Clift et al v. RDP Company et al

Filing 104

MEMORANDUM AND OPINION by Senior Judge Thomas B. Russell on 8/1/2016: The Clifts' Motion for Summary Judgment 84 , is DENIED. RDP Company's Motion for Summary Judgment 83 , Martin Marietta Materials, Inc.'s Motion for Summary Judgment 85 , and Lafarge West, Inc.'s Motion for Summary Judgment 86 are GRANTED. An appropriate order shall issue separate from this Memorandum Opinion. cc: counsel (JBM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CIVIL ACTION NO. 5:14-CV-00057-TBR-LLK
WILLIAM RALPH CLIFT, et al.,

Plaintiffs,

v.
RDP COMPANY, et al.,

Defendants,
***

RDP COMPANY,

Counterclaimant,

v.
WILLIAM RALPH CLIFT, et al.,

Counterclaim Defendants,
***

RDP COMPANY,

Crossclaimant,

v.
LAFARGE WEST, INC.,

Crossclaim Defendant,
***

LAFARGE WEST, INC.,

Crossclaimant,

v.
RDP COMPANY,

Crossclaim Defendant
***

RDP COMPANY,

Third-Party Plaintiff,

v.
MARTIN MARIETTA MATERIALS, INC.,

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Third-Party Defendant.

MEMORANDUM OPINION
The Clift family filed this action against RDP Company and Lafarge West, Inc.,
alleging various claims arising out of, or connected to, a mineral rights lease dating back
to 1977. With discovery at an end, the Clifts, RDP Company, and Lafarge West filed
competing motions for summary judgment. (To the extent RDP Company prevails,
Martin Marietta Materials, Inc., whom RDP Company impleaded, seeks summary
judgment too.) For reasons discussed at length below, the Clifts’ Motion for Summary
Judgment, R. 84, is DENIED, and RDP Company’s Motion for Summary Judgment, R.
83, Martin Marietta Materials, Inc.’s Motion for Summary Judgment, R. 85, and Lafarge
West, Inc.’s Motion for Summary Judgment, R. 86, are GRANTED.
I.
A.
1.
Between 1967 and 1977, Clifton, Sr. and Margaret Clift executed three leases
granting Fredonia Valley Quarries, Inc. the right to quarry “all merchantable limestone
rock and other kindred substances in, under and upon” a seventy-two acre tract of land in
Caldwell County, Kentucky. R. 84-2 at 1 (1967 Lease); R. 84-3 at 1 (1972 Lease); R. 844 at 1 (1977 Lease).
The 1967 Lease. Clifton, Sr. and Margaret signed the first lease on August 9,
1967. See R. 84-2 at 4. In detail, the lease granted to Fredonia Valley Quarries
the right and license to enter upon the premises hereinbefore described at
all times and to use so much of the surface thereof as may be reasonably
necessary in searching for and [exploring] for limestone rock and other
kindred substances and in determining the thickness thereof, and for the
establishment of Quarries and Quarry buildings and for the deposit of
waste material from such Quarries; also the right and license to quarry and
remove said limestone and/or kindred substances from said premises
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together with the rights, privileges, license and easements necessary,
incidental or in any manner appertaining to the proper prosecution of the
business of quarrying and removing said limestone and other kindred
substances; also the right to occupy so much of the surface of said
premises as may be reasonably necessary for storing of said limestone
rock or other kindred substances, and depositing the refuse therefrom, and
the right to erect on said premises such buildings, structures and fixtures
as may be necessary or incidental to the proper prosecution of said
business of quarrying.
Id. at 1–2. The lease reserved to the Clifts the “right to remove all timber . . . from [the]
premises thirty days before quarry operations” commenced. Id. at 2.
In exchange, the lease guaranteed the Clifts a minimum payment of $50.00 per
month without regard to whether Fredonia Valley Quarries quarried the Clifts’
tract. Id. Once Fredonia Valley Quarries began excavating the Clifts’ land, though, it
guaranteed a minimum royalty of $500.00 for each acre mined or stripped, or on which it
disposed of waste, to be paid from a production royalty. Id. at 3. The production royalty
consisted of 5ȼ per ton for the first 2,000 tons of limestone, and of 3ȼ for each ton
thereafter, removed during any particular month, less the guaranteed minimum payment
of $50.00. Id. at 2.
The initial term of the lease was for five years with an option to renew in
perpetuity if Fredonia Valley Quarries “well and truly kept and performed . . . all the
stipulations, covenants and agreements” in the lease. Id. at 3. Fredonia Valley Quarries
reserved the right to terminate the lease “at the end of any month upon written notice to
the [Clifts] and the payment of $250.00.” Id. If Fredonia Valley Quarries failed to pay
“rent for a period of six months beyond [the] due date,” the Clifts retained the right to
declare “a forfeiture of [the] lease.” Id.

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The 1972 Lease. A little over five years later, on August 16, 1972, Clifton, Sr.
and Margaret executed a second lease identical in all respects to the lease signed in
1967. Compare R. 84-3 at 1–4, with R. 84-2 at 1–4.
The 1977 Lease. Clifton, Sr. and Margaret executed the third and operative lease
with Fredonia Valley Quarries on August 1, 1977. See R. 84-4 at 4. The third lease
granted to Fredonia Valley Quarries
the right and license to enter upon the premises hereinbefore described at
all times and to use so much of the surface thereof as may be reasonably
necessary in searching for and exploring for limestone rock and other
kindred substances and in determining the thickness thereof, and for the
establishment of Quarries and Quarry building and for the deposit of waste
material from such quarries; also the right and license to quarry and
removed said limestone and/or kindred substances from said premises
together with the rights, privileges, license and easements necessary,
incidental or in any manner appertaining to the proper prosecution of the
business of quarrying and removing said limestone and other kindred
substances; also the right of way for necessary pads and railroads over said
premises, and the right to occupy so much of the surface of said premises
as may be reasonably necessary for the [storing] of said limestone rock or
other kindred substances, and depositing the refuse therefrom, and the
right to erect on said premises such buildings, structures and fixtures as
may be necessary or incidental to the proper prosecute of said business of
quarrying.
Id. at 2. Similar to the prior leases, the third lease reserved to the Clifts the “right to all
timber cut by [Fredonia Valley Quarries] on the premises in the course of operation.” Id.
at 3.
In return, the third lease guaranteed the Clifts a minimum royalty payment of
$50.00 per month, excluding the months from December to April unless the quarries
operated during those months. Id. at 2–3. It also provided a production royalty of 7.5ȼ
per ton for the first 4,000 tons of limestone, and of 4.5ȼ for each ton thereafter, removed
during any particular month. Id. at 2. Unlike the prior leases, the third lease further
obligated Fredonia Valley Quarries “to deliver to [the Clifts] at the Quarries, fifteen
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ton[s] (15) of agricultural lime each year for and during the life of [the] lease, free of any
cost.” Id. at 3.
Again, the initial term of the third lease was five years, with an option to renew:
It is mutually agreed by the parties hereto that this lease shall run for five
(5) years from and after this date and if all the stipulations, covenants and
agreements herein contained have been well and truly kept and performed
by the [lessee] as herein provided, this lease may be renewed according to
the terms hereof and for the same consideration for five (5) additional
years and at intervals of five (5) years thereafter for a period not exceeding
ninety nine (99) years, and so long as said conditions have been kept and
performed.
Id. If the lessee failed either “to operate the Quarries or to pay rent for a period of ninety
(90) days,” the Clifts retained the right to declare “a forfeiture of [the] lease.” Id. Other
than that, the lease did not include any provision allowing the lessee to terminate the
lease prior to expiration. See id. at 1–5.
2.
From at least 1977, the Clifts have farmed the tract of land at issue, growing
wheat, corn, soybeans, and alfalfa. See R. 83-5 at 27–28 (William Clift’s Deposition
Excerpt). Clifton Clift, Sr. died testate on October 16, 1988, and devised the tract of land
to his two sons, William Clift and Clifton Clift, Jr. See R. 84-7 at 1–3 (Last Will and
Testament); R. 83-5 at 10. Subsequently, in 2011, William and Judith Clift (his wife)
conveyed the entire tract to Clifton, Jr., and Barbara Clift (his wife), with a reservation of
an undivided one-half interest “in all of the minerals and limestone in, on or under” the
tract.

