United States District Court, W.D. Virginia, Roanoke Division
JUSTIN D. THOMAS and IRENE S. THOMAS, Plaintiffs/Counterdefendants,
CARMEUSE LIME & STONE, INC., and O-N MINERALS (CHEMSTONE) COMPANY, Defendants/Crossclaim Defendants,
THOMAS M. HELMS, SR., Intervenor Defendant/Counterclaimant/Crossclaimant
For Justin D. Thomas, Irene S. Thomas, Plaintiffs: J. Scott Sexton, GENTRY LOCKE RAKES & MOORE, ROANOKE, VA; Justin Michael Lugar, Gentry Locke Rakes & Moore, Roanoke, VA.
For Carmeuse Lime & Stone, Inc., O-N Minerals (Chemstone) Company, Defendants: Thomas Moore Lawson, LEAD ATTORNEY, LAWSON AND SILEK, PLC, WINCHESTER, VA; Joshua Eugene Hummer, LAWSON & SILEK, P.L.C., WINCHESTER, VA.
For Irene S. Thomas, Plaintiff: Travis Jarrett Graham, LEAD ATTORNEY, Gentry Locke Rakes & Moore, Roanoke, VA; J. Scott Sexton, GENTRY LOCKE RAKES & MOORE, ROANOKE, VA; Justin Michael Lugar, Gentry Locke Rakes & Moore, Roanoke, VA.
For O-N Minerals (Chemstone) Company, Defendant: Thomas Moore Lawson, LEAD ATTORNEY, LAWSON AND SILEK, PLC, WINCHESTER, VA; Joshua Eugene Hummer, LAWSON & SILEK, P.L.C., WINCHESTER, VA.
For Thomas M Helms, Sr., Intervenor Defendant: Robert Cameron Hagan, Jr., LEAD ATTORNEY, LAW OFFICE OF ROBERT C. HAGAN, JR., DALEVILLE, VA.
For Thomas M Helms, Sr., Cross Claimant: Robert Cameron Hagan, Jr., LEAD ATTORNEY, LAW OFFICE OF ROBERT C. HAGAN, JR., DALEVILLE, VA.
For O-N Minerals (Chemstone) Company, Cross Defendant: Thomas Moore Lawson, LEAD ATTORNEY, LAWSON AND SILEK, PLC, WINCHESTER, VA; Joshua Eugene Hummer, LAWSON & SILEK, P.L.C., WINCHESTER, VA.
For Carmeuse Lime & Stone, Inc., Cross Defendant: Thomas Moore Lawson, LEAD ATTORNEY, LAWSON AND SILEK, PLC, WINCHESTER, VA; Joshua Eugene Hummer, LAWSON & SILEK, P.L.C., WINCHESTER, VA.
For Thomas M Helms, Sr., Counter Claimant: Robert Cameron Hagan, Jr., LEAD ATTORNEY, LAW OFFICE OF ROBERT C. HAGAN, JR., DALEVILLE, VA.
For Irene S. Thomas, Counter Defendant: Travis Jarrett Graham, LEAD ATTORNEY, Gentry Locke Rakes & Moore, Roanoke, VA; J. Scott Sexton, GENTRY LOCKE RAKES & MOORE, ROANOKE, VA; Justin Michael Lugar, Gentry Locke Rakes & Moore, Roanoke, VA.
For Justin D. Thomas, Counter Defendant: Travis Jarrett Graham, LEAD ATTORNEY, Gentry Locke Rakes & Moore, Roanoke, VA; J. Scott Sexton, GENTRY LOCKE RAKES & MOORE, ROANOKE, VA; Justin Michael Lugar, Gentry Locke Rakes & Moore, Roanoke, VA.
For Irene S. Thomas, Counter Claimant: Travis Jarrett Graham, LEAD ATTORNEY, Gentry Locke Rakes & Moore, Roanoke, VA; J. Scott Sexton, GENTRY LOCKE RAKES & MOORE, ROANOKE, VA; Justin Michael Lugar, Gentry Locke Rakes & Moore, Roanoke, VA.
