[CITE: Bengert v. Bulmer, et al., 13 CADDNAR 230 (2014)]
[VOLUME 13, PAGE 230]
Cause #: 11-198F
Caption: Bengert v. Bulmer, et al.
Administrative Law Judge: Jensen
Attorneys: pro se (Bengert); Clarkson (Bulmer); pro se (Other Respondents)
Date: February 26, 2014
[See Editor’s note at end of this document regarding change in the decision’s original format.]
FINAL JUDGMENT
127. Stephen T. Bengert and Anna Bengert are awarded an administrative judgment against Brett O. Bulmer d/b/a Bulmer Logging & Sawmilling in the amount of $24,159.33.
128. Stephen T. Bengert and Anna Bengert are awarded an administrative judgment against Dillon Richardson in the amount of $24,159.33.
129. The liability of Brett O. Bulmer d/b/a Bulmer Logging & Sawmilling and the liability of Dillon Richardson to Stephen T. Bengert and Anna Bengert is joint and several. An amount toward the judgment paid by either Brett O. Bulmer d/b/a Bulmer Logging and Sawmilling or Dillon Richardson shall be credited to the other. This credit includes any payment of restitution to Stephen T. Bengert and Anna Bengert through sentencing orders entered with respect to either of the Respondents by the Franklin County Court.
130. Stephen T. Bengert and Anna Bengert are awarded an administrative judgment against Ohio Casualty Insurance Company in the amount of $8,053.11. Bulmer and Richardson shall receive credit to the extent payment is made to Stephen T. Bengert and Anna Bengert by Ohio Casualty Insurance Company.
131. Stephen T. Bengert and Anna Bengert shall receive no award with respect to their complaint against Heidi Smith.
132. This administrative judgment addresses all issues of damage and responsibility among the parties under I.C. 25-36.5 and 312 IAC 14. After completing the opportunity for judicial review under I.C. 4-21.5, this judgment may be enforced in a civil proceeding as a judgment.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Jurisdiction and Procedural Summary:
1. On December 2, 2011, Claimant, Anna Bengert (“A. Bengert”) , filed correspondence with the Natural Resources Commission (“Commission”) seeking $24,159.33 in damages from Respondents, Brett O. Bulmer, d/b/a Bulmer Logging & Sawmilling (“Bulmer”), Ohio Casualty Insurance Company (“OCIC”), Dillon Richardson (“Richardson”), and a person identified only as “Heidi”. The correspondence alleged that these individuals were involved in the unlawful harvest of timber, the stumpage value of which was $8,053.11.
2. Following a continuance on the motion of Bulmer, a prehearing conference was conducted on February 9, 2012.
3. At the prehearing conference, Anna Bengert appeared in person along with her husband, Stephen T. “Tracy” Bengert (“T. Bengert”) who is a co-owner of the property from which the trees at issue were harvested. T. Bengert was joined as a Claimant in the instant proceeding. (Anna Bengert and Stephen T. Bengert are hereinafter referred to collectively as “the Bengerts”).
4. Bulmer appeared for the prehearing conference in person and by counsel, C. Jack Clarkson. Despite OCIC having confirmed receipt of the Notice of Prehearing Conference, no representative appeared.
5. Service upon Richardson was not accomplished for purposes of the February 9, 2012 prehearing conference.
6. At the February 9, 2012 prehearing conference the individual identified initially only as “Heidi” was identified as Heidi Smith (“Smith”). The Bengerts and Bulmer provided address information for both Richardson and Smith for the purpose of achieving service.
7. A supplemental prehearing conference was scheduled and conducted by teleconference on March 27, 2012 with all parties participating. At that time it was revealed that Bulmer, Richardson and Smith had each been charged with criminal offenses associated with the timber harvest from the Bengerts’ property. It was decided to defer action in the instant proceeding to allow a reasonable period of time for the criminal proceedings to be concluded, if possible.