R. 84-8 at 1 (Deed). William Clift, II, the son of William and Judith Clift,

continues to farm the portion of the tract that has not yet been mined. See R. 88-3 at 23
(William Clift, II’s Deposition Excerpt).

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3.
Sometime between 1977 and 1986, Fredonia Valley Quarries, Inc. merged with
Basic Incorporated. See R. 84-9 at 11, ¶ 13 (Assignment and Assumption of Leases); R.
83-6 at 70–72 (Hastie’s Deposition).

Under Basic Incorporated’s management, the

quarry fell into a state of unprofitability and “disarray.” R. 83-6 at 75–76. In exchange
for $450,000, see id., Basic Incorporated assigned the quarry (including the third lease)
on January 28, 1986 to Rock Dust Products, see R. 84-9 at 11, ¶ 13, a general partnership
consisting of Denny and Simpson Stone Company, Inc., Rigsby and Barnard Quarry,
Inc., and Hastie Mining and Trucking Company, see id. at 1; R. 83-6 at 29–20.
Within the following six months, Rock Dust Products invested roughly
$2,000,000 in new equipment to make operating the quarry feasible. R. 83-6 at 76. Over
the next eleven years, Rock Dust Products operated the quarry with around twenty
employees. See id. at 35–37, 75–77. During that time, Rock Dust Products reinvested
any net income from the quarry back into the operation. See id. at 75–77.
Then, on May 5, 1997, Rock Dust Products assigned the quarry (including the
third lease) to RDP Company. See R. 84-9 at 11, ¶ 13. The same day, RDP Company
subleased the quarry to Martin Marietta Materials, Inc. See R. 84-10 at 17, ¶ 6 (Short
Form of Lease and Sublease Agreement); see also R. 1-3 to -5 (Master Lease and
Sublease Agreement). Under the sublease, Martin Marietta agreed to pay RDP Company
a royalty of 30.33ȼ per ton of limestone mined until April 30, 2007, followed by a royalty
of 30.33ȼ per ton, or 4.5% of Martin Marietta’s weighted average retail price per ton,
whichever is greater, until April 30, 2027. R. 1-3 at 10–11, § 3.2. RDP Company
remained responsible for paying all rents, royalties, unmined mineral taxes, and such

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other expenses related to the subleased tracts from its own royalty. Id. at 6, § 2.5. Martin
Marietta assigned the sublease to Lafarge West, Inc., the present quarry operator, on
December 9, 2011. See R. 84-11 at 7, ¶ 6 (Second Assignment and Assumption of Lease
Agreement). Lafarge West has operated the quarry since that time.
Sometime prior to 1998, it appears as if someone mined a small portion
(approximately 0.25 acres) of the Clift tract.

See R. 84-12 at 16–18 (Fernow’s

Deposition Excerpt); R. 83-16 at 1–2, ¶ 1 (Gaston’s Report); see also R. 90-1 at 4
(Survey of Rock Dust Products, Inc. Properties); R. 83-15 at 2 (Specific Purpose Survey).
Ostensibly, the area was forested too. See R. 84-21 at 1 (Aerial Photograph). It is
estimated that between 10,000 and 25,000 tons of material, a substantial portion of it
limestone, was excavated from that area. Compare R. 84-12 at 18 (estimating less than
10,000 tons of limestone), with R. 83-16 at 2, ¶ 1 (estimating 25,000 tons of material with
a “substantial portion” thereof being limestone). Regardless of the amount of limestone
presumably mined, the Clift family was not paid any production royalties for the 0.25
acre “nick.” RDP Company has no knowledge about when and how much limestone has
been quarried from the Clift tract. See R. 84-13 at 1 (RDP Company’s Response to
Clifts’ First Set of Interrogatories and Requests for Production of Documents).
Other than that small portion, the Clift tract remained undisturbed until sometime
in or about 2012. Around that time, Lafarge West began expanding its operation onto the
Clift tract. Between 2012 and 2013, Lafarge West constructed an access road on the
tract.

Compare R. 84-15 at 1 (Lafarge West’s Response to Clifts’ First Set of

Interrogatories) (summer of 2013), with R. 84-20 at 33–34 (Fernow’s Deposition
Excerpt) (estimating summer of 2012), and R. 83-16 at 3, ¶ 3 (estimating, based on aerial

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photography, between May 28, 2011 and November 6, 2013). Lafarge might have felled
trees in the process of constructing the road, but the record is hardly clear on that point.
See R. 84-21 at 1. In any event, the roadway was “made out of limestone that was not
commercially viable,” R. 84-16 at 33 (Fernow’s Deposition Excerpt), i.e., “waste rock in
the quarry” and not from the Clift tract, R. 83-9 at 25 (Champion’s Deposition Excerpt).
The access road is approximately 935 feet in length, see R. 84-15 at 1–2, and between
sixty to eighty feet in width, compare R. 83-9 at 24 (sixty feet), and R. 83-16 at 3, ¶ 3
(sixty-five feet), with R. 84-15 at 1–2 (eighty feet). While the road provides access to the
property, it does not traverse the tract. See R. 83-9 at 25; R. 90-3 at 49 (Fernow’s
Deposition Excerpt).
Generally speaking, the access road has “has been used sporadically since its
construction for inspection of the area for safety and environmental purposes, placement
of seismographs to monitor the blast vibration along the gas pipeline, and for access to do
stripping and other mining activities.” R. 84-18 at 1 (Lafarge West’s Response to Clifts’
First Set of Interrogatories). Mark Champion, Lafarge West’s Plant Manager, testified
that the Clift road has not been used to access other properties in the area, only for
operations on the Clift tract itself. See R. 83-9 at 24. Nathan Fernow, Lafarge West’s
Plant Manager from February 2014 to October 2015, see R. 83-19 at 1, ¶ 1 (Fernow’s
Declaration), said that no limestone has been hauled across the access road, and that there
are no plans to do so in the future. R. 84-20 at 34; see also R. 86-8 at 28–29 (Fernow’s
Deposition Excerpt). William Clift, II, has never seen limestone being hauled across the
Clift tract. See R. 83-17 at 9–11 (William Clift, II’s Deposition Excerpt).

