Old R.R. Bed, LLC v. Marcus

• Decision Date: 07 March 2014
• Docket Number: No. 12–341.,12–341.
• Citation: 2014 VT 23,95 A.3d 400
• Court: Vermont Supreme Court
• Parties: OLD RAILROAD BED, LLC v. Ronald A. MARCUS, Kristi Marcus, et al.

95 A.3d 400

2014 VT 23

OLD RAILROAD BED, LLC

v.Ronald A. MARCUS, Kristi Marcus, et al.

No. 12–341.

Supreme Court of Vermont.

March 7, 2014.

Robert E. Woolmington of Witten, Woolmington & Campbell, P.C., Manchester Center, for Plaintiff–Appellee.

Allan R. Keyes and James B. Anderson of Ryan, Smith & Carbine, Ltd., Rutland, for Defendants–Appellants.

Present: REIBER, C.J., DOOLEY, SKOGLUND, BURGESS and ROBINSON, JJ.

REIBER, C.J.

¶ 1. This is a dispute over title to an old railroad bed adjacent to defendants' property that plaintiff purchased with the goal of creating a public recreational trail. Defendants challenge the trial court's determination that plaintiff acquired a valid fee simple interest in the property, asserting that title either reverted to them when the railroad abandoned the line or vested in them through adverse possession. We affirm.

¶ 2. The background to this dispute may be succinctly summarized; additional material facts will be set forth in the discussion which follows. The property in question, located in the Town of Manchester, consists of a strip of land approximately fifty to eighty-two feet wide, comprised of several adjoining parcels conveyed by three separate warranty deeds in December 1902 from defendants' predecessors-in-interest to the Manchester, Dorset & Granville Railroad Company (MD & G). MD & G was incorporated in June 1902, tracks were laid in 1903, and the railroad began operating in 1904, chiefly for the transportation of marble. In 1913, the Vermont Marble Company acquired MD & G's stock. Railroad operations were suspended in 1918, revived briefly in 1924, and ceased altogether in 1934, when the tracks were removed from the railroad bed. Two years later, MD & G conveyed all of its remaining assets to Vermont Marble, and filed articles of dissolution. In 1992, Vermont Marble merged with OMYA, Inc., which became title holder of the railroad bed property. In 2009, plaintiff Old Railroad Bed, LLC purchased the property from OMYA for $39,614, for the purpose of creating a public recreational trail.

¶ 3. As noted, defendants own property adjacent to the old railroad bed and are the successors-in-interest of the original grantors of the property to MD & G. Defendants Ronald and Kristi Marcus own the northernmost property, defendants Bradford West, Vernon West, and Cathy Cushing own property to the south of the Marcuses, and defendants Donald and Eleanor Dykes own property to the south of the West/Cushing parcel. When the Marcuses objected to plaintiff's right to pursue its trail plan, plaintiff filed an ejectment action against them, seeking a writ of possession and injunction to prevent them from interfering with plaintiff's rights. The other adjacent property owners were subsequently granted leave to intervene in the lawsuit as co-defendants (hereafter collectively “defendants”).

¶ 4. Defendants ultimately filed two motions for summary judgment, one based on a claim that MD & G had acquired only an easement in the property, which reverted to the original grantors and their heirs and assigns, i.e., defendants, when the line was abandoned, and the other on a theory of adverse possession. In November 2011, the trial court issued a written decision, resolving the first claim in favor of plaintiff. The court concluded that each of the three original deeds on its face “convey[ed] a fee simple interest to MD & G”; that a location survey by the railroad company referenced in each of the deeds and later recorded did not effectively convert the conveyances into takings by condemnation; ¹ and that the statutory scheme in effect at the time did not preclude the railroad from obtaining a fee simple interest through a mutually agreed transfer of title for consideration.

¶ 5. In an order issued the following month, the trial court denied defendants' motion for summary judgment on the adverse possession claim, finding that genuine issues of material fact remained in dispute. In July 2012, following a two-day court trial, the court issued a thirty-two page decision rejecting the claim on its merits, and thereafter entered a final judgment in favor of plaintiff. This appeal followed.

I.

