Dow v. Hurst

146 N.E.3d 990

Mike DOW and Midwest Logging and Veneer, Appellants-Defendants,

v.John HURST and Linda Hurst, Appellees-Plaintiffs.

Court of Appeals Case No. 19A-PL-1709

Court of Appeals of Indiana.

FILED April 13, 2020

Attorney for Appellants: Jerry E. Smith, Jerry E. Smith, Attorney CPA, P.C., Indianapolis, Indiana

Attorney for Appellees: Glen E. Koch II, Boren, Oliver & Coffey, LLP, Martinsville, Indiana

Mathias, Judge.

[1] Mike Dow ("Dow") d/b/a Midwest Logging and Veneer appeals the judgment of the Morgan Superior Court in favor of John Hurst and Linda Hurst in the Hursts' action for trespass and conversion. On appeal, Dow presents three issues, which we restate as:

I. Whether the trial court clearly erred in concluding that Dow was liable for the actions of independent contractors;

II. Whether the trial court clearly erred in awarding the Hursts damages in the amount of $80,826.47; and

III. Whether the trial court abused its discretion in the admission of alleged hearsay evidence.

[2] We affirm.

Facts and Procedural History

[3] The facts most favorable to the trial court's judgment¹ reveal that the Hursts own approximately fifteen acres in Morgan County, Indiana. On this heavily wooded land is the Hursts' home, a garage, a barn, and other smaller outbuildings. The property is bordered on the north side by land owned by the Andrews family.² On June 30, 2015, Mr. Andrews entered into a Timber Purchasing Contract ("the Contract") with Dow to purchase timber on the Andrewses' land. Pursuant to this Contract, Dow and the Andrews would split the proceeds from the logging equally, but with a minimum guarantee of $4200 to be paid to the Andrews. Prior to logging, Dow walked the property with Mr. Andrews. Dow also spoke with Linda Hurst, who told him to make sure the logging took place north of the Andrews-Hurst property line. John Hurst had previously placed metal posts along the property line to demark the boundary.

[4] Dow contracted with Robert Parker to cut down the trees and harvest the timber, and Robert Parker hired his grandson James Parker to assist him in cutting down the trees and removing them from the property. Dow also contracted with two others to run a skidder and cut trees.

[5] While the trees were being harvested, Mr. Hurst heard the sound of chainsaws that appeared to be coming from his property. He investigated and determined that trees were being cut on his side of the property line. Mr. Hurst instructed the logger to stop but permitted him to finish felling the tree he was cutting. Mr. Hurst then informed Dow that no trees should be taken from the Hurst property. Mr. Hurst pointed out the boundary markers to Dow. Despite this, Mr. Hurst later observed trees being harvested from his property and again instructed Dow to stay off his property.

[6] The cutting activity caused significant damage to the Hurst property, including the loss of trees, erosion, and ruts caused by heavy equipment. It also left stumps and tree debris on the property. The Hursts hired Duane McCoy ("McCoy"), a forester with the Indiana Department of Natural Resources ("DNR") to assess the damage to their property. McCoy determined that trees harvested from the Hurst property included nine tulip poplar, eight hickory, five black walnut, five white oak, three red oak, three sugar maple, two ash, two black oak, two American beech, one Chinkapin oak, one American sycamore, and one red maple. McCoy estimated that these forty-two trees contained 17,521 board feet of lumber with a total value of $6,248.47. The Hursts also hired Mark Allison ("Allison"), the owner of Allison Farms, Lawn and Landscaping Services, to provide an estimate of the cost of remediating the damage done to the Hurst property. Allison estimated that it would cost $74,578 to clean up tree debris by cutting all fallen tree tops, chipping limbs and scattering the chips, sawing and stacking wood, cleaning up debris in the creek that runs on the property, and raking the ruts left by the logging equipment.

[7] On August 11, 2016, the Hursts filed a complaint against Dow alleging trespass and conversion and seeking treble damages under Indiana Code section 25-36.5-1-3.2. A bench trial was held on February 13, February 15, and March 28, 2019. At trial, the trial court permitted Mrs. Hurst to testify as to what Dow subcontractor James Parker told her. On June 26, 2019, the trial court entered findings of fact and conclusions of law in favor of the Hursts, which provided in relevant part as follows:

II. FINDINGS AND CONCLUSIONS

* * *

12. Hurst observed Dow's crew again cutting and removing trees from the Hurst property. At the second meeting John Hurst reiterated to Dow that he didn't want Dow or his crew on his property.

