Viriginia Elec. v. Northern Virginia Reg.

• Decision Date: 16 September 2005
• Docket Number: Record No. 042426.
• Citation: Viriginia Elec. v. Northern Virginia Reg., 618 S.E.2d 323, 270 Va. 309 (2005)
• Parties: VIRGINIA ELECTRIC AND POWER COMPANY, d/b/a Dominion Virginia Power v. NORTHERN VIRGINIA REGIONAL PARK AUTHORITY
• Court: Virginia Supreme Court

618 S.E.2d 323

VIRGINIA ELECTRIC AND POWER COMPANY, d/b/a Dominion Virginia Power v. NORTHERN VIRGINIA REGIONAL PARK AUTHORITY

Record No. 042426.

Supreme Court of Virginia.

September 16, 2005.

E. Duncan Getchell, Jr. (Robert L. Hodges; William H. Baxter, II, Richmond; John D. Sharer; Thomas E. Spahr; John D. Wilburn; McGuireWoods, Richmond, on briefs), for appellant.

Paul B. Terpak (Jennifer Redmond, Fairfax; Frank K. Friedman, Roanoke; Blankingship and Keith; Woods Rogers, on brief), for appellee.

Present: LACY, KEENAN, KOONTZ, KINSER, LEMONS, and AGEE, JJ., and STEPHENSON, S.J.

OPINION BY Justice DONALD W. LEMONS.

This case involves a strip of land generally 100 feet wide and 45 miles long known as the "W & OD Trail" ("the Trail") that is one of the most popular bike trails in America and is host to approximately three million visitors annually. Located in northern Virginia and stretching from Arlington County to Purcellville, Virginia, the Trail is also an extraordinarily valuable property impressed with numerous easements for utility purposes. This dispute centers upon whether Virginia Electric and Power Company, doing business as Dominion Virginia Power ("Virginia Power"), has an exclusive easement in gross upon the Trail for communication purposes such that it has the right to apportion its easement and license telecommunication rights to others.

I. Facts and Proceedings Below

The Northern Virginia Regional Park Authority ("Park Authority"), was formed in 1959 by the counties of Fairfax, Loudoun, and Arlington, and the cities of Fairfax, Falls Church, and Alexandria pursuant to former Code § 15-714.3 (1956), the predecessor of current Code § 15.2-5702. At that time, the Washington and Old Dominion Railroad ("W & OD Railroad") operated in part on the parcel of land involved in the controversy currently before the Court. In 1968, Virginia Power purchased this parcel of land from the W & OD Railroad. In 1976, the Park Authority sought to purchase the parcel in order to create a recreational trail and entered into discussions with Virginia Power to effect this purchase. Both the Park Authority and Virginia Power were sophisticated parties and well represented to ensure that their respective interests were protected. The parties entered into an Option Agreement on December 19, 1977.

Subsequent to the Option Agreement, the Park Authority purchased the parcel from Virginia Power in a series of successive transactions and deeds, and created what is now known as the W & OD Trail. These deeds each contain the same operative language found in Paragraphs 11 and 18 of the Option Agreement. It is this language contained in the Option Agreement and the deeds that is the focus of the dispute now before the Court. The parties agreed in Paragraph 11 of the Option Agreement that:

[Virginia Power] will reserve unto itself all its electric facilities now located on said lands. [Virginia Power] will further reserve unto itself and its successors the following:

The perpetual right, privilege and easement of right of way to lay, construct, operate and maintain one or more lines of poles, towers, structures, cables, conduits, pipes and mains, together with all wires, manholes, handholes, valves, regulators, meters, attachments, equipment, accessories and appurtenances desirable in connection therewith (hereinafter referred to as "facilities"), for the purpose of transmitting or distributing electric power, for the purpose of transporting natural gas, oil, petroleum pro[du]cts or any other liquids, gases or substances which can be transported through a pipe line, and for communication purposes, over, under, upon and across the lands hereby conveyed.

Paragraph 18 stated: "The Authority will not permit, assign or grant any other party easements, rights, privileges or encroachments of any nature on the land hereby conveyed, without the written approval of the Company, provided such approval shall not be withheld unreasonably." This language was incorporated into each of the deeds that ultimately conveyed fee simple ownership of what is now the W & OD Trail to the Park Authority. Each deed also contained a concluding paragraph that stated:

It is agreed between the parties hereto that all references to [Virginia Power] and the [Park] Authority shall include their respective successors, and that all obligations hereunder shall also bind any assignees of the [Park] Authority. All restrictions, rights, agreements, covenants and warranties herein are appurtenant to the property hereby conveyed and shall run with the land.

