Pepper v. Browning, 16 CADDNAR 13
Administrative Cause Number: 22-045F
Administrative Law Judge: Elizabeth Gamboa
Petitioner Counsel: pro se
Respondent Counsel: pro se
Date: March 2, 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 June 25, 2022, Doug and Sharon Pepper (Peppers) filed a request for a hearing on their complaint against Gordon Browning. Petitioners asserted Browning harvested timber from their property without permission.
2. The Peppers attached an affidavit from Duane McCoy, Timber Buyer Licensing Forester with the Department of Natural Resources, to their request. The affidavit included McCoy’s identification of trees that were cut from the Peppers’ property as well as his assessment of the stumpage value of the trees. Peppers’ Complaint.
3. In filing the complaint, the Peppers initiated a proceeding governed by Ind. Code 4-21.5-3, also known as the Indiana Administrative Orders and Procedures Act (AOPA).
4. On July 6, 2022, the Natural Resources Commission (Commission) notified Gordon Browning (Browning) and Nationwide Mutual Insurance Company of the complaint by sending a copy of the complaint to both Respondents with a Notice of Prehearing Conference. Notice of Telephonic Prehearing Conference.
5. A Telephonic Prehearing Conference was held July 20, 2022, at which the Peppers and Browning appeared. The Peppers indicated that after filing the request for a hearing, a survey of their property had been completed and it was determined one of the trees identified in the McCoy affidavit was not on their property. During the conference, Browning requested permission from the Peppers to allow foresters hired by Browning to enter the Petitioners’ property to provide appraisals of the felled timber. A Telephonic Status Conference (TSC) was scheduled for October 4, 2022. Report from Telephonic Prehearing Conference.
6. The Peppers filed an amended complaint on September 13, 2022, with a second affidavit from McCoy. Amended Petition. Using the updated survey, McCoy identified one White Oak, one Chinkapin Oak, one Hard Maple, and one Black Walnut that had been harvested on the Petitioners’ property. McCoy appraised the timber at $3,599.16.
7. At the TSC held on October 4, 2022, Browning indicated he contested only the value assigned to the trees in McCoy’s second affidavit. Browning further indicated that he wanted to obtain two more appraisals before a hearing was held. A Final TSC was scheduled for November 9, 2022, and a hearing on the facts was scheduled for November 17, 2022.
8. A Final TSC was held as scheduled on November 9, 2022. Neither party objected to proceeding to the administrative hearing scheduled for November 17, 2022.
9. The administrative hearing was conducted as scheduled at the Brookville Library in Brookville, IN, on November 17, 2022.
10. Doug and Sharon Pepper appeared in person, self-represented.
11. Gordon Browning appeared in person, self-represented.
12. The following witnesses were duly sworn and testified at the hearing: Sharon Pepper, Doug Pepper, Adam Hundley, and Gordon Browning.
13. The following exhibits were accepted into evident without objection: Peppers’ exhibits A, B, C and F and Browning’s exhibits 1 2, and 3. Both parties were given an opportunity to offer additional exhibits before the hearing was concluded.
14. The parties were given the option to file a written closing statement. Peppers timely filed their statement on November 21, 2022. Browning did not file a statement with the Commission.
15. Pursuant to Ind. Code § 25-36.5-1-3.2, a proceeding may be initiated at the request of a timber grower 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 timer grower as specified in the contract; or
(2) if:
(A) there is not a 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.
16. The Commission has adopted rules to assist in the administration of this statute at 312 Ind. Admin. Code 14.
17. 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).
18. The Commission is the ultimate authority with respect to administrative proceedings under I.C. § 25-36.5. 312 IAC 14-1-2(d),
19. The Commission has jurisdiction over the subject matter and over the parties in this dispute.
Findings of Fact:
20. Sharon and Doug Pepper are the owners of approximately 2.1 acres of property located at 7326 S. Snowden Road, Liberty Indiana (“Pepper property”). The Peppers’ home is located on the property. Testimony of S. Pepper, testimony of D. Pepper.
