W. Va. Dep't of Transp. v. Veach

• Decision Date: 17 April 2017
• Docket Number: No. 16-0326,16-0326
• Citation: 799 S.E.2d 78
• Court: West Virginia Supreme Court
• Parties: WEST VIRGINIA DEPARTMENT OF TRANSPORTATION, Division of Highways, Petitioner Below, Petitioner v. Douglas R. VEACH, Catherine D. Veach, Arvella Piercy, Aretta Turner, Rosella A. Veach, Dorothy Veach, Deborah E. Veach, Sheila Kay Veach, Sherwood S. Veach, Sharon A. Mehok, F. Craig Veach, L. Coleman Veach, Reginald K. Veach, Jeffrey T. Veach, Eric C. Veach, Christopher K. Veach, St. Mary's Catholic Church And Epiphany of the Lord Cemetery, and The Roman Catholic Diocese Wheeling-charleston, Respondents Below, Respondents

799 S.E.2d 78

WEST VIRGINIA DEPARTMENT OF TRANSPORTATION, Division of Highways, Petitioner Below, Petitioner

v.Douglas R. VEACH, Catherine D. Veach, Arvella Piercy, Aretta Turner, Rosella A. Veach, Dorothy Veach, Deborah E. Veach, Sheila Kay Veach, Sherwood S. Veach, Sharon A. Mehok, F. Craig Veach, L. Coleman Veach, Reginald K. Veach, Jeffrey T. Veach, Eric C. Veach, Christopher K. Veach, St. Mary's Catholic Church And Epiphany of the Lord Cemetery, and The Roman Catholic Diocese Wheeling-charleston, Respondents Below, Respondents

No. 16-0326

Supreme Court of Appeals of West Virginia.

Submitted: January 17, 2017

Filed: April 17, 2017

Scott L. Summers, Esq., Summers Law Office, PLLC, Charleston, West Virginia, Counsel for the Petitioner

J. David Judy, III, Esq., Judy & Judy, Moorefield, West Virginia, Counsel for the Respondents

WALKER, Justice:

Petitioner West Virginia Department of Transportation, Division of Highways ("DOH"), appeals the Circuit Court of Hardy County's March 2, 2016 order granting summary judgment against DOH and awarding attorneys' fees and costs to Respondents¹ ("Veach Heirs") in this condemnation action.

In this appeal, DOH asserts that the circuit court erred by refusing to set aside a stipulation entered into by its prior counsel that conceded ownership of limestone to the Veach Heirs as part of a mineral reservation. The DOH now contends that the Veach Heirs are not entitled to compensation for the limestone because limestone is not subject to a general mineral reservation and, therefore, the Veach Heirs do not own it. DOH further contends the circuit court erred in relying on these stipulations and applying the doctrine of collateral estoppel to grant the Veach Heirs' motion for summary judgment. Finally, DOH argues the circuit court erred in finding that it acted in bad faith and awarding costs and attorneys' fees to the Veach Heirs.

The Veach Heirs assert two cross-assignments of error. First, they argue that the circuit court erred in refusing to award attorneys' fees based upon their contingency fee contract with their counsel. The Veach Heirs also assert that the circuit court erred by ordering the statutory interest to commence on the date the condemnation proceeding was filed rather than the date the mandamus proceeding was filed.

Upon consideration of the parties' briefs and arguments, the submitted record and pertinent authorities, we affirm the circuit court's order granting summary judgment to the Veach Heirs and setting the date of commencement of interest from the date of the filing of the condemnation petition. However, we reverse the circuit court's rulings on attorneys' fees and costs and we remand the case with instructions to hold a hearing to provide both parties the opportunity to be heard on the issues of whether the Veach Heirs are entitled to recover attorney's fees and costs and, if so, the reasonableness of the amount to be awarded.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1968, Anna M. Veach conveyed to her three sons approximately 405 acres of real estate in Hardy County subject to a mineral reservation. The conveyance reserved to Ms. Veach "all minerals underlying the tracts of real estate." When Ms. Veach died on July 25, 2006, the Veach Heirs inherited her mineral rights.

In 2005, DOH began construction on a portion of the highway known as Corridor H near the Veach property. In the course of construction, DOH utilized limestone removed from the Veach property and a nearby property belonging to Margaret Z. Newton. In October 2010, the Veach Heirs filed a petition for writ of mandamus in the Circuit Court of Hardy County seeking to force DOH to institute a condemnation proceeding for the limestone excavated from their property. Construction on this section of Corridor H was completed and opened to the public on October 27, 2010.

Following discovery relating to DOH's duty to institute condemnation proceedings, the parties entered into an agreed order in March 2011 providing that DOH would institute a condemnation proceeding against the Veach Heirs' mineral interest, which included the limestone. Consequently, the mandamus proceeding was voluntarily dismissed. A similar agreed order was entered in a separate mandamus proceeding relating to the Newton property.

