CADDNAR

[CITE: Martin v. Curtis and Teague, 11 CADDNAR 53 (2007)]

 

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Cause #: 04-167F

Caption: Martin v. Curtis and Teague

Administrative Law Judge: Jensen

Attorneys: Henthorn; Thayer-Sword; Niehoff

Date: February 26, 2007

 

FINAL JUDGMENT

 

Charles E. Martin is granted an administrative judgment in the amount of $28,611.00, against Kemp Curtis and Billy D. Teague, who are liable jointly and severally.

 

Billy D. Teague’s Cross Claim Against Curtis is dismissed.

 

 

FINDINGS OF FACT AND CONCLUSIONS OF LAW

 

BACKGROUND

 

1.      Charles E. Martin (Martin) initiated the instant proceeding with the filing of his Complaint with the Natural Resources Commission (Commission) on September 9, 2004.

 

2.       Martin alleges that Billy D. Teague (Teague), at the direction of Kemp Curtis (Curtis), wrongfully harvested his timber and failed to provide compensation.

 

3.      Martin further alleges that the stumpage value of the wrongfully harvested timber is Twelve Thousand Four Hundred Three Dollars and Sixteen Cents ($12,403.16).

 

4.      Through the instant proceeding Martin seeks compensation, jointly and severally, from Curtis and Teague in an amount equal to three times the stumpage value of the timber wrongfully harvested, for costs and other just and proper relief.  

 

5.      On January 19, 2005, Teague filed his Cross-Claim against Curtis.[1] 

 

6.      Teague’s Cross-Claim alleges that Teague entered into an oral agreement with Curtis for the harvesting of timber from Curtis’ real property.  Teague further states that Curtis selected and marked all of the trees that were cut, and provided assurances that the trees so selected were the property of Curtis.  Consequently, Teague seeks indemnification from Curtis for all damages, costs and expenses incurred as a result of the timber harvest.

 

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7.      Curtis, in his Answer filed February 18, 2005, admits that he selected certain trees harvested by Teague from a potential building site, but denies that he selected all of the trees harvested.  Curtis maintains that Teague selected certain of the trees harvested from areas north and east of the potential building site.

 

8.      Teague filed his “Motion for Summary Judgment on Teague’s Cross-Claim Against Curtis” on June 3, 2005, which was denied in an interlocutory order entered on August 17, 2005.

 

9.      On October 21, 2005, Teague filed a “Renewed Motion for Summary Judgment on Teague’s Cross-Claim Against Curtis,” which was similarly denied in a second interlocutory order issued on November 23, 2005.

 

10.  Martin was represented by counsel, Thomas M. Barr, and Joyce Thayer-Sword, counsel, represented Curtis throughout the pendency of this proceeding.  Counsel, Benjamin Niehoff, entered his appearance and represented Teague until filing his Verified Notice of Termination and Motion to Withdraw Appearance, which was granted on November 15, 2006.

 

11.  The parties, by their respective attorneys of record, filed stipulations of fact on December 15, 2005, which document was admitted during the administrative hearing as ALJ Exhibit I.[2]

 

12.  On January 18, 2006, Niehoff, on behalf of Teague, filed a motion to publish the depositions of Curtis and Elkins.  No other party voiced an objection and the motion, was granted during the final status conference conducted on January 23, 2006.  However, the deposition of Elkins was not provided to the administrative law judge for consideration.

 

13.  An administrative hearing was commenced as scheduled on March 24, 2006, with all parties represented by their respective counsel.  The administrative hearing was recessed after approximately nine (9) hours without objection from any party and reconvened on November 16, 2006.  For the bifurcated portion of the administrative hearing, Martin and Curtis appeared in person and by their respective counsel while Teague appeared pro se.

 

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14.  The conduct of this proceeding is controlled by the Administrative Orders and Procedures Act, or “AOPA,” codified at IC 4-21.5-3 and administrative rules adopted at 312 IAC 3-1 to aid in the implementation of AOPA in proceedings before the Commission.

 

15.  Substantively, this proceeding involves IC 25-36.5, commonly referred to as the “Timber Buyers Statute,” and administrative rules adopted at 312 IAC 14-2.

 

16.   Pursuant to 312 IAC 14-1-2(d) the Commission is the ultimate authority for complaints initiated pursuant to IC 25-36.5.

 

17.  The Commission has jurisdiction over the subject matter and the parties to the instant proceeding. 

 

FINDINGS OF FACT

 

18.  The following facts were stipulated by the parties.

 

1.      At all times relevant hereto the Plaintiff, Charles E. Martin, owned a parcel of land consisting of 3.0927 acres located on Harrison Ridge Road in Brown County, Indiana.

2.      At all times relevant hereto Defendant Kemp Curtis owned a parcel of real estate located on Harrison Ridge Road in Brown County, Indiana, situated immediately to the north and east of Plaintiff’s property.

3.      Prior to September 29, 2003 Defendant Curtis contracted with Defendant Billy D. Teague to cut timber for the purpose of construction of a home which Curtis had planned to build on his property.  This was a verbal agreement; there was no written contract between Curtis and Teague.

4.      On September 29, 2003 Defendant Teague, with Defendant Curtis’ knowledge and consent, cut several trees pursuant to this agreement.

5.      Several trees which were cut pursuant to said agreement were located on Plaintiff’s property.

6.      Prior to cutting said trees neither Curtis nor Teague caused a survey to be performed to determine the boundary line between the Martin and Curtis properties.

7.      Plaintiff did not consent to the cutting of trees on his property, and did not learn of Curtis’ and Teague’s plans to cut these trees until after the cutting had taken place.

 

ALJ Exhibit I, “Stipulation of Facts” executed by all parties and filed with the Commission on December 15, 2006.

 

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17.  The Martin property is rectangular shaped with an eastern boundary measuring 250.0 feet and northern boundary measuring 489.6 feet, both of which abut the Curtis property.  The western boundary of the Martin property, also measuring 250.0 feet, fronts on Harrison Ridge Road.

