125 F.3d 420 (7th Cir. 1997), 96-3610, American Nat. Bank & Trust Co. of Chicago v. Regional Transp. Authority

Docket Nº:96-3610, 96-3611.
Citation:125 F.3d 420
Party Name:AMERICAN NATIONAL BANK & TRUST COMPANY OF CHICAGO, not individually, but as Trustee under Trust No. 107796-01, Plaintiff-Counter-Defendant- Appellee, Cross-Appellant, v. REGIONAL TRANSPORTATION AUTHORITY, a municipal corporation, and Commuter Rail Board, its Rail Division, Defendants-Counter-Plaintiffs, Third/Party-Plaintiffs- Appellants, Cross-App
Case Date:September 02, 1997
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 420

125 F.3d 420 (7th Cir. 1997)

AMERICAN NATIONAL BANK & TRUST COMPANY OF CHICAGO, not

individually, but as Trustee under Trust No.

107796-01,

Plaintiff-Counter-Defendant-

Appellee, Cross-Appellant,

v.

REGIONAL TRANSPORTATION AUTHORITY, a municipal corporation,

and Commuter Rail Board, its Rail Division,

Defendants-Counter-Plaintiffs,

Third/Party-Plaintiffs-

Appellants, Cross-Appellees,

and

NORTHEAST ILLINOIS REGIONAL COMMUTER RAILROAD CORPORATION,

Defendant-Counter-Plaintiff-Appellant, Cross-Appellee,

v.

W/H LIMITED PARTNERSHIP NO. 17, an Illinois limited

partnership, Walsh, Higgins & Company, an Illinois

corporation, and Congress Concourse Limited Partnership, an

Illinois limited partnership,

Third/Party-Defendants-Appellees, Cross-Appellants.

Nos. 96-3610, 96-3611.

United States Court of Appeals, Seventh Circuit

September 2, 1997

Argued May 28, 1997.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 10, 1997.[*]

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Thomas A. Foran, Peter A. Silverman, Foran & Schultz, Kevin M. Forde, Mary Anne Mason, Kevin M. Forde, Ltd., Carl Gigante James R. Figliulo (argued), James J. Sipchen, Jr., Figliulo & Silverman, Chicago, IL, for plaintiff-appellee American National Bank and Trust Company of Chicago in No. 96-3610.

Kevin M. Forde, Mary Anne Mason, Kevin M. Forde, Ltd., Carl Gigante, James R. Figliulo, James J. Sipchen, Jr., Figliulo & Silverman, Chicago, IL, for defendants-appellees W/H Limited Partnership No. 17, Walsh, Higgins & Company and Congress Concourse Limited Partnership in No. 96-3610.

Thomas P. Sullivan, Barry Levenstam, Jenner & Block, Michael M. Conway (argued), Bruce Doughty, Hopkins & Sutter, Chicago, IL, for defendants-appellants Regional Transit Authority, Commuter Rail Board and Northeast Illinois Regional Commuter Railroad Corporation in No. 96-3610.

Thomas A. Foran, Peter A. Silverman, Foran & Schultz, Carl Gigante, James R. Figliulo (argued), James J. Sipchen, Jr., Figliulo & Silverman, Chicago, IL, for American National Bank and Trust Company of Chicago in No. 96-3611.

Carl Gigante, James R. Figliulo, James J. Sipchen, Jr., Figliulo & Silverman, for defendants-appellants W/H Limited Partnership No. 17, Walsh, Higgins & Company and Congress Concourse Limited Partnership in No. 96-3611.

Michael M. Conway (argued), Bruce W. Doughty, Hopkins & Sutter, Chicago, IL, for Regional Transit Authority in No. 96-3611.

Thomas P. Sullivan, Barry Levenstam, Jenner & Block, Michael M. Conway, Bruce W. Doughty, Hopkins & Sutter, for Commuter Rail Board and Northeast Illinois Regional Commuter Railroad Corporation in No. 96-3611.

Before BAUER, COFFEY and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

American National Bank and Trust of Chicago, as trustee of land trust number 107796-01, and for the beneficial owner of the land trust that owns the property involved in this case, filed a three-count complaint against the Regional Transit Authority and Metra (collectively, "RTA") relating to the RTA's renovation of the LaSalle Street Station in downtown Chicago. The RTA

Page 425

filed two compulsory counterclaims, alleging that the beneficial interest holder had breached its agreement with the RTA and had failed to pay other costs of delay that it caused the RTA. After a four-week trial, the jury returned a verdict for the plaintiffs on two counts and awarded a little over $24.5 million. The jury found for the RTA on one of American National's claims and on both counterclaims; on these latter claims, the jury awarded the RTA just over $782,000. The district court denied the parties' post-trial motions, and the parties appealed. We affirm the judgment of the district court.