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As part of its expansion onto the Clift tract, Lafarge sent a letter to the Clifts on
January 24, 2014, informing them that it planned “to begin stripping efforts on
approximately 10 acres,” and requested a response within ten days of receipt in order to
discuss whether the Clifts wanted the timber. R. 83-10 at 1 (Letter from Hick Winters to
the Clifts). The Clift family acknowledged receipt of the letter on January 31, 2014, and
expressed their opinion that RDP Company was a holdover tenant whose rights would
terminate on August 1, 2014. See R. 83-11 at 1–2 (Letter from George E. Stigger, esq., to
RDP Company). However, the letter made no statement as to the Clifts’ desire for the
timber. See id. Clifton Clift, Jr., William Clift, and William Clift, II communicated no
objection to Lafarge West about removing the timber, and none are aware of anyone else
doing so either. See R. 83-8 at 47–48 (Clifton Clift, Jr.’s Deposition Excerpt); R. 86-4 at
36–39 (Clifton Clift, Jr.’s Deposition Excerpt); R. 86-5 at 104–06 (William Clift, II’s
Deposition Excerpt); R. 86-3 at 34–36 (William Clift’s Deposition Excerpt).
Still, Lafarge West contracted with Beavers Logging to appraise the value of the
timber. See R. 83-13 at 52–53 (Fernow’s Deposition Excerpt). According to Beaver,
around half of the ten-acre area contained timber worth somewhere between $4,700 to
$5,300 dollars, but harvesting it would not be “economically feasible.” R. 83-12 at 3
(Beavers Logging Timber Valuation Estimate). Subsequently, sometime between March
24 and March 31, 2014, Lafarge West bulldozed the timber and prepared the ground for
quarrying. See R. 83-13 at 50–54.
In accordance with Lafarge West’s mining permit, Lafarge West also constructed
a perimeter berm between the access road and a gas pipeline which traverses the Clift
tract. See R. 83-9 at 26; R. 86-6 at 88 (Gaston’s Deposition Excerpt); R. 84-17 at 1

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(Lafarge West’s Response to Clifts’ First Set of Interrogatories). To construct the berm,
Lafarge West used around 6,500 cubic yards of topsoil from the Clift tract. See R. 84-17
at 1; R. 83-9 at 26.
Lafarge West began mining limestone on the Clift tract in April 2015. See R. 8425 at 5 (Production Royalty Check). Between April 2015 and January 2016, RDP
Company has paid the Clifts around $2,575 in production royalties. See id. at 5–8.
While the Clifts have not cashed either those checks, or any others, from RDP Company
since January 2014, see R. 88-1 at 1, ¶ 3 (Fernow’s Second Declaration), the Clifts
cashed all royalty checks sent to them from as long ago as September 1977, see R. 83-5
at 13–14; R. 83-8 at 31–33. Prior to this litigation, William Clift never notified RDP
Company or its predecessors-in-interest that the lease had not been renewed, see R. 88-2
at 17–18 (William Clift’s Deposition), nor has William Clift, II, and he has no knowledge
of anyone else doing otherwise, see R. 86-5 at 57.
B.
William Ralph Clift and Judith Bennet Clift, his wife, and Clifton Clift, Jr. and
Barbara Clift, his wife, filed this action against RDP Company and Lafarge West, Inc. in
Caldwell County Circuit Court on March 11, 2014. See R. 1-1 at 4 (Complaint). The
Clifts bring claims for trespass, willful trespass, statutory waste, ejection, and declaratory
judgment. See R. 61 at 7–13, ¶¶ 14–30 (Second Amended Complaint). Relying on this
Court’s diversity jurisdiction, RDP Company and Lafarge West removed the Clifts’
action under 28 U.S.C. § 1441(a). See R. 1 at 1, ¶ 1 (Notice of Removal); see also Clift v.
RDP Company, No. 5:14-CV-00057-TBR, 2014 WL 2218258, at *1 (W.D. Ky. May 28,
2014) (denying motion to remand).

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Subsequently, RDP Company counterclaimed for declaratory judgment against
the Clifts. See R. 4 at 8–9, ¶¶ 16–17 (Answer and Counterclaim). In addition, RDP
Company and Lafarge West crossclaimed against one another, see R. 70 (RDP
Company’s Amended Crossclaim); R. 79 (Lafarge West’s Amended Crossclaim), and
RDP Company impleaded Martin Marietta Materials, Inc., asserting claims for common
law and contractual indemnity, breach of contract, negligence, gross negligence, and
willful misconduct, see R. 71 at 6–8, ¶¶ 26–41 (Amended Third-Party Complaint).
Now, RDP Company and Lafarge West ask the Court to grant them summary
judgment against the Clifts. See R. 83 at 1 (RDP Company’s Motion for Summary
Judgment); R. 86 at 1 (Lafarge West’s Motion for Summary Judgment). The Clifts make
a competing claim against RDP Company and Lafarge West. See R. 84 at 1 (Clifts’
Motion for Summary Judgment). To the extent RDP Company is successful, Martin
Marietta moves for summary judgment too. See R. 85 at 1–2 (Martin Marietta’s Motion
for Summary Judgment).
II.
Summary judgment is appropriate when the record, viewed in the light most
favorable to the nonmoving party, reveals “that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). A genuine dispute of material fact exists where “there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The Court “may not make credibility
determinations nor weigh the evidence when determining whether an issue of fact
remains for trial.” Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014) (citing

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Logan v. Denny’s, Inc., 259 F.3d 558, 566 (6th Cir. 2001); Ahlers v. Schebil, 188 F.3d
365, 369 (6th Cir. 1999)). “The ultimate question is ‘whether the evidence presents a
sufficient disagreement to require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law.’” Back v. Nestlé USA, Inc., 694 F.3d 571, 575
(6th Cir. 2012) (quoting Anderson, 477 U.S. at 251–52).
When the parties have filed competing motions for summary judgment, as is the
case here, the Court “must evaluate each motion on its own merits and view all facts and
inferences in the light most favorable to the nonmoving party.” Hensley v. Grassman,
693 F.3d 681, 686 (6th Cir. 2012) (quoting Wiley v. United States, 20 F.3d 222, 224 (6th
Cir. 1994)). The moving party must shoulder the burden of showing the absence of a
genuine dispute of material fact as to at least one essential element of the nonmovant’s
claim or defense. Fed. R. Civ. P. 56(c); see also Laster, 746 F.3d at 726 (citing Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Assuming the moving party satisfies its
burden of production, the nonmovant “must—by deposition, answers to interrogatories,
affidavits, and admissions on file—show specific facts that reveal a genuine issue for
trial.” Laster, 746 F.3d at 726 (citing Celotex Corp., 477 U.S. at 324). With its task
appropriately framed, the Court turns to the merits.
III.
In this action, the Clifts maintain a number of claims against RDP Company and
Lafarge West, Inc., such as for declaratory judgment, for trespass, and for waste.
Ultimately, though, the Clifts seek a declaration that the mineral rights lease between
them and RDP Company has not been renewed, has been terminated, or is
unconscionable and ought to be reformed. Upon careful consideration, and for the

