Memphis Light, Gas & Water Division v. Tommy Carl Starkey

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
May 23, 2007 Session
MEMPHIS LIGHT, GAS & WATER DIVISION
v.
TOMMY CARL STARKEY
An Appeal from the Circuit Court for Shelby County
No. CT-003082-03 Robert L. Childers, Judge
No. W2006-01089-COA-R3-CV - Filed July 17, 2007
This case involves wrongful interference with an easement. The plaintiff utility operates an
underground gas transmission line. The utility had an easement for the gas line, running along the
north edge of a large tract of real property. For the gas line to operate safely, it needed sufficient soil
both on top of the pipeline and on each side of the pipeline. The defendant developer acquired the
real property, subject to the easement for the pipeline. The developer then sought to develop the real
property. In May 2002, the defendant developer began excavating large amounts of dirt from within
the easement site without proper authorization from the utility. Despite the utility’s repeated
demands to stop, the developer continued the excavation. Only when the utility threatened to have
the developer arrested did he finally stop excavating dirt from around the pipeline. By this time,
there was so little dirt surrounding the pipeline that there was serious danger to the public, and the
utility was required to engage in immediate corrective work. The utility hauled in and spread 21,467
yards of dirt, restoring the easement site to a safe condition. The utility then filed suit against the
developer, seeking compensatory and punitive damages. After a bench trial, the trial court awarded
the utility compensatory damages and punitive damages. The defendant developer now appeals. We
affirm, finding ample evidence to support the award of damages.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court is Affirmed.
HOLLY M. KIRBY , J., delivered the opinion of the Court, in which ALAN E. HIGHERS, J., and DAVID
R. FARMER , J., joined.
Stephen R. Leffler,1 Memphis, Tennessee, for appellant, Tommy Carl Starkey.
William H. Haltom, Jr., and Stacie S. Winkler, Memphis, Tennessee, for appellee, Memphis Light,
Gas & Water Division.
1
Mr. Leffler did not serve as trial counsel in the instant dispute.
OPINION
Plaintiff/Appellee Memphis Light, Gas & Water Division (“MLGW”) is a public utility.
MLGW maintains an underground gas transmission line that runs from Fayette County, Tennessee,
all the way to Airways Road in the southern portion of Shelby County, Tennessee. The pipeline is
quite large, measuring 24 inches in diameter. It is the highest pressure underground gas transmission
line in Shelby County, operating under pressures of 650 to 800 pounds per square inch on a daily
basis. The gas line serves a third of highly-populated Shelby County.
When this gas line was installed, MLGW obtained an easement along the north edge of a
large tract of real property located at 5553 Hickory Hill Road. The easement is 75 feet wide; 50 feet
along the north side of the gas line and 25 feet along the south side of it. The width of the easement
allows room for construction and maintenance work along the gas main, and also acts as a “buffer”
to ensure the safety of the general public in the event of a rupture or leak.
In addition, the easement facilitates two specific safety requirements for the pipeline. The
first is the vertical “cover” for the pipeline, i.e., the amount of soil on top of it, to protect the line
from damage and to prevent safety hazards. Federal regulations require that a pipeline buried in a
location such as this be installed with a minimum “cover” of 36 inches. See 49 C.F.R. § 192.327.
Because of the design of this particular gas transmission line, MLGW requires a minimum of 42
inches of vertical cover.2 The second requirement facilitated by the easement is the lateral support
or lateral “cover” for the pipeline, that is, the amount of ground support on each side of the gas line
required to stabilize it. The easement at issue allows for at least 25 feet of lateral support on either
side of the pipeline.
Several years after MLGW obtained the easement, Defendant/Appellant Tommy Carl Starkey
(“Starkey”) purchased the 5553 Hickory Hill Road property. Starkey is a licensed general contractor
with 18 years’ experience, and he purchased the property in order to develop it. In 2000, Starkey
contacted MLGW’s supervisor of gas engineering, Mike Bridges (“Bridges”), and asked him about
the cost of relocating the underground gas transmission line. Starkey wanted the gas line relocated
or lowered so that he could excavate dirt from within the easement site and move it to lower lying
land. Bridges told Starkey that it would cost between $200,000 and $250,000 to relocate the gas
line. In light of this, Starkey put his development plans on hold.