13. Hurst has met his burden of proof as to the claims of trespass and conversion. The evidence establishes that Dow's crew entered and cut trees on Hurst's property. The crew left damage to the real estate (ruts from their skidder and erosion) and left several tree tops and other debris on the Hurst property. The crew also removed several Hurst trees during the harvest. At no time did Dow or his crew have permission or authority to enter upon the Hurst property or harvest trees from Hurst's property. The area of the trespass is depicted on the Drapalik survey. The Area of Disturbance is consistent with the observations of the Court on its site visit and as depicted in the photographs entered into evidence.

14. Dow claims that he did not convert or trespass, but that any liability for the Hursts' claims should be borne by the individual members of his crew; the Parkers and the Bixlers. Dow claims that the Parkers and the Bixlers are independent contractors and as a result he is not liable for their actions.

15. Dow has a non-delegable duty not to cut or cause to be cut timber he has not purchased. Pursuant to [Ind. Code] 25-36.5-1-1 Dow is a "Timber Buyer". It is unlawful for a Timber Buyer to cut or cause to be cut or appropriate any timber not purchased by the Timber Buyer. I.C. 25-36.5-1-4(b). A Timber Buyer who violates Section 4 commits a Class A Misdemeanor. I.C. 25-36.5-1-10.

16. As a general rule, a principal is not liable for the negligence of an independent contractor; however, an exception to the general rule exists where the principal is obligated by law or contract with performing a specific duty.

Bagley v. Insight Communications Co., LP. , 658 N.E.2d 584, 586 (Ind. 1995). This exception applies to Dow. Dow has a legal duty and obligation as a Timber Buyer to not cut or cause to be cut timber he has not purchased. In this instance, Dow cut Hurst's timber without purchasing Hurst's timber. Under the Timber Buyer Statute (I.C. 25-36.5-1) Dow is not permitted to transfer his duties under the statute to his crew, whether they be deemed to be employees or independent contractors.

17. Having concluded that Dow is liable for the trespass and conversion, the Court next turns to the issue of damages. There are two (2) separate categories of damages presented by the evidence. First is the value of the timber harvested from Hurst's property by Dow, and second are the damages resulting from the trespass (removal of tree tops/debris and restoration).

18. The measure of damages in a case of injury to real property depends upon whether the damages are temporary or permanent. Sheek v. Mark A. Morin Logging, Inc. , 993 N.E.2d 280, 288 (Ind. [Ct.] App. 2013). The injury is permanent when the cost of restoration exceeds the market value of the land before the injury. For a permanent injury, the measure of damages is the difference between the fair market value of the property before and after the injury, based upon a theory that economic waste occurs when the cost of restoration exceeds the economic benefit. If the injury is temporary, then the measure of damages is the cost of repair.

19. Here, the Court must conclude that the injury is temporary. There is no evidence that the remediation costs exceed the fair market value of the Hurst real estate. The Hurst real estate consists of two (2) separate tax parcels. The Court considers the Hurst real estate to be one (1) integrated parcel of real estate for this specific analysis. Based upon the tax assessment value, the Hurst real estate has a total assessed value for real estate taxes of $257,900.00. John Hurst estimated the value of the real estate to be between $500,000.00 to $600,000.00. The estimated cost to [ ] restore the damage to the Hurst real property was estimated to be $74,578.00. The value of the real estate clearly exceeds the cost to restore.

20. The Court determines the value of Hurst's timber cut and harvested by Dow to be the sum of $6,248.47, as calculated by Duane McCoy.

21. The only credible evidence offered as to the cost to restore the Hurst party was the Allison Farms Lawn & Landscaping Services, LLC estimate. James Parker did testify that he would do the work to remove the tops of [trees] on the Hurst property and restore the damage for about $5,000.00 to $7,000.00. The Court does not find James Parker's testimony to be credible. This only leaves the Allison Farms estimate as the evidence of the cost to restore the Hurst property. Dow failed to provide the Court with any credible evidence to the contrary. The Court determines that the cost to restore the damage to the Hurst real estate caused by Dow's trespass to the sum of $74,578.00.

22. The total damages suffered by Hurst is the sum of $80,826.47.

23. Hurst's claims for treble damages and attorney's fees are denied, as Hurst is not entitled to the damages under I.C. 25-36.5-1-3.2.

III. Judgment

24. A judgment is granted in favor of John Hurst and Linda Hurst and against Mike Dow and Midwest Logging and Veneer in the sum of $80,826.47, plus costs in the sum of $191.00, for a total judgment in the sum of $81,017.47. Interest to accrue at the statutory rate until paid in full.

Appellant's App. pp. 18–20 (record citations omitted).

Standard of Review

[8] In c...