Keokuk Junction Ry. Co. v. IES Industries, Inc., No. 99-340.

• Court: United States State Supreme Court of Iowa
• Writing for the Court: SNELL, Justice.
• Citation: 618 N.W.2d 352
• Parties: KEOKUK JUNCTION RAILWAY CO., an Iowa Corporation, Appellant, v. IES INDUSTRIES, INC., a Corporation, and IES Utilities, Inc., Appellees.
• Docket Number: No. 99-340.
• Decision Date: 11 October 2000

618 N.W.2d 352

KEOKUK JUNCTION RAILWAY CO., an Iowa Corporation, Appellant,
v.
IES INDUSTRIES, INC., a Corporation, and IES Utilities, Inc., Appellees

No. 99-340.

Supreme Court of Iowa.

October 11, 2000.

618 N.W.2d 353

Bruce C. McDonald of McDonald Law Office, Keokuk, and Daniel A. LaKemper of Keokuk Junction Railway Co., Keokuk, for appellant

Gerald D. Goddard of Cray, Goddard, Miller & Taylor, L.L.P., Burlington, for appellees.

Considered en banc.

SNELL, Justice.

This is an appeal from the Iowa District Court in a declaratory judgment action. Ruling on cross-motions for summary judgment, the court granted the motion in favor of defendant IES Industries, Incorporated.

618 N.W.2d 354

The district court was persuaded that a public highway purposes easement included within it the right of a private company to install electric utility poles. The court also found that the plaintiff landowner did not have standing to challenge the city's permission to the utility company enabling it to erect its lines on the plaintiff's land subject to the easement. We granted review and now reverse and remand

I. Background Facts and Proceedings

This case involves the scope of an easement secured by the city of Keokuk from Keokuk Junction Railway Company (KJRY). In 1993, through eminent domain proceedings, Keokuk condemned a portion of KJRY's land to build a public street, Twin Rivers Drive, above KJRY's railroad tracks. In 1997, Keokuk allowed IES to build electric power lines within the city's right of way on KJRY's land. Keokuk had given a letter to IES stating that it had no objection to this use of the city's easement. IES is a private corporation existing for profit. It is, however, considered a public utility under Iowa law. Iowa Code § 476.1 (1999); see 27A Am.Jur.2d Energy § 194 (1996) ("[A] private corporation engaged in furnishing electricity to a municipality or its inhabitants is manifestly a `public service' or `public utility'...."). This fact was stipulated to by the parties.

KJRY, the present appellant, immediately brought this lawsuit for declaratory judgment claiming that the construction of power lines by IES constitutes an additional servitude for which KJRY is entitled to compensation. IES maintains that the easement held by the city encompasses this type of activity and, as such, erection of power lines falls within the scope of the original easement.

The easement obtained by the city of Keokuk from KJRY is a public purpose easement which specifically created a right of way for construction, maintenance, and other highway purposes of the portion of Twin Rivers Drive that passes over KJRY's land. The purpose stated by the city to KJRY was as follows:

The City of Keokuk, Lee County, Iowa, desires the rights specified in the lands sought to be condemned for road right of way and/or obtaining and removing gravel and/or other suitable material for the construction, improvement and/or maintenance of the new street to be constructed, known as Twin Rivers Drive, within the City of Keokuk, Iowa.

The city also proclaimed that the condemnation would create a "permanent right of way easement for construction purposes and highway purposes...." In short, the easement taken by the city was a public use easement for two purposes: (1) construction and maintenance of Twin Rivers Drive and (2) highway purposes.

Appellant, KJRY would have us look only at the first purpose to determine the scope is limited to construction and removal of materials for maintenance. However, the second provision broadens the scope of the easement for highway purposes as well. It is the scope of "highway purposes" that is at issue in determining whether utility lines fall within the scope of the original easement.

Ruling on cross-motions for summary judgment, the district court sustained the motion for IES. The court based its decision on the conclusion that the "use of the electric transmission lines constitutes an incidental use or incidental easement rather than a burden which is in addition to the street right-of-way." The district court was specifically persuaded that the power lines in question were "owned and operated by a public utility which serve[d] the public generally, and that the primary easement in this case [was] a municipality's city street."

