Pennsylvania Power & Light Co. v. Maritime Management, Inc.

• Decision Date: 02 June 1997
• Citation: 693 A.2d 592
• Court: Pennsylvania Superior Court
• Parties: PENNSYLVANIA POWER & LIGHT COMPANY, Appellee, v. MARITIME MANAGEMENT, INC., Appellant.

Page 592

693 A.2d 592

PENNSYLVANIA POWER & LIGHT COMPANY, Appellee, v. MARITIME MANAGEMENT, INC., Appellant.

Superior Court of Pennsylvania.

Argued June 18, 1996.

Filed March 20, 1997.

Reargument Denied June 2, 1997.

Thomas A. Brown, Milford, for appellant.

Timothy G. Lenahan, Scranton, for appellee.

Before KELLY, EAKIN and OLSZEWSKI, JJ.

EAKIN, Judge:

Maritime Management, Inc. ("Maritime") appeals from the order of the Pike County Court of Common Pleas entered December 5, 1995 permanently enjoining Maritime from selling or giving away alcoholic beverages to customers aboard its seventy-five passenger cruise ship under a validly issued liquor license. Ironically, whether the passengers on the "Spirit of Paupack" may purchase a cocktail or wine with their dinner in 1996 and beyond turns on the degree to which the Wallenpaupack Creek was involved in the commerce of northeastern Pennsylvania before being subsumed by the creation of Lake Wallenpaupack in 1927.

Lake Wallenpaupack is thirteen miles long, approximately one mile wide, and up to sixty feet deep. It was created in 1927 when appellee, Pennsylvania Power & Light ("PP & L") dammed the Wallenpaupack Creek in order to generate hydroelectric power. The creek was impounded pursuant to a license issued by the Federal Energy Regulatory Commission ("FERC"), which, by its terms, requires PP & L to allow public access to the lake.

Maritime owns and operates the "Spirit of Paupack," a fifty foot ship that sails the waters of the lake as part of that public access. The ship is a commercial vessel and has been providing dinner and sightseeing cruises since 1987. In 1989, Maritime sought a license from the Pennsylvania Liquor Control Board ("LCB") to sell alcohol aboard the ship. PP & L intervened in the application process and opposed the issuance of the license. In 1993, the Commonwealth Court ordered the LCB to issue a liquor license to Maritime. See Maritime Management, Inc. v. Liquor Control Board, 153 Pa. Commw. 375, 621 A.2d 1097 (1993).

Shortly after the license was issued, PP & L, as "owner" of Lake Wallenpaupack, issued a "Public Lake Use Policy" that prohibited the sale or promotional distribution of alcoholic beverages on the lake. When Maritime refused to abide by that Policy, PP & L filed a Complaint in Equity in the Pike County Court of Common Pleas seeking to enjoin Maritime from selling alcoholic beverages aboard the ship. After a hearing, the injunction was granted in a thoughtful and comprehensive opinion by the Honorable Harold A. Thompson. This appeal follows.

This case turns upon whether PP & L owns Lake Wallenpaupack; if so, it may enforce its policy. If not, Maritime may continue to serve alcoholic beverages pursuant to its validly issued license. The trial court determined that there was sufficient competent evidence to determine that PP & L is the owner of Lake Wallenpaupack. Maritime alleges the contrary, and thus contends PP & L may not enforce an injunction upon water it does not own. ¹

When reviewing the decision of an equity court, the chancellor's findings of fact will stand unless there has been an abuse of discretion, a capricious disregard of evidence, a lack of evidentiary support on the record for the findings, or an error of law. Hahalyak v. A. Frost, Inc., 444 Pa.Super. 494, 502, 664 A.2d 545, 549 (1995) (citations omitted).

The equity court used a two-part analysis in finding that PP & L owned the lake. First, the court determined that PP & L owned the land under the lake; if it did not, it could not assert ownership of the lake itself. The owner in fee of lands beneath water has the right to control activities on the surface. Smoulter v. Boyd, 209 Pa. 146, 58 A. 144 (1904). The court found that current deeds and the predecessors thereto established that the bed of Wallenpaupack Creek and the now submerged adjacent lands are in PP & L's chain of title; the record supports the court's finding.

Second, the court found that the lake was not navigable, according to the legal meaning of the term. If a body of water is navigable, it is publicly owned and may only be regulated by the Commonwealth; ownership of the land beneath would not afford any right superior to that of the public to use the waterway. Conversely, if it is non-navigable, it is privately owned by those who own the lands beneath the water's surface and the lands abutting it, and may be regulated by them. Lakeside Park Co. v. Forsmark, 396 Pa. 389, 153 A.2d 486 (1959); Conneaut Lake Ice Co. v. Quigley, 225 Pa. 605, 74 A. 648 (1909).

