Emma Jean Anderson v. James Kenneth Lowry ( 2015 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
September 23, 2015 Session
EMMA JEAN ANDERSON v. JAMES KENNETH LOWRY, ET AL.
Appeal from the Chancery Court for Putnam County
No. 2011290 Ronald Thurman, Judge
________________________________
No. M2014-01107-COA-R3-CV – Filed December 30, 2015
_________________________________
This appeal originated from a boundary line dispute between adjacent landowners. In this
boundary line dispute, the trial court: (1) determined the boundary line that divides the
parties’ properties; (2) awarded treble damages to Appellee for timber that had been removed
from the disputed property by the Appellant; (3) set aside the quitclaim deed recorded the day
before the trial by Appellant as a fraudulent conveyance; and (4) awarded attorney fees to
Appellee for the expenses incurred in prosecuting the petition to set aside the quitclaim deed
as a fraudulent conveyance. We affirm in part, reverse in part, and remand for further
proceedings in accordance with this opinion.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Affirmed
in Part, Reversed in Part, and Remanded.
KENNY ARMSTRONG, J., delivered the opinion of the Court, in which ANDY D. BENNETT, and
BRANDON O. GIBSON, JJ., joined.
Brian O. Bowhan, Smyrna, Tennessee, for the appellant, James Kenneth Lowry.
William D. Birdwell, Cookeville, Tennessee, for the appellee, Emma Jean Anderson.
OPINION
I. Background and Procedural History
1
On July 15, 2011, Appellee Emma Jean Anderson filed a complaint against the
Appellant James Kenneth Lowry. In her complaint, Ms. Anderson sought a determination of
the common boundary line between the parties’ properties and to quiet title. In addition, Ms.
Anderson sought damages for timber that Mr. Lowry had removed from the disputed 4.39
acre tract of land,1 of which she claimed to be the owner.2
The trial court found, by clear and convincing evidence, that the survey commissioned
by Ms. Anderson in 2010 contained the correct boundary line. The proof established that Mr.
Lowry removed the boundary fence between the Anderson land and the Lowry land. The
trial court found the removal of the fence to be a willful act and awarded Ms. Anderson $600
in damages for destruction of the fence. Regarding Mr. Lowry’s decision to cut timber that
belonged to Ms. Anderson, the trial court specifically held that “[t]his was not a negligent
cutting of timber but a knowing and intentional cutting because the [Lowry’s] deed described
the boundary as the fence.” The trial court also made a specific finding that Ms. Anderson’s
expert, who testified as to the value of the timber cut, was a credible witness. Accordingly,
the trial court adopted Ms. Anderson’s expert’s value of $10,000 for the timber. Due to the
knowing and intentional nature of Mr. Lowry’s actions, the trial court awarded treble
1
Ms. Anderson’s complaint describes the disputed property as a 4.32 acre tract of land.
However, the survey adopted by the trial court indicates that the property in question is actually a
4.39 acre tract of land.
2
The trial court consolidated this case with another case involving Mary and TJ Bennett. Mr. and
Mrs. Bennett own property adjacent to the property of Mr. Lowry and Ms. Anderson, and the trial court found
that a determination of the property boundary between the Bennetts, Lowrys, and Ms. Anderson was material
to both cases. The Bennetts are not parties to this appeal.
2
damages in accordance with Tennessee Code Annotated section 43-28-312 (b).
The trial court entered its order on August 28, 2013, and on September 11, 2013, Mr.
and Mrs. Lowry filed a Tennessee Rule of Civil Procedure 59 motion to alter or amend
judgment. In their motion, the Lowrys alleged that the trial court entered a judgment against
Susan Lowry, even though she was not named as a party in Ms. Anderson’s complaint. The
Lowrys also alleged in their motion that Mr. Lowry did not “knowingly and intentionally” cut
Ms. Anderson’s timber, and, therefore, the trial court should not have awarded treble
damages. The Lowrys further argued that the trial court should have placed some
responsibility for damages on the woodcutter, as Tennessee Code Annotated section 43-28-
312 provides for joint liability. Finally, the Lowrys argued that the trial court erred in
valuing the timber and in awarding Ms. Anderson the replacement cost of the boundary
fence. On November 4, 2013, before a hearing on the Rule 59 motion, the Lowrys filed a
Tennessee Rule of Civil Procedure 60 motion for relief from judgment in which they
reiterated their Rule 59 argument that the judgment was erroneously entered against Mrs.