Additionally, the court held that KJRY lacked standing to challenge whether Keokuk's letter to IES gave permission to build the lines within its easement because KJRY was not a party to whatever transpired between the city and IES. KJRY

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objects to this conclusion and claims the city never actually gave IES permission but merely stated it had "no objection." The city's letter made it clear to IES that Keokuk did not purport to give IES actual authority to build the lines because it was unsure if it had the right to convey such permission. Accordingly, KJRY posits that there was no legal relationship between Keokuk and IES and, therefore, KJRY does not lack standing

In this appeal, KJRY challenges the district court's decision granting summary judgment in favor of IES and finding that KJRY lacked standing to challenge the city's letter. Further, KJRY asserts its own motion for summary judgment should have been granted because the erection of electric power lines resulted in an additional servitude for which KJRY should be compensated.

II. Scope and Standard of Review

This action was brought in equity. Generally, all cases in equity are reviewed de novo. Iowa R.App. P. 4. However, the same is not true if the appeal stems from the granting of summary judgment. Baratta v. Polk County Health Servs., 588 N.W.2d 107, 109 (Iowa 1999). Notwithstanding the nature of this equitable action, the court "cannot find facts de novo in an appeal from summary judgment." Moser v. Thorp Sales Corp., 312 N.W.2d 881, 886 (Iowa 1981). Review of a case in equity resulting in summary judgment is for correction of errors at law. Iowa R.App. 4; Baratta, 588 N.W.2d at 109. Therefore, the court reviews the district court's grant of IES's motion for summary judgment and the denial of KJRY's motion for summary judgment for the correction of errors at law.

The court will affirm if the entire record including pleadings, discovery, and affidavits on file show there is no genuine issue of material fact such that the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 237(c). A genuine issue of material fact is lacking when a reasonable jury or judge could conclude that no evidence entitles the nonmoving party to relief. Baratta, 588 N.W.2d at 109; Fees v. Mutual Fire & Auto. Ins. Co., 490 N.W.2d 55, 57 (Iowa 1992). "A fact is `material' only when its determination might affect the outcome of the suit." Baratta, 588 N.W.2d at 109. The grant or denial of a motion for summary judgment is reviewed in the light most favorable to the nonmovant. Mewes v. State Farm Auto. Ins. Co., 530 N.W.2d 718, 721 (Iowa 1995). Under these circumstances, summary judgment should be affirmed if IES has shown no genuine issue of material fact existed such that it is entitled to judgment as a matter of law. See Schumacher Elec., Inc. v. DeBruyn, 604 N.W.2d 39, 41 (Iowa 1999); Marcus v. Young, 538 N.W.2d 285, 287 (Iowa 1995).

III. Issue on Appeal

"An easement is a liberty, privilege, or advantage in land without profit, existing distinct from ownership." Hawk v. Rice, 325 N.W.2d 97, 98 (Iowa 1982). When an easement is created by a municipality through the use of its eminent domain power, it is taken for public benefit. However, "[p]rivate property shall not be taken for public use without just compensation being made, or secured to be made to the owner thereof...." Iowa Const. art. I, § 18. Once a valid easement has been created and the servient landowner justly compensated, the continued use of the easement must not place a greater burden on the servient estate than was contemplated at the time of formation. See Cline v. Richardson, 526 N.W.2d 166, 169 (Iowa App.1994); 39 Am.Jur.2d Highways, Streets, and Bridges § 183 (1998) ("The general rule is that the law will not by construction effect a grant of a greater interest than is essential for the public use.").

The notice of condemnation provided KJRY with the scope of the easement. It immediately stated: "[T]he City

618 N.W.2d 356

of Keokuk, Lee County, Iowa, desires certain rights for permanent right of way easements for construction purposes and for highway purposes." (emphasis added). To determine the scope of the easement, this court compares the language of the easement with the proposed use. Three considerations are: (1) the physical character of past use compared to the proposed use; (2) the purpose of the easement compared to the purpose of the proposed use; and (3) the additional burden imposed on the servient land by the proposed use. Restatement (First) of Property § 478 (1944 & Supp.1993). One thing is certain, a third party cannot be given more rights under the easement than the easement conveys to the holder. See Snyder v. Fort Madison St. Ry., 105 Iowa 284, 288, 75 N.W. 179 (1898).

A. The Five Possibilities

We are mindful that the national treatment of this issue is hardly uniform. The states which have addressed the present question have come to no less than five different conclusions. The possible outcomes are: (1) utility poles are within the highway easement; (2) utility poles are within the highway easement, but only if they are used to furnish power for reasons directly related to travel; (3) utility poles are within the highway easement, but only in relation to urban areas; (4) utility poles are within the highway easement if they (a) are necessary for travel purposes, and (b) the highway is in an urban area; or (5) utility poles are not within the highway easement. R.D. Hursh, Annotation, Electric Light or Power Line in Street or Highway as Additional Servitude, 58 A.L.R.2d 525, 527-28 (1958) [hereinafter...