Two years later, in May 2002, Starkey contacted Bridges again. This time, Bridges assigned
Steve Paschall (“Paschall”), a design engineer for MLGW, to work with Starkey. Starkey met with
Paschall to discuss his general development plans for the property and to review the location of the
gas line. Starkey gave Paschall a topographical map of the location. After the meeting, Paschall had
measurements taken at the easement site to determine the depth of the gas line; these measurements
indicated that parts of the gas line running through Starkey’s property had roughly six to eight feet
2
One of the purposes of vertical cover is to protect the gas line from “wheel-load,” but the easement at issue
was not designed as a thoroughfare or to withstand traffic from heavy equipment.
-2-
of vertical cover. Paschall and Starkey discussed these depth measurements on the telephone.
However, Starkey and Paschall did not reach any agreement regarding development work on the
easement site. Starkey did not obtain a permit for the excavation of soil within the easement.3
Despite the absence of any agreement with MLGW, in mid to late May 2002, Starkey hired
a contractor and began excavating soil from the property and in particular from the easement along
the pipeline. In early June 2002, MLGW learned that Starkey was excavating without authorization.
After that, MLGW officials visited the site and found that Starkey had removed dirt from the vertical
cover as well as from the lateral support on both sides of the gas line. The officials observed large
tire marks in the dirt on top of the gas line, indicating that a heavy vehicle had been run over the gas
line.
On approximately June 6, 2002, MLGW officials told Starkey to stop excavating. Starkey
defiantly refused and maintained that he could do whatever he pleased with his property, including
removing dirt from inside the easement. Starkey also told MLGW officials that, if the dirt were
replaced, he would remove it again. After the MLGW officials left the site, Starkey directed his
contractor to continue the excavation.
On June 10, 2002, MLGW sent a letter to Starkey. In the letter, MLGW informed Starkey
that his excavation of soil in the easement had created an “unsafe and potentially dangerous”
situation. MLGW outlined three possible plans of action to alleviate the danger Starkey’s excavation
had created: (1) Starkey could pay to have the gas main lowered, (2) restore 42 inches of vertical
cover to the easement with the same elevation carried along the north and south easement lines at
a three-to-one slope,4 or (3) have MLGW crews restore the easement to its original condition and pay
for all labor and machinery expenses. Starkey was told that he was required to respond to the letter
by June 21, 2002. Starkey received this letter, but apparently ignored it and continued to remove dirt
from the easement site. After that, MLGW brought law enforcement with them to the site and
threatened to have Starkey arrested. At this point, Starkey ceased all work on the location.
Meanwhile, MLGW gas engineers determined that the easement site was dangerous and
required immediate remedial work. As a result of Starkey’s excavation, the pipeline sat above
ground-level inside a “teepee”-like formation of dirt. To alleviate immediate hazard and create a
safe working environment for the remedial work, MLGW shut down the gas line and released the
gas inside it. MLGW then hired a third-party contractor to haul in and spread 21,467 yards of dirt
at the easement site, restoring both the vertical and lateral cover for the gas pipeline.
3
MLGW maintains an “Encroachment Policy” for the protection of its underground transmission lines. The
policy requires a permit “for all excavating” within easement sites where underground gas transmission lines are located.
MLGW also requires persons seeking to excavate within these easement sites to enter into an agreement under the policy.
4
A three-to-one slope means that the lateral cover drops in grade, or elevation, one foot for every three feet it
extends horizontally. The gradual slope prevents erosion and allows safe travel for vehicles and other equipment, such
as tractors, to perform maintenance work at the easement site.
-3-
On May 30, 2003, MLGW filed suit against Starkey for interference with the use of its
easement, seeking compensatory damages, punitive damages, and attorney’s fees. MLGW alleged
that Starkey willfully and intentionally interfered with its easement by “cut[ting] down” the elevation
of the easement and removing dirt along the north and south sides of the gas line. MLGW also
alleged that Starkey’s actions created a dangerous situation that necessitated immediate remedial
measures. In an answer filed on November 26, 2003, Starkey admitted that he removed dirt from
within the easement site, but he denied that his actions were wrongful. Discovery ensued.