Lowry, who was not a party to the lawsuit.
On March 20, 2014, pursuant to Tennessee Rule of Civil Procedure 15.02, Ms.
Anderson filed a motion to amend her pleadings to conform to the evidence and judgment of
the court in an attempt to add Mrs. Lowry to her complaint. On April 17, 2014, the trial court
entered an order denying Ms. Anderson’s Rule 15 motion on grounds that rule 15.02 does not
contemplate adding an individual as a party to a pleading following trial. The trial court
3
granted the Lowrys’ Rule 60 motion and Rule 59 motion as to the judgment against Mrs.
Lowry. Specifically, the trial court amended its August 28, 2013 order to constitute a
judgment against Mr. Lowry only. The trial court denied the Lowrys’ motions in all other
respects. Finally, the trial court issued a restraining order enjoining the Lowrys from
transferring, encumbering, or perfecting a lien on their real property pending resolution of the
fraudulent conveyance issue raised by Ms. Anderson during oral argument.
On August 20, 2013, one day before the trial of this case, Mr. Lowry recorded a
quitclaim deed transferring his property to himself and his wife. On July 24, 2014, Ms.
Anderson filed a petition against the Lowrys to set aside this quitclaim deed as a fraudulent
conveyance. The petition alleged that the execution and recording of the quitclaim deed,
conveying the subject property to James Kenneth Lowry and his wife Susan Lowry as an
estate by the entireties, constituted a conveyance in fraud of creditors pursuant to Tennessee
Code Annotated section 63-3-101.
On February 3, 2015, the trial court awarded a default judgment in favor of Ms.
Anderson against the Lowrys for the fraudulent conveyance of the property at issue. The trial
court specifically found that the quitclaim deed recorded the day prior to trial to be “clearly
and utterly void.” Additionally, the trial court awarded a judgment against Mr. and Mrs.
Lowry in the amount of $8,200 for attorney’s fees and expenses incurred by Ms. Anderson in
the prosecution of the fraudulent conveyance petition.
II. Issues
4
Appellant presents the following issues on appeal as stated in his brief:
1. Whether appellant is liable for double or treble damages for cutting the appellee’s
trees.
2. Whether the appellee is entitled to damages based on the gross market value of the
trees, or whether the damages must be calculated based on the net market value of the
trees, the amount appellee would have received from a voluntary sale.
3. Whether the appellant is only jointly liable and not completely or severally liable for
the cutting of the timber.
4. Whether attorney’s fees are appropriate in a fraudulent conveyance issue.
III. Standard of Review
To the extent that these issues involve questions of fact, our review of the trial court's
ruling is de novo with a presumption of correctness. Accordingly, we may not reverse these
findings unless they are contrary to the preponderance of the evidence. See, e.g., Randolph v.
Randolph, 937 S.W.2d 815, 819 (Tenn. 1996); T.R.A.P. 13(d). With respect to the trial
court's legal conclusions, however, our review is de novo with no presumption of correctness.
Southern Constructors, Inc. v. Loudon Cnty. Bd. of Educ., 58 S.W.3d 706, 710 (Tenn.
2001); Mix v. Miller, 27 S.W.3d 508, 511 (Tenn. Ct. App. 1999). We may only overturn the
judgment of the trial court if there was an error of law or the preponderance of the evidence
is otherwise. Bogan v. Bogan, 60 S.W.3d 721, 727 (Tenn. 2001). “Statutory interpretation is
a question of law, which we review de novo, with no presumption of correctness given to the
courts below.” Sullivan v. Edwards Oil Co., 141 S.W.3d 544, 547 (Tenn. 2004) (citing
Wallace v. State, 121 S.W.3d 652, 656 (Tenn. 2003)).
IV. Analysis
5
A. Damages
Mr. Lowry argues that the trial court erred by assessing treble damages for cutting Ms.