For Justin D. Thomas, Counter Claimant: Travis Jarrett Graham, LEAD ATTORNEY, Gentry Locke Rakes & Moore, Roanoke, VA; J. Scott Sexton, GENTRY LOCKE RAKES & MOORE, ROANOKE, VA; Justin Michael Lugar, Gentry Locke Rakes & Moore, Roanoke, VA.
For Thomas M Helms, Sr., Counter Defendant: Robert Cameron Hagan, Jr., LEAD ATTORNEY, LAW OFFICE OF ROBERT C. HAGAN, JR., DALEVILLE, VA.
Hon. Glen E. Conrad, Chief United States District Judge.
Pending before the court are four motions for summary judgment or partial summary judgment, all of which have been fully briefed and were argued before the court at an October 16, 2014 hearing. Two related motions by plaintiffs (in which they seek to exclude the opinions of certain experts offered by defendant Carmeuse) have also been fully briefed and argument on them waived. The court has carefully considered the submissions of the parties, the arguments of counsel, and the applicable law. The court's conclusions are set forth herein.
Factual and Procedural Background
This case concerns a dispute between the parties regarding which of them owns what portion of the mineral estate on a
piece of property where the surface estate is owned by the plaintiffs, Justin and Irene Thomas. The parcel of land at issue (" the Property" or " the Thomas Property" ) consists of approximately 150 acres in Botetourt County, Virginia. The mineral estate consists of ownership of the stone (including limestone) and related quarrying rights.
On the northwestern portion of the Property is an old stone house, which, according to one of plaintiffs' experts, " is an excellent, and rare, example of 18th century colonial American architecture." Dkt. No. 168-3 at 2. Although plaintiffs purchased the property in 2002, they have never lived in the home, and no one currently resides in the home. Apparently it has not been occupied since 1999. Mr. Thomas, who lives with his family in Ohio, contends that he continues to " make frequent trips to the property, using it for recreational purposes," Dkt. No. 168 at 11, although his deposition testimony on this issue is less than clear. He states that he currently 'inhabits" the house, and that at least two of his children have stayed at the property overnight. Dkt. No. 168-1, Thomas Dep. at 45-46. He acknowledges that there is no plumbing or sewage, only an outhouse, and that although the house was wired for electricity when he purchased it, the house does not have electricity currently. Id. at 29-30, 46, 146. Additionally, under current zoning regulations, the house cannot be occupied. Dkt. No. 195 at 10; Dkt No. 168 at 41. Because no part of the Thomas Property is zoned for residential use, Dkt. No. 168-1 at 107, Carmeuse contends the house is " unoccupiable." Dkt. No. 143 at 32.
On the northern border of the Thomas Property is land owned in fee simple by Carmeuse, on which Carmeuse operates an existing limestone quarry. Bordering the property on the south is property owned by persons not parties to this lawsuit, and south of those properties, intervenor Thomas M. Helms. Sr. owns a parcel of land in fee simple. See Appendix 1, docketed as Dkt No. 171-1 at 27 (composite map dated September 3, 2013 drawn by McMurry Surveyors, Inc., which shows generally land owned by Helms, Thomas, and by Carmeuse (described thereon as Rocky Point Farm)); see also Appendix 2, docketed as Dkt No. 94 at 2 (surveyor's plat map by Dorsey Surveyors dated August 30, 2013) (showing additional detail).
On the Thomas Property (and going through the neighboring properties), several " veins" of limestone, some of it high-grade limestone suitable for industrial uses, run in the general direction from northeast of the Property in a southwesterly direction. See Appendix 2; Appendix 3, docketed as Dkt. No. 143-3 at 11. (Figure 5-1 from the report of Carmeuse's proffered expert, Hans Naumann, showing the geological features of the area as
mapped in 1967). The property is in an area of the county which has been known to be rich in limestone since at least the mid-1800s, and a number of abandoned quarries are in the vicinity. The scope and size of Carmeuse's current quarry, however, far exceeds the size and scope of any abandoned quarries. See Appendix 3 (showing small " abandoned quarries" and Carmeuse's current quarry); Appendix 4, docketed as Dkt No. 168-29 at 19 (Figure 7-3 from Naumann's report, showing an aerial photograph depicting locations and sizes of historic quarries and Carmeuse's quarry).
