Sfpp, L.P. v. Burlington Northern

• Decision Date: 05 August 2004
• Docket Number: No. F043498.,F043498.
• Citation: 17 Cal.Rptr.3d 96,121 Cal.App.4th 452
• Parties: SFPP, L.P., Plaintiff, Cross-defendant and Appellant; Kinder-Morgan, Inc., Cross-defendant and Appellant, v. The BURLINGTON NORTHERN & SANTA FE RAILWAY CO., Defendant, Cross-complainant and Respondent.
• Court: California Court of Appeals Court of Appeals

17 Cal.Rptr.3d 96

121 Cal.App.4th 452

SFPP, L.P., Plaintiff, Cross-defendant and Appellant Kinder-Morgan, Inc., Cross-defendant and Appellant, v. The BURLINGTON NORTHERN & SANTA FE RAILWAY CO., Defendant, Cross-complainant and Respondent.

No. F043498.

Court of Appeal, Fifth District.

August 5, 2004.

Manatt, Phelps & Phillips, Mark D. Johnson, Costa Mesa, and Matthew S. Urbach, Los Angeles, for Plaintiff, Cross-defendants and Appellants.

Gresham Savage Nolan & Tilden, John C. Nolan, San Bernardino, and Marlene Allen for Defendant, Cross-complainant and Respondent.

OPINION

DAWSON, J.

A railroad and a pipeline company had a dispute over whether a pipeline existing in the railroad's right-of-way should be moved before the railroad built a second track in the right-of-way. The pipeline company refused to move the pipeline and filed a lawsuit to condemn a five-foot easement around the existing location of the pipeline. The parties agreed to employ a retired judge to decide the case as a referee pursuant to Code of Civil Procedure sections 638 and 644, subdivision (a).¹ The referee filed a written statement of decision holding that the proposed easement was not located in the manner most compatible with the greatest public good as required by section 1240.030, subdivision (b) and, accordingly, ruled in favor of the railroad.

The pipeline company appeals, claiming that the referee committed legal errors in applying the condemnation statute and that the decision was not supported by substantial evidence. We conclude that the doctrine of implied findings derived from section 634 is applicable to the statement of decision, that the referee correctly applied section 1240.030, and that the express and implied findings of fact are supported by substantial evidence. Thus, the judgment entered below is affirmed.

FACTS

Respondent Burlington Northern and Santa Fe Railway Company (BNSF) or its predecessor in interest has maintained and operated a railroad main line right-of-way though Central California for over 100 years.

Appellants SFPP, L.P., a Delaware limited partnership (SFPP), and its affiliate Kinder-Morgan, Inc. (Kinder-Morgan), a nationwide petroleum pipeline operator, have a petroleum terminal with storage tanks located in southern Fresno, immediately to the east of BNSF's right-of-way. The terminal is serviced by a pipeline distribution system operated by SFPP. The distribution system includes pipeline located in BNSF's right-of-way.

The facts that led to the dispute between SFPP and BNSF were set forth in the statement of decision as follows:

"[P]ursuant to various licensing agreements between the parties' predecessors in interest, a portion of the pipeline distribution system running between Concord and Bakersfield that SFPP operates and maintains is located within BNSF's right-of-way. This pipeline carries gasoline, jet fuel, and diesel to a distribution center in Fresno; this center is the major distribution center in the greater Fresno area. The pipeline also transports jet fuel to the Lemoore Naval Air Station, and is the only such pipeline servicing the Naval Air Station. BNSF, or its predecessor in interest, has maintained and operated a railroad main line right-of-way through Central California, extending from Bakersfield in the south to Port Chicago in the San Francisco Bay Area in the north, for over one hundred years. Originally the railroad right-of-way was exclusively single track but, as rail traffic increased, several areas expanded to double track. By federal law, railroads are required to make their rights-of-way available for use by AMTRAK, which provides long distance and commuter rail passenger service; in California, the State's Department of Transportation [CALTRANS] has entered into various agreements with AMTRAK to provide additional equipment and costs, enabling AMTRAK to increase passenger rail services and thereby reducing highway congestion and the need to build additional highways.

"In an effort to increase on-time performance, reduce travel times, and increase ridership, CALTRANS had BNSF conduct a study to determine what areas of train traffic were most impacted by congestion. That study concluded that converting an approximate 8.4 mile portion of BNSF's Calwa to Bowles right-of-way to double track would greatly reduce congestion and passenger travel time. Thereafter in or about September 2000 CALTRANS and BNSF entered into an agreement to expand the railroad tracks in this location.

