Ward v. Sturgeon, et al (20-040F), 16 CADDNAR 14
Administrative Cause Number: 20-040F
Administrative Law Judge: Elizabeth Gamboa
Petitioner Counsel: Glen E. Koch, II
Respondent Counsel: Edward Harney Jr., and Paul Watts
Date: March 3, 2023
[Editor’s Note: Final Order follows Findings of Fact and Conclusions of Law.]
FINDINGS OF FACT AND CONCLUSIONS OF LAW WITH FINAL ORDER
Procedural Background and Jurisdiction:
1. On July 30, 2020, James Ward (“Ward”) filed a request for a hearing on his complaint against Clint Sturgeon (Sturgeon) and Phillip Curry (Curry). Ward alleged that approximately two acres of his property had been clear cut and rutted by heavy equipment, and that debris was left on his property, making his property inaccessible and resulting in a costly clean up.
2. Ward attached an affidavit from Duane McCoy, Timber Buyer Licensing Forester with the Department of Natural Resources, to his request, which indicated 42 trees had been harvested with an appraised stumpage value of $4,181.44.
3. By filing the complaint, Ward initiated a proceeding governed by Ind. Code 4-21.5-3, also known as the Indiana Administrative Orders and Procedures Act (AOPA).
4. Administrative Law Judge (ALJ) Sandra Jensen was appointed to preside over the case.
5. On August 10, 2020, the Natural Resources Commission (Commission) notified Sturgeon, Curry and Fidelity and Deposit Company of Maryland/Zurich (Fidelity) of the complaint by sending a copy of the complaint to each party with a Notice of Prehearing Conference. Notice of Telephonic Prehearing Conference.
6. On September 8, 2020, attorney Paul Watts entered an appearance on behalf of Sturgeon and Curry.
7. A Telephonic Prehearing Conference was held as scheduled on September 9, 2020, during which an administrative hearing was scheduled for December 16, 2020.
8. On September 10, 2020, Patricia Schroeder, claims counsel for Zurich Commercial Surety Claims, notified the Commission that notices and orders should be forwarded to Schroeder.
9. An order joining the Phillip L. Curry and Susan L. Curry Revocable Living Trust (“Curry Trust”) as a Third Party was issued by the Commission on September 11, 2020. Mr. Watts also represents the trust.
10. A Telephonic Status Conference (TSC) was held as scheduled on November 19, 2020, during which the December 16, 2020 hearing was vacated and a TSC scheduled for January 19, 2021.
11. The January 19, 2021 TSC was continued to January 27, 2021 on the ALJ’s motion.
12. The January 27, 2021 TSC was rescheduled because Ward failed to appear.
13. Edward Harney entered an appearance on behalf of Sturgeon on January 29, 2021.
14. On February 2, 2021, Glen Koch entered an appearance on behalf of Ward.
15. A TSC was held March 3, 2021, after which another TSC was scheduled for May 5, 2021.
16. At the TSC conducted on May 5, 2021 a case management order was established, scheduling a final TSC for September 23, 2021 and an administrative hearing for October 4, 2021.
17. The October 4, 2021, hearing was rescheduled to October 20, 2021 by order dated July 1, 2021.
18. At a TSC held September 23, 2021, ALJ Jensen appointed ALJ Dawn Wilson to preside over this matter due to ALJ Jensen’s retirement. The October 20, 2021 hearing date was vacated and a hearing was scheduled for December 15, 2021.
19. On December 7, 2021, ALJ Wilson notified the parties of her pending retirement and vacated the December 15, 2021 hearing.
20. Administrative Law Judge Gamboa was appointed to preside over this matter and a TSC was scheduled for June 7, 2022.
21. By agreement of the parties at the June 7, 2022 TSC, a hearing was scheduled for October 20, 2022.
22. The hearing was held as scheduled on October 20, 2022, at McCormick’s Creek State Park.
23. Ward appeared in person and by counsel, Glen Koch. Phillip Curry appeared in person and by counsel, Paul Watts. Clint Sturgeon appeared in person and by counsel, Edward Harney.
24. The following witnesses were duly sworn and testified at the hearing: James Ward, Rodney Collier, Chris Hargis, Duane McCoy, Lieutenant Dale Clark, David Meier, Clint Sturgeon and Phillip Curry.
25. The following exhibits were accepted into evidence without objection: Petitioner’s Exhibits 1 through 7, 8 through 67, and 73 through 77; Respondents’ Exhibits A through H.
