[CITE: Goldasich v. Hites, et al., 11 CADDNAR 165 (2007)]
[VOLUME 11, PAGE 165]
Cause #: 04-198F
Caption: Goldasich v. Hites,
et al.
Administrative Law Judge:
Lucas
Attorneys: Kallenbach;
Mandeville; pro se (Millers)
Date: June 8, 2007
FINAL ADMINISTRATIVE JUDGMENT
Item (1) Larry Goldasich
has an administrative judgment against Carl Hites in the amount of $7,125.
Item (2) Larry Goldasich
has an administrative judgment against Allen Miller and against Debbie Miller
(also known as Deborah Miller) in the amount of $7,125. This amount is joint and several with the
judgment awarded against Carl Hites and described in Item (1).
Item (3) In addition to the
amount described in Item (1), Larry Goldasich has an administrative judgment
against Carl Hites in the amount of $1,000.
This amount is an individual liability of Carl Hites.
Item (4) Larry Goldasich
has an administrative judgment and is entitled to forfeiture of the bond,
posted with the Department of Natural Resources under the Timber Buyers Act on
behalf of Carl Hites, against the Western Surety Company in the amount of
$2,375.
Item (5) The recovery to
which Larry Goldasich is entitled under this administrative judgment, apart
from subsequent costs or interest, is in the total amount of $8,125.
Item (6) Carl Hites
and the Western Surety Company are entitled to indemnification from Allen
Miller and Debbie Miller, jointly and severally, for amounts which are paid to
Larry Goldasich under Item (1), Item (3) and Item (4).
Item (7) In
addition to the indemnification described in Item (6), Carl Hites has an
administrative judgment against Allen Miller and Debbie Miller, jointly and
severally, in the amount of $2,000.
Item (8) This
administrative judgment addresses all issues of damage and responsibility over
which the Natural Resources Commission has jurisdiction in this proceeding,
and, after completion of the opportunity for judicial review under IC 4-21.5,
may be enforced in a civil proceeding as a judgment.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
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A. Statement of the Case and Jurisdiction
1. On October 26,
2004, Larry Goldasich (“Goldasich”) by his attorney initiated the proceeding
when he filed a “Complaint” with the Natural Resources Commission (the “Commission”). In the complaint, Goldasich outlined a claim
against Carl Hites (“Hites”) and against his surety, Western Surety Company
(“Western Surety”). The Complaint also sought relief against Allen Miller
(“A-Miller”) and Debbie Miller, also known as Deborah Miller (“D-Miller”). A-Miller and D-Miller are collectively
referred to as the “Millers”.
2. Goldasich’s
claim is governed procedurally by IC 4-21.5 (sometimes referred to as the “Administrative
Orders and Procedures Act” or “AOPA”) and rules adopted by the Commission at
312 IAC 3-1 to assist with its implementation of AOPA.
3. The regulation
by the Department of Natural Resources (the “DNR”) of timber buyers and other
persons associated with the enterprise of timber harvesting is provided in IC
25-36.5 (the “Timber Buyers Act”).
4. Goldasich
contended Hites harvested approximately 40 trees on property owned by Goldasich
in the fall of 2003 (the “timber harvest”) at the corner of County Road 900
North and County Road 100 West in Jasper County, Indiana (the “subject
property”) and that the Millers approved the logging even though they did not
own the subject property and were not authorized to give Hites approval for the
timber harvest.
5. Hites is
registered as a “timber buyer” under the Timber Buyers Act. IC 25-36.5-1-2.
6. Every person
registered as a timber buyer is required by IC 25-36.5-1-3 to post a bond or
other appropriate surety to provide compensation to a timber grower if the
timber buyer:
(a) fails to pay
when due any amount due a timber grower for timber purchased;
(b) fails to pay legally determined damages for timber wrongfully cut by a
timber buyer or his agent; or,
(c) commits any violation of the Timber Buyers Act.
7. Under the Timber
Buyers Act, Western Surety is the surety for Hites and has posted a $7,000 bond
with the DNR.
8. In the
Complaint, Goldasich sought monetary damages for the devaluation of the subject
property resulting from the timber harvest, punitive damages for conversion and
trespass, and the reimbursement of attorney fees from Hites and the
Millers. Goldasich also sought forfeiture
from Western Surety of the surety bond posted with the DNR under the Timber
Buyers Act.
9. Personal service
was made upon Hites, Western Surety, A-Miller and D-Miller.
