CADDNAR
[CITE: O’Neal v. Bowers and Spurgeon, 13 CADDNAR 64 (2012)]
[VOLUME 13, PAGE 64]
Cause #: 11-177F
Caption: O’Neal v. Bowers and Spurgeon
Administrative Law Judge: Lucas
Attorneys: pro se (all parties)
Date: October 22, 2012
FINAL ADMINISTRATIVE JUDGMENT
[In order to maintain the original document’s footnote numeration, the Final Administrative Judgment follows Findings of Fact and Conclusions of Law.]
FINDINGS OF FACT AND CONCLUSIONS OF LAW
A. Statement of the Case and Jurisdiction
1. Charlotte O’Neal (“O’Neal”) and Margie Speckner (“Speckner”) initiated the
proceeding by filing a “Request for Administrative Review” (the “Complaint”)
with the Natural Resources Commission (the “Commission”) on October 14, 2011
against Benjamin Todd Bowers (“Bowers”). O’Neal and Speckner are collectively
the “Claimants”. The Complaint sought relief under Ind. Code § 25-36.5
(sometimes referred to as the “Timber Buyer Act”) and 312 Ind. Admin. Code §
14, rules adopted by the Commission to assist with implementation of the Timber
Buyer Act. The Timber Buyer Act provides for the regulation of timber buyers
and other persons associated with the enterprise of timber harvesting.
2. The Complaint is governed procedurally by Ind. Code § 4-21.5 (sometimes referred to as the “Administrative Orders and Procedures Act” or “AOPA”) and rules adopted by the Commission at 312 Ind. Admin. Code § 3-1 to assist with its implementation of AOPA. The Commission is the “ultimate authority” under AOPA for the Timber Buyer Act and 312 IAC § 14. Davies v. Powers d/b/a Powers Logging & Hanover Ins. Co., 12 Caddnar 297 (2011).[1]
3. An administrative law judge was appointed to preside under AOPA. The administrative law judge served a “Notice of Prehearing Conference” upon O’Neal, Speckner, and Bowers. On December 30, 2011, the initial prehearing conference was conducted as scheduled at Edinburgh, Indiana. O’Neal, Speckner, and Bowers each attended in person.
4. On January 6, 2012, Bowers filed correspondence in which he alleged that Leia Gay Spurgen (“Spurgeon”) was “also at fault in this incident”.
5. On January 11, 2012, the administrative law judge entered an “Order Adding Leia Spurgeon as a Party needed for Just Adjudication and Designating Her a Third Party Respondent” and sent copies of the Order to O’Neal, Speckner, and Bowers.
6. On January 12, 2012, the administrative law judge issued a “Notice to Leia Spurgeon that Benjamin J. Bowers has made a Claim against Her for Contribution or Other Financial Relief, that She has been Added as a Third Party Respondent, and that She must Appear and Defend or an Administrative Judgment may be entered Against Spurgeon in Her Absence”.
7. A second prehearing conference was scheduled for February 6, 2012 and conducted by telephone. Bowers and Spurgeon participated. The administrative law judge made a telephone call to O’Neal and Speckner, but they were unavailable. The conference was held in the absence of O’Neal and Speckner. Shortly after the conference, O’Neal telephoned the administrative law judge and apologized for the Claimants’ absence.
8. A telephone status conference was conducted as scheduled on April 30, 2012. O’Neal, Speckner, Bowers, and Spurgeon each participated. O’Neal, Speckner, Bowers, and Spurgeon are collectively the “Parties”.
9. The Commission has jurisdiction over the subject matter and over persons of the Parties.
10. On May 1, 2012, the administrative law judge issued a “Report of Telephone Status Conference and Notice of Hearing” and sent the Report and Notice to the Parties by which the proceeding was set for a hearing of the facts on August 9, 2012. A “Confirmation of Hearing of the Facts” to be held on August 9 was sent to the parties on July 6.