26. Respondents and Petitioner filed post-trial briefs on November 21, 2022.
27. Pursuant to Ind. Code § 25-36.5-1-3.2, a timber grower may initiate a proceeding with the Commission against a timber buyer or timber cutter if the timber is cut or acquired from the owner without payment.
28. 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).
29. The Commission is the ultimate authority with respect to administrative proceedings under I.C. § 25-36.5. 312 IAC 14-1-2(d).
30. The Commission has jurisdiction over the subject matter and over the parties in this dispute.
Findings of Fact:
31. Ward owns property located at 3510 N. U.S. 231 Spencer, IN, in Owen County (“Ward Property”). Ward did not reside at the property in October, 2019, when this dispute arose.
32. The Ward Property is approximately 62 acres. Testimony of Ward.
33. Ward purchased the Ward Property from Ohio River Veneer and Logging Company (ORV) in 2018 for $28,000. Ward testified there were two properties involved in the same transaction and that the properties are currently worth $350,000. Testimony of Ward.
34. The Phillip L. Curry and Susan L. Curry Revocable Trust holds title to property adjacent to Ward’s property, located at 2955 Country Club Road, Spencer, Indiana (“Curry Property”). Curry purchased this property in 2005. Testimony of Curry.
35. Matthew Dorsett was purchasing the Curry Property “on contract” at the time this dispute arose. Testimony of P. Curry.
36. In October, 2019, Ward noticed Sturgeon a couple of other people on what Ward claims to be his property. The property at issue is a tract of approximately two acres along the property line separating the Ward Property from the north-west section of the Curry Property. Testimony of Ward.
37. Ward’s claim of ownership is based on a survey prepared by David Meier (“Meier”). Testimony of Ward.
38. David Meier prepared a retracement survey of the Curry Property in 2015 for Curry. Testimony of Meier; testimony of P. Curry.
39. In completing the survey, Meier conducted a deed analysis and reviewed previous surveys of the property. He also walked the property to determine if there were any inconsistencies between the deeds and the property itself. Testimony of Meier.
40. Meier noticed that the deed contained a directional bearing that was “opposite what it should be.” Further, there were stones called for in the deed that were in the creek bottom and could not be found. Testimony of Meijer.
41. Meier could not find a monument marking the northern point of the Curry Property. Meier set the corner of the property “the record distance north of the east corner of said section four” as described in the deed. Meier found trees near the location with what appeared to be old fencing in them that “lined up” with what Meier found to be the corner. The information from the deeds and this physical evidence led Meier to conclude that he had the corner of the property. Testimony of Meier.
42. Meier testified that when he could not find the monument for this corner of the property, he used accepted surveying practices to determine where the monument should be set. Testimony of Meier.
43. According to Meier’s survey, the Curry Property contains only 14 acres; whereas, the deed to the Curry Property indicates the property contains 18 acres. Meier explained that there are sometimes discrepancies in the acreage stated in the deed and the actual acreage of the property. Further, according to Meier, other factors were more important in his determination of the corner marker than the number of acres stated in the deed. Testimony of Meier.
44. Meier recorded his survey in 2017. Testimony of Meier.
45. Curry disputed the survey after it was completed and continues to do so. Testimony of Curry.
46. Curry told Meier in 2015 the survey was wrong because it is inconsistent with what shows on a phone application. Curry did not specify what application was being used. . Testimony of Meier
47. Curry maintained the northern corner of the Curry property is further north than what Meier established. Testimony of Meier, Testimony of Curry.
48. Meier spoke to Doug Graham, a surveyor, sometime after Ward initiated this case. The two discussed Meier’s decision to place the marker for the northernmost corner where he did. In Graham’s opinion, the corner could have been located further north. Testimony of Meier.
49. Graham did not testify at the hearing.
50. After speaking to Graham, Meier prepared a drawing to compare the difference between the monument he placed and Graham’s proposed placement. The exhibit is reproduced below:
“:
51. The trees at issue were harvested in the Discrepancy Area.
52. Ward did not obtain a new survey but retained Meier in 2020 to mark Ward’s property line adjacent to the Curry Property. Testimony of Ward; testimony of Meier.
53. Meier has several years of experience as a surveyor in the Owen County area. He demonstrated knowledge of best practices for surveyors and testified he used those best practices in surveying the Curry Property. His testimony is found to be credible.
54. Sturgeon is a seventh-generation logger and has held a timber buyer license, in either in his own name or through an employer, since 1987. Testimony of Sturgeon.
55. Currys, Sturgeon, and Dorsett entered into a Timber Sale Contract for the sale of 144 trees from Curry on March 17, 2018, from the Curry Property at issue here and from other property owned by Curry. Exhibit D; testimony of Sturgeon.
