Richardson v. Citizens Gas & Coke Utility

• Decision Date: 30 June 1981
• Docket Number: No. 2-877A342,2-877A342
• Parties: Claude R. RICHARDSON and Elma Richardson, his wife, Plaintiffs-Appellants, v. CITIZENS GAS & COKE UTILITY, A Utility District and an Instrumentality of the City of Indianapolis, Indiana; the Board of Directors for Utilities of the City of Indianapolis, d/b/a Citizens Gas & Coke Utility; Citizens By-Products Coal Company, a West Virginia Corporation, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 704

422 N.E.2d 704

Claude R. RICHARDSON and Elma Richardson, his wife, Plaintiffs-Appellants, v. CITIZENS GAS & COKE UTILITY, A Utility District and an

Instrumentality of the City of Indianapolis, Indiana; the

Board of Directors for Utilities of the City of

Indianapolis, d/b/a Citizens Gas & Coke Utility; Citizens

By-Products Coal Company, a West Virginia Corporation,

Defendants-Appellees.

No. 2-877A342.

Court of Appeals of Indiana, Fourth District.

June 30, 1981.

David Rogers, Rogers, McDonald & Grodner, Bloomington, for plaintiffs-appellants.

James R. McClarnon, Robert S. Hulett, Smith, Morgan & Ryan, Harry V. Huffman, Indianapolis, for defendants-appellees.

MILLER, Judge.

Plaintiff-appellants, Claude and Elma Richardson appeal from the summary and final judgments entered in favor of the defendant-appellees, Citizens Gas & Coke Utility, the Board of Directors for Utilities of the City of Indianapolis and Citizens By-Products Coal Company (collectively referred to as Citizens), on the Richardsons' amended complaint claiming an inverse condemnation under Indiana's eminent domain law ¹ by Citizens. The Richardsons' amended complaint was premised upon an alleged improper seizure of their right to coal and other minerals, as conveyed to Claude Richardson by deed in 1933, located under real estate situated in section ten, Township 7 North, Range 7 West in Green County, Indiana (Section 10). The Richardsons alleged Citizens committed a compensible taking of their: 1) coal and mineral interests (which were unmined but were in place); 2) oil and gas already mined; and 3) underground gas storage rights. Citizens denied these claims in its answer and raised several affirmative defenses the gist of which asserted the Richardsons owned only the coal interests while Citizens possessed title to the oil, gas and underground gas storage rights by virtue of leases and assignments of leases executed by the surface owners of Section 10. Finally, Citizens argued Indiana law vested ways of necessity ² in the natural gas storage lessee through the Richardsons' coal and such easements did not constitute a compensible taking.

Additional to its answer, on February 28, 1977 Citizens filed their "Objections to Appointment of Appraisers, Raising Matters Requiring Dismissal or Transfer and Warranting Entry of Judgment for Defendants." The basis of Citizens' objections was the phrase in the 1933 deed conveying only "coal and other minerals" to Claude Richardson. Citizens argued this phrase included only coal and hard minerals and, as a matter of law, did not convey title to oil, gas or underground gas storage rights. Citizens' also filed its summary judgment motion, as an alternative to its Objections, focusing on three issues:

1) Who owned title to the gas and oil exploration rights as well as the gas storage rights?

2) Were gas storage and coal mining compatible in the same fields at different levels?

3) Did easements in gross exist allowing Citizens to remove gas through the Richardsons' coal fields and, if they did exist, did they constitute a compensible taking of the Richardsons' coal interest?

In its summary treatment of this cause the trial court ruled on each of the above issues at three separate hearings. At the first hearing on March 8, 1977, the Richardsons responded to Citizens' objections and sought a partial summary judgment in their favor on the ownership of the oil, gas and gas storage rights issue. The same day the trial court entered a partial summary judgment in favor of Citizens on this issue. (Richardsons' Motion to Correct Errors seeking reversal of this ruling was denied on May 31, 1977.)

The next hearing, an evidentiary one, was held on June 1, 1977 to determine if coal mining and gas storage were compatible and, therefore, implicitly to decide whether oil and gas easements could exist. After refusing to admit the testimony of one of the Richardsons' two expert witnesses on this issue and, then considering the testimony of Citizens' compatibility expert, the trial court ruled the two endeavors compatible but did not explicitly hold that Citizens possessed easements through the Richardsons' coal fields.

The final argument was held in the case on June 24, 1977 after which the trial court reaffirmed its earlier rulings and finally adjudged that a compensible taking by Citizens of the Richardsons' coal interest had not occurred.

