Louis W. Epstein Family Partnership v. Kmart Corp.

• Decision Date: 12 January 1994
• Docket Number: No. 93-1516,93-1516
• Citation: 13 F.3d 762
• Parties: LOUIS W. EPSTEIN FAMILY PARTNERSHIP; Levitz Furniture Corporation, Intervenor in D.C. v. KMART CORPORATION, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 762

13 F.3d 762

LOUIS W. EPSTEIN FAMILY PARTNERSHIP; Levitz Furniture Corporation, Intervenor in D.C. v. KMART CORPORATION, Appellant.

No. 93-1516.

United States Court of Appeals Third Circuit.

Argued Aug. 4, 1993.

Decided Jan. 12, 1994.

Howard D. Scher, Richard M. Simins, Melissa E. Kraras, Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, Daniel M. Brinks, Edward H. Pappas (argued), Dickinson, Wright, Moon, Van Dusen & Freeman, Bloomfield Hills, MI, and Robert W. Powell, Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, MI, for appellant.

Alan M. Black (argued), Black, McCarthy, Eidelman, Feinberg, Anewalt & Kercher, Allentown, PA, for appellee Louis W. Epstein Family Partnership.

Joseph A. Fitzpatrick, Jr. (argued), Fitzpatrick, Lentz & Bubba, Center Valley, PA, for appellee Levitz Furniture Corp.

Before: STAPLETON, HUTCHINSON and ROTH, Circuit Judges.

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

Appellant, Kmart Corporation ("Kmart"), appeals an order of the United States District Court for the Eastern District of Pennsylvania. In that order, the district court permanently enjoined Kmart from constructing certain barriers and traffic control devices on a piece of its property. Appellee, the Louis W. Epstein Family Partnership ("Epstein"), holds an easement over the Kmart property. The easement is dedicated to ingress and egress from Epstein's land-locked parcel. The district court's order also enjoined Kmart from removing a sign on its property that had been erected and maintained by Epstein's tenant, Levitz Furniture Co. ("Levitz"). It held that Levitz had an implied easement or, in the alternative, an easement by estoppel, permitting the sign on the Kmart parcel. Finally, the injunction prohibited Kmart generally from future violations of the Declaration of Easements. See Louis W. Epstein Family Partnership v. Kmart Corp., 828 F.Supp. 328 (E.D.Pa.1993).

Kmart asserts that its proposed plan to improve the disputed area by constructing traffic control devices does not interfere with the purpose of the easement. Kmart also challenges the injunction as overly restrictive and broad. We agree with the district court that Kmart's proposed plan would substantially interfere, in some respects, with rights specifically conveyed in the Declaration of Easements, but we conclude that Epstein may not unreasonably enforce the easement to exclude all of the improvements Kmart plans. Thus we hold that the injunction as drafted by the district court is overly broad. We will, therefore, remand this case to the district court so that it may modify the injunction in a manner consistent with this opinion.

Kmart also contends that Levitz has not shown it has either an easement by implication or an easement by estoppel to maintain its sign on Kmart property. We agree. Thus, we will reverse the district court's determination that Levitz has an easement to maintain its sign on the Kmart parcel. ¹

I.

Prior to October 21, 1975, Louis W. Epstein ("Louis") and Morris Epstein ("Morris") owned a parcel of land on MacArthur Road in Whitehall Township, Lehigh County, Pennsylvania, as tenants in common. Levitz leased the northwestern portion of the parcel since 1962. On October 21, 1975, Morris and Louis divided the parcel. Louis acquired sole ownership of the part Levitz leased and the land that lay immediately to the north-west of the Levitz parcel ("the dominant estate" or "Louis's parcel"). Morris acquired the remainder of the land ("the servient estate" or "Morris's parcel"). This division of the property would have land-locked Louis's parcel but for the contemporaneous Declaration of Easements Louis and Morris executed and recorded. It established an "L-shaped" non-exclusive right-of-way across Morris's property to secure ingress and egress from Louis's property. The easement area is 100 feet wide at MacArthur Road and then turns right at slightly less than a right angle to form the second leg which is 50 feet wide. The second leg leads to Louis's property.

The Declaration states that the purpose of the easement is for "ingress, egress, and regress" to both parcels. Appellant's Appendix ("App.") at 112. The Declaration also states that "[n]o barriers, fences, curbs or other obstruction to the free and unhampered use of said easement area and right of way shall hereafter be permitted." Id. It provides that maintenance expenses incurred in the upkeep of the easement, including the "painting of direction signals for the flow of traffic on said area," will be shared by the parties. Id. at 113.

