Next Tuesday I go to appraise 80 trees rustled out of a wetland. Customer wants to know value of trees, timber and beyond. Land is "certified" wetland, and under some oversight of the Army Corps of Engineers.

Yet when the rustling was reported, the Corps would not pursue the rustlers. They said that since they didn't disturb the soil very much, there was no enforcement called for.

This sounds crazy to me. Living trees add value to a wetland; a lot more than rotting stumps. It sounds like I need to provide information to the Corps, since my documentation may not be compelling without their understanding and agreement.

Has anyone had experience valuing trees as part of a wetland ecosystem?

Reply to post by Guy Meilleur, on February 20, 2002 at 22:57:55:

Well, just as we've discussed in many of these threads that value is not intrinsic and varies case by case what constitues a wetland is not intrinsic in a regulatory sense and will vary by jurisdiction.

In many areas of the country the USACOE is the lead agnecy having jurisdiction over wetlands. What their regulations define as valuable is what matters. In some states a state agency is lead agency and that state's regs supercede or exceed the Corps'. In some states soil type defines a wetland. In others vegetation types. These can be adjoining states and a single patch of land can straddle the border and be defined differently on each side. In some, maybe all, jurisdictions the Corps's responsibility or level of interest may vary by the size of wetland. A "National Permit" is sort of pro forma if not rubber stamp. Special permits are different. Some states empower local inland wetlands agencies which are the lead agency. Some of these local agencies protect dead trees lying in the mud or standing stumps... the owner cannot even clean them up. Entirely separate from the definitions of wetland are the penalty provisions for destroying or disturbing any component. And these will vary by jurisdiction. And the other big difference is where a penalty assessed against a third party would go.... If A owns a wetland and B robs the trees and Agency C says OK pay X, I'd guess that X goes to the agency or if to A for the express purpose of being spent on resoration or paying fines to C. I doubt it would go into A's pocket. If on the other hand Agency C does not care (your case) then the value of the trees to B is what state law allows. That might be timber value. Might be replacement value (with our without depreciation). Might be diminution in R.E. value. Might be nothing. Might be increased by punitive amounts. Might or might not be influenced at all by the status as a wetland.

Value and damages are what the law allows them to be. You have to detremine what that is and who is entitled.

Reply to post by Scott Cullen, on February 20, 2002 at 22:57:55:

Scott, you hit the nail on the head with "the Corps's ...interest may vary with the size of the wetland." Perhaps it may be too small to merit anyone leaving their desk right now. I may stimulate more interest on their or the state's part as I look into what laws affect the loss.

Perhaps this is straying close to Advocacy, which is not supposed to be mixed with Appraisal, but I'll mind that fine line as I go along. I take it that, in finding out "what the law allows", the Appraiser may be bringing facts to an agency's attention which may or may not result in action, without straying into Advocacy.

Anyway, I'm authorized to spend up to 20 hrs. on it, and may be checking in again as things develop. It'll be one more case for the next edition of Lew's book, at lest.

Reply to post by Guy Meilleur, on February 21, 2002 at 15:56:35:

Remember that one of your upfront questions is "value to whom?" If you spend 20 hours of your client's time and doing that you convince the corps to levy some fines or other penalty that does not go to your client have you done any good for them? Especially if it just goes in some genreal fund not into restoration.

I'd start with finding out what the law allows (to the owner) for simple tresspass or timber theft and consider wetlands status as it affects that.

Reply to post by Scott Cullen, on February 21, 2002 at 18:26:17:

I agree with the approach you describe. In previous cases, when I've gone off the appraiser track I've gone off the customer's clock, and told him. Sometimes it fits as tacked on the end of a report to describe the results.

Once the customer paid me half-time for pursuing what was tangential to his case but may well have the effect of improving the next guy's situation.

Reply to post by Scott Cullen, on February 20, 2002 at 22:57:55:

Scott wrote: "what their regulations defone as valuable is what matters." I agree, but would add: "what THEY INTERPRET their reg..."

In a meeting with customer and lawyer, I opined that the more attention that was paid to this matter by govt agencies, the more enforcement of regs would occur, and the stronger the customer's case for lost value would be.