10. On February 27, 2006, Hites and Western filed
a “Crossclaim” against the Millers in which they contended the timber harvest
was authorized by the Millers on the subject property through the Millers’
misrepresentations to Hites and through their negligence. The Crossclaim seeks to have the Millers
indemnify Hites and Western Surety.
[VOLUME 11,
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11. The Commission
is the “ultimate authority” for the Timber Buyers Act and for this proceeding
under AOPA. IC 14-10-2-3.
12. The Commission
has jurisdiction over the subject matter and jurisdiction over the person of
the parties.
B. Evidence at Hearing
13. Stephen Lucas
was appointed administrative law judge for the Commission. He presided over a
hearing that was conducted in
14. D-Miller did
not participate in the hearing. A “Final
Order of Default against Debbie Miller” was entered on May 14, 2007. The default applied as to any issue of
liability or responsibility by a party against D-Miller but did not determine
damages against D-Miller and in favor of another party. The default specified that the extent of
D-Miller’s responsibility for damages would be determined from the evidence
adduced at the hearing of April 3, 2007 and from the record as a whole. The instant disposition determines those
damages.
15. Testimony by
Goldasich is unrefuted that he is the owner of the subject property near
Wheatfield in
16. Goldasich never
gave Hites or any other person permission to harvest timber from the subject
property. Goldasich considers himself a
“conservator”[1]
of the subject property and planted trees in 1973. The tree plantings in 1973 were primarily
pines, and these are not at issue.
17. Goldasich lives
in Pickerington, a suburb of
[VOLUME 11,
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18. Goldasich
obtained an appraisal from Bruce Wakeland of Wakeland Forestry Consultants,
Inc. of trees alleged by Goldasich to have been harvested from the subject
property and at issue in this proceeding.
On February 28, 2004, Bruce Wakeland provided Goldasich with a written
appraisal which stated in substantive part:
On
February 28, 2004 Matt Fromm, who is a forester employed by Wakeland Forestry
Consultants Inc. and myself completed the fieldwork for the appraisal of trees
on approximately 3 acres that had been harvested in 2003 on property owned by
Larry Goldasich and located in section 12 of Walker Township of Jasper County,
Indiana. Our purpose was to appraise the
2003 stumpage timber value of the harvested trees. The harvest area was larger than just the
Goldasich woodland, and included additional acreage adjoining to the east. The property lien between these two
ownerships was not marked. With the help
of a 2001 survey plat map provided by the owner to the east I was able to
locate survey markers for this Goldasich east line at both the southeast and
northeast corners of the Goldasich woodland.
I then established the property lines between the two properties using a
compass to connect these survey markers.
INVENTORY
Because
the harvest had just recently been completed it was easy to locate and identify
the tree stumps that were part of this harvest.
Matching treetops that went with those stumps was more difficult because
most of them had been moved from where they fell during the logging. We found and measured stumps for 40
merchantable trees that had been harvested.
Data collected to help determine the timber volumes and values of the 40
harvested trees included, tree species, stump diameters outside the bark of the
tree top at the cut off, and defects in the stumps or other remaining parts of
the harvested tree. I also observed the
quality, diameters, tapers, and tree heights of the remaining trees in the
woods and surrounding properties to better understand and predict the volume
and quality of the harvest trees.
Logging—I
would describe this harvest as a commercial clear cut. I did not observe excessive logging damage
for this type of harvest. I would
consider this an average logging job for a clear cut with regard to damage to
the residual trees and to the soil. I
therefore did not do any inventory for damage to the side or add any value for
our appraisal to compensate for logging damage.
TREE VOLUMES
To
determine the volumes of the 40 harvested trees I used Doyle tree scale. Tree scale uses total merchantable height and
tree DBH (diameter at 4.5 feet above ground) to determine volume. In appraisals such as this a trees
merchantable height is usually determining by measuring from the stump to the
treetop, but many of the treetops had been moved during logging. For trees with moved tops I used the average
tree height of the residual and harvested trees. The diameter at breast height of each tree
was estimated by measuring stump heights, stump diameters, and by using average
tree tapers, which were determined by measuring stump to DBH measurements of on
site residual trees. After merchantable
tree length and DBH have been estimated the tree volume can then be obtained by
using a volume table.
[VOLUME
11, PAGE 169]
Volume
Estimate Summary
Species # of Trees Estimated Bd.Ft. Volume Doyle
Black
Oak 30 8719
White
Oak 9 1971
Black Cherry 1
105
Totals 40 trees 10,795 Bd.Ft.