Plaintiffs filed this declaratory judgment action after receiving a letter from Carmeuse's attorney in June 2012, in which he explained that Carmeuse would be conducting core drilling on the Property and in which he made a reference to Carmeuse's right to " destroy and disturb the surface to allow the [Carmeuse] to extract the limestone." Dkt. No. 1-7 at 1. After the court denied plaintiffs' request for a temporary restraining order, the core drilling took place, although no quarrying has occurred on the Property since the Thomases purchased it.
Plaintiffs have since dismissed their request for injunctive relief. Instead, the amended complaint asks for various declaratory judgments as to the respective property rights of the parties. After some preliminary title work had begun, plaintiffs subsequently moved to add Thomas Helms as a party, and ultimately, Helms retained counsel and elected to join this lawsuit, asserting both a counterclaim against plaintiffs and a cross-claim against Carmeuse.
Without going into unnecessary detail concerning each party's chain of title, the court focuses on a few key points that are undisputed. First, the Thomas Property is part of a 200 acre-parcel that was owned by Reynolds in the mid-1800s, the same parcel that was subsequently owned by other parties and is referred to in certain documents as being owned by Pitzer, Webster or Alphin. Dkt. No. 143 at 2-3, ¶ 2. In an 1849 deed (the " 1849 Deed" or the " Severance Deed" ), Reynolds conveyed ownership of the limestone and other stone on his property to John S. Wilson, thereby creating two estates in the same parcel of land, the surface estate and the mineral estate. See Bostic v. Bostic, 199 Va. 348, 99 S.E.2d 591, 594 (Va. 1957) (explaining that an owner may convey the underlying minerals and except from the operation of the conveyance the surface of the land, which severs the mineral estate from the surface estate and creates two separate estates). Thus, any claims of ownership of that stone and the related quarrying rights on the Property, such as those now asserted by Carmeuse and Helms, trace back to the 1849 Deed.
The plaintiffs' chain of title forward through today is not the subject of any dispute here. The only point of note is that plaintiffs do not own the entirety of
the surface estate that Reynolds retained after the 1849 Deed. Instead, a portion of that 200-acre tract was sold after 1992 and a portion of it on the northeast side of Route 622 was outconveyed to Eubank. Dkt No. 194-3 at 13, ¶ 4.
The extent of Helms' and Carmeuse's interest in the mineral estate will turn, to a large degree, on two related deeds from 1901 and 1902 and on two deeds from 1992. Each of these and their significance will be discussed in more detail in context below. There are other deeds and leases of mineral rights in each party's chain of title, but they are largely immaterial to the issues before the court, and will be discussed in context below only as necessary to understand the parties' arguments.
As noted, there are four motions for partial summary judgment or for summary judgment pending. In each of them, the filer requests specific rulings as to the meaning of various deeds or provisions in a deed, and a declaration concerning the ownership interests of the mineral estate of the Thomas Property. The parties have filed more than a thousand pages of briefing on the summary judgment motions and the related motions to exclude certain expert testimony, but the legal issues in this case are relatively straightforward. As to the property interests at stake, there are essentially four main disputes.
First, the parties dispute the meaning and consequences of a provision in the 1849 Deed referred to in prior court opinions as the " Yard Restriction." Plaintiffs contend that this provision in the 1849 Deed prohibits the owner or owners of the mineral estate from quarrying limestone within the enclosure of the " yard," which is some disputed and uncertain amount of land around what was the Reynolds' dwelling house.
Second, the parties interpret differently two deeds recorded in 1901 and 1902. According to Carmeuse and Helms, these two deeds conveyed the entirety of Wilson's estate (which included both property in fee simple north and south of the Thomas parcel and all of the mineral estate conveyed by Reynolds in 1849). According to the Thomases, the plain language of these two deeds conveyed only a portion of the mineral estate and the rest (the portion not conveyed) reverted by operation of law back to the original owners and thus is now owned by plaintiffs. Thus, according to plaintiffs, Carmeuse and Helms own substantially less of the mineral or limestone rights than the defendants contend.