21. The Pepper property is adjacent to property owned by Adam Hundley (“Hundley property”). The Pepper property shares a property line with the Hundley property in the southwest corner, on the west side, and in the northwest corner. Testimony of S. Pepper and Exhibit A.
22. Gordon Browning has been in the timber-cutting business for over thirty years. testimony of Browning.
23. Hundley and Browning discussed harvesting timber on the Hundley property in 2021. Testimony of Hundley, Testimony of Browning.
24. In 2021, Browning walked the Hundley property, marked trees to harvest, and provided Hundley with an estimate of what Browning would pay for the trees. Testimony of Hundley, testimony of Browning.
25. Several months later, late in 2021, Browning returned to the Hundley property to harvest the timber. Testimony of Hundley.
26. Hundley did not walk the property with Browning when Browning marked the trees to be harvested because he believed Browning knew where the property lines were located. Testimony of Hundley.
27. Hundley did not know the location of his property lines until he had the property surveyed after the trees were harvested. Testimony of Hundley.
28. Before Browning started harvesting trees on January 6 or 7, 2022, he asked Hundley if there were any trees “in question.” Testimony of Hundley, testimony of Browning.
29. Hundley indicated the trees Browning marked “looked good,” which Browning took to mean the trees were all located on the Hundley property. Testimony of Browning.
30. At the time the trees were harvested there were no visible surveying markers showing the common boundary between the Pepper property and the Hundley property. Testimony of Hundley.
31. Neither Hundley nor Browning approached the Peppers before Browning began harvesting the trees. Testimony of S. Pepper.
32. On January 6 or 7, 2022, Sharon Pepper heard chain saws being operated in the woods by her house. She heard men talking and then saw trees falling behind her house. Pepper could tell from the location that the trees being cut were on her property. Testimony of S. Pepper.
33. Doug Pepper approached Browning in the woods and told him he was cutting trees on the Pepper property. Testimony of S. Pepper, testimony of D. Pepper.
34. Browning went with D. Pepper to the Peppers’ garage to discuss the situation. Testimony of S. Pepper, testimony of D. Pepper, testimony of Browning.
35. Browning explained to D. Pepper that he used an application on his telephone, called “onX Hunt” to determine the location of the Hundley property, and explained to D. Pepper that the application must have been faulty. Testimony of D. Pepper.
36. Browning did not harvest any more trees in the area after his conversation. Testimony D. Pepper. testimony of Browning.
37. During their conversation in the garage, Browning offered Peppers $1500 for the trees, which, according to Browning, was twice the value of the trees. When the Peppers declined this offer, Browning gave the Peppers information on how to request a hearing. Testimony of D. Pepper, testimony of Browning.
38. Browning regularly relies on the on X Hunt application to determine property lines when he harvests trees. He uses the application because it “can show him where he is standing on the property.” Testimony of Browning.
39. Browning is not aware of particular problems with the accuracy of the application and has not done any research on the accuracy of the application. Testimony of Browning.
40. The onX Hunt application is commonly used by timber cutters. Testimony of Browning.
41. Browning testified that the application could have been “thrown off” due to cell phone reception problems at the Union/Franklin County line near the Pepper property. Testimony of Browning.
42. On January 11, 2022, Duane McCoy walked the Pepper property by himself to assess the value of the trees Browning harvested from the Pepper property. Testimony of S. Pepper. McCoy provided the following affidavit to the Peppers:
This is to certify that on January 11, 2022, I, Duane McCoy the Timber Buyer Licensing Forester, examined the trees that were harvested from the Pepper property in Union County, Indiana. I further certify that I found 2 White Oak, 1 Chinkapin Oak, and 1 Hard Maple trees that were harvested from the property. I estimate these 4 trees contained 1,748 board feet with an estimated appraised value of $4,137.11.
This value is based on the average price being paid by Indiana mills near the time of the harvest.
Petitioner’s Exhibit C.
43. McCoy was not certain if one of the White Oaks he identified was on the Pepper property. S. Pepper asked that he include it in the assessment. Testimony of S. Pepper.