TREE QUALITY
Tree
quality is very important when appraising timber value. We have several ways to determine the quality
of harvested and removed trees. I use
observations of the quality of remaining and surrounding trees. I looked for signs of defects in the tree
stumps and considered stump diameters and stump heights. I also used my knowledge of the general
timber quality in this part of
APPRAISAL
To estimate the
stumpage timber value for the 40 harvested trees I have used values from 9
comparable timber sales which were selected from over 200 sealed bid timber
sales that we have conducted and sold for clients in that time period. Stumpage value means the harvest value of
trees still standing in the woods and before the costs associated with harvest
are added. Based on comparable timber
sales, and my knowledge of timber markets and values, and my volume and quality
estimates, I would appraise the stumpage value of these 40 harvested trees to
be as follows. 40 harvested trees. 10,795 Bd.Ft. @ $.22/Bd.Ft.=$2375
Attached to the appraisal
was a listing of “Comparable Timber Sales” which is not included in these
Findings. Also included was a summary of
Bruce Wakeland’s education, certifications and current professional services. Included among these is that he was awarded a
Bachelor of Science in Forestry from Purdue University in 1972, is a Certified
Forester, has several professional affiliations, and has been engaged in the
timber and forestry industry since his graduation from Purdue University.
19. The appraisal
described in Finding 18 was admitted into
evidence as Claimant’s Exhibit A, in accordance with IC 4-21.5-3-26(a)
pertaining to hearsay, over timely objections by Hites and Western Surety.
20. Goldasich
testified he obtained a written opinion by Joan Kamminga-Majerik, a Broker and
Realtor with substantial experience in
21. In a letter
dated January 13, 2006, Kamminga-Majerik stated in part:
Based
on market statistics regarding vacant land, I feel the removal of the mature
trees and the subsequent required clean up of scrubs and stumps has damaged the
value as well as the potential for future development of the afore mentioned
property. Addressing the five (5) acres
that have been affected, I find that in its original condition would have
brought approximately sixty five thousand dollars ($65,000.00). I find that in its present state the value to
be at approximately twenty five thousand dollars ($25,000).
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22. The written
opinion described in Finding 20 and Finding 21
was admitted into evidence as Claimant’s Exhibit D, in accordance with IC
4-21.5-3-26(a) pertaining to hearsay, over timely objections by Hites, Western Surety
and A-Miller.
23. Goldasich
testified his opinion was that the harvest of timber by Hites had, “to me as an
owner”, diminished the value of the subject property “in the neighborhood of
$30,000 to $40,000.”
24. Goldasich also
testified with regard to photographs he took at the subject property. He said a portable sawmill was set up on the
subject property after trees were harvested.
The photographs depicted debris associated with the harvest, slabs on a
pile, sawdust in the vicinity of the former sawmill and “used oil cans and
maintenance scraps from the process”.
The photographs were admitted into evidence as a group, without
objection, as Claimant’s Exhibit B.
25. Goldasich testified
that on January 18, 2005, he obtained a written estimate in the amount of
$5,500 from Russell’s Tree Service in DeMotte, Indiana of the costs required to
“remove scraps, logs and brushing resulting from previous tree removals,” as well
as to “[g]rind any stumps 6 [inches] and above” located on the subject
property. He later testified he believed
this estimate was reasonable but would not include tree plantings or similar
restorations.
26. The estimate
described in Finding 25 was admitted into evidence as
Claimant’s Exhibit C, in accordance with IC 4-21.5-3-26(a) pertaining to
hearsay, over timely objections by Hites, Western and A-Miller.
27.
Goldasich testified that the pursuit of this proceeding has required him to
investigate and quantify the extent of the damage, as well as to attend prehearing
conferences. From his residence in
28. On
cross-examination by Hites and Western Surety, Goldasich testified he also
wished to be reimbursed for his attorney fees expended in preparation for this
proceeding.
29.
Carl Hites is a timber buyer who has been engaged in the business for 57 years,
and his father was also a timber buyer.
Hites testified he has five employees, and the newest of them has five
years of business experience. Hites is
currently licensed as a timber buyer under the Timber Buyers Act, and he has
been properly licensed since the statute was enacted in 1972.
[VOLUME 11,
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30.
Effective March 18, 2003, Western Surety increased the amount of its bond for
Hites, as required for timber buyers under the Timber Buyers Act, from $6,500
to $7,000. Respondent Exhibit 4.
31.
Hites testified he had not previously been the subject of a proceeding by a
landowner for compensation under the Timber Buyers Act. On one occasion, a timber cutter for Hites
cut a tree that went across a fence of a neighboring landowner and “tore his
fence up. It cost me $3,750 to put it
back.” Hites said he replaced the fence.
32.
