Court Opinion

ID: 9733443
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:07:51.68496+00
Date Added: 2024-06-11T18:26:41.550060
License: Public Domain

JOHNSTONE, Justice,
dissenting.
I must respectfully dissent from the majority opinion holding that the trial court properly submitted the issue of damages to the jury. In so holding, this Court has misconstrued the rules governing the operation of presumptions, and thus used the incorrect standard of measurement in determining the sufficiency of the evidence. Rule 301 of the Kentucky Rules of Evidence governs the use of presumptions in civil actions.1 The drafters of this Rule explained its intended operation thusly:
This provision adopts what is commonly known as the “bursting bubble” approach to presumptions. Proof of the basic facts of the presumption will shift the burden of going forward with evidence to the opponent of the presumption. If the opponent fails to satisfy this burden the party in whose favor the presumption operates is entitled to a directed verdict on the presumed fact. If the burden is satisfied the presumption disappears from the case and has no additional impact on the burden of proof. Specifically, it does not have an impact on the placement of the burden of persuasion as to the presumed fact; this burden remains on the party to whom it would be allocated if no presumption existed.
Study Committee, Kentucky Rules of Evidence — Final Draft, p. 18 (Nov.1989).
In the case at bar, when the Elli-sons/Sullivans introduced evidence as to the dumping of waste on their land and the subsequent cost of removal, a presumption was created that the diminution in fair market value of the land equaled the cost to return the land to its original state. We stated a similar principle in State Property and Buildings Commission of Department of Finance v. H.W. Miller Construction Co., Ky., 385 S.W.2d 211 (1964):
In the absence of evidence to the contrary it would ordinarily be presumed ... that as between a willing seller and a willing buyer of a new building known to be in need of certain repair work the anticipated cost of the remedial work would reduce the price by an equivalent amount. So, unless there is evidence to inject it, the question of market value need not be considered ....
Id. at 214 (emphasis added). In this case, however, the construction companies rebutted that presumption by introducing expert testimony that the value of the land before and after the trespass was the same. At this point, the presumption “burst,” and the burden of going forward with the evidence shifted back to the Elli-sons/Sullivans.
Professor Lawson explains the task faced by a trial judge when a party has presented evidence in rebuttal to a presumption as follows:
Under this standard a trial judge is obligated to make one of the following findings in evaluating evidence presented in contradiction of a presumption: (i) that no reasonable juror could find the nonexistence of the presumed fact; (ii) that reasonable jurors could differ as to the existence or nonexistence of that fact; or (iii) that no reasonable juror could find the existence of the presumed fact. A finding of the first type would *81call for a directed verdict in favor of the proponent of the presumption. A finding of the second type would result in a jury submission on the issue of the presumed fact. A finding of the third type would revive the burden of going forward with evidence as to the presumed fact and shift it back to the proponent of the presumption; a directed verdict in favor of the opponent of the presumption would be required if additional evidence of the presumed fact is not produced.
Robert G. Lawson, The Kentucky Evidence Law Handbook, § 10.05 at 552 (3d ed.1993) (emphasis added).
The above analysis is to be done in light of the weight and sufficiency of the rebuttal evidence. If this evidence simply casts doubt upon the presumed fact, then the presumption is reduced to a permissible inference. See Workman v. Wesley Manor Methodist Home, Ky., 462 S.W.2d 898, 900 (1971). However, if the rebuttal evidence is strong enough to “burst” the presumption rather than simply cast doubt upon it, then the proponent of the presumption must come forward with evidence in support of the presumed fact in order to survive a motion for directed verdict.
In the case at bar, the construction companies’ direct evidence as to the before and after value of the land completely rebutted the presumption of diminution of value created by the Ellisons’/Sullivans’ introduction of evidence of clean-up costs. This renewed the Ellisons’/Sullivans’ burden of going forward with the evidence, which they failed to do. Thus, the construction companies were entitled to a directed verdict.
The operation of the above principles is demonstrated in the case of Newsome v. Billips, Ky.App., 671 S.W.2d 252 (1984), which is factually indistinguishable from the case at bar. Defendant Billips damaged rental property owned by Plaintiffs, the Newsomes, while the former’s mining company was conducting blasting operations. The Newsomes sued for damages and proved the cost of repair at somewhere between $9,500 and $12,500. Billips put on evidence through an expert appraiser that the value of the house before the damage was $25,000 and was valued at $24,200 immediately thereafter and also put on evidence that the cost of repair was $600. After the close of evidence, Billips moved for a directed verdict on the grounds that the Newsomes failed to show the fair market value of the house immediately before and after the alleged damages. The trial court denied the motion, and in affirming the trial court, the Court of Appeals correctly stated:
In order to sustain a motion for a directed verdict, the court must draw all fair and rational inferences from the evidence in favor of the party opposing the motion. A verdict should not be directed unless the evidence is insufficient to sustain the verdict. The Newsomes’ proof was based solely on the cost to cure by repair. They did not offer any direct proof of the difference in the fair market value of their property, immediately before and immediately after the alleged damages, but the fact that the only proof of the difference in the before and after values was to be less than their estimated cost of repair was not in issue. In the absence of evidence to the contrary, it may be presumed that the anticipated cost of repair would reduce the value by an equal amount. The directed verdict was properly denied.
Id. at 254-55 (emphasis added and internal citations omitted).
