Hardin Cnty. Drainage Dist. 55, Div. 3, Lateral 10 v. Union Pac. R.R. Co.

• Decision Date: 01 February 2013
• Docket Number: No. 11–1637.,11–1637.
• Parties: HARDIN COUNTY DRAINAGE DISTRICT 55, DIVISION 3, LATERAL 10, Appellee, v. UNION PACIFIC RAILROAD COMPANY, Appellant.
• Court: Iowa Supreme Court

826 N.W.2d 507

HARDIN COUNTY DRAINAGE DISTRICT 55, DIVISION 3, LATERAL 10, Appellee,

v.UNION PACIFIC RAILROAD COMPANY, Appellant.

No. 11–1637.

Supreme Court of Iowa.

Feb. 1, 2013.

Bruce E. Johnson of Cutler Law Firm, P.C., West Des Moines, for appellant.

Michael A. Smith and Shean D. Fletchall of Craig, Smith & Cutler, LLP, Eldora, for appellee.

ZAGER, Justice.

In this appeal, we must determine under Iowa's laws relating to drainage districts, who is responsible for the costs to repair and improve old underground drainage tiles which run under a railroad roadbed. Hardin County Drainage District 55 (Hardin County) argues that the Union Pacific Railroad Company (Union Pacific) should be responsible for repair of a subterranean drainage tile found under its roadbed, as railroads are statutorily required to pay for the construction and maintenance of culverts and bridges occurring at natural waterways on the railroad's right-of-way. Union Pacific counters that underground drainage tiles are not “culverts” as defined by the relevant statute.

The district court agreed with the drainage district, finding the railroad breached its statutory duty to repair the drainage tile. For the reasons set forth below, we disagree, finding the drainage tile does not fit the statutory definition of a culvert obligating the railroad to pay for the necessary repairs. We therefore reverse the judgment of the district court and remand the case to the district court for dismissal.

I. Factual Background and Procedural History.

Due to ancient glacier activity, much of north central and northwest Iowa consists of land that simply does not drain well. Up until drainage systems were installed, the land was either very wet or consisted of swamps. In order to transform these lands into the productive farm land that exists today, farmers began tiling their fields to allow subsurface drainage. As early as the turn of the century, the Iowa legislature recognized that in order to efficiently handle the administration of drainage, a statutory scheme was necessary. What resulted was Iowa Code chapter 468, entitled Levee and Drainage Districts and Improvements.

The railroad was built in Hardin County in 1910. Drainage District 55 was likely established between 1915 and 1920 in Hardin County. Drainage districts are divided into divisions and further broken down by laterals. The one in issue here is the Lateral 10 tile line, which became a part of Drainage District 55 in 1917. This lateral serves approximately forty-four landowners, and the tile in question services between 560 and 580 acres of farmland. This tile carries both surface and subsurface water from the west side of the railroad tracks to the east side.

In the spring of 2007, workers for Union Pacific noticed a void in the roadbed under its tracks. In compliance with federal railroad safety regulations, Union Pacific workers repaired the railroad bed by adding rock ballast to fill the void. The rock caused the already damaged drain tile to become plugged, thereby preventing drainage and causing flooding to farmland on the west side of the roadbed.

It is estimated that the clay underground drainage tile that is at issue in this case was installed around 1914, so it has been in use for nearly a century. It is also thought to have been originally installed by one of the adjacent landowners, not the railroad. It is likely there are hundreds of these underground drainage tiles that cross the Union Pacific railroad bed in Hardin County alone. There are no records as to the location of these drainage tiles. Additionally, this particular drainage tile was located 6.62 feet below the bottom of the ditch on the west side of the railroad bed. Union Pacific claims it had no knowledge of the existence of this drain tile, and it is not visible from an inspection of the area. There is a railroad culvert carrying surface water from the west side of the roadbed through to the east side located not far from the disputed drain tile.

On April 12, 2007, the drainage district provided Union Pacific with the statutory notice under Iowa Code section 468.109 requiring the railroad to rebuild and reconstruct the damaged tile. It was initially difficult to discuss this repair with Union Pacific. However, it was later determined by the drainage district that the existing tile line had insufficient capacity to drain the land it served, even in good repair, so it decided to replace the existing fourteen-inch drain tile with a twenty-one inch inside-diameter carrier pipe enclosed within a twenty-eight inch steel carrier pipe. While Union Pacific did not object to the proposed repair or replacement, it consistently denied that it was statutorily obligated to pay for it.

