Jackson v. Don Johnson Forestry, Inc.

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-354
Filed: 15 January 2019
Bertie County, No. 15-CVS-264
BETTY BURDEN JACKSON, NANCY BURDEN ELLIOTT; JAMES BURDEN,
REBECCA BURTON BELL, DARREN BURTON, CLARENCE BURTON, JR. and
JOHN BURDEN, Plaintiffs,
v.
DON JOHNSON FORESTRY, INC. and EAST CAROLINA TIMBER, LLC, and
NELLIE BURDEN WARD, ALBERT R. BURDEN, LEVY BURDEN, CLARENCE L.
BURDEN and BRENDA B. MILLER, Other Grandchildren Defendants,
and
EAST CAROLINA TIMBER, LLC, Third-Party/Counterclaim Plaintiff,
v.
ESTATE OF WILLIAM F. BAZEMORE by and through its Executors, NELLIE
WARD and TARSHA DUDLEY, and ESTATE OF FLORIDA BAZEMORE by and
through its Administrator, MARIA JONES, Third-Party/Counterclaim Defendants.
Appeal by Plaintiffs, appeal by Defendant East Carolina Timber, LLC, and
appeal by Third-Party Defendant Estate of Florida Bazemore, all from judgment
entered 9 November 2017 by Judge Wayland J. Sermons, Jr., in Bertie County
Superior Court. Heard in the Court of Appeals 3 October 2018.
Hornthal, Riley, Ellis & Maland, LLP, by M. H. Hood Ellis and Casey L.
Peaden, for the Plaintiff.
JACKSON V. DON JOHNSON FORESTRY
Opinion of the Court
Yates, McLamb & Weyher, L.L.P., by Christopher J. Skinner and Denaa J.
Griffin, for Defendant Don Johnson Forestry, Inc.
McAngus Goudelock & Courie, PLLC, by Elizabeth H. Overmann, and Ward
and Smith, P.A., by E. Bradley Evans, for Defendant and Third-
Party/Counterclaim Plaintiff East Carolina Timber, LLC.
Dixon & Thompson Law PLLC, by Paul Faison S. Winborne, for the Third-
Party/Counterclaim Defendant Estate of Florida Bazemore.
DILLON, Judge.
This is an appeal and cross-appeal by a number of parties from a summary
judgment order in this case involving alleged damages caused by the unauthorized
cutting of timber from a certain tract of land.
I. Background
In 1982, Z. J. Burden died, bequeathing a large tract of land (the “Property”)
to his lineal descendants. Specifically, pursuant to Mr. Burden’s will, Mr. Burden’s
five children, or the survivor(s) of them, received a life estate in the Property; and the
remainder interest was held by Mr. Burden’s grandchildren per stirpes in fee simple
absolute. That is, the Property would not pass in fee simple absolute to Mr. Burden’s
grandchildren until all of his children had died.
Mr. Burden’s will also granted to his children, or the survivor(s) of them,
during the life tenancy, the right to sell any timber growing on the Property that was
at least twelve (12) inches in diameter for any reason they saw fit, without having to
share the proceeds from the sale with the remaindermen-grandchildren.
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Opinion of the Court
In early 2014, Florida Bazemore was the sole surviving child of Mr. Burden
and, therefore, was the sole owner of the life estate in the Property. After entering a
nursing home, Mrs. Bazemore signed a General Power of Attorney, naming her
husband, William Bazemore, and two others as her attorneys-in-fact.
Shortly thereafter, Mr. Bazemore entered into a broker’s agreement with
Defendant Don Johnson Forestry, Inc. (the “Broker”), to procure a buyer for the
timber growing on the Property. The Property had not been timbered since the mid-
1980s. The Broker procured an offer from Defendant East Carolina Timber, LLC,
(the “Timber Buyer”) to purchase the timber growing on the Property.
In March 2014, Mr. Bazemore signed an agreement to sell the timber growing
on the Property to the Timber Buyer.
During the summer of 2014, the Timber Buyer cut a number of trees from the
Property, paying $130,000; $122,000 of this money was paid to Mr. Bazemore, and
the remainder was paid to the Broker for its brokerage commission.
In May 2015, Mr. Bazemore died. Two months later, in July 2015, Mrs.
Bazemore died. Upon her death, the Property passed to Mr. Burden’s grandchildren
per stirpes in fee simple absolute.
In October 2015, several of Mr. Burden’s grandchildren1 (the “Grandchildren”)
commenced this action against the Broker and the Timber Buyer for cutting timber
1 The remaining grandchildren were subsequently made parties, denominated in the caption
as “Other Grandchildren Defendants.”