Lawyer said "That goes without question", so I'm proceeding to spend some of the customer's money spotlighting all relevant regs to the reg agency. Is this straying too far into Advocacy, per ASCA SPP? My reading of that role, and the discouraged overlap, is fuzzy.

My view is that regs are almost moot if dormant, and therefore unknown or unapplied, but it's their APPLICATION is what brings them into the case. So to determine value it's key to know all the regs and how they SHOULD apply, even if that exceeds the previous level of agency involvement. What's your take on this?

Reply to post by Guy, on February 21, 2002 at 15:56:35:

As an appraiser I think you should appraise value as the regulations allow it or define it. Understand however that history and case law also influence interpretaions of value so to disclose the entire picture to your client those limitations or potential limitaions must also be disclosed.

The other thing you really need to identify is WHO a regulatory penalty would go to and how it would be spent or used. If it goes to the agency and they must spend it on restoration your client benefits. If however it goes into a general fund and disappears your client gets no additional benefit.

As to the advocacy issue and SPP, as an ASCA member, why don't you post it to the ASCA listserve as a question? If you are not signed up the ASCA office will tell you how to do it.

Reply to post by Scott, on February 27, 2002 at 05:58:32:

"as the regulations allow it or define it", yes, even if the agencies don't fully apply their own regs on their own, or interpret the legal definition as it was intended (in this observer's view). The point of thoroughly investigating their actions and thereby possibly stimulating them to do more is not just a potential penalty that might or might not go directly to the client, but heightened official attention that may get the notice of the judicial body judging the case, and favorably color the judgment for the client. That's my point here.

re "history and case law...disclosed", is this the appraiser's job, when there is already a lawyer involved? I see no reason to reinvent that wheel--I don't want to insult the lawyer by doing his job again, do I? My Assignment is to put a value on the trees themselves--if this comes close to looking at the "intrinsic" value that some appraisers don't see or choose to consider, so be it. I'm not assigned to put the value in the context of local case law; if I was, I'd charge a lawyer's rate.

The Advocacy/SPP issue is academic for me; I've been $770. from joining ASCA since the '96 Academy, and have no economic impetus to make the investment (kind of like Piling it high and Deep for a school; if it doesn't yield a return, why do it?). So apparently the ASCA listserv is not open; that's why I'm digging around in the Knothole I guess.

Reply to post by Guy , on February 27, 2002 at 06:29:20:

In my opinion, "intrinsic" is a meaningless concept in an appraisal context. If your assignment is to estimate value, value is constrained by the law in a jurisdcition. If statute or case law allows "any reasonable measure of damages" the replacement cost might indeed be value. If however statute or case law specifically excludes replacment cost as a measure of damages then in cannot be used to indicate value. The Uniform Standards of Professional Appraisal Practice require an appraiser to identify the legal interests in the appraised property. IMO that would include the legal constraints on value. If on the other hand your assignment is to estimate replacement cost, then you can do that. Good faith would require that your clients know if that is likely to be greater than "value" they can go to court to recover.

Now, whether you disclose that limitation to the rest of the world depends on your Role. If you are an Apprasier and profess yourself to be Independedent and distenetersted and intend to testify as an expert who is not an advocate you need to report such constraints. You have to be prepared to answer questions about it in direct or cross examination. If you have to say "well gee yes replacment cost is way below the measure of damages that the law allows" or "duhhh, no I didn't know that the regulations do not allow replacment cost" what happens to your credibility? If on the other hand, you are a advocate for your client, a consultant not an expert witness you do not have to report anything but replacement cost to the world. That would be up to the lawyer and the client. Of course they'd have to get some other expert who would be in the same place you would on the stand... squirm, squirm, sweat, sweat. Unless they just want the replacment numbers for negotiation it gets messy.

Reply to post by Scott, on February 27, 2002 at 22:58:30:

That's the first I've heard of USPAP, and my interpretaton of that requirement "to identify legal interests" is quite different. If a previous case excluded replacement cost, does that preclude me from using Cost of Cure? I think not.

If every appraiser treats existing case law precedent in a jurisdiction as a limitation, how is case law ever going to change? If a statute forbids replacement cost (what ones do?), it's the lawyer's job to limit the appraiser's methods in the Assignment. He did not; he made approving sounds when I talked about using both TF and CoC.