11. The hearing was conducted as scheduled on August 9, 2012 at Edinburgh, Indiana. Each of the Parties was present in person and each participated in the hearing. Following the completion of testimony and the receipt of exhibits, the hearing was adjourned. No party requested to file post-hearing briefs or proposed findings.
12. The proceeding is ripe for disposition.
B. Facts Determined from Hearing
13. The Claimants are the co-owners of real estate located along the north side of Rooster Hill Road near Salem, Washington County, Indiana and more particularly described as follow:
A part of the southeast quarter of section 4, township 3 north, range 4 east, and a part of the northeast quarter of section 9, township 3 north, range 4 east, described as follows: Beginning at the southeast corner of the southeast quarter of section 4, township and range aforesaid, thence running thence north 40 rods, thence west 80 rods to the line of Lora Trueblood, thence south thur [sic.] section 4 to the County Road, which is THE TRUE BEGINNING POINT of the real estate herein being described, thence from said beginning point run eastwardly with said road 225 feet, thence north 200 feet, thence west to the line of Lora Trueblood (being the west line of this grantor), thence south to THE PLACE OF BEGINNING, containing 1 acre, more or less, subject to legal highways.
[VOLUME 13, PAGE 65]
This real estate is the “subject real estate”. The subject real estate has been owned by one or both of the Claimants since the 1960s. O’Neal Testimony, Claimants’ Exhibit 2, and Claimants’ Exhibit 4.
14. Frank Hodge owns a parcel of real estate (the “Frank Hodge parcel”) which borders the north and the east side of the subject real estate. Since the 1980s, Spurgeon has owned a parcel (the “Leia Spurgeon parcel”) which borders the west side of the subject real estate. In addition to bordering the subject real estate, the Frank Hodge parcel and the Leia Spurgeon parcel share a common border north of the subject real estate. Bowers Testimony, Spurgeon Testimony, and Claimants’ Exhibit 1.
15. Without objection, a sketch which fairly depicts the subject property, the Frank Hodge parcel, and the Leia Spurgeon parcel was admitted into evidence as Claimants’ Exhibit 1. O’Neal illustrated the subject property with yellow highlighter. Pertinent portions of the sketch are as follows:
A telephone number attributed to Spurgeon on the sketch was redacted for purposes of this Finding.
16. Bowers contracted with Frank Hodge for the purchase and sale of standing timber from the Frank Hodge parcel. Before harvesting timber from the Frank Hodge parcel, Bowers searched for points to identify its boundaries. He located each corner point except for a point which forms the northwest corner of the subject real estate as discussed subsequently in Finding 30. Bowers approximated the location of the missing point and believed his approximation was consistent with McCoy’s. Bowers Testimony.
17. The Frank Hodge parcel borders Rooster Hill Road, but Hodge was using an unimproved pathway across the subject real estate to access the Frank Hodge parcel. Bowers Testimony.
18. Bowers arranged for harvest of timber from the Frank Hodge parcel to be performed through an agent.[2] The agent informed Bowers a gulley posed access problems for a timber harvest, if using the Frank Hodge parcel exclusively, and asked whether access could be secured using the unimproved pathway. Bowers responded to the agent that Bowers would “have to see who owns it.”[3]
19. Bowers went to the Washington County Recorder to determine ownership of the real estate which included the unimproved pathway. He testified an employee of the Recorder told him “Leia Spurgeon is the person you need to talk to.” Bowers said he then asked if property taxes were paid. The employee confirmed taxes were paid and said Spurgeon “owns this many acres.” Bowers did not testify to the number of acres Spurgeon was said to have owned. Taken as a whole, a reasonable inference is that Bowers pointed to the location of the unimproved pathway, which was located on the subject property, when he asked the employee about ownership.[4] The employee also provided Spurgeon’s address. Bowers Testimony. On cross-examination by O’Neal, Bowers testified his conversation with the employee was not specific to the subject real estate but to acreage owned by Spurgeon generally.