56. Sturgeon reviewed the deed to the Curry Property and a document Sturgeon referred to as the “Trico Survey” before he began harvesting timber. Exhibits E and F. Sturgeon
also observed ribbons along what he believed to be the property line between the Curry Property and the Ward Property. Curry believed the ribbons were set by ORV, who cut timber on the property before selling it to Ward. He compared the location of the ribbons and the “Trico Survey” to what appeared on ta phone application called 39 Degree North. 39 Degree North is an application based on the county’s GIS[1] information. Testimony of Sturgeon.
57. Sturgeon also walked the property with Dorsett. Testimony of Sturgeon.[2]
58. Sturgeon denied having seen the Meier survey before harvesting timber. Testimony of Sturgeon.[3]
59. The “Trico Survey,” the ribbons, the lines formed by ORV, as well as the information from 39 North appeared to Sturgeon to “all line up” and accurately mark the property line. Testimony of Sturgeon.
60. The “Trico Survey” to which Sturgeon referred is not a survey but a Surveyor Location Report[4] (“Trico Report”) and contains the following statement:
THIS REPORT IS DESIGNED FOR USE BY A TITLE INSURANCE COMPANY WITH RESIDENTIAL LOAN POLICIES. NO CORNER MARKERS WERE SET AND THE LOCATION DATA HEREIN IS BASED ON LIMITED ACCURACY MEASURMENTS. THEREFORE, NO liability will be assumed for any use of this date for construction of new improvements or fences.
61. The Location Report also provides:
I HEREBY CERTIFY TO THE PARTIES NAMED BELOW THAT THE REAL ESTATE DESCRIBED HEREIN WAS INSPECTED UNDER MY SUPERVISION ON THE DATE INDICATED AND THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF, THIS REPORT CONFORMS WITH THE REQUIREMENTS CONTAINED IN SECTIONS 42 THROUGH 44 OF 865 IAC 1.1-13 FOR A SURVEYOR LOCATION REPORT. THE ACCURACY OF ANY FLOOD HAZARD STATEMENT SHOWN ON THIS REPORT IS SUBJECT TO MAP SCALE UNCERTAINTY AND TO ANY OTHER UNCERTAINT IN LOCATION OR ELEVATION ON THE REFERENCE FLOOD INSURANCE RATE MAP.
Exhibit E.
62. The Trico Report also contains a specific warning that that the report was prepared “based on limited accuracy measurements.”
63. The Trico Report is of limited accuracy and its use in determining the respective property lines is found to be negligible.
64. Duane McCoy is the Timber Buyer License Enforcer for the Department of Natural Resources. One of his responsibilities in this position is to assist law enforcement and landowners in appraising timber that has been stolen. Testimony of McCoy.
65. Using the boundary flags Meier set on the Ward Property as a guide, McCoy assessed 42 trees on Ward’s property, including 24 American Sycamore, 7 Ash, 4 Hickory, 3 Black Walnut, 1 Red Oak, and 1 Bur-Oak. McCoy estimated the trees contained 19,808 board feet with an estimated appraised value of $4,.181.44. Testimony of McCoy; Exhibit 77.
66. McCoy’s valuation is not disputed.
67. To support his claim for remediation, Ward presented the testimony of Rodney Collier and Chris Hargis.
68. In July, 2020, Rodney Collier of Collier Construction provided an estimate for stump removal, road repairs and brush removal. Collier and Ward “walked the whole property” and saw approximately 40 trees that had been cut on two acres of Ward’s property. Collier’s estimate of $17,000 for “stump removal, road repairs, extra amount of brush removal, [and] build temporary bridge to get across creek.” Exhibit 75. According to Collier, the price to do the work in 2022 would be twice this amount. Testimony of Collier.
69. Chris Hargis, owner of Berger Hargis Landscape Management, provided an estimate to Ward to remediate Ward’s property. Hargis walked Ward’s property with Ward and saw “a huge mess” that was “going to take a long time to clean…”. Hargis provided an estimate of $57,000 for the following:
all cut up of treetops, logs and debris from where trees were cut and propped onto Mr. Wards property. This price is only from where the property stakes are to where they are currently laying. All wood will be stacked in places Mr. Ward desires. 4 guys for 4 weeks 4 x 10 hours a day = 200 hours a week x 4 weeks = 800hours. 800 hours x 65 \per hour
[illegible] per day 125 x. 20 days=2500.
Exhibit 76.
70. In addition, Harris testified it would cost $19,800 to grind all stumps and distribute the debris, for a total estimate of $76,800.00.