Subsequently, on April 7, 2005, MLGW filed a motion for partial summary judgment.
Relying on affidavits from two of its witnesses and Starkey’s deposition, MLGW asked the trial
court to enter judgment on the issue of liability. This motion was denied. A bench trial was then
held on April 17, 18, and 19, 2006.
At the outset of the trial, MLGW presented testimony from the MLGW design engineer,
Steve Paschall. Paschall testified that when Starkey called in May 2002 for the initial depth
measurements of the soil over the gas pipeline, he informed Starkey that “more work” needed to be
done before any digging could begin. Paschall specifically recalled telling Starkey on at least two
occasions that he did not have authority to remove dirt from the easement, and that any excavation
required MLGW supervision. Paschall testified that Starkey was not given a copy of the MLGW
encroachment policy or told about the permit process because MLGW was in the early phases of
planning the relocation of the gas pipeline. Paschall said that he had created a preliminary design
of the relocation and was waiting for Starkey to submit a more specific plan for development of the
property.
MLGW called Starkey to testify. Starkey disputed Paschall’s testimony that he was
proposing a relocation of the gas line in their May 2002 conversations. Starkey said that he decided
against relocating the pipeline when he found out that it would cost him more than $200,000,
because the soil he wanted to excavate was only “worth $11,000” to him. He said that, in May 2002,
he contacted Paschall for “guidance” on whether he could excavate dirt from the easement and “how
much.” Starkey said that he did not call Paschall in order to obtain MLGW’s permission to excavate
soil, and he did not believe that he needed authorization from MLGW for the excavation. Instead,
Starkey said, he was discussing the matter with MLGW as a professional courtesy. According to
Starkey, Paschall never told him that he could not dig within the easement; rather, Paschall told him
only that he had to maintain the 42-inch minimum vertical cover and that he should call beforehand
so that MLGW could supervise the process. Starkey asserted that he called Paschall and waited for
two or three days for a response; it was not until two weeks later, he said, on June 6, 2002, that
MLGW officials told him to stop. Starkey acknowledged that, at that point, he became
argumentative with the MLGW officials and, despite MLGW’s directive to stop excavating, he told
his contractor to continue the excavation.5
5
W hile on the stand, counsel for M LGW also elicited testimony from Starkey about his assets in support of its
claim for punitive damages. Starkey testified that he owned real properties worth a total of $1,303,177, which included
the development property at issue, his home in Mississippi, and approximately eight acres of land at Pickwick Lake in
-4-
MLGW’s supervisor of gas engineering, Mike Bridges, testified about the steps MLGW took
after learning that Starkey was excavating dirt within the easement. Bridges said that when he
visited the site on June 6, 2002, he observed the excavation and the track marks in the dirt. Causing
even more concern was a “burn pit” for debris sitting no more than three or four feet from the gas
line.6 He then convened a meeting of MLGW officials and directed them to order Starkey to cease
the excavation. Bridges said that on June 20, 2002, when MLGW started the corrective work, they
“became very concerned . . . . This large a [gas] line sitting in a little pedestal of dirt like that with
800 pounds of pressure on it was something we felt we couldn’t live with.”
On cross-examination, Bridges conceded that no exact measurements were taken to
determine the amount of dirt needed to restore the vertical and lateral cover to the gas line. He
explained: “[N]o calculations were made . . . because when you’re in the middle of a fire you don’t
stop and say let’s generate some plans and some calculations . . . . This was an emergency situation
. . . to make it safe.” He said that making exact calculations would have necessitated a survey, which
would have delayed the work by at least two days. Because of the exigencies of the situation,
Bridges simply instructed MLGW’s contractor, whom he knew to have 30-plus years in gas
construction, to make the easement site safe and to leave a plateau at a three-to-one slope so that
MLGW could safely move equipment onto the easement site if necessary. Bridges estimated that
MLGW replaced approximately a third of the amount of dirt that Starkey excavated from the
easement site.