"Once BNSF determined that it would be constructing a second track in this location, it notified all utilities utilizing the right-of-way of the impending construction and requested that the utilities, pursuant to their various licenses, move their pipes, wires, etc. so as not to interfere with the proposed second track. All utilities except SFPP agreed to do so and have now relocated their equipment. After some correspondence and discussion between the parties, SFPP refused to pay to relocate any portion of its pipeline, alleging that there was no legal or safety issue basis for doing so.

"The licensing agreements under which SFPP operated its pipeline in BNSF's right-of-way provided that:

"`4. [SFPP] shall, at its own cost and subject to the supervision and control of [BNSF], locate, construct and maintain the PIPELINE in such a manner and of such material that it will not at any time be a source of danger to or interference with the present or future tracks, roadbed and property of [BNSF], or the safe operation of its railroad. [¶] ... [¶]

"`7. If at any time [SFPP] shall fail or refuse to comply with or carry out any of the covenants herein contained [BNSF] may at its election forthwith revoke this License.

"`8. THIS LICENSE is given by [BNSF] and accepted by [SFPP] upon the express condition that the same may be terminated at any time by either party upon ten (10) days' notice in writing to be served upon the other party, stating therein the date that such termination shall take place, and that upon the termination of this License in this or any other manner herein provided, [SFPP], upon demand of [BNSF], shall abandon the use of the PIPELINE and remove the same and restore the right of way and tracks of [BNSF] to the same condition in which they were prior to the placing of the PIPELINE thereunder. In case [SFPP] shall fail to restore [BNSF's] premises as aforesaid within ten (10) days after the effective date of termination, [BNSF] may proceed with such work at the expense of [SFPP]. No termination hereof shall release [SFPP] from any liability or obligation hereunder, whether of indemnity or otherwise, resulting from any acts, omissions or events happening prior to the date the PIPELINE is removed and the right of way and track of [BNSF] restored as provided above.'

"Exhibits 6, 7 and 8.

"Upon SFPP's refusal to relocate the pipeline, BNSF sent a letter, dated October 24, 2001, terminating the license agreements, citing both paragraphs 7 and 8 of the licensing agreements, and demanding that SFPP remove the pipeline and restore the right-of-way and tracks to their previous condition. Exhibit 222. On November 14, 2001, SFPP filed a Complaint in Eminent Domain in the instant action, seeking to condemn a five foot wide easement for purposes of operating and maintaining the pipeline. In response, BNSF filed a Cross-Complaint for Declaratory Relief, seeking a declaration that SFPP had no on-going rights to maintain its pipeline within the right-of-way and that BNSF was entitled to move the pipeline and charge SFPP for the cost of that move."

One of the pipelines servicing SFPP's Fresno terminal is 12 inches in diameter and approaches BNSF's right-of-way from the northwest as it runs parallel to South Golden State Boulevard (12" Line Section 60). The 12" Line Section 60 enters BNSF's right-of-way in the area where the right-of-way intersects with South Golden State Boulevard and runs approximately 5,787 feet south where it leaves the right-of-way and enters SFPP's Fresno terminal. Cover over the 12" Line Section 60 varies from three to nine feet deep.

The pipeline used in delivering jet fuel to the Lemoore Naval Air Station is a multidimensional line (Line Section 119) which leaves the Fresno terminal and runs south on the east side of the right-of-way before turning west, crossing under the track, and exiting the right-of-way. The length of Line Section 119 occupying the right-of-way is approximately 737 feet. Cover over the Line Section 119 varies from seven to 10 feet deep.

BNSF intends to install the second track to the east of its existing track. To make room for the second track, BNSF requested that SFPP move its pipelines to the other side (west) of the existing track. BNSF intends the centerline of the proposed second track to be a minimum of 25 feet from the centerline of the existing track because that distance would allow it to perform maintenance on either line without closing both tracks. Also, BNSF asserts that the second track must be placed to the east of the existing track because the existing track is located near the western edge of two underpasses, and placing the second track to the west of the existing track would require reconstruction of the underpasses at the cost of several million dollars.

SFPP does not dispute this assertion regarding the inadequacy of space for another track on the west side of the existing track, but contends that the proposed track can be added in its intended location without moving the pipelines from their current locations.

A report prepared for CALTRANS by the Parsons Transportation Group states that the 12" Line Section 60 currently is located from eight to 19 feet from the centerline of the proposed second track. The report concludes that locating the pipeline 25 feet from the track would lessen the risk of pipeline rupture and avoid the need to close the proposed track for pipeline maintenance. The report bases its...