Bloedel Timberlands Development, Inc. v. Timber Industries, Inc.

• Decision Date: 23 March 1981
• Docket Number: No. 3909-II,3909-II
• Citation: 28 Wn.App. 669,626 P.2d 30
• Court: Washington Court of Appeals
• Parties: BLOEDEL TIMBERLANDS DEVELOPMENT, INC., Respondent, v. TIMBER INDUSTRIES, INC., Appellant, Jack L. Ortolf and Mitsui & Co. (U.S.A.), Inc., Defendants.

Page 669

28 Wn.App. 669

626 P.2d 30

BLOEDEL TIMBERLANDS DEVELOPMENT, INC., Respondent, v. TIMBER INDUSTRIES, INC., Appellant, Jack L. Ortolf and Mitsui & Co. (U.S.A.), Inc., Defendants.

No. 3909-II.

Court of Appeals of Washington, Division 2.

March 23, 1981.

Mark S. Clark, John Cooper, Seattle, for appellant.

Joseph C. Finley, Gerald Shucklin, Seattle, for respondent.

PETRICH, Judge.

Treble damages for a timber trespass and damages for conversion for the timber severed from the trespass area are sought in this lawsuit. ¹

Appeals and cross appeals followed a bench trial resulting in the award of treble damages in favor of the plaintiff Bloedel Timberlands Development, Inc. against defendant Timber Industries, Inc., less a set off and dismissal of the claim for treble damages against individual defendant Jack Ortolf, president of Timber Industries, as well as the dismissal of the claim against defendant Mitsui & Co. (U.S.A.), Inc. for conversion. We affirm the trial court's judgment in all respects.

Bloedel, as part of its on-going forest management practices, decided in 1972 to sell some of its standing timber and took steps to prepare an offering of such timber in the tract known as the Wright Timber Sale. This area, carved out of a larger tract owned by Bloedel, consisted of about 60 acres of land irregular in shape. It was bounded on the north by the clearly identified Goodyear Camp railroad grade; on the east and west "by orange-glow flagging"; and the south by the southern section line of two adjoining sections. Defendant Jack Ortolf, acting in his capacity as president of Timber Industries, inspected the Wright Timber Sale in the company of John Allen, Forest Manager for Bloedel, who pointed out the orange-glow flagging. Allen had previously erected the orange-glow flagging for the east and west boundaries. During this inspection trip, a line of blazed trees extending between the southern terminus of the east and west flag lines was observed and discussed by Ortolf and Allen. The testimony at trial was in conflict as to the representation of the blazed tree line as the section line, with Ortolf claiming Allen verbally represented the blazed tree line as the section line and Allen denying the same.

An agreement between Bloedel and Timber Industries dated November 8, 1972, entitled Timber to harvest standing timber in the Wright Timber Sale area in exchange for a cash payment of $80,000. Whether conditions as well as the timber market delayed completion of the project as originally scheduled. For additional sums of money and a deposit of $1,000 to be held as a "performance bond," time for completion was extended by written agreement to September 30, 1976. The actual operation extended into October or early November of 1976 without the benefit of a written extension. The source of the $80,000 cash consideration was from an advance in a like amount to Timber Industries from defendant Mitsui. The advance was evidenced by a note and security agreement in favor of Mitsui on the timber to be harvested. Mitsui also agreed with Timber Industries to purchase about a million board feet of Hemlock and Douglas Fir logs of certain sizes for export. Payment in part for such logs was by a credit on the advance at a predetermined rate. The remaining timber was to be sold by Timber Industries to other customers. This was one of other similar, although not necessarily identical, arrangements between Timber industries and Mitsui which provided financing assistance to Timber Industries and a ready source of logs suitable for export to Mitsui.

Timber Industries contracted with logging operators for the actual logging operations. Three such operators in succession were so engaged, the last being M & M Logging owned by Ray Allen, with Stan Hull as one of its principal employees. Subsequent to the original Bloedel-Timber Industries agreement but before completion of the cutting, Crown Zellerbach, the owner of the property immediately south of the Wright Timber Sale area, located a claimed boundary line somewhat north of the blazed tree line. Once this line was established, Timber Industries respected it and refrained from any cutting south of the Crown Zellerbach line.