Hites testified the subject property was characterized by “low-grade, black oak
timber” which was typically used for pallets or in steel mills for
blocking. None of the timber harvested
from the subject property was veneer quality.
33.
Hites testified that a tree spotter, Roger Risner, came to Hites and informed
him A-Miller had “some trees for sale”.
Afterwards, Hites went to see A-Miller.
“He sold me these 40 trees or whatever it was.” In addition, A-Miller asked Hites to cut a
tree behind the Millers’ house. He
testified that A-Miller represented he owned the trees all the way to the field
line, an area which included the entirety of the uncultivated subject
property. Hites saw no markers which
were inconsistent with an assumption the Millers’s property included all of the
wooded area. Hites testified he believed
A-Miller when A-Miller said he owned the trees.
34. On
cross-examination, Hites testified he had no familiarity with A-Miller before
contracting with A-Miller to harvest the trees.
He did not know whether A-Miller was honest and did not check A-Miller’s
reputation in the community. Hites did
not check records in the
35. On
cross-examination, Hites said A-Miller showed him the area, and Hites counted
40 trees that he estimated were worth about $50 each. On direct examination, Hites testified, “I
offered [A-Miller] $2,000 for his trees, and he took it.” On cross-examination, he testified a
landowner may take the first offer, a second or later offer following
negotiations, or a landowner may reject every offer. Hites conceded he might have paid $2,200 for
the timber had the Millers bargained for more money.
36. Three
or four days after the negotiations between Hites and A-Miller, Hites delivered
Official Check 785097006 to D-Miller.
The check was dated October 8, 2003 on the Lafayette Bank & Trust from
“Carl Hites” and was in the amount of $2,000 made payable to “Allen
Miller”. Hites informed D-Miller the
check was in compensation for the trees, and she accepted the check. Respondent Exhibit 3.
37.
Hites testified a woman stopped while he was harvesting the trees from the
subject property and told him he was “cutting somebody else’s trees” rather
than those of the Millers. “I was dealing
with [A-Miller] and not some lady that stopped along the road. I didn’t know her…. I didn’t pay any attention to it,
really. But we already had it half-cut
by then.” On cross-examination, Hites
testified the timber harvest required approximately one month for completion.
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38.
Hites testified the first communication he received on behalf of Goldasich was
a letter from Goldasich’s former attorney.
Upon receipt, Hites went to A-Miller and asked, “What’s this all about? He said, ‘I’ll take care of it.’” Hites said his first direct communications
with Goldasich were at the initial prehearing conference held in this
proceeding. The prehearing conference
was held on December 3, 2004. See
“Report of Prehearing Conference” (December 7, 2004). Hites testified that, during the prehearing
conference, A-Miller repeated he would “take care of it.”
39.
Hites testified “truthfully, right now, I don’t know where I cut trees at,”
although he expressed the perspective “Mr. Miller certainly owns something
there, I would think.” He added that
“possibly I cut Mr. Miller’s, and possibly I cut Mr. Goldasich’s…. Who owns what, I have no idea.”
40.
Hites testified he was willing and able to remove the pile of slabs and the
pile of sawdust. “But when you cut
trees…, the stumps and the tops belong to the landowner.”
41.
Jack Edward Nelson is a consultant forester with a B.S. in Forestry from
Southern Illinois University. He started
his career in the fall of 1970 as a forester for the State of
42.
Nelson testified that most sawmills in the Kankakee River Basin of Northwest
Indiana “are smaller mills and or portable sawmills”, and “usually the timber
was marginal at best.” Previously, a lot
of timber harvested from the area was used for blocking in the steel mills, and
more recently it has been used for pallets. “Most of the area is not considered to have
real good timber.”
43.
Nelson testified he examined the subject property and the D-Miller
property. He observed “very poor quality
timber”. Typical of the uplands in the
area, the soils are very sandy. In addition,
most of the area “was burned repeatedly up until the ‘50s and ‘60s.”
44.
Using a tape measure, Nelson attempted to determine the boundary between the
subject property and the D-Miller property.
Nelson testified he observed evidence of timber harvested from both
sides of what he estimated to be the line.
He also testified, however, that A-Miller identified a nondescript site
to be the supposed corner of his (in actuality, D-Miller’s) property. This site was based upon a length of 185 feet
provided by A-Miller. Nelson determined
the line identified by A-Miller was probably inaccurate. The determination was based upon a warranty
deed, provided to Nelson by Hites’s attorney, which indicated a length of 230
feet. Nelson testified he did not return
to the site and re-evaluate whether timber was harvested from both sides of the
corrected line.
