Landowner Awarded Punitive Damages, Attorney Fees Against Contractor, Utility Company

in Columns/Law
James R. Keller

By JAMES R. KELLER

Missouri’s Southern District Court of Appeals recently upheld a jury verdict and court judgment in favor of the landlord and against Carroll Electric Cooperative Corp. for $12,224 in actual damages, $75,000 in punitive damages and $59,456 in attorney’s fees. The appellate court also upheld a separate judgment for the same amount in actual damages – but not punitive damages – against Seven Valleys Construction Co.

The case is Bare v. Carroll Electric Cooperative Corporation and Seven Valleys Construction Company, 2018 WL 1281114, decided March 13.

The judgment against Carroll Electric and Seven Valleys was for common-law trespass. The appellate court decided there was sufficient evidence to support the jury’s verdicts and the trial court’s judgments.

Carroll Electric had hired Seven Valleys to clear a right-of-way and pile resulting severed trees and brush on the edge of the right-of-way. Steven and Suzanne Bare were the co-trustees/owners of the land.

They granted an easement to Carroll Electric to clear and keep clear the right-of-way. The easement permitted the removal of trees and other obstacles outside of the right-of-way that were tall enough to interfere with transmission lines.

The landowner was concerned that the language in the easement contract seemed vague. The field service supervisor for Carroll Electric told the landowner that the language was in the easement contract so that Carroll Electric could “take danger trees.”

The landlord wanted this language removed. Carroll Electric’s representative would not do this but also said, “You have nothing to worry about.”

Carroll Electric’s design engineer had assured the landowner that the tree-clearing project could be done within 100 feet, the width of the right-of-way. Carroll Electric’s field service supervisor also told the landowner that if any damage occurred to landowner’s property beyond the right-of-way, then the landowner should “make a written claim to Carroll Electric and they would take care of restoring and repairing the damage.”

Without these promises, the landowner testified that she would not have signed the easement contract. The easement contract was one piece of paper. It guaranteed payment of $9,060 to the landowner for the easement.

The easement contract noted that logs would be left on the edge of the right-of-way for the landowner.

At trial, the Court received into evidence the one-page easement contract. It contained an additional hand-written note that stated: “Brush also to be left pushed off edge of right-of-way.”

Suzanne Bare testified at trial that she did not recognize the handwriting. She said the hand-written note was not on the easement contract when she signed it.

Carroll Electric’s field service supervisor testified that he added the hand-written note and it was on the easement before Suzanne Bare signed it.

The Southern District noted that the jury was entitled to believe or disbelief part or all of the testimony of any witness.

Steven Bare testified that he told Seven Valleys’ supervisor “not to clear anything wider than 100 feet.”

After the clearing crew had moved past the landowner’s property, the Bares went on an out-of-town trip. When they returned three days later, they discovered that a large area of their property had been bulldozed on what was previously a “fully wooded” section of their land.  In total, Seven Valleys’ work crew had removed 46 trees.

Contrary to the 100-foot limitation, Seven Valleys piled trees and lumber on the landowner’s property. Some of the trees had been placed on top of landowner’s fence, damaging the fence.  The landowner also discovered that other trees outside the boundary of the easement had been cut.

One of the issues on appeal was whether Carroll Electric controlled or had the right to control the activities of Seven Valleys. The appellate court noted that Seven Valleys’ contract permitted Carroll Electric to remove any employee of Seven Valleys. Carroll Electric could also force Seven Valleys to add employees to the project.

Further, Carroll Electric’s supervisor not only inspected Seven Valleys’ work, but he had the ability to correct work. The Southern District decided that there was substantial evidence supporting a finding that Carroll Electric’s control over Seven Valleys’ conduct “produced a trespass.”

The appellate court also considered whether the trial court errored by instructing the jury on punitive damages.

The Southern District concluded that the jury could reasonably find that Carroll Electric’s field service supervisor had added the hand-written note on the easement after it was signed by the landowner “to make it appear that the landowner had agreed to something that it had actually rejected.”

The Southern District further noted that he told Carroll Electric’s supervisor that he did not want any trees cleared beyond what they had agreed to in the easement. The supervisor replied that he would take any tree on landowner’s property that he wished.

With this evidence, the appellate court concluded that a reasonable juror could find that Carroll Electric’s conduct was outrageous by demonstrating a complete indifference to or a conscious disregard for landowner’s rights.

This is the legal standard to support an award of punitive damages under Missouri law. The Southern District, based on the standard and the evidence it considered, affirmed the award of punitive damages.

The Southern District also upheld the award of attorney fees pursuant to a Missouri statute. The statute provides that if a property owner prevails in an action for trespass against a rural electric cooperative, such property owner may be awarded reasonable attorneys’ fees, costs and expenses.

This statute also entitled the landowner to recover legal fees for the appeal including research in preparation of appellate briefs.

The appellate court sent the case back to the trial court to consider the reasonableness of the request for attorney fees and costs incurred by the appeal.

James R. Keller is counsel with Sandberg Phoenix & von Gontard P.C. where he concentrates his practice on construction law, complex business disputes, real estate and alternative dispute resolution. He also is an arbitrator and a mediator. Keller can be reached at (314) 446-4285 or jkeller@sandbergphoenix.com.

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