Case Title: Tolar v. Amax Coal Co., a Div. of Amax, Inc.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1993-11-01T00:00:00Z

Document:
Tolar v. Amax Coal Co., a Div. of Amax, Inc.1993 WY 137862 P.2d 144Case Number: 92-282Decided: 11/01/1993Supreme Court of Wyoming
Jackie Lavaughn TOLAR and 
Ada Ruth Tolar,

 Appellants 
(Plaintiffs),

v.

AMAX COAL COMPANY, A 
DIVISION OF AMAX, INC., a New York corporation,

 Appellee 
(Defendant).

Appeal from The District 
Court, Campbell County, Terrence L. O'Brien, J.

Ronald E. 
Triggs, Cheyenne, for appellants.

Marilyn S. Kite 
of Holland & Hart, Jackson, Marcelle Shoop (argued), of Holland & Hart, 
Cheyenne, for appellee.

Before MACY, 
C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, JJ.

CARDINE, 
Justice.

[¶1]      Jackie and Ada 
Tolar appeal from the district court's award of summary judgment in favor of 
Amax Coal Company, wherein the district court found that the cause of any damage 
to the Tolars' businesses was the result of a downturn in the Gillette economy 
and not the result of the escape of methane and hydrogen sulphide gases from a 
mine developed by Amax.

[¶2]      We 
reverse.

[¶3]      The Tolars state 
these issues:

1. Did the trial court 
err in determining as a matter of law that the appellants incurred no damages as 
a proximate cause of the appellee's negligence?

2. Did the trial court 
err in refusing to reverse its decision upon the appellants' motion for 
reconsideration?

3. Did the trial court 
err in granting summary judgment on the issue of punitive 
damages?

4. Are there genuine 
issues of material fact entitling the appellants to have all issues determined 
by a jury?

[¶4]      In turn, Amax 
offers this summary of the issues:

A. Did the district court 
properly grant summary judgment to Amax Coal Company where there was no dispute 
of fact that the Tolars suffered no compensable damages caused by the evacuation 
of Rawhide Subdivision, irrespective of how the gas seepage in Rawhide was 
caused?

B. Did the district court 
properly grant summary judgment to Amax Coal Company on the issue of punitive 
damages when plaintiffs suffered no compensable actual 
damages?

[¶5]      The Tolars opened 
a "Cent Saver" convenience store in Horizon, a subdivision located about seven 
miles north of Gillette and adjacent to Rawhide Village, on August 28, 1986. 
They contend that Amax's mining operations resulted in the release into the 
atmosphere of poisonous methane and hydrogen sulphide gases and that, on June 2, 
1987, the Board of County Commissioners of Campbell County ordered the 
evacuation of Horizon and Rawhide Village because of the presence of those 
gases. The Tolars contend they were forced to evacuate their business and that 
the evacuation resulted in the complete destruction of that business, as well as 
consequential damages to other business enterprises they owned. The Tolars filed 
their complaint on December 8, 1989. The complaint presented four causes of 
action against Amax:

1. Amax's mining 
activities were inherently dangerous and created a public nuisance which 
proximately caused injury to the Tolars' business.

2. Amax's acts and 
omissions constituted a private nuisance which proximately caused injury to the 
Tolars.

3. Amax was negligent in 
its operation of the mine and that negligence was the proximate cause of the 
Tolars' injury.

4. Amax's actions were 
grossly negligent, caused injury to the Tolars and give rise to an award of 
punitive damages.

[¶6]      As the case 
progressed through the district court, the issue of whether the gas seepage 
actually occurred, or was the fault of Amax, was put to one side, and no 
evidence was heard concerning that matter. Rather, Amax filed a motion for 
summary judgment premised on the theory that, irrespective of the gas seepage, 
the Tolars' damages, if any, were the result of a general downturn in the 
Gillette area economy and the "Cent Saver" business would have failed whether or 
not there had been a gas seepage problem and subsequent 
evacuation.

