Opinion
Civil Action No. 3:97cv103-D-A
June 3, 1998
MEMORANDUM OPINION
Presently before the court is the joint motion of the parties for relief from judgment, i.e., from relief of a prior order of this court dated April 8, 1998. On that date, the undersigned denied without substantial discussion the plaintiff's motion for partial summary judgment. Liberty Mutual Ins. Co. v. Reid Timber, Inc., Civil Cause No. 3:97cv103-D-A (N.D. Miss. Apr. 8, 1998) (Order Denying Motion for Partial Summary Judgment). While this court is not to render advisory opinions regarding the law, the undersigned finds that this court's original order was correct, and that the plaintiff is not entitled to the entry of summary judgment in this cause. The joint motion of the parties shall be denied.
Factual and Procedural Background
The crux of this cause concerns the interpretation of a provision of Mississippi's workers' compensation law. More particularly, the dispute arises over an exemption for those who are required by state law to maintain workers' compensation coverage on behalf of those in their employ. The relevant provision of the statute provides that
[a]ny purchaser of timber products shall not be liable for workers' compensation for any person who harvests and delivers timber to such purchaser if such purchaser is not liable for unemployment tax on the person harvesting and delivering the timber as provided by United States Code Annotated, Title 26, Section 3306, as amended.
Miss Code Ann. § 71-3-5. Under the facts of the present case, the plaintiff Liberty Mutual Insurance Company ("Liberty Mutual") contends that the defendant Reid Timber ("Reid") is liable to it for certain insurance premiums charged for the workers' compensation coverage provided by a contract of insurance issued by Liberty Mutual to Reid. More precisely, Liberty Mutual asserts it is entitled to recover premiums charged for the issuance of coverage for loggers who harvest timber on behalf of Reid. Reid responds that the loggers are independent contractors and that pursuant to Miss. Code Ann. § 71-3-5 it is not responsible to provide workers' compensation coverage to those loggers because it is not liable to pay unemployment tax for them. The following facts are stipulated to by the parties:
) Reid brokers (buys and sells) timber by purchasing timber which has already been cut from loggers who are mere vendors and by purchasing tracts of timber by way of timber deed and using loggers selected by Reid, known as timber deed loggers, to harvest and deliver the same. The parties stipulate and agree that Reid is a "purchaser" as defined by § 71-3-5 when buying from loggers timber which has already been cut and harvested and upon which Reid does not hold a timber deed;
) Reid does not own or lease any land from which timber is harvested. When Reid purchases timber from a land owner Reid receives a timber deed in return for consideration paid. Such timber deed gives Reid the right, within a specified period of time, to cut and remove the timber from the land. If the timber is not harvested within the period of time set forth in the timber deed, usually two years, the timber reverts to the land owner; and
) Following the execution of the timber deed, Reid uses timber deed loggers selected by Reid to harvest and deliver the timber within the period of time specified in the applicable timber deed.
II. Discussion
Summary Judgment Standard
Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The burden rests upon the party seeking summary judgment show to the district court that an absence of evidence exists in the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); see Jackson v. Widnall, 99 F.3d 710, 713 (5th Cir. 1996); Hirras v. Nat'l R.R. Passenger Corp., 95 F.3d 396, 399 (5th Cir. 1996). Once such a showing is presented by the moving party, the burden shifts to the non-moving party to demonstrate, by specific facts, that a genuine issue of material fact exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Texas Manufactured Housing Ass'n, Inc. v. City of Nederland, 101 F.3d 1095, 1099 (5th Cir. 1996); Brothers v. Klevenhagen, 28 F.3d 452, 455 (5th Cir. 1994). Substantive law will determine what is considered material. Anderson, 477 U.S. at 248; see Nichols v. Loral Vought Sys. Corp., 81 F.3d 38, 40 (5th Cir. 1996). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248; see City of Nederland, 101 F.3d at 1099; Gibson v. Rich. 44 F.3d 274, 277 (5th Cir. 1995). Further, "[w]here the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue of for trial." Anderson, 477 U.S. at 248; see City of Nederland, 101 F.3d at 1099. Finally, all facts are considered in favor of the non-moving party, including all reasonable inferences therefrom. See Anderson, 477 U.S. at 254;Banc One Capital Partners Corp. v. Kneipper, 67 F.3d 1187, 1198 (5th Cir. 1995); Taylor v. Gregg, 36 F.3d 453, 455 (5th Cir. 1994); Matagorda County v. Russell Law. 19 F.3d 215, 217 (5th Cir. 1994). However, this is so only when there is "an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994); Guillory v. Domtar Industries Inc., 95 F.3d 1320, 1326 (5th Cir. 1996); Richter v. Merchants Fast Motor Lines. Inc., 83 F.3d 96, 97 (5th Cir. 1996). In the absence of proof, the court does not "assume that the nonmoving party could or would prove the necessary facts." Little, 37 F.3d at 1075 (emphasis omitted): see Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 111 L.Ed. 695, 110 S.Ct. 3177 (1990).
