathering and a finding of liability on the trespass claim. Arguments were presented on first-in-time recording and Ohio Gathering's knowledge of Oxford Mining's rights. (The motion also requested an order on how to measure damages.)
{¶13} Ohio Gathering's motion for summary judgment argued there was no trespass as the pipeline was constructed pursuant to valid easements and claimed this was prior to Oxford Mining's perfection of its complete interest and/or receipt of a mining permit.
{¶14} The trial court granted partial summary judgment in favor of Oxford Mining. (1/4/19 J.E.); (1/8/19 J.E.). The court found Oxford Mining was entitled to a declaratory judgment that it had superior rights and there was a trespass on Oxford Mining's coal rights. (The court denied summary judgment on the measure of damages). As to Ohio Gathering's summary judgment motion, the court granted summary judgment against Oxford Mining on its nuisance claim and denied the remainder of the motion. Ohio Gathering's January 7, 2019 motion for reconsideration was denied the next day. (Tr. 17).
{¶15} A four-day jury trial on damages commenced on January 8, 2019. The court granted Ohio Gathering's motion for directed verdict on punitive damages and refused Oxford Mining's request to instruct the jury on punitive damages. (Tr. 812, 820-821). The court also rejected Ohio Gathering's proposed jury instruction on mitigation of damages.
{¶16} The jury returned a verdict for Oxford Mining in the amount of $5,506,717.87. The court entered judgment on the verdict on January 14, 2019 (amended 2/5/19 nunc pro tunc to change "subject to further order" to "Case Closed").
{¶17} On February 11, 2019, Ohio Gathering filed a motion for judgment notwithstanding the verdict or new trial. The motion was timely filed within 28 days (using the date of either judgment). See Civ.R. 50(B). In pertinent part, the motion (as related to the verdict) contested the refusal to provide a jury instruction on mitigation of damages. The motion also contained a request for judgment as a matter of law, contesting the prior summary judgment.
{¶18} The court overruled Ohio Gathering's post-judgment motion. (4/4/19 J.E.); (4/11/19 J.E.). Ohio Gathering filed a timely notice of appeal on May 1, 2019, and Oxford Mining filed a timely notice of cross-appeal on May 9, 2019.
{¶19} Ohio Gathering sets forth three assignments of error on whether Oxford Mining was entitled to summary judgment on property rights and trespass. The general argument on summary judgment is contained in the first assignment of error which provides:
"The Trial Court Erred in Its January 4, 2019 and January 8, 2019 Judgment Entries by Granting Partial Summary Judgment in Favor of Plaintiff-Appellee, Oxford Mining Company, LLC."
{¶20} The second assignment of error says the court erred by overruling the motion to reconsider the summary judgment motion, and the fourth assignment of error says the court erred in failing to grant the...
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