8. The stay in this proceeding was lifted on April 16, 2013.
9. The parties conducted necessary discovery and an administrative hearing was conducted on November 14, 2013 at the Brookville Reservoir Office in Brookville, Indiana. The Bengerts and Smith appeared pro se. Bulmer appeared in person and by counsel, C. Jack Clarkson.
10. OCIC and Richardson failed to appear for the administrative hearing.
11. The instant proceeding was initiated pursuant to I.C. 25-36.5-1-3.2, which states:
(b) …if there is reason to believe that:
(1) the timber buyer or timber cutter has acquired timber from a timber grower under a written contract for the sale of the timber without payment having been made to the timber grower as specified in the contract; or
(2) if:
(A) there is no written contract for the sale of the timber; or
(B) there is a written contract for the sale of the timber but the contract does not set forth the purchase price for the timber;
the timber buyer or timber cutter has cut timber or acquired timber from the timber grower without payment having been made to the timber grower equal to the value of the timber as determined under IC 26-1-2.
I.C. 25-36.5-1-3.2(b) & (c). Also applicable is 312 IAC 14.
12. A proceeding under I.C. 25-36.5-1-3.2 is initiated in accordance with I.C. 4-21.5-3-8. I.C. 25-36.5-1-3.2(b).
13. The Commission is the ultimate authority, as that term is defined at I.C. 4-21.5-1-15, with respect to adjudicatory proceedings initiated under I.C. 25-36.5. 312 IAC 14-1-2(d).
14. The Commission possesses jurisdiction over the subject matter and over the persons of the parties.
[VOLUME 13, PAGE 231]
Final Order of Default as to OCIC and Richardson:
15. Immediately before commencing the administrative hearing the administrative law judge was advised that Richardson was incarcerated and was believed to be in the Franklin County Jail. An attempt was made to arrange for Richardson’s transport from the jail to the Brookville Reservoir Office such that Richardson could participate in the administrative hearing. It was subsequently determined that Richardson had been transferred to the Indiana Department of Correction and his presence for the administrative hearing could not be secured.
16. The administrative law judge observed that Richardson had previously been irresponsible in notifying the administrative law judge with respect to revised contact information and had on earlier occasions failed to appear for telephone status conferences. The administrative law judge further observed that Richardson had failed to offer any notification of his incarceration, had failed to seek a continuance of the administrative hearing for that reason and had failed to seek transport for purposes of permitting his participation in the administrative hearing.
17. The administrative law judge determined that under the circumstances the issuance of a final order of default pursuant to 312 IAC 3-1-9(d) would be appropriate. However, the administrative law judge suggested, and the parties present, agreed that Richardson be provided an opportunity, upon his request, to testify and to cross examine witnesses who testified during the administrative hearing.
18. The administrative law judge notes that Richardson failed to file a witness and exhibit list and as such would have been refused the opportunity to call any witnesses in his own behalf, except those called by other parties.
19. Richardson was provided until December 2, 2013 to notify the administrative law judge of his election to exercise the offered right to testify and to cross examine the witnesses who testified during the administrative hearing. Richardson failed to timely exercise this offered right.
20. However, on December 23, 2013, Richardson submitted correspondence indicating the expectation that he would be released from incarceration on January 15, 2014 and requesting a continuance until that time in order to allow him to make contact.[1]
21. As of January 24, 2014, Richardson has not initiated further contact.
22. As a result of Richardson’s failure to appear for the administrative hearing along with his failure to take appropriate steps to ensure his ability to appear or to exercise his right to cross examine witnesses through means of a bifurcated administrative hearing, a final order of default should be and is now entered against Richardson.
23. OCIC also failed to appear for the administrative hearing after having also failed to appear for all but one prehearing conference or status conference.
24. It is likewise determined that a final order of default should be and is now entered against OCIC.
25. In accordance with 312 IAC 3-1-9(d) a final order of default is entered as to both Richardson and OCIC and pursuant to 312 IAC 3-1-9(c), the Administrative Law Judge will conduct all other action necessary to complete the proceeding.