20. Bowers went to Spurgeon’s residence and asked for permission to cross the subject real estate to harvest timber from the Hodge parcel. He asked Spurgeon if she was the owner. Spurgeon responded she was and that Bowers was “welcome to cross it.”[5] Bowers Testimony.
21. Spurgeon confirmed she gave Bowers permission to cross her “property with his equipment” to harvest timber from the Frank Hodge parcel. She added that she told Bowers if he was logging the Frank Hodge parcel, he “might as well go ahead and log that piece that [Bowers’ agent was] crossing and make it easier to cross.” After a brief conversation, they agreed orally Bowers would pay her $500 for timber harvested adjacent to the unimproved pathway (that was to become a haul road). Spurgeon Testimony.
22. Bowers later informed Spurgeon the timber harvest was complete on the Frank Hodge parcel and along the unimproved-pathway-turned-haul-road. He offered to pay her the agreed $500. Instead of accepting payment, Spurgeon testified she asked Bowers, “Why don’t you just go ahead and log the rest of my property while you’re out there with all your equipment?” Bowers responded he needed a contract “for that”. Following a conversation with her husband, Tom Schulz (“Schulz”), Spurgeon agreed to the entry of a contract on shares. Spurgeon Testimony.
[VOLUME 13, PAGE 66]
23. Spurgeon and Bowers entered a written contract as follows:
Timber Contract
This contracted entered into this 8th day of June 2011between Leia Gay Spurgeon of 620 East Rooster Hill Rd., Salem IN, hereinafter called the seller, and Ben Bowers Logging, hereinafter called the purchaser.
1. The Seller agrees to sell, and the purchaser agrees to buy, 18 inches and up timber located at above address. The purchaser agrees to pay the seller 50% for any timber sold.
2. The Seller further agrees to:
A. To guarantee title to the forest products covered by this contract and to defend it against all claims at his/her expense.
B. No concurrent contract involving the area or period will be entered into by the seller without written consent of the purchaser.
C. The purchaser and his employees shall have access to the area at all times for the purpose of carrying out the terms of this contract.
3. The purchaser agrees to:
A. To pay the seller 50% for all timber sold.
B. To remove all of equipment within 90 days of job completion.
C. To use his entire force to prevent or suppress forest fires.
D. To clear yards of tops and debris.
Bowers Testimony and Respondent’s Exhibit A. The written contract described in this Finding is the only written contract entered between Bowers and Spurgeon and was intended by them as their exclusive agreement for the purchase and sale of standing timber. Spurgeon Testimony and Bowers Testimony.
24. On June 12, O’Neal learned standing timber had been harvested from the subject real estate. She does not live on the subject real estate, but lives nearby and goes “past the property quite often.” She contacted the Washington County Sheriff’s Office which put her in contact with Indiana Conservation Officer, Neal W. Brewington. O’Neal was informed Bowers harvested the timber.
25. A meeting was scheduled for and held on June 13, 2011 at the subject real estate. Several persons attended, including the Claimants, Bowers, and Officer Brewington. Bowers told them he cut the timber, believing Spurgeon owned the subject real estate. During the meeting, Bowers said he had a contract to harvest timber from the Frank Hodge parcel. Bowers said he also had a contract to harvest timber, with payment on 50-50 shares, from the Leia Spurgeon parcel. O’Neal Testimony, Claimants’ Exhibit 1, and Claimants’ Exhibit 3.
