Union Pacific R. Co. v. ETHINGTON TRUST

• Decision Date: 10 June 2002
• Docket Number: No. 27177.,27177.
• Citation: 137 Idaho 435,50 P.3d 450
• Parties: UNION PACIFIC RAILROAD COMPANY, Plaintiff-Appellant, v. ETHINGTON FAMILY TRUST, Defendant-Respondent.
• Court: Idaho Supreme Court

50 P.3d 450

137 Idaho 435

UNION PACIFIC RAILROAD COMPANY, Plaintiff-Appellant, v. ETHINGTON FAMILY TRUST, Defendant-Respondent.

No. 27177.

Supreme Court of Idaho, Boise, January 2002 Term.

June 10, 2002.

Rehearing Denied July 15, 2002.

Jim Jones & Associates, Boise, for appellant. Jim Jones argued.

Kenneth F. White, Nampa, for respondent.

SCHROEDER, Justice.

Union Pacific Railroad Company (UP) seeks to quiet title to portions of the Homedale railroad line, which extends from Marsing, Idaho, to the Oregon border, passing through property owned by the Ethington Family Trust (Ethington).

I. FACTUAL BACKGROUND

UP contends that its predecessor in interest, Oregon Short Line Railroad Company (OSL), acquired title to a strip of property in 1911 and 1912, and that part of the strip runs through Ethington's property. UP has quieted title in this land as to everyone but Ethington. It appears that the railroad track was already in existence when OSL got title to the property, because the deeds conveying the property use the "center line of the main track of the South Side Line of the Oregon Short Line railroad" as the landmark in the legal description. UP hypothesizes that OSL had acquired a right of way from the federal government to construct the line before the acquisition of title.

UP sold off parts of the line but began encountering difficulties in getting title insurance. UP initiated several quiet title suits. Ethington appeared and asserted a right to title, claiming an entitlement in a reversionary interest and to a contractual right to purchase the property.

Ethington describes the chain of title from the perspective of the land around the strip, noting that the original owner of 80 acres of the property (the north half of the northeast quarter), Mr. Joseph Patch, owned the property based on a 1907 deed. Patch granted the 80 acres to a Fred Richardson in 1909. In 1915, the U.S. granted Charles McCoard 271 acres. McCoard conveyed a portion of his property in 1911 to OSL, as such:

A strip of land ONE HUNDRED (100) feet wide, being FIFTY (50) feet on each side of the centerline of the main track of the Southside line of the Oregon Short Line railroad as same is now located over and across lot THREE (3) ...

Another parcel originally owned by Patch was conveyed by Patch's heir to Richardson with the same one-hundred-feet-wide right of way described above.

UP moved for summary judgment against Ethington. The district court denied the motion. Following trial, the district court held that Ethington had no contractual right to purchase the strip, and that the deeds had merely conveyed an easement to OSL, UP's predecessor. The court stated that "railroads in Idaho have always been prevented from dealing in real property for any purpose other than for the operation of the railroad." In a judgment entered in February 2001, the court adjudged UP's interest to be merely an easement, and that UP's right of abandonment constituted an extinguishments of the easement and title.

UP moved for relief under I.R.C.P. 60(b) and 59(e), arguing that railroads could own real property for purposes other than the operation of the railroad and that Ethington had established no claim to the strip of property. The court agreed on the issue of Ethington's claim but denied UP's request for a ruling that it held fee title to the strip. The district court entered an amended judgment holding UP's interest to be an easement and striking the ruling that Ethington had an interest in the strip.

UP filed a second motion for relief, claiming that the judgment had quieted title in favor of UP against all potential claimants except Ethington, and that Ethington's lack of ownership interest in the property left the Trust without standing. The court denied the motion, and UP appealed; Ethington did not cross-appeal.

II. THE DISTRICT COURT ERRED IN DETERMINING THAT UNION PACIFIC COULD NOT OWN PROPERTY FOR NON-OPERATING PURPOSES

The district court applied Idaho Code § 62-104, which enumerates powers of railroad corporations, and determined that UP could not own property for non-operating purposes. The district court erred in doing so. Idaho Code § 62-104 was intended as an expansion of a railroad's powers, not a limitation. A review of Idaho's statutory scheme makes it clear that railroads may own property for non-operating purposes. See, e.g., I.C. § 63-402, which provides the following:

63-402. Nonoperating property assessed by county assessor. All property belonging to any person owning, operating or constructing any public utility or railroad, wholly or partly within this state, not included within the meaning of the term "operating property" as defined in this title, namely, property not reasonably necessary for the maintenance and operation of such public utility or railroad, including land or buildings rented by a company or corporation as lessee which is used as or in connection with its business, such as business offices, warehouses, service centers, moorage grounds or docks, vacant lots and tracts of land, and lots and tracts of land with the buildings thereon not used or intended to be used in the operation of such public utility or railroad, also tenement and resident property, except section houses, also hotels and eating houses, not situated adjacent to the main track of any such railroad, shall be assessed by the assessor of the county wherein the same is situated.

Case law has assumed that railroads can own property for non-operating purposes. See, e.g., O'Brien v. Best, 68 Idaho 348, 353, 359, 194 P.2d 608 (1948); Loomis v. Union Pacific Railway Co., 97 Idaho 341, 343, 544 P.2d 299, 301 (1975). Again, in C & G,...