At present, the 100-feet-wide portion of the easement is paved and access is gained from MacArthur Road through two thirty-five-foot cuts in the curb, one for ingress and one for egress.

In 1963, before division of the original parcel, Levitz had erected and paid for a sign along MacArthur Road, on what became the servient estate, outside the area which was to become the easement of way. The sign directs traffic to Levitz's store which is set 518 feet from MacArthur Road. At all times Levitz has assumed the expense of lighting the sign and paying for its maintenance. Neither the severance agreement nor the Declaration of Easements mentions the sign.

On November 4, 1992, Kmart acquired the servient estate from Morris for the purpose of erecting a shopping center that would house a number of retail establishments including a Kmart store. As part of its development plan, Kmart proposed substantial modifications to the easement area including erection of concrete barriers, painting of directional traffic lines, including an overhead sign, and erection of traffic control devices. The development plan also proposed moving the Levitz sign, which now sits adjacent to MacArthur Road, in order to allow construction of a deceleration lane on MacArthur Road.

The district court found that this plan would require all patrons who wish ingress to Louis's parcel and the Levitz store to use a right-hand lane fourteen feet wide, as the only lane from which a right-hand turn could be made. Epstein, 828 F.Supp. at 334-35. Patrons exiting Louis's parcel and the Levitz store would be confined to two lanes of the easement which then widens to four lanes. The district court also found, under the proposed plan, that delivery trucks, so-called "eighteen wheelers," would be forced to go outside the lane marked for entry to Levitz's store in order to complete the right-hand turn necessary to gain access to the Levitz parking area. Id. at 336.

In December of 1992, Epstein filed suit in the Court of Common Pleas of Lehigh County seeking injunctive relief. It claimed that Kmart's proposed development plan violated the Declaration of Easements. Kmart removed the case to federal court and, shortly thereafter, Levitz intervened and sought injunctive relief to prohibit removal of its sign. Levitz and Epstein filed a motion for a preliminary injunction which the district court consolidated into a trial on the merits under Federal Rule of Civil Procedure 65(a)(2). The district court issued findings of fact and conclusions of law and permanently enjoined Kmart from erecting barriers or directional devices in the easement area. The injunction also restricted Kmart from all future violations of the Declaration. Holding that Levitz had obtained an easement over Kmart's land both by estoppel and implication, the district court also enjoined Kmart from removing Levitz's sign.

Kmart filed a timely notice of appeal.

II.

While we will reverse factual conclusions of the district court only if they are clearly erroneous, see Fed.R.Civ.P. 52(a), we exercise plenary review over the trial court's choice and interpretation of legal precepts and its application of those precepts to the historical facts. Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 102 (3d Cir.1981). Moreover, "[t]he district court cannot, by couching a legal conclusion as a finding of fact, prevent appellate review of legal errors." Griggs v. Provident Consumer Discount Co., 680 F.2d 927, 931 n. 3 (3d Cir.), vacated on other grounds, 459 U.S. 56, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982). We review the grant of a motion for a permanent injunction for abuse of discretion but, as set forth above, "factual determinations prerequisite to issuing the injunction are reviewed for clear error, and we conduct a plenary review of legal questions." McLendon v. Continental Can Co., 908 F.2d 1171, 1177 (3d Cir.1990).

When a federal court sits in diversity, it applies state law and if the state's highest court has not spoken on the issue, the federal court must predict how it would rule if presented with the issue. Kleinknecht v. Gettysburg College, 989 F.2d 1360, 1365 (3d Cir.1993) (quoting Robertson v. Allied Signal, Inc., 914 F.2d 360, 378 (3d Cir.1990)).

III.

We begin with the access easement. Kmart contends that its proposed development plan for this area will not substantially interfere with the dominant estate's use. Alternately, it argues that the injunction, as entered, is too broad.

A.

In the case of express easements, the terms of the conveyance determine the rights and liabilities of the parties. Hann v. Saylor, 386 Pa.Super. 248, 562 A.2d 891, 893 (1989). The express language of the agreement, unless ambiguous, controls. See Merrill v. Manufacturers Light & Heat Co., 409 Pa. 68, 185 A.2d 573, 575 (1962). A court should construe ambiguous terms in favor of the grantee. Id. (citing Hammond v. Hammond, 258 Pa. 51, 101 A. 855 (1917)). In this case, the Declaration of Easements is clear. It describes the property precisely and states that its purpose is "ingress, egress, and regress" to and from Epstein's landlocked parcel on which Levitz was and is a tenant. App. at 112.

"[T]he owner of land, who grants a right of way over it, conveys nothing but the right of passage and reserves all incidents of ownership not granted." Mercantile Library Co. v. Fidelity Trust Co., 235 Pa. 5,...