12

reasons discussed in more detail below, the Court finds the Clifts’ manifold theories to be
meritless. Accordingly, RDP Company and Lafarge West (as well as Martin Marietta
Materials, Inc.) are entitled to judgment as a matter of law.
A.
The Clifts claim that RDP Company and its sublessees are nothing more than
holdover tenants under Ky. Rev. Stat. § 383.160. See R. 84-1 at 17–19 (Memorandum in
Support of Clifts’ Motion for Summary Judgment); R. 95 at 3 (Reply to Lafarge West’s
Response); R. 96 at 10–12 (Reply to RDP Company’s Response). To arrive at that
conclusion, the Clifts make two separate arguments. First, the Clifts say that the lease
provided a right to renew, but not to extend, the lease—a right neither RDP Company nor
its predecessors-in-interest exercised. See R. 84-1 at 9–12; R. 95 at 4–7; R. 96 at 2–7.
Second, the Clifts submit, even if RDP Company and its predecessors-in-interest had an
option to extend the lease, neither satisfied the conditions precedent to exercising that
right. See R. 84-1 at 14–17; R. 95 at 8–10; R. 96 at 7–10. The Court disagrees on both
scores.
1.
Kentucky law has long recognized two kinds of rights allowing a lessee to
prolong a tenancy. The first is a “right of renewal,” which “connotes that a new, formal
agreement in writing [will] be executed by the parties . . . or, at the least, [that] some
positive act other than a mere holding over beyond the fixed term [will] be taken.”
Lexington Flying Serv. v. Anderson’s Ex’r, 239 S.W.2d 945, 946 (Ky. 1951). The second
is a “right of extension,” which generally requires only that the lessee hold over in order
to exercise the “option or privilege ‘to extend.’” Klein v. Auto Parcel Delivery Co., 234

13

S.W. 213, 214 (Ky. 1921). To determine which type of right that a lease contemplates,
courts look to “[1] the language the lease uses to describe the right, [2] the intent of the
parties as manifested by other terms in the lease, and [3] the parties’ conduct before the
controversy arose.” 1651 N. Collins Corp. v. Lab. Corp. of Am., 529 F. App’x 628, 633
(6th Cir. 2013) (citing Klein, 234 S.W. at 215).
Here, the Clifts say, RDP Company has nothing more than a right to renew the
lease. See R. 84-1 at 9–12; R. 95 at 4–7; R. 96 at 2–7. Respectfully, the Court disagrees.
Though the lease uses the term “renew,” it contemplates a right to extend the lease term
by “well and truly” keeping and performing “all [of] the stipulations, covenants and
agreements” in the lease. R. 84-4 at 3.
As the Clifts point out, the lease uses the term “to be ‘renewed,’” as opposed to
“‘extend’ or [to be] ‘extended.’” R. 84-1 at 9; see also R. 84-4 at 3. True enough, the
use of the word “renew” has at least some significance. See 1651 N. Collins Corp., 529
F. App’x at 633 (“The language of the original lease agreement . . . provides for an
‘option to renew,’ suggesting the parties believed at the time of the original lease that
separate agreements to prolong the lease would be needed.”). However, the inclusion of
that term is often not, standing alone, dispositive. See Klein, 234 S.W. at 215 (“[T]he
privilege may thus be construed as one to ‘extend’ the term, although the language
employed is one ‘to renew’ it.”); Kozy Theater Co. v. Love, 231 S.W. 249, 251 (Ky.
1921) (same); 1651 N. Collins Corp., 529 F. App’x at 633 (same). Instead, the word
“‘renew’ will not be given its strict legal interpretation, unless it is evident from some
provision of the lease, or from the conduct of the parties [before the controversy arose,]

14

that the word was not used as a synonym for the word ‘extend.’” Lexington Flying Serv.,
239 S.W.2d at 947.
Here, the relevant terms of the lease suggest that RDP Company (and its
predecessors-in-interest) hold an option to extend. For example, the lease provides that
RDP Company’s option is on the same “terms and for the same consideration” as the
original lease. R. 84-4 at 3. No material term is left open, in which case a new signed
writing capturing all material terms (e.g., a renewal) would be required. Cf. Camelot
LLC v. AMC ShowPlace Theatres, Inc., 665 F.3d 1008, 1010 (8th Cir. 2012) (“If terms
have deliberately been left open, the parties have an option to renew and the terms must
be renegotiated for a binding contract to exist.” (citing King v. Dalton Motors, Inc., 109
N.W.2d 51, 52–53 (Minn. 1961))).
While the Clifts maintain that, by conditioning the option to prolong the lease on
the lessee’s performance of “all [of its] stipulations, covenants and agreements,” the
parties intended to confer a right of renewal, R. 84-1 at 10 (quoting R. 84-4 at 3), the
Court is not so sure. The presence of a condition precedent to the exercise of an option to
prolong a lease does not, in of itself, mean that the corresponding right must be of
renewal. Instead, “if the lease prescribes a condition precedent to the exercise of the
privilege by the lessee, . . . whether the privilege be one ‘to renew’ or ‘to extend’ the
original term . . . such condition must be complied with, or it must be waived by the
lessor”—nothing more, nothing less. Klein, 234 S.W. at 215 (emphasis added). There is
nothing anomalous about conditioning an option to extend on the satisfaction of some
term or the performance of some particular act. See Edwards-Pickering Co. v. Rodes,
261 S.W. 884, 886–87 (Ky. 1924).