MLGW also presented testimony about the decrease in vertical cover that took place after
MLGW’s June 10, 2002 letter to Starkey, telling him that his unauthorized excavation had created
a dangerous situation. Paul Dobbins, a crew leader for MLGW, testified that he took two sets of
depth measurements at the easement site. The first set, taken on June 14, 2002, indicated that
between 69 and 96 inches of cover remained on top of the gas line at that time. The second set,
taken on June 20, 2002, reflected a significant decrease in cover, showing that only 18 to 24 inches
of cover remained on top of the gas line. These measurements do not account for the dirt removed
from alongside the gas line. Dobbins corroborated Bridges’ testimony that, as of June 20, 2002, the
situation had become dangerous. On that day, Dobbins stated, MLGW started “bleeding” the gas
line to relieve the pressure.
Bill Kizer, the contractor hired by Starkey to excavate the soil on the property, testified as
well. Kizer testified that MLGW officials came out to the property on several occasions, told him
to stop excavating and warned him of the dangers. Kizer said that he responded to the MLGW
officials by telling them to “[t]ell Mr. Starkey. I’m working for him, and I need to do what he
wants.” Starkey instructed Kizer to continue the excavation. Kizer testified that his crew excavated
so much dirt from within the easement site that, in one particular location, the dirt on one side of the
Tennessee. In addition, Starkey said that he owned an antique car worth $10,000 and a boat worth approximately $2,000.
6
Later testimony from Starkey’s contractor, Bill Kizer, indicated that the “burn pit” may have pre-existed the
excavations. Kizer testified that neither he nor his employees burned any debris at the easement site.
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gas line fell away, completely exposing the gas line. He reported that he could see the pipeline.7
According to Kizer, MLGW hauled in dirt and immediately covered the exposed location. Kizer
speculated that, by the time the excavation ceased, there was about two feet of vertical cover left over
the gas line.
Finally, MLGW presented expert testimony from Bob Conrad, a consulting engineer who
helped design the safety features on the gas line at issue. Conrad explained that this particular gas
line is in an “overbend” position, meaning that it does not extend lengthwise in a straight line.
Rather, the gas line begins at a lower elevation on one end of Starkey’s property, gradually rises, and
then gradually descends towards the other end of the property. Because of this, the pipeline requires
sufficient lateral support to prevent it from rolling to its side. Conrad testified that Starkey’s
excavation created the risk of the pipeline rolling over. A roll over would have caused torque on the
pipeline and the possibility of a rupture. In light of the danger, Conrad believed that MLGW should
have asked for law enforcement to intervene sooner.
Conrad also testified about the repair work necessary after Starkey stopped excavating the
soil on the property. He said that it would have been “optimal” to replace enough dirt to the
easement so that there would be at least 42 inches of cover extending the entire width of the 75-foot
wide easement, but he conceded that it would have been sufficient, for safety, erosion, and
maintenance purposes, to extend the 42-inch cover 25 feet on either side of the gas line and then to
“slope” the remaining 25 feet. Conrad said that it would not be necessary to restore the easement
to its original grade.
On the issue of damages, MLGW submitted testimony and documentary evidence reflecting
a total loss of $174,737.50. This figure included $139,535.50 for the 21,467 yards of dirt, $14,303
for the cost of labor and other expenses for replacing the soil in the easement, $15,911 in wages for
MLGW’s in-house labor and for the officials who visited the site, and $4,988 in gas lost when
MLGW shut down the gas line.
After MLGW concluded its proof, Starkey took the stand again to testify in his own behalf.
