Hoffman, R. v. Gongaware, S.

J-S75007-17
2018 PA Super 116RANDY E. HOFFMAN AND SHERRY L. : IN THE SUPERIOR COURT OF
HOFFMAN, HIS WIFE : PENNSYLVANIA
:
Appellants :
:
:
v. :
:
: No. 152 WDA 2017
SCOTT A. GONGAWARE AND KERN :
BROTHERS LUMBER COMPANY, :
A/K/A KERN BROTHERS LUMBER :
COMPANY, INC. :
Appeal from the Order January 10, 2017
In the Court of Common Pleas of Somerset County Civil Division at
No(s): No. 503 Civil 2014
BEFORE: SHOGAN, J., OTT, J., and MUSMANNO, J.
OPINION BY SHOGAN, J.: FILED MAY 4, 2018
Randy E. Hoffman and Sherry L. Hoffman (“Appellants”) appeal from the
trial court’s January 10, 2017 order sustaining the preliminary objections in
the nature of a demurrer of Scott A. Gongaware and Kern Brothers Lumber
Company (“Appellees”) and dismissing Appellants’ complaint. On appeal,
Appellants argue that the trial court erred in concluding that their reservation
of timber rights in a duly recorded deed constituted an interest in personal
property, rather than land, and in finding that they forfeited this interest when
they failed to remove the timber in a reasonable amount of time. After careful
review, we reverse and remand for further proceedings.
The trial court summarized the facts as follows:
[Appellants], Randy E. Hoffman and Sherry L. Hoffman,
husband-and-wife, were the owners of a 20 acre parcel of land
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on which a crop of timber existed in Lincoln Township, Somerset
County, together with a residence in which the [Appellants]
apparently resided. On October 12, 1977 [Appellants] conveyed
the premises to Consolidation Coal Company by deed recorded in
record book volume 812, page 646 and recorded on the following
day [(“the 1977 Deed”)]. Of particular importance are the various
“Exceptions and Reservations” which we shall include verbatim.
EXCEPTING AND RESERVING all coal and mining
rights previously conveyed by predecessors in title.
ALSO EXCEPTING AND RESERVING unto the grantors,
their heirs and assigns, all the oil and gas underlying
the premises hereby conveyed and all necessary and
convenient rights for the removal thereof, provided
that such operations do not interfere with the coal
mining operations of the grantee, its successors or
assigns.
ALSO EXCEPTING AND RESERVING unto the grantors,
their heirs and assigns, all of the timber on the
premises hereby conveyed and all necessary and
convenient rights for the removal thereof, provided
that the grantors, their heirs and assigns, must
exercise said right upon six (6) months written notice
by the grantee, its successors or assigns, and
provided further, that such operations by the
grantors, their heirs and assigns, do not interfere with
the coal mining operations of the grantee, its
successors or assigns.[1]
ALSO EXCEPTING AND RESERVING unto the grantors,
their heirs and assigns, the right to remain at the
residence located on the premises hereby conveyed,
together with the full right to use and possession of
an area constituting a 200 foot radius surrounding
said residence, provided that: (1) the grantors, their
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1 As discussed infra, the language of the 1977 Deed requires Appellees to
provide written notice to Appellants, at which point Appellants have six months
to remove the timber from the property. The 1977 Deed does not require
Appellants to provide notice to Appellees before Appellants exercise their right
to the timber on the property.
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heirs and assigns, may remain on said premises at
their sole risk and expense, with the understanding
and agreement that the grantors, their heirs and
assigns, shall pay to the grantee, its successors or
assigns, and advance annual rental of a sum equal to
all taxes levied on all the premises hereby conveyed
used by the grantors, their heirs and assigns; (2) the
grantee, its successors or assigns, shall have
exclusive possession of the premises hereby conveyed
upon six (6) months written notice to the grantors,
their heirs and assigns, provided that in no event shall
the grantors, their heirs and assigns, [be] deprived of
the use and possession of the aforesaid residence and
surrounding area for a period less than nine months
from October 12, [1977], (that is, notice by the
grantee, its successors or assigns, to the grantors,
their heirs and assigns, to remove from the aforesaid
residence and surrounding area shall not be given
within the first three (3) months after October 12,
1977); (3) the grantors, their heirs and assigns, shall
remove from the premises hereby conveyed on or
before the expiration of the aforesaid notice. All crops,
livestock and other removable personal property.
