## Facts

- A faulty underground heating-oil storage tank on property owned by the Martha Magel Estate released roughly 1,000 gallons of fuel oil.
- The oil flowed downhill and contaminated Cindy and Jim Muncie’s neighboring residence, including their basement, driveway, and lawn.
- Contractors were hired to remove oil and prevent further contamination, but leakage continued; a sump pump failure worsened the damage.
- State environmental authorities treated the incident as an emergency and implemented measures to limit human health and environmental impacts at the Muncies’ home.
- The Estate’s liability insurer brought a federal interpleader action involving affected landowners and government entities.
- In that federal matter, the parties executed a partial settlement that paid the Muncies $60,000 for repair costs and released many claims, while expressly reserving the Muncies’ claim for diminution in value of their real estate due to contamination stigma.
- The Muncies then sued in Kentucky state court for negligence, trespass, and permanent nuisance, seeking stigma damages (diminution in market value) tied to the contamination history.

## Issues

1. Whether Kentucky law permits property owners who previously settled for repair/remediation costs to pursue reserved stigma damages for post-remediation diminution in market value.
2. Whether allowing both repair/remediation recovery and stigma damages constitutes impermissible double recovery when the settlement expressly preserved the stigma claim.

## Decision

- The Supreme Court of Kentucky reversed the summary judgment for the defendant and remanded.
- The court held stigma damages are a distinct component of property-damage compensation and may be recovered in addition to settled repair/remediation costs when expressly reserved.
- The court rejected the view that a repair-cost settlement necessarily constitutes full compensation that bars any subsequent diminution-in-value claim.
- The court emphasized that any recovery must avoid duplicating compensation for the same physical injury.

## Legal Principles

- Stigma damages measure diminution in market value attributable to a property’s contamination history or perceived ongoing risk, even after physical remediation.
- A settlement for repair/remediation costs does not extinguish a separately reserved claim for stigma-based diminution in value when the agreement expressly preserves that claim.
- Courts must prevent double recovery: plaintiffs may not obtain overlapping compensation for the same physical harm, but may recover for distinct, uncompensated market-value loss.

## Conclusion

Kentucky law allows a property owner to pursue expressly reserved stigma damages for post-remediation diminution in value after settling repair/remediation costs, so long as the resulting award does not duplicate compensation for the same injury.


Muncie v. Wiesemann, 548 S.W.3d 877 (Ky. 2018)