Findings of Fact:
26. The Bengerts are the owners of real property located at 15031 Ott Road, Laurel, Indiana from which standing timber was harvested pursuant to a contract between the Bengerts and Bulmer.
27. At all times relevant to the events at issue Bulmer was the holder of a valid timber buyer’s license issued in accordance with I.C. 25-36.5 bearing the company license number FTB000765.
28. As required, Bulmer purchased a surety bond in the amount of $20,000 from OCIC.
29. Richardson is not the holder of a timber buyer’s license under I.C. 25-36.5-1-2.
30. Richardson is not the holder of a timber buyer agent’s license under I.C. 25-36.5-1-15.
31. On three separate occasions Richardson engaged the Bengerts in conversation regarding the harvest of timber from the Bengerts’ real property.
32. Richardson expressed to the Bengerts that as Bulmer’s partner and timber cutter he worked under the license held by Bulmer.
33. Smith confirmed that Richardson represented himself as Bulmer’s partner observing that Richardson truly considered himself to be Bulmer’s partner.
34. On the first two occasions in which Richardson engaged the Bengerts he was allowed to walk the property and thereafter tendered offers to purchase the Bengerts’ timber that were rejected.
35. On the third occasion, T. Bengert walked the property with Richardson to provide Richardson an “idea of where the property starts and ends.” During this walk, Richardson took notes and started marking trees using a can of white spray paint. However, after marking only three or four trees Richardson ran out of paint. The Bengerts, who are not familiar with tree species, do not know the species of the trees Richardson marked.
36. Richardson advised T. Bengert that there were 14 Hickory trees of interest and after further discussion Richardson and the Bengerts orally settled upon a purchase price and contract terms associated with the timber harvest.
37. The Bengerts understood the oral agreement to allow the harvest of 14 Hickory trees under certain agreed upon conditions pertaining to the location where the staging of logs would occur and the location where vehicles could be driven to access the timber, as well as a prohibition on the use of heavy equipment when the ground was not solid.
38. There exists a degree of inconsistency between A. Bengert and T. Bengert with respect to the amount they were to be paid for the 14 Hickory trees.
39. T. Bengert testified that he did not expect to receive any more compensation than the $4,350 specified in the contract.
40. However, A. Bengert testified that her understanding of the agreement was for the Bengerts to be provided a copy of the sales slips for the logs as verification of the selling price and receive one half of the selling price of the logs from the 14 Hickory trees. A. Bengert understood the $4,350 figure was the minimum amount the Bengerts would receive.
41. The terms of the oral agreement were accepted by the Bengerts and Richardson and before parting company, Richardson provided the Bengerts a note containing his telephone number upon which he also wrote “14 Hickory Trees $4,350 HARD NUMBER”. Claimant’s Exhibit A.
[VOLUME 13, PAGE 232]
42. T. Bengert’s understanding of the amount to be paid under the contract is most consistent with the note written by Richardson contemporaneous with the negotiation of the contract terms, which undisputedly reflect that the $4,350 was a “hard number.”
43. After orally agreeing to the contract terms, the Bengerts were presented with a written contract.[2]
44. Bulmer had prepared the contract based upon Richardson’s representations and indicated that the Bengerts would receive payment of $4,350 but identified the items to be sold simply as “said logs”. The remaining conditions surrounding such things as the location of the staging area and the locations to be used for access are not included in the written contract.
45. A. Bengert refused to sign the contract as written for the reason that she believed the contract to be too vague.
46. Despite a realization that the contract was vague, T. Bengert executed the contract. T. Bengert explained that he had consulted with two neighbors, one of whom showed him a contract written in nearly the same way. Both of the neighbors expressed satisfaction with the business dealings they had previously had with Richardson and Bulmer. Both of the neighbors offered that to some degree it was a matter of trust.
47. T. Bengert understood his agreement with Richardson to be the sale of 14 Hickory trees, so while the contract stated that “said logs” had been sold for $4,350 T. Bengert “took that to mean 14 Hickory trees.” Testimony of T. Bengert.