After completion of the repairs and improvements, Union Pacific refused to pay the drainage district. As a result, the drainage district filed a petition at law claiming the railroad breached its statutory duty to repair; was negligent in its failure to discover the drainage tile; was negligent in its ballast repair, which caused further damage to the drain tile and resulted in crop loss; and claimed further relief. The matter was tried to the court. A decree was entered by the court on July 18, 2011. In its order, the court awarded damages to the drainage district in the amount of $47,871 for the costs of the construction, $3055 for permit fees, $16,788 for surveying, engineering and construction observation, and $300.64 for administration and publication costs. Additionally, the district court entered judgment against Union Pacific on a negligence theory for crop loss in the amount of $22,402, and attorney fees of $21,553.46. After timely posttrial motions were denied, Union Pacific appealed. We retained the case.

II. Standard of Review.

The case was tried at law, and thus, the scope of review is for errors at law. Iowa R.App. P. 6.907 (2009); Johnson v. Kaster, 637 N.W.2d 174, 177 (Iowa 2001) (“Generally, we will hear a case on appeal in the same manner in which it was tried in the district court.”).¹ Under this standard of review, “[t]he trial court's findings carry the force of a special verdict and are binding on us if supported by substantial evidence.” Johnson, 637 N.W.2d at 177. We are not, however, bound by the trial court's legal conclusions. Am. Family Mut. Ins. Co. v. Petersen, 679 N.W.2d 571, 575 (Iowa 2004). To the extent that key questions in this appeal involve statutory construction, our review is for correction of legal error. Chi. Cent. & Pac. R.R. v. Calhoun Cnty. Bd. of Supervisors, 816 N.W.2d 367, 370 (Iowa 2012).

III. Statutory Framework.

Iowa Code chapter 468 governs the creation and function of drainage districts. The purpose of drainage districts is to build and maintain drainage improvements that provide for the “drainage and improvement of agricultural and other lands, thereby making them tillable or suitable for profitable use.” Chi., M. & St. P. Ry. v. Mosquito Drainage Dist., 190 Iowa 162, 162, 180 N.W. 170, 170 (1920). “The drainage of surface waters from agricultural lands ... shall be presumed to be a public benefit and conducive to the public health, convenience, and welfare.” Iowa Code § 468.2 (2007). To achieve this goal, counties may “establish a drainage district and ... construct whatever [drainage improvement] is necessary for the public health, convenience, or welfare.” Hicks v. Franklin Cnty. Auditor, 514 N.W.2d 431, 435 (Iowa 1994) (citing Iowa Code § 468.1).

Once a drainage improvement has been installed, it will eventually need to be repaired. Section 468.126 requires the board of supervisors to keep the improvement in repair in the following manner:

The board at any time on its own motion, without notice, may order done whatever is necessary to restore or maintain a drainage ... improvement in its original efficiency or capacity, and for that purpose may remove silt and debris, [or] repair any damaged structures....

Iowa Code § 468.126(1)( a ).

The board is also allowed to consider replacing a tile line rather than repairing a tile line, if laying a new tile line would be “more economical.” Id. § 468.126(1)( b ). Instead of repairing an old improvement, the board may elect to construct a new improvement, so long as more rigorous procedural requirements are met. Id. § 468.126(4). The costs of repairs or new improvements must be paid from the funds of the drainage district. Id. § 468.127. If there are insufficient funds on hand, “the board within two years shall levy an assessment sufficient to pay the outstanding indebtedness and leave the balance which the board determines is desirable as a sinking fund to pay maintenance and repair expenses.” Id.

Drainage district improvements must necessarily cross railroad rights-of-way. Sections 469.109 to 468.112 address how the cost of these intersections will be allocated between the district and the railroad. See Chi. & N.W. Transp. Co. v. Webster Cnty. Bd. of Supervisors, 880 F.Supp. 1290, 1295 (N.D.Iowa), aff'd,71 F.3d 265 (8th Cir.1995). When a proposed improvement crosses a right-of-way, section 468.109 requires the county auditor to serve notice on the railroad, indicating both the location of the improvement and the plans for how the improvement will cross the right-of-way. Iowa Code § 468.109; Chi. & N.W. Transp. Co., 880 F.Supp. at 1295. The railroad company is then directed

to construct such improvement according to said plans and specifications at the place designated, across its right-of-way, and to build and construct or rebuild and reconstruct the necessary culvert or bridge where any ditch, drain, or watercourse crosses its right of way, so as not to obstruct, impede, or interfere with the free flow of the water therein, within thirty days from the time of the service of such notice upon it.

Iowa Code § 468.109. The construction must be done “according to the plans and specifications prepared by the engineer” of the drainage district...