Schulenburg v. United States

• Decision Date: 23 October 2018
• Docket Number: No. 16-371L,16-371L
• Parties: DELBERT and CATHY SCHULENBURG, et al., Plaintiffs, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

DELBERT and CATHY SCHULENBURG, et al., Plaintiffs, v. THE UNITED STATES, Defendant.

No. 16-371L

United States Court of Federal Claims

October 23, 2018

Summary Judgment; Fifth Amendment Takings; National Trails System Act; 16 U.S.C. § 1247(d); Crossing Rights; Ind. Code § 8-6-14-1.

Mark F. (Thor) Hearne, II, Lindsay S.C. Brinton, Meghan S. Largent, and Stephen S. Davis, Arent Fox, LLP, 112 South Hanley Road, Suite 200, Clayton, MO 63105, for Plaintiffs.

Kristine S. Tardiff, United States Department of Justice Environment & Natural Resources Division, Natural Resources Section, 53 Pleasant Street, 4th Floor, Concord, NH 03301, and Jeffrey H. Wood and Laura Duncan, United States Department of Justice Environment & Natural Resources Division, Natural Resources Section, P.O. Box 7611, Washington, DC 20044-7611, for Defendant.

OPINION AND ORDER

WILLIAMS, Senior Judge.

This rails-to-trails action comes before the Court on Defendant's motion for partial summary judgment.¹ Defendant moved for summary judgment on two issues: whether the Stippshave a right under Indiana law to cross the rail corridor and whether Section 8 of the Trails Act preempts or extinguishes state law crossing rights.

This Court previously determined that Defendant effected a Trails Act taking of the segment of the railroad corridor that crosses the Stipps' property. Schulenburg v. United States, 137 Fed. Cl. 79, 98-99 (2018). The parties are currently engaged in settlement discussions and have requested that the Court resolve the crossing rights issue to define the scope of the taking and facilitate their negotiation of just compensation. Tr. 5, 12-15 (June 20, 2018).

For the reasons stated below, this Court concludes that the Stipps have crossing rights under Indiana law and that the Trails Act taking did not impact those rights. While the valuation of the property in the after condition may present factual issues, the valuation issue is not presently before the Court. Tr. 24-25 (Aug. 23, 2018); Def.'s Reply 2. As such, Defendant's motion for summary judgment is granted.

Background

The Crane-Bedford Railroad Line was initially developed by the Evansville and Richmond Railroad, a company incorporated in Indiana on September 11, 1886. The Evansville and Richmond Railroad acquired the segments of the corridor via six deeds from grantors Ferguson, Cosner, Dussard, Whitted, Johnson, and Cox in the 1880s.

In 1897, the Evansville and Richmond Railroad was acquired by John R. Walsh and renamed the Southern Indiana Railroad. Through a series of railroad reorganizations, mergers, and acquisitions, the line was eventually acquired by Canadian Pacific Railway, and ultimately, in 2006, Indiana Rail Road ("INRD") acquired Canadian Pacific's portion of the line between Chicago, Illinois and Louisville, Kentucky by quitclaim deed. Since INRD's acquisition, traffic on the Crane-Bedford line has decreased, and on December 7, 2009, INRD filed a petition with the STB seeking an exemption under 49 U.S.C. § 10502 from the prior approval requirements of 49 U.S.C. § 10903 to abandon approximately 21.15 miles of its railroad corridor extending across portions of Martin and Lawrence counties in Indiana. INRD determined that the limited amount of overhead traffic hardly justifies the costs of maintaining the Line.

On March 26, 2010, the STB issued a NITU for the Crane-Bedford Line, and provided INRD and the Indiana Trails Fund, Inc. ("ITF") with 180 days to negotiate an agreement for interim trail use and railbanking of the corridor. On September 16, 2011, INRD entered into a License Agreement with ITF, relating to the railroad right-of-way ("Licensing Agreement"). Under the Licensing Agreement, INRD granted ITF the right to occupy the premises for use as a "bicycle-pedestrian-equestrian recreational-transportation trail" while reserving rights regarding the continued and future use of the premises for utility facilities and other structures within the corridor. The Licensing Agreement also reserved for INRD all current and future mineral rights in the premises and required ITF to assure that its use would not interfere with the rights reserved by INRD. In addition, INRD expressly retained the right to reactivate railroad service over all or part of the premises. The subject corridor is presently known as the Milwaukee RoadTransportation Trailway, and portions of the trail have been improved and opened for recreational use.