48. The evidence reveals that Smith was essentially an assistant of Richardson’s. Smith is responsible for presenting the contract, prepared by Bulmer, to the Bengerts and following execution by T. Bengert returning the original contract to Bulmer who, in turn, also signed the document. There is no evidence that Smith assisted Richardson in the negotiation of the contract.
49. Bulmer acknowledged that Richardson “priced” the Bengerts’ trees and he approved that price. Bulmer claimed no knowledge of any agreement to divide the proceeds of the sale of the timber 50/50 with the Bengerts.
50. According to Bulmer, Richardson conveyed to him that the contract was for the harvest of 34 trees of various species from the Bengerts’ property in exchange for the $4,350 payment specified.
51. Bulmer made no effort to confirm the information he received from Richardson.
52. The only evidence in the record with respect to the number of and species of trees that were to be harvested in exchange for the $4,350 payment to the Bengerts comes from the Bengerts and from Bulmer.
53. There is no dispute in the record that Richardson provided the Bengerts with the handwritten note containing his phone number along with the reference to 14 Hickory trees and the payment of $4,350 as a “hard number.”
54. During the administrative hearing, the testimony provided by both T. Bengert and A. Bengert was straightforward, logical and reasonable.
55. Bulmer’s testimony, on the other hand, was evasive. He repeatedly answered “I don’t know” to simple questions. On one occasion Bulmer refused to provide any answer other than “I don’t know” to a question regarding whether a date in November 2011 came before or after a date in December 2011. Bulmer who had appeared alert, calm and attentive throughout the administrative hearing became fidgety, yawning, stretching and displaying simply bizarre behavior during his testimony. At one point Bulmer simply left the witness chair without being excused proclaiming the need for a drink of water.
56. From the evidence available it is reasonable to conclude that the Bengerts entered into a contract to sell to Bulmer 14 Hickory trees for the prescribed compensation of $4,350.
57. Bulmer rejected any contention that Richardson was his partner. However, Bulmer acknowledged that Richardson was representing him with respect to the transaction between Bulmer and the Bengerts.
58. Bulmer confirmed further that Richardson had negotiated six to eight other contracts in addition to the contract with the Bengerts. Bulmer expressed his belief that it would not hurt anything to allow Richardson to negotiate the contracts.
59. The events and discussions between the Bengerts and Richardson leading up to the execution of the contract along with the fact that Bulmer prepared a contract between himself and the Bengerts based upon the representations of Richardson supports the conclusion that Richardson was serving as Bulmer’s agent and provides credence to the Bengerts’ stated belief that Richardson was the partner of Bulmer.
60. In acknowledging that Richardson negotiated the contract with the Bengerts, Bulmer stated “I wasn’t aware of everything.”
61. In addition to negotiating the contract with the Bengerts, Richardson was the timber cutter responsible for the timber harvest occurring on the Bengerts’ property.
62. Smith’s only involvement in the matters underlying the instant proceeding involved delivering the contract to the Bengerts for signature and assisting Richardson in cutting, trimming and staging the timber.
63. The logs resulting from the timber harvest were removed from the Bengerts’ property on May 12, 2011. In accordance with Richardson’s representations, the Bengerts expected to receive payment for the logs on May 13, 2011.
64. On May 16, 2011, having yet not been paid for the timber, A. Bengert inquired of Richardson about payment. Richardson explained that Bulmer was awaiting payment from the buyer and that upon receipt the check would be deposited and funds would not be available for five days.
[VOLUME 13, PAGE 233]
65. When the cutting was complete and the logs had been removed from the staging areas, T. Bengert walked his property and realized that more than 14 Hickory trees had been cut. T. Bengert was already aware that a second staging area was established in a location different than what had been authorized but discovered other significant property damage had occurred in the woods as a result of the timber harvest. T. Bengert also observed that “good sized trees” had been cut and left in the field to gain access to larger trees that had been taken.