Anderson’s timber. Tennessee Code Annotated section 43-28-312 governs wrongfully
cutting the timber of another. The statute states as follows:
(a)(1) Civil liability for the negligent cutting of timber from the
property of another is in an amount double that of the current market
value of the timber.
(2) If the timber is negligently cut from the property of another because
the landowner for whom the timber is being cut has marked or
designated the boundary of the landowner's property incorrectly, then
the landowner is jointly liable for the double damages.
(b) Civil liability for knowingly and intentionally cutting timber from
the property of another is in an amount treble that of the current market
value of the timber.
Tenn. Code Ann. § 43-28-312. Although Mr. Lowry concedes that he cut timber from land
the trial court found belonged to Ms. Anderson, he argues that he had a valid survey
indicating that the land in question belonged to him. Therefore, Mr. Lowry argues that he
should only be liable for double the current market value of the timber pursuant to section
43-28-312(a)(1). In support of his contention, Mr. Lowry cites the case of Mix v. Miller, 27
S.W.3d 508, 515 (Tenn. Ct. App. 1999). In Mix, the family cut timber from their neighbor’s
property in reliance on a recent survey of their land. In Mix, this Court found no evidence to
suggest “that the Mixes acted with the intent to deprive the Millers of their property.” Id.
Under those circumstances, we held that the removal of the timber was negligent rather than
intentional. Id. at 516.
6
There are several factors that distinguish this case from the Mix case. Here, the trial
court made a specific finding that Mr. Lowry acted with intent to deprive Ms. Anderson of
her property. In its ruling, the trial court stated: “This was not a negligent cutting of timber
but a knowing and intentional cutting because the Lowrys’ deed described the boundary as
the fence. This fence was removed.”
Ms. Anderson hired Chris Vick to survey her property in April 2010. Mr. Vick
testified that on April 13, 2010, while surveying the northwest portion of Ms. Anderson’s
property, he met Mrs. Lowry in the proximity of the disputed 4.39 acre tract. After
exchanging introductions, Mrs. Lowry told Mr. Vick that the fence line was not the boundary
line of the Anderson property and instructed him not to tie ribbons there. Mr. Vick noted the
existence of a fence and did not see any evidence of logging in the disputed acreage. The
next day when Mr. Vick came back to complete his survey, Mrs. Lowry asked him to leave
and not come back. As a result, Mr. Vick was unable to complete his survey of the Anderson
land until he obtained a court order in September of 2010. On September 23, 2010, Mr. Vick
returned, escorted by sheriff’s deputies, to complete his survey. At that time, Mr. Vick
observed that the fence had been removed. Mr. Vick also observed evidence of logging and
bulldozing in the area. Thus, it is undisputed that Mr. Lowry cut the trees from the Anderson
property after receiving notice that there was a question regarding the ownership of the 4.39
acre tract of land adjacent to his property. Additionally, a deed on the Lowry property
recorded in 2000 clearly describes the Anderson family as owners of the land east of the road
7
and that the Anderson land includes the 4.39 acre tract in dispute. Thus, we conclude from
our review of the record that the preponderance of the evidence supports the trial court’s
finding that Mr. Lowry knowingly and intentionally cut Ms. Anderson’s timber. Therefore,
pursuant to Tennessee Code Annotated section 43-28-312, the trial court did not err in
awarding damages “in an amount treble that of the current market value of the timber.”
Mr. Lowry also argues that he should only be jointly liable and not completely or
severally liable for cutting Ms. Anderson’s timber, noting that Ms. Anderson also sued his
surveyor and his woodcutter.3 In support of his argument, Mr. Lowry relies on the following
statute provision:
(2) If the timber is negligently cut from the property of another because
the landowner for whom the timber is being cut has marked or
designated the boundary of the landowner's property incorrectly, then
the landowner is jointly liable for the double damages.
Tenn. Code Ann. § 43-28-312(a)(2). This provision, however, is inapplicable here because it
refers to the negligent cutting of timber from the property of another. Pursuant to our prior
determination that Mr. Lowry knowingly and intentionally cut Ms. Anderson’s timber, we
conclude that his argument on this issue is without merit. Before contracting with his
woodcutter and his surveyor, Mr. Lowry was on notice that Ms. Anderson was claiming
ownership of the 4.39 acre tract and had hired a surveyor to establish the boundary lines of
her property.
