[CITE AS: Ellis
v. Brading, et al., 11 CADDNAR 238 (2007)]
[VOLUME 11, PAGE 238]
Cause #: 06-074F
Caption: Ellis v. Brading, et al.
Administrative Law Judge: Jensen
Attorneys: pro se (Ellis); pro se (Brading);
Carl Miller (International Wood, Inc.);
Michael Maschmeyer, David
Nachand (Koetter Woodworking)
Date: December 20, 2007
FINAL ADMINISTRATIVE JUDGMENT
105. Ellis is
granted a total administrative judgment of $16,293.00 for the wrongful harvest
of timber, which sum represents three times the stumpage value of the timber
wrongfully harvested.
106. Brading is
liable to Ellis for the entire sum.
107. Hortenberry’s
liability is limited to the actual stumpage value of $5,431.00, which liability
she shares with Brading, jointly and severally.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
PROCEDURAL HISTORY
1.
The
instant proceeding was initiated by correspondence filed on April 13, 2006 by
Claimant, Rodney Ellis (“Ellis”), who
alleged that Respondents, Danny Brading (“Brading”),
Tina Hortenberry (“Hortenberry”), Ann
Terry and Raymond Terry (collectively
“the Terrys”), had harvested timber without authorization from real
property owned by Ellis, and had further failed to compensate Ellis for the
value of the timber harvested, all of which Ellis alleged to be in violation of
Ind. Code. §§ 25-36.5-1 et seq. and 312 IAC 14-1 et seq.
2.
Ellis
further alleged that Koetter Woodworking, Inc. (“Koetter”) and International Wood, Inc. (“International”) purchased the unlawfully harvested timber.
3.
A
prehearing conference was scheduled and conducted on June 13, 2006, with all
parties except International in attendance.[1] Service was eventually effectuated upon
International and a supplemental prehearing conference was scheduled and
conducted on July 14, 2006, with all parties participating.
[VOLUME 11, PAGE 239]
4.
A case
management schedule was established for the purpose of allowing the parties to
conduct discovery. Following the parties’
unsuccessful participation in mediation and Koetter’s and International’s
unsuccessful motions to dismiss, the parties exchanged final witness and
exhibit lists and an administrative hearing was held on June 28, 2007.
5.
At the
conclusion of Ellis’ case in chief, Koetter and International, moved for a
judgment on the evidence, which motion was taken under advisement and will be
ruled upon herein.
6.
This
proceeding is controlled substantively by Ind.Code §§ 25-36.5-1 et seq. and 312
IAC 14-1 et seq., which authorizes a timber grower to institute an adjudicative
proceeding against a timber buyer, as defined at Ind. Code § 25-36.5-1-1, or a
timber cutter, as defined at 312 IAC 14-2-11, seeking actual damages to
property resulting from the timber harvest and damages up to three times the
actual stumpage value of the timber wrongfully harvested.
7.
Procedurally,
Ind. Code §§ 4-21.5-3 et seq., commonly referred to as the Administrative
Orders and Procedures Act or AOPA, and administrative rules adopted by the
Commission at 312 IAC 3-1 et seq. for the purpose of implementing AOPA in
proceedings under its jurisdiction, will govern.
8.
The
Commission is the ultimate authority for adjudicative proceedings under Ind.Code
§§ 25-36.5-1 et seq. 312 IAC 14-1-2(d).
9.
The
Commission is possessed of jurisdiction over the persons of the parties and the
subject matter of the instant proceeding.
FINDINGS OF FACT
10.
The
Terrys had purchased a twenty-two (22) acre parcel of real property for the
purpose of selling it on contract to Brading and Hortenberry. Brading and Hortenberry were making monthly
payments to the Terrys for the property.
Testimony of Brading, Testimony of
Ann Terry, Testimony of Hortenberry.
11.
Ellis
owns eleven (11) acres situated on
12.
Brading
acknowledged having harvested timber from Ellis’ property at the same time he
harvested timber from the 22 acre parcel he and Hortenberry were purchasing
from the Terrys. Testimony of Brading.
[VOLUME 11, PAGE 240]
13.