IN THE EVENT THAT the grantee, its successors or
assigns, determines at any time to remove the
residency [erected on] the premises hereby
conveyed, the grantors, their heirs and assigns, shall
have the right of first refusal relative to the sale of
said residence, or any and all salvageable parts
thereof, at the same purchase price as offered by any
third party who has submitted and executed written
offer to purchase the aforesaid residence and/or any
part thereof, and grantee, its successors or assigns,
shall submit a copy of such executed written offer to
the grantors, their heirs and assigns, who shall have
sixty (60) days from the date of receipt of such written
offer to either exercise or refuse to exercise the right
to purchase the aforesaid residence or any part
thereof for the same purchase price as set forth in said
written offer.
The Grantee in [the 1977 Deed], Consolidation Coal
Company, conveyed the premises under and subject to the
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foregoing “Exception and Reservation” clauses in 1984 to an
entity which ultimately became known as Reserve Coal Properties
Company. On June 28, 2004, 27 years after [Appellants]
conveyed away the premises, Reserve Coal Properties Company
conveyed the property to [Appellee], Scott A. Gongaware,
providing that the same was ---
UNDER AND SUBJECT to all exceptions, reservations
and all other matters affecting title as set forth in the
deed from Randy E. Hoffman and Sherry L. Hoffman,
his wife, to Consolidation Coal Company dated
October 12, 1977 and recorded in deed book volume
812, page 646.
There is no suggestion that Consolidation Coal Company or
its successors ever gave [Appellants] notice to remove the
timber.
Sometime prior to 2012, [Appellee], Scott A. Gongaware,
entered into an agreement with [Appellee], Kern Brothers
Lumber Company, to harvest the timber upon the real estate.
[Appellants] learned of the harvesting of timber in 2012, and for
these purposes, it is undisputed that the harvesting was done
without the knowledge or consent of [Appellants].
[Appellants] bring their action against both the [Appellee]
landowner, Scott A. Gongaware, and the timber removal
contractee, Kern Brothers Lumber Company, for damages in
conversion, unjust enrichment, and statutory treble damages
under 42 Pa.C.S.A. §8311.
[Appellees] demur to the causes of action on the theory
that [Appellants] had no actionable claim to the timber at the
time [Appellees] commenced timber removal operations.
Trial Court Opinion, 1/10/17, at unnumbered 1–3. Finding that Appellants
had “no property interest, either real or personal, in the timber existing on the
premises at the commencement of these proceedings,” the trial court
sustained Appellees’ preliminary objections and dismissed Appellants’ case.
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Id. at unnumbered 6. Appellants filed a timely notice of appeal on January 19,
2017. Both Appellants and the trial court have complied with Pa.R.A.P. 1925.
On appeal, Appellants present the following questions for our review:
I. Whether the Lower Court erred in granting Appellees’
Preliminary Objection in the nature of a demurrer based on
facts and factual inferences not made in the Appellants’
Complaint?
II. Whether the Lower Court erred in sustaining the Appellees’
Preliminary Objection in the nature of a demurrer as
Appellants’ Complaint met the extremely low standard for
surviving a demurrer?
III. Whether the Lower Court erred in sustaining the Preliminary
Objection in the nature of a demurrer based on the
reasoning that the timber reservation was that of personal
property and that Appellants had to remove the timber in a
reasonable amount of time?
IV. Whether the Lower Court erred in granting Appellees’
Preliminary Objection in the nature of a demurrer since
under the facts pled Appellants can recover under every
cause of action brought forth in the Complaint?
Appellants’ Brief at 3.
