[CITE: Gross v. Whitaker Standing Timber, 12 CADDNAR 278 (2011)]
[VOLUME 12, PAGE 278]
Cause #: 10-138F
Caption: Gross v. Whitaker Standing Timber
Administrative Law Judge: Lucas
Attorneys: pro se (Gross); pro se (Whitaker); Boyko (DNR)
Date: January 13, 2011
FINAL ADMINISTRATIVE JUDGMENT
Duane H. Gross is not entitled to compensation against either Henry Jay Whitaker, doing business as Whitaker Standing Timber, or Fidelity and Deposit of Maryland. This final judgment addresses all issues of damage and responsibility among the Parties.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
A. Statement of the Case
1. Duane H. Gross (“Gross”) initiated the proceeding on July 20, 2010 by filing correspondence (the “complaint”) with the Natural Resources Commission (the “Commission”) to seek compensation against Henry Jay Whitaker, doing business as Whitaker Standing Timber, (“Whitaker”) and Whitaker’s surety, Fidelity and Deposit of Maryland, with respect to timber harvested in LaPorte County, Indiana. Effectively, Gross was seeking relief under Ind. Code § 25-36.5 (sometimes referred to as the “Timber Buyer Act”) and 312 Ind. Admin. Code § 14, rules adopted by the Commission to assist with implementation of the Timber Buyer Act. The Timber Buyer Act provides for the regulation of timber buyers and other persons associated with the enterprise of timber harvesting.
2. The Complaint is procedurally governed by IC § 4-21.5 (sometimes referred to as the “Administrative Orders and Procedures Act” or “AOPA”) and rules which the Commission adopted at 312 IAC § 3-1 to assist with its implementation of AOPA.
3. Stephen L. Lucas was appointed the Commission’s administrative law judge. He served notice of a “Notice of Prehearing Conference”, with a copy of the Complaint attached, upon Gross, Whitaker, and Fidelity and Deposit of Maryland.
4. On August 24, 2010, Whitaker filed an answer to the complaint in which he referenced an action by a Shawn Brown, a Conservation Officer for the Department of Natural Resources (the “DNR”), pertaining to the timber harvest. Based upon the answer, the administrative law judge determined the DNR should be added as a party, and the DNR was ordered to be added on August 26.
5. The prehearing conference was conducted as scheduled on September 10, 2010. Gross and Whitaker appeared in person. The DNR appeared by its attorney, Ihor N. Boyko. Fidelity and Deposit of Maryland did not appear in person or by an attorney for the prehearing conference.
6. Gross, Whitaker, Fidelity and Deposit of Maryland, and the DNR are collectively the “Parties”.
7. The Commission is the “ultimate authority” under AOPA for an action applying IC § 25-36.5-1-3.2. 312 IAC § 14-1-2(d) and Chacon v. Richards Sawmill, et al., 10 Caddnar 311, 312 (2006).[1]
8. The Commission has jurisdiction over the subject matter and over persons of the Parties.
9. During the prehearing conference, Gross and Whitaker agreed a settlement could not be achieved, and they agreed to schedule a hearing on the facts for November 5, 2010 in Michigan City, Indiana. The hearing was conducted as scheduled. Gross and Whitaker participated. Fidelity and Deposit of Maryland and the DNR did not.
10. The proceeding is ripe for disposition under AOPA and 312 IAC § 3-1.
B. Timber Sale Contract
11. Gross testified he initially discussed with Whitaker the sale and purchase for $2,300 of seven trees from real estate which Gross owns at 2634E, LaPorte County Road 800 North, LaPorte, Indiana (the “subject real estate”).
12. Gross testified on Monday, March 15, 2010, Whitaker and Whitaker’s uncle subsequently came to the subject real estate and stated they wished to purchase 13 trees for $2,650. He told Whitaker and his uncle “It’s unjustifiable being that you were going to give me $2,350 for seven trees.”[2] Gross added “they were intoxicated…. They pinned me against the truck. I was more or less coerced into signing this. I felt threatened because they had both been drinking. Right off the bat, this was just a bad, bad time. I was definitely bulldogged into signing the contract.”
13. In Indiana, a contract may be voided by actual or threatened violence or restraint of a person which causes the person to enter into the contract. In deciding whether a person signed a contract under duress, the ultimate fact to be determined is whether the purported victim was deprived of the exercise of free will. New Elton Homes v. Eckman, 830 N.E.2d 32 (Ind. 2005).
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14. The testimony by Gross, which is set forth in Finding 12, could support voidance of a contract based upon duress. But Gross did not sign a contract on March 15. He testified he later decided to go “on through with this deal”.
