Case Title: Dale Henderson Logging, Inc. v. Dept. of Transportation

Citation: 

Docket Number: 

State: maine

Court: Maine Supreme Court

Date: 2012-07-19T00:00:00Z

Document:
MAINE SUPREME JUDICIAL COURT 
 
 
 
     
    Reporter of Decisions 
Decision: 
2012 ME 99 
Docket: 
Was-11-523; Han-11-598 
 
Argued: 
June 15, 2012 
Decided:     July 19, 2012 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, LEVY, MEAD, GORMAN, and JABAR, JJ. 
 
 
DALE HENDERSON LOGGING, INC. 
 
v. 
 
DEPARTMENT OF TRANSPORTATION 
 
OAK LEAF REALTY, INC., et al. 
 
v. 
 
DEPARTMENT OF TRANSPORTATION 
 
 
MEAD, J. 
 
[¶1]  In these consolidated cases, Dale Henderson is the principal owner of 
Dale Henderson Logging, Inc. (DHL), and Oak Leaf Realty, Inc. (OLR).  DHL 
owns property in Washington County, and OLR owns several thousand acres in 
Hancock County.  The DHL and OLR properties have a four-rod-wide rail corridor 
running over them that was once owned by the Maine Central Railroad Company 
and later conveyed to the State of Maine, which the Department of Transportation 
(DOT) claims to own in fee simple absolute by virtue of deeds given to Maine 
Central’s predecessor in title from 1897 to 1898.  DHL and OLR assert that Maine 
Central held only a railroad easement that it abandoned prior to its purported 
 
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conveyance to the State, and therefore DOT now owns nothing.  Alternatively, 
OLR contends that if DOT holds an interest in the corridor, two deeds in DOT’s 
chain of title contain covenants allowing OLR to compel DOT to build and 
maintain a fence along a portion of the corridor in Hancock County. 
 
[¶2]  DHL and OLR appeal from summary judgments entered in favor of 
DOT by the Superior Court (Hunter, J., Washington and Hancock Counties) on 
their complaints seeking (1) a declaration that they own the portions of the corridor 
running over their respective properties in fee simple absolute, unburdened by any 
easement; (2) a declaration that if DOT holds an interest in the portion of the 
corridor claimed by OLR, then it must build and maintain a fence along it; and 
(3) injunctive relief barring DOT from conducting any activities in the corridor. 
 
[¶3]  We conclude that pursuant to the Short Form Deeds Act, 33 M.R.S. 
§§ 761-775 (2011), and former 23 M.R.S.A. § 4207(3) (“An Act to Protect 
Railroad Rights-of-way”),1 the court correctly found that DOT holds an easement 
that has not been abandoned in the Washington County portion of the corridor, and 
owns the fee simple in the Hancock County portion of the corridor.  We further 
conclude that the covenants requiring Maine Central to build and maintain a fence 
                                         
1  In the version pertinent to this appeal, 23 M.R.S.A. § 4207(3) was enacted by P.L. 1985, ch. 398 
(effective Sept. 19, 1985).  It was repealed by P.L. 1989, ch. 398, § 4 (effective Sept. 30, 1989), and 
replaced with 23 M.R.S. § 7105(3), P.L. 1989, ch. 398, § 7 (effective Sept. 30, 1989).  The two sections 
remain substantively the same, see 23 M.R.S. § 7105(3) (2011). 
 
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along the corridor are not enforceable against DOT in equity.  Accordingly, we 
affirm the judgments. 
I.  BACKGROUND 
A. 
Dale Henderson Logging, Inc. 
 
[¶4]  The historical facts are not disputed.  See Hilderbrand v. Wash. Cnty. 
Comm’rs, 2011 ME 132, ¶ 7, 33 A.3d 425 (stating that the facts on a motion for 
summary judgment are viewed in the light most favorable to the nonmoving party).  
The issue on appeal is a legal one; accordingly, we review the summary judgment 
ruling de novo to determine whether any party is entitled to a judgment as a matter 
of law.   See McIlroy v. Gibson’s Apple Orchard, 2012 ME 59, ¶ 7, 43 A.3d 948. 
 
