DNR v. Carmody-Lahti Real Estate, Inc.

• Decision Date: 27 May 2005
• Docket Number: Docket No. 124413. Calendar No. 8.
• Citation: 472 Mich. 359,699 N.W.2d 272
• Parties: MICHIGAN DEPARTMENT OF NATURAL RESOURCES, Plaintiff-Appellee and Cross-Appellant, v. CARMODY-LAHTI REAL ESTATE, INC., a Michigan Corporation Defendant-Appellant and Cross-Appellee.
• Court: Michigan Supreme Court

699 N.W.2d 272

472 Mich. 359

MICHIGAN DEPARTMENT OF NATURAL RESOURCES, Plaintiff-Appellee and Cross-Appellant, v. CARMODY-LAHTI REAL ESTATE, INC., a Michigan Corporation Defendant-Appellant and Cross-Appellee.

Docket No. 124413. Calendar No. 8.

Supreme Court of Michigan.

May 27, 2005.

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and Harold J. Martin and John F. Szczubelek, Assistant Attorneys General, Escanaba, MI, for the plaintiff.

Bridges and Bridges (by Caroline Bridges), Negaunee, MI, for the defendant.

YOUNG, J.

In 1873, the Quincy Mining Company conveyed an interest in real property located in Houghton County, Michigan, to the Mineral Range Railroad Company. The parties labeled this interest a "right of way" in the written deed. The precise nature of this right-of-way-whether it was an easement or a fee estate, whether it was limited to railroad purposes and, if so, what such a limitation would mean-is the subject matter of this appeal.

Plaintiff, the Michigan Department of Natural Resources, is the successor in interest of the Mineral Range Railroad Company. It asserts that it owns a fee simple interest and is therefore entitled to use the right-of-way as a snowmobile and recreation trail. Defendant, Carmody-Lahti Real Estate, Inc., is the successor in interest of the Quincy Mining Company and maintains that plaintiff's predecessor in interest enjoyed only an easement, which it abandoned before purporting to convey it to plaintiff.

We conclude that the Court of Appeals correctly determined that the 1873 deed conveyed an easement rather than a fee simple. However, we conclude that the panel erred in holding that the easement was neither limited to a specific purpose nor abandoned by plaintiff's predecessor in interest. Properly construed, the instrument conveyed an easement for railroad purposes only. Thus, when plaintiff's predecessor in interest unambiguously manifested its intent to relinquish any use of the right-of-way for railroad purposes and took action consistent with that intent, the easement was abandoned. Defendant, as successor in interest to the original grantor, now has an unencumbered fee simple interest in the land formerly subject to the easement.

We therefore reverse the judgment of the Court of Appeals and remand to the circuit court for entry of summary disposition in defendant's favor.

I. FACTS AND PROCEDURAL HISTORY

In 1873, Quincy Mining conveyed a "right of way" to Mineral Range through a written instrument that provided:

This indenture made this twenty-first day of October in the Year of Our Lord [1873] between the Quincy Mining Company ... and The Mineral Range Railroad Company ... witnesseth that [Quincy Mining] for and in consideration of the sum of one dollar to it in hand paid by [Mineral Range], the receipt whereof is hereby ... acknowledged has granted, bargained, sold, remised, aliened and confirmed and by these presents does grant, bargain, sell, remise, release, alien and confirm unto [Mineral Range] its successors and assigns forever a right of way for the railroad of [Mineral Range] as already surveyed and located by the engineer of [Mineral Range] and according to the survey thereof on file in the Office of the Registrar of Deeds for the County of Houghton, Michigan to consist of a strip of land one hundred feet in width being fifty feet on each side of said surveyed line across the following described tracts or parcels of land situated in said county of Houghton: [describes parcels/plats].

Also a right of way for said railroad surveyed and located as aforesaid and according to the survey thereof on file as aforesaid to consist of a strip of land one hundred feet in width being twenty feet in width on the north side of said surveyed line and eighty feet in width on the south side of said surveyed line across the tract or parcel of land known ... as [describes parcels/ plats].

Reserving to [Quincy Mining] and to its successors and assigns all ore and minerals on said strip of land and the right to mine the same from underneath the surface in such manner as not to interfere with the construction or operation of said railroad. Provided that [Quincy Mining] shall not in any case mine within fifteen feet of the surface of the [rock?] without the consent in writing of [Mineral Range] together with all and singular the hereditaments and appurtenances thereunto belonging or in anywise appearing to have and to hold the said strip of land with the appurtenances, for the purpose and uses above stated and subject to the reservations aforesaid unto [Mineral Range] its successors and assigns forever In Witness Whereof [Quincy Mining] has caused its corporate seal to be affixed and these presents to be executed by its President and Secretary the day and year first above written. Signed, sealed and delivered....