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Lastly, the parties’ conduct contemplates an option to extend the lease. From
1982 through 2012, the parties never signed any document purporting to prolong the
1977 lease, and the Clifts didn’t ask to either. See R. 88-2 at 17–18; R. 86-5 at 57.
Instead, the Clifts cashed each royalty check sent to them for over thirty-five years. See
R. 83-5 at 13–14; R. 83-8 at 31–33. Throughout that time period, the parties treated the
1977 lease as a binding agreement.
The Clifts claim that the parties’ conduct reveals that a separate, formal lease
agreement is necessary to prolong the lease term. See R. 84-1 at 10–11. To arrive at that
conclusion, the Clifts characterize the 1977 lease as a written renewal of the 1972 lease,
and the 1972 lease as a written renewal of the 1967 lease. See id. at 3, 10–11. Since the
parties required written renewals then, the Clifts say, the parties must have meant to
prolong the lease term only if a written renewal was executed. See id. at 11.
The “prior execution of a signed agreement to renew a lease,” it is true, tends to
show that “a covenant to renew . . . required a writing.” 1651 N. Collins Corp., 529 F.
App’x at 634 (quoting Tinaco Plaza, LLC v. Freebob’s, Inc., 814 A.2d 403, 410 (Conn.
App. Ct. 2003), cert. granted, 819 A.2d 840 (Conn. 2003), and cert. dismissed, No.
16970 (Conn. Feb. 4, 2004)). The 1977 lease is not, however, a “written renewal” of the
1972 lease. While the 1972 lease contained an option to “renew” on the same “terms and
for the same consideration” as the original lease, R. 84-3 at 3, the 1977 lease differed
from the 1972 lease in almost every material respect: The 1977 lease completely altered
the formula for calculating production royalties, omitted a minimum acreage royalty,
added a right to fifteen tons agricultural lime annually, and set 2076 as outer mark for
prolonging the lease term. Compare R. 84-4 at 1–5, with R. 84-3 at 1–4; see also R. 88 at

16

7–8 (RDP Company’s Response). Properly described, the 1977 lease is a separate and
independent agreement. See Ala. Farmers Co-op., Inc. v. Jordan, 440 F. App’x 463, 467
(6th Cir. 2011) (“The 2000–2005 lease—not signed until sometime in 2001—could not
reasonably be deemed a ‘renewal’ of the 1995–2000 lease because the second lease
contained different terms—namely, an increase in the price of purchase option . . . .”).
Since the 1977 lease stands apart from the 1972 lease, the parties’ conduct as to that lease
is most probative of what the parties intended.
To summarize, though the lease uses the term “renew,” the parties’ intent as
manifested in other terms of the lease and the parties’ conduct before the controversy
arose point to a right to “extend” instead. In other words, RDP Company need not
“renew” the lease in writing. Instead, the lease contemplates a right to extend the lease
term by “well and truly” keeping and performing “all [of] the stipulations, covenants and
agreements” in the lease. R. 84-4 at 3.
2.
Even if RDP Company had an option to extend the lease, though, the Clifts argue
that RDP Company failed to satisfy the conditions precedent to exercising that right. See
R. 84-1 at 14–17; R. 95 at 8–10; R. 96 at 7–10. Said differently, the Clifts maintain that
RDP Company has not “well and truly kept and performed . . . all the stipulations,
covenants and agreements” in the lease. R. 84-4 at 3. While the Clifts point to four
alleged defaults in support of that proposition, none show promise.
a.
The Clifts argue that RDP Company defaulted under the lease because it failed to
pay production royalties on a small portion of the Clift tract ostensibly mined sometime

17

before 1998. See R. 84-1 at 14–15; R. 90 at 17–18 (Response to RDP Company); R. 95
at 8–9; R. 96 at 7–8. The Clifts concede that any claim “for breach of contract for failure
to pay the production royalty is time-barred.” R. 95 at 9; see also R. 96 at 8 n.5. But the
failure to pay that production royalty, the Clifts say, “remains a breach of the stipulations,
covenants and agreements” such that it prevented renewal of the lease. R. 95 at 9. The
Court is not so sure.
In the main, the Clifts have waived any right to work a forfeiture of the lease, or
to contest any subsequent renewal of the lease, based upon the alleged nonpayment of the
production royalty.

Under Kentucky law, “waiver” is defined as “an intentional

relinquishment of a known right.” Bates v. Grain Dealers Nat’l Mut. Fire Ins. Co., 283
S.W.2d 3, 5 (Ky. 1955). It may be express, or it may be implied from the conduct of a
party. Id. The question of whether certain conduct amounts to “a waiver is a question of
law” for the Court to decide. Eaton v. Trautwein, 155 S.W.2d 474, 478 (Ky. 1941)
(citing Vroman v. Darrow, 40 Ill. 171, 173 (1866)). “The general rule is that when rent is
accepted by a lessor with knowledge of particular conduct which is claimed to be a
default on the part of the lessee, acceptance of the rent constitutes a waiver by the lessor
of the lessee’s default.” First Nat’l Bank & Tr. Co. v. Marietta Materials, Inc., 22 F.
App’x 546, 549 (6th Cir. 2001) (citing 49 Am. Jur. 2d Landlord and Tenant §§ 87, 330
(1995); 3 Am. Jur. Proof of Facts 2d §§ 1–2 (1974)); accord Bridges v. Jeffrey, 437
S.W.2d 732, 733 (Ky. 1968); Venters v. Reynolds, 354 S.W.2d 521, 524 (Ky. 1961);
Stamper v. Ford’s Adm’x, 260 S.W.2d 942, 943 (Ky. 1953); Kelley v. Ivyton Oil & Gas
Co., 265 S.W. 309, 310 (Ky. 1924); Rich v. Rose, 99 S.W. 953, 955 (Ky. 1907).

18

Constructive knowledge of the conduct is sufficient. Batson v. Clark, 980 S.W.2d 566,
576 (Ky. Ct. App. 1998).
Here, RDP Company ostensibly mined a small portion of the Clift tract sometime
prior to November 1998. It paid no production royalties on the limestone quarried, if
any, from that tract. Since the Clift family has been farming the land since at least 1977,
the Clifts certainly knew that portion of the tract had been mined. However, the Clifts
cashed each and every royalty payment RDP Company sent to them through January
2014. Until filing the instant action, the Clifts neither demanded that RDP Company pay
the production royalty, nor notified RDP Company that the Clifts considered the lease
inoperative. “Under Kentucky law, by accepting these payments with knowledge of the
alleged breach, the [Clifts] waived their right to terminate” the lease for the breach. First
Nat’l Bank & Tr. Co., 22 F. App’x at 550.
In the alternative, and as the Clifts concede, any claim “for breach of contract for
failure to pay the production royalty is time-barred.” R. 95 at 9. Ky. Rev. Stat. §
413.090(2) provides that all actions upon a written contract “shall be commenced within
fifteen (15) years after the cause of action first accrued.” In this case, a breach of
contract claim would have accrued the month after the Clift tract was quarried. The
disturbance occurred in November 1998. The Clifts initiated the instant action on March
11, 2014. Accordingly, any claim for forfeiture or termination of the lease based upon
the disturbance is barred by the statute of limitations.
b.
Next, though the Clifts say that RDP Company has not delivered the fifteen tons
of agricultural lime as provided for in the lease, see R. 84-1 at 17, that argument is of no