The resulting condemnation action relating to the Veach property commenced by petition filed on May 27, 2011, while the condemnation action relating to the Newton property commenced on April 29, 2011. The cases were consolidated for pre-trial hearings because, in the words of counsel for DOH, they dealt with "exactly the same" issues. Several pre-trial rulings were made to clarify the trial issues, including that (1) DOH's failure to first contact Veach and Newton before the commencement of construction denied them the opportunity to determine the highest and best use of the limestone and the just compensation they were each entitled to receive; and (2) DOH entered onto Veach and Newton's respective properties and excavated and appropriated limestone without their permission and by so doing, acted in bad faith and in a willful trespass against their interests. The circuit court also adopted identical jury charges, instructions and verdict forms for both cases other than non-substantive differences. Regarding the Veach property specifically, the parties stipulated during a hearing in 2013 as follows:

1. That Anna M. Veach conveyed surface only to three (3) of her sons on August 31, 1968, reserving unto herself fee simple ownership of all minerals underlying the Veach real estate, without limitation or restriction, and which reservation and exception is free of ambiguity and clear in its intent.

2. That the minerals reserved by Anna M. Veach include limestone and gravel as defined by the Court.

Similarly, prior to trial in the Newton matter, the parties in that case stipulated that "the minerals reserved by Margaret Z. Newton include limestone and gravel as defined by the Court."

The parties agreed that the Newton case would be tried first. Following a three-day trial, the jury rendered a verdict in favor of Ms. Newton, finding that she had met her burden of proving the quantity, quality, marketability, and market value of the limestone removed by DOH and left in its natural state on the property. The jury fixed the value of limestone that was removed from the property at $3.79/ton and allowed a value of $0.25/ton for limestone remaining in the ground. DOH appealed the verdict, which we affirmed in West Virginia Department of Transportation, Division of Highways v. Newton , 235 W.Va. 267, 773 S.E.2d 371 (2015) (" Newton I" ).

After the verdict was affirmed in Newton I , DOH retained different counsel to complete the remaining litigation in the Veach matter. New DOH counsel filed (1) a motion for summary judgment arguing that the Veach Heirs did not own the limestone because it is not a "mineral" subject to a general reservation of mineral rights; (2) a motion to rescind the stipulations on those points made by prior counsel; and (3) a motion to certify the question to this Court as to whether limestone is included in a general mineral reservation. The Veach Heirs also moved for summary judgment on the basis of collateral estoppel pursuant to adjudication of the Newton case.

The various motions were heard on August 25, 2015. On March 2, 2016, the circuit court granted the motion for summary judgment filed by the Veach Heirs and denied all three DOH motions on the grounds that DOH had stipulated to the Veach Heirs' ownership of the limestone, pleaded the Veach Heirs' ownership of the limestone, neglected to appeal the writ of mandamus on the subject, and voluntarily agreed to dismiss the mandamus proceeding. The circuit court applied the market values for limestone as determined by the jury in the Newton case because the limestone was taken from a similarly situated property and the value had already been adjudicated by a Hardy County jury. The circuit court also ordered the payment of attorneys' fees and costs. The resulting award to the Veach Heirs was (1) $19,565,393.00 plus interest at a rate of 10% per annum accruing from the date of the take on May 27, 2011; (2) $13,051.01 plus interest at a rate of 7% per annum for attorneys' fees and costs in the mandamus action; and (3) $199,243.09 plus interest at a rate of 7% per annum for attorneys' fees and costs in the condemnation action. Thereafter, DOH filed this appeal.

II. STANDARD OF REVIEW

"A circuit court's entry of summary judgment is reviewed de novo ." Syl. Pt. 1, Painter v. Peavy , 192 W.Va. 189, 451 S.E.2d 755 (1994). We review entry of summary judgment according to the same standards as the circuit court: "[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syl. Pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York , 148 W.Va. 160, 133 S.E.2d 770 (1963).

Similarly, "[w]here the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." Syl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995).

Finally, "[t]he decision to award or not to award attorneys' fees rests in the sound discretion of the circuit court, and the exercise of that discretion will not be disturbed on appeal except in cases of abuse." Beto v. Stewart , 213 W.Va. 355, 359, 582 S.E.2d 802, 806 (2003) ; see also Sanson v. Brandywine Homes, Inc. , 215 W.Va. 307, 310, 599 S.E.2d 730, 733 (2004) ( "We ... apply the abuse of discretion standard of review to an award of attorneys' fees."). Likewise, "[t]he trial [court] ... is vested with a wide discretion in determining the amount of ... court costs and counsel fees; and the trial [court's] ... determination of such matters will not be disturbed upon appeal to this Court...