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45.
Nelson testified many of the tree stumps showed internal rot, a symptom typical
of trees in
46.
Nelson testified the timber harvest by Hites appeared to be a “normal logging”
operation. He observed “very little of
what I would call ‘residual damage’; that is, where a skidder is moving along
through the woods and the log bangs up against a standing tree, and it causes damage
to the base similar to what your lawn mower does to trees.” Also, because the soils were very sandy,
“there really wasn’t much rutting.” He
said the logging residue was typical for a logging job, and “the standard
within the business is that the tops are left.
If a landowner has a neighbor who wants to cut firewood, that’s
great. Mother Nature is pretty good
about taking care of things, and within a few years, the material
decomposes.” Normally, slabs and sawdust
residue from a portable sawmill are not taken away from the site.
47.
Nelson did not provide a value for the harvested timber. He indicated his experience was that the
harvest would have little or no appreciable consequence to the realty value of
the subject property.
48.
Timothy H. Webb is a real estate appraiser and is a Certified General Real
Estate Appraiser, licensed in
49. On
cross-examination by Goldasich, Webb testified most of his appraisal work is
directed to agricultural land with a significant fraction also directed to
commercial land. He testified that 5% or
fewer of the appraisals he performs are for residential land.
50.
Using a sales comparison approach, Webb appraised the subject property at
$40,000 as of April 24, 2006. He testified
he determined the highest and best use was for a rural residential site. Webb characterized the subject property as
containing five acres, with two acres of cropland and the remainder being “low
density woods”. On cross-examination by
A-Miller, he acknowledged his appraisal showed the portions of cropland and
woodland to be approximately equal.
51.
Webb did not provide a comparison of the value of the subject property before
and after the timber harvest by Hites.
Making comparison among four properties he used for determining
comparable sales, some of which had mature trees and some of which did not,
Hites concluded the harvest would have no impact on the value of the subject
property.
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52.
Duane McCoy is the Timber Buyer Licensing Forester for the Division of Forestry
of the Indiana Department of Natural Resources, a position he has held for a
little more than one year. McCoy
administers the Timber Buyers Act for the Division of Forestry. He testified that his responsibilities as the
Timber Buyer Licensing Forester include administering a database, keeping track
of complaints against Timber Buyers, and assisting Conservation Officers with
investigating claims of timber theft.
53.
McCoy testified that the records of the Department of Natural Resources
indicate Hites has been a licensed timber buyer since 1974. These records do not show any complaint has
been filed against Hites under the Timber Buyers Act. McCoy acknowledged that records concerning
complaints were not maintained for all periods back to 1974, and grievances
against timber buyers could be resolved without a person filing a complaint
with the Division of Forestry.
54.
Larry Slawnikowski is a resident of rural Wheatfield in
55. Allen
Miller (A-Miller) testified on his own behalf.
He stated his wife, Debbie Miller (D-Miller), owned the D-Miller
property before A-Miller met her. He
acknowledged “property-line problems” with the Millers’ neighbors to the east,
the Greers. When the Greers caused a
survey to be performed, the survey indicated that ¾ of the Millers’ backyard
was owned by the Greers. A-Miller
testified that at the time the Greers had their survey performed, D-Miller
determined to have the remainder of her property boundaries also surveyed.
56. The
survey described in Finding 55 was performed by Michael G. Kingman, an Indiana
Registered Land Surveyor, in early 2001.
In a deposition, Kingman testified the four corners of the D-Miller
property were marked with irons and evidenced by off-set laths, the latter of
which he would have typically marked with florescent orange flags. When asked whether either of the Millers
questioned the marking of the western boundary (the common line with the
subject property), Kingman responded “No, there was no mention of that.” Respondent Exhibit 2.
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57. On
direct examination, A-Miller testified that when he made the agreement with
Hites for the timber sale, A-Miller believed his wife owned the property from
which the timber was harvested. After
the timber was harvested, a law enforcement officer showed A-Miller where the
officer believed the common line with the subject property was located. A-Miller testified it was then he learned his
beliefs as to the location of the property line had been mistaken. On cross-examination by Goldasich, A-Miller
testified he did not look at the Kingman’s 2001 survey until after the 2003
timber harvest.
58. On
cross-examination by Hites, A-Miller testified D-Miller received the check from
Hites that is described in Finding 36.
After endorsing the check, he returned it to D-Miller.
59. On
cross-examination by Hites, A-Miller testified he incorrectly identified the
boundaries of the D-Miller property, although A-Miller said he did not then
understand the information was incorrect.