No
survey was completed at the time the Terrys purchased the 22 acre parcel and
Brading completed no survey before he proceeded with the timber harvest. Testimony
of Brading.
14.
However,
the 22 acre parcel as well as properties surrounding Ellis’ 11 acre parcel had
been surveyed recently and both Brading and Ellis had observed boundary survey
stakes on their respective parcels of property.
Testimony of Brading, Testimony of
Ellis, Testimony of Randall Moser.
15.
Brading’s
timber harvest from Ellis’ property was based upon an erroneous belief that
Ellis’ property was a part of the 22 acre parcel he and Hortenberry were
purchasing. Testimony of Brading.
16.
Brading
discovered his error regarding the property line location only after the timber
had been harvested. Testimony of Brading.
17.
The fact
that Brading and Hortenberry had also obtained a septic system permit for the
construction of a septic system in preparation for the placement of a
$100,000.00 modular on the land later determined to belong to Ellis further bolsters
Brading’s testimony that the harvest of Ellis’ trees occurred from a genuine
belief that the trees were located on the land he and Hortenberry were
purchasing. Testimony of Brading.
18.
Brading accepted
sole responsibility for the timber harvest indicating further that he
personally rented the equipment necessary and was acted under directions from
no one else. Testimony of Brading.
19.
Hortenberry
acknowledged receiving, endorsing and cashing check number 134514, dated
February 18, 2005 in the amount of $4,737.95 issued by Koetter. Hortenberry testified, and Brading confirmed,
that Hortenberry’s endorsement of the check on behalf of Brading, was done with
his permission. Claimant’s Exhibit 1, Testimony of Brading, Testimony of Hortenberry.
20.
The Terrys
acknowledged receipt of check number 21374 dated March 24, 2005 from
International in the amount of $6,618.05 as payment for timber harvested. Testimony
of Ann Terry, Testimony of Raymond Terry. Ann Terry initially insisted that
all of the timber associated with the payment was harvested from the Terrys’
property. Upon further questioning she acknowledged
her lack of knowledge as to the actual ownership of the timber sold to
International. Claimant’s Exhibit 2, Testimony of Ann Terry.
[VOLUME 11, PAGE 241]
21.
According
to Brading, the bulk of the proceeds of the timber sale had been conveyed to
the Terrys as payment on the land contract.
Testimony of Brading.
22.
The
Terrys received $2,100.00 of the proceeds associated with check number 134514
issued by Koetter and all of the proceeds of check number 21374 issued by International. Testimony
of Raymond Terry.
23.
The
timber harvested by Brading was hauled to International and Koetter in or near March
2005 by Kenny Elliott (“Elliott”) and
Ed Eiler (“Eiler”). Testimony
of Elliott, Testimony of Eiler.
24.
Elliott
delivered logs that had been tagged in the field to Koetter and approximately
“a month or two later” hauled four loads of logs to International. Testimony
of Elliott. Eiler, whose testimony was initially evasive, eventually
acknowledged having hauled two loads of logs to Koetter from an area near
25.
Brading
paid Elliott cash to haul the logs to Koetter. International paid Elliott $700.00 for that
delivery and deducted the hauling fee from the payment made to the Terrys. Testimony
of Elliott, Testimony of John Chapman, Claimant’s Exhibit 3. Eiler testified that he hauled logs for
Brading as a personal favor at no cost. Considering
Eiler’s evasive approach to his testimony, his contention that he hauled logs
for no fee is questionable; however, no evidence to the contrary was presented.
26.
Elliott,
who has been hauling timber, for approximately twenty years and has been
working in the Washington County area for at least ten years, explained that Greg
Thevenot (“Thevenot”), Director of
Purchasing and Sales for Koetter, advised him that if he was in need of a load
that Brading was looking for someone to haul some logs. According to Elliott, Thevenot provided a
general location where Brading’s logs could be picked up. Testimony
of Elliot, Testimony of Thevenot.
27.
When
Elliott arrived in the location as provided by Thevenot, Brading was on site
with a pile of logs that had already been cut and skidded to a gravel
landing. The logs he hauled to Koetter
had been previously tagged indicating that Koetter had purchased them previously. Testimony
of Elliott.