3
Ms. Anderson entered a notice of voluntary non-suit as to both the surveyor and the
woodcutter on the day of trial.
8
B. Determining the Value of the Timber
In determining the value of the timber cut from Ms. Anderson’s property, Mr. Lowry
argues that the trial court should have based damages on the net market value of the trees,
deducting the cost of the woodcutting from the gross amount of the sale. Tennessee Code
Annotated section 43-28-312 mandates that the damages must be based on current value.
Ronnie Tucker, an expert logger for thirty-four years, testified on behalf of Ms. Anderson as
to the value of the timber. Mr. Tucker contracts directly with landowners to buy timber. He
then contracts with a saw mill to sell the timber. Typically, Mr. Tucker uses two methods to
buy timber. In the first method, he makes a bid for the standing timber based on his estimate
of the current market value. The second method involves harvesting the lumber, selling it to
the mill, and dividing the gross proceeds with the landowner. Mr. Tucker determined the
value of the timber cut from Ms. Anderson’s land by surveying the stumps left and taking an
inventory of the density of the trees. He used that information and applied the December
2010 market price in his determination that Ms. Anderson’s timber had a market value of
$10,000.
In support of its finding that Ms. Anderson’s timber was valued at $10,000.00, the
trial court made a specific finding that Mr. Tucker was a credible expert witness. When it
comes to live, in-court witnesses, appellate courts should afford trial courts considerable
deference when reviewing issues that hinge on the witnesses' credibility because trial courts
are “uniquely positioned to observe the demeanor and conduct of witnesses.” State v.
9
Binette, 33 S.W.3d 215, 217 (Tenn. 2000). “[A]ppellate courts will not re-evaluate a trial
judge's assessment of witness credibility absent clear and convincing evidence to the
contrary.” Wells v. Tennessee Bd. of Regents, 9 S.W.3d 779, 783 (Tenn. 1999); see also
Hughes v. Metro. Gov't of Nashville & Davidson Cnty., 340 S.W.3d 352, 360 (Tenn. 2011).
Kelly v. Kelly, 445 S.W.3d 685, 692-93 (Tenn. 2014). With regard to expert testimony, the
Tennessee Supreme Court has determined that “questions pertaining to the qualifications,
admissibility, relevancy, and competency of expert testimony are matters left to the trial
court's discretion.” Brown v. Crown Equip. Corp., 181 S.W.3d 268, 273 (Tenn. 2005)
(citing McDaniel v. CSX Transportation, Inc., 955 S.W.2d 257, 263 (Tenn.1997)).
Mr. Lowry argues that a value that does not include the cost of the wood cutter’s
services is a windfall to the landowner. However, in this case, the only evidence in the
record is the undisputed testimony of Ronnie Tucker. Mr. Tucker specifically testified that in
December 2010, a reasonable buyer would pay a reasonable seller $10,000 for Ms.
Anderson’s timber. Mr. Lowry argues in his Rule 59 motion that Mr. Tucker must have
“misstated that amount of payment.” However, there is nothing in the record to either refute
Mr. Tucker’s testimony or to support Mr. Lowry’s argument that Mr. Tucker was mistaken.
Therefore, we conclude that the findings of the trial court are supported by a preponderance
of the evidence.
C. Attorney’s fees
Mr. Lowry argues that the trial court erred in awarding Ms. Anderson a judgment in
10
the amount of $8,200 for attorney fees and expenses incurred in prosecuting her petition to
set aside Mr. Lowry’s quitclaim deed as a fraudulent conveyance. Mr. Lowry argues that the
trial court’s award of attorney’s fees must be vacated because there is no case authority
supporting such an award.