[¶7]      The facts 
available to the district court were these: The Tolars moved to Gillette in 
1982. They were in the business mainly of residential construction. They also 
operated a carpet business and an eave gutter installation business. They had no 
direct prior experience in the convenience store business. In August 1986, they 
opened a "Cent Saver" convenience store, almost entirely with borrowed money. 
They operated that store until late June of 1987; and, during that ten month 
period, the store was unprofitable. In early 1987, concern began to develop over 
the presence of methane and hydrogen sulphide gases in the Rawhide and Horizon 
Subdivisions. Those subdivisions were the primary market served by the 
convenience store. On June 2, 1987, the Board of County Commissioners of 
Campbell County ordered the evacuation of both the Rawhide Subdivision and the 
Horizon Subdivision, such evacuation to be accomplished not later than July 31, 
1987. In response to that order, the Tolars closed the "Cent Saver" store on 
June 25, 1987. The evacuation order was rescinded on July 28, 1987. The Tolars 
did not reopen the store. The Tolars filed a chapter 11 bankruptcy in February 
1988, at least in part because of the closure.

[¶8]      The Tolars' 
depositions reveal that they accomplished what they considered to be a careful 
market study before opening the store and believed that it would eventually be a 
profitable enterprise, although they did not expect it to be profitable during 
the first two years of operation. They also intended to expand the operation to 
include wine and beer sales, as well as a pizza parlor, in order to enhance the 
profitability of the store.

[¶9]      Expert witnesses 
were hired by both parties and, as might be expected, their views were quite 
divergent. Suffice it to say that the Tolars' expert opined that the store could 
have become a profitable venture, and the experts for Amax opined that the store 
was a foolish venture that was destined never to be 
profitable.

[¶10]   A significant factor in this case 
was the general downturn in the Gillette economy which began in the mid 1980's 
and persisted until the time of the hearing on Amax's motions for summary 
judgment. One result of that economic downturn was a dramatic reduction in 
housing starts, and that was particularly true for the Rawhide and Horizon 
subdivisions where the Tolars had done much residential construction and where 
they intended to do more construction in the future.

[¶11]   We review a summary judgment in the 
same light as the district court, using the same materials and following the 
same standards. Summary judgment is proper only where there are no genuine 
issues of material fact and the prevailing party is entitled to judgment a 
matter of law. Romero v. Hoppal, 855 P.2d 366, 368 (Wyo. 1993); Eisenbarth v. 
Hartford Fire Ins. Co., 840 P.2d 945, 948 (Wyo. 1992).

[¶12]   In the explanation of its decision 
to grant summary judgment for Amax, the district court viewed the testimony by 
and on behalf of the Tolars as "unsupported optimism" and "wishful thinking" and 
"[i]t appears to me quite clear that the convenience store would have failed 
irrespective of what happened with Amax." The district court based these 
conclusions on the general downturn in the Gillette 
economy.

[¶13]   Our discussion need only be brief. 
It is manifest from the evidence presented to the district court that, as a 
factual matter, the cause of the failure of the convenience store and the 
consequential economic problems experienced by the Tolars was hotly disputed. 
The Tolars claim the cause was the methane and hydrogen sulphide gas seepage, 
and Amax contends that it was the downturn in the Gillette economy. Very likely, 
the truth lies somewhere in between, but that is a question which must be 
resolved by a fact finder. As is evident from the testimony in this case thus 
far, there may be countless factors which enter into every business failure - 
lack of intelligent management or skilled technical direction, insufficient 
capitalization, basic infirmities in process or method, delays, miscalculations, 
inefficiency of personnel, an economic downturn, premature closure brought about 
by an external force, and so on. The very purpose of the jury system is to 
resolve such complex and multi-faceted problems. See, e.g., Springfield v. 
State, 860 P.2d 435, 443 (Wyo. 1993) (citing United States v. Jakobetz, 955 F.2d 786, 796 (2nd Cir. 1992)). Under these circumstances, we do not perceive the 
dual requirements of no genuine issue of material fact and that Amax is entitled 
to judgment as a matter of law. See Jurkovich v. Estate of Tomlinson, 843 P.2d 1166, 1173-74 (Wyo. 1992). Thus, we are compelled to 
reverse.

[¶14]   The orders on summary judgment are 
reversed and the matter is remanded to the district court for further 
proceedings consistent with this opinion.

[¶15]   TAYLOR, Justice, dissenting, 
with whom MACY, Chief Justice, joins.