15. On Friday, March 19, Gross testified Whitaker came back with a draft written contract. Gross and Whitaker stipulated entry of the written contract into evidence as both Claimant’s Exhibit 4 and Respondent’s Exhibit A. A review of these two exhibits supports a conclusion they are copies of the same document, except Claimant’s Exhibit 4 contains additional notations made by Gross or others which are not part of the contract. Respondent’s Exhibit A is true and accurate depiction of the written contract entered between Gross and Whitaker and provides as follows:
16. Any discussion which may have taken place regarding seven trees was part of negotiations and was superseded by the written contract described in Finding 15. The evidence does not support a finding that Gross was under duress when he entered the written contract.
17. The parties agreed that on March 19 Whitaker paid Gross $2,650 cash for the walnut trees described in the written contract. No balance remained on the written contract entered between Gross and Whitaker. This conclusion is also supported by Respondent’s Exhibit B.[3]
18. Whitaker testified the original agreement was for the purchase and sale of twelve trees from the subject real estate. After paying Gross the $2,650 contract price, Gross told Whitaker one of the twelve trees was not on Gross’s real estate and Whitaker could not cut the tree. Whitaker testified he told Gross, “Well, you said it was yours when I bought it.” He testified Gross responded, “’Well, I don’t think it’s mine. I talked with my neighbor, and he thinks that it’s his.’ I said, ‘Okay…, instead of having a big argument about it, just give me that money back for that one tree.’” Gross then responded, “Well, I don’t have the money.” Whitaker said Gross offered to replace the one tree with another, but Whitaker said the offered substitution was smaller than the one tree. Whitaker testified that he and Gross ultimately agreed to replace the one tree with two smaller walnut trees. “We got that in the contract here.”
19. Later in his testimony, Gross seemingly agreed the written agreement entered on March 19 originally anticipated twelve trees but was changed to 13 trees because of an ambiguity as to ownership of one tree. Examination of Respondent’s Exhibit B also supports this conclusion. The Arabic numeral “12” was marked out and the numeral “13” substituted. A notation is that Gross and Whitaker “switched 2 trees for tree number 1”. In addition, $50 was included for two additional trees. The evidence is that the final agreement between Gross and Whitaker is as set forth in Finding 15.
20. On or about March 28, Gross spoke with another timber buyer, David Moore, concerning the same walnut trees that were the subject of the written contract entered between Whitaker and Gross as described in Finding 15. Gross testified, “I asked [Moore] for an estimate of what they was worth. I wanted to see if I was getting a reasonable deal.”
21. The next day, on March 29, Gross entered a second written contract with David Moore for the purchase and sale of the same trees he had sold to Whitaker. The contract between Gross and David Moore provided that Moore would pay $3,500 “for 13 marked trees some are standing and some are already cut.”[4]
22. Gross testified that he informed Whitaker of his second contract with Moore, and Whitaker then promised to pay Gross an additional $800 to “meet” Moore’s purchase agreement. Gross testified Whitaker also “wanted to get at the trees on the 4,500 acres” over which Gross had recently obtained control. “I had a lot more walnut trees on the 4,500 acres that I’d gotten control of.” He testified Whitaker promised he “would meet the price that [Moore] offered.”
23. Whitaker testified he did not agree to pay Gross an additional $800 for trees for which he had already given the full contract price of $2,650.
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24. Even if Whitaker is assumed to have made the promise that Gross claims, the promise is not legally binding.
25. “Consideration” is a requirement for a valid contract. “Consideration” means ‘[s]omething of value (such as an act, a forbearance, or a return promise) received by a promisor for a promisee.’ Black’s Law Dictionary 200 (7th ed. 1999). ‘To constitute consideration there must be a benefit accruing to the promisor or a detriment to the promise.’” Jackson v. Luellen Farms, Inc., 877 N.E.2d 848, 857 (Ind. Ap. 2007).
26. Gross provided Whitaker with nothing that Whitaker did not already have. Whitaker had already paid full purchase price for the 13 walnut trees. Gross made no forbearance. He was already responsible for providing Whitaker with a reasonable opportunity to harvest the 13 trees.
27. Gross and Whitaker testified extensively concerning the number of days required for Whitaker to complete the timber harvest under their written contract of March 19. Gross was frustrated by the pace of the harvest, but Whitaker believed with sporadic rains and a flat tire on a piece of equipment, the harvest was timely. The exact date of completion is unclear, but the preponderance of the evidence is completion occurred approximately five or six weeks after entry of their contract (probably in late April). The contract did not provide a date by which the harvest must have been completed, and no evidence was provided for a reasonable period in the trade for performing timber harvests. Gross never offered the return to Whitaker of any portion of what they both agreed was the full purchase prices for the walnut trees. Neither did Gross provide testimony of damages resulting from the pace of the harvest. The most notable action by Gross during the harvest period was to enter a written contract with David Moore, ten days after entering the contract with Whitaker, for the purchase and sale of the same trees. The preponderance of the evidence does not support a conclusion that the pace of the harvest was unreasonably slow. If any conclusion is supported, the conclusion is that Whitaker performed the harvest within a reasonable period.