Despite contrary testimony from his contractor, Kizer, Starkey asserted that he only “took two feet
off the top” of the gas line and that “95 percent of the dirt [removed] came from the side of that
pipe.” Starkey said that, by the time he received the June 10, 2002 letter from MLGW, he had
already begun excavating alongside the gas line. In addition, Starkey claimed that his excavation
completely ceased as early as June 14, 2002, the date that Paul Dobbins visited the easement site to
take depth measurements. In support of these assertions, counsel for Starkey entered into evidence
a set of photographs that Starkey took on June 18, 2002. Some of these photographs depicted small
patches of grass or weeds on the east end of the easement, which were growing on top of the
“teepee”-shaped mound of dirt covering the pipeline. Other photographs showed the markers, or
stakes, that Paul Dobbins placed in the dirt on top of the pipeline during his June 14, 2002
7
At trial, Starkey strongly disputed that any portion of the gas line became exposed during the excavation.
W hen questioned about the exposed gas line, he said, “This is a lie. That has been fabricated from this whole project.”
-6-
measurements. Starkey testified that the photographs showed the amount of cover indicated by the
June 14, 2002 measurements. Starkey asserted that neither he nor anyone under his direction
removed any dirt from the top of the gas line between June 18, 2002 and June 20, 2002.
In addition, Starkey took issue with the amount of dirt MLGW hauled in to replace the dirt
that was excavated. Starkey said that when he visited the site after MLGW completed its corrective
work, “what caught my eye was how much extra dirt they put on the east end” of the easement. In
some areas, he said, it appeared that MLGW exceeded the original elevation of the easement. In
support of this assertion, Starkey presented the testimony of James Helton. Helton had prepared the
topographical map submitted by Starkey to MLGW during their initial discussions. After MLGW
finished its corrective work, Helton measured the elevation of the easement site. Based on his
measurements, Helton testified that some areas now had approximately two feet more vertical cover
than before Starkey’s excavation and other areas had a foot or so less. Helton prepared a drawing,
submitted into evidence, that compared the original elevation of the vertical cover, prior to Starkey’s
excavation, to the elevation of the vertical cover after MLGW completed its corrective work.
At the conclusion of the proof, the trial court issued its ruling from the bench. The trial court
first noted that MLGW is charged with a heightened duty to ensure that its underground gas
transmission lines are safe for the public. It expressly credited Kizer’s testimony on the extent of
Starkey’s excavation, and found that Starkey, by continuing to excavate without authorization from
MLGW, prevented MLGW from maintaining this particular gas line in a reasonably safe manner.
Based on these findings, the trial court held Starkey liable for interference with the use and
enjoyment of MLGW’s easement, and awarded MLGW the full $174,737.50 requested in
compensatory damages. As to the amount of dirt MLGW restored to the easement site, the trial court
found that “the evidence show[ed] that [MLGW] restored only about one-third of the dirt” that
Starkey removed. Finally, the trial court concluded that MLGW had established by clear and
convincing evidence that Starkey intentionally interfered with the use and enjoyment of MLGW’s
easement. After considering a number of the factors outlined in Hodges v. S.C. Toof & Co., 833
S.W.2d 896, 901-02 (Tenn. 1992), the trial court awarded MLGW $11,000 in punitive damages.
This ruling was memorialized in an order entered on April 24, 2006.8 Starkey then filed a timely
notice of appeal.
In this appeal, Starkey does not dispute the finding of liability or intentional interference.
Instead, the issues on appeal relate solely to the award of damages. These issues are: (1) whether
the trial court erred in not considering whether MLGW mitigated its damages; (2) whether there was
sufficient evidence to support an award of $174,737.50 in compensatory damages; and (3) whether
the trial court had sufficient evidence upon which to calculate an award of punitive damages.
8
The trial court’s April 24, 2006 order did not constitute a final and appealable judgment under Rule 3 of the
Tennessee Rules of Appellate Procedure, because MLGW ’s request for attorney’s fees remained unresolved. As a result,
the cause was remanded for the limited purpose of entering a final judgment. On March 14, 2007, the trial court entered
a final order, and the record was supplemented to include a copy of that order. The order finalized the judgment in
accordance with Rule 54.02 of the Tennessee Rules of Civil Procedure.
-7-
In the appeal of a damages award, the appellate review of “[w]hether the trial court has
utilized the proper measure of damages is a question of law that we review de novo.” Beaty v.