The Evansville and Richmond Railroad Company originally acquired the Stipp segment of the corridor by two warranty deeds, the Ferguson and Cosner deeds. The Ferguson deed conveyed a fee simple interest to the Railroad under Indiana law. The Court found the Cosner deed conveyed an easement because it specified that the use of the land was for "Rail Road purposes," referred to the corridor as a "right of way," and included the Grantor's waiver of damages due to the Railroad's digging up and removing about four acres of dirt - - damages which the Grantors would not have needed to waive if they had conveyed the land outright to the Railroad in fee simple.

The new recreational trail corridor bisects the Stipps' property, leaving the southern remainder of the property landlocked. During settlement discussions, the landowners retained a local appraiser to determine the value of the property the Government took from these owners, including the Stipp family. The appraiser, David Matthews, is the same appraiser retained in a companion case, McCarty v. United States (No. 14-316), who valued properties in Martin and Lawrence Counties, Indiana. Mr. Matthews used his research and analysis from the McCarty appraisals to derive preliminary appraisal summaries for the subject properties in this action. Based upon Mr. Matthews' appraisal summaries, the parties were able to tentatively resolve the compensation due all of the owners, except the Stipps. Mr. Matthews opined that the Government took 6.35 acres of the Stipps' land for the recreational trail corridor and that "55 acres of tillable land on the river are landlocked by the take." Pls.' Resp., Ex. 2.

Discussion

Summary Judgment Standard

Summary judgment is appropriate where the evidence demonstrates that there is "no genuine dispute as to any material fact and the moving party is entitled to a judgment as a matter of law." RCFC 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). A genuine issue is one that "may reasonably be resolved in favor of either party." Liberty Lobby, 477 U.S. at 250. A fact is material if it "might affect the outcome of the suit . . . ." Id. at 248. The moving party bears the burden of establishing the absence of any genuine issue of material fact, and any doubt over factual issues will be resolved in favor of the non-moving party. Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. Cir. 1987) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) and SRI Int'l v. Matsushita Elec. Corp., 775 F.2d 1107, 1116 (Fed. Cir. 1985)). Once the moving party's burden is met, the onus shifts to the non-movant, who must present sufficient evidence of a material fact in dispute that would allow a reasonable finder of fact to rule in the non-movant's favor. Liberty Lobby, 477 U.S. at 256-57. The evidence need not ultimately be admissible, but mere denials, conclusory statements, or evidence that is merely colorable or not significantly probative will not defeat summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Liberty Lobby, 477 U.S. at 249-50; Mingus Constructors, 812 F.2d at 1390-91. A court does not weigh each side's evidence when considering a motion for summary judgment, but "'inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp, 475 U.S. 574, 587 (1986) (quoting Diebold, 369 U.S. at 655) (omission in original).

Crossing Rights under Indiana Law

Defendant contends that the right to cross a right of way that divides one's land is well established under Indiana law. Plaintiffs disagree and argue that there is uncertainty in Indiana law regarding a landowner's right to cross the land encumbered by the rail-trail corridor and that further litigation would be required to establish their rights. The Court concludes that crossing rights are well established under Indiana law, and that these rights run with the land. As explained by the Indiana Supreme Court,

[i]t is settled law that if one conveys a part of his land in such form as to deprive himself of access to the remainder, unless he goes across the land sold, he has a way of necessity over the portion conveyed. This is because the law presumes an understanding of the parties that the one selling a portion of his land shall have a legal right of access over the part sold to the remainder if he cannot reach it in any other way. This presumption prevails over the ordinary covenants of a warranty deed.

Vandalia R.R. Co. v. Furnas, 106 N.E. 401, 402 (Ind. 1914) (citations omitted); see also Pittsburgh, Cincinnati, Chi. & St. Louis Ry. Co. v. Kearns, 108 N.E. 873, 875 (Ind. Ct. App. 1915) (finding that the right to a crossing "runs with the land").

The Indiana Supreme Court held in Vandalia that, due to this legal presumption regarding access, no express provision in the original deed granting such crossing rights was necessary, but rather that "[t]his privilege to cross the right of way was an easement running with the lands" and therefore passed to the successors of the original grantor to the railroad. Id. at 402. The Indiana Supreme Court noted in Vandalia that the state legislature in the 1800s expressly provided that "notwithstanding the conveyance, the grantor may have a wagon and driveways across such right of way to other lands owned by said grantor, or to a public highway contiguous to the right of way." Id. at 402 (citing Ind. Code Ann. § 5444 (1914)).

As...