“An appeal from an order granting preliminary objections in the nature
of demurrer is subject to plenary review.” Erdely v. Hinchcliffe and Keener,
Inc., 875 A.2d 1078, 1081 (Pa. Super. 2005). When determining whether
the trial court properly sustained the preliminary objections, this Court will
examine the “averments in the complaint, together with the documents and
exhibits attached thereto.” Id. Further:
The impetus of our inquiry is to determine the legal sufficiency of
the complaint and whether the pleading would permit recovery if
ultimately proven. This Court will reverse the trial court’s decision
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regarding preliminary objections only where there has been an
error of law or abuse of discretion. When sustaining the trial
court’s ruling will result in the denial of claim or a dismissal of suit,
preliminary objections will be sustained only where the case is free
and clear of doubt.
Clausi v. Stuck, 74 A.3d 242, 246 (Pa. Super. 2013) (quoting Conway v.
The Cutler Group, Inc., 57 A.3d 155, 157–158 (Pa. Super. 2012)). “If any
doubt exists as to whether a demurrer should be sustained, it should be
resolved in favor of overruling the preliminary objections.” Haun v.
Community Health Systems, Inc., 14 A.3d 120, 123 (Pa. Super. 2011)
(quoting Hykes v. Hughes, 835 A.2d 382, 383 (Pa. Super. 2003)).
In support of their first issue, Appellants contend that the trial court
erred when it relied on “facts and factual inferences” not contained in the
complaint. Appellants’ Brief at 9. Specifically, Appellants argue that the trial
court erred when it found that the property at issue was conveyed for
“anticipated coal operations” because the complaint was void of any factual
averments indicating the same. Id. at 9–10 (quoting Trial Court Opinion,
1/10/17, at unumbered 5).
Although Appellants did not make any averments regarding the
anticipated operations on the property, they attached a copy of the 1977 Deed
to their complaint. Complaint, 4/22/2015, Exhibit B.2 The 1977 Deed
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2 Appellants also attached a copy of the 2004 Special Warranty Deed, which
conveyed the land from Reserve Coal Properties (an affiliate of Consolidation
Coal Company) to Appellee Gongaware, to their complaint. Complaint,
4/22/2015, Exhibit A.
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contained the following language, “EXCEPTING AND RESERVING all coal
mining rights previously conveyed by predecessors in title.” Id. at Exhibit B.
Additionally, the 1977 Deed addressed the Appellants’ ability to harvest the
timber from the land as follows, “grantors . . . must exercise said right upon
six (6) months written notice by the grantee . . . and provided further, that
such operations by the grantors . . . do not interfere with the coal mining
operations of the grantee . . .” Id. (emphasis added). We also note that
the 1977 Deed includes a reservation of the grantors’ rights relating to the oil
and gas underlying the property, which allowed grantors to remove the oil and
gas, so long as those operations do not interfere with coal mining operations.
Id. The trial court properly considered the appended 1977 Deed and, in view
of the above quoted language, did not err when it found that the property was
conveyed for anticipated coal operations. See, e.g., Detweiler v. School
Dist. Of Borough of Hatfield, 104 A.2d 110, 113 (Pa. 1954) (finding no
error where trial court considered agreements attached to defendant’s
demurrer because those agreements were acknowledged and relied upon by
plaintiffs to establish their claims).
The trial court also concluded, however, that “[c]oal mining operations,
for surface mining, would be inconsistent with the preservation of timber due
to the requirement to remove the surface overburden above the coal seam.”
Trial Court Opinion, 1/10/17 at unnumbered 5. Appellants allege that the trial
court went beyond the permitted scope of material when it determined that
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the property was to be used for surface mining, as opposed to underground
mining. Appellants’ Brief at 9–10. We agree. Neither the complaint nor the
appended 1977 Deed indicates that the property was to be used for surface
mining. It is not clear whether this information was contained in documents
not properly before the court on preliminary objections or simply an
unsupportable inference made by the trial court. Regardless, it was an
impermissible consideration in deciding preliminary objections in the nature
of a demurrer and tainted the trial court’s conclusion that Appellants did not
have an actionable claim, as discussed in more detail below.