26. After conclusion of the meeting, Officer Brewington went to Spurgeon’s residence on State Route 135. Brewington prepared an Incident Report Form which included a summary of his meeting with Spurgeon. He wrote in part:
Spurgeon stated that Bowers approached and asked if it was ok to move logs across her property. She stated that Bowers informed her that the surveyors [sic.] office had directed him to her as the property owner. She advised Bowers that it was her property and that it would be ok to drive across it. Spurgeon then stated that she asked Bowers to timber the property of hers. She advised they agreed on $500 dollars for the one acre and the rest would be cut on shares. Spurgeon advised that she had not received any payment yet. I told her that the property did not belong to her and she stated that she did not believe that the surveyors [sic.] office would have gotten it wrong and that she must have owned it. Spurgeon advised that she had always believed that she owned it. While I was speaking with Spurgeon a male subject (Tom Schulz dob 5/23/62) walked up to us. Spurgeon advised Schulz that she did not own the property and Schulz replied that he told her that. Schulz stated that he was out of town when Bowers came by, but that when he returned he told Spurgeon that he did not believe her to own the property. Spurgeon then agreed that this had occurred but she told him the courthouse wouldn’t have gotten it wrong.
27. Schulz does not share title in the Leia Spurgeon parcel. Until his recent retirement, he lived apart from her at Camp Atterbury. Spurgeon testified Schulz is not knowledgeable concerning Spurgeon’s real estate interests. Spurgeon Testimony.
28. Bowers testified, “I’m a logger. I’m not a surveyor. I go to the courthouse. They show me a deed. I don’t know about you, but can you look at 15 acres and tell me if one acre don’t fit? I can’t do it. They told me that this plot of ground was what Leia [Spurgeon] owned. They showed me the deed saying she owned it. I cut the timber, you know. That’s what I did. You know, as far as the acre, I couldn’t tell it looked any different from her ground…. I already had [the Frank Hodge parcel] done. I had his coordinates, and so I worked off his coordinates…. Whenever I go and talk to someone at the courthouse that has a job to do, which is to supply somebody with maps and correct information, then I have to rely on them.” Bowers Testimony.
29. Duane Alan McCoy is the Timber Buyer Licensing Forester for the Department of Natural Resources. He met on June 16, 2011 with Indiana Conservation Officer, Neal W. Brewington. McCoy and Officer Brewington went to the subject real estate
30. Officer Brewington showed McCoy survey points identifying the subject real estate. They walked around its boundaries. McCoy was unable to identify the northwest corner of the subject real estate, which was in a brushy area, but using other points was able to determine its approximate location. McCoy Testimony on direct and on cross-examination by O’Neal.
31. On June 16 and June 20, 2011, McCoy examined the subject real estate and determined 24 trees were recently harvested: nine sugar maples, eight chestnut oaks, three hickories, two tulip poplars, one white oak, and one black oak. McCoy Testimony and NRC Exhibit One.
32. McCoy estimated the 24 trees contained 7,796 board feet of harvestable timber with a total stumpage value of $2,407.63. He summarized the estimate and his findings in an affidavit dated July 11, 2011. McCoy used the “2010 Price Report for Delivered Saw Logs” by William Hoover of Purdue University in making the timber valuation. This version was the report appropriate to the time period when the harvest occurred. NRC Exhibit One and McCoy Testimony on direct examination and on cross-examination by Bowers.
33. O’Neal stated during the hearing that she believed McCoy’s evaluation was appropriate. Bowers testified he believed McCoy’s appraisal of timber value was fair. Spurgeon did not offer evidence concerning valuation of timber harvested from the subject real estate.
34. The uncontroverted evidence is the total stumpage value of timber which Bowers harvested from the subject real estate is $2,407.63.
[VOLUME 13, PAGE 67]
C. Triple Stumpage Value
35. The Claimants seeks relief under Ind. Code § 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 “treble-damages clause”.
36. Before 1993, the treble-damages clause provided a timber buyer who cuts “any timber which he has not previously purchased shall, in lieu of the normal penalties” must pay the timber grower “three (3) times the stumpage value of the timber.”
37. 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.
38. Amendments to the Timber Buyer Act in 1993 made a number of changes. Among these was to replace the mandatory structure for treble stumpage damage with a new arrangement, by which a timber grower may seek treble damages, through an adjudicative proceeding before the Commission. Stell v. Allen, d/b/a, A& S Logging, 12 Caddnar 124, 136 (2009).
