Pinelawn Cemetery v. Coastal Distrib., LLC, 2010 NY Slip Op 04981 (N.Y. App. Div. 6/8/2010), 2009-02839.

• Decision Date: 08 June 2010
• Docket Number: 2009-02839.
• Citation: 2010 NY Slip Op 04981
• Parties: PINELAWN CEMETERY, appellant, v. COASTAL DISTRIBUTION, LLC, ET AL., respondents.
• Court: New York Supreme Court — Appellate Division

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2010 NY Slip Op 04981

PINELAWN CEMETERY, appellant, v. COASTAL DISTRIBUTION, LLC, ET AL., respondents.

2009-02839.

Appellate Division of the Supreme Court of New York, Second Department.

Decided June 8, 2010.

In an action, inter alia, for a judgment declaring that a certain lease dated August 30, 1904, was terminated, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Costello, J.), dated February 19, 2009, as, upon renewal, adhered to the original determination in an order dated January 8, 2008, granting the separate motions of the defendants Coastal Distribution, LLC, and New York & Atlantic Railway for summary judgment dismissing the complaint insofar as asserted against each of them and, in effect, directing the dismissal of the complaint against all of the defendants on the ground that its claims were preempted by that provision of the Interstate Commerce Commission Termination Act which grants exclusive jurisdiction to the United States Surface Transportation Board to regulate the abandonment of railroads.

Mark A. Cuthbertson, Huntington, N.Y. (Jessica P. Driscoll of counsel), for appellant.

John F. McHugh, New York, N.Y., for respondent Coastal Distribution, LLC.

Jay Safar, Central Islip, N.Y., for respondents Metropolitan Transportation Authority and Long Island Rail Road Company.

Before: Mark C. Dillon, J.P., Ruth C. Balkin, L. Priscilla Hall, Plummer E. Lott, JJ.

DECISION & ORDER

ORDERED that the order is reversed insofar as appealed from, on the law, with one bill of costs payable by the respondents appearing separately and filing separate briefs, upon renewal, the order dated January 8, 2008, is vacated, the motions of the defendants Coastal Distribution, LLC, and New York & Atlantic Railway for summary judgment dismissing the complaint insofar as asserted against them are denied, and the matter is remitted to the Supreme Court, Suffolk County, for the imposition of a stay of any further proceedings in this action pending resolution by the United States Surface Transportation Board of the issue of whether the subject railroad has been abandoned.

In 1904 and 1905, the plaintiff, Pinelawn Cemetery (hereinafter Pinelawn), leased two parcels of real property to the defendant Long Island Rail Road (hereinafter the LIRR) for a term of 99 years, with an option to renew each lease for a second term of 99 years, provided that the LIRR exercised that option in writing at least three months prior to the termination of each lease. The LIRR constructed two railroad tracks on the two parcels, which are collectively referred to as the Farmingdale Yard. Although it is undisputed that the LIRR properly renewed the 1905 lease, the primary issue in this case is whether the LIRR properly renewed the 1904 lease.

In 1996 the LIRR transferred its freight operations, including the facilities at the Farmingdale Yard, to the Southern Empire State Railroad Company, which subsequently changed its name to the defendant New York & Atlantic Railway (hereinafter NYAR). In 2002 NYAR, a licensed rail carrier, subleased the Farmingdale Yard to the defendant Coastal Distribution, LLC (hereinafter Coastal), which uses the site as a transloading facility to weigh, sort, and load construction and demolition debris onto railroad cars that are bound for Ohio.

In March 2004 the Town of Babylon issued a stop work order, which prohibited Coastal from completing the construction of a three-sided shed at the Farmingdale Yard. In August 2004 Coastal and NYAR replaced the sublease with a transload facility operations agreement, whereby NYAR engaged Coastal as its "contractor" to operate the transloading facility. Coastal applied to the Town's Zoning Board of Appeals (hereinafter the ZBA) to annul the stop work order on the ground that it was exempt from the local zoning laws because it was governed by the Interstate Commerce Commission Termination Act (49 USC § 10101, et seq.) (hereinafter the ICCTA), which grants exclusive jurisdiction upon the United States Surface Transportation Board (hereinafter the STB) over most railroad matters. In April 2005 the ZBA upheld the stop work order on the ground that Coastal's activities did not constitute transportation by a rail carrier within the meaning of the ICCTA.

In a related federal action, the United States District Court for the Eastern District of New York granted Coastal's and NYAR's request to preliminarily enjoin the Town from enforcing the stop work order. On appeal, the United States Court of Appeals for the Second Circuit modified the injunction to permit the parties to seek a declaratory order from the STB on the scope of its jurisdiction (see Coastal Distrib., LLC v Town of Babylon, 2006 US Dist Lexis 8400 [ED NY 2006], affd in part and mod in part, 2007 US App Lexis 3042 [2d Cir 2007]). In a decision dated January 31, 2008, the STB determined that it did not have jurisdiction because Coastal's transloading activities at the Farmingdale Yard did not constitute transportation by a rail carrier (see Town of Babylon and Pinelawn Cemetery, STB Fin. Dkt. No. 35057 [Jan. 31, 2008], 2008 WL 275697).

In April 2004 Pinelawn commenced the present action in the Supreme Court, Suffolk County, against Coastal, NYAR, the LIRR, and its parent...