Court Opinion

ID: 4152857
Source: CourtListenerOpinion
Date Created: 2017-03-15 19:07:47.145867+00
Date Added: 2024-06-11T07:46:32.476461
License: Public Domain

FIFTH DIVISION
                              DILLARD, P. J.,
                           REESE and BETHEL, JJ.

                  NOTICE: Motions for reconsideration must be
                  physically received in our clerk’s office within ten
                  days of the date of decision to be deemed timely filed.
                              http://www.gaappeals.us/rules

                                                                   March 15, 2017

In the Court of Appeals of Georgia
 A16A2192. REDCEDAR, LLC v. CML-GA SOCIAL CIRCLE,
     LLC.
 A16A2193. CML-GA SOCIAL CIRCLE, LLC v. REDCEDAR,
     LLC.

      REESE, Judge.

      In these companion cases, the parties dispute whether Redcedar, LLC, a

company which cut and removed timber from certain property, can be held liable

under the Georgia Timber Collateral Conversion Statute (“GTCCS”), OCGA § 51-12-

51, and, if so, the proper measurement of damages arising from such conversion. In

Case No. A16A2192, Redcedar appeals from an order of the Superior Court of

Newton County granting a motion for partial summary judgment filed by CML-GA

Social Circle, LLC (“CML-GA”), based on a finding that Redcedar was liable under
the GTCCS as a matter of law.1 In Case No. A16A2193, CML-GA appeals from a

related order granting Redcedar’s cross-motion for partial summary judgment as to

the applicable measure of damages to be determined at trial. For the reasons set forth,

infra, we affirm the grant of partial summary judgment to CML-GA in Case No.

A16A2192, and we affirm in part and reverse in part the judgment in Case No.

A16A2193.

      “On appeal from the grant of summary judgment this Court conducts a de novo

review of the evidence to determine whether there is a genuine issue of material fact

and whether the undisputed facts, viewed in the light most favorable to the

nonmoving party, warrant judgment as a matter of law.”2 With these guiding

principles in mind, we turn now to the parties’ specific claims of error.

      1
         The court’s order also granted summary judgment to CML-GA as to the
liability of Redcedar’s co-defendants, Georgia Timber, LLC and its agent, Barry
Bedingfield. In addition, the court denied cross-motions for summary judgment filed
by Redcedar and Bedingfield. Although Bedingfield initially appealed from the
summary judgment order, this Court granted his motion to withdraw the appeal on
August 19, 2016. Georgia Timber and CML-GA settled the case after the court
entered summary judgment against the former on the issue of liability. Thus, Georgia
Timber is not a party to these appeals.
      2
       Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243, 245 (1)
(577 SE2d 564) (2003) (citation and punctuation omitted).

                                          2
                               Case No. A16A2192

       This case arose from the cutting and removal of timber from portions of

undeveloped property in Newton County. In 2007, Carolyn Penland executed a

security deed to the entire 463.74-acre parcel of land as collateral for three

promissory notes.

       In October 2010, the security deed executed by Penland was assigned to CML-

GA. When Penland defaulted on the three notes secured by the security deed, CML-

GA filed suit on the notes. In August 2012, CML-GA obtained a default judgment

against Penland for approximately $9.6 million in principal, accrued interest, late

charges, and attorney fees. CML-GA did not, however, institute foreclosure

proceedings pursuant to the security deed at that time.

       Georgia Timber, LLC, subsequently contracted with Little River Construction

Company (a company owned by Penland’s son, Michael), for the “thinning and

removal” of timber from the property. In September 2013, Georgia Timber applied

for a timber harvest permit from Newton County, and it hired Redcedar to cut the

trees and haul them off the property. Georgia Timber then sold the timber to third

parties.

                                         3
      In October 2014, CML-GA discovered that someone had “clear-cut” several

acres of the property and removed the timber. In response, CML-GA filed a complaint

for conversion against the Penlands, Georgia Timber, Redcedar, and others, asserting

that they had illegally cut and removed timber from the property without first

obtaining its written permission and that, as a result, they were liable under the

GTCCS. The GTCCS provides, in relevant part, as follows:

      Every person, firm, or corporation who, without the written consent of
      the person holding legal title to land or to an interest in land as security
      for debt, . . . buys, sells, cuts, removes, holds, disposes of, changes the
      form of, or otherwise converts to the use of himself, itself, or another
      any trees growing or grown on such land shall be liable to the holder of
      the legal title for such trees, in any form, bought, sold, cut, removed,
      held, disposed of, changed in form, or otherwise converted by him or it,
      or for the value of such trees, provided that recovery may not be for
      more than the unpaid portion of the secured indebtedness, interest
      thereon, and a reasonable attorney’s fee. Recovery may be had by action
      at law from one who purchases, without the consent of the holder of the
      legal title, such interest in the trees, mineral or other rights, or interest
      in the encumbered real estate, either jointly or severally, with the holder
      of the equitable title.3

      3
          OCGA § 51-12-51 (a).

                                           4
In its complaint, CML-GA alleged that, because the removal of the timber had

diminished the fair market value of the real property, the damaged property provided

“inadequate security to cover the debt owed [by Penland] under the Security Deed.”