28.
The fact
that a veteran truck driver who has hauled logs in a general vicinity for ten
years has developed a relationship with sawmill employees to the extent that
the driver receives job referrals is not viewed as unusual.
29.
Thevenot’s
referral of Elliott to Brading for the purpose of hauling logs previously
purchased by Koetter in no manner warrants the conclusion that Elliott was
acting on behalf of Koetter. This is
especially true when Elliott took all direction from Brading and Brading was
the individual who paid Elliott for hauling the logs. Testimony
of Elliott.
[VOLUME 11, PAGE 242]
30.
Within
the logging industry, the tagging of logs in the field indicates that those
logs have had already been selected by a particular purchaser. Testimony
of Elliott.
31.
At the
time of Elliott’s arrival at Brading’s timber harvest site all timber
harvesting had been completed. Testimony of Elliott.
32.
Koetter’s
tagging of certain logs before Elliott’s arrival leads to the logical conclusion
that Koetter was on site before Elliott arrived but does not support a
conclusion that Koetter had been on site before Brading had concluded his
timber harvest or that Koetter had purchased standing timber that was being cut
by Brading at Koetter’s direction.
33.
While
Eiler could not recall with certainty, the only evidence associated with the
loads of logs Eiler hauled to Koetter tends to establish that these logs had
not been tagged in the field, but were simply delivered to Koetter and
identified by Eiler as belonging to Brading.
Testimony of Eiler.
34.
Koetter
acknowledged purchasing three loads of logs from Brading in or around March
2005. One load was hauled by Eiler while
Elliott, using a truck owned by Baker Trucking, hauled the other two loads. Testimony
of James Nett (“Nett”), Testimony of Mike Baker (“Baker”), Testimony of Eiler,
Testimony of Elliott. Koetter
customarily pays the seller for logs within a few days of delivery to the mill;
however, Koetter did not pay any truck driver for hauling any logs associated
with that transaction. Testimony of Nett, Testimony of Elliott,
Testimony of Eiler.
35.
Thevenot,
Director of Log Purchasing and Sales, has never been to Ellis’ property located
on
36.
Thevenot
tagged only one load of logs after those logs had been delivered to Koetter’s
yard in
37.
Thevenot
has no involvement with the payments made to sellers for logs. Testimony
of Thevenot.
38.
Brad
Foster (“Foster”), a timber buyer for
Koetter, admitted having inspected timber cut by Brading after the logs had
been laid out on the landing at Brading’s timber harvest site. Testimony of Foster, Testimony of Brading.
[VOLUME 11, PAGE 243]
39.
Foster
denied having inspected or purchased standing timber. Testimony
of Foster.
40.
Brading
rejected a bid offered by Foster on the logs.
Consequently, the logs were not purchased on the day of Foster’s
inspection and the logs were also not tagged that day. Testimony
of Foster.
41.
Logs are
only tagged when purchased or upon arrival at the yard. Testimony
of Foster.
42.
The
evidence is somewhat sketchy as it relates to Koetter’s tagging of certain logs
before they were hauled by Elliott.
Thevenot and Foster both deny having tagged or purchased logs or
standing timber from Brading in the field.
However, Elliott clearly recalled that certain logs he hauled for
Brading had been tagged by Koetter, indicating that someone, on behalf of
Koetter, purchased the logs in the field.
While this evidence presents a curiosity, the testimony of Elliott and
employees of Koetter appeared forthright and non-evasive, providing no cause to
question their credibility.[3]
43.
John
Chapman (“Chapman”), in March 2005
was employed by International. In the course of that employment, Chapman graded
and measured logs and developed quotes for the purchase of timber. Testimony
of Chapman.
44.
Chapman,
at the request of Brading and on behalf of International, visited the site of
the timber harvest for the purpose of inspecting cut timber. Testimony
of Chapman.
45.
Brading’s
timber harvesting had been completed at the time of Chapman’s visit and he
observed no activities associated with the skidding or loading of any
logs. Brading was the only other person
present during Chapman’s visit. Testimony of Chapman, Testimony of Brading.
46.