 

18.  The Curtis property is best characterized as “L-shaped” with a portion of its western boundary fronting on Harrison Ridge Road.  The Curtis property generally wraps around the north and east boundaries of the Martin property.  More specifically, a portion of the southern boundary of the Curtis property abuts the northern boundary of the Martin property for a distance of 489.6 feet from west to east.  At that eastern point, a second portion of the western boundary of the Curtis property extends 250.0 feet in a north to south direction abutting the eastern boundary of the Martin property.

 

19.  The portion of the Martin property from which timber was wrongfully harvested can generally be characterized as the eastern-most one hundred feet (100’).  Testimony of Darnall.    

 

20.  During negotiations for the purchase of the Curtis property, Curtis initially sought a boundary survey to be completed at the seller’s expense, Claimant’s Exhibit 4, “Purchase Agreement,” which was refused by the seller.  Claimant’s Exhibit 4, “Counter Offer # 1,” and Testimony of Karen Smith.

 

21.  The undisputed testimony of Karen Smith (Smith), Curtis’ realtor, and the deposition testimony of Curtis and Teague indicates that there were numerous galvanized pipes, rebar, fence posts and an old barbed wire fence located on the Curtis property; however, none of the markers were inscribed with a surveyor’s cap or other identification.  Claimant’s Exhibit 17, “Teague Deposition,” pg. 18; Claimant’s Exhibit 18, “Curtis Deposition,” pgs. 21-29.

 

22.  Due to the additional costs associated with a survey and reassurances from Smith as to the corner locations of the Curtis property, Curtis opted not to commission a survey at his own cost and withdrew his demand for a survey to be completed at the cost of the sellers.  Claimant’s Exhibit 18, “Curtis Deposition,” pgs 34, 44-48, and 52-54; Claimant’s Exhibit 5.

 

23.  Smith testified that the only surveyor’s marking found were located on the northeast and southeast corners of the Curtis property.  Further Smith testified that near what was later identified as the Martin Property’s eastern boundary, which is shared with the Curtis property, was a row of rebar that Smith explained may have been placed by a surveyor to identify a questioned boundary line.  Smith testified that she recommended that Curtis have the seller replace the missing surveyor’s corner stakes or markers. Testimony of Smith. 

 

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24.  Curtis, contradicting Smith’s testimony, stated that he was directed to certain known corner stakes or markers by Smith based upon information and assurances she received from the sellers.  According to Curtis, one corner marker identified by Smith was located on the shared north/south boundary between the Martin and the Curtis properties (northern boundary of the Martin property and southern boundary of the Curtis property).  According to Curtis, a second corner identified by Smith was located on the southern boundary of the Martin property.  A line drawn between the two corners identified by Smith created a boundary line running essentially parallel to Harrison Ridge Road.  Claimant’s Exhibit 18, “Curtis Deposition,” pgs. 19-22 and deposition exhibit 1.  

 

25.  However, each of the corner markers Curtis identified as having been confirmed by Smith were located westward of what was later determined to be the actual northeast and southeast corners of the Martin property. 

 

26.  The generally conflicting testimony of Smith and Curtis tend to prove only that the boundaries of the Curtis property were not known at the time of Curtis’ purchase.

 

27.  Curtis purchased the Curtis property, without benefit of a survey, on September 2, 2003.  Claimant’s Exhibit 9, “Warranty Deed.”

 

28.  Shortly after Curtis’ purchase he commenced activities consistent with his stated plans to construct a home.  Curtis’ testimony is uncontroverted that he contracted with Bynum Fanyo & Associates, Inc. who submitted inquiries, on behalf of Curtis, to the Department of Natural Resources relating to base flood elevations and a planned stream crossing and prepared a limited survey associated with the planned bridge.  Curtis also obtained home plans from Elkins, obtained a driveway permit and cleared timber for purposes of facilitating construction.  Claimant’s Exhibit 18, “Curtis Deposition,” pgs 37-39, 41, 43 and deposition exhibits 9 and 3.

 

29.  Prior to the timber harvest, Curtis’ activities are consistent with his belief that part of the land actually contained within the boundaries of the Martin property was part of the Curtis property.  This is evidenced by Curtis’ plans to construct his home, the septic system and a portion of the driveway on what was later determined to be the Martin property.[3]  Claimant’s Exhibit 18, “Curtis Deposition,” pgs. 34-36 and deposition exhibit 9 and 3. 

 

30.  After Teague completed the timber harvest, Martin caused a survey of the Martin property to be completed and Curtis did likewise.  Claimant’s Exhibit 1, “Martin Survey;” and Testimony of Curtis.  Based upon the surveys, Curtis acknowledged that his original beliefs regarding the property boundaries, was erroneous.  Claimant’s Exhibit 18, “Curtis Deposition,” pg 20, 79, and 84.

 

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31.  Martin retained the services of Crowder and Darnall to prepare the survey of the Martin property (the Martin Survey).  Ted Darnall (Darnall), a licensed land surveyor since 1996, testified that he made two visits to the Martin property to identify record monuments and other evidence or markers to assist in identifying the property line.  After those monuments, markers and other evidence were recorded, the survey was run and the data analyzed in comparison to record documents, record surveys and other known data.  At that time the Martin property boundary lines were set.  Testimony of Darnall.

 

32.  The Martin Survey was certified on February 17, 2004.  Testimony of Darnall and Claimant’s Exhibit 1.

 

33.  It was determined that a discrepancy existed with respect to other record deeds of the Curtis property which impacted both the eastern and northern boundary lines of the Martin property that are shared with the Curtis property.  Testimony of Darnall.

 

34.  According to Darnall, Curtis’ deed reflects a distance of eighty-eight (88) feet from the Curtis property’s southwest corner (the Martin property’s southeast corner) to the southeast corner of the southwest quarter, while earlier deeds for the Curtis property reflect a distance of one hundred eighty-eight (188) feet.[4]  However, the measured distance between Martin’s southeast corner and the southeast corner of the quarter section is 64.21 feet.  Darnall concluded that Martin’s deed “holds senior rights” and states a belief that the “uncertainties are irrelevant.”  Testimony of Darnall and Claimant’s Exhibit I.

 

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35.  Any discrepancy in Curtis’ actual deed results from a stated distance of 88 feet and a measured distance of 64.21 feet amounting to only a 24 foot difference.  This distance is insignificant in light of the large land area of the Martin property from which Curtis, in conjunction with Teague, harvested timber.