After the Option Agreement was finalized in 1977, and following the initial transfer of the parcel to the Park Authority in 1978, Virginia Power advised all tenants of the transfer of ownership and provided the Park Authority with a list of all tenants and their respective rents.

The present dispute has its origins in the growth of the telecommunications industry that occurred in the 1980s and 1990s. Dating back to the ownership of the parcel by the W & OD Railroad, numerous servitudes existed upon the parcel. Many of these continued into the ownership of the parcel by both Virginia Power and the Park Authority. The Option Agreement and deeds specifically stated that the Park Authority "will permit the present Lessees of [Virginia Power], to continue to occupy such portions [of the parcel] as are presently under lease, for at least five years from the date of the conveyance, provided such occupancy does not unreasonably interfere with the establishment" of the W & OD Trail.

In 1986, AT & T approached the Park Authority seeking to install fiber optic cables along the W & OD Trail. During negotiations with AT & T, a dispute arose between the Park Authority and Virginia Power as to the scope of Virginia Power's "approval" rights. In 2000, following several years of work on its existing transmission lines to equip them with fiber optic lines, Virginia Power decided that it could and would negotiate directly with telecommunication customers regarding licensing of its lines without including the Park Authority in the process.

The Park Authority initiated this present action when it filed a "Motion for Declaratory Judgment and Other Relief" asking the Circuit Court of Fairfax County "to clarify that in addition to Virginia Power having no right to assign, and no exclusive rights, it has no right of apportionment" with respect to the granting of telecommunication access to third parties, without a license granted by the Park Authority. Virginia Power filed an answer and a cross-bill seeking declaratory judgment in its favor. Both the Park Authority and Virginia Power asserted in the trial court that the deeds were unambiguous.

After hearing evidence ore tenus, the trial court held "that the deeds are unambiguous and clearly demonstrate the parties' intention to enter into a non-exclusive easement in gross. Therefore, Virginia Power does not have the power to apportion it's [sic] easement to third parties for telecommunication purposes." Virginia Power filed a "Renewed Motion to Strike," which was denied, and the trial court entered its final decree declaring that the parties entered into a "non-exclusive easement in gross with no right of apportionment," that the Park Authority "has the right to make further conveyances to third parties for telecommunications and other purposes, subject to [Virginia Power's] approval, which shall not be withheld unreasonably," and that Virginia Power's "purported transfer to its sister company Dominion Telecom, Inc. of any right to install or use telecommunications lines on the W & OD Trail exceeded [Virginia Power's] rights under its easement."

We awarded Virginia Power this appeal and agreed to hear four assignments of error: (1) the trial court erred in determining that the easement is non-exclusive; (2) the trial court erred in determining that the easement is not apportionable; (3) the trial court erred "in considering extrinsic evidence in construing unambiguous language of the deeds creating the easement;" and (4) the trial court was clearly erroneous in finding that Virginia Power's "legal position concerning the proper construction of its easement was of recent origin." We also agreed to hear the Park Authority's assignment of cross-error that the trial court reached the correct result, but nonetheless erred in failing to consider the Option Agreement and the transfer letters Virginia Power sent after execution of the first deed.

II. Analysis

A. Standard of Review

Whether a writing is ambiguous is a question of law, not of fact. Utsch v. Utsch, 266 Va. 124, 129, 581 S.E.2d 507, 509 (2003); Pyramid Dev., L.L.C. v. D & J Assocs., 262 Va. 750, 754, 553 S.E.2d 725, 727 (2001). "Accordingly, on appeal we are not bound by the trial court's interpretation of the contract provision at issue; rather, we have an equal opportunity to consider the words of the contract within the four corners of the instrument itself." Eure v. Norfolk Shipbuilding & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663, 667 (2002) (citing Wilson v. Holyfield, 227 Va. 184, 187-88, 313 S.E.2d 396, 398 (1984)). As such, we review the judgment of the trial court de novo. In conducting our review, we are mindful that "the function of the court is to construe the contract made by the parties, not to make a contract for them." Doswell L.P. v. VEPCO, 251 Va. 215, 222, 468 S.E.2d 84, 88 (1996) (citing Wilson, 227 Va. at 187, 313 S.E.2d at 398).

"`[W]here an agreement is complete on its face, is plain and unambiguous in its terms, the court is not at liberty to search for its meaning beyond the instrument itself. . . . This is so because the writing is the repository of the final agreement of the parties.'" Berry v. Klinger, 225 Va. 201, 208, 300 S.E.2d 792, 796 (1983) (quoting Globe Company v. Bank of Boston, 205 Va. 841, 848, 140 S.E.2d 629, 633 (1965)). "`When the language of a deed is `clear,...