C. Standard of Care for Determining Ownership of the
Subject Property
60. The Commission has consistently held that a timber buyer must exercise due diligence, under the Timber Buyers Act, in ascertaining that the person with whom he contracts to purchase timber is the owner of land from which timber is to be harvested. Beeman v. Pendley & Zurich N. Amer., 9 Caddnar 53, 56 (2002). To similar effect is Pike Lumber Co., Inc. v. Cruse Timber, et al., 10 Caddnar 28 (2005).
61. A timber buyer who relies upon a person’s oral claim of real estate ownership does not satisfy due diligence. A county recorder provides evidence of title and not a person who claims title or who happens to live on the land. Fischer v. Stodghill and Hartford Fire Insurance Company, 10 Caddnar 147, 156 (2005).
62. Hites relied exclusively and blindly on the oral representation by A-Miller that A-Miller owned the subject property. Warned by a citizen from the community that he was harvesting timber owned by other than A-Miller, when by Hites’s own testimony only half of a one-month harvest was completed, he chose to ignore the warning and to continue with the harvest. Hites’s conduct does not even approach satisfying the requisite due diligence for ascertaining the ownership of the subject property.
63. Hites failed to meet a reasonable standard of care for determining ownership of the subject property. He must properly be held liable under the Timber Buyers Act for this lack of due diligence.
D. Compensation Under the Timber Buyers Act
64. Six persons
offered opinions concerning the financial consequences of the timber
harvest. Four of these were directed
mostly to perceived consequences for the fair-market value of the subject
property as realty. These opinions
differed dramatically, from conclusions there was little or no damage to conclusions
that damages were in the range of $40,000.
Two opinions included consideration of the impact upon stumpage value of
the harvested timber.
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65. The factors to
be considered are set forth in IC 25-36.5-1-3.2(f). They provide that a complaint under the
Timber Buyer’s Act may seek:
(1)
Damages in compensation for damage actually resulting from the wrongful
activities of a timber buyer or timber cutter.
(2)
Damages equal to three (3) times the stumpage value of any timber that is
wrongfully cut or appropriate without payment.
66. The Timber
Buyers Act does not define what constitutes “damage actually resulting from the
wrongful activities” under IC 25-36.5-1-3.2(f)(1). Neither has the Commission defined the phrase
by rule. The Court of Appeals of
67. More directly,
the import of IC 25-36.5-1-3.2(f)(1) is stated in Roberts v. Voorhees, 453 N.E.2d 342, 343 (1983
68. Applying Wright v. Reuss and Roberts v. Voorhees, the Commission has determined IC 25-36.5-1-3.2(f)(1) authorizes compensation for
repairs to damaged fencing and compensation for repairing ruts. Industry standards are relevant to
determining whether a timber buyer properly conducted a timber harvest. Rose
Acre Farms, Inc. v. Ault and Curry, 8 Caddnar 138 (1999). Similarly, the Commission has found compensable
the costs of equipment
rental (including a back hoe) to repair ruts, to restore the contour of a
swale, to reseed the swale and to remove debris. Zwahlen v. McDurmon and Ohio Casualty Insurance
Company, 7 Caddnar 45 (1994).
69. Nelson and Wakeland provided the most pertinent
evidence concerning whether the timber harvest met industry standards. Both concluded the harvest did generally
satisfy industry standards. Both
concluded damages to residual trees and to the soil were within acceptable
ranges.
70. Hites operated a portable sawmill on the subject
property. Goldasich testified that Hites left
piles of sawdust in the vicinity of the former sawmill, slabs in a pile, and
“used oil cans and maintenance scraps from the process”. Hites testified he was now willing to remove
the piles of sawdust and the slabs, but he offered no testimony regarding the
used oil cans and other scraps.
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71. For the most
part, Hites achieved a minimum standard for his conduct of the timber harvest,
but this standard was not met in association with reclamation at the site of
the former portable sawmill. Hites
should have addressed the sawdust pile and the slabs before leaving the
field. More importantly, his treatment
of the used oil cans is a violation of state statutes and does not meet minimum
industry standards. See, generally, IC
13-11-2-42, IC 13-11-2-99, IC 13-11-2-144 and IC 13-30-2-1. Hites should be assessed damages of $1,000 in
favor of Goldasich with respect to reclamation at the former portable sawmill
site.
72. Based upon Roberts v. Voorhees and Wright v. Reuss, and as consistently
applied by the Commission, the conclusion is that the Timber Buyers Act was not
intended to provide compensation based upon alleged diminution to the fair
market value of the underlying real estate as a result of a timber harvest. The Commission cannot properly award
compensation for Goldasach’s claim of diminution in value to the subject
property.