¶ 6. Defendants do not challenge the trial court's finding that each of the deeds conveyed a fee simple interest to MD & G. They contend, nevertheless, that MD & G acquired at most an easement in the properties which reverted to the grantors and their heirs and assigns when the line was abandoned. As below, defendants advance two arguments to support the claim. First, they cite settled law that a railroad acquiring property by condemnation receives only an easement interest that reverts to the grantor upon abandonment. Dessureau v. Maurice Mem'ls, Inc., 132 Vt. 350, 351, 318 A.2d 652, 653 (1974). While acknowledging that MD & G did not acquire the properties through formal eminent domain proceedings, defendants maintain that because the land records reveal the location survey was recorded before the deed, they were obtained under “threat of condemnation” and therefore subject to the same common-law limitation requiring reversion upon abandonment.²

¶ 7. Defendants place principal reliance on Preseault v. United States, 100 F.3d 1525 (Fed.Cir.1996), a Federal Circuit court decision involving a takings claim arising from an attempted conversion of an abandoned railroad line to a recreational trail in Burlington, Vermont. The record there showed that, in 1899, the Rutland–Canadian Railroad obtained three parcels for a railroad line, two (parcels A & B) by eminent domain pursuant to a commissioner's award of damages, and a third parcel (parcel C)—owned by the plaintiffs' predecessor-in-interest—by warranty deed conveying a fee simple interest. Id. at 1531–34. Noting that the deed to parcel C “was given following survey and location” of the line by the railroad company pursuant to the statutory takings procedure and that “the A & B parcels unquestionably involved conveyances of easements [by condemnation] and not fee simple estates,” the court concluded that “[o]n balance it would seem that ... the proceeding retained its eminent domain flavor” and the railroad thus acquired only an easement in all three parcels. Id. at 1536–37.³

¶ 8. To the extent that the federal court relied on the location survey, together with all of the other surrounding circumstances, as evidentiary support for finding that the third parcel was effectively taken by eminent domain, Preseault appears to be unexceptional. To the extent that, as defendants here argue, Preseault holds that a location survey automatically converts a subsequent fee-simple conveyance into an easement, we know of no law in Vermont or elsewhere to support such a claim. See Gregory v. United States, 101 Fed.Cl. 203, 210 (2011) (rejecting claim based on Preseault that fee-simple deed to railroad could convey only easement following survey and location, observing that there was “no [such] rule in Mississippi”); Miller v. United States, 67 Fed.Cl. 542, 545 (2005) (rejecting Preseault-based argument that fee-simple deed to railroad following survey took “on the character of a condemnation proceeding,” noting the absence of any “Missouri law that would incline us to reach a similar conclusion, permitting us to ignore the deed”).

¶ 9. The principal Vermont decision on which Preseault relied, Troy & Boston R.R. v. Potter, 42 Vt. 265 (1869), was a trespass action by a railroad for damages caused when the defendant, an adjacent landowner and the party from whom the railroad had acquired the line by eminent domain, entered the right-of-way to remove grass. The defendant claimed that the railroad had never acquired a valid interest in the land because it failed to record its location survey in the town clerk's office, as required by the company's legislative charter. Id. at 271. This Court rejected the claim, concluding that the survey and location of the road were sufficient to effectuate the taking without the recording, and therefore that defendant could not “take advantage of the omission by the Company in these respects.” Id. at 272. The issue presented here—the effect of a survey and location on a subsequent fee-simple interest deed to a railroad—was not raised in Troy, and the Court did not address it.

¶ 10. The other Vermont decision cited by the federal court, Hill v. Western Vt. R.R., 32 Vt. 68 (1859), raised the question of whether a creditor could place a lien upon certain property acquired by the defendant railroad by contract, and the Court interpreted the contract to convey only an easement not subject to levy. Although in its lengthy discussion of railroad law the Court observed that, whether a railroad takes by purchase or condemnation, “the proceeding is, in some sense, compulsory,” it did not purport to hold that a grantor may not convey, nor a railroad acquire, a fee interest. Id. at 75. Indeed, the Court expressly limited its holding, stating that it did “not intend to say that if [the railroad] purchased and took the conveyance of the fee of land for [railroad] purposes, they could not hold it or convey it.” Id. at 74. Thus, neither of the Vermont decisions cited in Preseault stands for the ultimate proposition that a location survey precludes a subsequent fee-simple conveyance to a railroad.

¶ 11. The circuit court in Preseault also indicated that it had relied on the analysis of the lower federal claims court, which relied in turn on two additional turn-of-the-century decisions. See Preseault v. United States, 24 Cl.Ct. 818, 830 (Fed.Cl.1992). The first, Williams v. Odessa & M. Ry., 44 A. 821, 836 (Del.Ch.1895), simply observed, in the course of determining a railroad's authority to relocate a line after the initial location survey, that a “location is not a mere right; it is an act.” The court did not address any question concerning the effect of a railroad survey on a subsequent fee-simple deed. The second, Chesapeake & O. Ry. v....