Jackson v. Don Johnson Forestry, Inc.
265 N.C. App. 20, 830 S.E.2d 659 (2019)
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Rule of Law:
A contingent remainderman may sue for damages for waste committed during a preceding life tenancy once their interest has vested. However, remaindermen cannot recover for the cutting of timber when the testator's will expressly severed that timber from the fee and granted the life tenant the unfettered right to sell it for her own profit.
Facts:
- In 1982, Z. J. Burden died, and his will granted a life estate in a large tract of land to his children, with the remainder interest going to the grandchildren who survived the last of his children.
- The will also explicitly granted the life tenants the right to sell any timber growing on the property that was at least twelve inches in diameter for their own profit.
- In early 2014, Florida Bazemore was the sole surviving child and life tenant. She granted a power of attorney to her husband, William Bazemore.
- Mr. Bazemore, acting as attorney-in-fact, entered into an agreement with East Carolina Timber, LLC (the 'Timber Buyer') to sell the timber on the property.
- During the summer of 2014, the Timber Buyer cut a number of trees from the property, including both trees over twelve inches in diameter ('Large Trees') and trees under twelve inches in diameter ('Small Trees').
- The Timber Buyer paid approximately $130,000 for the timber, most of which went to the Bazemores.
- In July 2015, Florida Bazemore died, terminating the life estate and causing the property to pass in fee simple to Mr. Burden's then-living grandchildren (the 'Grandchildren').
Procedural Posture:
- In October 2015, the Grandchildren filed suit in trial court against the Timber Buyer and its broker, seeking double the value of the cut timber pursuant to N.C. Gen. Stat. § 1-539.1.
- The Timber Buyer filed a third-party complaint against the estates of Mr. and Mrs. Bazemore, seeking indemnity.
- All parties filed cross-motions for summary judgment.
- The trial court granted summary judgment for the Broker, dismissing the claims against it.
- The trial court granted the Grandchildren's motion for summary judgment against the Timber Buyer, awarding $259,596 in double damages.
- The trial court granted the Timber Buyer's motion for summary judgment for indemnity against the Bazemore estates.
- All parties appealed the trial court's summary judgment order to the intermediate appellate court.
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Issue:
Can contingent remaindermen, after their interest has vested, recover damages under a theory of waste from a third-party timber company that cut timber at the direction of the life tenant?
Opinions:
Majority - Dillon, Judge
Yes. Contingent remaindermen whose interest has vested may sue for damages caused by waste that occurred during the preceding life tenancy, but their recovery is limited to the property that constituted their inheritance. Here, the Grandchildren could sue for the unauthorized cutting of the Small Trees but not the Large Trees. The will specifically severed the Large Trees from the fee that the Grandchildren were to inherit, granting Mrs. Bazemore the absolute right to sell them for her benefit during her lifetime. Therefore, the Grandchildren had no property interest in the Large Trees and cannot claim waste regarding them. However, Mrs. Bazemore's rights to the Small Trees were limited to those of a traditional life tenant, which does not include the right to sell them commercially. Cutting the Small Trees for profit constituted waste against the Grandchildren's remainder interest. Although contingent remaindermen are typically limited to injunctive relief during the life tenancy, their right to sue for monetary damages accrues once their interest vests. Finally, while the Timber Buyer is liable for the actual damages from cutting the Small Trees, it is not liable for statutory double damages because it had a contractual right to be on the land and was not a trespasser.
Analysis:
This decision clarifies the rights of contingent remaindermen concerning waste, establishing that their cause of action for damages crystallizes upon the vesting of their interest. It reinforces the power of a testator to alter the default rules of property law, such as by severing specific rights (like timber) from a remainder interest and granting them exclusively to a life tenant. The ruling also provides a significant protection for third parties, holding that liability for statutory double damages under N.C. Gen. Stat. § 1-539.1 requires a trespass onto the land itself, not merely exceeding the scope of a contract to harvest timber.
