There will be no DD for Labor Day, September 7, 2009

Daily Development for Friday, September 4, 2009
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri

EASEMENTS; ABANDONMENT; RAILROADS: Even where original deed to railroad purports to convey “a strip of land . . . forever,” such deed is not a grant of fee simple to the railroad, but only an easement, when the deed is further qualified by expressions of purpose that the strip of land is to be used for a right of way for railroad purposes.

Timberlake, Inc. v. O'Brien, 902 N.E.2d 843, (Ind.App. 2009).

In 1973, Timberlake purchased 40 acres of land in LaPorte County, Indiana pursuant to a warranty deed. There was a strip of land adjacent to Timberlake’s property that  was originally conveyed to the predecessor railroad company of CSX in 1881 pursuant to three deeds. Each handwritten instrument stated that “a strip of land” was conveyed “forever” bit firther stated that the conveyance was for railroad purposes and in some detail permitted the railroad company to construct, maintain, and use a railroad over the strip of land in each parcel.

On July 31, 1988 CSX filed a notice with the Interstate Commerce Commission indicating its intent to abandon the railroad running over Timberlake's property. On June 28, 1990, before it had removed its rails, ties, and ballast, CSX conveyed its interest in the property to O'Brien.

In 1991, CSX removed its rails, ties and ballast. On June 29, 2004, Timberlake brought suit in LaPorte Circuit Court to quiet title to the railroad property and for trespass, to declare that Timberlake was entitled to an easement by necessity, and to enjoin O'Brien from blocking access to the property. On December 1, 2005, Timberlake filed a motion for summary judgment on its claim to quiet title to the railroad property. In its motion, Timberlake asserted that CSX only held a railroad easement to the property and by abandoning the property prior to executing the quitclaim deed with O'Brien, CSX extinguished the right-of-way easement. Timberlake maintained that as a result, O'Brien had no claim to the property.

O’Brien, who operated a golf course and other operations adjacent to the strip, argued that the original conveyance to the railroad’s predecessor was in fee. 

On January 2, 2008, the trial court denied Timberlake's and O’Brien’s motions for summary judgment. The trial court concluded that the 1881 deeds instituted right-of-way easements for use by a railroad and could not be characterized as transfers in fee. The trial court further held that because CSX had not yet removed its track and ballast from the property at the time of conveyance to O'Brien, the property was not abandoned and therefore O'Brien received a railroad right-of-way interest.

Timberlake appealed, and the appeals court affirmed. This was a relatively straightforward matter because the state legislature had passed a statute holding that an easement was not deemed abandoned until the Interstate Commerce Commission had approved the abandonment and the rails had been removed.  Apparently prior decisions had challenged [properly] the constitutionality of the statute, and it had been amended.  The court apparently accepted the amended version here and concluded that it was binding on the issue of abandonment.

But the court went on to moot its above holding when it held that O’Brien’s sole interest in the right of way was for railroad purposes.  The court noted Indiana authority that held that although a grant of a “strip of land” in Indiana to a railroad will be viewed as a grant in fee, qualifications of the grant stating that it is to be used as a right of way for railroad purposes turns the grant into an easement, notwithstanding that the grant is made “forever.”

Comment 1:   Because of the peculiarities of the statute, it appears that O’Brien continues to hold a railroad easement in the property notwithstanding the fact that the rails and tracks have been removed, unless and until CSX’s petition to abandon is approved by the ICC.  Bizarre, particularly when a prior class action had attempted to resolve abandonment issues in favor of neighbors.

Comment 2: The issue of existence and abandonment of railroad rights of way continues to be a matter of great significance in rural America.  The court doesn’t answer all the questions.  The court does state that an unqualified grant of a “strip of land” to a railroad will be viewed as a grant in fee, and that where the grant is qualified by a statement that it is for railroad purposes, it will be an easement.   But the court emphasizes the language “right of way” as part of the qualification.  Here the term “right of way” appeared in the deeds in question.  Without that language, this case doesn’t really stand as a holding for the proposition that other qualifying language that expresses the railroad intent is sufficient to make the deed into an easement.

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