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Opinion of the Court
from the Property during Mrs. Bazemore’s life tenancy. The Grandchildren sought
double the value of the timber cut, pursuant to N.C. Gen. Stat. § 1-539.1.
The Broker and Timber Buyer each answered denying liability. And the
Timber Buyer asserted a third-party complaint against the estates of Mr. and Mrs.
Bazemore for indemnity.
In November 2017, after a hearing on summary judgment motions, the trial
court entered a summary judgment order, which did three things: (1) it granted the
Broker’s motion for summary judgment, thereby dismissing the Grandchildren’s
claims against it; (2) it granted the Grandchildren’s motion for summary judgment
on their claims against the Timber Buyer, awarding $259,596 in damages; and (3) it
granted the Timber Buyer’s motion for summary judgment against Mr. and Mrs.
Bazemore’s estates for indemnity. Each part of the summary judgment order was
timely appealed. For the reasons stated below, we affirm in part, reverse in part, and
remand for further proceedings.
II. Analysis
A. Mrs. Bazemore’s Rights in the Trees During Her Life Tenancy
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Opinion of the Court
Rights in a particular piece of property have been described as a “bundle of
sticks”2 or “bundle of rights,”3 where various people/entities could own different rights
in that property. These rights include the right to timber the property.
Mr. Burden, as the fee simple absolute titleholder, owned substantially all of
the “sticks” or “rights” in the Property. When Mr. Burden died, he left some of the
“sticks” to Mrs. Bazemore, as a life tenant, and other “sticks” to the Grandchildren,
as remaindermen. Important to the present case are the sticks owned by Mrs.
Bazemore and by the Grandchildren relating to the timber on the Property.
Mr. Burden bequeathed to Mrs. Bazemore a life estate, which carries with it
some rights in the trees. Specifically, our Supreme Court has held that, absent some
other express grant, a life tenant’s right to cut timber from her land is limited. That
is, a life tenant is allowed to “clear tillable land to be cultivated for the necessary
support of [her] family,” and she may “also cut and use timber appropriate for
necessary fuel” or to build structures on the property. Dorsey v. Moore, 100 N.C. 41,
44, 6 S.E. 270, 271 (1888). Further, a life tenant is permitted to harvest and sell
sufficient timber needed to maintain the property. Fleming v. Sexton, 172 N.C. 250,
257, 90 S.E. 247, 250 (1916). However, a life tenant commits waste if she cuts timber
2 See U.S. v. Craft, 535 U.S. 274, 278 (2002); Everett's Lake Corp. v. Dye, ___ N.C. App. ___, ___
n.1, ___ S.E.2d ___, ___ n.1, 2018 WL 4996362 (2018).
3 In re Greens of Pine Glen, 356 N.C. 642, 651, 576 S.E.2d 316, 322 (2003).
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“merely for sale,--to sell the timber trees, and allow them to be cut down and
manufactured into lumber for market[:]”
It would take from the land that which is not incident to
the life-estate, and the just enjoyment of it, consistently
with the estate and rights of the remainder-man or
reversioner. The law intends that the life-tenant shall
enjoy his estate in such reasonable way as that the land
shall pass to the reversioner, as nearly as practicable
unimpaired as to its natural capacities, and the
improvements upon it.
Moore, 100 N.C. at 44, 6 S.E. at 271 (citations omitted).4
Mr. Burden, however, bequeathed to Mrs. Bazemore more “sticks” in the
timber than that normally held by a life tenant, as was his right as the fee simple
owner. See Fletcher v. Bray, 201 N.C. 763, 767-68, 161 S.E. 383, 385-86 (1931).
Specifically, in addition to bequeathing to Mrs. Bazemore the “sticks” in the timber
normally reserved for a life tenant, Mr. Burden bequeathed to Mrs. Bazemore the
unfettered right to cut and sell any tree with a diameter of twelve (12) inches or more
(hereinafter the “Large Trees”) during her life tenancy. This arrangement was
similar to that in Fletcher v. Bray, where the fee simple owner bequeathed a life estate
in certain property to his wife and the right to dispose of the trees thereon for any
4 In an opinion written by Judge John Haywood in 1800, the Court of Conference, which was
our State’s appellate court prior to the establishment of our Supreme Court in 1818, defined waste by
a life tenant as “an unnecessary cutting down and disposing of timber, or destruction thereof upon
wood lands, where there is already sufficient cleared land for the [life tenant] to cultivate, and over
and above what is necessary to be used for fuel, fences, plantation utensils and the like[.]” Ballentine
v. Poyner, 3 N.C. 268, 269 (1800).
