Mid-America Pipeline Co. v. Lario Enterprises

• Decision Date: 02 June 1989
• Docket Number: No. 88-4205-S.,88-4205-S.
• Parties: MID-AMERICA PIPELINE COMPANY, Plaintiff, v. LARIO ENTERPRISES, INC. and the City of Topeka, Kansas, Defendants.
• Court: U.S. District Court — District of Kansas

716 F. Supp. 511

MID-AMERICA PIPELINE COMPANY, Plaintiff, v. LARIO ENTERPRISES, INC. and the City of Topeka, Kansas, Defendants.

No. 88-4205-S.

United States District Court, D. Kansas.

June 2, 1989.

James L. Grimes, Jr., Cosgrove, Webb & Oman, Topeka, Kan., Kristen E. Cook, Mid-America Pipeline Co., Tulsa, Okl., and Leonard J. Johnson and David C. Stout, Morrison, Hecker, Curtis, Kuder & Parrish, Kansas City, Mo., for plaintiff.

Donald D. Barry, Donald D. Barry, Chtd., and Gerald L. Goodell, Goodell, Stratton, Edmonds & Palmer, Topeka, Kan., for Mid-America Pipeline Co.

Edwin P. Carpenter and Stephen P. Weir, Carpenter, Weir & Myers, Chtd., Topeka, Kan., for City of Topeka.

MEMORANDUM AND ORDER

ROGERS, District Judge.

This case is now before the court upon plaintiff's prayer for a permanent injunction against the further construction and operation of Heartland Park Topeka (HPT), a motor sports racing facility being constructed over pipelines operated by plaintiff. After a hearing upon a preliminary injunction motion, which the court denied, the parties agreed, pursuant to FED.R. CIV.P. 65(a)(2), that the court could consider the evidence presented at the hearing upon the preliminary injunction motion, together with final argument at a subsequent hearing, to determine whether to grant a permanent injunction.

Plaintiff is Mid-America Pipeline Company. Defendants are Lario Enterprises, Inc. ("Lario") and the City of Topeka, Kansas. After considering all the material before the court, the court shall deny plaintiff's prayer for a permanent injunction on the following grounds: plaintiff has an adequate remedy in condemnation or damages; an injunction would place an unfair hardship upon defendants; and, an injunction would not be in the interests of the public. These conclusions are founded upon the following findings of fact and conclusions of law.

1. There is no dispute as to this court's jurisdiction over this case under 28 U.S.C. § 1332, the diversity of citizenship statute.

2. Plaintiff is an interstate common carrier of natural gas liquids. Plaintiff has two pipelines buried at HPT. One of the pipelines was built in 1960. The other was built in 1971. The pipelines were buried at a depth of 30 to 48 inches. The pipelines carry propane and ethane, in liquid form.

3. These pipelines were laid pursuant to easements purchased by plaintiff from Alice E. Boley and Mary E. Zeidler in 1960. The easements provide:

"Grantor (whether one or more) do hereby grant, bargain, sell and convey unto Mid-America Pipeline Company, a Delaware Corporation, its successors and assigns, hereinafter referred to as `Grantee', the right, privilege and easement, at any time and from time to time to construct, maintain, inspect, operate, protect, repair, replace, change the size of, or remove a pipeline or pipelines, gate valves and other appurtenances, including cathodic protection equipment, within the confines of a right of way Sixty feet in width, said right of way being Twenty feet on the North/West side and Forty feet on the South/East side of a line (to be) (as) surveyed and definitely established by the center line of the initial pipeline constructed for transportation of natural gas, oil, petroleum products or any other liquids, gases or substances which can be transported through a pipeline, together with the right of ingress and egress to and from the same for the purposes aforesaid, over, under, through and across the following described lands, of which the Grantor warrants they are the owners in fee simple, situated in the County of Shawnee, State of Kansas, to wit:

(Legal Description omitted)

TO HAVE AND TO HOLD said right of way and easement unto said Grantee, its successors and assigns forever.

It is agreed that the pipeline or pipelines to be laid under this grant shall be constructed at sufficient depth below the surface of the ground to permit normal cultivations, and Grantor shall have the right to fully use and enjoy the above described premises subject to the rights herein granted. Grantee shall have the right to clear and keep clear all trees, undergrowth and other obstructions from the herein granted right of way, and Grantor agrees not to build, construct or create, nor permit others to build, construct or create any buildings or other structures on the herein granted right of way that will interfere with the normal operation and maintenance of the said line or lines. Grantee agrees to pay to the then owners and to any tenant, as their interests may be, any and all damages to crops, timber, fences, drain tile, or other improvements on said premises that may arise from the exercise of the rights hereby granted, said damages, if not mutually agreed upon, to be ascertained and determined by three disinterested persons, one of whom to be appointed by the Grantor, one by the Grantee, and the third by the two so appointed, and the written award of such three persons shall be final and conclusive. Any payment due hereunder may be made direct to the said Grantor or any one of them."

