Gerdes v. Bohemia, Inc.

Citations: 744 P.2d 275; 88 Or. App. 62Docket: 16-84-03197; CA A40699

Court: Court of Appeals of Oregon; October 21, 1987; Oregon; State Appellate Court

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In the case of Rollie O. Gerdes and Jeanne Gerdes v. Bohemia Inc., the Court of Appeals of Oregon addressed a timber trespass action in which Bohemia, Inc. appealed a judgment that awarded damages to the Gerdes, who cross-appealed the amount of damages. The dispute arose from a land sale contract executed in October 1978 between Rollie's Mobiles, Inc. and Jeffrey and Lynda Powell, which allowed the Powells to cut and remove timber under specific conditions, including maintaining the property and obtaining liability insurance.

In February 1979, Bohemia negotiated a timber sale contract with the Powells, mistakenly believing that the land sale contract did not require the consent of Rollie's Mobiles for timber sales. Bohemia subsequently executed a timber deed giving it the right to harvest timber for ten years, paying the Powells $25,000. Following the Powells' default on the land sale contract and their subsequent bankruptcy filing, the Gerdes retained possession of the land but did not terminate the contract.

In 1983, after negotiations with the Gerdes regarding the property, Bohemia harvested the timber, leading the Gerdes to file a trespass action under ORS 105.810. The court denied Bohemia's motion for summary judgment but granted the Gerdes' cross-motion, ruling that Bohemia had trespassed. The case proceeded to trial to determine damages, resulting in an award of treble damages to the Gerdes. Bohemia contended that the Powells had the unrestricted right to harvest timber and that it had acquired valid title through the timber deed. Alternatively, Bohemia argued that its good faith belief in the deed's validity should mitigate its liability, asserting that only double damages should apply under ORS 105.815, rather than treble damages for willful trespass.

The trial judge interpreted the contract as clearly prohibiting the Powells from transferring any interest in the property, including timber, without the plaintiffs' consent, a conclusion upheld by the court. The court found that the land sale contract unambiguously restricted the Powells' rights and that the defendant had actual notice of these provisions, thus requiring plaintiffs' consent for any title acquisition. Since such consent was not given, the defendant had no rights under its timber deed and committed trespass by harvesting the timber. The court deemed the trespass as willful, rejecting any defense by the defendant, as mistakes regarding the law or facts do not excuse trespass. The defendant's actions were not innocent; it was aware of the contract's prohibitions and the dispute regarding its deed's validity.

The trial court also correctly found the defendant liable for willful trespass and applied treble damages according to ORS 105.810. Both parties disputed the damage calculation methodology. Plaintiffs claimed errors in considering actual mill values and logging costs, arguing that such evidence was irrelevant to stumpage value calculation and that the court erred in mitigating damages based on the value of remaining standing trees and a road built by the defendant. Conversely, the defendant argued against the court’s mitigation approach, asserting that those values should have been included in the property’s fair market value post-trespass calculation.

In timber trespass cases, damages are typically assessed based on the land's diminished value, with stumpage value as a key measure. The trial court could consider various factors in determining stumpage value, such as the quantity and quality of timber, cutting practices, and logging costs. The court's approach to evaluating the factors affecting purchaser interest in standing timber was reasonable and did not simply subtract the defendant's costs from stumpage value. Evidence of increased logging costs due to specific site conditions was not used to determine the defendant's actual costs but rather to assess what a purchaser might pay for the timber.

The court found no errors in the acceptance of evidence or in its calculations, concluding that the plaintiffs did not prove their right to additional damages for reforestation. Although the parties agreed on reasonable reforestation costs, the plaintiffs failed to provide necessary evidence to support its necessity, acknowledging this in their cross-appeal. They referenced OAR 629-24-502(1), which outlines reforestation requirements when tree stocking falls below specified levels, but this regulation was not explicitly presented to the trial judge and its applicability was uncertain. The court correctly determined the values of standing trees and the road, but mistakenly treated these as mitigating factors; these values should have been deducted from the stumpage value prior to trebling the damage award. The total stumpage value was assessed at $21,000, with unlogged trees valued at $5,200 and the road at $500, leading to a land value diminution of $15,300. Consequently, the appropriate treble damages amount to $45,900. The judgment was modified to reflect this award and affirmed; the court also dismissed claims against John Does. Defendants argued the action was premature due to unresolved interests of the Powells, but the court recognized contingent interests as sufficient for a timber trespass claim. Additionally, ORS 105.810 stipulates treble damages for unauthorized timber trespass actions.

Plaintiff must provide proof of ownership and evidence of defendant's actions to establish prima facie case of willful and intentional trespass without consent. ORS 105.815 states that if the trespass is shown to be casual or involuntary, or if the defendant had reasonable belief regarding the land ownership or acted in the service of another, double damages may be awarded. Additionally, the defendant's attempt to differentiate between 'assignment' and 'sale' is rejected; the relevant contract section does not make such a distinction. The interpretation of the contract restricts all forms of transfer, including assignments and sales, in relation to the vendor-vendee relationship.