19

moment. The lease obligates RDP Company to deliver fifteen tons of agricultural lime
per year “at the Quarries.” R. 84-4 at 3. It is undisputed that Lafarge West opened an
account and set-aside that agricultural lime each year. See R. 83-13 at 56–57. Yet, no
one from the Clift family ever travelled to the quarry and claimed the agricultural lime.
See R. 84-23 at 54–55 (William Clift, II’s Deposition); R. 86-5 at 106. Contrary to the
Clifts’ suggestion, see R. 84-1 at 17 & n.6, the lease does not obligate RDP Company to
notify them when the agricultural lime is available. Instead, it grants the Clifts a right to
retrieve the agricultural lime upon demand. Having never made such a demand, see R.
86-5 at 106, there is no breach.
c.
Moreover, the Clifts maintain that RDP Company has not kept its “implied
covenant to quarry and remove the limestone and related substances within a reasonable
time.” R. 84-1 at 16. As RDP Company is quick to point out, though, the Clifts’ second
amended complaint makes no mention of any breach of an implied obligation to
diligently mine the Clift tract. See R. 88 at 11–12. The Court agrees: Such a claim is not
properly before the Court
An evaluation of the scope of a party’s claim at the summary judgment stage
“amounts to a decision of the sufficiency of a pleading, which is a question of law” for
the Court to decide. Carter v. Ford Motor Co., 561 F.3d 562, 565 (6th Cir. 2009) (citing
Minadeo v. ICI Paints, 398 F.3d 751, 756 (6th Cir. 2005)). The key issue in a challenge
to the sufficiency of a pleading is notice. Id. at 565–66; see also Kurtz v. McHugh, 423
F. App’x 572, 579 (6th Cir. 2011). The Federal Rules of Civil Procedure provide “for
liberal notice pleading at the outset of the litigation because ‘[t]he provisions for

20

discovery are so flexible’ that by the time a case is ready for summary judgment, ‘the
gravamen of the dispute [has been] brought frankly into the open for inspection by the
court.’” Tucker v. Union of Needletrades, Indus. & Textile Emps., 407 F.3d 784, 788 (6th
Cir. 2005) (alterations in original) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506,
512–13 (2002)). But the “nature of the notice requirement is much more demanding at
the summary judgment stage than at earlier stages of the litigation, because by this point a
plaintiff has had the opportunity to conduct discovery and to amend the complaint to
reflect new theories.” Desparois v. Perrysburg Exempted Vill. Sch. Dist., 455 F. App’x
659, 665 (6th Cir. 2012) (citing Tucker, 407 F.3d at 787–88). With limited exception,
then, a party may not raise new claims or assert new legal theories during the summary
judgment stage. See Bridgeport Music, Inc. v. WM Music Corp., 508 F.3d 394, 400 (6th
Cir. 2007) (citing Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 329 (6th Cir. 2006);
Tucker, 407 F.3d at 788; Mich. Bell Tel. Co. v. Strand, 305 F.3d 580, 589–90 (6th Cir.
2002)).
Here, the Clifts attempt to do just that, and it is hard to say that RDP Company
had sufficient notice. The Clifts’ second amended complaint makes no reference to an
implied obligation of diligent mining. See R. 61 at 6–13, ¶¶ 12–30, and “contains little in
the way of ‘supporting facts’” that might have provided RDP Company with some
warning, Carter, 561 F.3d at 566. Despite ample opportunity, see R. 19 at 1 (Order of
November 14, 2014); R. 59 at 1 (Order of August 7, 2015), the Clifts never added an
allegation of that ilk to their pleadings. With this litigation now in the eleventh hour, the
Clifts cannot expand their claims to include that new legal theory. Cf. Henderson v.

21

Chrysler Grp., LLC, 610 F. App’x 488, 494 (6th Cir. 2015); Renner v. Ford Motor Co.,
516 F. App’x 498, 504 (6th Cir. 2013); Desparois, 455 F. App’x at 666.
Even if the Clifts could, though, the theory goes nowhere on the merits. In
Kentucky, a mineral lessee may forfeit its interest by breaching an express or implied
obligation, see Wheeler & Lemaster Oil & Gas Co. v. Henley, 398 S.W.2d 475, 476 (Ky.
1965), including an implied obligation to develop the mineral leasehold, see Cawood v.
Hall Land & Mining Co., 168 S.W.2d 366, 369 (Ky. 1943). Where the lease provides the
lessor with minimum advance royalties, the implied obligation comes into play only after
(1) the lessor gives notice and demand to commence (or increase) development, and (2)
declines to accept subsequent advance royalty payments. See Cameron v. Lebow, 338
S.W.2d 399, 403 (Ky. 1960), overruled on other grounds as recognized in Carrs Fork
Corp. v. Kodak Mining Co., 809 S.W.2d 699, 702 (Ky. 1991); Warren Oil & Gas Co. v.
Gilliam, 207 S.W. 698, 699 (Ky. 1919); Monarch Oil, Gas & Coal Co. v. Richardson, 99
S.W. 668, 669 (Ky. 1907); Hiroc Programs, Inc. v. Robertson, 40 S.W.3d 373, 377 (Ky.
Ct. App. 2000); accord Johns Hopkins Hosp. v. Peabody Coal Co., 920 F. Supp. 738,
749–50 (W.D. Ky. 1996); cf. Nancy Saint-Paul, 3 Summers Oil and Gas § 22:22 (3d ed.),
Westlaw (database updated Nov. 2015).
Both before and after filing this action, the Clifts never told RDP Company to
develop and mine the tract. See Carrs Fork Corp., 809 S.W.2d at 702 (“The filing of a
lawsuit is not proper notice when a lessor seeks forfeiture on due diligence grounds.”
(citing B & B Oil Co. v. Lane, 249 S.W.2d 705 (Ky. 1952))). Likewise, the Clifts
accepted all royalty payments sent to them through January 2014. Accordingly, RDP
Company did not breach any implied obligation to develop the mineral leasehold.

22

d.
Lastly, the Clifts argue that RDP Company breached the lease when, without
notice to the Clifts, it ostensibly felled timber in 2012 to construct the access road and to
mine a portion of the tract sometime prior to 1998. See R. 84-1 at 16–17; R. 90 at 18; R.
95 at 9–10. RDP Company points out, however, that the Clifts’ allegations sorely lack
evidentiary support. See R. 92 at 3 (RDP Company’s Reply). Indeed, it seems as though
the Clifts’ only proof consists of a few aerial photographs ostensibly showing the areas
were forested years earlier. These facts do not give rise to an inference of default under
the lease.1
3.
In summary, RDP Company has not defaulted under the terms of the lease
between it and the Clifts. RDP Company has extended the term of the lease by “well and
truly kep[ing] and perform[ing] . . . all the stipulations, covenants and agreements”
contained therein. R. 84-4 at 3. It may extend the lease through July 31, 2076, should it
continue to do the same.
B.
In the alternative, the Clifts maintain that the third lease has become
unconscionable over time because the royalty paid to them has remained constant, even
though the price of limestone in the area has ostensibly risen since 1977. See R. 84-1 at
19–24; R. 95 at 10–13; R. 96 at 12–15. Though only “used in rare instances, such as
when a party abuses its right to contract freely,” Forsythe v. BancBoston Mortg. Corp.,

1

For the same reason, the Clifts’ statutory waste claim, see R. 84-1 at 16–17 (Memorandum in
Support of the Clifts’ Motion for Summary Judgment); R. 89 at 9–11 (Response to Lafarge West); R. 90 at
13 (Response to RDP Company); R. 96 at 9–10 (Reply to Lafarge West), also fails.

