Radec, Inc. v. Mountaineer Coal Dev. Co.

Decision Date11 December 2000
Docket NumberNo. 27804.,27804.
Citation210 W.Va. 1,552 S.E.2d 377
CourtWest Virginia Supreme Court
PartiesRADEC, INC., Plaintiff Below, Appellee, v. MOUNTAINEER COAL DEVELOPMENT COMPANY, d/b/a Marrowbone Development Company, Defendant Below, Appellant.
Dissenting Opinion of Justice Scott December 13, 2000.

Richard J. Bolen, Huddleston, Bolen, Beatty, Porter & Copen, Huntington, for appellant.

Robert A. Taylor, Rachael S. Carrico, Masters & Taylor, Charleston, for appellee.


Mountaineer Coal Development Company, d/b/a Marrowbone Development Company (hereinafter referred to as "Marrowbone"), appellant/defendant below, appeals from an adverse jury verdict entered in the Circuit Court of Mingo County. The jury awarded Radec, Inc. (hereinafter referred to as "Radec"), appellee/plaintiff below, $89,629.89 in compensatory damages. Additionally, the jury awarded to Radec $1,541,638.00 in punitive damages. Marrowbone asserts assignments of error related to the following topics: (1) the submission of a fraud theory to the jury; (2) the jury instructions on punitive damages; (3) the trial court's review of the punitive damage award; (4) the excessiveness of the punitive damages; and (5) the admission of certain evidence regarding finances and the mentioning of a non-union coal operation. Based upon the parties' arguments on appeal, the record designated for appellate review, and the pertinent authorities, we affirm the decision of the Circuit Court of Mingo County.


This case arises from a 1991 written mining contract between Marrowbone and Radec. Under the terms of the contract, Radec agreed to mine coal from two separate mines owned by Marrowbone. The two mines were designated as Radec No. 4 and Radec No. 5. Under the terms of the contract, Radec No. 4 was to be mined first. The mining of Radec No. 5 would not begin until one-and-one-half years later. However, this time frame was extended after Marrowbone requested that Radec mine additional coal reserves adjacent to Radec No. 4. As a result of the additional work, Radec did not complete work at Radec No. 4 until December of 1995, some four years later.

In May of 1995, Radec was prepared to begin mining preparations for Radec No. 5. Due to the unexpected delay in getting to Radec No. 5, a great deal of deterioration had occurred. Approximately twenty-million gallons of water had flooded Radec No. 5, which caused 1,800 feet of the mine's ceiling to fall. The additional cost for rehabilitating Radec No. 5 was not part of the original written contract between Radec and Marrowbone. However, because of Marrowbone's request for additional work on Radec No. 4, and the resulting delay of the start up on of Radec No. 5, Marrowbone orally agreed to reimburse Radec for the cost of rehabilitating Radec No. 5.

Eventually, Marrowbone rejected paying to Radec the amounts requested by Radec for rehabilitating Radec No. 5. Radec then concluded that, as a result of Marrowbone's refusal to pay all of the rehabilitation costs for Radec No. 5, it would no longer be profitable for Radec to remove coal from Radec No. 5. Under the terms of the original written contract between Radec and Marrowbone, Radec could terminate its obligation to work Radec No. 5 by providing 30 days notice to Marrowbone. Radec gave no such notice to Marrowbone. Instead, Radec continued to work Radec No. 5 after Marrowbone orally agreed to permit Radec to additionally mine a profitable site known as the Drautz property.

Radec was finishing its work on Radec No. 5 in September of 1996 when Marrowbone advised Radec that Radec would not be allowed to mine the Drautz property. Radec subsequently filed this civil lawsuit in July, 1997. The suit alleged causes of action for breach of an oral contract and fraud.1

The case was tried before a jury. On June 2, 1999, the jury returned a verdict against Marrowbone in the amount of $89,629.89 as compensatory damages, and $1,541,648.00 as punitive damages. Following the trial court's denial of Marrowbone's post-trial motions, Marrowbone filed this appeal.


We are asked to determine whether the trial court committed error by denying Marrowbones post-trial motion for a new trial. As a general matter, we indicated in Syllabus point 4 of Sanders v. Georgia-Pacific Corp., 159 W.Va. 621, 225 S.E.2d 218 (1976) that "[a]lthough the ruling of a trial court in granting or denying a motion for a new trial is entitled to great respect and weight, the trial court's ruling will be reversed on appeal when it is clear that the trial court has acted under some misapprehension of the law or the evidence." We have held more specifically regarding appellate review of a motion for a new trial:

In reviewing challenges to findings and rulings made by a circuit court, we apply a two-pronged deferential standard of review. We review the rulings of the circuit court concerning a new trial and its conclusion as to the existence of reversible error under an abuse of discretion standard, and we review the circuit court's underlying factual findings under a clearly erroneous standard. Questions of law are subject to a de novo review.