66. T. Bengert was obligated to repair the damage associated with one of the staging areas, which he did himself with his tractor. Otherwise T. Bengert has let “nature take its course” to correct the damage.
67. There is no evidence regarding expenses incurred as a result of property damage.
68. On June 1, 2011, the Bengerts walked the woods and identified 35 tree stumps from trees that had been harvested.
69. By June 9, 2011, the Bengerts filed a complaint with the Department of Natural Resources, Division of Law Enforcement with respect to the fact that they had not received payment from Bulmer pursuant to the contract and pertaining to their allegation that an excessive number of trees had been harvested.
70. On June 10, 2011, Bulmer arrived at the Bengerts’ home and delivered a check numbered 6365 in the amount of $4,350. The date on the check was May 14, 2011 and in the memo line was written “Logs Bought”. A. Bengert refused to accept the check until Bulmer agreed to reflect on the check that the $4,350 payment was for only 14 Hickory trees. Bulmer acquiesced and wrote “14 Hickory Marked Trees” on the face of the check.
71. It is interesting to note that while Bulmer referred to the 14 Hickory trees as “marked” trees, the evidence reveals that only three or four trees of unknown species were actually marked by Richardson before he ran out of paint.
72. Bulmer explained to A. Bengert on June 10, 2011 that he had attempted to deliver the check twice before but had found no one home.
73. Harold Bulmer (“H. Bulmer”), Bulmer’s father, testified that he had been with Bulmer on two to four occasions when Bulmer had attempted to deliver payment to the Bengerts.
74. H. Bulmer particularly recalled one instance when he claims A. Bengert would not answer the door despite the fact that he observed her standing inside. A. Bengert denied refusing to answer the door for Bulmer.
75. Great effort is not being made to ascertain the number of times Bulmer attempted to deliver the Bengerts’ payment or whether A. Bengert did refused to answer the door as H. Bulmer claims. The reality is that while the Bengerts waited longer than they anticipated for payment they received check number 6365 from Bulmer less than 30 days after the logs were removed from the Bengerts’ property.
76. The fact that delivery of check number 6365 was delayed is of little consequences to this proceeding.
77. On June 10, 2011 and to this date the Bengerts believe they are entitled to receive additional compensation for the trees harvested in excess of the agreed upon 14 Hickory trees. For that reason the Bengerts did not immediately negotiate check number 6365.
78. Eventually, on November 12, 2011, the Bengerts deposited check number 6365 and on November 14, 2011 received notice of insufficient funds with respect to the check.
79. On December 1, 2011, the Bengerts received a certified check in the amount of $4,567.50 to replace check number 6365.
80. The amount of the certified check constituted replacement of the original $4,350 that represented payment pursuant to the timber contract plus additional sums associated with fees and other remedies associated with Bulmer’s issuance of the insufficient funds check.
81. The additional sums included in the certified check do not represent payment for the trees harvested from the Bengerts’ property in excess of the 14 Hickory trees.
82. Bulmer was, in the months between June and November 2011, engaged in the process of separating the finances of Bulmer Logging and Sawmilling from his and his wife’s personal finances. A part of that process included the transfer of company funds from Bulmer’s and his wife’s personal checking account to the Bulmer Logging and Sawmilling checking account. Check number 6365, issued to the Bengerts, was written from Bulmer’s and his wife’s personal account and by November 12, 2011, approximately five months after delivery to the Bengerts, there were not sufficient funds in that account to cover the check. However, there was $26,442.71 in the Bulmer Logging and Sawmilling account on October 31, 2011.
83. The circumstances surrounding the insufficient funds check are unfortunate. The evidence viewed as a whole does not support the conclusion that Bulmer issued check number 6365 with any knowledge or intent that it would not be honored; however, it was Bulmer’s sole responsibility to ensure that check number 6365 tendered to the Bengerts would be honored.