B. Status of Reid Timber as a "Purchaser of Timber Products" under Miss. Code Ann. § 71-3-5
Timber is traditionally considered a part of realty until cut or severed from the realty upon which it grows. South Mississippi Electric Power Ass'n v. J. F. Miller Timber Co., Inc., 314 So.2d 346, 348 (Miss. 1975). Such a principle is a venerable one in our system of jurisprudence.
The term "land" includes, not only the ground or soil, but everything which is attached to the earth, whether by the course of nature, as trees, herbage, and water, or by the hand of man, as houses and other buildings; and it has an indefinite extent upwards as well as downwards, so as to include everything terrestrial under or over it.
SIR EDWARD COKE, COMMENTARY ON LITTLETON, 4a. (Charles Butler ed., 18th ed., Legal Classics Library 1985) (1628) (emphasis added). Consequently, timber deeds have long been acknowledged to convey not an interest in personalty, but one in realty. See, e.g., Towles v. Hodges 235 Miss. 258, 261, 108 So.2d 884, 885 (1959); L.N. Dantzler Lumber Co. v. State, 97 Miss. 355, 53 So. 1, 6 (1910); Butterfield Lumber Co. v. Guv, 46 So. 78, 92 Miss. 361 (1908). However, the adoption of the Uniform Commercial Code in Mississippi has greyed the distinction by designating that timber not yet cut constitute "goods" subject to the provisions of the U.C.C. Miss. Code Ann. § 75-2-107(2) ("A contract for the sale apart from the land . . . of timber to be cut is a contract for the sale of goods within this chapter. . . ."); T.K. Stanley v. Scott Paper Co., 793 F. Supp. 707, 709 (S.D. Miss. 1992); Bay Springs Forest Products v. Wade. 435 So.2d 690 (1983) (noting that Miss. Code Ann. § 75-2-107(2) includes "timber, whether cut or to be cut."). Nevertheless, Mississippi has long recognized that despite the designation of the timber as realty or personalty, a timber deed is in fact a method for the purchase of uncut timber and effectuates a transfer of title to the purchaser. See, e.g., Chevron U.S.A., Inc. v. State, 578 So.2d 644, 654 (Miss. 1991) (Robertson, J, dissenting) (noting timber deed "effects a sale of the product of the land, not a sale of the land itself."); Smith v. Salemen Brick Lumber Co., 118 So.2d 179, 151 Miss. 329 (1928) (noting timber deed "vested title to timber in grantee subject to possibility of reverter.").
In light of the aforementioned authorities, this court has little difficulty determining that Reid Timber constitutes a "purchaser of timber products" as contemplated by Miss. Code Ann. § 71-3-5. By acquiring timber deeds, Reid becomes the purchaser of the timber which is encompassed by those deeds. The timber deed vests title of the timber in Reid. Of course, by virtue of the timber deed, title ownership of the timber is subject to the possibility of reverter if not severed from the realty within the time specified in the timber deed. Until such a contingency occurs, however, title to the timber remains in the hands of Reid.
Liberty Mutual takes the position that Reid Timber cannot be a purchaser under this provision of § 71-3-5 because Reid Timber already has title to the timber at the time it is harvested. Plaintiff's Memoranda, p. 2 ("Reid Timber cannot `purchase' what it already owns."). Liberty Mutual's logic in this regard is flawed. The terms "owner" and "purchaser" are not mutually exclusive in this context. Likewise, the court does not believe that the term "purchaser" is limited to the temporally fixed point of purchase alone. Indeed, the term "purchaser" includes not only those who acquire title to property but those who have already done so. A person who has bought an item is no less a purchaser of that item once he has paid for it and become an owner. Even Black's Law Dictionary defines the term as encompassing such usage.
[The term "purchaser"] may be employed in broad sense to include anyone who obtains title otherwise than by descent and distribution but is more commonly used to refer to a vendee or buyer who has purchased property for valuable consideration.
BLACK'S LAW DICTIONARY 1235 (6th ed. 1990) (emphasis added) (citingSmith v. Enochs, 233 F. Supp. 925, 927 (S.D. Miss. 1964). The undersigned finds the Liberty Mutual's semantical argument unpersuasive.