[¶5]  In 2008, DHL bought two parcels of property in the Town of Steuben 
in Washington County.  The rail corridor claimed by DOT runs over DHL’s land 
for approximately 845 feet.  The railroad tracks and ties have been removed, and 
the corridor is now managed by DOT and the Department of Conservation as part 
of the Down East Sunrise Trail.  DOT’s stated goal is to use the corridor for 
recreational purposes on an interim basis as a way to rehabilitate and protect it 
until conditions and funding warrant the resumption of rail service. 
 
[¶6]  The rail corridor originated in March 1896, when, pursuant to statute, 
the Washington County Commissioners approved the location of a rail line filed by 
the Washington County Railroad Company (WCRC).  In January 1898, DHL’s 
 
4 
predecessors-in-title gave two deeds to WCRC; one of the central issues in this 
appeal is whether the two deeds conveyed a fee interest, as DOT contends, or 
whether, as DHL asserts, the deeds simply confirmed the easement that was 
created when the Washington County Commissioners approved WCRC’s filing 
and thereby completed its taking of the corridor by eminent domain. 
 
[¶7]  In 1911, the Legislature merged WCRC into the Maine Central 
Railroad Company, which then acquired all of WCRC’s property holdings.  In 
August 1985, Maine Central filed an application with the Interstate Commerce 
Commission (ICC) to abandon service along the corridor; the application was 
approved in November 1985.  In June 1987, Maine Central conveyed whatever 
interest it then had in the rail corridor to the State of Maine, which eventually used 
the corridor to create the Down East Sunrise Trail. 
 
[¶8]  DHL purchased the properties at issue on December 22, 2008; two 
days later it filed suit against the State.  In June 2009, DOT moved for summary 
judgment.  The court issued two orders resolving the motion.  In the first, the court 
granted DHL partial summary judgment and declared that WCRC had acquired 
only an easement in the corridor, and therefore DHL owned the fee underlying the 
easement.  The court deferred deciding whether the easement had been abandoned.  
Following further briefing, the court issued a supplemental order declaring that the 
 
5 
easement had not been abandoned, and therefore DOT continues to own an 
easement for railroad purposes over DHL’s land. 
B. 
Oak Leaf Realty, Inc. 
 
[¶9]  The historical facts in Oak Leaf Realty, Inc., closely parallel those in 
Dale Henderson Logging, Inc., insofar as both cases arise from the 1893 formation 
of the Washington County Railroad Company; the approval of the location of its 
rail line by the county commissioners; WCRC’s merger into Maine Central 
Railroad Company in 1911; the ICC’s approval of Maine Central abandoning rail 
service on the line in 1985; Maine Central’s conveyance of whatever interest it 
held in the rail corridor to the State in 1987; and the State’s current interim use of 
the corridor as a recreational trail while it seeks to restore rail service. 
 
[¶10]  Specific to this case, OLR owns several thousand acres of land in the 
Town of Hancock in Hancock County.  The rail corridor crosses OLR’s land for 
approximately 21,400 feet.  In May 2008, OLR filed suit against DOT.  In 
April 2009, the State moved for partial summary judgment concerning ownership 
of the fee in the corridor.  The court granted the motion and declared that the State 
owned the section of the corridor at issue in fee simple absolute.  In August 2009, 
the State again moved for partial summary judgment concerning its obligation to 
build and maintain a fence along a portion of the corridor.  That motion was also 
 
6 
granted when the court found that a release deed given to Maine Central in 1929 
extinguished the original covenants requiring a fence.  These appeals followed. 
II.  DISCUSSION 
A. 
The Short Form Deeds Act 
 
[¶11]  In both of these cases the Superior Court was required to resolve the 
question of what interests were conveyed by the ancient deeds involved.  The court 
concluded in Dale Henderson Logging, Inc., that only an easement was conveyed, 
and determined in Oak Leaf Realty, Inc., that a fee simple was given.  We review 
the interpretation of a deed de novo as a question of law.  Stanton v. Strong, 
2012 ME 48, ¶ 8, 40 A.3d 1013; Tarason v. Wesson Realty, LLC, 2012 ME 47, 
¶ 18, 40 A.3d 1005. 
 