84. Bulmer has paid the original contract amount of $4,350 to the Bengerts along with assessed fees associated with the issuance of the insufficient funds check. The Bengerts’ claims of nonpayment pursuant to the contract are also of little consequence to the instant proceeding.
85. However, as A. Bengert pointed out during her testimony there remains the issue of payment for the additional trees harvested in excess of the 14 Hickory trees.
86. The parties stipulated to the education and qualifications of Duane McCoy (“McCoy”), the Department of Natural Resources’ (“Department”) Timber Buyer Licensing Forester. McCoy was consequently recognized as an expert with respect to timber assessment and valuation.
87. McCoy confirmed that the Bengerts had contacted him about Bulmer’s and Richardson’s activities alleging that a number of trees had been harvested in excess of what was authorized by the contract. McCoy referred the Bengerts to the Local District Headquarters for the Department’s Law Enforcement Division to file a complaint. At a later time, McCoy, along with the Conservation Officer Corey Norrod, inspected the Bengerts’ property and McCoy later prepared an appraisal for the timber cut.
88. It is noted that the evidence in this proceeding includes evidence relating to trees harvested from property owned by Pamela Kerkhoff. During the timber harvest conducted on the Bengert property by Richardson, on behalf of Bulmer, access was made to Pamela Kerkhoff’s property by driving through a fence separating the properties. Because the Department’s Law Enforcement Division investigation involved the timber harvest from both the Bengerts’ and the Kerkhoff’s properties, the record of this proceeding includes certain evidence regarding the timber harvested from the Kerkhoff property. It is confirmed here that this proceeding does not involve the timber harvested from Pamela Kerkhoff’s property and that evidence is not being further considered.
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89. Through an examination of the Bengerts’ property that occurred on August 22 – 24, 2011 and on August 30, 2011, McCoy identified 38 trees that had been harvested. Exhibit V-1. The trees harvested included “16 Black Cherry, 13 Black Walnut, 3 Hickory, 2 Black Oak, 2 Sassafras, 1 Red Oak and 1 White Oak” containing 10,852 board feet with a total stumpage value of $8,053.11.” Id.
90. Stumpage value is the amount that “most closely represents the value of the trees ‘standing on [their] property’” without account for imperfections that could not be discovered until after the trees were harvested. Pollock v. Coats, 8 CADDNAR 124, 125, (1999)
91. It is irreconcilable that Richardson memorialized in his written note that 14 Hickory trees would be harvested, when in reality only three of the 38 total trees harvested were Hickory trees.
92. One might also speculate that compensation to a timber grower in the amount of $4,350, which represents approximately 54% of the stumpage value calculation of $8,053.11, would have been reasonable compensation to the timber grower.
93. It is somewhat certain that Richardson’s testimony may have been yielded a degree of enlightenment; however, he did not appear and neither the Bengerts nor Bulmer insisted upon his participation as either a party or a witness during the administrative hearing.
94. McCoy testified that he “measure[s] the stump at least three times to get the diameter for the stump outside bark, I measure the top inside bark the same way for diameter and then I get a distance. I usually look for marks on the ground or something where I can see where the tree; the butt log landed and then I try to get an estimate of length for that tree. Once I have that I can go back in the office; I can get the lengths and the diameters and put a straight taper on it to get an estimate of volume and grade. I also look to see what’s been trimmed off that tree while it was on the ground before it was moved to the landing.” Testimony of McCoy.
95. McCoy’s valuation of the Bengerts’ timber is based upon sound and accepted valuation practices for ascertaining the volume and grade of the timber and using the 2010 average price report, compiled from a survey of all the mills in Indiana, for the assignment of value. The valuation of the Bengerts’ timber also included a deduction for “cut, skid and haul” expenses of either $0.16 or $0.17[3] per board foot to compensate normal “costs of doing business.”
96. Bulmer eventually plead guilty to criminal trespass and was placed on probation with an order to pay restitution to the Bengerts in the amount of $8,053.11.