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reason during her life tenancy, with the remainder to his nephews and nieces in fee
simple. Id. Our Supreme Court held that this arrangement was lawful:
The court holds the opinion that the standing timber was
severed by the testator from the fee and the absolute
dominion thereof given the wife, and such severance was
designed for her benefit rather than for the benefit of [the
remaindermen]. Therefore, [wife], upon the sale of the
timber, was entitled to hold the proceeds in her own right
as her own property [and had the right to bequeath the
proceeds as she saw fit].
Id. at 768, 161 S.E. at 386.
Therefore, Mrs. Bazemore had the unfettered right during her life tenancy to
profit from any Large Tree, pursuant to Mr. Burden’s will. However, her right to the
smaller trees during her life tenancy was limited to that of a life tenant.
B. The Grandchildren’s Right to Seek Relief as Remaindermen
Where there is an unauthorized cutting of trees during a life tenancy, the
remaindermen may seek relief. But the type of relief that a remainderman can seek
depends on whether his interest is vested or contingent.
Our Supreme Court has held that a vested remainderman or reversioner “has
his election either to bring trover for the value of the tree after it is cut, or an action
[for trespass] on the case in the nature of waste, in which, besides the value of the
tree considered as timber, he may recover damages for any injury to the inheritance
which is consequent upon the destruction of the tree.” Burnett v. Thompson, 51 N.C.
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210, 213 (1858). Indeed, the right to bring an action for waste has been codified in
Chapter 1, Article 42 of our General Statutes. See N.C. Gen. Stat. § 1-42 (2017).
However, the owner of a contingent future interest “cannot recover damages
for waste already committed, [but] they are entitled to have their [contingent]
interests protected from [future] threatened waste or destruction by injunctive relief.”
Gordon v. Lowther, 75 N.C. 193, 193 (1876); see also Peterson v. Ferrell, 127 N.C. 169,
170, 37 S.E. 189, 190 (1900) (holding that both vested and contingent remaindermen
have the right to seek an injunction to protect against future waste); Edens v. Foulks,
2 N.C. App. 325, 331, 163 S.E.2d 51, 54 (1968) (stating that “[i]t is well settled in this
State, as in other states, that a contingent remainderman is entitled to an injunction
to prevent a person in possession from committing future waste”).
In the present case, the Timber Buyer argues that the Grandchildren have no
standing to sue for damages because they were mere contingent remaindermen when
the trees were cut. We conclude, though, that it is irrelevant whether the
Grandchildren’s remaindermen interest in the Property was vested or contingent
under Mr. Burden’s will: They did not bring suit until after Mrs. Bazemore’s death,
after their interest became a vested fee simple interest. Though neither party cites
a case on point on this issue, we conclude that once a contingent remainderman’s
interest vests, he may bring suit for damages, even for acts committed during the life
tenancy. Indeed, in discussing the limited right of a contingent remainderman to
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Opinion of the Court
seek only injunctive relief, our Supreme Court stated that a contingent
remainderman “could not maintain [an] action [for damages] during the life of the
first taker.” Latham v. Roanoke R. & Lumber Co., 139 N.C. 9, 51 S.E. 780, 780 (1905)
(emphasis added). Our Supreme Court reasoned that, during the life tenancy, it is
impossible to know what, if any, damage any particular contingent remainderman
will suffer or which remainderman will vest and actually will suffer the damage. Id.
at 11-12, 51 S.E. at 780-81.5 But once the life tenancy terminates, this concern goes
away.6
Further, our General Assembly has provided that any remainderman whose
interest has become a vested present interest may sue for damages for timber cut
during the preceding life tenancy. N.C. Gen. Stat. § 1-537 (2017) (“Every heir may
bring action for waste committed on lands . . . of his own inheritance, as well in the
time of his ancestor as in his own.”)
5 Our holding on this issue is the rule in other jurisdictions as well. See, e.g., Fisher’s Ex’r v.
Haney, 180 Ky. 257, 262, 202 S.W. 495, 497 (1918) (holding that though a contingent remainderman
can only seek injunctive relief during the life tenancy, this limiting rule has no application once the
remainderman becomes vested at the death of the life tenant); In re Estate of Hemauer, 135 Wis. 2d
542, 401 N.W.2d 27, 1986 Wisc. App. LEXIS 3973, *3 (1986) (holding “that the [contingent]
remaindermen’s cause of action for waste did not accrue until [the life tenant’s] death because the
remaindermen had no right to enforce prior to her death”).