Appellants’ remaining issues focus on the trial court’s ultimate
conclusion that Appellants did not have an interest in the timber Appellees
harvested. More specifically, they argue that the trial court erred in finding
that the timber-reservation clause contained in the 1977 Deed constituted a
reservation of personal property. The trial court further found that because
the timber-reservation clause was an interest in personal property, Appellants
had to remove the timber within a reasonable time. The trial court concluded
that Appellants failed to do so, and that their rights to the timber were thus
extinguished. Trial Court Opinion, 1/10/17, at unnumbered 5–6.
Appellants aver, to the contrary, that the timber-reservation clause
constitutes a reservation in realty, not personal property, and point to the
language contained in the 1977 Deed. Appellants’ Brief at 13. Appellants
assert that the language reserving rights for “their heirs and assigns” in the
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timber-reservation clause gives Appellants a perpetual right to enter the
property and remove the timber. Id. at 13–14. They argue that the second
part of the conveyance, which provides that the grantors, heirs, and assigns
must exercise the right to remove the timber upon six months of the grantees’
written notice, constitutes a condition subsequent. Id. at 14. Appellants
assert that written notice by Appellees, followed by Appellants’ failure to
remove the timber over the subsequent six months, is the only way that
Appellant’s interest in the timber can be extinguished pursuant to the terms
of the Exception and Reservation clause in the 1977 Deed. Id. Because
Appellees have not given any such notice to them, Appellants contend the
condition subsequent has not occurred, and their right to the timber on the
property has not been extinguished. Id.
Appellants further aver that the trial court erred in granting the
Appellees’ preliminary objections because, under Pennsylvania statutory law,
a reservation of timber rights constitutes an interest in land, not personal
property. Appellants’ Brief at 16. Appellants rely on the statute governing
timber deeds, which states:
It shall be lawful for the owner or owners of land, timber or bark,
or for any person or persons having an interest therein, to grant,
bargain and sell, or contract to sell, by deed, conveyance or
contract in writing, signed by the grantor or grantors therein, and
proved or acknowledged by them, as now required by law of this
commonwealth for the signing and acknowledging of deeds, all or
any right, title, claim or interest such grantor or grantors may
have in or to any standing or growing timber, or the bark thereon,
upon any lands in this commonwealth; and any such deed,
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conveyance or contract shall be taken and deemed as a deed,
conveyance or contract conveying and vesting an interest in land.
21 P.S § 521 (emphasis added).3
Although the majority of case law addressing whether timber should be
considered real or personal property was handed down over 100 years ago,
those holdings remain valid law and inform our decision in this case. Notably,
this Court recently addressed this issue and analyzed Section 521 in Zitney
v. Applachian Timber Products, 72 A.3d 281 (Pa. Super. 2013). Although
the Court ultimately held that a contract for the sale of timber to be removed
within twenty-four months was a contract for the sale of personal property,
the court extensively discussed Section 521 and the relevant case law.
The Zitney Court noted that Section 521 was enacted in 1895, and was
“bookended” by two cases, Appeal of McClintock, 71 Pa. 365 (Pa. 1872)
(decided before the enactment of Section 521) and Havens v. Pearson, 6
A.2d 84 (Pa. 1939) (decided after the enactment of Section 521). Citing
McClintock and Havens, the Zitney Court noted “that despite the general
categorization of 21 P.S. §521, not all timber contracts constitute contracts
for the sale of land.” Zitney, 72 A.3d at 287–288. Justice Wecht, a former
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3Appellants included a discussion of Section 521 in their brief in response to
Appellees’ preliminary objections. The trial court, however, failed to discuss,
analyze, or even mention Section 521 in its opinion sustaining Appellees’
preliminary objections. Indeed, in that opinion, the trial court relied primarily
on a case, Appeal of McClintock 71 Pa. 365 (Pa. 1872), which was handed
down well before Section 521 was enacted in 1895.