The Richardsons filed a second Motion to Correct Errors stemming from the last two hearings which was denied. The Richardsons properly perfected a consolidated appeal from the partial summary and final judgments raising for this Court's consideration the following issues:

1) Did the March 8, 1977 partial summary judgment violate the requirement of Ind.Rules of Procedure, Trial Rule 56(C) that a Motion for Summary Judgment be served on the opposing party no less than ten days prior to a hearing on the motion since only eight days elapsed between service of, and the hearing on, Citizens' motion?

2) Was the partial summary judgment on the ownership issue contrary to law since a genuine issue of a material fact remained concerning the construction of the phrase "coal and other minerals" contained in the 1933 deed to Claude Richardson?

3) At the June 1, 1977 hearing on the question of the compatibility of coal mining and gas storage did the trial court abuse its discretion by prohibiting testimony of one of the Richardsons' two expert witnesses on the issue when the Richardsons failed to establish his qualifications as an expert on this issue?

4) Was the June 1, 1977 decision that Citizens possessed easements in gross through the Richardsons' coal fields supported by sufficient evidence?

5) Was the decision that Citizens' easements in gross measured 300 feet in diameter contrary to law?

6) Was the June 24, 1977 decision that Citizens' easements in gross did not constitute a compensible taking contrary to law since such a conclusion required a factual determination by a jury?

7) Was the June 24, 1977 final judgment contrary to law since the trial court failed to make a finding of the absence of any genuine issues of any material fact?

8) Was the final judgment contrary to law due to the trial court's failure to specify the particular reasons for granting such judgment?

For the reasons stated below, we affirm both the partial summary and final judgments.

FACTS

The material facts, as revealed from exhibits, affidavits and sworn testimony, do not appear to be disputed and reveal the following. The mineral rights in question were initially severed from the surface land through a series of deeds dated from 1899 to 1905. Ten of the thirteen original severance deeds conveyed "coal and other minerals" while two of the original severance deeds transfered only "coal." The remaining deed passed rights to "coal, clays, minerals and mineral substances." These original severance deeds were purchased by three grantees: 1) the Black Creek Semi-Block Coal Company; 2) the North Linton Coal Company; and 3) Livingston T. Dickason. Significantly, these three grantees did not explore for, nor sell, gas or oil. In fact the articles of incorporation of the two corporations did not authorize exploration or development of gas or oil properties. Similarly, historical evidence submitted to the court evinced that Dickason dealt only in coal property. Finally, historical documents demonstrated that prior to and during the period of the severance of mineral rights from surface rights, neither gas nor oil were discovered in Greene County. Rather the earliest instrument specifically designating gas and oil fields in Greene County was not recorded until 1907.

Eventually, the United Fourth Vein Coal Company (United Coal Company) purchased the mineral rights in Section 10 conveyed by the 13 original severance deeds. United Coal Company became bankrupt in 1933 with the Marion County Probate Court supervising the attendant receivership. Through its Receiver, George D. Yeazel, the United Coal Company published a notice of sale of its coal and mineral rights in Section 10 along with the right to mine and remove the same. Claude Richardson bid for these rights and, pursuant to an order of the Probate Court, Yeazel executed a deed to Richardson (dated May 19, 1933) conveying to him "the right, title and interest of (the United Coal Company) ... in and to the unmined coal owned by (the United Coal Company) underlying (Section 10)." (Emphasis added.) Subsequently, Yeazel discovered the Company did not own the entire tract conveyed to Richardson. As a substitute for the portion the United Coal Company could not convey, Richardson agreed to accept from Yeazel a conveyance of "all the right, title and interest of the (United Coal Company) and the (R)eceiver in and to the coal and minerals lying in and under (Section 10) ... by way of adjustment and settlement of the matter." (Emphasis added.) The subsequent deed (dated October 31, 1933), making this adjustment, conveyed to Richardson:

"all of the right, title and interest of the grantor and of the United Fourth Vein Coal Co. an Indiana corporation in and to the coal and minerals lying in under the north half of the southwest quarter, the southwest quarter of the northeast quarter and the northwest quarter of the southeast quarter, all in Section 10 ... together with all rights and privileges in connection therewith now vested in the grantor or vested in the said United Fourth Vein Coal Co." (Emphasis added.)

Neither the original severance deeds nor either of Richardsons' two deeds defined "coal," "coal and other minerals" or "coal, clays, minerals and mineral substances." Significantly, Richardson did not explore for oil and gas until 1943 when he executed a gas and oil lease with Sun Oil Co. Actual discovery of natural gas, pursuant to this lease, did not occur until 1947. However, due to a lack of interest in gas, Sun Oil capped the well and released...