Ms. Anderson responds that Tennessee United Paint Store, Inc. v. D. H. Overmyer
Warehouse Co., 62 Tenn. App. 721, 467 S.W.2d 806 (1971) supports her judgment for
attorney’s fees. In Tennessee United Paint Store, this Court held that where the Appellee
creates or preserves assets for the benefit of creditors, the trial court may award attorney’s
fees incurred in prosecuting the creditor’s bill, even when the statute did not specifically
authorize attorney’s fees. Id. at 809. Similarly, in Pennington et al v. Divney, 182 Tenn.
207, 185 S.W.2d 514 (1945), complainants brought suit on behalf of themselves, and other
creditors of the defendant, and sought to set aside, as fraudulent and void, a conveyance of
real estate. The Tennessee Supreme Court held the sale void and ordered a sale of the realty
for the payment of creditors. The Court also granted attorney’s fees, although noting that the
statute made no specific provision for the allowance of attorney’s fees. Id. 185 S.W.2d at
516.
In both Tenn. United Paint Store and Pennington, funds were recovered on behalf of
the complainants and others. The attorney’s fees were then paid from the recovered funds.
This common fund doctrine is an exception to the general rule that attorneys in Tennessee
must generally look only to their own client for their fees. See Remco Equip. Sales, Inc. v.
11
Manz, 952 S.W.2d 437, 439 (Tenn. Ct. App.1997). This doctrine applies when the attorney
“has succeeded in securing, augmenting, or preserving property or a fund of money in which
other people are entitled to share in common.” Travelers Ins. Co. v. Williams, 541 S.W.2d
587, 589–90 (Tenn.1976). In such a case, the attorney may oblige the beneficiaries of the
fund or property to contribute to his or her fee by assessing that fee directly against the fund
or property itself. Shamblin v. Sylvester, 304 S.W.3d 320, 328-29 (Tenn. Ct. App. 2009).
"The common fund doctrine can be invoked only when there is a fund within the court's
jurisdiction from which fees can be awarded." Roberts v. Sanders, 2002 WL 256740 *11
(Tenn. Ct. App. Feb. 22, 2002). In this case, there is no "common fund," and there are no
other parties entitled to share in the damages, as they are awarded solely to Ms. Anderson.
Thus, it does not appear that Tenn. United Paint Store or Pennington applies.
Tennessee, along with many other states, adheres to the “American rule” for award of
attorney’s fees. Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308
(Tenn. 2009); John Kohl & Co. v. Dearborn & Ewing, 977 S.W.2d 528, 534 (Tenn. 1998);
Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985). Under the
American rule, a party in a civil action may recover attorney fees only if: (1) a contractual or
statutory provision creates a right to recover attorney fees; or (2) some other recognized
exception to the American rule applies, allowing for recovery of such fees in a particular
case. Cracker Barrel Old Country Store, Inc., 284 S.W.3d at 308 (Tenn. 2009); Taylor v.
Fezell, 158 S.W.3d 352, 359 (Tenn. 2005); John Kohl, 977 S.W.2d at 534.
12
Tennessee Code Annotated section 29-12-101 determines the proper procedure to
rectify a fraudulent conveyance. The statute provides:
Any creditor, without first having obtained a judgment at law,
may file the bill in chancery for the creditor, or for the creditor
and other creditors, to set aside fraudulent conveyances of
property, or other devices resorted to for the purpose of
hindering and delaying creditors, and subject the property, by
sale or otherwise, to the satisfaction of the debt.
Tenn. Code Ann. § 29-12-101 (West). The statute does not contain any provision for
recovery of attorney’s fees. While we concede that the trial court was attempting to make an
innocent party whole after a long and arduous litigation, this is insufficient, as a matter of
law, to support the trial court’s award of attorney’s fees. Accordingly, we reverse the trial
court’s award of attorney’s fees to Ms. Anderson.
V. Conclusion
For the foregoing reasons, we affirm trial court’s order with regard to the amount of
damages awarded to Ms. Anderson. We reverse the trial court’s order requiring Mr. Lowry
to pay Ms. Anderson’s attorney’s fees in the amount of $8,200. We remand the case for such
further proceedings as may be necessary and are consistent with this opinion. Costs of the
appeal are assessed against Appellant, James Kenneth Lowry and his surety, for all of which
execution may issue if necessary.
_________________________________
KENNY ARMSTRONG, JUDGE
13