      CML-GA subsequently amended its complaint to add allegations that, under

the GTCCS, Redcedar was a “purchaser” of the timber removed from the property or,

in the alternative, purchased an “interest” in that timber. CML-GA also added a claim

that Redcedar “aided, abetted, and assisted” Georgia Timber in the unauthorized

removal and purchase of the timber removed from the property and, as a result, was

just as liable as Georgia Timber for damages under the GTCCS.

      In February 2015, while this conversion action was pending, CML-GA

instituted foreclosure proceedings under the security deed. CML-GA purchased the

property at the foreclosure sale, crediting $4.4 million toward Penland’s outstanding

debt on the notes.

      Then, in July 2015, CML-GA filed a motion for partial summary judgment in

the instant conversion action, seeking a ruling that the co-defendants were liable as

a matter of law under the GTCCS. In its brief and documents supporting the motion,

CML-GA asserted that, after it credited $4.4 million from the foreclosure sale to the

balance owed on the promissory notes that were subject to the security deed, a

                                         5
deficiency remained unpaid on the notes. It claimed that the co-defendants were liable

for this “unpaid portion of the indebtedness [that was] secured by the security deed.”

      In response to CML-GA’s motion for partial summary judgment, Redcedar

filed a cross-motion for summary judgment on CML-GA’s complaint, denying that

it was liable under the GTCCS because, although it had cut and removed timber from

the property, it had been hired to do so by Georgia Timber and, as a result, was

simply acting as a contractor under the direction of Georgia Timber. Redcedar also

contended that CML-GA could not recover money damages under the GTCCS

because it had foreclosed on its security interest in the property. According to

Redcedar, the plain language of the statute provided that a plaintiff’s “recovery may

not be for more than the unpaid portion of the secured indebtedness, interest thereon,

and a reasonable attorney’s fee.” It argued that the foreclosure on the security deed

extinguished any “secured indebtedness” upon which to claim damages under the

statute. Further, Redcedar argued that CML-GA should be estopped from trying to

recover a deficiency judgment, i.e., the difference between the outstanding balance

on the notes and the proceeds from the foreclosure sale, because CML-GA had failed

to obtain a judicial confirmation of the sale, pursuant to OCGA § 44-14-161. Finally,

it argued that, even if CML-GA had secured a judicial confirmation of the sale, it

                                          6
should be estopped from seeking a deficiency judgment from Redcedar because

CML-GA had failed to provide it with notice of the confirmation proceedings, as

required by OCGA § 44-12-161 (c).

      Following motion hearings, the trial court denied Redcedar’s motion for

summary judgment and granted partial summary judgment to CML-GA, finding that

the co-defendants were liable as a matter of law under the GTCCS. Redcedar appeals

from the court’s order.

      1. Redcedar contends that the trial court erred in concluding that it was liable

as a matter of law under the GTCCS, arguing that it is not within the class of

defendants subject to liability under the statute. Given the plain language of the

statute, however, this argument lacks merit.

             In interpreting any statute, we necessarily begin our analysis with
      familiar and binding canons of construction. Indeed, in considering the
      meaning of a statute, our charge as an appellate court is to presume that
      the General Assembly meant what it said and said what it meant. And
      toward that end, we must afford the statutory text its plain and ordinary
      meaning, consider the text contextually, read the text in its most natural
      and reasonable way, as an ordinary speaker of the English language
      would, and seek to avoid a construction that makes some language mere
      surplusage. In sum, where the language of a statute is plain and

                                          7
      susceptible of only one natural and reasonable construction, courts must
      construe the statute accordingly.4

      With regard to the GTCCS, the General Assembly left little doubt as to how it

expected this statute to be construed.5 Indeed, the statute explicitly provides as

follows:

      Every person, firm, or corporation who, without the written consent of
      the person holding legal title to land or to an interest in land as security
      for debt, . . . buys, sells, cuts, removes, holds, disposes of, changes the
      form of, or otherwise converts to the use of himself, itself, or another
      any trees growing or grown on such land shall be liable to the holder of
      the legal title for such trees, in any form, bought, sold, cut, removed,
      held, disposed of, changed in form, or otherwise converted by him or
      it[.]6

      In this case, Redcedar did not dispute that it cut and removed timber from the

property without CML-GA’s written authorization. It argued, however, that it had

been hired as a contractor by Georgia Timber to cut and remove the timber and, as a

      4
       Holcomb v. Long, 329 Ga. App. 515, 517-518 (1) (765 SE2d 687) (2014)
(punctuation and footnotes omitted).
      5
          See generally Holcomb, 329 Ga. App. at 518 (1).
      6
          OCGA § 51-12-51 (a) (emphasis supplied).

