B-138525, JAN. 15, 1963

B-138525: Jan 15, 1963

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TO THE SECRETARY OF THE INTERIOR: WE HAVE A LETTER OF DECEMBER 27. AT THE SAME TIME WE NOTED THAT IT WAS NOT POSSIBLE TO SET OUT DEFINITIVE AND ALL INCLUSIVE GUIDE LINES TO BE FOLLOWED. IF THE CIRCUMSTANCES OF THE TRESPASS WERE SUCH AS TO AMOUNT TO A . WHICH APPARENTLY IS THE SOURCE OF YOUR DOUBTS IN THE MATTER. WAS INTENDED TO APPLY ONLY IN THE CASE OF A NONDISCHARGEABLE CLAIM. IS THEREFORE PROPER ONLY IN THAT PARTICULAR SITUATION. IN THE LETTER THERE IS PRESENTED THE CASE OF JOHN JOE LEONARD WHO PRIOR TO HIS ADJUDICATION AS A BANKRUPT HAD COMMITTED A TIMBER TRESPASS AGAINST FEDERAL PROPERTY IN THE STATE OF OREGON. NO CLAIM FOR THE TRESPASS WAS FILED IN THE BANKRUPTCY PROCEEDINGS. IT APPEARING THAT THE CLAIM WAS CONSIDERED BY THE APPROPRIATE OFFICERS OF YOUR DEPARTMENT AS A TORT CLAIM WHICH WOULD SURVIVE THE ADJUDICATION OF BANKRUPTCY.

B-138525, JAN. 15, 1963

TO THE SECRETARY OF THE INTERIOR:

WE HAVE A LETTER OF DECEMBER 27, 1962, WITH ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING CLARIFICATION OF OUR DECISION OF APRIL 21, 1959, B-138525, AND FURTHER INSTRUCTIONS WITH RESPECT TO THE PROPER DISPOSITION OF TIMBER TRESPASS CLAIMS WHEN THE TRESPASSER BECOMES INVOLVED IN BANKRUPTCY PROCEEDINGS.

IN THE DECISION REFERRED TO WE SET OUT CERTAIN CONSIDERATIONS TO BE TAKEN INTO ACCOUNT IN DECIDING UPON THE ACTION APPROPRIATE IN THIS TYPE OF CASE TO BEST PROTECT THE GOVERNMENT'S INTEREST. AT THE SAME TIME WE NOTED THAT IT WAS NOT POSSIBLE TO SET OUT DEFINITIVE AND ALL INCLUSIVE GUIDE LINES TO BE FOLLOWED, IN VIEW OF THE WIDE VARIETY OF FACTUAL SITUATIONS WHICH MIGHT BE ENCOUNTERED IN PARTICULAR CASES. WE TOOK THE POSITION, IN GENERAL, THAT TO THE EXTENT A TIMBER TRESPASS CLAIM MAY BE REGARDED, FOR PURPOSES OF SUBMITTING CLAIMS IN BANKRUPTCY PROCEEDINGS, AS FOUNDED ON QUASI- CONTRACT BASED ON UNJUST ENRICHMENT SUCH CLAIM WOULD BE INCLUDED IN THE GENERAL DISCHARGE OF THE BANKRUPT UNLESS EXCEPTED 11 U.S.C. 35 (A). THE EXTENT THAT IT MAY NOT BE REGARDED AS FOUNDED ON QUASI-CONTRACT BASED ON UNJUST ENRICHMENT OF THE BANKRUPT--- AS IN CASES IN WHICH THE GOVERNMENT HAS TAKEN POSSESSION OF THE CUT TIMBER--- THE TORT LIABILITY WOULD SURVIVE THE BANKRUPTCY. IF THE CIRCUMSTANCES OF THE TRESPASS WERE SUCH AS TO AMOUNT TO A ,WILLFUL AND MALICIOUS" INJURY UNDER 11 U.S.C. 35 (A) (2), THE TRESPASSER'S LIABILITY, EITHER IN TORT OR QUASI-CONTRACT, WOULD NOT BE AFFECTED BY DISCHARGE IN BANKRUPTCY. THE STATEMENT ON PAGE 7 OF OUR PRIOR DECISION CONCERNING THE EFFECT OF FILING A CLAIM AS AN ELECTION OF REMEDIES, PRECLUDING A SUBSEQUENT TORT ACTION, WHICH APPARENTLY IS THE SOURCE OF YOUR DOUBTS IN THE MATTER, WAS INTENDED TO APPLY ONLY IN THE CASE OF A NONDISCHARGEABLE CLAIM. THE INFERENCE SUGGESTED IN YOUR LETTER, THAT THE GOVERNMENT MAY ELECT NOT TO CLAIM UNDER IMPLIED CONTRACT BUT TO SUE IN TORT AFTER DISCHARGE, IS THEREFORE PROPER ONLY IN THAT PARTICULAR SITUATION.