McGraw, 15 S.W.3d 819, 829 (Tenn. Ct. App. 1998); see also Taylor v. Fezell, 158 S.W.3d 352,
357 (Tenn. 2005). The amount of damages awarded, however, is a question of fact so long as the
amount awarded is within the limits set by the law. Beaty, 15 S.W.3d at 829. Thus, in a non-jury
case such as this, we review the amount of damages awarded by the trial court with a presumption
of correctness, unless the preponderance of the evidence demonstrates otherwise. See Tenn. R. App.
P. 13(d); Beaty, 15 S.W.3d at 829 (citing Armstrong v. Hickman County Highway Dep’t, 743
S.W.2d 189, 195 (Tenn. Ct. App. 1987)). Great weight is given to factual findings that are based
on the trial court’s assessment of witness credibility. Smith v. Smith, 93 S.W.3d 871, 875 (Tenn.
Ct. App. 2002). This is because the “trial judge as the trier of fact had the opportunity to observe
the manner and demeanor of all of the witnesses as they testified from the witness stand.” Whitaker
v. Whitaker, 957 S.W.2d 834, 837 (Tenn. Ct. App. 1997); McCaleb v. Saturn Corp., 910 S.W.2d
412, 415 (Tenn. 1995).
The first issue presented in this appeal concerns the mitigation of damages. The doctrine of
mitigation of damages dictates that,
one who is injured by the wrongful or negligent act of another, whether by tort or
breach of contract, is bound to exercise reasonable care and diligence to avoid loss
or to minimize or lessen the resulting damage, and to the extent that damages are the
result of his active and unreasonable enhancement thereof, or due to his failure to
exercise such care and diligence, he cannot recover.
Cook & Nichols, Inc. v. Peat, Marwick, Mitchell & Co., 480 S.W.2d 542, 545 (Tenn. Ct. App.
1971). Thus, a party injured by the wrongful act of another is under a legal duty to use reasonable
efforts to minimize the loss and, to the extent that the injured party fails to do so, he or she cannot
recover. Id.; see also Kline v. Benefiel, No. W1999-00918-COA-R3-CV, 2001 WL 25750, at *7
(Tenn. Ct. App. Jan. 9, 2001). The injured party is not, however, required to mitigate damages
where the duty would impose an undue burden or be impossible under the circumstances. See Kline,
2001 WL 25750, at *7 (citing Cummins v. Brodie, 667 S.W.2d 759, 766 (Tenn. Ct. App. 1983)).
In the instant case, Starkey argues that MLGW failed to mitigate its damages by failing to
minimize the volume of dirt replaced in the easement as a corrective measure. Starkey notes that,
in its June 10, 2002 letter, MLGW told him that he could cure the problem by restoring 42 inches
of cover to the easement site, with a three-to-one slope extending to the north and south lines of the
easement. He also points to the testimony of MLGW’s expert witness, Bob Conrad, who indicated
that it was unnecessary to restore the easement to its original elevation, and that it would have been
sufficient to restore 42 inches of cover on the top of the gas line extending 25 feet to each side.
Starkey contends that MLGW used a “sledgehammer to kill a flea,” noting that he paid his contractor
to move approximately “$11,000 worth of dirt,” while MLGW spent $139,535.50 for replacement
dirt to restore the easement. From this, Starkey argues that the trial court erred in permitting MLGW
to recover for costs in excess of that necessary to restore 42 inches of cover to the easement.
-8-
At the outset, we recognize that MLGW, as a supplier of gas, is charged with a duty to ensure
that its underground transmission lines are adequately protected and safe for the public. Cf. Rollins
v. Electric Power Bd., No. M2003-00865-COA-R3-CV, 2004 WL 1268431, at *6 (Tenn. Ct. App.