6 Neither party makes any argument that the Grandchildren’s claims are time-barred, and it
does not appear that they are. But we note that claims of a remainderman for waste committed during
the life tenancy but brought after the death of the life tenant may be time-barred. See, e.g., McCarver
v. Blythe, 147 N.C. App. 496, 499, 555 S.E.2d 680, 683 (2001).
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Therefore, we conclude that the Grandchildren do have standing to seek relief
for damage caused by any unauthorized cutting of timber on the Property which
occurred during Mrs. Bazemore’s life tenancy.
C. The Large Trees
The Grandchildren argue that they are entitled to damages for the trees which
were cut, contending that the contract between Mr. Bazemore (purportedly signed on
behalf of Mrs. Bazemore) and the Timber Buyer was not validly executed.
We conclude that the Grandchildren have no claim regarding the Large Trees.
Even if the contract was not valid, any claim pertaining to the cutting of Large Trees
which occurred during the life tenancy of Mrs. Bazemore belonged to Mrs. Bazemore
alone, and now to her estate. That is, the Large Trees belonged to Mrs. Bazemore
during the life tenancy pursuant to the express grant in Mr. Burden’s will, and they
were cut during the life tenancy. Unlike typical remaindermen, because of Mr.
Burden’s express grant to Mrs. Bazemore (and the other life tenants), the
Grandchildren had no rights in the Large Trees during the life tenancy, see Fletcher,
201 N.C. at 768, 161 S.E. at 386; and, therefore, they had no rights in the Large Trees
which were severed from the Property during the life tenancy. Therefore, assuming
that the Large Trees were cut without Mrs. Bazemore’s authorization, it is Mrs.
Bazemore who suffered. The Grandchildren can make no claim for waste of their
inheritance since Mr. Burden had “severed” the Large Trees from the fee that they
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were entitled to inherit. Id. And they have no claim for trover, as the Large Trees,
once cut, belonged to Mrs. Bazemore.
D. The Small Trees
We conclude that the Grandchildren are entitled to any damage caused by the
cutting of trees less than twelve (12) inches in diameter (hereinafter the “Small
Trees”) by the Timber Buyer. Mrs. Bazemore’s interest in the Small Trees was only
that of a life tenant, as Mr. Burden did not expressly grant her any additional rights
in the Small Trees in his will. And there was no evidence offered at summary
judgment suggesting that the Small Trees were cut for any reason other than for
profit, which, as explained above, is not permissible for a life tenant to enjoy.
The Timber Buyer argues that it is entitled to summary judgment, in any
event, because the Grandchildren failed to put on any evidence showing that any of
the trees cut by the Timber Buyer were, in fact, Small Trees. However, we conclude
that there was enough evidence presented to survive summary judgment on this
point. Specifically, the contract with the Timber Buyer provided that the Property
would be “clear cut,” suggesting that all of the marketable trees on the Property
would be cut, not just the Large Trees. Further, the evidence identifies the types of
trees which were actually cut by the Timber Buyer, including trees used for “pulp”
and “chip-in-saw,” which are typically made from smaller trees, less than twelve (12)
inches in diameter. It certainly would have been better if the Grandchildren had
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Opinion of the Court
offered an affidavit of a witness who expressly stated that at least one Small Tree
was cut. However, we conclude that the record was sufficient to create an issue of
fact that at least one Small Tree was cut, and therefore sufficient to reach the jury on
the question of damages.
E. Liability of Timber Buyer
Our Supreme Court has held that a third party may be liable to a
remainderman whose interest has vested for wrongfully cutting timber, specifically,
for trover (the value of the trees) or for “an action on the case in the nature of waste”
(the damage to the land). Burnett, 51 N.C. at 213.
Our Supreme Court has held that even if the third party contracts with the life
tenant to cut timber, the third party is still liable to the remaindermen if any cutting
is unauthorized. Dorsey, 100 N.C. at 45, 6 S.E. at 272. That is, it is no excuse that
the third party acted under a contract with the life tenant, where the life tenant,
otherwise, had no right to have the timber cut:
The judgment, it seems, is founded upon the supposition
that the contract between the life-tenant in possession and
the [third party], purporting to give them the right to cut
and remove the timber, had the legal effect to exempt [the
third party] from liability to the [remaindermen] on such
account. This was a misapprehension of the law applicable.
Id.at 45-6, 6 S.E. at 272.
Therefore, we conclude that the Timber Buyer is liable to the Grandchildren
for any damage caused by the cutting of the Small Trees.