[¶12]  The trial court discussed the Short Form Deeds Act (SFDA) in 
reaching its decisions, and we conclude that the Act is dispositive in each of these 
cases.  The SFDA provides, in part: 
In a conveyance or reservation of real estate, the terms “heirs,” 
“successors,” “assigns,” “forever” or other technical words of 
inheritance, or an habendum clause, are not necessary to convey or 
reserve an estate in fee.  A conveyance or reservation of real estate, 
whether made before or after the effective date of this section, must be 
construed to convey or reserve an estate in fee simple, unless a 
different intention clearly appears in the deed. 
 
33 M.R.S. § 772(1).  In Tarason, we discussed and applied the SFDA, noting that 
section 772(1) requires that any conveyance of property not exempted by the Act’s 
 
7 
“savings clause” be construed to grant a fee simple interest “unless a different 
intention clearly appears in the deed.”  2012 ME 47, ¶¶ 12-18, 40 A.3d 1005 
(quotation marks omitted).  The SFDA is to be liberally construed.  Id. ¶ 13; 
33 M.R.S. § 772(5).   
 
[¶13]  In Dale Henderson Logging, Inc., the two deeds at issue contain a 
restriction: “This conveyance of right of way is for Railroad purposes only.”  
When discussing the potential application of the SFDA, the trial court found that 
the restriction constituted “clear and limiting language in the source conveyances” 
indicating “that the Grantors intended to convey no more than rights of way, i.e. 
easements.”  We agree with the court’s finding.  There is nothing ambiguous about 
the language used,2 and the only reason to insert the restriction “[t]his conveyance 
of right of way is for Railroad purposes only” is to make clear that a fee interest is 
not what the deed conveys.  Accordingly, because the restriction is evidence of “a 
different intention clearly appear[ing] in the deed,” 33 M.R.S. § 772(1), application 
of the SFDA leads to the court’s result—unless it was abandoned, discussed infra, 
DOT holds an easement, not a fee simple, in the rail corridor. 
 
[¶14]  In contrast, the operative deeds in Oak Leaf Realty, Inc., do not 
contain any similar restriction, and on their face the deeds convey a fee simple 
                                         
2  If the language were found to be ambiguous, then we would be required to construe the deeds as 
conveying a fee simple interest.  See Tarason v. Wesson Realty, LLC, 2012 ME 47, ¶ 18 n.8, 
40 A.3d 1005. 
 
8 
interest.  OLR asserts that because WCRC initially took an easement interest in the 
rail corridor by eminent domain, when read in context the deeds obtained from 
landowners shortly after the taking do not convey any additional interest, but rather 
serve only to memorialize the taking and to fix damages.  In an SFDA analysis, 
however, the only relevant evidence of an intention to convey something other than 
a fee simple interest is evidence that appears in the deed itself.  Therefore, if there 
were evidence within the four corners of the deeds at issue to indicate that they 
served only to memorialize WCRC’s taking by eminent domain or to fix damages 
for that taking, that evidence would be relevant.  In this case, there is no such 
indication clearly appearing in the deeds.  Accordingly, the trial court correctly 
applied the SFDA in finding that, absent such evidence, the original grantors 
conveyed a fee simple to WCRC, which is now held by DOT. 
 
[¶15]  OLR further asserts that if the deeds conveyed any additional interest, 
they are ambiguous as to what that interest was, and therefore we must consider 
extrinsic evidence to discern the parties’ intent.  Assuming arguendo that OLR is 
correct and the deeds are ambiguous, Tarason clarified the outcome required by 
the SFDA in that situation: 
The statute requires a deed to be construed as conveying an estate in 
fee simple unless “a different intention clearly appears in the deed.” 
33 M.R.S. § 772(1) (emphasis added).  Accordingly, if the language 
of the deed is deemed ambiguous, a court would not look to extrinsic 
sources to determine the intent of the parties to the deed, as would 
 
9 
apply when construing a deed in other contexts . . . but would instead 
be required to construe the deed as creating a fee simple estate. 
 
