Consolidated Rail Corp. v. MASP Equipment Corp.

• Decision Date: 05 March 1985
• Citation: Consolidated Rail Corp. v. MASP Equipment Corp., 486 N.Y.S.2d 4, 109 A.D.2d 604 (N.Y. App. Div. 1985)
• Parties: CONSOLIDATED RAIL CORPORATION, Plaintiff-Respondent, v. MASP EQUIPMENT CORP., Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 4

486 N.Y.S.2d 4

109 A.D.2d 604

CONSOLIDATED RAIL CORPORATION, Plaintiff-Respondent, v. MASP EQUIPMENT CORP., Defendant-Appellant.

Supreme Court, Appellate Division First Department.

March 5, 1985.

W.P. Jones, New York City, for plaintiff-respondent.

R.A. Scher, Great Neck, for defendant-appellant.

Before SULLIVAN, J.P., and ROSS, BLOOM, FEIN and KASSAL, JJ.

MEMORANDUM DECISION.

Judgment, Supreme Court, Bronx County, entered November 24, 1982, amended by order (same court), entered May 17, 1983, which, inter alia, had (1) declared plaintiff's entitlement to and awarded immediate possession of a driveway easement, (2) ejected defendant therefrom, (3) granted a mandatory injunction to remove the fencing, equipment and other material obstructing plaintiff's use and enjoyment of the easement and, (4) granted a permanent injunction enjoining defendant from encroaching or trespassing upon plaintiff's property, modified, on the law, to delete paragraph VI of the amended judgment, which had directed the payment to plaintiff of $1,000 per day for every day after the initial 45-day grace period that defendant maintained its equipment upon "the easement or any other part of Plaintiff's property," and otherwise affirmed, without costs or disbursements. The said order entered May 17, 1983, amending the judgment to provide that said payment of $1,000 per day be "liquidated damages" in lieu of "a penalty," as had been provided in the original judgment, is reversed, on the law, without costs or disbursements, and the motion to clarify the judgment and for punitive damages denied.

The action was brought to recover possession of a driveway easement which had been created on October 23, 1969, by an express grant from the then owner, Hunts Point Industrial Park, Inc., to plaintiff's predecessor, Penn Central Transportation Company. The easement was to provide access from East 149th Street into the Penn Central Oak Point Yard. Defendant, lessee of the property (from Hunts Point) over which the easement ran, had erected a fence in 1968, prior to the grant of the easement, and since then had used the area to store construction equipment and building material. The present fee owner, 900 Woolworth Redevelopment Corporation, which acquired the property from Federal Deposit Insurance Company, the successor to the bankrupt Franklin National Bank, following a mortgage foreclosure against Hunts Point, is not a party to the action and has expressed no interest in the outcome of the litigation.

In defending the action, MASP alleged that after the easement had been created and filed, the original parties (Hunts Point, Penn Central and Coca Cola, which had been contemplating the construction of a building adjacent to the easement) agreed to a modification of the easement by creating, at its easterly end, a "dog-leg" path over the property of Woolworth and Coca Cola to by-pass the fenced area. It is alleged that the modification, agreed to in August 1971, served the interests of all parties by permitting MASP to have the use of the blocked area for storage of its construction equipment and Penn Central to have access to the yard through the "dog-leg" path. This, in turn, would accommodate Coca Cola, which could thereby use a portion of the original by-passed easement area for its trucks. The modification also worked to the advantage of Idaho Potato Packing Co., a tenant of the railroad which, by use of the "dog-leg," would gain access to the front entrance to its warehouse.

Plaintiff argues that its predecessor's representative at that meeting had no authority to bind the railroad to any modification and that the modification places plaintiff at the mercy of the adjoining property owners, thus posing a threat of loss of the easement in the future. In any event, the "dog-leg" has been used by plaintiff and its predecessor in interest for the past 11 years. According to plaintiff, it first learned of defendant's encroachment upon its easement in July 1977 and demands were made for MASP to vacate same in June and July 1981. On February 3, 1982, this action was commenced for both ejectment and a mandatory and permanent injunction, directing defendant to remove the fence and its equipment and restraining defendant from such use in the future.

We find ourselves in agreement with Trial Term in its assessment of the legal issues respecting the entitlement of the parties to the disputed tract. As was held, an easement created by grant, express or implied, cannot be extinguished by nonuser alone for any length of time. (Gerbig v. Zumpano, 7 N.Y.2d 327, 197 N.Y.S.2d 161, 165 N.E.2d 178; Welsh v. Taylor, 134 N.Y. 450, 31 N.E. 896; Snell v. Levitt, 110 N.Y. 595, 18 N.E. 370). As held in these and other cases, an easement may only be lost by abandonment, conveyance, condemnation or adverse possession. Under the facts of this case, defendant may not claim entitlement to the disputed area through adverse possession since, on this record, it appears undisputed that the easterly end of the easement has never been opened, defendant having fenced the area in 1968, one year before the easement was created. (See Castle Assoc. v. Schwartz, 63 A.D.2d 481, 490, 407 N.Y.S.2d 717; Powlowski v. Mohawk Golf Club, 204 App.Div. 200, 204, 198 N.Y.S. 30).

However, we disagree with the direction by the trial court that plaintiff be awarded damages of $1,000 per day for each day after the expiration of the initial 45-grace period. The court had initially imposed said sum as "a penalty" and, upon motion to clarify the judgment so as to refer to the monetary award as punitive damages, sua sponte, amended the judgment to provide for the payment to be made as "liquidated damages". Under the facts of this case, however, there was no basis for either. Liquidated damages is a contract remedy whereby the parties agree to an estimate of the extent of injury which would be sustained as a result of any breach (see Truck Rent-A-Center v. Puritan Farms 2nd, 41 N.Y.2d 420, 424, 393 N.Y.S.2d 365, 361 N.E.2d 1015). A liquidated damages provision may not be implied and must be agreed to. (Winkelman v. Winkelman, 208 App.Div. 68, 203 N.Y.S. 63). Clearly, it has no applicability to this case, brought for ejectment and injunctive relief. This action does not sound in contract. Moreover, plaintiff sought no monetary relief, either in its pleadings or by motion to amend at trial and there was no proof that it had sustained...