[¶16]   In August of 1986, the economic 
climate in Gillette, Wyoming was in the doldrums. New home construction was at a 
near standstill. In July of 1988, the Department of Housing and Urban 
Development (HUD) auctioned 104 houses at an average price of $15,400.00. 
Construction of new housing in the Rawhide Village Subdivision, approximately 
seven miles north of Gillette, had ceased in 1982. In the Horizon Subdivision, 
also seven miles north of Gillette, only seven houses had been constructed by 
1983; three had been sold and four had been foreclosed.

[¶17]   It was during this precarious time 
in 1986 that Jack and Ada Tolar (Tolars) embarked upon their ill-fated venture, 
the establishment of a "Cent Saver" store adjacent to the Rawhide Village and 
Horizon Subdivisions. The store, during its entire history of operation, did not 
realize a single profitable month. The Tolars reported taxable losses of more 
than $96,000.00 over the ten months the store was in 
operation.

[¶18]   In February of 1987, methane gas 
was discovered seeping out of the soil near the southern boundary of the Rawhide 
Village Subdivision. On June 2, 1987, the Board of County Commissioners of 
Campbell County, Wyoming ordered all residents of both the Rawhide Village and 
Horizon Subdivisions to evacuate by July 31, 1987. The order to evacuate was 
rescinded on July 28, 1987; however, the Tolars had already closed the "Cent 
Saver" store on June 25, 1987.

[¶19]   The Tolars eventually dismantled 
and sold the "Cent Saver" store for $30,000.00. The Tolars applied $21,585 to 
the United States Small Business Administration (SBA) loan of 175,600.00, 
received a full release of liability and retained the lot on which the store was 
located.

[¶20]   Finally, the Tolars failed in all 
their business ventures: a construction business; a carpet business; a gutter 
business; a ranch purchased in September of 1986 with a loan of $350,000.00; 
and, of course, the "Cent Saver" debacle. The Tolars predictably filed for 
bankruptcy in February of 1988.

[¶21]   The Tolars assert that: if 
their creditors could have held off and they could have operated the store 
for a few years, it could have been profitable; if they could have 
obtained a liquor license, the store could have become profitable; if 
they could have built twenty-eight houses in the Horizon Subdivision, both 
the construction business and the store could have been profitable; and, 
if the gas leak had not resulted in an evacuation of the Rawhide Village 
and Horizon Subdivisions, the store could have been profitable. Amax Coal 
Company said it best in their appellate brief, "`if wishes and buts, were candy 
and nuts, we'd all have a Merry Christmas!'" Now, perhaps, the net profit that 
has so long escaped the Tolars in business will be available to them from the 
courtroom at the expense of Amax Coal Company.

[¶22]   I would hold, as a matter of law, 
that the Tolars' claims must fail for two reasons. First, the Tolars have not 
shown that Amax Coal Company had a duty to prevent naturally occurring methane 
gas from seeping to the surface. The majority admits no evidence was heard on 
this element of the causes of action. Second, summary judgment in favor of Amax 
Coal Company was appropriate because the Tolars have not established that Amax 
Coal Company's operations were the proximate cause of the injuries their 
businesses sustained. Century Ready-Mix Co. v. Campbell County School Dist., 816 P.2d 795, 802 (Wyo. 1991). The Tolars' store did close during the period when an 
evacuation order had been issued by the county. However, when that order was 
rescinded, the Tolars did not reopen their store. The economic reality is that 
the store closed because it was unprofitable and their other businesses failed 
for the same reason. "Negligence and proximate cause are never presumed from the 
happening of an accident, and mere conjecture cannot form the basis of 
liability." DeWald v. State, 719 P.2d 643, 652 (Wyo. 1986). Amax Coal Company 
should not be held to be an insurer of the economic success of the Tolars' 
enterprises.

[¶23]   Many of the factors cited by the 
majority are present here, lack of intelligent management, miscalculation, 
inefficiency, and economic downturn. However, I disagree that the closing was 
premature - it was inevitable. The district court correctly assessed that 
economic projections could not dispel economic reality. Sam Walton would have 
failed under these circumstances.

[¶24]   I respectfully dissent.