Quincy Mining, the grantor, subsequently transferred its remaining interest in the Houghton County property to the Armstrong-Thielman Lumber Company, which, in turn, sold its interest to defendant Carmody-Lahti Real Estate, Inc. Mineral Range later conveyed its right-of-way to the Soo Line Railroad Company, which, until the early 1980s, continued to utilize the right-of-way for railroad purposes.

Although the railroad industry was central to the economic vitality of our nation in the mid-nineteenth century, its dominance began to wane in the late nineteenth and early twentieth centuries-the years following the initial transfer of the Houghton County right-of-way.¹ But even as railroading itself declined in importance, the United States Congress determined that the rail corridors themselves might prove vital for future economic growth.² Accordingly, Congress enacted the Transportation Act of 1920, which required, among other things, that railroad companies seek and obtain the permission of the Interstate Commerce Commission (ICC) before abandoning any extant rail line.³ Congress has since amended this procedure with the Railroad Revitalization and Regulatory Reform Act (RRRRA) of 1976,⁴ and again with the Staggers Rail Act of 1980.⁵ In September 1982, Soo Line, which then owned the right-of-way originally granted to the Mineral Range Railroad in 1873, sought federal permission to abandon the railway. The ICC granted this request in a written order on September 29, 1982. The order placed specific conditions on Soo Line's abandonment of its railway:

Soo Line shall keep intact all of the right-of-way underling [sic] the track, including all the bridges and culverts, for a period of 120 days from the decided date of this certificate and decision to permit any state or local government agency or other interested party to negotiate the acquisition for public use of all or any portion of the right-of-way. In addition, Soo Line shall maintain the Houghton Depot for 120 days from the decided date of this certificate and decision. During this time, Soo Line shall take reasonable steps to prevent significant alteration or deterioration of the structure and afford to any public agency or private organization wishing to acquire the structure for public use the right of first refusal for its acquisition.

Six years after the ICC granted its request to abandon the railway, Soo Line conveyed the right-of-way to plaintiff, the Michigan Department of Natural Resources (MDNR). By that time, the railroad tracks that originally occupied the right-of-way had been largely removed. The record reveals that, by 1988, there were no railroad tracks on the thirty-foot strip of land at issue in this case and there were only remnants of track scattered along the easement. Thus, the task of reconstructing the path of the railroad for litigation purposes was a difficult one. The parties offered on this issue the testimony of several surveyors, and each described a painstaking process in which they consulted a number of maps and searched for remaining physical evidence of the railroad.

The MDNR used the right-of-way as a snowmobile and recreation trail until 1997, when defendant installed a fence that blocked a portion of the right-of-way, substantially interfered with its recreational use, and spawned the present litigation.

In December 1997, plaintiff filed a complaint seeking an order to enjoin defendant from blocking the right-of-way with its fence. Plaintiff argued that it had an unlimited right to use the right-of-way for any purpose because the 1873 deed conveyed to Mineral Range Railroad, its predecessor in interest, a fee simple estate. Defendant argued in response that the deed had conveyed only an easement limited to railroad purposes. The MDNR exceeded the scope of the easement, defendant argued, and had thereby extinguished the right-of-way.

The trial court initially granted summary disposition in plaintiff's favor, concluding that the 1873 instrument conveyed a fee estate rather than an easement and that plaintiff was therefore permitted to use the right-of-way as a snowmobiling trail. The Court of Appeals reversed and remanded the matter to the trial court. Unpublished opinion per curiam, issued June 5, 2001, 2001 WL 620105 (Docket No. 222645). The panel held that the 1873 deed conveyed an easement rather than a fee simple and, accordingly, remanded to the circuit court for a determination whether the easement had been extinguished.

When the matter returned to the trial court, defendant filed a motion for summary disposition, arguing that the right-of-way had been extinguished by abandonment or by a 1920 tax sale of the servient estate. The trial court rejected both claims, granted summary disposition to plaintiff, and ordered the injunctive relief-removal of defendant's fence-sought by plaintiff.

Defendant appealed this judgment to the Court of Appeals. There, defendant no longer asserted that Soo Line had abandoned the easement as a result of the 1920 tax sale. Rather, defendant maintained that plaintiff's predecessor abandoned the...