44. Sometime after January 11, 2022, Peppers obtained a survey of their property from Andy Murray. Murray placed markers on the property line. Testimony of S. Pepper.
45. After the survey was completed and the property lines marked, McCoy returned to the property to provide a second assessment. Testimony of S. Pepper.
46. McCoy assessed the trees and executed the following affidavit:
This is to certify that on January 11th and September 1st of 2022 I, Duane McCoy the Timber Buyer Licensing Forester, examined the trees that were harvested from the Pepper property in Union County, Indiana. The September visit was to determine the trees that were on the Pepper property after a new survey had been carried out. From the new survey tree number 1, a White oak, was removed from the appraisal as it was determined that was on the adjoining property. Also, from this survey, tree number 5, a Black Walnut, was added to the appraisal.
I further certify that after making these changes to the appraisal, I found 1 White Oak, 1 Chinkapin Oak, 1 Black Walnut and 1 hard Maple trees that were harvested from the property. I estimate these 4 trees contained 1,745 board feet with an estimated appraised value of $3,599.16.
I was requested to list each individual tree by number, species, and individual value. A list of the individual trees follows:
Tree number 2 – White Oak - $1,912.22
Tree number 3 - Chinkapin Oak - $470.92
Tree number 4 - Hard Maple $111.03
Tree number 5 – Black Walnut $ 1,104.99
This value is based on the average price being paid by Indiana mills near the time of the harvest.
Exhibit B.
47. The property-line survey was admitted into evidence at the hearing without objection. S. Pepper included notations on the survey lines to indicate where the trees included in McCoy’s second affidavit were located. Tree number 5 is labeled as being located on the Pepper property, very near the property line shared with the Hundley property. Exhibit A.
48. S. Pepper testified tree number 5 was located on the Pepper property before it was cut. Testimony of Pepper. D. Pepper admitted the tree is “very close” to the property line.
49. Browning testified tree number 5 on McCoy’s affidavit was right on the property line; however, he did not present a survey to contradict Peppers’ Exhibit A.
50. Consulting Forester Matt Goeke “walked the woods” with Browning and D. Pepper to “appraise trees that had mistakenly been cut.” Goeke estimated trees 2, 3, 4 and 5 contained 1,134 total board feet and appraised them at a total value of $1,177.50. Exhibit 3.
51. Browning was paid a total of $8,000.00 for logs “for the Hurley job” from Personette Timber. It cannot be determined from Browning’s testimony whether this included the trees harvested from the Pepper property. See, Exhibit 1.
52. Personette also indicated he “appraised the value of assorted lots at a value of $1,389.” Testimony of Browning, Exhibit 3.
CONCLUSIONS OF LAW:
53. 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.
54. As owners of property from which timber was harvested, Petitioners are “timber buyers.” I.C.§ 25-36.5-1-1.
55. A “timber cutter” is one who cuts timber who is not a timber buyer. 312 IAC 14-2-11.
56. Browning is a timber cutter.
57. 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; 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).
Stumpage value:
58. The first issue that must be addressed is what trees are to be included in the valuation of the timber.
59. Pepper admits trees 2, 3, and 4 were on the Pepper property, but argued that tree number 5 was on the line between the Pepper property and the Hundley property. Testimony of Browning.
60. The Peppers’ assertion that tree No. 5 is located on their property is supported by the Peppers’ survey and by McCoy’s second affidavit.
61. The evidence supports a finding tree number 5 was located on the Pepper property and its value should be included in the damages awarded Peppers.
62. Browning argues McCoy’s assessment of stumpage value is too high. Browning submitted appraisals he obtained from Personette and Goeke to support this claim.
63. Personette’ s appraisal is very general and refers only to “maple logs and small number of walnut logs.” Exhibit 1. This assessment is not linked to specific trees and is not helpful in assigning an accurate stumpage value.