My approach is to look at the Clean Water Act, which governs this wetland frome the fed level, and state requirements on wetland restoration. The CoC will be astronomical, but it will give one view of how owner can made whole, an entirely legit one. TF is a whole lot trickier--let's not say "intrinsic", but look at the value of the trees in their contribution to the property.

Several functional attributes can be added to the list in the CTLA form here and be entirely reasonable. I can get into great detail on environmental benefits of the trees, and document that, and not sweat and squirm when crossed. I can surely be aggressive when investigating and documenting the environmental value of the trees without leaving behind Independence and Objectivity,m and retain the expert witness role, can't I?

BTW, I've always had a problem using aesthetic attributes much; that's so much in the eye of the beholder...

Reply to post by Guy, on March 01, 2002 at 13:43:16:

OK. You've raised a lot of issues. Let's take them one at a time.

"Legal interests" means the rights in the property. In the strict sense it means fee simple absolute at one end of the range and nothing (you are a squatter) at the other. In between you might have easement rights or leashold rights or have your ownership interest encumbered by either of those. You might have surrendered mineral rights or air rights.

The law in any given state will govern what thos rights entitle you to. In some states tree value is limited to contribution to property value even if you own it in fee, unencumbered. IMO, understanding that is part of the appraiser's job. In an ideal world the attorney should be telling you, but they don't always. In fact I've been on a case where the attorney purposely did not give me direction to avoid the appearance of directing the value opinion only to realize after the appraisal was prepared that it would not be admissable. USPAP also requires the appraiser to select appropriate methods. So, IMO a replacment cost approach is not appropriate if the law does not recognize it.

In that state the preponderance of case law (not a single case) excludes replacement cost. Cost of Cure has a different sounding name but it is still a replacement cost approach to value, it's just that a lot of the depreciation is implicit rather than explicit.

CoC may well be applicable, but it is a replacment cost approach. TFM is also a replacment cost approach to value. It just uses unit costs rather than actual replacment. TFM only ties the trees to property value IF that's the definition of value the appraiser specifes and estimates AND IF the appraiser depreciates to that contribution through the Location factor. "Intrinsic" has nothing to do with it that I can see.

Remember that CTLA methods are depreciated replacment cost methods. All the functional considerations are deductions from cost, not additions to cost. They are depreciation. By enumerating additional environmetal benefits you may make smaller depreciation deductions but you do not add anything.

Using CoC you explicity depreciate only for condition. CTLA does not apply the species or location factor in CoC. Does that mean you do not depreciate? Maybe, maybe not. TFM says OK a 4" tree is $X/sq.in. so 30" tree is it's area x $X. You then depreciate by three factors. CoC might say OK one 30" tree is "cured" by seven 4" trees. You depreciate that cost by condition. You have not depreciated by species or location so you are out of balance with TFM unless those two factors were both 100%. But if in your appraisal wisdom you say well one 30" tree is "cured" by three 4" trees you have implicitly depreciated by 4/7. The depreciation is there just as in TFM you just haven't said that what it is.

Go back through the old threads and look for "Factual vs. Methological Determinations" and "Depreciation in CoC."

If the attorney thinks that there is a case to be made your approach seems sound. Just get a good handle on what the methods really are trying to represent.

Reply to post by Scott, on March 01, 2002 at 19:21:41:

Scott, Thanks for clarification of previous posts and description of that case. I understand and concur with all you're saying.

Am now poring over state and fedral law (w help)to see what's applicable. Will update in a week or so if you're interested.

Reply to post by Guy , on March 02, 2002 at 19:06:03:

Guy, (and Scott, too)

I don't weigh in too often, but IMO, you, Guy are correct. It is not your job to research case law, etc. The attorney on the other side will ask you when you passed the bar. Been there, done that. That is the lawyers job to do. Of course you can help him or her with past cases, but do not put into your report!!!

Also, as you point out, case law is constantly changing, as in Booksa v Patel with the Massachusetts (self help) law. As the expert, it is up to you to decide which method is more appropriate, and defend it with passion.