 

36.  In any event, Curtis’ surveyor, Doug Curry, confirmed that the survey prepared for Martin was correct.  Claimant’s Exhibit 18, “Curtis Deposition” pg 84.

  

DAMAGES ASSOCIATED WITH THE TIMBER HARVEST:

 

37.  Darnall, as part of his service, identified tree stumps located on the Martin property.  Darnall identified only those tree stumps approximately 12 inches from ground level with visible saw marks.  He further testified that he did not believe he found all of the tree stumps because the survey was conducted in February and there was snow on the ground, which possibly prevented identification of some stumps.  Furthermore, there was a significant amount of tree debris remaining that possibly concealed additional stumps.  Testimony of Darnall.

 

38.  On the Martin Survey, Darnall identified twenty-one (21) tree stumps located on the Martin property.  Testimony of Darnall and Claimant’s Exhibit 1. 

 

39.  Clark Fleming (Fleming), a Consulting Forester, with fifteen (15) years of full time experience and a Batchelor of Science degree in Horticulture, was retained by Martin to appraise the timber at issue.  Testimony of Fleming and Claimant’s Exhibit 15, “Fleming Appraisal Report.”

 

40.  Jerry Hudson (Hudson), who possesses twenty-eight (28) years experience as a Consulting Forester and holds a Batchelor of Science degree in Forestry, provided timber appraisal services for Teague.  Testimony of Hudson and Respondent’s Exhibit e, “Hudson Appraisal Report.”

 

41.  Fleming was hired by Martin to establish the stumpage value of the timber.  Fleming visited the Martin property on four occasions after Darnall had completed his survey and was directed to Darnall’s survey markers of the boundary line locations by Martin.  Testimony of Fleming.

 

42.  Hudson was hired by Teague to appraise all of the cut timber “on a certain parcel of land;” however no evidence was presented to further describe the boundaries of the parcel of land or how those boundaries were ascertained.  Testimony of Hudson.

43.  Fleming identified a total of twenty-eight (28) stumps of merchantable trees and seven (7) small stumps he estimated to contain one ten inch diameter, twelve foot long log that could be used as crating lumber.  Testimony of Fleming and Claimant’s Exhibit 15, “Fleming Appraisal Report.”

 

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44.  Hudson, however, identified only twenty-three (23) stumps associated with what he considered to be merchantable timber and determined that two of the 23 identified trees were “culls,” without value.  Consequently, Hudson assigned a value to only twenty-one (21) trees.[5]  Testimony of Hudson, Respondent’s Exhibit e, “Hudson Appraisal Report,” and Respondent’s Exhibit f, “Hudson Field Notes.”    

 

45.  Fleming and Hudson agreed generally that the process of appraising the timber at issue involved calculating the volume of board feet contained within the timber, grading the timber quality and valuing the timber.  Testimony of Fleming and Testimony of Hudson.

 

46.  Both Consulting Foresters indicated that in a situation such as this, where the timber has been removed, the volume in board feet must be estimated based upon information available from the site.  Id.

 

47.  The logs had been removed before either Fleming or Hudson visited the site.  Id.  Additionally, many of the tree tops had already been cut into firewood or run through a “chipper.”  Testimony of Fleming. 

 

48.  Calculating the volume of the timber in board feet involves determining a diameter of the logs derived from a tree, ascertaining the taper of the tree from stump to top and determining the approximate height of the tree in order to estimate the length of the logs.  Testimony of Fleming and Testimony of Hudson. 

 

49.  With the logs removed the actual taper of the trees from stump to top could not be measured.  The inability to determine the actual taper required the diameter of the individual log(s) derived from the tree to be estimated.  Testimony of Fleming and Testimony of Hudson. 

 

50.  Furthermore, with the tree tops being previously removed, the distance between the stump and the tree top, which could have provided an accurate estimate of tree height and assist in ascertaining log length(s), could not be measured.  Testimony of Fleming and Testimony of Hudson. 

 

51.  Consequently, the determination of volume in board feet was difficult, at best, and was in large part based upon estimations of Fleming and Hudson.

 

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52.  In estimating the tree height/log length and taper Fleming considered the standing timber in the area, which revealed tall, straight and healthy trees with little taper although the trees remaining were smaller than those harvested.  Testimony of Fleming.

 

53.  Fleming assigned lengths to the 28 trees he identified by comparing the harvested trees to standing timber remaining in the area.  Testimony of Fleming, Claimant’s Exhibit 16. 

 

54.  For each tree harvested Fleming identified a standing tree of the same species with a similar diameter in the general area and on that basis estimated the height of each tree harvested as well as the number and length of logs likely derived from that tree.  Testimony of Fleming and Claimant’s Exhibit 15 “Fleming Appraisal Report.”

 

55.  Hudson, who possessed the Fleming Appraisal Report at the time of his own appraisal, did not recreate or dispute Fleming’s estimations as to tree height or log length.  Testimony of Hudson and Respondent’s Exhibit e, “Hudson Appraisal Report.”

 

56.   Both Fleming and Hudson utilized the Doyle Scale, in one form or another, in their individual estimations of volume.  Hudson used a Doyle Log and Tree Scale Stick while Fleming used a Scribner’s Log Table by Doyle’s Rule.  Testimony of Fleming, Testimony of Hudson, Respondent’s Exhibit b “Log Table,” and Respondent’s Exhibit h “Log Scale Stick.”

 

57.  Fleming used the Scribner’s Log Table for each of Martin’s trees, while Hudson used the Log Scale Stick for certain trees and the Tree Scale Stick for other trees.  Hudson acknowledge his belief that the Log Scale Stick, which provides the same volume calculations as the Scribner’s Log Table used by Fleming for all the trees, is “more accurate” than the Tree Scale Stick.

 

58.  Hudson maintains that the determination of volume in board feet is based upon the diameter of the small end of the log whether the Log Scale Stick or the Scribner’s Table is being used. Testimony of Hudson, Respondent’s Exhibit b “Log Table,” and Respondent’s Exhibit h “Log Scale Stick.”