Additionally, Liberty Mutual asserts that a basic principle of Mississippi worker's compensation law requires this court to find that Reid is not a "purchaser" of timber products within the meaning of § 71-3-5. More specifically, Liberty Mutual directs this court to the general principle that the provisions of the Mississippi Workers' Compensation Act are to be construed liberally and that "doubtful cases are to be resolved in favor of compensation so that the beneficent purposes of the act may be achieved." Holbrook By and Through Holbrook v. Albright Mobile Homes. Inc., 703 So.2d 842, 844 (Miss. 1997); DeLaughter v. South Centr. Tractor Parts. 642 So.2d 375, 379 (Miss. 1994); Robinson v. Packard Electric Division. 523 So.2d 329, 332 (Miss. 1988). Nevertheless, the principle appears to have little, if any, application to the determination of whether Reid is a "purchaser of timber products." As the defendant notes, this is not a "doubtful case" of compensation coverage. Further, this court finds no ambiguity in the statutory language.
Where the language used by the legislature in a statute is plain and unambiguous and conveys a clear and definite meaning there is no occasion to resort to rules of statutory interpretation.Allred v. Webb, 641 So.2d 1218, 1221 (Miss. 1994) (quoting Mississippi Power Company v. Jones. 369 So.2d 1381 (Miss. 1979)). Further,
[w]here a popular word used in a statute is given no statutory definition, the word must be accepted in its popular sense, and the court must attempt to glean the legislative intent from the statute.Pegram v. Bailey, 694 So.2d 664, 670 (Miss. 1997) (citing Lambert v. Ogden, 423 So.2d 1319 (Miss. 1982)). Reid is a "purchaser" of timber products under that word's popular and common meaning. There is no apparent legislative intent to make the word mean otherwise.
Finally, Liberty Mutual contends that failing to give § 71-3-5 the interpretation proffered by Liberty Mutual would "effect no change at all" to the impact of the statute when compared to the previous state of Mississippi law. Again, this court disagrees. While traditional considerations for determining whether an individual is an employee or an independent contractor are similar to one method of determining whether a person is required by 26 U.S.C. § 3306 to pay unemployment taxes for that individual, they are by no means identical to each other.Compare Jones v. James Reeves Contractors. Inc., 701 So.2d 774, 778 (Miss. 1997) and Richardson v. APAC-Mississippi. Inc., 631 So.2d 143 (Miss. 1994) (independent contractor distinguished from servant or agent under Mississippi law) with In re Rasburv, 130B.R. 990, 1005 (N.D. Ala. 1991) and 26 U.S.C. § 3121(d)(2). Also absent from the prior Mississippi law are the other considerations contained under the federal statutory scheme to determine whether unemployment taxes are owed. For example, a relevant statutory provision provides:
(2) Agricultural labor. — In the case of agricultural labor, the term "employer" means, with respect to any calendar year, any person who —
(A) during any calendar quarter in the calendar year or the preceding calendar year paid wages of $20,000 or more for agricultural labor, or
(B) on each of some 20 days during the calendar year or during the preceding calendar year, each day being in a different calendar week, employed at least 10 individuals in employment in agricultural labor for some portion of the day.26 U.S.C. § 3306(a)(2); see also 26 U.S.C. § 3121(g)(3) (defining "agricultural labor" to include "production and harvesting of any commodity defined as an agricultural commodity"); 7 U.S.C. § 1518 (including "timber and forests" within definition of agricultural commodity). This is merely one of the many relevant federal statutory provisions which could apply to the determination of whether "such purchaser is not liable for unemployment tax on the person harvesting and delivering the timber as provided by United States Code Annotated, Title 26, Section 3306, as amended." In light of the myriad of federal statutory provisions that could apply to this determination, the undersigned finds that Reid's status as a "purchaser" of timber products under this statute would not necessitate a determination that Mississippi's workmen's compensation law remains "unchanged" after the relevant 1992 amendments.
Further, even if the considerations were identical, many potential legislative justifications remain for the amendment, not the least of which might be conformity with existing federal law. Such conformity could bring many attendant benefits to the resolution of disputes under this exemption, such as the preclusive effect of federal court and administrative findings regarding whether unemployment taxes are owed by an individual employer. United States v. Utah Constr. Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966) ("When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply resjudicata to enforce repose.").
Is Reid liable for federal unemployment tax for the timber deed loggers?
As to the remainder of the exception provided by Miss. Code Ann. § 71-3-5 for purchasers of timber products, the undersigned is of the opinion that numerous genuine issues of material fact remain which preclude the award of summary judgment in this matter. Based upon the conflicting evidence before the court, as well as the lack of evidence on particular relevant points, it is impossible at this juncture for the court to resolve the question today. Therefore, the plaintiff's motion for the entry of summary judgment was properly denied.
III. Conclusion
Upon consideration of the joint motion of the parties, undersigned finds that its prior order was correct and should not be disturbed. Therefore, the joint motion of the parties for relief from judgment shall be denied.
A separate order in accordance with this opinion shall issue this day.
ORDER DENYING PARTIES JOINT MOTION FOR RELIEF FROM JUDGMENT
Pursuant to a memorandum opinion issued this day, it is hereby ORDERED THAT the joint motion of the parties for relief from judgment is hereby DENIEDSO ORDERED.