28. The written contract set forth in Finding 15 is the complete contract entered between Whitaker and Gross for the purchase and sale of the walnut trees. The contract has been completely executed. Neither Gross nor Whitaker received anything more or anything less than that to which they were entitled under the contract. Gross has not met the burden of proof for any additional compensation based upon the March 19, 2010 timber sale contract.
C. Four Additional Logs
29. Gross testified that another timber buyer harvested four other trees in 2008, but the resulting logs were not removed from the subject real estate before Whitaker harvested the walnut trees in 2010. Gross testified he believed the four additional logs were later removed by Whitaker without consent by Gross.
30. Whitaker denies removing the four logs from the subject real estate, or for that matter, having significant interest in their acquisition. Whitaker testified that at the instigation of Gross, Whitaker cut off the ends of the logs to determine if they had rotted. He determined they had not rotted, but Gross quoted a sale price in excess of Whitaker’s opinion of their value.
31. Whitaker and Gross agree that after Whitaker completed his tree harvest, David Moore performed a separate harvest of land (not necessarily the subject real estate, but land in the vicinity) controlled by Gross.
32. David Moore provided Whitaker a handwritten note, admitted into evidence as Respondent’s Exhibit C, which stated: “There were 4 logs left after we all left that neither Mr. Whitaker got or I David Moore got. Duane [Gross] did try to sell me the 4 logs but I don’t know if there [sic., they’re] the 4 logs in question.”
33. The conclusion by Gross that Whitaker removed the four logs is speculation. A sufficient basis is not provided to conclude who removed the logs or when. Gross has not met the burden of proof for a showing that Whitaker removed the four logs.[5]
34. Gross also had no creditable valuation for the four logs.[6] The person who originally harvested the logs had little interest in them. Whitaker had little interest in them. David Moore apparently had little interest in them. As likely a conclusion as any is that the four logs were without significant monetary value.
35. Gross has not met the burden of proof for entitlement to any compensation from Whitaker based upon removal or valuation of the four logs.
D. Discarded Beer Cans
36. Gross testified he believed Whitaker and his workers consumed alcohol and discarded beer cans and other rubbish at the subject real estate. He testified he has observed Whitaker in an intoxicated state.
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37. Gross offered two photographs which he testified depict beer cans removed from the subject real estate. The photographs were admitted into evidence as Claimant’s Exhibit 1-a and 1-b. The photographs appear to include approximately 24 (perhaps a former case of) empty aluminum cans of Natural Ice beer collected in a wheel barrow.
38. Whitaker testified he does not drink alcohol nor does his timber cutter. He conceded that his uncle consumes alcohol and testified he has spoken with Gross when Gross was in an intoxicated state. He testified his uncle and Gross could have consumed the beer described in Claimant’s Exhibit 1-a and 1-b.
39. The Commission has determined a timber buyer that discards “spray cans, oil cans, and large plastic containers containing hydraulic and transmission fluid” at a timber harvest can be required to compensate a landowner. Stell v. Allen, d/b/a, A& S Logging, 12 Caddnar 124 (2009) citing Goldasich v. Hites, et al., 11 Caddnar 165, 177 (2007).
40. There was a strong inference the discarded materials in Stell and in Goldasich were associated with a timber harvest, and they included wastes which are potentially hazardous. Empty hydraulic and transmission fluid containers onsite suggested the replaced fluids may have been disposed improperly at the same site. The potential association between a discarded case of beer and a timber harvest does not rise to the level of a reasonable inference. Also, empty beer cans are less likely to suggest the occurrence of notable onsite contamination. No compensation should be provided against Whitaker and in favor of Gross for the discarded beer cans.
E. Compensation and Responsibility
41. The evidence does not support a finding that Gross is entitled to compensation against Whitaker based upon the Timber Buyer Act or the complaint.
42. The potential liability under the Timber Buyer Act by Fidelity and Deposit of Maryland is as a surety for Whitaker and depends upon a determination of liability by Whitaker in favor of Gross. With the determination that Whitaker has no liability to Gross, Fidelity and Deposit of Maryland also has no liability to Gross.
43. The DNR’s sole responsibility is as the state agency primarily responsible for licensure under the Timber Buyer Act. Licensure is not here at issue, and the DNR has no financial responsibility.