 

59.  Fleming, contrary to Hudson, maintains that the Scribner’s Table does not require the determination of volume in board feet on the basis of the diameter of the small end of the log.  Testimony of Fleming, Respondent’s Exhibit b “Log Table,” and Respondent’s Exhibit h “Log Scale Stick.”

 

60.  Fleming points out that the Log and Tree Scale Stick, used by Hudson, specifically states that the volume is determined by the diameter of the small end of the log, while his Scribner’s Table does not so specify.  Testimony of Fleming.

 

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61.  However, Hudson points out that the volume calculations contained within the Scribner’s Table and on the Log Scale Stick are identical.  The volume of a two identical logs would be exactly the same whether calculated using the Scribner’s Table or the Log Scale Stick as long as the same small end diameter was utilized for the calculation.  Hudson concluded that two volume calculation tools, each based on Doyle’s Rule, could not be intended to result in different volumes for two identical logs.   Consequently, whether the Scribner’s Table stated as much, it must require volume determinations to be based upon the small end of the log.  Testimony of Hudson, compare Respondent’s Exhibit b “Log Table,” and Respondent’s Exhibit h “Log Scale Stick.”

 

62.  Hudson’s point is well received as it does not stand to reason that the use of one tool would result in a very different volume calculation than the other tool, when both tools are derived from the same rule.

 

63.  Furthermore, logic dictates that the volume of a log is determined by the diameter of the small end.  This is so because the amount of lumber derived from any given log is restricted to the dimensions of the small end of that log.

 

64.  Fleming and Hudson agree that due to a tree’s taper the diameter of the stump will always be greater than the diameter breast high[6], hereinafter referred to as “dbh”, and the dbh will always be greater than the diameter of the small end of the first log and so on for subsequent logs from higher in the tree.  Testimony of Fleming and Testimony of Hudson.

 

65.  Hudson, on his appraisal report identifies the diameter of the stumps, while Fleming, in his appraisal report, identifies the dbh.  The two reports generally reflect that Fleming’s dbh’s are consistently 2 – 3 inches less than Hudson’s stump diameters.   See Respondent’s Exhibit f “Hudson Field Notes” and Claimant’s Exhibit 15 “Fleming Appraisal Report.”

 

66.  Hudson testified that in determining volume he generally applied a taper of five inches (5”) from the stump to the small end of the first ten foot log, but for certain species, including cherry and poplar, he may have applied less taper.[7]  Testimony of Hudson.  

 

67.  According to Fleming, Hudson’s volume determinations are generally consistent with five inches (5”) of taper per log for the total height of the tree (length of all logs combined), which he characterized as excessive taper.  Testimony of Fleming and Respondent’s Exhibit e, “Hudson Appraisal Report.”

 

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68.  Fleming acknowledged that five inches (5”) of taper from the stump to the top, or small end, of the first log “might not be too far off” reflecting also that “there’s a lot more taper on that first butt log than on other logs subsequent.”  Testimony of Fleming.

 

69.  However, Fleming cautioned that taper varies and the woods overall must be considered.  He concluded that using a five inch taper for each ten feet for the full length of the tree would be completely inaccurate for Martin’s timber.  Testimony of Fleming, Claimant’s Exhibit 16.

 

70.  Fleming based his volume calculations relating to Martin’s timber on two inches (2”) of taper per log subsequent to the first log.  Testimony of Fleming, Claimant’s Exhibit 15 “Fleming Appraisal Report.”

 

71.  Despite generally applying five inches of taper per log for purposes of his appraisal, Hudson acknowledged that the largest amount of taper will occur between the stump and dbh and thereafter a taper of three inches (3”) from the dbh to the small end of the first twelve foot log, and for each subsequent log, would be generally consistent.  Hudson also noted that Fleming’s results were consistent with a continuing taper of two inches per log subsequent to the first log, which Hudson agreed would be fairly accurate in many cases.

 

72.  However, Hudson observed that on the first column of the Fleming Appraisal Report the “ESTIMATED D.B.H.” is identified for each tree valued.  Hudson continued that the volume of the first log of each tree was calculated using the dbh instead of the diameter of the small end of the log.  Testimony of Hudson and Claimant’s Exhibit 15, “Fleming Appraisal Report.”

 

73.  To further explain his point, Hudson recalculated the volume in board feet for the first black oak identified on the Fleming Appraisal Report.  Fleming’s appraisal identifies this tree as having a 21 inch diameter dbh and calculates the volume based on that dbh.  Hudson reduced the dbh by three inches, to more accurately reflect the small end of the log, and calculated the volume of the first log based on an eighteen inch diameter.  This reduced the volume of the first log to 147 board feet.  Thereafter, Hudson reduced the diameter for the second log by an additional 2 inches to sixteen inches, which reduced the volume of the second log to 108 board feet.  The same recalculating was done for the third log and resulted in a reduction in volume to 75 board feet.  For one tree, the volume in board feet was reduced by a total of 183 feet as a result of beginning the calculations based on the diameter of the small end of the log instead of the dbh.  Testimony of Hudson and Claimant’s Exhibit 15, “Fleming Appraisal Report.”

 

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74.  Fleming accounted for approximately three inches (3”) of taper between the stump and dbh, but Hudson steadfastly maintained that Fleming failed to account for continuing taper, between dbh and the small end of the first log as required by Doyle’s Rule.  Testimony of Hudson.  See Respondent’s Exhibit f “Hudson Field Notes” and Claimant’s Exhibit 15 “Fleming Appraisal Report.”

 

75.  Hudson stated, “I think he (Fleming) took what he figured the dbh to be and did not allow for the actual taper to the small end of the first log, after which I think he was OK by dropping it two inches each log…” Testimony of Hudson.

 

76.  Hudson’s acknowledgement stated in finding 75 is not consistent with Hudson’s own calculation of Martin’s timber as consisted of only 6,521 board feet by volume.

 

77.  However, Hudson’s conclusion that Fleming’s appraisal is based upon erroneously calculated volumes of the first log based upon the dbh, or the diameter of the large end of the first log, instead of being based on the diameter of the small end of the log, as required by Doyle’s Rule is persuasive. 

 

78.  Fleming’s erroneous calculations resulted in an artificially high volume in board feet for each log derived from the timber at issue and must be corrected. 