97. With respect to the restitution order issued as a result of Bulmer’s plea agreement, Bulmer has paid the Bengerts the contract amount of $4,350 towards the $8,053.11, restitution order.
Conclusions of Law:
98. As persons who are owners of land “entitled to receive any part of the proceeds from, the sale of timber grown in this state”, the Bengerts are “timber growers”. I.C. 25-26.5-1-1 & 312 IAC 14-2-12.
99. Bulmer, as “a person engaged in the business of buying timber from timber growers for sawing into lumber, processing, or resale” is a “timber buyer”. I.C. 25-36.5-1-1 & 312 IAC 14-2-10.
100. Richardson served as Bulmer’s “timber cutter” as a “person who cuts timber but who is not a timber buyer.” 312 IAC 14-2-11.
101. Within the context of I.C. 25-36.5-1, “‘Agent’ means an individual who represents a timber buyer in effecting or attempting to effect purchases of timber.”
102. “Apparent authority” is the authority that a third person reasonably believes an agent to possess because of some manifestation from the agent's principal. The necessary manifestation is one made by the principal to a third party, who in turn is instilled with a reasonable belief that another individual is an agent of the principal. Id. at 1166-67. It is essential that there be some form of communication, direct or indirect, by the principal, which instills a reasonable belief in the mind of the third party. Id. at 1167.” Cain Family Farm v. Schrader Real Estate, 991 N.E.2d 971, 977, (Ind.App. 2013) citing Pepkowski v. Life of Indiana Ins. Co., 535 N.E.2d 1164, 1166 (Ind.1989).
103. Through his acknowledgment that Richardson negotiated contracts on his behalf, including in this instance the Bengert contract, Bulmer admitted the existence of an agency relationship between himself and Richardson.
104. Additionally, the evidence is at odds with any attempt of Bulmer to refute the existence of such an agency relationship with Richardson. The evidence is clear that Bulmer, as the principal, communicated with “third persons”, the Bengerts, through his preparation, presentment and execution of a written contract based upon the representations of Richardson. Without doubt, the Bengerts’ reasonably believed Richardson’s representations to be the representations of the principal, Bulmer.
105. It is of no impact to the liability of Bulmer, OCIC or Richardson, that Richardson did not possess a timber buyer agent’s license under I.C. 25-36.5-1-15. I.C. 25-36.5-1-1 & 312 IAC 14-2-2, Bowman v. Browning Logging & State Farm Ins., 13 CADDNAR 79 (2012).
106. The purpose of I.C. 25-36.5 is to “protect timber growers that are harmed by timber buying activities which are unlawful or incompetent.” Bowman v. Browning Logging & State Farm Ins., 13 CADDNAR 79, 85, (2012)
107. Bulmer prepared the contract that was executed by the Bengerts. Clearly, Bulmer intended to purchase and T. Bengert intended to sell timber for $4,350.
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108. With respect to contracts for the purchase of timber,
Reference is properly made to IC § 26-1-2 and the Uniform Commercial Code in determining the treatment and sale of timber harvested from the subject property.
IC § 26-1-2-204(1) provides that “A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.”
A contract for the sale of goods may be made in any way sufficient to show the parties to the contract recognized the existence of an agreement. Even if a contract form used does not establish a binding contract, the conduct of the parties can make a contract binding. Gumz v. Starke Cty. Farm Bureau Co-op Assn., 395 N.E.2d 257, 262 (Ind. 1979) applying IC § 26-1-2-204(1).
IC § 26-1-2-204(3) provides that “Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.”
Stell v. Allen, d/b/a, A& S Logging, 12 CADDNAR 124, 133 (2009)
109. As was the situation in Allen, the conduct of parties involved here clearly demonstrate their belief that a binding contract for the sale and purchase of timber existed.
110. However, exactly what timber it was that Bulmer intended to purchase and the Bengerts intended to sell is not entirely clear because the contact refers to the timber simply as “said logs.”