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Opinion of the Court
But we further conclude that the Timber Buyer is not liable for double damages
pursuant to N.C. Gen. Stat. § 1-539.1. Specifically, our Court has held that a third
party is not liable for double damages under this statute if the third party was not
trespassing on the land itself when the cutting occurred. Matthews v. Brown, 62 N.C.
App. 559, 561, 303 S.E.2d 223, 225 (1983). In Matthews, a timber company had the
contractual right to enter upon a tract of land and cut some trees, but the evidence
demonstrated that the company cut more trees than it was authorized to cut. Id. at
560, 303 S.E.2d at 224. We held that the award of damages for the unauthorized
cutting of trees was appropriate, but that the doubling of the award was not since the
company was lawfully on the land. Id. at 561, 303 S.E.2d at 225 (holding that N.C.
Gen. Stat. § 1-539.1 does not apply unless the defendant was a “trespasser to the
land”). In the present case, the Timber Buyer was authorized by Mr. Bazemore, who
was acting within his apparent authority as Mrs. Bazemore’s agent, to enter the
Property and was therefore not a trespasser.
F. Indemnity from the Estates of the Bazemores
The trial court concluded that the estates of Mr. and Mrs. Bazemore are liable
to indemnify the Timber Buyer, as a matter of law. We agree.
As to Mrs. Bazemore’s liability, the third party may be entitled to indemnity
from the life tenant with whom he contracted. N.C. Gen. Stat. § 1-539.1(c). And,
here, we conclude that the evidence establishes, as a matter of law, that Mr.
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Opinion of the Court
Bazemore was acting as Mrs. Bazemore’s agent when he contracted with the Timber
Buyer.
As to Mr. Bazemore’s liability, our Supreme Court has held that “[a]n agent
who makes a contract for an undisclosed principal is personally liable as a party to it
unless the other party had actual knowledge of the agency and of the principal’s
identity.” Howell v. Smith, 261 N.C. 256, 258-59, 134 S.E.2d 381, 383 (1964).
G. The Broker
The Grandchildren argue that the Broker, with whom Mr. Bazemore
contracted to procure a buyer, was liable to them for any unauthorized cutting.
The trial court held that the Broker was not liable, as a matter of law. We
agree. Section 32A-407 of our General Statutes provides that a person who relies in
good faith on a power of attorney is not responsible for the misapplication of property,
even where the attorney-in-fact exceeds or improperly exercises his authority.
Here, there was no evidence of actionable negligence or bad faith on the part
of the Broker in this case. The evidence shows that the Broker reasonably acted in
good faith to ensure that Mr. Bazemore had the authority to sell the timber on the
Property: Mr. Bazemore assured the Broker of his authority to sell all of the timber
on the Property; the Broker spoke to the Bazemores’ attorney to confirm Mr.
Bazemore’s authority to sell the timber; the Broker communicated with all of Mrs.
7 N.C. Gen. Stat. § 32A-40 (2017) has since been recodified as N.C. Gen. Stat. § 32C-1-119(c),
effective as of 1 January 2018.
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Opinion of the Court
Bazemore’s attorneys-in-fact; and the Broker checked the tax card to ensure that Mrs.
Bazemore was the record owner of the Property. We believe that it is too much to ask
this Broker, who is not an attorney, to have reviewed Mr. Burden’s will and to have
done any more to understand the exact rights Mrs. Bazemore had in the trees on the
Property.
III. Conclusion
As a matter of law, the Grandchildren are entitled to damages from the Timber
Buyer for any Small Trees they are able to prove on remand were cut by the Timber
Buyer, but not for double damages pursuant to N.C. Gen. Stat. § 1-539.1.
As a matter of law, the Grandchildren are not entitled to any damages from
the Timber Buyer for any Large Trees which were cut.
And since whether the Grandchildren are entitled to any damages is still to be
determined on remand, it was error for the trial court to award costs to the
Grandchildren in its summary judgment order. The trial court may consider whether
an award of costs in favor of the Grandchildren would be appropriate at the
appropriate time on remand.
The Grandchildren are not entitled to any damages from the Broker for any of
the trees (whether Large or Small) which were cut, as a matter of law. And the trial
court did not err in awarding the Broker its costs.
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Opinion of the Court
The estates of Mr. and Mrs. Bazemore are liable to Timber Buyer for indemnity
for any liability of the Timber Buyer to the Grandchildren for damage caused by any
wrongful cutting of the Small Trees, as a matter of law. And the trial court properly
awarded costs to the Timber Buyer.
AFFIRMED IN PART, REVERSED IN PART, REMANDED IN PART.
Judges STROUD and BERGER concur.
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