 

79.  Hudson and Fleming also disagree as to the quality of the timber at issue.

 

80.  Fleming viewed the stumps in February and March 2004, within approximately six months of cutting.     

  

81.  At the time Fleming viewed the stumps he numbered them.  While photos of Fleming’s numbers were not admitted as evidence Fleming identified certain of his numbers, in a severely faded condition, on photos taken in January 2006.  Testimony of Fleming; See faded number “4” on Respondent’s Exhibit c14 as example of Fleming’s numbering.

 

82.  Fleming testified that the overall quality of the timber was “good or better” with little evidence of defect.  Fleming identified a few trees with a small pocket of rot in the center that possibly resulted from a fire early in the life of the tree.  Otherwise, he looked for separations between growth rings as evidence of “windshake,” for signs of lightning strikes and for dottiness, but observed nothing.

 

83.  Fleming observed that the overall characteristics of the woods provided an environment in which “timber pruning,” or natural limb shedding, will occur early.  He observed in the standing timber in the area that the first limbs were frequently located approximately sixty feet (60’) from the ground, which reduced the number of limb scars and increased the length of the first, and typically the highest quality, log. Testimony of Fleming.

 

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84.  Fleming believed the trees harvested would exhibit the same characteristics as the smaller trees remaining on Martin’s property and estimated that the white oak trees harvested were probably over one hundred years old.  Testimony of Fleming.

 

85.  On the issue of quality, Hudson’s testimony is less persuasive for a variety of reasons relating predominantly to the circumstances and timing of his evaluation of the stumps.

 

86.  Hudson testified that within his business he grades timber only as veneer or generically as “saw logs.”  Hudson acknowledged that Fleming, like other timber consultants, used a more specific grading mechanism for saw logs that characterizes top quality, non-veneer timber as “prime” and categorizes remaining saw logs from grade 1 to grade 4.  Testimony of Hudson.

 

87.  Hudson graded the timber harvested from the Martin property only as veneer or saw logs, while Fleming graded the timber to include veneer, prime, grade #1 and grade #2.  Testimony of Fleming and Testimony of Hudson.

 

88.  Contrary to the testimony of Fleming, Hudson testified that he observed rot, double hearts, grub worm holes and other defects in the stumps he observed.  Testimony of Hudson, Respondent’s Exhibit f “Hudson’s Field Notes.”

 

89.  Because Hudson graded the timber only into categories of veneer or saw logs, it is impossible to compare the three categories of saw logs referred to by Fleming against the generic category of saw logs utilized by Hudson.

 

90.  Fleming’s and Hudson’s determination regarding the amount of veneer can be compared.  Each of them determined that the only veneer grade species were the black walnut and the white oak.  However, Fleming determined that there were 1,978 combined board feet of veneer while Hudson categorized only a combined total of 471 board feet as veneer. 

 

91.  Hudson stated that optimally he would have viewed freshly cut stumps to evaluate the timber’s grade, but in this case he was not contacted to provide an appraisal until January 2006, approximately two years after the fact.  While he acknowledged that deterioration would occur in that time and indicated his awareness that holes had been drilled into some of the stumps by Curtis, he believed he had accounted for those factors such that they did not significantly impact his evaluation.  Testimony of Hudson.

 

92.  Hudson’s testimony regarding the condition of the stumps observed included the use of photographs taken when Hudson was not present.  Evidence presented in this case does not reveal who took the photographs.  Testimony of Hudson.

 

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93.  Hudson testified that the photographs depict the area he observed and the stumps he evaluated and for the majority of the photographs this is obviously true because the stumps depicted bear Hudson’s marking with “pink glo paint”.  Testimony of Hudson and Respondent’s Exhibit c.

 

94.  While the photographs clearly depict some of the stumps evaluated by Hudson, they also raise the questions whether the stumps evaluated by Hudson were the same stumps evaluated by Fleming.

95.  The photographs depict only nine (9) individual stumps marked with pink glo paint.   Testimony of Hudson and Respondent’s Exhibit c. 

 

96.  Of the nine stumps depicted in the photographs marked with Hudson’s pink glo paint, only two (2) depict tree stumps bearing the faded numbering associated with Fleming’s two year old markings.  See Respondent’s Exhibit c1 and c2, both showing a faded “59,” and c14, depicting a faded “4.”

 

97.  Furthermore, six (6) of the nineteen photographs depict stumps and tree tops that do not even reveal the pink glo paint used by Hudson.  

 

98.  It is not disputed that a certain number of trees were harvested from the Curtis property but only those trees harvested from the Martin property are at issue here.  Stumps located on the Curtis property were not evaluated and thus not marked by Fleming.

 

99.  It is noted that the stumps bearing Fleming’s faded marking of “59”, which is Hudson’s number “5” was determined by Hudson to be of veneer quality.  Fleming’s stump “4”, Hudson’s stump “15”, was noted by Hudson as having an unspecified defect on the west side but there is no significant defect apparent in the photograph.  Testimony of Hudson, Respondent’s Exhibit c1, c2, c14 and Respondent’s Exhibit f.

 

100.          The tree stumps evaluated and marked with Hudson’s pink glo paint, that do not bear evidence of Fleming’s two year old markings show varying degrees of defects, including double hearts, rotted centers and side rot.  Respondent’s Exhibit c 5 – 7, 9, 10 & 19.

 

101.          The evidence in the record fails to explain why Fleming’s two year old markings would appear on certain stumps evaluated by Hudson but not appear on others. 

 

102.          This discovery certainly depreciates the value of Hudson’s grading because of the possibility that Hudson simply evaluated certain stumps different from those evaluated by Fleming.

 

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103.          Hudson testified that Teague identified for him the area within which to identify and evaluate tree stumps.

 

104.          However Teague did not testify and there exists no evidence of record by which to ascertain whether Teague’s identification of the area to Hudson was accurate or based upon the survey completed by Darnall.  Testimony of Hudson.