2012 ME 47, ¶ 18 n.8, 40 A.3d 1005 (citations omitted).  Accordingly, OLR’s 
premise leads to the Superior Court’s conclusion that DOT owns the corridor 
traversing OLR’s land in fee simple. 
B. 
Abandonment 
 
[¶16]  In Dale Henderson Logging, Inc., DHL contends that the easement 
originally taken by WCRC was abandoned when Maine Central filed an 
application with the ICC to discontinue rail service, and then did not use the 
easement in the nineteen-month period between the approval of its request and its 
purported transfer of the easement to the State in June 1987.  In essence, DHL 
argues that DOT took nothing because in 1987 Maine Central held nothing.  To 
make a prima facie showing of abandonment under the common law standard, 
DHL would be required to establish that Maine Central demonstrated “a history of 
nonuse coupled with an act or omission evincing a clear intent to abandon” its 
easement.  Laux v. Harrington, 2012 ME 18, ¶ 21, 38 A.3d 318. 
 
[¶17]  In this case, we need not reach the question of whether DHL could 
meet its burden under the common law standard because we agree with the trial 
court’s finding that former 23 M.R.S.A. § 4207(3) is dispositive of DHL’s 
 
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abandonment claim.  Effective September 19, 1985, section 4207(3) provided, in 
part: 
B.  The abandonment of service shall not mean or infer that the 
rights-of-way on a railroad line have been abandoned.  In the event 
that the railroad, any person, firm or corporation, or any agency shows 
interest in the eventual restoration of service, the rights-of-way shall 
not be deemed abandoned. 
 
Since it is in the best interest of the State to retain the rights-of-way 
intact, this paragraph shall apply to all existing and future 
rights-of-way created prior to or following the effective date of this 
section, as amended. 
 
C.  Whenever the department acquires railroad lines, to hold and to 
manage for future railroad uses, those lines shall not be considered 
abandoned for railroad purposes.  The commissioner shall periodically 
review the need to hold those lines for future railroad uses. 
 
P.L. 1985, ch. 398 (effective Sept. 19, 1985). 
 
[¶18]  Maine Central filed its application to abandon rail service along the 
corridor on August 21, 1985, about one month before section 4207(3) became 
effective.  The ICC’s order approving the request was not issued until 
November 4, 1985, after the effective date of the statute.  Because the application 
could have been denied, or could have been withdrawn before it was approved, 
Maine Central did not actually abandon its rail service until November 4, 1985, 
after section 4207(3) had taken effect.  Accordingly, if DOT “show[ed] interest in 
the eventual restoration of service” during the nineteen-month period between the 
ICC’s order and Maine Central’s sale of the corridor to the State, 23 M.R.S.A. 
 
11 
§ 4207(3)(B), then by statute Maine Central’s right-of-way could not be deemed 
abandoned, id. 
 
[¶19]  There is ample evidence in the summary judgment record to support 
the court’s finding that DOT showed interest in the eventual restoration of rail 
service in the corridor.  On November 5, 1985, one day after the ICC ruled that 
Maine Central could abandon rail service, Maine voters approved a bond issue to 
purchase the line once the ICC’s ruling became effective on November 30, 1985.  
See P. & S.L. 1985, ch. 75.  Dana Connors, DOT Commissioner from 1984 to 
1994, averred that the purpose of the bond was to maintain the corridor for future 
rail 
use; 
DOT 
entered 
into 
negotiations 
with 
Maine 
Central 
after 
November 30, 1985, to acquire the corridor; and “[t]hroughout [his] tenure as 
Commissioner, the Department showed an interest in eventual restoration of 
service on the Calais Branch line.” 
 