71. A large skidder was used by Sturgeon in harvesting the timber. Ward testified the skidder created ruts in his property. Testimony of Ward; Exhibit 1 -3.
72. The Ward Property is heavily forested. Pictures admitted into evidence show debris throughout the property. See generally, exhibits 1-7, 9-37.
73. Further, ORV had harvested trees from the property a few months before Sturgeon. Testimony of Sturgeon, testimony of Ward.
74. While there appears to be downed trees and debris on the property, the evidence does not support a determination that Curry caused the damage.
75. Lieutenant Dale Clark, a Department Conservation Office invested Ward’s complaint that timber had been improperly cut from his property. Clark submitted a copy of the report of his investigation to the Owen County prosecutor’s office; however, no criminal charges have been filed. Testimony of Lt. Clark.
76. Ward paid his attorney $3,000 in fees for this litigation. Testimony of Ward.
CONCLUSIONS OF LAW:
77. The timber industry is governed in Indiana law under Ind. Code § 25-36.5-1.
78. The Commission has adopted rules found at 312 IAC 14 to assist in the implementation of I.C.§ 25-36.5.
79. A “timber grower” is defined as the owner, tenant or operator of land in Indiana “who has an interest in, or is entitled to receive any part of the proceeds from, the sale of timber grown in this state and includes persons exercising lawful authority to sell timber for a timber grower.” Ind. Code § 25-36.5-1-1; 312 IAC 14-2-12.
80. As owners of property from which timber was harvested, Petitioner is a “timber grower.”
81. A “timber buyer” is a person who engages “in the business of buying timber from timber growers for sawing into lumber, processing, or resale . . ..” 312 IAC 14-2-10. Sturgeon is a timber buyer.
82. A timber grower may “file a complaint with the Commission against a timber buyer or a timber cutter to seek compensation under IC 25-36.5-1-3.2.” 312 IAC 14-6-1(a). An adjacent landowner may be joined in the complaint if the adjacent landowner has a relationship to the site or the subject of the complaint. 312 IAC 14-6-1(b).
83. In a claim against a timber cutter who wrongfully cuts timber brought pursuant to I.C. § 25-36.5-1-3.2, the timber grower may seek 1) damages in compensation actually resulting from the wrongful activities; 2) damages equal to three times the stumpage value of any timber wrongfully cut or appropriated without payment; 3) damages for costs associated with a claim or action; 4) damages specified by a contract between the timber grower and timber buyer. I.C. § 25-36.5-1-3.2. See also 312 IAC 14-6-2(a)(6).
PROPERTY OWNERSHIP
84. The first issue that must be resolved is whether Ward has met his burden by a preponderance of the evidence that the timber at issue here was harvested from the Ward Property.
85. Ward points to the Meier survey to support his claim of ownership. Meier’s survey was conducted according to standard licensed surveyor practices and was recorded in Owen County in 2017. The results of his survey were not contested at the hearing by another professionally prepared survey. The Meier survey is found to establish Ward’s property line. Ward has met his burden to establish the timber at issue was harvested from his property.
86. Both Curry and Sturgeon argue the Meier survey should not be considered because it contradicts the Tricor Report and the GIS information for the property. The Tricor Report is not a survey but a “Surveyor Location Report.” As stated on the face of the document, the report is based on limited accuracy measurements and was prepared for title insurance purposes.
87. In his post-hearing brief, Curry raised for the first time the time that he is owner of the disputed tract under adverse possession. The burden is on Curry to establish by clear and convincing proof, the following elements:
1. the exercise of a degree of use and control over the parcel that is ]normal and customary considering the characteristics of the land;
2. intent to claim full ownership of the tract superior to the right of all others, particularly the legal owner;
3. the claimant’s actions with respect to the land must be sufficient to give actual or constructive notice to the legal owner of the claimant’s intent and exclusive control; and
4. Each element is satisfied for the required period of time.
Frendewey & Bartuska v. Brase, 15 CADDNAR 121, 125 (2020).
88. The evidence shows that Curry believed the property in the discrepancy area belonged to him and that he paid taxes on 18 acres as indicated in his deed, not 14 acres as is stated in the Meier deed. This does not meet Curry’s burden of establishing each of the elements of adverse possession by a preponderance of the evidence.
89. Sturgeon also argues that he cannot be held to the Meier survey because it was not recorded when he harvested the trees. The survey was recorded int 2017, Sturgeon harvested the trees in 2019.
