## Facts

- American Canadian Expeditions, Ltd. (ACE) operated a white-water rafting business competing with Gauley River Corporation and Mountain River Tours, Inc.
- On May 1, 2002, ACE and defendants executed a real estate option contract granting ACE an exclusive three-year right to purchase specified Fayette County, West Virginia property, expiring April 1, 2005.
- ACE paid $75,000 consideration for the option and a contemporaneous deed of easement, with an additional $175,000 due upon exercise of the option.
- The deed of easement granted ACE and its customers access to the Gauley River over the property for rafting-related operations.
- Neither the option contract nor the easement addressed standing timber, logging rights, or restrictions on timber removal.
- In July 2002, defendants contracted to remove timber from part of the option property; logging occurred in August 2002 and was completed by year end.
- Defendants received nearly $42,000 for the timber removed and asserted the logging was open and visible while ACE used the property.
- In February 2004, ACE sued seeking damages for the value of the timber removed and for alleged property harm from the logging operation.
- While the litigation was pending, ACE gave notice that it intended to exercise the purchase option and stated that doing so was not a waiver of damage claims.
- The Fayette County Circuit Court granted summary judgment to defendants, concluding ACE had no legal or equitable right to damages for timber removed during the option period; ACE appealed.

## Issues

1. Whether an optionee under a real estate option contract has a present legal or equitable ownership interest in the land or its timber during the option period, absent express contract language, sufficient to support damages for timber removed by the owner.
2. Whether equitable conversion or related equitable doctrines vest an optionee with an interest in the property or timber before the option is exercised.
3. Whether the optionee’s later exercise of the option can retroactively supply a compensable interest for timber removed earlier.

## Decision

- The Supreme Court of Appeals of West Virginia affirmed summary judgment for defendants.
- The court held that, during an option period, the optionee has only contractual rights and no present legal or equitable ownership interest in the land or its timber unless the option contract expressly provides otherwise.
- The court rejected application of equitable conversion because the option had not been exercised at the time of the timber removal and no bilateral contract of sale existed.
- The court concluded ACE’s easement for river access conveyed no timber rights and imposed no logging restrictions relevant to ACE’s damages claim.
- The court held that ACE’s later exercise of the option did not relate back to create a compensable interest at the time the timber was cut.

## Legal Principles

- A real estate option contract gives the optionee a power to purchase within a stated period; until exercise, it does not convey an estate or ownership interest in the land.
- Absent express contractual allocation, an optionee has no legal or equitable interest in standing timber on the option property during the option term and cannot recover damages for the owner’s timber removal during that period.
- Equitable conversion generally arises from a specifically enforceable, bilateral executory contract of sale; a mere unexercised option does not trigger equitable conversion.
- An easement granting access does not, without express language, convey timber rights or restrict the servient owner’s use of the land, including logging.
- Later acquisition of title through exercise of an option does not retroactively confer ownership or create a damages claim for pre-acquisition timber removal.

## Conclusion

The court held that an optionee’s rights are purely contractual until the option is exercised; without express terms addressing timber, the optionee has no compensable interest in timber removed by the landowner during the option period, and later exercise of the option does not create retroactive damages rights.


Am. Canadian Expeditions, Ltd. v. Gauley River Corp., 655 S.E.2d 188 (W. Va. 2007)