Syl. pt. 3, State v. Vance, 207 W.Va. 640, 535 S.E.2d 484 (2000). Accord Lipscomb v. Tucker County Comm'n, 206 W.Va. 627, 630, 527 S.E.2d 171, 174 (1999)

; Coleman v. Sopher, 201 W.Va. 588, 605, 499 S.E.2d 592, 609 (1997); Tennant v. Marion Health Care Found., 194 W.Va. 97, 104, 459 S.E.2d 374, 381 (1995). It is based upon these standards that we review this appeal.

A. Fraud Theory

Marrowbone contends that the trial court should not have submitted Radec's fraud theory of liability to the jury. Marrowbone asserts that Radec failed to put forth sufficient evidence of fraud for the jury to consider.2 We have held that "[t]he essential elements in an action for fraud are: (1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied on it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied on it." Syl. pt. 1, Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66 (1981). Accord Kessel v. Leavitt, 204 W.Va. 95, 127, 511 S.E.2d 720, 752 (1998); Syl. pt. 2, Bowling v. Ansted Chrysler-Plymouth-Dodge, Inc., 188 W.Va. 468, 425 S.E.2d 144 (1992); Syl. pt. 2, Muzelak v. King Chevrolet, Inc., 179 W.Va. 340, 368 S.E.2d 710 (1988).

We have further held that " `[w]hen the plaintiff's evidence, considered in the light most favorable to him, fails to establish a prima facie right of recovery, the trial court should direct a verdict in favor of the defendant.' Syl. pt. 3, Roberts v. Gale, 149 W.Va. 166, 139 S.E.2d 272 (1964)." Syl. pt 1, Brannon v. Riffle, 197 W.Va. 97, 475 S.E.2d 97 (1996). However, it is equally well established that a claim should go to the jury unless manifest insufficiencies in the evidence compel otherwise. Accordingly, it has long been the rule in this jurisdiction that " `[b]efore directing a verdict in a defendant's favor, every reasonable and legitimate inference favorable to the plaintiff fairly arising from the evidence, considered as a whole, should be entertained by the trial court, and those facts should be assumed as true which the jury may properly find under the evidence.' Syl. pt. 1, Fielder v. Service Cab Co., 122 W.Va. 522, 11 S.E.2d 115 (1940)." Syl. pt. 9, Casto v. Martin, 159 W.Va. 761, 230 S.E.2d 722 (1976). Accord Syl. pt. 1, Blake v. John Skidmore Truck Stop, Inc., 201 W.Va. 126, 493 S.E.2d 887 (1997). In our review of the record, we are left with little doubt that sufficient evidence was adduced by Radec to warrant the fraud claim being submitted to the jury.3

To begin, a Radec official, Richard Goff, testified that a Marrowbone official, Howard Epperly, promised to let Radec mine the Drautz property if Radec continued to rehabilitate and mine Radec No. 5. Goff further testified that another Marrowbone official, John Faulconer, took Radec officials to see the Drautz property. Mr. Goff clearly testified that Radec would not have continued to rehabilitate and mine Radec No. 5 had Marrowbone not promised to permit Radec to mine the Drautz property.

The Evidence presented by Radec suggested that it was reasonable for Radec to rely on such a promise, because Radec had done business with Marrowbone for almost twenty years. Moreover, Marrowbone made additional representations to Radec regarding Marrowbone's preparation of the necessary paperwork to secure governmental approval for mining the Drautz property.

In contrast, John Faulconer testified that Marrowbone had never actually considered letting Radec mine the Drautz property.4 Other evidence suggested that Marrowbone had been considering mining the Drautz property itself. There was also evidence indicating that a mining application for the Drautz property was initially filed under the name of Marrowbone, but was later transferred to that of the Heritage Corporation. The mining application for the Drautz property was never listed in the name of Radec.

To support their damage claim, Radec produced testimony from Mr. Goff, Ms. Kay Parsley, bookkeeper, and Mr. Drew Baldock, accountant. Those witnesses testified that Radec was financially ruined as a result of its reliance on Marrowbone's promise to allow Radec to mine the Drautz property. There was evidence that Radec incurred debts totaling $1.1 million dollars in rehabilitation costs relating to Radec No. 5. Additionally, Radec lost all of its mining equipment due to its inability to make loan payments on the equipment.

It is clear from the above evidence that it was proper to allow Radec's fraud theory to go to the jury. There were "various legitimate inquiries proper for jury resolution regarding [Radec's theory of fraud.]" Brannon v. Riffle, 197 W.Va. 97, 101, 475 S.E.2d 97, 101 (1996)....

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