23

135 F.3d 1069, 1074 (6th Cir. 1997) (citing Louisville Bear Safety Serv., Inc. v. S. Cent.
Bell Tel. Co., 571 S.W.2d 438, 439 (Ky. Ct. App. 1978)), the doctrine of
unconscionability is “one of the grounds upon which any contract may be revoked,”
Energy Home, Div. of S. Energy Homes, Inc. v. Peay, 406 S.W.3d 828, 835 (Ky. 2013)
(citing AT & T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1747 (2011); Schnuerle v.
Insight Commc’ns Co., 376 S.W.3d 561, 575 (Ky. 2012); Conseco Fin. Servicing Corp. v.
Wilder, 47 S.W.3d 335, 341 (Ky. Ct. App. 2001)). “An unconscionable contract is ‘one
which no man in his sense, not under delusion, would make, on the one hand, and which
no fair and honest man would accept, on the other.’” Schnuerle, 376 S.W.3d at 575
(quoting Louisville Bear Safety Serv., Inc., 571 S.W.2d at 440).
Unconscionability comes in two flavors: procedural and substantive. Energy
Home, 406 S.W.3d at 835; accord In re Merv Properties, L.L.C., 539 B.R. 516, 531
(B.A.P. 6th Cir. 2015). “Procedural unconscionability relates to the process by which an
agreement is reached and to the form of the agreement.” Energy Home, 406 S.W.3d at
835 (citing Schnuerle, 376 S.W.3d at 576–77). It includes, for example, “the use of fine
or inconspicuous print and convoluted or unclear language that may conceal or obscure a
contractual term.” Id. (citing Schnuerle, 376 S.W.3d at 576–77). When evaluating
whether a contract is procedurally unconscionable, the Court ought to consider factors
such as “the bargaining power of the parties, ‘the conspicuousness and comprehensibility
of the contract language, the oppressiveness of the terms, and the presence or absence of
a meaningful choice.’” Schnuerle, 376 S.W.3d at 576 (quoting Jenkins v. First Am. Cash
Advance of Ga., LLC, 400 F.3d 868, 875–76 (11th Cir. 2005)).

“Substantive

unconscionability refers to contractual terms that are unreasonably or grossly favorable to

24

one side and to which the disfavored party does not assent.” Energy Home, 406 S.W.3d
at 835 (citing Schnuerle, 376 S.W.3d at 577).

Factors relevant to the substantive

unconscionability inquiry include “the commercial reasonableness of the contract terms,
the purpose and effect of the terms, the allocation of the risks between the parties, and
similar public policy concerns.” Id. (quoting Schnuerle, 376 S.W.3d at 577).
Here, the Clifts take the position that the Kentucky Supreme Court would endorse
the view that a contract may become unconscionable over time based upon changed
circumstances. See R. 84-1 at 19–24; R. 95 at 10–13; R. 96 at 12–15. They urge the
Court to follow the Kentucky Court of Appeals’ holding to that effect in Kentucky West
Virginia Gas Co. v. Interstate Natural Gas Co., Nos. 1998-CA-001460-MR, 1998-CA001953-MR,

1998-CA-002036-MR,

1998-CA-002037-MR,

1998-CA-002038-MR,

1998-CA-003186-MR, 1999-CA-000186-MR (Ky. Ct. App. June 9, 2000) (unpublished),
as modified on denial of reh’g (Ky. Ct. App. Aug. 25, 2000), discretionary review
denied, Nos. 2000-SC-000847-D, 2000-SC-000862-D (Ky. Aug. 15, 2001), as that
decision “removes any doubt” as to how Kentucky would resolve the issue, R. 95 at 12.
The Court rejects that argument.
Because the Court’s jurisdiction over this case rests on the diversity of the parties,
see 28 U.S.C. § 1332, this Court applies Kentucky law as enunciated by the Kentucky
Supreme Court, see Tooling, Mfg. & Techs. Ass’n v. Hartford Fire Ins. Co., 693 F.3d
665, 670 (6th Cir. 2012). Absent a controlling decision on the relevant issue, the Court
must try to predict how the Kentucky Supreme Court would resolve the question. See
Heil Co. v. Evanston Ins. Co., 690 F.3d 722, 731 (6th Cir. 2012). In doing so, the Court
looks to “the decisions (or dicta) of the Kentucky Supreme Court in analogous cases,

25

pronouncements from other Kentucky courts, restatements of law, commentaries, and
decisions from other jurisdictions.” State Auto Prop. & Cas. Ins. Co. v. Hargis, 785 F.3d
189, 195 (6th Cir. 2015) (citing Combs v. Int’l Ins. Co., 354 F.3d 568, 577 (6th Cir.
2004); Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1130 (6th Cir.
1995); Bailey v. V & O Press Co., 770 F.2d 601, 604 (6th Cir. 1985)). The Court should
follow the opinions—published or not—of the Kentucky Court of Appeals unless
persuaded that the Kentucky Supreme Court would decide the issue otherwise. See
Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 517 (6th Cir. 2001).
The Court predicts that Kentucky Supreme Court would not endorse the view that
a contract may become unconscionable over time based upon changed circumstances.
Under the general and long-standing rule, “the unconscionability of a contract or term is
considered in light of circumstances ‘at the time the contract is made.’” Neely v. Consol
Inc., 25 F. App’x 394, 401 (6th Cir. 2002) (quoting Restatement (Second) of Contracts §
208 (1979)). The rationale behind measuring unconscionability at the time of contract
formation is sound:
[V]irtually all contracts involve the assessment of risks. How fast,
if at all, will land values rise over the next ten years? Are interest rates
likely to increase, decrease, or remain constant? Is a particular venture
likely to be a wild success or an abysmal failure? What is the probability
of a debtor[] not repaying his debt? What collateral is necessary as
security to protect against the debtor’s possible failure to repay?
Assessment of such risks is intrinsic to the process of contracting and
affects the terms on which contracts are entered into.
To judge the substantive fairness of contracts at a date subsequent
to their making could nullify many contracts entailing a speculative
element. Option to purchase agreements, for instance, might prove
particularly difficult to enforce. Contingency fee contracts would be
suspect if the part contracting for the free achieved unexpectedly
beneficial results. Home mortgages executed at low interest rates prevent
in the late 1950’s might, in the light of hindsight, today be considered
unconscionable in substantive terms.
26

