Travis Lumber Co. v. Deichman

• Decision Date: 25 June 2010
• Docket Number: No. 08-916.,08-916.
• Citation: 2009 Ark. 299,319 S.W.3d 239
• Parties: TRAVIS LUMBER COMPANY; J.W. Mooty Timber Company, Inc.; J.W. Mooty II; Westlake Logging, Appellants,v.Joe Richard DEICHMAN, as Trustee of the Margaret Louise Camp Deichman Revocable Trust, Administrator of the Estate of Margaret Louise Camp Deichman, and Individually, Appellee.
• Court: Arkansas Supreme Court

2009 Ark. 299

319 S.W.3d 239

TRAVIS LUMBER COMPANY; J.W. Mooty Timber Company, Inc.; J.W. Mooty II; Westlake Logging, Appellants,v.Joe Richard DEICHMAN, as Trustee of the Margaret Louise Camp Deichman Revocable Trust, Administrator of the Estate of Margaret Louise Camp Deichman, and Individually, Appellee.

No. 08-916.

Supreme Court of Arkansas.

May 21, 2009.

Rehearing Denied June 25, 2010.

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Frye Law Firm, PA, by: William C. Frye; North Little Rock, and Ledbetter, Cogbill, Arnold & Harrison, LLP, by: Jim A. Arnold II, and Victor L. Crowell, Fort Smith, for appellant.

Friday, Eldredge & Clark, LLP, by: Clifford W. Plunkett, Seth M. Haines, and C. Aaron Holt, Fayetteville, for appellee.

ANNABELLE CLINTON IMBER, Justice.

Appellant/Cross-Appellee Travis Lumber Company (“Travis Lumber”) appeals from a judgment entered by the Yell County Circuit Court in favor of Appellee/Cross-Appellant Joe Richard Deichman (“Deichman”), trustee of the Margaret Louise Camp Deichman Revocable Trust (“the trust”). Travis Lumber asserts four points of error on appeal: 1) the jury verdict granting statutory double and treble damages and punitive damages was not supported by sufficient evidence; 2) the jury's compensatory damage award of $347,714.25 was excessive and requires a new trial; 3) the circuit court erred in admitting inadmissible evidence; 4) the circuit court failed to properly instruct the jury as to the elements of liability under the applicable statutes. Deichman has cross-appealed from the circuit court's judgment, alleging three points of error: 1) the circuit court erred in dismissing his claims on behalf of the estate of Margaret Louise Camp Deichman; 2) the circuit court erred in ruling that Deichman, as trustee, could not recover for damages accrued before December 17, 1997; 3) the circuit court erred in refusing to award prejudgment interest. Because this appeal involves a substantial question of law concerning the interpretation of an act of the General Assembly, our jurisdiction is pursuant to Arkansas Supreme Court Rule 1-2(b)(6) (2008). We agree that the circuit court erred in failing to order a new trial due to excessive damages or, alternatively, to order a remittitur. We affirm the judgment on condition of remittitur.

On October 26, 2000, Deichman filed a complaint in the circuit court in his capacity as trustee of the trust and executor of the estate of his mother, Margaret Louise Camp Deichman (“Margaret”). The named defendants were J.W. Mooty Timber Company; J.W. Mooty, II (“Mooty”); Travis Lumber; and John Does 1 through 20. The complaint was amended on January 25, 2001, and added Westlake Logging as a defendant. The amended complaint also brought claims on behalf of Deichman individually and changed the style of the case to show that he was the administrator, rather than executor, of his mother's estate. The crux of the complaint and amended complaint was that the defendants had engaged in the wrongful harvesting of timber from Yell County property owned at various times by Deichman, his mother, and the trust.

Specifically, the complaints alleged that in August 1997, Mooty illegally forged a timber deed purporting to transfer the right to cut and remove certain timber from the property to J.W. Mooty Timber Company. The signature on the forged deed, purporting to be that of “Louise Diechman,” was not authorized by Margaret. Mooty testified at the trial of this matter that he knew there was “something wrong” with the deed as it was unsigned in his Arkansas office one day and appeared in his office the following day bearing the signature, despite the fact that Margaret lived in Chicago. The complaints further alleged that in September 1997, Mooty and J.W. Mooty Timber Company unlawfully executed a timber deed purporting to transfer title to the timber on the property to Travis Lumber. This deed transferred title to “[a]ll pine and hardwood timber 8? in diameter and larger at ground level.” The complaints alleged that in February 1998, Travis Lumber employed, directed, or authorized Westlake Logging to enter the property and harvest the timber.¹ Travis Lumber then milled or sold the timber to others. According to Mooty's testimony, he offered the timber rights to Travis Lumber and no one else, knowing that the deed had been forged.