[¶20]  The record also supports a finding that following DOT’s purchase of 
the corridor easement, it has held and managed it “for future railroad uses,” see 
23 M.R.S.A. § 4207(3)(C); 23 M.R.S. § 7105(3)(C) (2011).  Accordingly, “th[at] 
line[] shall not be considered abandoned for railroad purposes.”  23 M.R.S.A. 
§ 4207(3)(C); 23 M.R.S. § 7105(3)(C) (2011).  Connors averred that DOT had 
issued several requests for proposals from short line operators to restore service, a 
statement supported by Department correspondence and other documents in the 
 
12 
record.  Nathan Moulton, a rail program official for DOT, stated in his affidavit 
that since shortly after acquiring the corridor, and continuing to the date of the 
affidavit in June 2009, “the [DOT] has expended significant time, labor and money 
on the inspection and maintenance of the Calais Branch.”  Moulton averred that the 
bridges, culverts and tracks on the corridor are inspected annually, and that in 2000 
and 2001, DOT spent $767,500.47 maintaining the corridor, all with the goal “to 
maintain the Calais Branch rail line in such a condition to allow for the future 
resumption of rail service thereon.” 
 
[¶21]  Finally, contrary to DHL’s assertion that the easement has been 
abandoned because the State has converted property that was taken expressly for 
rail purposes into a public recreation trail, the Legislature has indicated that the 
ultimate purpose of the corridor remains the resumption of rail service.  In 2007, it 
provided by statute that “[t]he Department of Transportation reserves the right to 
terminate at any time the use of the Calais Branch rail corridor for recreational 
purposes and to use the Calais Branch rail corridor for railroad purposes.”  
23 M.R.S. § 7108(2) (2011).  The statute is clear legislative support for DOT’s 
assertions in the summary judgment record, admitted by DHL, that “Maine DOT’s 
goal is to rehabilitate, preserve and protect the corridor for future railroad use 
should conditions and funding warrant,” and that “[i]n the interim until rail service 
is reestablished, the rail corridor will be available for recreational use.” 
 
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[¶22]  In sum, as the motion court concluded in its thoughtful and thorough 
decision, “[t]he Legislature passed the Act [to Protect Railroad Rights-of-way] for 
the exact circumstances before the court: to defer the abandonment of railroad 
easements where the State has expressed an interest in holding and managing the 
easements for future railroad use.”  That observation leads to the court’s correct 
result—the easement acquired by DOT from Maine Central was not abandoned 
and remains viable. 
C. 
Fence Covenants 
 
[¶23]  In Oak Leaf Realty, Inc., two of the deeds in DOT’s chain of title, 
both given to WCRC by Mary and Theodore Austin in 1897, contain a restrictive 
covenant: 
Said Company by acceptance of this deed for itself, its successors and 
assigns, becomes bound to and agrees with said Grantors herein, their 
heirs and assigns, as follows: . . . (2) To construct and maintain fences 
on both sides of said four rod strip made of poles and “Pages” wire 
fencing or some other wire fencing of equal merit, not dangerous to 
cattle, and said fences shall be provided with gates for use in 
connection[3] with each of said crossings, when they are constructed. 
 
The record indicates that a fence once existed, but it has not been maintained for 
decades. 
                                         
3  One deed uses the word “connection” and the other “construction.”  The difference is immaterial. 
 
14 
 
[¶24]  In 1929, the heirs of Mary and Theodore Austin gave Maine Central a 
release from its obligation to build and maintain a fence.  The release contained a 
new obligation: 
And [Maine Central] by the acceptance of this deed for itself, its 
successors and assigns, becomes bound to and agrees with said 
[Austin heirs], their heirs and assigns, as follows: 
 
(a)  To construct and maintain on the property of the [Austin 
heirs] adjacent to said four (4) rod strip at an agreed location 
reasonable and suitable therefor, a public siding to hold four 
(4) cars . . . and to agree to maintain said sidetrack as long as 
reasonably warranted by the amount of traffic offered[.] 
 
DOT acknowledges that there is no evidence that the siding was ever built. 
 
[¶25]  The Superior Court declared that DOT was not obligated to build or 
maintain a fence along the Austin portion of the rail corridor after construing the 
1929 release to be immediately effective, and not conditioned on Maine Central’s 
future fulfillment of its agreement to build a siding.  As an initial matter, we note 
that the court’s decision only resolves the issue as to one of the two original Austin 
deeds conveying 13,752 feet of the rail corridor; the release does not reference the 
deed conveying an additional 1,827 feet of the corridor. 
 