Chapman
did not go beyond where the logs had been laid out and was unaware of the
location from which they had been harvested.
Testimony of Chapman.
47.
Following
his inspection of the logs, Chapman telephoned Brading with a quote to purchase
logs upon Brading’s delivery of the logs to the mill. Testimony
of Chapman.
48.
International’s
practice was to pay for logs only upon the seller’s delivery of the logs to the
mill. All costs associated with the
hauling was the seller’s responsibility; however, it was not unusual for
International to pay the driver’s hauling fee and deduct that amount from the purchase
amount paid to the seller. Testimony of Chapman, Testimony of Elliott.
[VOLUME 11, PAGE 244]
49.
Both
Eiler and Elliott received all of direction from Brading while at the timber
harvest site and the only driver who received payment, Elliott, was paid either
by Brading or out of proceeds of the timber sale that would have otherwise been
paid to the Terrys. Neither Koetter, nor
International paid Elliott or Eiler out of their own coffers. Testimony
of Eiler, Testimony of Chapman, Testimony of Stidham, Testimony of James Nett,
Testimony of Thevenot.
50.
There
exists no evidence that Elliott or Eiler were operating as agents or employees
of Koetter or International or acting under the direction of any person except
Brading.
51.
Elliott acknowledged
having backed his truck onto the gravel lane located on the property near the
landing area to be loaded with the cut logs.
Testimony of Elliott.
52.
No
evidence was presented to establish specifically that Elliott’s act of backing
onto the gravel lane to the landing resulted in damage to Ellis’ property.
53.
The only
evidence available establishes that Eiler’s truck was loaded by Brading while
the truck sat on the
54.
Randall
L. Moser (“Moser”), a consulting
forester, viewed the Ellis’ property for the purpose of establishing the
stumpage value of the timber harvested from that property. Testimony
of Moser.
55.
The
survey stakes readily apparent on Ellis’ property were used in conjunction with
a surveyor’s report by Moser to ascertain the boundaries of the Ellis and Terry
properties. Testimony of Ellis, Testimony of Moser.
56.
The
primary landing area, to which the harvested timber had been skidded was
located on Ellis’ property; however, evidence also indicated that a certain
number of logs may have been loaded at the
57.
Within
the boundaries of Ellis’ eleven (11) acre property, seventy-six (76) stumps were
identified. As he proceeded to measure,
identify the species of and tally each stump located, Moser marked each stump with
blue paint to ensure that no duplication occurred within his calculations or
report. Testimony of Moser, Claimant’s Exhibit 4.
58.
The
calculation of stumpage value was based upon the stumps identified, although
Moser felt certain that some stumps were probably hidden under tree tops. Testimony
of Moser.
[VOLUME 11, PAGE 245]
59.
The
stumps identified by Moser included black, white and red oak, hickory, sugar
and red maple, sassafras, ash, and poplar totaling 18,140 board feet. Based
upon the estimated volume, species and grade, Moser calculated a stumpage value
of $5,431.00 for the 76 trees harvested from Ellis’ property.
Testimony of Moser, Claimant’s Exhibit 4.
60.
Large
ruts caused by heavy equipment were visible throughout the properties owned by
Ellis and the Terrys. Testimony of Moser, Testimony of Ellis, Claimant’s
Exhibit 8.
61.
Because
the primary landing area was located on Ellis’ property, the skidding of a
large number of the logs to that location caused a “disproportionate share” of
the property damage to occur on Ellis’ property. Testimony
of Moser.
62.
At no
time was any evidence presented to establish or estimate the cost to repair the
property damage associated with the ruts.
Testimony of Moser, Testimony of
Ellis.
63.
Moser
was unaware of who purchased the timber and stated he could not determine “what
came from where and have no idea where they went.” Testimony
of Moser. Even with a load receipt from both International and Koetter,
Moser testified that he would be unable to determine whether Koetter or
International purchased Ellis’ trees or the Brading and Hortenberry trees, or
both.
64.
Based
upon Brading’s belief that all of the trees harvested and logs sold had been
cut from his and Hortenberry’s property, it may be reasonably inferred that the
logs sold by Brading to Koetter and International included both theirs and
Ellis’ logs.