39. Since 1993, the Commission has required less than the full impact of the treble-damages clause only if treble damages would cause an injustice. Hagan, et al. v. Lewis, Cincinnati Insurance Co., Martin and US Fidelity & Guaranty Co., 7 Caddnar 146 (1996); Guy W. Pollock v. Dale Coats, 8 Caddnar 124 (1999); Gallien v. Sloan Logging, Pendley & Zurich N. Am., 9 Caddnar 40 (2002); and Booker, et al v. Mason and Shorter, 10 Caddnar 1 (2005).
40. The treble damages clause does not allow a timber buyer the defense of mistake of fact as to ownership of real estate where timber is located. Neither is a timber grower required to show the person who wrongfully cut timber acted with malicious intent. Beeman v. Marling, 646 N.E.2d 382 (Ind. App. 1995).
41. Primary responsibility under the Timber Buyer Act does not rest with a property owner to complain when a timber buyer enters the lands of a property owner to cut timber. Primary responsibility rests with a timber buyer to exercise due diligence to assure activities are restricted to lands where the timber buyer is authorized to harvest timber. Beeman v. Pendley & Zurich N. Amer., 9 Caddnar 53, 56 (2002).
42. The preponderance of the evidence is Bowers mistakenly believed Spurgeon owned the subject real estate. Bowers did not act with malicious intent. Bowers relied on a discussion with an employee of the Washington County Recorder and on discussions with Spurgeon.
43. Reliance by Bowers on the employee of the Washington County Recorder was misplaced and unreasonable. No one was called to testify from the Washington County Recorder concerning the employee’s or the office’s interpretation of the conversation. His testimony as to information received from the employee is hearsay. Even if the hearsay evidence is accepted at face value, Bowers’ testimony is problematic whether the employee distinguished the Leia Spurgeon parcel from the subject real estate. The record includes no suggestion Bowers sought information from the Washington County Recorder concerning the title history for the subject real estate. Nothing in the record suggests Spurgeon or a relative of Spurgeon ever had an interest in the subject real estate.
44. Bowers mischaracterizes the responsibilities of a county recorder in Finding 28. A county recorder is governed by Ind. Code § 5-14-3, sometimes referred to as the “Access to Public Records Act”. Generally a “person may inspect and copy the public records of any public agency during regular business hours of the agency.” IC 5-14-3-3(a). A county recorder is required to “establish a written procedure for the public to obtain access to the original instrument [such as a deed or mortgage] in order to protect the instrument from loss, alteration, mutilation or destruction.” Ind. Code § 36-2-11-8(b). A county recorder is responsible for “[p]roviding an exact copy of an original instrument in the possession of the recorder” under the Access to Public Records Act, “if the original document has not been archived.” IC 36-2-11-8(c).
45. A county recorder is responsible for maintaining deeds and similar documents, but a county recorder is not responsible for interpreting those documents to the public. A county recorder is responsible for managing and providing public access to its records but is not responsible for the accuracy or legal consequences of those records. Illustrative is that a county recorder is not required to certify an abstract of title. If a county recorder elects to certify an abstract, he or she may be liable for a breach of contract if the certificate is false, but the liability is not a consequence of the official capacity of the recorder. Bldg. Ass’n v. Whitacre, 92 Ind. 547 (Ind. 1883).
46. A timber buyer is responsible for determining whether a described parcel of real estate is the site where a timber harvest is to occur. If the services of a registered land surveyor, a licensed attorney, or another professional are required to be assured the timber buyer knows who owns a parcel of real estate, then obtaining those services is an element of due diligence.
47. As to the timber harvest on the subject real estate, Bowers did not perform due diligence. The Claimants are without fault and are entitled to triple stumpage value for the timber wrongfully harvested. The Claimants are entitled to an administrative judgment against Bowers in the amount of three times $2,407.63. The Claimants are entitled to an administrative judgment against Bowers in the amount of $7,222.89.