 

105.          Based upon the evidence, Fleming’s gradation of Martin’s timber is certainly more persuasive.

 

106.          Fleming’s valuation of 16,645 board feet of timber at $12,403.16 results in an average of seventy-five cents (0.75¢) per board foot, which Hudson concluded was excessively high.  Testimony of Fleming, Claimant’s Exhibit 15 “Fleming Appraisal Report”

 

107.          Fleming considered the 2004 “Hoover Report,” which is a timber price report and trend analysis, compiled from data reported by Indiana timber mills.  Respondent’s Exhibit a “Hoover Report.”

 

108.          The Hoover Report for 2004 provides a price for an “average stand” of timber between $0.43 and $0.45 per board foot and also provides pricing information on the bases of specific species and grades of timber.  Respondent’s Exhibit a “Hoover Report.”

 

109.          An “average stand” of timber includes such species as soft maple, sassafras and cottonwood, which are not highly sought after in the timber market.  According to Fleming “there was no junk in this woods” and Martin’s timber could not be considered an average stand. Testimony of Fleming.

 

110.          While an average of $0.75 per board foot may initially appear high, a review of Fleming’s valuations by species reveals consistency with or less than averages contained within the Hoover Report.  For instance, Fleming’s calculations result in an average per board foot price of $0.53 for 4,853 total board feet of red oak of which 2,215 board feet was prime grade, 1,610 board feet was grade 1 and 1,028 board feet was grade 2.  According to the Hoover Report, in 2003 – 2004 prime red oak averaged $0.80, grade 1 averaged $0.70 and grade 2 averaged $0.45 per board foot, respectively.  According to the prices contained within the Hoover Report the average price per board foot for Martin’s red oak would be $0.69.  Fleming valued Martin’s red oak at an average of $0.53, which is hardly excessive.  Calculations based upon information contained within Claimant’s Exhibit 15 “Fleming Appraisal Report” and Respondent’s Exhibit a “Hoover Report.”

 

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111.          Hudson based his valuations on six (6) of his own sales occurring in 2003 and 2004, which netted an average per board foot price of between $0.30 and $0.45.  Respondent’s Exhibit g “Hudson Comparables.”

 

112.          Hudson’s price per board foot based upon species cannot be ascertained from the comparables provided.  Respondent’s Exhibit g “Hudson Comparables.”

 

113.          Each of the sales Hudson referred to in valuing Martin’s timber were consistent with an “average stand” of timber, including varying volumes of sassafras, soft maple, gum, basswood, elm and cottonwood.  Respondent’s Exhibit g “Hudson Comparables.”

 

114.          In reality, despite the fact that Fleming graded Martin’s timber into veneer and three grade categories of saw logs and Hudson graded it only as veneer and generic saw logs, Hudson’s averages while expectedly lower, are not dramatically different than Fleming’s, except with respect to the veneer species. 

 

	Fleming Per Board Foot Average	Hudson Per Board Foot Average
Black Oak	0.42	0.35
Red Oak	0.53	0.48
Poplar	0.30	0.17
Beech	0.12	0.11
Maple	0.43	0.60
Cherry	0.75	0.70

           

115.          Collier Lumber Company, Inc. paid Teague and Curtis a total of $8,085.00 for 15,649 total board feet of Martin’s timber, none of which was veneer grade.  This calculates to an average per board foot price of $0.46 for all non-veneer grade timber, which is greater than the $0.44 average price used by Fleming in valuing Martin’s non-veneer timber.  Claimant’s Exhibit 15 “Fleming Appraisal Report” and Claimant’s Exhibit 21 “Collier Lumber Tallies.”

 

116.          There is a wide disparity between Hudson and Fleming with respect to the white oak and the walnut (the veneer timber) with Fleming’s overall average per board foot values being $2.08 for the walnut and $1.53 for the white oak, while Hudson’s average per board foot values were calculated to be $1.04 for the walnut and $0.50 for the white oak. 

 

117.          The differences between Hudson and Fleming associated with the veneer species are easily understood when considering the volumes of veneer grade timber valued by each. 

 

118.          Fleming calculated veneer quality value for 324 board feet of walnut, slightly less than one half the total volume of walnut valued.  Hudson, by comparison calculated veneer quality pricing for only 127 board feet of walnut, or approximately one-third the total volume of walnut valued.  Claimant’s Exhibit 15, “Fleming Appraisal Report” and Respondent’s Exhibit e, “Hudson Appraisal Report.”

 

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119.          The same is true for the white oak, for which Fleming categorized a total of 1,654 board feet, approximately forty-five percent (45%), to be veneer grade as compared to Hudson’s 344 board feet, or approximately fourteen percent (14%).  Claimant’s Exhibit 15, “Fleming Appraisal Report” and Respondent’s Exhibit e, “Hudson Appraisal Report.”

 

120.          These calculations clearly reflect that the $0.75 per board foot average, which is higher than any board foot average presented in the instant record, results not from general over valuations by Fleming, but instead results from the large amount of veneer quality timber, which is consistent with Fleming’s determination that Martin’s timber cannot be characterized as an “average stand.”    

 

121.          Fleming and Hudson arrived at widely disparate appraisals for Martin’s timber with Fleming valuing 16,645 board feet of timber at $12,403.16 and Hudson valuing only 6,521 board feet of timber at $2,977.00.  Claimant’s Exhibit 15, “Fleming Appraisal Report” and Respondent’s Exhibit e, “Hudson Appraisal Report.” 

 

122.          The testimony of both Fleming and Hudson was honest and forthright.

 

123.          Most obvious of the factors associated with the disparity in the Fleming and Hudson appraisals is the fact that Fleming valued a total of thirty-five (35) trees (28 merchantable and 7 small crating log trees) while Hudson valued only twenty-one (21) merchantable trees. 

 

124.          Hudson’s testimony regarding Fleming’s error in establishing the volume in board feet based upon the dbh, instead of the diameter of the small end of the log, is persuasive.

 

125.          However, Fleming’s grading of Martin’s timber is very much more persuasive than that of Hudson.  Hudson was not afforded an optimal opportunity to view the stumps when they were fresh cut and the stumps depicted in Respondent Teague’s photos raise questions whether Hudson even graded the same stumps as did Fleming.  The evidence in the record simply reveals that Teague showed Hudson the area and the stumps at issue.  Teague did not testify and no evidence exists in the record of this proceeding to prove by any degree of certainty that Teague was fully aware of the actual boundaries of the Martin property, as determined by Darnall.