Using Maritime's theory, Lake Wallenpaupack is merely a larger version of Wallenpaupack Creek; if either is or was navigable in fact, Maritime may prevail. That is, if the public had a right to use the creek, that right cannot be divested by the mere enlargement of the waterway through impoundment, or by the purchase of all submerged lands. We will examine both manifestations of the Wallenpaupack.

In Conneaut, the owners of an ice company contended that as record owners of the lands under, adjoining, and surrounding Lake Conneaut, they had the exclusive right to control and navigate the lake. The parties whom the company sought to exclude from the lake countered that the lake was part of the public waters of the Commonwealth and as such they were entitled to use and navigate it. Conneaut, 225 Pa. at 608-09, 74 A. at 649-50. Our Supreme Court first noted that an Act passed in 1798 specifically designated the lake and the creek leading into it as public streams and highways for the passage of boats and rafts. Therefore, the Court observed that "without regard to the question of navigability in fact, we have the legislative declaration that in the view of the law, Conneaut Lake is to be considered a public body of water, subject to the right of navigation by the public." Id. at 610, 74 A. at 650.

Maritime suggests a similar statute controls here: the Act of February 4, 1808 establishing Lake Wallenpaupack as navigable at law:

... Wallenpaupack Creek ... is declared a public highway for the passage of rafts, boats, and other vessels; and it shall be lawful for the inhabitants, and others, desirous of using the navigation of said creek, to remove all natural and artificial obstructions ...

However, the analysis in Conneaut did not end with the statute. The Court noted that such a legislative pronouncement would be essentially hortatory, and ineffective as against private property, since it would comprise a taking without compensation. The Court therefore went beyond the legislative enactment, to determine whether the waterway was navigable in fact, stating that "[i]f it is navigable in fact, then it is to be so considered in law." Id. at 610, 74 A. at 650. The issue of whether the legislature may statutorily render a body of water navigable was addressed in Commonwealth v. Foster, 36 Pa.Super. 433 (1908). ² This court held:

If a stream is not in fact navigable it cannot be made so by the mere passage of an act of assembly. 'If the stream is not actually navigable, so that there is no public right of way therein, a declaration by the legislature that it shall be regarded as navigable is a taking of public property for public use, and unless compensation is made the statute will be in conflict with the constitutional provision requiring compensation in such cases.'

Id. at 435 (quoting Barclay Railroad & Coal Co. v. Ingham, 36 Pa. 194).

Therefore, even though the Act of 1808 considered the Wallenpaupack Creek navigable "in the view of the law," the determinative question is whether Maritime has established that the Wallenpaupack Creek was navigable in fact; it is only the latter that gave the public the right to use it free of private regulation. If navigable in fact, it is so in law; it is public and no such statute need be considered. If not navigable in fact, it is not so in law and no statute can make it public, for the owners had title to the center of the waterway that cannot be divested by mere legislation. Smoulter v. Boyd, supra.

The Court in Conneaut stated the test for navigability this way:

The use to which the body of water may be put, is the true criterion. If the body of water is sufficiently large and deep to serve the public in providing transportation to any considerable extent upon its bosom, it is sufficient to give the public an easement therein, for the purpose of transportation and commercial intercourse.

Conneaut, 225 Pa. at 610, 74 A. at 650.

In Forsmark, supra, our Supreme Court stated that the rule for determining the navigability of rivers is whether they are " 'used, or susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.' " Forsmark, 396 Pa. at 391-92, 153 A.2d at 487 (quoting Cleveland & Pittsburgh Railroad Co. v. Pittsburgh Coal Co., 317 Pa. 395, 397, 176 A. 7, 9 (1935)). The Court went on to state:

We think that the concept of navigability should not be limited alone by lake or river, or by commercial use; or by the size of the water or its capacity to float a boat. Rather it should depend upon whether the water is used or usable as a broad highroad for commerce and the transport in quantity of goods and people, which is the rule naturally applicable to rivers and to large lakes, or whether with all of the mentioned factors counted in the water remains a local focus of attraction, which is the rule sensibly applicable to shallow streams and to small lakes and ponds. The basic difference is that between a trade-route [sic] and a point of interest. The first is a public use and the second private.

Id. at 396, 153 A.2d at 489 (emphasis added).

Over PP & L's objection, evidence regarding the Wallenpaupack Creek, in the form of a passage from History of Wayne, Pike and Monroe Counties, Pennsylvania, published in 1886 by Alfred Matthews, was read into the...