65.
Ellis
observed no person cut timber or skid timber involved in the instant proceeding. Testimony
of Ellis.
66.
Ellis offered
no evidence to prove that Koetter or International had purchased standing
timber or were otherwise involved in the timber harvest completed by Brading.
67.
Ellis
testified that he had no evidence that Brading was working as an employee or
agent of Koetter or International or that Brading maintained any relationship
of any kind with Koetter or International at the time he harvested trees off
Ellis’ property.
68.
Ellis
acknowledged that the only evidence in existence linking Koetter and
International to the timber harvest is the fact that they purchased the timber
from Brading. Testimony of Ellis.
[VOLUME 11, PAGE 246]
KOETTER’S AND INTERNATIONAL’ MOTION FOR
69.
At the
conclusion of Ellis’ case in chief, Respondents, Koetter and International,
joined in a motion for judgment on the evidence as specified within the Indiana
Rules of Trial Procedure, Trial Rule 50.
70.
The
administrative law judge took the motion under advisement and requested that
all Respondents proceed with the presentation of evidence. However, only that evidence presented during Ellis’ case in chief is
relevant to a determination of Koetter’s and International’s motion.
71.
Upon
proper motion Trial Rule 50 obligates the administrative law judge to withdraw
from consideration those issues upon which a Claimant has failed to carry its
burden of going forward with evidence. Save Our Rivers v. DNR & Aztar
Indiana Gaming Corporation, 7 CADDNAR 115, (1995), Stanton v. Star Lite
Leasing, Inc. a/k/a Starlight Leasing, Inc. and DNR, 10 CADDNAR 244, (2006).
72.
Ellis proved
only that Koetter and International purchased logs from Brading.
73.
Ellis
acknowledged that there exists no proof that Koetter or International purchased
standing timber or that Brading was acting as an agent or employee of Koetter
or International or that Koetter or International directed Bradings timber
harvest activities.
74.
The sole
evidence presented by Ellis establishes that Brading, at his own direction
selected trees for harvest and only after the timber harvest was completed did
Brading solicit bids from Koetter and International that ultimately lead to
their purchase of logs.
75.
Ellis
has simply failed to go forward with evidence upon which it may reasonably be
concluded that Koetter or International are liable for damages associated with
the timber harvest at issue herein.
76.
Ellis
complaint with respect to Koetter and International, should be dismissed.
CONCLUSIONS OF LAW
77.
[VOLUME 11, PAGE 247]
78.
A
“timber grower” is “the owner, tenant, or operator of land in this state who
has an interest in, or is entitled to receive any part of the proceeds from,
the sale of timber grown in this state and includes persons exercising lawful
authority to sell timber for a timber grower.”
79.
A
“timber cutter” is a “person who cuts timber but who is not a timber
buyer.” Ind. Code § 25-36.5-1-3.2 and 312 IAC 14-2-11
80.
A
“timber buyer” is a “person engaged in the business of buying timber from
timber growers for sawing into lumber, processing, or resale, but does not
include a person who occasionally purchases timber for sawing or processing for
his on use and not for resale.”
81.
Ellis is
a timber grower, while Brading, for purposes of this proceeding, is a timber
cutter.
82.
Brading
admitted having harvested trees he later determined to be the property of Ellis
without compensation to Ellis for timber harvested.
83.
Seventy-six
(76) stumps were identified on Ellis’ property as having been harvested by
Brading.
84.
The stumpage value of the timber associated
with the 76 stumps is $5,431.00.
85.
The
amount of potential liability for the wrongfully harvested timber, based upon
the imposition of three times Moser’s stumpage value determination, equals
$16,293.00.
86.
The
Commission has previously determined that it possesses discretion to demand
less than the full impact of the treble-damages clause, particularly in
situations in which the timber cutter or timber buyer acts will all due
diligence but, as a result of misdirection or interference of another person is
caused to trespass. Schneider v. Grosnickle & Cincinnati Insurance Company, 9 CADDNAR
180, (2004).
87.