[¶26]  DOT argues that the court’s decision concerning the effect of the 
release was correct, and that for several other reasons the second deed’s covenant 
is ineffective as well.  OLR frames the issue as whether the release was a 
substituted contract, meaning that Maine Central’s obligation to build a fence was 
 
15 
immediately discharged when the release was signed, or an accord and satisfaction, 
in which case the obligation was not discharged until the new obligation to build a 
siding was performed.  See Rosenthal v. Rosenthal, 543 A.2d 348, 354-55 
(Me. 1988) (discussing accord and satisfaction versus substituted contract).  OLR 
did not present that argument to the trial court in its opposition to DOT’s motion 
for summary judgment, although it opposed the motion for other reasons. 
 
[¶27]  We do not need to characterize the release, however, because we 
conclude that regardless of whether it was a substituted contract or an accord and 
satisfaction, the obligation it imposed to build a siding, and the fence covenants in 
the original deeds, are no longer enforceable in equity.  We have said that “[a] 
restrictive covenant will be enforced in equity only if it is reasonable under the 
circumstances,” Green v. Lawrence, 2005 ME 90, ¶ 11, 877 A.2d 1079, and have 
observed that  
[c]ourts in this country have adopted a flexible approach toward the 
enforcement of covenants which “touch and concern” the land and 
impose obligations affirmative in nature upon the owners of burdened 
property.  A variety of factors are relevant to the determination of 
enforceability, including the reasonableness of the obligation imposed 
in terms of its scope and duration . . . . 
 
Day v. McEwen, 385 A.2d 790, 793 (Me. 1978). 
 
[¶28]  The 1929 release implicitly recognized that at some point a cattle 
fence along a rail corridor, and the rail siding meant to substitute for it thirty-two 
 
16 
years later, would become unnecessary when the volume of rail traffic no longer 
warranted either.  Although we proceed cautiously before nullifying a covenant in 
equity, certainly that point has been reached in this case, where the fence has not 
been maintained for decades; there has officially been no rail traffic in the corridor 
for twenty-seven years; the tracks are gone; and even if constructed, the fence 
would protect only a portion of the corridor abutted by OLR’s property.  As a 
matter of logic, if the obligation to maintain a siding no longer mattered to the 
grantors once the amount of rail traffic no longer warranted one, as the release 
states, then there is no reason, under the current circumstances, to enforce the 
obligation to maintain a fence, which, according to OLR, acted as a form of 
collateral to ensure that the siding was built.  Given this record, equity does not 
require DOT to reconstruct and maintain in perpetuity a fence to protect OLR’s 
nonexistent cattle from a currently nonexistent rail line.4 
 
The entry is: 
Judgments affirmed. 
 
 
 
 
 
                                         
4  The original covenants required a fence “not dangerous to cattle,” but it is evident that OLR is not 
seeking a fence to protect cattle.  Its opposition to DOT’s motion for summary judgment states: “If the 
State insists that the requirement to build a fence only exists if there are cattle on Henderson’s land, then 
that could easily be arranged.” 
 
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On the briefs: 
 
Timothy A. Pease, Esq., Rudman & Winchell, LLC, Bangor, for appellants 
Dale Henderson Logging, Inc., and Oak Leaf Realty, Inc. 
 
Rebecca H. Farnum, Esq. and Jason P. Donovan, Esq., Thompson & Bowie, 
LLP, Portland, for appellee Department of Transportation 
 
 
At oral argument: 
 
Timothy A. Pease, Esq., for appellants Dale Henderson Logging, Inc., and 
Oak Leaf Realty, Inc. 
 
Jason P. Donovan, Esq., for appellee Department of Transportation 
 
 
 
Washington County Superior Court docket number CV-2008-50  
Hancock County Superior Court docket number RE-2008-17 
FOR CLERK REFERENCE ONLY