                                           8
result, it could not be held directly liable for its actions in this case. In support of this

argument, Redcedar showed that it was not a party to the timber removal contract

between Georgia Timber and Little River, and it did not obtain the timber removal

permit from Newton County. Further, Redcedar argued that, as a contractor hired by

Georgia Timber, it provided services pursuant to Georgia Timber’s instructions and

under the company’s direction; that it had relied on Georgia Timber to obtain the

necessary consent and permits to authorize the timber removal; that this reliance was

consistent with industry standards and practices; and that, while it was compensated

by Georgia Timber for its services, it did not purchase or sell the timber at issue in

this case.

       However, we decline to construe the plain language of the GTCCS in a manner

that provides for an exception to liability for those who admittedly violated the

statute, but insist that they only did so as an agent or employee of another. Indeed,

doing so would run afoul of the General Assembly’s explicit creation of broad, strict

liability for anyone who cuts, removes, or otherwise converts timber from property

without the written consent of those with an ownership or security interest in the

land.7 Consequently, we conclude that the trial court did not err in finding that

       7
           See generally Holcomb, 329 Ga. App. at 520 (1).

                                             9
Redcedar was liable to CML-GA under the GTCCS as a matter of law and in granting

partial summary judgment to CML-GA on this issue.8

      2. Nevertheless, Redcedar contends that, despite the above-quoted language,

OCGA § 51-12-51 (a) limits liability to either the purchasers of the timber at issue or

the holder of the equitable title to the property. In support of this argument, Redcedar

relies on the second sentence of the statute, which provides that “[r]ecovery may be

had by action at law from one who purchases, without the consent of the holder of the

      8
         We note that this Court has previously held that individuals who cut or
removed trees without the requisite consent could be held liable under the GTCCS,
although the rulings did not expressly address the issues raised by Redcedar in this
appeal. See, e.g., AgSouth Farm Credit v. Gowen Timber Co., 336 Ga. App. 581, 587-
592 (2) (b) (784 SE2d 913) (2016) (holding that a company that cut, removed, and
sold timber from land that secured a debt held by the plaintiff was liable as a matter
of law under the GTCCS because it had not first obtained the written consent of the
plaintiff); Thakkar v. St. Ives Country Club, 250 Ga. App. 893, 896 (5) (553 SE2d
181) (2001) (holding that a person who cut and removed timber from a golf course
was liable to the owners of the course as a matter of law under the GTCCS, regardless
how the person subsequently disposed of the timber, i.e., by using, selling, or
discarding it); Southern Land & Cattle Co. v. Simmons, 202 Ga. App. 734, 736 (415
SE2d 329) (1992) (holding that a person who cut and removed timber pursuant to the
direction of the person in possession of the property, but without the written consent
of the company holding legal title to the land, could be held liable under the GTCCS);
Cordele Sash, Door & Lumber Co. v. Prudential Ins. Co. of America, 86 Ga. App.
738, 742 (2) (72 SE2d 497) (1952) (holding that a company that cut and removed
timber from land that secured a debt held by the plaintiff was liable as a matter of law
under an earlier version of the GTCCS because it had not first obtained the written
consent of the plaintiff).

                                          10
legal title, such interest in the trees, mineral or other rights, or interest in the

encumbered real estate, either jointly or severally, with the holder of the equitable

title.”9

           However, the fact that this sentence provides that the holder of legal title or a

security interest in the property may also recover from the purchaser of an interest in

the subject trees, the holder of equitable title to the property, or both, does not negate

or undermine the strict liability that the first sentence of the statute expressly imposes

on those who, inter alia, cut and remove trees without written consent. Indeed,

Redcedar’s proposed construction of the GTCCS would render the statute’s express

imposition of strict liability for cutting and removing trees without consent

meaningless, essentially treating it as mere surplusage.10

           Consequently, we find this argument to be without merit.

           9
               OCGA § 51-12-51 (a) (emphasis supplied).
           10
         See Hill v. Owens, 292 Ga. 380, 383 (2) (a) (738 SE2d 56) (2013) (“[T]his
Court avoids interpreting statutes in a manner that renders any portion of them
surplusage or meaningless.”) (citation omitted); Motors Acceptance Corp. v. Rozier,
278 Ga. 52, 53 (1) (597 SE2d 367) (2004) (“This Court is to construe the statute to
give sensible and intelligent effect to all of its provisions and to refrain from any
interpretation which renders any part of the statute meaningless.”) (punctuation and
footnote omitted); see also Holcomb, 329 Ga. App. at 517-518 (1).