I

BACKGROUND

  1. Facts

    This case involves the operation of a commuter rail line running from Joliet, Illinois to Chicago. The RTA took over operation of the service from the Chicago & Rock Island Railroad Company ("Rock Island") after Rock Island filed for bankruptcy protection in 1975. The RTA acquired its rights to operate the commuter line from the trustee in Rock Island's bankruptcy proceeding. However, the background of the current dispute dates back to June 26, 1851. On that date, the Northern Indiana Railroad ("Northern Indiana") and the Rock Island entered into a contract to create a co-tenancy in a rail line from the south side of Chicago to downtown, including a depot at LaSalle Street. Under this contract, Northern Indiana agreed to construct and maintain a rail line that would connect Northern Indiana's line with the Rock Island line, which ran into the City. In return, Rock Island granted to Northern Indiana, their successors and assigns a "one-half, in common and undivided," interest in

    the line of the said Chicago and Rock Island Railroad lying between the point of the junction of the road so to be built, from the Indiana State line, with said Chicago and Rock Island Railroad, and the terminus in the City of Chicago, and of the Depot in the City of Chicago, with the one undivided half of all the lands, rights of way and appurtenances, depot lands and privileges acquired or hereafter to be acquired for joint use.

    R.169, Ex.1 at 2. Both parties also had an equal undivided interest in the rights and privileges "in surveying, locating and constructing the said road, its depot and appurtenances, and using, running or repairing the same." Id. Finally, the contract provided that the parties would divide the cost of repairs in proportion to each business on the jointly owned and operated section of the rail line. For many years, the Rock Island and Northern Indiana entered into numerous agreements confirming and supporting each party's right to continue railroad operation on the right of way and allocating the cost of maintaining the right of way for continued rail use. Northern Indiana's interest in the property was eventually acquired by the Penn Central Corporation.

    In 1975 the Rock Island filed for bankruptcy, and a bankruptcy trustee, William M. Gibbons, was appointed. From 1975 to 1979, the trustee operated Rock Island's commuter line from Joliet to Chicago. In 1980 the RTA was authorized to operate the service and sought to acquire Rock Island's rights of way and equipment through the exercise of its power of eminent domain. After some negotiation between the RTA and the trustee, the RTA acquired the necessary rights to continue to operate the rail service for $35 million. The rights that it acquired are set forth in a November 12, 1982 Stipulation, a September 6, 1984 Supplement to the Stipulation and a September 6, 1984 Final Judgement Order (collectively, "1984 Judgment Order"). With respect to the property at issue in this appeal 1--the North Parcel--the 1982 Stipulation provided that the RTA acquired

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    [a] permanent relocatable easement interest for commuter railroad purposes in and to all of the rights, titles or interests of William M. Gibbons, Trustee ..., subject to:

    (i) Existing easements, leases, licenses, ordinances and agreements, delineated in [various exhibits], and

    (ii) All existing rights, titles or interests of the Penn Central Corporation, successors and assigns, and

    ...

    * * *

    (iv) The rights of the Trustee under Paragraph 6A herein

    ....

    R.315, Ex.D at 5-6. Paragraph 6A of the Stipulation states:

    [I]n the segments of real property between 17th Street and Congress Street, described in Exhibit A, that the Trustee shall have all sub-surface rights as aforesaid, as well as all air rights above a plane over the surface of the property at a height sufficient to accommodate the use of the property for commuter rail purposes.... In addition the Trustee shall have such rights in and to the surface (not irreconcilable with the RTA commuter service and facilities) as are necessary to use, develop and/or implement the air rights and subsurface rights for any lawful purposes.

    Id. at 13. 2 The Supplement to the Stipulation provided that, incident to the RTA's permanent relocatable easement, the RTA had acquired the right of entry onto the trustee's retained rights for the maintenance and repair of its facilities. It was also understood, according to the Supplement, that safety concerns might require "changes or modifications to the presently existing structures, improvements, and any other facilities." R.315, Ex.E at 2. "Incident to the exercise of such right of entry, the RTA agrees that it will not unreasonably interfere with the retained rights of the Trustee...." Id. In addition, the RTA agreed to indemnify the trustee and his assigns from any claims, damages, losses or expenses arising from the RTA's exercise of this right.

    In short, the RTA acquired from the trustee a permanent, relocatable easement and other rights to operate the commuter rail service. One such other right was the right of entry to maintain, repair or rebuild the facilities, including the LaSalle Street Station. In exercising this right of entry, however, the RTA could not interfere unreasonably with the rights retained by the trustee and had to indemnify the trustee for any damages arising from the RTA's repair or maintenance activities. The trustee, on the other hand, retained the rights to develop the air and sub-surface, including necessary incidental rights, as long as in developing these rights he did not unreasonably interfere with the RTA's exercise of its rights.

    In June 1984, the bankruptcy trustee sold his retained rights in the property to the Chicago Pacific Corporation ("CPC"). CPC negotiated with the RTA to try to develop a plan by which the LaSalle Street Station (by this time in...

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