Res. Mgmt. Co. v. Weston Ranch & Livestock Co., 706 P.2d 1028, 1043 (Utah 1985). A
number of jurisdictions subscribe to the traditional view. See, e.g., Kenyon Ltd. P’ship v.
1372 Kenyon St. Nw. Tenants’ Ass’n, 979 A.2d 1176, 1186 (D.C. 2009) (“Whether a
contract term is unconscionable is determined as of the time the contract is made.”); Stern
v. Cingular Wireless Corp., 453 F. Supp. 2d 1138, 1144 (C.D. Cal. 2006) (“Under
California law, ‘[t]he critical juncture for determining whether a contract is
unconscionable is the moment when it is entered into by the parties—not whether it is
unconscionable in light of subsequent events.’” (alteration in original) (quoting Am.
Software, Inc. v. Ali, 54 Cal. Rptr. 2d 477, 480 (Cal. Ct. App. 1996))); Best v. U.S. Nat’l
Bank of Ore., 739 P.2d 554, 556 (Ore. 1987) (“Unconscionability is a legal issue that
must be assessed as of the time of contract formation.” (citing W. L. May Co. v. PhilcoFord Corp., 543 P.2d 283, 286 (Ore. 1975))); Bos. Helicopter Charter, Inc. v. Agusta
Aviation Corp., 767 F. Supp. 363, 375 (D. Mass. 1991) (“The relevant consideration is
the circumstances at the time the contract was made, and not the circumstances as they
later developed.” (citing Zapatha v. Dairy Mart, Inc., 408 N.E.2d 1370, 1375 (Mass.
1980))). In light of those authorities, the Court does not find Kentucky West Virginia Gas
Co. to be persuasive.
Even if the Kentucky Supreme Court recognized that a contract may become
unconscionable over time based upon changed circumstances, though, there is no reason
to say that the third lease is unconscionable now. In the main, the Clifts point to nothing
demonstrating that the lease has become commercially unreasonable. For example, the
Clifts have not introduced any proof as to the “current market rates being paid to
similarly-situated landowners,” or “how the rate paid to the Clifts is ‘unconscionably’ out

27

of line with those rates.” R. 88 at 22. Instead, the Clifts rely solely on the fact that RDP
Company receives a royalty of 30.33ȼ per ton of limestone mined until April 30, 2007,
followed by a royalty of 30.33ȼ per ton, or 4.5% of Martin Marietta’s weighted average
retail price per ton, whichever is greater, until April 30, 2027. See R. 1-3 at 10–11, § 3.2.
Yet, the Clifts ignore the fact that RDP Company’s royalty represents the purchase price
not simply of raw limestone, but of a quarrying business—one into which RDP Company
invested millions of dollars for more than a decade. See R. 88 at 22–25. Without any
proper comparators, there is simply no factual basis for the Clifts’ unconscionability
claim.
C.
Next, the Clifts allege that RDP Company and its successors-in-interest have
exceeded their rights under the lease by using the Clifts’ property in conjunction with
quarrying operations on adjacent lands. See R. 89 at 12–13; R. 90 at 7–12. In detail, the
Clifts claim that Lafarge West has stored topsoil removed elsewhere on, and transported
limestone quarried elsewhere over, their land. See R. 89 at 12–13; R. 90 at 7–12. Such
conduct, the Clifts submit, constitutes a trespass. See R. 89 at 12–13; R. 90 at 7–12.
The Clifts’ allegations, however, lack evidentiary support. First, there is no
evidence of Lafarge West “storing” topsoil on the Clifts’ property. Instead, the record
reflects that Lafarge West constructed a perimeter berm between the access road and a
gas pipeline in accordance with its mining permit. See R. 83-9 at 26; R. 86-6 at 88; R.
84-14 at 1. The construction of such a berm is “necessary or incidental to the proper
prosecution of [the] business of quarrying,” R. 84-4 at 2, as contemplated and allowed
under the lease.

28

Second, Lafarge West has not used the access road on the Clift tract as a “haul
road” for moving limestone or other kindred substances mined from other tracts. For
example, Mark Champion testified that the Clift road has not been used to access other
properties in the area, only for operations on the Clift tract itself. See R. 83-9 at 24.
Nathan Fernow said that no limestone has been hauled across the access road, and that
there are no plans to do so in the future. See R. 84-20 at 34; R. 86-8 at 28–29. William
Clift, II, has never seen limestone being hauled across the Clift tract either. See R. 83-17
at 9–11. Because the Clifts’ trespass claims lack factual support, summary judgment in
favor of RDP Company and Lafarge West is appropriate.
D.
Lastly, the Clifts claim that RDP Company and its successors-in-interest
committed waste by using more surface than reasonably necessary for the quarrying
operation. See R. 89 at 11–12; R. 90 at 13–14. “Waste” is any act “done by a tenant
without license or authority from his landlord, whereby a lasting damage is done to the
freehold.” Calvert v. Rice, 12 Ky. L. Rptr. 252, 254 (1890) (quoting Loudon v. Warfield,
28 Ky. 196, 196 (1830)). Under Kentucky’s codification of the ancient common-law
doctrine of waste,
If any tenant for life or years commits waste during his estate or term, of
anything belonging to the tenement so held, without special written
permission to do so, he shall be subject to an action of waste, shall lose the
thing wasted, and pay treble the amount at which the waste is assessed.
Ky. Rev. Stat. § 381.350; see also Salyer’s Guardian v. Keeton, 283 S.W. 1015, 1018
(Ky. 1926) (recounting history of common-law and statutory waste).
Even assuming that unnecessary use of surface area might constitute “waste,” see
Helm Bros. v. Trauger, 389 N.W.2d 600, 602 (N.D. 1986), the Clifts cannot show that
29

RDP Company or its successors-in-interest stand guilty of it.

The only allegation

supporting the Clifts’ statutory waste claim is that the access road is too wide. See R. 89
at 11–12; R. 90 at 13–14. The access road is approximately sixty to eighty feet in width.
Compare R. 83-9 at 24 (sixty feet), and R. 83-16 at 3, ¶ 3 (sixty-five feet), with R. 84-15
at 1–2 (eighty feet). Under Mine and Safety Health Administration guidelines, each lane
of travel on such a road must “provide clearance, on both sides, equal to one-half the
width of the widest vehicle in use,” with “an additional margin for error” around curves.
U.S. Department of Labor, Mine Safety and Health Administration, Handbook Number
PH 99-I-4, MSHA Handbook Series: Haul Road Inspection Handbook 20–21 (June
1999). The widest vehicle at the quarry is the CAT 775, which is roughly eighteen feet
wide. See R. 83-19 at 1, ¶ 3. For the access road to remain MSHA compliant, then, it
ought to measure at least sixty-three feet wide, plus an additional margin for error around
curves. Consequently, even if the access road measures eighty feet in width, Lafarge
West has not used more surface area than is reasonably necessary.
IV.
The Clifts’ Motion for Summary Judgment, R. 84, is DENIED. RDP Company’s
Motion for Summary Judgment, R. 83, Martin Marietta Materials, Inc.’s Motion for
Summary Judgment, R. 85, and Lafarge West, Inc.’s Motion for Summary Judgment, R.
86, are GRANTED.
An appropriate order shall issue separate from this Memorandum Opinion.
Date:

August 1, 2016

cc:

Counsel of Record

30