                                              11
       3. Redcedar contends that the trial court erred in rejecting its argument that

CML-GA could not recover under the GTCCS because it no longer held a security

interest in the property. Redcedar also argues that the trial court erred in finding that

it was liable to CML-GA for “the unpaid portion of the secured indebtedness” under

the GTCCS, arguing that CML-GA was seeking a deficiency judgment following its

foreclosure on the property.

       Redcedar has failed, however, to show that the trial court specifically ruled on

these issues. “When this Court reviews a decision of a trial court on a motion for

summary judgment, it sits as a court for the correction of errors of law. An error of

law has as its basis a specific ruling made by the trial court.”11 It follows that, because

the trial court did not rule on these issues, there is nothing for this Court to review.12

                                  Case No. A16A2193

       In this case, CML-GA appeals from the trial court’s grant of Redcedar’s cross-

motion for partial summary judgment as to the appropriate measure of damages to be

applied in this case.

       11
Will. v. United Cmty. Bank, 313 Ga. App. 706, 707-708 (722 SE2d 440)
(2012) (citation and punctuation omitted).
       12
            Id.

                                            12
      4. CML-GA contends that the trial court erred in limiting the amount of

damages it could recover at trial to the value of the trees as personal property, instead

of allowing it to recover damages in the amount of the diminished value of the land

that resulted from Redcedar’s unauthorized removal of timber. We disagree.

      As shown above, the GTCCS specifically provides that a person who converts

timber shall be liable “for such trees, in any form, bought, sold, cut, removed, held,

disposed of, changed in form, or otherwise converted by him or it, or for the value of

such trees[.]”13 In this case, the trial court ruled that, given this plain language,

“recovery under OCGA § 51-12-51 (a) shall be limited to the value of the removed

trees as personal property.”

      CML-GA has not identified anything in the text of the GTCCS that would

allow it to recover damages in the amount of the diminished value of the property due

to the unauthorized removal of timber. It follows that CML-GA has failed to show

any error in the trial court’s grant of summary judgment to Redcedar on this issue.14

      13
           OCGA § 51-12-51 (a) (emphasis supplied).
      14
           See AgSouth Farm Credit, 336 Ga. App. at 585, 592 (3) (remanding for a
new trial on damages only in a conversion case brought under the GTCCS, in which
the plaintiff sought to recover the amount paid to the defendant for “the value of the
. . . timber”); Cordele Sash, Door & Lumber Co., 86 Ga. App. at 742 (2) (affirming
the trial court’s submission of “the amount of the value of the timber cut and removed

                                           13
      5. Nevertheless, CML-GA contends that the court abused its discretion in

refusing to allow it to present evidence of the diminished value of the property at trial

for the purpose of showing that it is entitled to attorney fees and punitive damages.

It argues that such evidence is relevant to show that Redcedar acted in bad faith and

in conscious indifference to the consequences,15 contending that, when Redcedar cut

and removed the timber, it knew that its actions would diminish the value of the

property.

      It is axiomatic that, “[e]vidence having a tendency to establish facts in issue is

relevant and admissible, and no matter how slight the probative value, our law favors

admission of relevant evidence.”16 Under the circumstances presented here, we

by the defendant” to the jury).
      15
         See OCGA §§ 13-6-11 (“The expenses of litigation generally shall not be
allowed as a part of the damages; but where the plaintiff has specially pleaded and has
made prayer therefor and where the defendant has acted in bad faith, has been
stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the
jury may allow them.”); 51-12-5.1 (b) (“Punitive damages may be awarded only in
such tort actions in which it is proven by clear and convincing evidence that the
defendant’s actions showed willful misconduct, malice, fraud, wantonness,
oppression, or that entire want of care which would raise the presumption of
conscious indifference to consequences.”).
      16
         AgSouth Farm Credit, 336 Ga. App. at 593 (3) (a), (b) (citation and
punctuation omitted). See also OCGA §§ 24-4-401 (“[T]he term ‘relevant evidence’
means evidence having any tendency to make the existence of any fact that is of

                                           14
conclude that the trial court erred in refusing to allow CML-GA to present evidence

of the diminished value of the property following Redcedar’s removal of timber at

trial for the limited purpose of demonstrating its entitlement to attorney fees and

punitive damages. Thus, we reverse that portion of the trial court’s order in Case No.

A16A2193.

      Judgment affirmed in Case No. A16A2192. Judgment affirmed in part and

reversed in part in Case No. A16A2193. Dillard, P. J., and Bethel, J., concur.

consequence to the determination of the action more probable or less probable than
it would be without the evidence.”); 24-4-402 (“All relevant evidence shall be
admissible,” unless constitutional or other legal authority renders it inadmissible.).

                                         15