4. Plaintiff drew the easement language.

5. When the easements were purchased, the property was used to grow crops or as pasture. The path of the pipelines was selected by plaintiff to avoid developed property.

6. Plaintiff's officers became aware of the plans for HPT in the summer of 1988. Plaintiff promptly warned defendants of plaintiff's easement rights and objected to the planned construction.

7. Plaintiff filed the instant lawsuit against defendant Lario on August 31, 1988.

8. In October 1988, title to the property below the asphalt tracks was deeded from Lario to the City of Topeka. The City was joined as a defendant in this case shortly thereafter.

9. Currently, four racetrack surfaces approximately 36 feet in width cross over the pipelines. A drag strip approximately 60 feet in width also crosses the pipelines. These surfaces are composed of 7½ inches of asphalt over a 12 inch fly ash/clay base. The base is a mixture of materials designed to set up like concrete. The depth of the cover has been increased over the pipelines in some areas by as much as 12 to 20 feet. It is anticipated that moveable concrete barriers weighing approximately 8,000 pounds apiece shall border the racetrack. Two chain link fences will cross the pipelines in four locations. Additionally, two tram roadways that will also cross the pipelines are contemplated in the future. Spectator seating is not located on the easement property. Indeed, through the use of visual screens on fences, people will be encouraged not to watch races from the easement property. Grandstands and spectator berms are several hundred feet from the pipelines.

10. No pipeline leak or safety problem has developed at the HPT site in the pipelines' history. Recently, however, an explosion caused by a leak from the pipelines occurred at U.S. Highway 75, near HPT. The pipelines at HPT were excavated and inspected in the fall of 1988 after the explosion. No safety problem was detected. The pipelines satisfy federal safety regulations. The construction at HPT will not materially increase the safety risk from the pipelines. The additional asphalt surface hampers plaintiff's biweekly aerial surveillance of the pipelines and interferes with close-interval surveys. These are some of the methods used to guard against leaks or detect leaks in pipelines. Aerial surveillance may spot dead vegetation which could indicate even a small or pin-size leak in the pipelines. Close-interval surveys are conducted across spans of the pipelines at intervals of a few feet to determine the corrosion protection of pipelines. Pipelines may be walked to find signs of small leaks. The pipelines are also computer monitored for major leaks every ten seconds. Asphalt and other obstructions to surveillance exist in hundreds of places in plaintiff's pipeline system. The undisputed testimony from knowledgeable witnesses in this case is that the pipelines are safe and that the racetrack construction will not make them unsafe.

11. If excavation of the pipelines is required in the future, it will be more difficult, time-consuming and expensive to excavate the pipelines now covered by asphalt at HPT. This is because of the asphalt, the fly ash/clay base, and the fill dirt on top of the pipelines. It is unknown whether excavation will be required in the future. Before October 1988, the pipelines had not been excavated. So, the probability of pipeline excavation appears remote.

12. Additional construction of fences and other items, such as utility or sewer lines, may require additional digging near the pipelines. Although excavation activities near pipelines constitute a danger, the pipelines are well-marked at HPT, and there has been no proof of a substantial or unreasonable danger from future construction or excavation work.

13. HPT is being developed through a development and management agreement between defendants Lario and the City of Topeka. Lario initially purchased the real property for the project. The City passed an ordinance to acquire real estate of the project and pay for the design, purchase, equipping, construction and installation of the buildings, improvements, machinery and equipment at the site. Lario is to manage, operate and maintain the project. The City of Topeka issued general obligation bonds to raise $7.5 million for the project. Lario is investing a similar sum in the project. The City will retain title to the property for HPT for 23 years. Thereafter, the property will revert to Lario, but the City will acquire the right to 1% of the gross receipts of HPT for 27 years. HPT is scheduled to begin operation in August 1989. It is being built to accommodate 75,000 spectators.

14. The asphalt tracks of HPT are "structures which interfere with the normal operation and maintenance of the pipelines" and, therefore, violate plaintiff's easement rights. "Structures which interfere with the...