There, I said it!

lew

Reply to post by lewbloch, on March 03, 2002 at 15:35:07:

Lew,

This is a complex issue. You are completely correct that unless you are admitted to the bar you cannot testify to matters of law. I think you can practice law without being admitted, you just can't argue cases in court. So you could reference case law in a report and give opinion about it if you wre an unadmitted lawyer. Of course most of us are not.

If a lawyer asks you to report (to him/her) on your knowledge of case law can you provide that report? I'd guess you'd load it with disclaimers about not being offered as opinions of law, just a catalog of cases.

Is investigating past cases our job? We certainly have no obligation to do groundwork we don't get paid for. And even if paid we have an obligation not to offer opinion outside our competence. But IMO understanding the legal nature of tree value in our jurisdiction(s) should be part of our underlying, background knowledge and competence (i.e. overhead).

IMO we have an ethical obligation NOT to prepare opinions of value ignoring the law. It is irresponsible to prepare a replacment cost estimate for a fee, hand it to a client, let them think they can rely on it, and later learn from their lawyer or from the court it is a useless opinion.

Yes case law evolves, but making cases is what is really the lawyer's job. Lawyer and client need to decide if a case is importat enough to spend the money to make a strong enough case to make new case law including goint through layers of appeals. If they conciously make that decson and accept the risks, then the expert can prepare whatever reports they need to support them. Everybody has their eyes open.

I have made it my practice to say something like "what theory of value or what remedy is your lawyer going to pursue? I need to know that before I spend your money on extensive investigation and reporting. I am happy to talk to your lawyer. Has your lawyer read the case law on this?" In one of the states where I work the statute reads like any reasonable measure of value is admissable. It is also the treble damages statute. So lawyers glom on to it instantly. Often they have a paralegal do that upfront work. "Sure client we have a case AND we can get 3x damages!" Then once the case has progressed and they have your report in hand they might read the case law and discover the preponderance of cases limit value to cordwood. And the cases seem to read this as a matter of law not of fact. Or maybe they don't read the cases and they get hammered in court. Been there, done that.

So there is a delicate balance to be struck between unauthorized practice of law and meaningful recognition of the legal environment which is necessary to ethical practice.

Reply to post by Scott, on March 04, 2002 at 12:45:02:

>

I agree with you about our lack of "obligation" to do ground work for lawyers, however, if we have an obligation to our client, it becomes imperative that we have an open dialogue with the lawyer representing them. How can the client possibly be "best served" without an interchange of information between the arborist and the lawyer??? They know the law, we know the trees!!!

This is an interesting discussion here, I have attended a couple of Victor Merullo's workshops, and have ended up asking myself why? I am interested in learning, but it is not my job, why are there more arborists and city planners at his workshops than there are lawyers????


James

Reply to post by James Causton, on March 05, 2002 at 06:45:11:

Yes, that conversation is very important. And sometimes the client is just thinking about limiting up front expenses... "oh no if you talk to my lawyer he'll bill me for the time, he said you should just do an appraisal." I try to explain I don't know if my appraisal, also billable, will be a waste of time unless I talk to the lawyer.

But "they know the law, we know the trees" can wind upbeing a little over simplified. They may in fact not know the "law" about trees which can be pretty arcane. There are few lawyers who specialize, probably not many who have even done a tree case, let alone a few. And the "law" varies widely by jurisdiction. The arborist in fact may be able to point the lawyer to the specifically applicable law upfront, rather than allowing the lawyer to discover it later on. It is the lawyer's job to make legal determinations, the arborist CANNOT do that, but the arborist can help the lawyer know where to look, what questions to answer. And what the arborist "knows" about trees may in fact be colored by legal definitions. So it's a two way interchange or should be.

I think the Merullo question is pretty simple. Arborists and planners have to deal with trees every day and knowing about legal aspects is increasingly important. Lawyers don't very frequently deal with trees and there's not much incentive to go to a tree law workshop. And they already know basic legal precepts... they would have to apply those to local statute, regulation and case law when they do get a tree case and I don't think Merullo does that.

Reply to post by Scott, on March 05, 2002 at 23:25:09:

Hi Scott,

As usual, you make some very good points. HOWEVER, maybe also as usual, you did not change my mind-------

lew

Reply to post by lewbloch, on March 06, 2002 at 06:48:26:

No, I don't mind at all Lew.