64. Goeke’ s assessment indicates it is for trees 2, 3, 4 and 5, but does not indicate the value assigned to each tree.
65. McCoy is employed by the Department of Natural Resources and not otherwise engaged in the timber business.
66. McCoy’s assessment of the stumpage value is found to be most credible.
67. The stumpage value of the trees is $3,599.16.
Treble Damages:
68. In addition to the stumpage value, Peppers request an award of three times the stumpage value, or treble damages, pursuant to I.C. § 25-36.5-1-3.2 and 312 IAC 14-6-2(a)(6).
69. “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).
70. 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.
71. 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.
72. Prior to 1993, Ind. Code 25-36.5-1-17(a) provided:
A person, or a representative of the person who cuts or causes to be cut any timber which the person, or a representative of the person has not previously purchased shall, in lieu of the normal penalties of this chapter, pay the owner of the cut or appropriated timber three (3) times the stumpage value of the time.
.
See, Beeman, 646 N.E.2d 382
73. This provision was repealed in 1993 in favor of the current version of I.C. 25-36.5-1-3.2 cited above.
74. The Commission has previously held that the Commission has the authority to impose liability in an amount less than the full impact of the treble-damages clause where the imposition of treble damages would work an injustice. Stell v. Allen, d/b/a A & S Logging, 12 CADDNAR 124, 133 (2009).
75. Commission discretion in imposing less than the full treble damages “may most appropriately be applied where the timber buyer or timber cutter acts with all due diligence, but because of misdirection or connivance of another, is caused to err.” Gallien v. Sloan Logging, Pendley & Zurich N. Amer., 9 CADDNAR 40 (2002).
76. There are no provisions in Indiana law or in the administrative code that provide guidance to the Commission in determining the appropriate award of damages.[1] In previous decisions, the Commission has focused on the “primary responsibility” of the timber cutter “to exercise due diligence to assure activities are restricted to lands where the timber buyer is authorized to harvest time. Henry v. Underhill and Fidelity and Deposit Co. of Maryland, 16 CADDAR 1, (2021) para. 85.
77. Relying solely on the representation of the person in possession of the real estate as to ownership of the real estate has been determined to be inadequate to show due diligence. Id; Fischer v. Stodghill and Hartford Fire Insurance Co., 10 CADDNAR 147, 156 (2005)
78. In Pollock v. Coats, 8 CADDNAR 124, 125 (1999), the Commission imposed a penalty of two times the stumpage value where the timber buyer consulted with an immediate adjacent neighbor, identified a corner stone of the relevant property, and used a compass to determine the relevant property lines. Also, in The Adams Group v. Beckman, Meehan and Ohio Casualty Ins. Co., 8 CADDNAR 134, 137 (1999), two times the stumpage value was awarded because the timber buyer relied upon a survey that later proved to be incorrect.
79. Browning relied primarily on the onX Hunt application to determine the extent of the Hundley property. The application showed him the GIS representation of the property; however, there is no evidence that the GIS county records are created to show the exact property lines. The Peppers questioned the accuracy of the application, and Browning conceded that it could have been “thrown off” due to known cell phone reception problems in the area. There were no property markers present on the property to which Browning could refer. Further, the trees Browning cut were close to the Pepper property line. Browning did not request Hundley walk the property with him and did not contact the immediately adjacent neighbor to double check the property lines before he harvested the timber.
80. The Peppers have demonstrated Browning failed to use due diligence in to verify Hundley’s ownership of the property on which he harvested timber.
81. Based upon the available evidence, an award of treble damages is appropriate.
FINAL JUDGMENT
82. Peppers are awarded an administrative judgment of $10,797.48.
83. 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.
84. This administrative judgment is subject to judicial review under Ind. Code § 4-21.5-5.
85. 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] Such guidance is provided if the action is an action initiated by the Department against a timber buyer or timber cutter for violating Indiana law. Ind. Code 25-36.5-1-13.5 provides the maximum penalty that may be imposed for a particular violation. 312 Ind. Admin. Code § 14-4-3 contains a list of mitigating and aggravating circumstances to be considered in imposing penalties under I.C. § 26-36.5-1-13.5.