Third, the parties dispute the meaning of two 1992 deeds, one in Carmeuse's chain of title and one in Helms' chain of title. This dispute is primarily one between Carmeuse and Helms over how to divide their
respective interests in the mineral estate, although plaintiffs have also weighed in and aligned themselves with Helms' interests. That is, although plaintiffs' expert has opined that the deeds are not clear as to what interest is conveyed to Helms, plaintiffs and Helms do agree that, as to the division of the mineral estate between Carmeuse and Helms, Helms owns far more than Carmeuse claims.
The fourth issue arises from plaintiffs' request for a ruling precluding the owners of the mineral estate from using modern mining or quarrying techniques to extract their stone, on the grounds that such techniques were not contemplated by Wilson or Reynolds, the original parties to the 1849 Deed. Defendants counter than neither the 1849 Deed nor Virginia law places any restriction on the methods or technology that the mineral estate owner may use to obtain the stone it owns.
An award of summary judgment is appropriate when " the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). For a party's evidence to raise a genuine issue of material fact to avoid summary judgment, it must be " such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether to grant a motion for summary judgment, the court must view the record in the light most favorable to the non-moving party, and draw all reasonable inferences in his favor. Id. at 255.
Although the parties have submitted expert testimony addressing many of the issues in the case (and testimony that often conflicts), the court concludes that much of that testimony is not helpful to the issues before the court, which involve the legal interpretation and significance of the pertinent deeds. Thus, these competing opinions between the experts do not preclude the court ruling as a matter of law on these issues of deed interpretation. See Sun Yung Lee v. Clarendon, 453 F.App'x 270, 278 (4th Cir. 2011) (holding that district court did not abuse its discretion in refusing to consider certain expert reports that provided opinions on questions of law in property dispute and noting that where the court sits as the trier of fact, it is in the " best position to know whether expert testimony would help [it]" ) (citation omitted). Similarly, the fact that the court finds several of the deeds ambiguous and looks to extrinsic evidence to interpret them does not preclude the entry of summary judgment. See, e.g., World-Wide Rights Ltd. P'ship v. Combe Inc., 955 F.2d 242, 245 (4th Cir. 1992) (in contract interpretation case, summary judgment may be granted even where the contract is ambiguous and requires examination of extrinsic evidence, so long as the " evidence is, as a matter of law, dispositive of the interpretative issue" ).
Choice of Law
The parties all agree that Virginia law governs this case. Where a federal court's jurisdiction is based on diversity, it must apply the forum state's substantive law, including its choice of law rules. Erie R. Co. v. Tompkins, 304 U.S. 64,78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Under Virginia law, cases involving disputes related to real property " are to be governed by the law of the place where the
property is situated." Mort v. Jones, 105 Va. 668, S.E. 220, 221 (Va. 1905).
General Principles of Deed Construction
Relevant to at least the first three issues are the general rules of construction for analyzing deeds. The Supreme Court of Virginia has recently clarified these principles and they are worth stating in detail. First,
[w]here the language of a deed clearly and unambiguously expresses the intention of the parties, no rules of construction should be used to defeat that intention. Where, however, the language is obscure and doubtful, it is frequently helpful to consider the surrounding circumstances and probable motives of the parties. Harris v. Scott, 179 Va. 102, 108, 18 S.E.2d 305, 307 (1942); Schultz v. Carter, 153 Va. 730, 734,151 S.E. 130, 131 (1930).
CNX Gas Co. LLC v. Rasnake,
287 Va. 163, 752 S.E.2d 865, 867 (Va. 2014). Thus, the court's consideration is " initially confine[d] to the four comers of the ... deed to ascertain whether its language ... is plain and unambiguous." Id. " Ambiguity" is defined as " the condition of admitting of two or more meanings, of being understood in more than one way." Id. (quoting B ...