June 8, 2004) (finding that a utility easement holder that supplies electricity “is charged with the
heightened duties for public safety”). The underground gas transmission line at issue in this lawsuit
is the highest pressure gas main in Shelby County, servicing a third of the entire county. MLGW’s
internal policies require that the pipeline be installed with vertical cover in excess of that mandated
by Federal regulations. See 49 C.F.R. § 192.327. Apart from the obvious danger inherent with any
pipeline transmitting a highly flammable substance, the evidence showed that the “overbending”
installation of this particular gas line created the risk of the pipeline “rolling over” and rupturing if
it did not have sufficient lateral ground support. Testimony from Starkey’s own contractor, expressly
credited by the trial court, indicated that so much dirt was removed from within MLGW’s easement
site that the gas line was completely exposed in one location. Moreover, Starkey’s own photographs
show that his excavation left only a “teepee”-like mound of dirt over the length of the gas line,
leaving the pipeline essentially sitting above ground level with a compromised vertical cover and
insufficient lateral support.
Throughout the events that spawned this lawsuit, in his determination to develop his property,
Starkey consistently displayed a casual, nay, an arrogant attitude toward the danger to the public
created by his actions. Initiating excavation within the easement without any authorization or
participation by MLGW, Starkey obstinately and recklessly continued excavating even after
receiving explicit warnings about the risks, stopping only when threatened with arrest. The evidence
fully supports the trial court’s finding that Starkey’s reckless conduct created an emergency situation
that required immediate corrective measures. In this appeal, Starkey gives only perfunctory
recognition to MLGW’s obligation to protect the public, arguing that MLGW was required to
“mitigate” its damages by precisely measuring the amount of soil replaced so as to put in only the
minimum required vertical cover for the pipeline. However, in these circumstances, MLGW’s first
obligation was to ensure that the pipeline did not leak or rupture for lack of either vertical cover or
lateral support. This was a much more important concern than minimizing the amount of
replacement dirt for which Starkey would later be required to pay. Starkey’s argument on mitigation
of damages is without merit.
Starkey also argues on appeal that the record does not contain sufficient evidence to support
the trial court’s award of $174,737.50 in compensatory damages. The primary goal of a
compensatory damage award is to make the injured party whole, see Inland Container Corp. v.
March, 529 S.W.2d 43, 44 (Tenn. 1975), or stated differently, to restore the injured party to the
position that the injured party would have been in had the wrongful conduct not occurred. Beaty v.
McGraw, 15 S.W.3d 819, 829 (Tenn. Ct. App. 1998). Compensatory damages need not be
calculated with “mathematical precision.” Id. (citing Provident Life & Accident Ins. Co. v. Globe
Indem. Co., 3 S.W.2d 1057, 1058 (Tenn. 1928)). The damages must, however, be proven with
reasonable certainty. Id. (citing Act-O-Lane Gas Serv. Co. v. Clinton, 245 S.W.2d 795, 802 (Tenn.
Ct. App. 1951)).
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On this issue, Starkey contends that MLGW failed to establish that his excavation left only
18 to 24 inches of vertical cover over the gas line, as reflected in MLGW’s June 20, 2002 depth
measurements. Starkey also asserts that because MLGW “did not take time to do calculations to
determine the exact volume of replacement dirt” necessary to correct the easement, it cannot prove
the extent to which it was damaged or the cost of restoring the easement to its “pre-removal depth.”
In support, Starkey points to the June 18, 2002 photographs depicting a few small patches of grass
and weeds growing in the dirt atop the gas line on the east end of the easement.
The June 18, 2002 photographs, however, depict only a small portion of the easement. They
are also consistent with the testimony of MLGW’s witnesses that Starkey’s excavation resulted in
a “teepee” of dirt over the gas line, and that the bulk of the soil excavated came from alongside the
gas line, removing virtually the entire lateral support for the pipeline.
Moreover, MLGW’s supervisor of gas engineering estimated that MLGW replaced only a
third of the dirt removed by Starkey during his excavation, and this testimony was credited by the
trial court. Given the immediate danger created by Starkey’s brazen conduct, MLGW was required
to act quickly to protect the public, and it is unsurprising that its remedial actions resulted in
elevations in the easement that were higher than the original elevation in some places and lower in
others. Starkey, having created the exigent circumstances requiring quick action, cannot now
complain that MLGW may have put in more dirt than was minimally necessary in some areas to
alleviate the immediate hazard. We find that the trial court’s award of compensatory damages was
fully supported by the evidence.