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member of our Court and author of the Zitney opinion, summarized the facts
and relevant principles established by these cases, as follows:
In McClintock’s Appeal, John Strawbridge conveyed 130
acres of land to Lafayette McClintock, but reserved “all the pine
and hemlock timber, also the mineral that may be found on said
premises, to his own use and advantage.” 71 Pa. at 366. The
reservation further provided that, in the event that McClintock
wanted to “clear any part of the land,” Strawbridge was to remove
the timber within thirty days after being notified of McClintock’s
intentions. Id. Upon Strawbridge’s death, McClintock was named
as the administrator of Strawbridge’s estate. During inventory of
the estate, a question arose as to whether the timber reserved on
the property now owned by McClintock constituted personal
property of the estate. An auditor was appointed, and he
determined that the timber was personal property. The Orphans’
Court agreed with the auditor. Id. at 365–66.
Our Supreme Court affirmed the Orphans’ Court, holding
that “[i]n agreements for the reservation or sale of growing
timber, whether the timber is to be regarded as personal property
or an interest in real estate, depends on the nature of the contract
and the intent of the parties.” Id. at 366. The Court explained
the basis for its rule as follows:
If the agreement does not contemplate the
immediate severance of the timber it is a contract for
the sale or reservation of an interest in land, and until
actual severance the timber in such cases passes to
the heir, and not to the personal representative. But
when the agreement is made with a view to the
immediate severance of the timber from the soil, it is
regarded as personal property, and passes to the
executor and administrator, not the heir.
***
But in the case at hand it is manifest that the
parties intended by their contract to divide the pine
and hemlock from the freehold, and give to it the
quality of a chattel. It was not to be taken off at
discretion, as to the time. By the express terms of
the deed the vendee of the land had the right to
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require the removal on giving, and the vendor was
bound to take it off on receiving thirty days’ notice.
The timber must, therefore, be regarded as a chattel,
which passed to the administrator.
***
If the reservation had been of a perpetual right
to enter on the land and cut all the pine and hemlock
timber growing thereon, then it would be ... regarded
as an interest in land.
Id. at 366–67.
Our Supreme Court reaffirmed these legal distinctions in
reviewing the nature of the timber removal contracts in Havens.
In that case, W.H. Pearson owned, by written contract, the timber
growing on 1,300 acres of land owned by someone else. The
contract provided Pearson twenty years to cut and remove the
timber. Havens, 6 A.2d at 85. Following a lien and a judgment,
the property was purchased through a sheriff’s sale by O.S.
Havens. Pearson continued to remove timber from the property
after Havens took ownership of it. Havens sought an injunction
preventing Pearson from continuing to remove the timber. Id. at
86. As in the case sub judice, the question became whether the
timber contract was for the sale of land or of goods. If the contract
was for goods, the timber would not have been subject to the lien,
judgment, and subsequent sale.
Although the Supreme Court ultimately held that the
contract in Havens was for a sale of land, permitting Havens to
enjoin Pearson from removing the timber, the Court applied the
following principles:
Ordinarily a contract for the sale of standing
timber to be cut and removed, or one that gives the
purchaser discretion as to the time of removal, is a
sale of land within the meaning of the Statute of
Frauds. Where, however, timber is to be cut and
[removed] by the purchaser within a definite or
reasonable time, it becomes a question of the
intent of the parties as to whether a sale of
realty, the creation of a chattel real, or a sale of
personalty was intended. It has been stated in
many of our cases that the contract to be a sale of
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personalty must intend an ‘immediate severance’; it
would be more accurate to say that the real test is,
considering the nature and extent of the land, the
number of feet of merchantable timber and the time
given for removal, whether the vendor intended the
vendee to have an interest in the standing timber as
land, or whether he contemplated a removal within a
time reasonably necessary therefor, in which case the
vendee would have a chattel interest.
Id. at 86 (citations and footnote omitted; emphasis added). To
illustrate these principles, the Havens Court cited Robbins v.