DAMAGES:
90. Ward seeks a damages award of $92,000: $12,544.32 for triple stumpage value; $3,000 in attorney fees; and the rest for remediation of the property.[5]
91. A person filing a complaint pursuant to I.C. § 25-36.5-1-3.2 may seek the following:
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 appropriated without payment.
3. Damages for costs associated with a claim or action, including attorney fees.
4. Damages specified by a contract between a timber grower and a timber buyer.
I.C. § 25-36.5-1-3.2(f).
Stumpage value:
92. Ward seeks damages in the amount of three times of the stumpage value of the improperly harvested trees. I.C. § 25-36.5-1-3.2(f).
93. “The purpose of the treble-damages clause is to ensure that timber buyers will exercise care in cutting of timber and to protect landowners from careless felling of their timber. “ O’Neal v. Bowers and Spurgeon, 13 CADDNAR 64, 67 (2012).
94. The treble damages provision “does not allow a timber buyer the defense of mistake of fact as to ownership of real estate where timber is located.” Beeman v. Marling, 646 N.E.2d 382 (Ind. Ct. App., 1995). Further, the timber grower is not required to show the person who wrongfully cut the timber acted with malicious intent. Id.
95. A timber cutter must use due diligence in determining whether a described parcel of real estate is the site where the timber harvest will occur. O’Neal, 13 CADDNAR 64 at 67.
96. McCoy’s stumpage appraisal of $4,181.44 is not contested. Curry and Sturgeon do not argue that an amount less than treble damages should be ordered.
97. Curry was aware of the Meier survey as he is the one who obtained it. Curry disputed the report as early as 2015 but made no attempt to resolve the dispute at the time it arose. It is not clear whether Curry told Sturgeon about the survey. For his part, Sturgeon relied, at least in part, on a surveyor location report that had limited accuracy. As the Meier survey was recorded in 2017, the survey was available to Sturgeon before he harvested the timber.
98. Under the circumstances presented here, an award of treble stumpage value, or $12,544.32 is warranted.
Remediation Claim:
99. Ward requests an amount between $17,000.00 and $76,800.00 for remediation of damage Ward claims was caused by the harvesting pursuant to I.C. 25-36.5-1-3.2(f).
100. Ward presented several pictures, in addition to his testimony, as evidence of the damage caused by the timber harvesting. While the pictures show felled logs, treetops, and debris on the ground in 2020 when the pictures were taken, the evidence is not sufficient to show that Sturgeon caused that damage. Further, given the disparity in price between what Ward paid for the property and what he estimates the current value to be, it is reasonable to conclude the property was not in pristine condition when he purchased it.
101. Ward is not entitled to an award for remediation.
Attorney fees:
102. Ward’s claim of attorney fees of $3,000 is supported by the evidence.
103. Ward is entitled to an award of attorney fees of $3,000 pursuant to I.C. 25-36.5-1- 3.2(f).
AMENDED NONFINAL JUDGMENT
104. Ward is awarded an administrative judgment of triple the value of the timber – $ 4,181.44 – in the amount of $12,544.32, as well as attorney fees in the amount of $3,000, for a total administrative judgment of $15,544.32.
105. The Respondents, Clint Sturgeon, Phillip Curry and the Phillip L. Curry and Susan Curry Revocable Living Trust are jointly and severally liable.
106. Pursuant to Ind. Code § 25-36.5-1-3.2(g), the liability on the surety bond is limited to the value of any timber wrongfully cut.
107. This administrative judgment is subject to judicial review under Ind. Code § 4-21.5-5.
108. This order addresses all issues of damage and responsibility amount the parties under Ind. Code § 25-36.5. After completing the opportunity for judicial review, this judgment may be enforced in a civil proceeding as a judgment.
[1] “GIS” is the common acronym for geographic information system mapping.
[2] Lt. Clark reported that Curry initially told him he (Curry) had walked the property with Sturgeon, but Curry later denied having done this. Testimony of Clark. Curry testified at the hearing he did not show Sturgeon a copy of the survey.
[3] Ward testified that when he approached Sturgeon on his property in 2019, it was Ward’s understanding that Sturgeon had a copy of the Meier report in his hands, but that Ward only “had a short glimpse of it.” Testimony of Ward.
[4] Surveyor location reports are specifically designed for use by title companies to determine the location of structures on a property. The reports are not required to comply with the requirements of a survey. See, 865 IAC 1-12-27.
[5] Ward presented two estimates for the necessary remediation: Collier’s proposal of $17,000 from 2020, which according to Collier, would be double that amount; and the Berger Hargis estimate of $76,800. Ward did not specify a specific amount in his request for remediation.