Prior to December 17, 1997, Margaret owned the property at issue in her individual capacity. On that date, while the harvesting of the timber was ongoing, she transferred the property to the trust. Margaret was named as trustee, and Deichman was named as successor trustee. Deichman was also the beneficiary under the trust. In addition, Deichman was named executor of his mother's estate under her will. According to the complaints, Deichman and his mother were unaware of the unlawful harvesting until October 2000, shortly before Margaret's death. Travis Lumber asserted in its answer that it was also unaware of any suggestion of invalidity of the timber deed until October 6, 2000. According to Mooty's testimony, he was indicted and pled guilty to wire fraud and mail fraud. His indictment included the allegation that he “devised a scheme for obtaining money and property from timber owners and timber cutters by making fraudulent representations.”

In his complaints, Deichman asserted claims for conversion, trespass, and statutory recovery under Arkansas Code Annotated sections 15-32-301 and 18-60-102. Section 15-32-301 permits a landowner to recover double the value of timber unlawfully cut down, destroyed, or carried away by someone who does so knowingly. Ark.Code Ann. § 15-32-301(a) (Repl.2003). A person who aids and abets or assists another in such activity or who purchases or receives timber knowing it to have been unlawfully cut is also liable for double damages under section 15-32-301 Id. Section 18-60-102 permits treble damages for trespass if the trespasser shall “[c]ut down, injure, destroy, or carry away any tree placed or growing for use or shade or any timber, rails, or wood, standing, being, or growing on the land of another person.” Id. § 18-60-102(a)(1) (Repl.2003). However, if the trespasser had probable cause to believe that the land or the thing removed or destroyed was his or her own, then the landowner recovers single damages only. Id. § 18-60-102(c). Pursuant to these statutes, Deichman sought “recovery of double or triple damages, including compensatory damages for the fair market value of the timber, the reduced value of the Property, the costs to restore the Property to its original condition, clean-up cost associated with the damage to the Property, punitive damages, prejudgment interest, post-judgment interest, attorneys fees, and costs.”

On August 22, 2005, Travis Lumber filed a motion to dismiss for lack of subject-matter jurisdiction, arguing that Deichman's claims as administrator of the estate should be dismissed with prejudice due to his failure to obtain ancillary letters of administration authorizing him to sue on behalf of the estate. Alternatively, Travis Lumber sought dismissal of all claims on behalf of the estate that accrued before January 25, 1998. Deichman was appointed representative of his mother's estate and granted letters of office by a December 28, 2000 order of the Circuit Court of Cook County, Illinois. In its motion to dismiss, Travis Lumber asserted that, even if this order granted Deichman authority to file suit on behalf of the estate in Arkansas, the original complaint was a nullity because these letters had not been obtained at the time of filing. It alleged that any claims on behalf of the estate for damages accruing before three years prior to the filing of the amended complaint were barred by the statute of limitations.

On September 28, 2005, the circuit court entered an order of dismissal, dismissing with prejudice all claims on behalf of the estate. Specifically, the court found that both the original and amended complaints failed to comply with the statutory requirements for the filing of ancillary administration and the statutory bond requirement of Arkansas Code Annotated section 16-61-110, making both complaints nullities. The circuit court also found that the December 17, 1997 deed transferring Margaret's interest in the property to the trust “did not convey any accrued causes of action for property damage”; therefore, the claims of the estate were never transferred to the trust.

Travis Lumber filed a motion in limine on October 23, 2007, seeking to exclude certain evidence at trial. Pursuant to Arkansas Rules of Evidence 401, 402, and 403, Travis Lumber sought exclusion of “any and all evidence of any damages of Plaintiff, Joe Richard Deichman, as the Administrator of the Estate of Margaret Louise Camp Deichman, due to this Court's September 20[sic], 2005 dismissal of all of the damage claims of the Estate of Margaret Louise Camp Deichman.” Travis Lumber argued that evidence of damages accruing prior to December 17, 1997, was irrelevant. This portion of Travis Lumber's motion was granted at a pretrial hearing. Pursuant to Rules 801, 602, 403, and 404, Travis Lumber also sought exclusion of Mooty's testimony to the effect that he gave $15,000 to an associate and intended that it be forwarded to a Travis Lumber employee. The circuit court declined to rule on this portion of the motion until trial. Finally, Travis Lumber also sought exclusion of portions of the testimony of Carroll Cochran, Deichman's expert witness, on four bases: that he lacked the requisite foundation and knowledge to testify as an expert regarding the standard of care of Arkansas timber companies in verifying the validity of timber deeds; that his estimation of the fair market value of the timber removed erroneously included damages incurred by the estate and damages incurred by the trust; that his estimation of the fair market value was erroneously based on the...