Farwell, 193 Pa. 37, 44 A. 260 (1899), which held that a six- to
seven-year window to remove timber demonstrated that the
parties intended the contract to be one for the sale of personal
property, and Patterson et al. v. Graham et al.,164 Pa. 234, 30
A. 247 (1894), in which the Pennsylvania Supreme Court held that
a five-year period to remove timber evinced the intent to create a
contract for the sale of personal property. However, the Court
contrasted those cases with Wilson v. Irvin, 1 Pennyp. 203 (Pa.
1881), in which the Court held that a nine-year period to remove
timber created a contract for the sale of land. Havens, 6 A.2d at
86.
Zitney, 72 A.3d at 287–288. (citations edited for clarity). The Zitney Court
also noted that, “[p]er McClintock and Havens, the critical term is the time
period within which the timber is to be removed.” Zitney, 72 A.3d at 289.
Thus, pursuant to well established precedent:
[W]hether growing timber is to be regarded as personal property
or an interest in real estate in an agreement for its reservation or
sale depends on the nature of the contract and the intent of the
parties; that, if the agreement does not contemplate the
immediate severance of the timber, it is a contract for the sale or
reservation of an interest in land; but that, where the agreement
is made with a view to an immediate severance, the timber is to
be regarded as personal property.
Strause v. Berger, 220 Pa. 367, 370 (Pa. 1908); see also McClintock, 71
Pa. at 366 (“If the agreement does not contemplate the immediate severance
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of the timber it is a contract for the sale or reservation of an interest in
land…”). Indeed, as Appellees state in their brief, “The right to harvest timber
depends on the nature of the contract and the intent of the parties . . . .”
Appellees’ Brief at 3; see also McClintock, 71 Pa. at 366 (“In agreements
for the reservation or sale of growing timber, whether the timber is to be
regarded as personal property or an interest in real estate, depends on the
nature of the contract and the intent of the parties.”).
The instant case involves a reservation of timber rights in a deed, not
a timber contract. The deed meets the requirements of the Statue of Frauds
and was duly recorded as a property interest. Even more importantly, the
inclusion of the “heirs and assigns” and “successors and assigns” language
relating to both Appellants and Appellees in the timber-reservation clause is
evidence that Appellants’ interest in the timber is not a short-term, personal-
property interest. See, e.g., Strycker v. Richardson, 77 Pa. Super. 252(Pa. Super. 1921) (finding easement which included “heirs and assigns”
constituted a perpetual easement and was not limited to the named grantee).
Indeed, there was no question that the timber-reservation was included in
Gongaware’s deed and that he had notice. Significantly, the language of the
deed did not contemplate the immediate severance of the timber. In fact, it
appears that over thirty-five years passed before the cutting of the timber
became an issue. We further note that there is no language in the timber-
reservation that requires Appellants to provide notice or seek permission from
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Appellees prior to entering the property and removing the timber. Under these
circumstances, we conclude it was premature for the trial court to bar
Appellants’ claims.
The intent of the parties and the nature of the reservation at issue
cannot be determined based upon the pleadings and their attachments in the
instant case. Indeed, this is a fact specific inquiry and the trial court will need
to look to extrinsic or parole evidence in making its determination. Thus, the
matter is not properly disposed of by preliminary objections in the nature of a
demurrer. See, e.g., Bouchon v. Citizen Care, Inc., 176 A.3d 244, 254
(Pa. Super. 2017) (“In determining whether the trial court properly sustained
preliminary objections, the appellate court must examine the averments in
the complaint, together with the documents and exhibits attached thereto, in
order to evaluate the sufficiency of the facts averred.”); Kane v. State Farm
Fire and Cas. Co., 841 A.2d 1038, 1041 (Pa. Super. 2003) (“When
considering the grant of preliminary objections in the nature of a demurrer,
this Court must resolve the issues solely on the basis of the pleadings; no
testimony or other evidence outside the complaint may be considered.”).
Thus, the trial court erred when it sustained Appellees’ preliminary objections.
Order reversed. Case remanded. Jurisdiction relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/4/2018
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