IN THE LETTER THERE IS PRESENTED THE CASE OF JOHN JOE LEONARD WHO PRIOR TO HIS ADJUDICATION AS A BANKRUPT HAD COMMITTED A TIMBER TRESPASS AGAINST FEDERAL PROPERTY IN THE STATE OF OREGON. NO CLAIM FOR THE TRESPASS WAS FILED IN THE BANKRUPTCY PROCEEDINGS, IT APPEARING THAT THE CLAIM WAS CONSIDERED BY THE APPROPRIATE OFFICERS OF YOUR DEPARTMENT AS A TORT CLAIM WHICH WOULD SURVIVE THE ADJUDICATION OF BANKRUPTCY. THE SAME POSITION APPEARS TO HAVE BEEN TAKEN BY OUR CLAIMS DIVISION IN A LETTER OF MAY 22, 1962, RECOMMENDING THAT THE MATTER BE REFERRED TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE ACTION.

THE TRESPASS CLAIM AGAINST MR. LEONARD IS BASED ON THE OREGON CODE WHICH PROVIDES AT O.R.S. 105.810 THAT ONE UNLAWFULLY SEVERING TIMBER FROM THE LAND OF THE UNITED STATES SHALL BE SUBJECT TO JUDGMENT OF THREE TIMES THE AMOUNT OF DAMAGES CLAIMED. UNDER O.R.S. 105.815 THE JUDGMENT IS LIMITED TO DOUBLE DAMAGES WHEN THE TRESPASS WAS CASUAL, INVOLUNTARY, OR WITH PROBABLE CAUSE TO BELIEVE THAT THE TAKING WAS PROPER. THE FILE SUBMITTED WITH THE LETTER INDICATES THAT IT IS NOT POSSIBLE TO TRACE THE PROPERTY TO RECOVER IT IN KIND AND EFFORTS TO COLLECT FROM THE PARTY WHO PURCHASED IT FROM THE TRESPASSER HAVE BEEN UNSUCCESSFUL. FURTHER, IT APPEARS THAT THE TRESPASSER VOLUNTARILY BROUGHT THE TRESPASS TO THE ATTENTION OF THE DEPARTMENT AND THERE SEEMS LITTLE QUESTION ON THE BASIS OF THE INFORMATION FURNISHED BY YOU THAT THE TRESPASS COMES WITHIN THE SCOPE OF THE LANGUAGE OF O.R.S. 105.815. THE DOUBLE DAMAGES PROVIDED FOR BY THAT PROVISION HAVE BEEN HELD TO PROVIDE WHAT WAS REGARDED BY THE STATE LEGISLATURE AS ADEQUATE COMPENSATION FOR THE WRONG COMMITTED RATHER THAN A PENALTY OR PUNITIVE DAMAGES. KINZUA LUMBER CO. V. DAGGETT, 281 P.2D 221 (OREGON 1955). UNDER THE CIRCUMSTANCES AND IN ACCORDANCE WITH THE AUTHORITIES CITED IN OUR DECISION OF APRIL 21, 1959, THE DEBT APPEARS TO HAVE BEEN ONE REQUIRED TO BE PROVED IN THE BANKRUPTCY PROCEEDINGS AND ANY FURTHER ACTION AGAINST LEONARD WOULD THEREFORE BE BARRED BY THE DISCHARGE. ACCORDINGLY, THE LETTER OF MAY 22, 1962, FROM OUR CLAIMS DIVISION MAY BE IGNORED.

THE FILE ENCLOSED WITH YOUR LETTER OF DECEMBER 27, 1962, IS RETURNED AS REQUESTED.