Case of the Day – Thursday, January 19, 2023

THAT’S PERSONAL

Reader Paul D. sent a comment yesterday:

Figuring damages for tree loss… I don’t understand why you would use diminution of property value… Unless you were going to soon sell the property or you had a business on the property or your property generated some kind of income. But if the trees were for a personal reason, such as shade or privacy, wouldn’t the better way of proving damages be the current value of trees removed or at least restoration costs?

I think placing a diminution price on a residential property can often be very subjective and inaccurate, especially compared to having a qualified arborist make a value assessment.

Paul asks a good question. Why would anyone prefer a diminution in property value over restoration costs or stumpage value?

Here’s a prime example of someone who might: A few years ago, a tree service company sent a crew to an address in Grove City, Ohio, to remove a maple on the front lawn. Instead of going to 1553 Main Street, the crew mistakenly went to 1533 Main Street. That house, coincidentally, also had a maple tree in its front lawn, a magnificent and healthy specimen that the homeowner loved very much.

You can guess what happened. While the homeowner was obliviously toiling in his office 10 miles away, the tree cutting crew made short work of the beautiful maple. When the owner arrived home that evening, his arboreal pride and joy was nothing but a stump and some sawdust.

There was no question about liability: the tree service company goofed. But how much to pay for the tree? Stumpage value makes no sense. The homeowner wasn’t raising the tree to sell the timber. Replacement cost for the tree might be a fairer measure. However, the largest tree that could be planted for the homeowner – with costs of a few thousand dollars – will not begin to replace the lost tree.

In our homeowner’s case, the measure of damages we finally settled on was a real estate appraisal that concluded that the value of the home had been lessened by about $17,000 by the removal of the mature tree.

Today’s case considers what might happen if the removal of the trees does not diminish the value of the property. A man named Chung bought a parcel of land for a home. When he had a tree-cutting service clear the land for construction, the cutters crossed the line onto Rora Park’s land and removed about 560 trees. The decision only implies this, but it appears that the “accident” might not have been accidental at all. Rather, Chung may have steered the cutters in the wrong direction in order to improve the view from his land.

Whatever the reason, the liability was certain. The problem arose because removing 560 trees didn’t really decrease the value of Rora Park’s land at all. Hard to believe, but then, Alaska is a pretty big place. So Ms. Park demanded restoration damages and payment of the cost of restoring the property by planting new trees. That would have been about $400,000. The trial court granted damages equal to the cost of replanting 50 trees, but the Alaskan Supreme Court reversed.

It seems that if the wronged property owner doesn’t have a “reason personal to the land-owner for restoring the trees,” an Alaskan court won’t use that measure of damages. In this case, Ms. Park waxed eloquent about how she had once had cancer, and “this natural beauty of my yard is [a] healing spot for me, and . . . after work I come by, see my property and see the natural beauty and the trees and all that[. W]hen I [saw] that all cut out it just [made] me very – [it] just [broke] my heart, and then very angry . . .” Unfortunately for her, she later tried to downplay how often she visited the property.

The trial court wouldn’t let her have it both ways and found that she hadn’t justified restoration damages. But, apparently troubled by Ms. Parks’ neighbor getting away with a fast one, the trial court nevertheless awarded her restoration damages anyway. It may have seemed like justice, but it wasn’t the law.

The Alaskan Supreme Court said that restoration damages could be awarded only if Park had a “reason personal” for restoring her property. Because she failed to prove she had such a reason, she ended up being entitled to pretty much nothing.

There’s something not right about letting a slippery character like Chung pull a fast one, cut down 50 of the neighbor’s trees for a better view, and not have to pay damages for it. But that’s the system for you. It reminds one of a quotation attributed to Oliver Wendell Holmes, Jr: “This is a court of law, young man, not a court of justice.”

Chung v. Park, 339 P.3d (Sup.Ct. Alaska, 2014). Landowner Rora Park sued her neighbor Christopher Chung for trespass, alleging that he cleared about 50 trees from her property without permission. The trial court found that the tree cutting did not diminish the property value and that there was no reason personal to the landowner for restoring the trees. But the trial judge nevertheless awarded damages equal to the cost of restoring 50 trees on the property.

Ordinarily, a landowner damaged by a trespass may recover either the loss in property value or reasonable restoration costs. But restoration costs are inappropriate if they are disproportionate to the loss in property value unless there is a reason personal to the landowner for restoring the land. We thus conclude that we must vacate this award.

Chung hired a company to build the foundation of his new house. As part of that project, the contractor agreed to clear trees and other vegetation from the lot. Aerial photographs indicate that some trees were removed from Park’s property near the border of Chung’s lot between August 2008 and the end of September 2008, and more trees were removed between 2008 and 2009. The trees appear to have been removed more or less directly behind the house built on Chung’s property. Timber debris, presumably from the cleared trees, was also discovered buried on Park’s property. An expert witness hired by Park estimated that 562 trees were cleared from about a third of an acre of Park’s property. He calculated that it would cost over $400,000 to restore the property to its former condition. But Chung’s expert witness testified that the market value of Park’s property was likely not affected by the removal of trees.

The trial court found Chung liable for the trees removed from Park’s property. Although the court acknowledged that Park had not proved that the tree cutting reduced the value of her property and found that Park had no reason personal for replacing the trees, it nevertheless concluded that “it would be reasonable both aesthetically and legally to award damages that would permit replacement of trees on that first portion of the lot that can be clearly shown to have been scraped clean as of September 27th, 2008.” The court, therefore, awarded Park the cost of replacing 50 trees, $23,500. Because the court found that Chung’s trespass was intentional, it awarded treble damages under AS 09.45.730.

Chung appealed.

Held: The Alaska Supreme Court vacated the damage award. It held that a party who is injured by an invasion of his property not totally destroying its value may choose as damages either the loss in value or reasonable restoration costs. But reasonable restoration costs are an inappropriate measure of damages when those costs are disproportionately larger than the diminution in the value of the land and there is no reason personal to the owner for restoring the land to its original condition. A reason personal is one that is “peculiar or special to the owner.” The Court said, “We require the landowner to demonstrate a reason personal because we believe it indicates circumstances where the owner holds property primarily for use rather than for sale and where the owner is likely to make repairs with the restoration costs award rather than to pocket the funds and enjoy a windfall.”

During the trial of this case, Park tried to establish a reason personal for replacing the trees that Chung had allegedly removed. She talked about having had cancer, and relying on her property as a “healing spot for me.” But later in the trial, she downplayed her visits to the property. As a result, the court found that Park had not established a reason personal for restoring her property.

According to the unrebutted testimony of Chung’s expert witness, the removal of trees from Park’s property did not appreciably affect the value of her property. The trial court accepted that testimony in its findings of fact. Therefore, the Supreme Court concluded, the damages the trial court awarded – $23,500 before trebling – were disproportionate to the diminution of the property value. The Court said that the trial court could award restoration damages only if it found that Park had a reason personal for restoring her property. Because it did not, the trial court’s award of compensatory damages that exceeded the diminution in the market value of Park’s property was not appropriate.

– Tom Root