 

126.          Fleming, on the other hand, was directed to the appropriate area by Martin after the survey was completed and was allowed to complete his site inspections and stump evaluations within approximately six months of the harvest.  With respect to the grading of Martin’s timber, Fleming’s testimony is highly persuasive.

 

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127.           The Respondents did not dispute the tree height/log length data presented by Fleming so this is accepted as proved.

 

128.          While an average of $0.75 per board foot for Martin’s timber appears to be a high average, after full evaluation, as stated in findings 106 – 120, the average per board foot values utilized by Hudson and Fleming are only $0.02 different for all non-veneer timber.  The large disparity is a result only of the amount of veneer grade timber.  See finding 115 & 116.

 

ATTORNEY FEES, COSTS AND OTHER DAMAGES:

 

129.          Martin has incurred attorney fees and expenses associated with the litigation herein.  Claimant’s Exhibit 19, “Litigation Expense Summary” and Claimant’s Exhibit 20, “Fees and Expenses by Matter,” Testimony of Martin, Testimony of Thomas M. Barr.

 

130.          Martin has expended a total of one thousand nine hundred thirteen dollars and twenty-five cents ($1,913.25) for depositions of parties and witnesses.  Claimant’s Exhibit 19, “Litigation Expense Summary.”

 

131.          Martin has also incurred attorney fees associated with the representation of Thomas M. Barr from May 6, 2004 through November 15, 2006.  Thomas M. Barr has dedicated 128.70 hours and incurred certain miscellaneous expenses associated with the legal representation of Martin.  Martin’s attorney fees equal seventeen thousand six hundred eighty-nine dollars and twenty-five cents ($17,689.25) plus expenses of one hundred fifty-five dollars and ninety cents ($155.90).  Claimant’s Exhibit 20, “Fees and Expenses by Matter,” Testimony of Martin, Testimony of Thomas M. Barr.

 

LIABILITY:

 

132.          Neither Curtis, nor Teague, caused a survey of the Curtis property to be completed before harvesting timber.  Claimant’s Exhibit 17, “Teague Deposition” and Claimant’s Exhibit 18, “Curtis Deposition.”

 

133.          Teague, with knowledge that the Curtis property had not been recently surveyed, relied upon Curtis’ identification of the property boundaries.  Claimant’s Exhibit 17, “Teague Deposition” pgs 35, and 37-41.  

 

134.          Neither Teague nor Curtis inquired of Martin or attempted to obtain Martin’s input in verifying the location of the boundary lines.  Testimony of Martin.

 

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135.          Before cutting the timber, neither Teague nor Curtis attempted to measure the distance between the corners or other boundary markers they identified and neither of them possessed a compass, a tape measure or a measuring wheel for that purpose while walking the Curtis property.  Claimant’s Exhibit 17, “Teague Deposition,” pgs 19-20, 53; Claimant’s Exhibit 18, “Curtis Deposition,” pg 102.

 

136.          Teague cut timber according to the agreement between himself and Curtis.  Claimant’s Exhibit 18, “Curtis Deposition,” pg 99; Claimant’s Exhibit 17, “Teague Deposition,” pg 50.

 

137.          Neither Curtis nor Teague provided a total count of the trees harvested.  Claimant’s Exhibit 17, “Teague Deposition,” pg 53; Claimant’s Exhibit 18, “Curtis Deposition,” pg. 43.

 

138.          Curtis’ and Teague’s testimony is consistent that the timber harvested was generally located in the area where Curtis proposed to construct his home but that Teague selected some trees from areas north and east of the proposed construction site.  Claimant’s Exhibit 18, “Curtis Deposition,” pg. 90 and deposition exhibit 1.

 

139.          The Martin Survey, acknowledged to be accurate by Curtis, reveals that the timber harvested from Curtis’ proposed construction site would have been located on land within the Martin property, while timber harvested from areas north and east of the construction site would likely have been located on the Curtis property.  Claimant’s Exhibit 18, “Curtis Deposition,” pg. 90 and deposition exhibit 1.

 

140.          It is not disputed that the timber harvest contract between Curtis and Teague was an oral agreement by which proceeds of the sale would be equally divided.  Claimant’s Exhibit 18, “Curtis Deposition,” pg. 68.

 

141.          The non-veneer timber was sold by Teague to Collier Lumber Company, Inc., now Tri-State Timber, LLC, for the total sum of eight thousand eighty-five dollars ($8,085.00), of which Curtis acknowledged receipt of one-half the total amount.  Claimant’s Exhibit 18, “Curtis Deposition;” Claimant’s Exhibit 17, “Teague Deposition,” and Deposition Exhibit C.

 

142.          Collier Lumber Company, Inc., now Tri-State Timber, LLC, did not purchase the veneer grade timber from Teague.  There is no evidence in the record regarding the division of the proceeds of its sale.

 

 

CONCLUSIONS OF LAW

 

143.          Martin is a “timber grower” as that term is defined at IC 25-36.5-1-1 in that he was, at all times relevant to this proceeding, the owner of timber growing on the Martin property that was harvested by Teague.

 

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144.          Teague, who purchased timber from Curtis, selected certain trees for harvest, caused the delivery of timber to Collier Lumber Company, Inc. and provided equipment and manpower for the timber harvest, is a “timber buyer.”  IC 25-36.5-1-1 and 312 IAC 14-2-8.

 

145.          IC 25-36.5-1-3.2(e) specifies that a “landowner” or “an owner of land adjacent to land from which the timber was cut” who has a relationship to the subject of the complaint may be joined to answer the complaint.  Curtis is among the class of persons potentially liable to a Martin for damages associated with the wrongful harvest of timber.  Pike Lumber Co., Inc. v. Cruse Timber, et al., 10 CADDNAR 28, (2005).

 

146.          Despite the fact that Curtis’s knowledge of the location of his property boundaries was based, at best, upon the representations of Smith, Curtis set out to identify those boundaries for Teague and in so doing misdirected Teague. 

 

147.          However, Teague, as a timber buyer, exercised no care and no due diligence in ascertaining the boundaries of the property from which he intended to harvest timber.