The
purpose of the treble damages provision contained within Ind. Code §
25-36.5-1-3.2 is to enforce against the careless felling of trees through the
negligent actions of timber buyers and timber cutters. Id,
citing Wright v. Reuss, 434 N.E.2d 925, (
88.
It is
also not required that a timber grower establish that the wrongful timber
harvest was the result of maliciousness on the part of the timber buyer or
timber cutter. Id and Gallien v. Sloan Logging, Pendley &
[VOLUME 11, PAGE 248]
89.
Ellis’
failure to prove the costs to repair the property damage associated with the
timber harvest frustrates any possibility of awarding additional compensation
for the ruts other actual property damage.
90.
It is
not questioned that Brading believed Ellis’ eleven (11) acre parcel of property
was part of the real property he and Hortenberry were purchasing on contract
from the Terrys.
91.
It is
clear that Brading’s actions in harvesting timber later determined to be Ellis’
was not a consequence of maliciousness.
92.
However,
Brading did nothing to affirmatively identify the property boundaries of the
real property he was purchasing until after he had harvested the timber.
93.
Where a
timber buyer or timber cutter has either failed to take affirmative steps to
identify property boundaries or has encroached upon property beyond an
established boundary line an award to the Claimant of three times the stumpage
value of the timber is appropriate. Schneider, supra; Gallien,
supra; Martin v. Curtis & Teague, 11 CADDNAR 53, (2007).
94.
Brading,
as the timber cutter, is liable to Ellis, the timber grower, for three times
the stumpage value of the timber wrongfully harvested, or $16,293.00.
95.
However,
a landowner or person with an ownership interest in property who ultimately shares
in the proceeds of a wrongful timber harvest is also within a class of persons
who may be liable to a timber grower for the wrongful harvest of timber. Pike
Lumber Co., Inc. v. Cruse Timber, et al., 10 CADDNAR 28 (2005).
96.
It is
not disputed that the Terrys owned the 22 acre parcel of property adjacent to
Ellis and were selling it on contract to Brading and Hortenberry.
97.
It is
also not disputed that the Terrys received proceeds of Brading’s sale of the
timber he harvested.
98.
Brading’s
testimony that the Terrys received the proceeds of the timber sale as payment
on the land sale contract between himself and Hortenberry and the Terrys is
also not disputed.
99.
Consequently,
while the monies paid to the Terrys were earned by Brading and Hortenberry from
the sale of timber, the Terrys are not true recipients of proceeds of a
wrongful timber harvest, but are the recipients of land sale contract payments.
100.
Thus the
Terrys are not liable to Ellis for damages associated with the timber harvest.
[VOLUME 11, PAGE 249]
101.
Hortenberry,
like Brading, as the real recipients of the proceeds of the wrongful timber
harvest, earned monies from the sale of the timber necessary to pay on their
land sale contract with the Terrys. As a
result, Hortenberry shared with Brading the proceeds of the wrongful timber
harvest and is liable to Ellis for damages associated therewith. Pike
Lumber Co., supra.
102.
The
treble damages clause of Ind. Code § 25-36.5-1-3.2 is a punitive statutory
provision, which must be strictly construed.
Pike Lumber Co., supra.
103.
While
Hortenberry is liable to Ellis as a landowner who shared in the proceeds of the
wrongful timber harvest, there exists no evidence to suggest that she was
actually involved in the timber harvest such that she should be liable for punitive
treble damages.
104.
Hortenberry’s
liability is limited to the actual stumpage value of $5,431.00, which liability
she shares jointly and severally with Brading.
[1] Scheduling of the initial prehearing conference was delayed as a result of Ellis’ failure to provide mailing addresses for the identified Respondents such that service, in accordance with I.C. § 4-21.5-3-1, could be effectuated.
[2] Ellis owned the property jointly with his wife until
their divorce, which according to Ellis’ testimony was either pending or final
in 2005. Ellis testified that he was
granted sole ownership of the property in the divorce and that his estranged
wife waived all rights to this proceeding at the time of the final decree
dissolving the marriage.
[3] Ellis and the four individual Respondents, Brading, Hortenberry, and the Terrys, appeared pro se. It is believed that certain evidentiary gaps, such as this, could have been eliminated through proper discovery and preparation.