In discussing the effect of Billips’ direct evidence as to the before and after values of the property on the presumption created by the Newsomes’ evidence of cost repair, the Court of Appeals again correctly stated:
In Kentucky, the real measure of damages in a blasting case where the injury is partial or “temporary” is the reasonable cost of repair. However, re*82pair is unreasonable when its cost exceeds the difference in the before and after values. The unreasonableness of the Newsomes’ cost figures was brought into issue by Billips’ proof of the diminished value. Any presumption the Neivsomes might have enjoyed was eliminated by Billips’ proof The New-somes offered nothing to counter it.
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The law is clear enough. The problem in this case is with the proof and the development of the facts. The estimated cost to repair ranged from $600.00 to $12,500.00. The loss in value was essentially fixed at $800.00. The jury could have awarded damages between $600.00 and $800.00. The verdict of $800.00 was proper whether it was based on the jury’s determination of a cost to repair or the actual loss in value as was proven.
Id. at 255 (emphasis added and internal citations omitted).
As in Newsome v. Billips, the Elli-sons/Sullivans in the case at bar were entitled to the presumption that their proof of cost to restore the land to its original condition equaled the diminution in value of the land. However, the construction companies’ proof of the before and after value of the land eliminated that presumption. Consequently, this limited the amount of the Ellisons’/Sullivans’ damages to the construction companies’ proof of diminution of the fair market value of the property. Unfortunately for the Elli-sons/Sullivans, they failed to present any competent countervailing evidence as to the diminution in value. As a result, the Ellisons’/Sullivans’ unrebutted proof of no diminution in value entitled the construction companies to a directed verdict, since the Ellisons/Sullivans failed to prove damages.
I believe the majority opinion loses sight of that which Newsome v. Billips makes obvious by misconstruing the issue, which it frames thusly:
Despite dicta to the contrary in Newsome v. Billips and State Property and Buildings Commission of Department of Finance v. H. W. Miller Construction Co., reasonable inferences regarding diminution in fair market value drawn from evidence of restoration costs do not evaporate when an “expert” expresses an opinion contrary to the reasonable inference. The expert’s opinion is additional evidence for the jury to consider in deciding the issue, but no more and no less.
Majority Opinion at 77.
However, the issue in this case is not whether expert testimony concerning fair market value of property trumps lay testimony on the same question. Indeed, orn-ease law clearly holds that an owner of land or other lay witness is not excluded from testifying as to the value of property on grounds that he or she is not an expert. See, e.g., Commonwealth, Department of Highways v. Fister, Ky., 373 S.W.2d 720, 722-23 (1963). Rather, the issue is whether evidence of the cost to restore the land to its pre-trespass conditions is competent evidence to prove the fair market value of the land post-trespass.
While conceding that the Ellisons/Sulli-vans introduced “no ‘direct’ evidence of a decline in the fair market value of the land ...,”2 the majority nonetheless holds that the Ellisons/Sullivans introduced sufficient “inferential evidence” of diminution of the fair market value of the property in the form of “ ‘clean up costs’ associated with restoring the property to its original position ....”3 It is axiomatic that diminution of the fair market value of the property in this case equals the fair market value of the property pre-trespass minus the fair market of the property post-trespass. Thus, the majority holds that evidence to restore the property to its original state is competent evidence of the property’s fair *83market value post-trespass, which is simply incorrect.
The number of cases dealing with the competency of evidence in demonstrating fair market value are legion within the Commonwealth. Like the majority, I can find not one of them that holds that cost of repair or restoration is competent evidence of fair market value. Unlike the majority, I am willing to admit my failure rather than trying to reach a desired result via misdirection with the pertinent issues.
Determining fair market value is essential in assessing damages to real estate. Where such damage is permanent, it acts as a benchmark, with the difference between the property’s fair market value immediately prior to and subsequent to the injury determining damages. River Queen Coal Co., Inc. v. Mencer, Ky., 379 S.W.2d 461, 464 (1964). Where such damage is temporary, it serves to determine the reasonableness of the cost of repairs, a prerequisite being that such cost not exceed the property’s pre-existing fair market value. Kentucky Stone Co. v. Gaddie, Ky., 396 S.W.2d 337, 340 (1965). In either event, without such a determination of fair market value, no proper assessment of damages is possible. To allow evidence of the cost of repair or restoration to serve as competent evidence of diminution in value is to do away with the requirement under our law that the cost of repairs or restoration in a temporary trespass case be reasonable. Such a change in this area of the law is significant, and in my view, unwarranted.
The property owners, in failing to go forward with competent evidence demonstrating a diminution of fair market value, failed to prove damages. Under a permanent damage analysis, the diminution of the property’s fair market value was $0, while a temporary damage analysis yields that any repair costs was prima facie unreasonable. As a result, the trial court had an insufficient basis as a matter of law for submitting that issue to the jury. I would therefore affirm the holding of the Court of Appeals that the trial court erred in failing to grant a directed verdict to the construction companies at the close of evidence.

. The rule reads as follows:
In all civil actions and proceedings when not otherwise provided for by statute or by these rules, a presumption imposes on the parly against whom it is directed the burden of going forward with evidence to rebut or meet the presumption, but does not shift to such party the burden of proof in the sense of the risk of nonpersuasion, which remains throughout the trial on the party on whom it was originally cast.

. Majority Opinion at 77.

. Majority Opinion at 76.