111. The vagueness in the identification of the timber to be sold creates an open term in the contract.
112. IC § 26-1-2-202 provides:
Terms with
respect to which the confirmatory memoranda of the parties agree or which are
otherwise set forth in a writing intended by the parties as a final expression of
their agreement with respect to such terms as are included therein may not be
contradicted by evidence of any prior agreement or of a contemporaneous oral
agreement but may be explained or supplemented:
(a) by course of dealing or
usage of trade (IC § 26-1-1-205) or by course of performance (IC § 26-1-1-205); and
(b) by evidence of consistent
additional terms, unless the court finds the writing to have been intended also
as a complete and exclusive statement of the terms of the agreement.
113. The handwritten note provided by Richardson to the Bengerts is the only evidence of additional terms that are consistent with, and that also provide explanation and supplementation to define specifically the term “said logs” as presented in the actual written contract. Allen, supra.
114. From the evidence it is reasonably concluded that Richardson, as Bulmer’s agent, agreed to purchase and T. Bengert agreed to sell 14 Hickory trees for the specified $4,350.
115. In actuality, there were 38 standing trees of various species harvested from the Bengerts’ property. It is acknowledged that Richardson, as Bulmer’s timber cutter failed to harvest 11 of the Hickory trees contracted for but of the 34 trees harvested, only the three Hickory trees, were within the number and species of trees the Bengerts agreed to sell.
116. The stumpage value of the timber harvested from the Bengerts’ property is $8,053.11.
117. The relief sought by the Bengerts is $24,159.33, which constitutes the full imposition of treble damages, or three times the stumpage value of the timber harvested.
118. The Commission has routinely held that it possesses the authority to impose liability in an amount less than the full impact of the treble-damages clause where such an imposition would work an injustice. Allen, supra.
119. In this instance, Bulmer utilized the services of an agent, Richardson, who was not licensed in accordance with I.C. 25-36.5-1-15. Furthermore, despite Bulmer’s stated understanding, from Richardson, that the contract price of $4,350 was intended as compensation for the harvest of 34 trees, Bulmer admits to having prepared the contract identifying the timber simply as “said logs”.
120. If Bulmer had properly identified the timber to be purchased and harvested the controversy regarding the timber harvest at issue may have been avoided.
121. These factors, along with the deceitfulness apparent in Bulmer’s administrative hearing testimony, provide impetus for the imposition of the full treble damages award.
122. As a timber buyer, Bulmer is responsible to the Bengerts for his own actions as well as for the actions of his agent and timber cutter, Richardson. Schneider v. Grosnickle and Cincinnati Ins. Co., 9 CADDNAR 180 (2004).
123. As a timber cutter and as the agent of Bulmer, Richardson is likewise liable to the Bengerts.
124. The bond issued by OCIC to Bulmer was required by I.C. 25-36.5-1-3 for the purpose of providing “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.” Gallien v. Sloan Logging, Pendley & Zurich N. Am., 9 CADDNAR 40, 40, (2002), also 312 IAC 14-5-1.
125. Liability of OCIC is limited to the actual value of any timber wrongfully or unlawfully cut and appropriated. I.C. 25-36.5-1-3.2(g).
126. Smith bears no liability to the Bengerts.
[EDITOR’S NOTE: The original format of the Findings of Fact, Conclusions of Law, and Final Order has been modified to correspond with CADDNAR format. The Final Order, Paragraphs 127 through 132, have been relocated to the “Final Order” section at the beginning of this document.]
[1] The correspondence was not served upon the remaining parties and thus did not constitute a validly filed pleading appropriate for action.
[2] After the first day of cutting timber at the Bengerts’ property, Smith discovered that a contract had not been executed between Bulmer and the Bengerts. She did not want to proceed with the cutting until a contract was signed so she facilitated delivery of the contract to the Bengerts for execution and thereafter returned the original contract to Bulmer.
[3] McCoy was uncertain whether in 2011 he was deducting $0.16 or $0.17 per board foot but was certain that he deducted the “cut, skid and haul” expenses from the valuation.