73. The evidence is
unrefuted that Hites paid A-Miller (with delivery to D-Miller) $2,000 on a
first offer for the 40 harvested trees. Hites
conceded he might have paid A-Miller $2,200 if A-Miller had not taken the first
offer.
74. Although some
of the trees referenced in Finding 73 could have been located on the D-Miller
property, there is a reasonable inference the trees were all located on the
subject property. Hites conceded he is now
guessing where the trees were located. A-Miller’s
testimony lacks credibility as to location of the D-Miller property. Nelson’s testimony regarding harvested trees
is largely dependent upon measurements, made using inaccurate distances
provided by A-Miller, so Nelson’s testimony is also unconvincing. D-Miller did not participate in the hearing. The preponderance of the evidence is that all
40 trees were located on the subject property.
75. Based upon the
testimony of Hites, the value of the trees harvested from the subject property
probably exceeds $2,200. Hites is an
experienced businessman, who would be expected to achieve a bargain price, and the
value of the trees might reasonably be inferred to approach $3,000.
76. Wakeland
determined the value of the 40 harvested trees was $2,375. The methodologies applied by Wakeland, including
application of the Doyle Rule, are consistent with methodologies previously
approved by the Commission for determining stumpage values under the Timber
Buyers Act. Gallien v. Sloan Logging, Pendley, and Zurich N. Am., 9 Caddnar 40
(2002), citing Hornaday v. Ammerman, et
al., 8 Caddnar 112 (1999) and Hagan,
et al. v. Lewis, Cincinnati Insurance Co., Martin and US Fidelity &
Guaranty Co., 7 Caddnar 146 (1996).
Wakeland’s analysis was also precise as to species. His written report is easily the most precise
and persuasive for determining the value of timber harvested from the subject
property, and the value determined is generally consistent with testimony
offered by Hites.
77. The
preponderance of the evidence is that the value of the timber from the 40 trees
harvested from the subject property was $2,375.
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D. Unauthorized Timber Harvest and Financial Responsibility of
Hites
78. With respect to
the 40 trees, Goldasich is a “timber grower” as the term is used under the
Timber Buyers Act. IC 25-36.5-1-1 and IC 25-36.5-1-3.2(c).
79. As a “timber
buyer”, Hites entered a contract with the Millers to harvest trees on
80. Hites harvested
trees pursuant to the contract during a one-month period in the fall of 2003. This harvest included logging of the 40
trees.
81. Hites did not
contract with Goldasich to harvest the 40 trees nor did Goldasich otherwise acquiesce
in the harvest by Hites. Hites has not
compensated Goldasich for harvest of the 40 trees.
82. Goldasich seeks
relief under IC 25-36.5-1-3.2(f)(2) for “Damages equal to three (3) times the
stumpage value of any timber that is wrongfully cut or appropriated without
payment.” This remedy is sometimes
referred to as the Timber Buyers Act “treble damages clause”.
83. The purpose of
the treble-damages clause is “to insure that timber buyers will exercise care
in cutting of timber and to protect landowners from careless felling of their
timber.” Wright v. Reuss, cited previously, at 929.
84. Before
conducting the timber harvest, Hites did no research to confirm oral
representations by A-Miller that the subject property was owned by
A-Miller. Even when warned by a local
citizen that A-Miller was not the owner, Hites made no effort to research the
ownership of the subject property.
85. Goldasich is
entitled to recover from Hites three times the stumpage value of the 40 trees.
86. The 40 trees have
a stumpage value of $2,375. Three times
that value is in the amount of $7,125.
Goldasich is entitled to recover from Hites the amount of $7,125 under
IC 25-36.5-1-3.2(f)(2). In addition,
Goldasich is entitled to recover $1,000 from Hites under IC 25-36.5-1-3.2(f)(1)
as described in Finding 71. Goldasich is entitled to an administrative
judgment against Hites in the total amount of $8,125.
E. Financial Responsibility of the Millers
87. In addition to
the responsibility of the timber buyer, a “landowner” and “an owner of land
adjacent to the land from which the timber was cut” are among the class of
persons who may be liable for a wrongful timber harvest. IC
25-36.5-1-3.2(e)(4). This responsibility
is also appropriately placed in a person who falsely claims to be a landowner.
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88. A-Miller and
D-Miller are both persons who are responsible under the Timber Buyers Act for
timber harvested from the subject property.