 

148.          In an effort to avoid liability and gain indemnification from Curtis, Teague maintains that the trees harvested from the home construction site, which were later determined to be Martin’s trees, were selected solely by Curtis. 

 

149.          Teague’s position that he bears no liability for harvesting trees selected solely by Curtis is unsound.  Teague was totally oblivious to the location of the boundaries of the Curtis property so the fact that the timber he personally selected was actually located on the Curtis property was shear coincidence just as it was shear coincidence that the trees selected by Curtis were actually on the Martin property.  These coincidences do not mitigate Teague’s failure to exercise care to avoid wrongfully cutting Martin’s timber and likewise does not mitigate Teague’s liability for the unlawful harvest of Martin’s timber.

 

150.          Furthermore, it is of no consequence what trees were selected for harvest by Teague or Curtis, because they each accepted and shared equally the profits earned.[8]

 

151.          There is no mistake of fact defense available to Teague under a claim that he acted in good faith based upon Curtis’ representations.  Similarly, there is no such defense available to Curtis because of any good faith reliance upon the representations of Smith. 

 

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152.          The statute in question is a strict liability statute.  Rose Acre Farms, Inc. v. Ault and Curry, 8 CADDNAR 138, December 15, 1999, see also Schneider v. Grosnickle and Cincinnati Insurance Company, 9 CADDNAR 180, July 7, 2004.

 

153.          The harvest of Martin’s timber is the resulting consequence of the actions, or inactions, of both Curtis and Teague. Pike Lumber Co., Inc. v. Cruse Timber, et al., 10 CADDNAR 28, (2005).

 

154.          Consequently, Teague’s Cross-Claim Against Curtis for damages, costs and expenses incurred as a result of this proceeding must fail.

 

155.          It is determined that Teague and Curtis are liable, jointly and severally, to Martin for the unlawful harvest of timber.

 

156.          The purpose of the treble-damages clause of the Timber Buyer’s Statute is "to insure that timber buyers will exercise care in the cutting of timber and to protect landowners from careless felling of their timber." Wright V. Reuss, 434 N.E.2d 925, 22 (Ind. App. 1982).

 

157.          The Commission has previously determined that it possesses discretion in determining whether to award treble damages.  See Gallien v. Sloan Logging, Pendley & Zurich North American, 9 CADDNAR 40, 2002, timber buyer held jointly and severally liable for actual and full treble damages despite having obtained a survey where the timber cutter misunderstood the boundary line flags; Rose Acre Farms, Inc. v. Ault and Curry, 8 CADDNAR 138, 1999, timber seller held jointly and severally liable with timber buyer for actual damages while timber buyer held solely liable for full treble damages; Hornaday v. Ammerman, Et Al., 8 CADDNAR 112, 1999, timber buyer held liable for actual and full treble damages despite assurances of ownership by the timber seller where timber buyer made no additional efforts to confirm ownership; Pollock v. Coats, 8 CADDNAR 124, 1999, timber buyer held liable for lesser amount of treble damages where adjoining landowners’ trees were wrongfully harvested but where timber buyer had consulted with the same adjoining landowner before commencing tree harvest in an effort to identify markers and confirm boundary lines between the properties.

 

158.          Such "discretion may most appropriately be applied where the timber buyer or timber cutter acts with all due diligence, but because of misdirection or connivance of another, is caused to err." See Gallien, Hornaday, and Pollock, supra.

 

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159.          While Teague did act under inaccurate information provided by Curtis, Teague acknowledged a total lack of effort to confirm the information provided by Curtis before harvesting the timber. 

 

160.          While there is contradiction regarding exactly what property boundary information was provided to Curtis by Smith, the best case scenario for Curtis is that he was operating under inaccurate information supplied by Smith.  Similar to Teague, Curtis failed to take any effort to confirm the property boundaries prior to the timber harvest. 

 

161.          In a situation such as this, where no person involved with the timber harvest made any legitimate effort to ascertain the property boundaries, a full award of treble damages, or an award of three times the stumpage value, is particularly appropriate.  See Pike Lumber Company, Inc. supra.

 

162.          The Commission has previously accepted the use of Doyle’s Rule in evaluating the volume of board feet associated with timber for use in valuation.  Hagan, et al. v. Lewis, Cincinnati Insurance Company, Martin and US Fidelity & Guaranty Co., 7 CADDNAR 146 (1996).

 

163.          It is apparent that both Hudson and Fleming utilized the Doyle Rule in establishing the volume in total board feet of Martin’s timber.

 

164.          Fleming’s determination of volume is more persuasive, but contains an error in that he calculated the volume based on the dbh and not the diameter of the small end of the first log. 

 

165.          This error with respect to the first log carried through to the calculation of volume associated with the second log, and in some cases third log, of each tree. 

 

166.          The preponderance of the evidence supports a recalculation of the volume of Martin’s timber by reducing the dbh identified on the Fleming Appraisal Report by two inches (2”) to appropriately adjust for taper to the small end of the first log and continuing a two inch (2”) taper for each subsequent log.

 

167.          This recalculation results in a total volume for Martin’s timber of 12,716 board feet. 

 

168.          The total value of 12,716 board feet of timber owned by Martin at the average price per board foot established by Fleming, or $0.75, equals $9,537.00.

 

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169.          The stumpage value of Martin’s timber, unlawfully harvested by Teague and Curtis, is determined to be $9,537.00.

 

170.          Martin is entitled to a judgment in the amount of three times the stumpage value of the timber or a total of $28,611.00.   

   

171.          “Indiana ordinarily does not allow the recovery of litigation expenses as damages.  "Expenses of litigation and attorneys fees may not be included in damages unless they are provided for by some prior contract or statute." Booker et al. v. Mason and Shorter, 10 CADDNAR 1, 2005.  Citing Bituminous, Inc. v. Culligan Fyrprotexion, Inc., 437 N.E.2d 1360, (Ind.App. 1982).

 

172.          The Commission, in conducting administrative review is possessed only of those powers expressly granted to it by the Indiana General Assembly.  In enacting IC 25-36.5, the Timber Buyer’s Statute, the ability to award litigation expenses was not authorized.  Pike Lumber Co., Inc. supra.

 

173.          Consequently, Martin is not awarded the sought attorneys fees and litigation expenses.