Finally, it must be determined whether the trial court erred in awarding $11,000 in punitive
damages to MLGW. The law on punitive damages is well-settled in Tennessee. Once a court
determines that a plaintiff is entitled to actual damages, Oakley v. Simmons, 799 S.W.2d 669, 672
(Tenn. Ct. App. 1990), it may award punitive damages if the plaintiff shows, by clear and convincing
evidence, that the defendant acted intentionally, fraudulently, maliciously, or recklessly. E.g.,
Culbreath v. First Tenn. Bank, 44 S.W.3d 518, 527 (Tenn. 2001). If the trial court determines that
the defendant is liable for punitive damages, it must, to the extent relevant, consider the factors
outlined by the Tennessee Supreme Court in Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn.
1992),9 in assessing the amount of punitive damages to be awarded. Id. at 901; Coffey v. Fayette
9
These factors are as follows:
(1) The defendant's financial affairs, financial condition, and net worth;
(2) The nature and reprehensibility of defendant's wrongdoing, for example
(A) The impact of defendant's conduct on the plaintiff, or
(B) The relationship of defendant to plaintiff;
(3) The defendant's awareness of the amount of harm being caused and defendant's motivation in
causing the harm;
(4) The duration of defendant's misconduct and whether defendant attempted to conceal the conduct;
(5) The expense plaintiff has borne in the attempt to recover the losses;
(6) W hether defendant profited from the activity, and if defendant did profit, whether the punitive
award should be in excess of the profit in order to deter similar future behavior;
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Tabular Prods., 929 S.W.2d 326, 328 (Tenn. 1996). Punitive damages are not awarded to
compensate the injured party, but instead serve to punish the wrongdoer and to deter the wrongful
conduct. Coffey, 929 S.W.2d at 328 (citing Huckeby v. Spangler, 563 S.W.2d 555, 558-59 (Tenn.
1978)).
In this appeal, Starkey asserts that the trial court did not have sufficient evidence upon which
to calculate an award of punitive damages, because it failed to consider proof of either the existence
or absence of encumbrances attached to his property. As a result, Starkey asks this Court to remand
the issue of punitive damages for further proceedings. We decline to do so.
It is clear from the record that the trial court considered a number of the Hodges factors listed
above, including the reprehensibility and objectionable nature of Starkey’s wrongdoing, the potential
danger to the public, Starkey’s awareness of the risks of harm, the impact on MLGW, and Starkey’s
reported financial condition, particularly the total value of his real properties, $1,303,177. As an
additional factor, the trial court also found that Starkey sought to profit as a result of his wrongful
conduct, moving dirt out of MLGW’s easement that, according to Starkey’s valuation, was worth
$11,000. At no time during the trial on this matter did Starkey proffer any evidence as to the equity
he held in his property or otherwise raise this issue to the trial court. Therefore, Starkey’s argument
that the trial court erred in not considering proof of equity must be considered waived. Tenn. R.
App. P. 36(a) (2005); see also Johnston v. Houston, 170 S.W.3d 573, 578 (Tenn. Ct. App. 2004)
(noting that “an issue not raised in the trial court may not be raised for the first time on appeal”).
Moreover, considering Starkey’s flagrant indifference to the danger he created in the course of his
quest to develop his property, a punitive damages award of a significantly higher amount would have
been justified by the evidence. Therefore, this award is affirmed as well.
The decision of the trial court is affirmed, and the costs of this appeal are assessed against
Defendant/Appellant Tommy Carl Starkey, and his surety, for which execution may issue, if
necessary.
__________________________________________
HOLLY M. KIRBY, JUDGE
(7) W hether, and the extent to which, defendant has been subjected to previous punitive damage
awards based upon the same wrongful act;
(8) W hether, once the misconduct became known to defendant, defendant took remedial action or
attempted to make amends by offering a prompt and fair settlement for actual harm caused; and
(9) Any other circumstances shown by the evidence that bear on determining the proper amount of the
punitive award.
Hodges, 833 S.W .2d at 901-02.
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