89. The Millers
misrepresented to Hites the location of the D-Miller property line. This misrepresentation was made in spite of
the Millers having had the boundaries of the D-Miller property determined and
marked by a professional survey just two years before the timber sale, a survey
originally prompted by a property line dispute with another neighbor of the
Millers. Viewing the conduct of the
Millers in the most generous and positive light, they performed irresponsibly
and recklessly.
90. As a result of
the Millers’ misrepresentation concerning the D-Miller property line, Hites was
induced to contract with A-Miller to harvest timber from the subject
property. As a result of the
misrepresentation, the Millers were wrongly enriched by a $2,000 payment from
Hites.
91. This timber
consisted of the 40 trees, the total stumpage value of which is $2,375. Three times that value is in the amount of
$7,125. Goldasich is entitled to
compensation from the A-Miller and D-Miller, jointly and severally, in the
amount of $7,125.
92. The liability
of Hites and of the Millers to Goldasich under the Timber Buyers Act, in the
amount of $7,125, is joint and several.
Hites is additionally individually liable to Goldasich for the $1,000
amount described in Finding 71.
93. The crossclaims
by Hites and Western Surety should be granted against the Millers. A-Miller and D-Miller are jointly and
severally liable to indemnify Hites and Western Surety for amounts required to
be paid by Hites and Western Surety as a consequence of this administrative
judgment, except for the $1,000 amount described in Finding 71. In addition, A-Miller and D-Miller should be
ordered to reimburse Hites for the $2,000 payment by which the Millers were
unjustly enriched for the payment of timber they did not own.
F. Financial Responsibility of the Western Surety Company
94. As the surety
for Hites under the Timber Buyers Act, Western Surety is liable to Goldasich
for the stumpage value of timber wrongfully cut and appropriated.
95. IC 25-36.5-1-3.2(g)
limits any judgment against the Western Surety to the value of timber
wrongfully cut or appropriated.
96. The 40 trees have
a stumpage value of $2,375.
97. Western Surety
is liable to Goldasich in the amount of $2,375.
Upon demand on the bond to the Department of Natural Resources, the
Department of Natural Resources shall cause forfeiture the amount of $2,375 to
Goldasich.
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G. Litigation Expenses under the Timber Buyers Act
98. Goldasich seeks
relief for expenses directly or indirectly incurred in preparation for this
proceeding. These may be generally categorized as “litigation expenses”.
99. Goldasich
offered testimony pertaining to travel expenses, attorney fees, real estate and
timber harvest appraisal fees, site restoration estimates and similar administrative
costs.
100.
101. A state
administrative agency has only the powers conferred on it by the Indiana
General Assembly. Powers not within the agency’s legislative grant of authority
may not be assumed by the agency nor implied to exist in its powers. Bell v.
State Board of Tax Commissioners, 615 N.E.2d 816, 819 (Ind. Tax Ct. 1995),
citing Fort Wayne Education Association,
Inc. v. Aldrich, 527 N.E.2d 201, 216 (Ind. Ct. App. 1988). The Commission has only the powers granted specifically
by the Indiana General Assembly. Pratt v. Indianapolis Water Co. and DNR,
9 Caddnar 17 (2001).
102. The
103. The
104. Under the
Timber Buyers Act, Goldasich cannot be awarded his litigation expenses.
H. Treble Damages in Certain Civil Actions by Crime Victims
105. Goldasich also
seeks relief under IC 34-24-3 which provides a victim of a crime committed
under IC 35-43, IC 35-42-3-3, IC 35-3-4 or IC 35-4-9 may bring a civil action
against the person who caused the loss.
This statutory chapter authorizes qualified victims to receive
compensation for a broad range of litigation expenses, including attorney fees,
and for three times the actual damages the person suffered from the loss.
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106. As stated in Finding 101, a state administrative agency has only
the powers conferred on it by the Indiana General Assembly. Powers not within the agency’s legislative
grant of authority may not be assumed by the agency nor implied to exist in its
powers. The Commission has only the
powers granted specifically by the Indiana General Assembly.
107. The relief
authorized by IC 34-24-3 can be provided only by a civil court. The Indiana General Assembly has not
authorized the Commission to grant relief under IC 34-24-3.
108. The Commission
lacks jurisdiction to grant Goldasich an award under IC 34-24-3.
[1] The court reporter has not been
requested to prepare a transcript of testimony at hearing. If a witness is shown as being quoted in
these findings, the statement is as nearly verbatim as could be determined by
the administrative law judge. If a
transcript is subsequently prepared that indicates different wording, the
transcript shall be considered the official record and a quotation as
paraphrasing of witness testimony.