D. Other Damages Resulting from the Wrongful Activities of a Timber Buyer
48. O’Neal testified, “I feel like there was destruction of property from the timber equipment, damage to other trees due to the timbering, the property value definitely decreased, and what would the value of the trees be ten years down the road from now?” She added her enjoyment of the subject property has been decreased by the loss of shade, increases in weeds, and limits to the use of ATVs.
49. The factors considered for damages from a wrongful timber harvest are set forth in Ind. Code § 25-36.5-1-3.2(f). In addition to the possibility of triple stumpage value, Section 3.2 provides in subdivision (1) that a landowner may seek “[d]amages in compensation for damage actually resulting from the wrongful activities of a timber buyer or timber cutter.”
50. 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 Indiana provided insight into interpretation of the phrase in Wright v. Reuss, 434 N.E.2d 925, 930. The costs for repairing fences, repairing ruts, and removing felled but unharvested trees and debris might appropriately be included. The costs for replacing felled trees would not.
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51. The application of IC § 25-36.5-1-3.2(f)(1) is stated in Roberts v. Voorhees, 453 N.E.2d 342, 343 (1983 Ind. App.) as the secondary goal of the Timber Buyers Act. The primary goal of the Timber Buyer Act is to insure a landowner is compensated for the harvest of standing timber. The secondary goal is to protect the landowner “from damage to his land resulting from improper logging methods.”
52. 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 significant to determining whether a timber buyer conducted a timber harvest properly. Goldasich v. Hites, et al., 11 Caddnar 165, 176 (2007). The Commission has ordered compensation for 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).
53. Nothing in the record would support a finding that Bowers’ timber harvest on the subject real estate failed to meet industry standards or was otherwise performed improperly. Loss of shade is probably an inevitable result of a timber harvest. At least in the near term, weeds are likely to replace trees. The possible future value of timber is speculative and not compensable. No estimates were provided by the Claimants for costs associated with site restoration. The Claimants have the burden of proof and have not identified any amount for financial loss other than for triple stumpage value.
54. The Claimants have provided no basis on which an award can be made for damages other than triple stumpage value. No additional award should be made to the Claimants under IC § 25-36.5-1-3.2(f)(1).
E. Contribution to Bowers from Spurgeon
55. Bowers relied in part on inaccurate representations by Spurgeon that she was the owner of the subject real estate. See, for example, Finding 20 through Finding 23.
56. Schulz previously told Spurgeon she was not the owner. How Schulz reached this conclusion is not disclosed by the evidence, but Spurgeon was put on reasonable notice that she should at least make a further inquiry. She did not.
57. Spurgeon was never the owner of the subject real estate. The shape of the subject real estate and its physical relationship to the Leia Spurgeon parcel do not provide a reasonable basis for her to believe she was the owner.
58. Bowers’ reliance on Spurgeon provides no defense to his responsibility to the Claimants. But because of her unsupported representations to Bowers of ownership to the subject real estate, she bears partial responsibility for the wrongful timber harvest. Spurgeon should be required to contribute $2,407.63 to Bowers in support of his administrative judgment to the Claimants. Entitlement to contribution from Spurgeon does not excuse Bowers from any portion of the Claimants’ administrative judgment against him.
FINAL ADMINISTRATIVE JUDGMENT
Part 1. Charlotte O’Neal and Margie Speckner are granted an administrative judgment against Benjamin Todd Bowers in the amount of $7,222.89.
Part 2. As a consequence of the administrative judgment granted in Part 1, Benjamin Todd Bowers is granted an administrative judgment for contribution against Leia Gay Spurgeon in the amount of $2,407.63.
Part 3. The administrative judgment addresses all issues of damage and responsibility among the Parties under Ind. Code § 25-36.5 and 312 Ind. Admin. Code § 14. After completing the opportunity for judicial review under Ind. Code § 4-21.5, this judgment may be enforced in a civil proceeding as a judgment.[6]