Case of the Day – Thursday, August 11, 2016

MEANWHILE, BACK AT THE RANCH …

ranch

… that confounded sodbuster neighbor just done cut our power line with his plow. In the ensuing fire that swept across the plain, the trees planted in our windbreak went up like Roman candles, and the ranch hands couldn’t stop the conflagration. Sure, the farmer was negligent, but to what extent?

One of the first things new law students learn is the lesson of Hawkins v. McGee, the “case of the hairy hand,” in which we find that the measure of damages is the difference between the value before the breach or the negligence, and the difference after the breach. Nebraska law in this case held that if the trees were used for residential or recreational purposes, the damages are the replacement cost of the trees up to the value of the real estate. But if they were just used for agricultural purposes, the Hawkins v. McGee formulation is fine.

hairyhandHere, replacement of the trees would cost over $270,000, but the reduction in value of the farmland was only $30,000. David Spicer, owner of the ranch, tried to bootstrap himself into qualifying for the “recreational” formulation by arguing that not only did he use the windbreak for the usual agricultural purposes, but he relied on it for recreational purposes as well, including for his kids’ 4-H projects. The 4-H projects argument was especially touching, except that David Spicer’s youngest kid was 25 years old. And we thought Hillary and the Donald bent the facts occasionally

The trial court granted summary judgment on the damages question, holding that the replacement cost exceeded the value of the land, and that $30,000 was adequate to compensate for the loss of the trees. The Court of Appeals ruled, however, that whether the trees were recreational in nature or agricultural in nature was a question of fact, and the trial court was wrong to resolve that question without a trial.

The issue of how to value the loss of trees – especially where the value of the tree to the homeowner is due to noneconomic reasons such as beauty, sentimentality or recreational value, arises often, and for good reason. The aphorism in real estate is that value of a home depends on location, location, location. Much could be said of trees as well. The mighty oak that shades the plantation house is worth far more than its identical twin standing a quarter mile into the woods behind the fields. Determining exactly how much more may require juries to consider not so much stumpage prices as the quality of 4-H projects.

Spicer Ranch v. Schilke, 734 N.W.2d 314 (Neb.App., 2007). Schilke farmed leased land next to the Spicer Ranch. While he was plowing one day, he cut a power line leading to some irrigation pumps. A fire resulted, which — before it burned out – destroyed a windbreak on Spicer Ranch consisting of red cedar and juniper trees, and located about five hundred yards from the ranch house. Spicers used the windbreak, which was on a 110-acre tract of land, in the normal fashion of slowing the wind, providing shelter for cattle, for calving, for horses and for general farm use. David Spicer – mindful of how damages were figured in cases such as these – also maintained that he used the trees for recreational purposes including his kids’ cataloging the trees for 4-H projects (except it turned out that his youngest child was 25 years old). Spicer sued for negligence, which was pretty much conceded.

Claiming the windbreak was worth $270,000 was just so much puffery ...

The Court found that Spicer’s claim that the windbreak was worth $270,000 was just puffery …

In an affidavit to the trial court, Spicers’ expert valued the windbreak at $270,000 for replacement of the trees. But the trial court granted summary judgment to Schilke, finding that to value the trees on the 110-acre tract at $270,000 far exceeded the value of the real estate involved. The trees included only made up a small percentage of the tract, the Court found, and that small percentage of land likewise would not be permanently damaged because of the loss of the trees. The trial court awarded Spicer Ranch $30,000 as the highest amount of damages suffered by Spicer Ranch.

The sodbuster was relieved. The rancher was not, and appealed.

Held: Summary judgment was reversed on the damages issue. Spicer Ranch argued the district court erred in using a “before and after” measurement of damages. Instead, it said, to determine compensatory damages for destroying trees and for related damage to the land – where the owner of land intends to use the property for residential or recreational purposes – the owner is not limited to the difference in value of the property before and after the damage or to the stumpage or other commercial value of the timber, but instead may recover the cost of reasonable restoration of the property to its preexisting condition or to a condition as close as reasonably feasible.

The Court of Appeals noted that the trial court’s implicit rationale for its calculation of damages is that the land was used for the farming business, not for any recreational purposes, apparently because of the age of the youngest child was then 25 years old. The trial court’s finding failed to account for the material question of fact as to whether the windbreak was used for residential and recreational purposes, as stated in David’s affidavit, or whether the windbreak was simply a “normal and average farm windbreak,” as could be implied from David’s deposition testimony and as stated in the affidavit of a real estate appraiser. The Court of Appeals noted that measure of a plaintiff’s damages would depend upon the evidence presented at trial and might require alternative instructions, depending upon the jury’s determination of contested factual issues. Because a material issue of fact existed, the Court of Appeals held, summary judgment with respect to damages was improper.

Even under the “before and after” theory of damages used by the trial court, the evidence revealed a range of damages — not just a fixed, undisputed figure of $30,000. The trial judge made a factual finding when he awarded Spicer Ranch $30,000, which he said “is the highest amount of damages suffered by the Ranch according to the before and after damage appraisal.” He should have simply determined whether a material issue of fact existed with respect to damages, and – if one did – set the case for trial. The matter had to be returned to the trial court.
TNLBGray140407

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s