Jack Ortolf was seldom on the tract after the initial inspection. In the spring of 1975, he personally inspected the property. Up to that time the logging operations were primarily in the western part, progressing toward the east. At this time he and his son erected red and blue flagging slightly inside the east orange-glow flag line. His stated reason was that the orange-glow flag line was poorly marked, and the new line was a clear warning of the east boundary, the general direction in which the operation was progressing. During the summer months of 1976, David Cassida, an employee of Timber Industries, was assigned the task of supervising the operation. Cassida, on behalf of Timber, entered into the agreement with Ray Allen of M &amp M Logging, the third and last logging contractor to do the cutting, loading and delivery of the timber.

However, David Cassida's knowledge of the boundaries was apparently gained from a map of the area, and the flagged boundary to the east had never been pointed out to him. Ray Allen of M & M had been advised of the boundaries, not by Cassida but by members of a prior logging crew. Because of other commitments Ray Allen left the Wright tract the end of September, and Stan Hull, an employee of M & M Logging, continued the operation. The logging operation in late September and October of 1976 progressed east beyond the eastern boundary of the Wright tract and onto Bloedel's adjoining property. The operation to the east stopped when the outer limits of the most recent yarding site had been reached. It was not until the loggers returned towards the yarding site that the orange-glow flagging and the red and blue flagging were noticed. Upon realizing a probable trespass, Timber Industries ceased logging operations in the trespassed area. The fact of the trespass onto 9.3 acres of the Bloedel property is not disputed, nor is the stumpage value of $20,000 for severed timber.

At the close of the plaintiff's case the trial court dismissed the trespass claims against defendants Ortolf and Mitsui, as well as the alternate claim of conversion against defendant Mitsui. It did award judgment against defendant Timber Industries in the amount of $60,000, thrice the value of the standing timber for the timber trespass, but allowed a set off in the amount of $5,746 for the standing timber in the disputed area of the south boundary plus an additional $1,000, the amount of bond deposit.

Timber Industries appeals, claiming that the admitted trespass was committed with M & M Logging acting as an independent contractor rather than its agent, and further, that the trespass was unintentional and therefore not subject to treble damages. Bloedel cross appeals the award of the set off in favor of Timber Industries, as well as the dismissal of the trespass claim against the individual defendant Ortolf and the conversion claim against Mitsui.

We first address Timber Industries' challenge to the trial court's determination that Ray Allen and Stan Hull, the owner and employee of M & M Logging, were its agents.

The contract between Timber and M & M Logging specified the M & M was an independent contractor. The record shows that M & M was an entity distinct from Timber, that its employees were paid by it and that it supplied its workers with tools and equipment. Timber argues that M & M is an independent contractor as a matter of law. The trial court found, however, that fallers Stan Hull and Ray Allen were agents of Timber because Timber retained the right to control them by the presence of Cassida in the field. Factors to be considered in determining whether an agency relationship exists include: the extent of control; whether a distinct business exists; who supplies tools and equipment; the length of time worked; the method of payment; whether or not the work is part of the regular business of the employer; and the kind of occupation with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision. Hollingbery v. Dunn, 68 Wash.2d 75, 411 P.2d 431 (1966) (citing Restatement (Second), Agency § 220(2) (1958)). The crucial factor is the right of control which must exist to prove agency. Control is not established if the asserted principal retains the right to supervise the asserted agent merely to determine if the agent performs in conformity with the contract. E. g. Seattle Aerie No. 1 of the Fraternal Order of Eagles v. Commissioner of Unemployment Compensation and Placement, 23 Wash.2d 167, 160 P.2d 614 (1945). Instead, control establishes agency only if the principal controls the manner of performance, in this case the actual cutting. E. g. Langness v. Ketonen, 42 Wash.2d 394, 255 P.2d 551 (1953); Nawrocki v. Cole, 41 Wash.2d 474, 249 P.2d 969 (1952); Bill v. Gattavara, 24 Wash.2d 819, 167 P.2d 434 (1946).

The holding of the court in Hollingbery v. Dunn, supra, concerning the determination of agency by the trier of fact is most helpful when it says 68 Wash.2d at page 80, 411 P.2d 431 If the facts are undisputed and but a single conclusion may be drawn therefrom, it becomes a question of law as to whether one is an employee or an independent contractor. Conversely, where the facts as to the agreement between the parties to the transaction are in dispute or are susceptible of more than one interpretation or conclusion, then the relationship of the parties generally becomes a question to be determined by the trier of the facts. Restatement (Second), Agency § 220, comment c (1958); 57 C.J.S. Master and Servant § 530 (1948); 27 Am.Jur. Independent Contractors § 60 (1941).

(Italics ours.)

In the present case the extent of Cassida's control appears to be either a...