Opinion ID: 4398244
Heading Depth: 2
Heading Rank: 1

Heading: The Parties and Relevant Properties

Text: Norfolk Southern owns and operates the Haselton Yard, a switching yard northeast of Poland Avenue in Youngstown, Ohio. Allied Erecting engages in the business of constructing and dismantling industrial buildings; it is headquartered on a parcel of land located south of Poland Avenue. The Canfield Branch is a strip of land over which run disused railroad tracks and a dirt pathway parallel to those tracks (the “pathway”). The portion of the Canfield Branch relevant to this appeal begins northeast of Poland Avenue and runs roughly eastward until terminating below the Haselton Yard. Allied Erecting owns various parcels of land located on the southern side of the Canfield Branch but north of Poland Avenue. A sister company of Allied Erecting, Allied Industrial Development (“AID”), owns a parcel north of the Canfield Branch. A dirt, gravel, and asphalt roadway (the “Current Roadway”) abuts the southern edge of the Canfield Branch. The Current Roadway begins at Poland Avenue, heads roughly northeast until meeting the Canfield Branch, turns east to run parallel with the Canfield Branch for some distance, then turns northeast again across the Canfield Branch and terminates on the northern side of the Canfield Branch at the Haselton Yard. Part of the Current Roadway is owned by Allied Erecting, and part is owned by AID. Although the Current Roadway is privately owned, various local property owners, including Norfolk Southern, possess non-exclusive easements over the Current Roadway. In the years preceding this litigation, Allied Erecting employees also regularly used the Current Roadway to travel between Allied Erecting property and AID property. In particular, Allied Erecting employees routinely traversed the Canfield Branch at an old crossing located approximately at the mid-point of the Canfield Branch (the “Powers Crossing”). 2 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. The genesis of the Powers Crossing was in 1872, when brothers Abraham and William Powers— Youngstown farmers who owned parcels of property north and south of the Canfield Branch that now belong to AID and Allied Erecting, respectively—conveyed the Canfield Branch to the Youngstown and Canfield Railroad Company for the purpose of laying railroad tracks. In the deed (the “Powers Deed”) conveying the Canfield Branch, the brothers Powers retained a right to cross the Canfield Branch so they could travel between the parcels they still owned on the north and south. In relevant part, the Powers Deed provided: [T]he said Railroad Co. as a further consideration of this grant . . . agrees to put up[,] build and maintain and keep in repair along the north side of the said strip of land a good and sufficient post and board fence except at the crossings of the highway . . . . And further the said Railroad Company & assigns to build and maintain our waggon road crossing at such place as said Grantors may designate[,] said fences and crossing to be built before said strip of land shall be taken possession of. R. 69-9, PageID 1970–71. B. Conrail Conveys the Canfield Branch to Allied Erecting At the beginning of 1994, the Canfield Branch belonged to the Consolidated Rail Corporation (“Conrail”). In October of that year, Conrail sold the Canfield Branch to Allied Erecting. The sale was negotiated by John Ramun, the president of Allied Erecting, and Sandra Rhodes Homan, who at the time was Manager of Line Sales at Conrail. Three documents, executed and signed by the parties on separate days, reflected the relevant terms of the agreement. The first document was an agreement of sale executed on July 22, 1994. It stated in relevant part: 17. Easements. After Closing: (a) Purchaser [i.e., Allied Erecting] shall convey to Conrail a permanent, unconditional, exclusive easement for the purpose of a roadway for vehicular and pedestrian traffic to provide access from Poland Avenue to Conrail’s 3 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. Haselton Yard (“New Roadway”), and Purchaser shall construct the New Roadway at Purchaser’s expense. The conveyance of said easement shall be completed within 10 years of the date of this Agreement. The location and bounds of the said easement and the design of the New Roadway shall be subject to the prior approval of Conrail. The New Roadway shall be sufficient for Conrail’s intended use; the sufficiency of the New Roadway, as constructed, for Conrail’s intended use shall be subject to the approval of Conrail, and no action will be taken to restrict Conrail’s use of the roadway that currently runs from Poland Avenue to Conrail’s Haselton Yard (“Current Roadway”) until Conrail has approved the New Roadway as constructed. The bounds and location of the easement shall not unreasonably interfere with Purchaser’s use of the Premises. The deed shall contain a reservation of an unconditional, exclusive easement for the Current Roadway or an alternative roadway for vehicular and pedestrian traffic, the location of which alternative roadway shall also be subject to Conrail’s prior approval; said reservation shall provide that said reserved easement shall terminate upon the approval by Conrail of the New Roadway, as constructed. R. 125-5, PageID 2903. The second document (the “agreement”) was executed on October 10, 1994 and provided in relevant part: GRANTOR [i.e., Allied Erecting] will convey to Grantee [i.e., Conrail] a permanent, unconditional, exclusive easement for the purpose of a roadway for vehicular and pedestrian traffic to provide access from Poland Avenue to Grantee’s adjoining and adjacent property (“New Roadway”), and Grantor shall construct the New Roadway at Grantor’s sole cost and expense. The conveyance of the said easement shall be completed within ten (10) years of the date of this Agreement, as evidenced by a recordable document, otherwise in the absences [sic] of such recordable document this Agreement shall remain in effect. The location and bounds of the said easement and the design of the New Roadway shall be subject to the prior approval of Grantee. The New Roadway shall be sufficient for Grantee’s intended use; the sufficiency of the New Roadway as constructed for Grantee’s intended use shall be subject to the approval of Grantee, and no action will be taken to restrict Grantee’s use of the roadway that currently runs from Poland Avenue to Grantee’s Hazelton [sic] Yard (“Current Roadway”) until Grantee has approved the New Roadway as constructed. The bounds and location of the easement shall not unreasonably interfere with Grantor’s use of the Premises. R. 125-4, PageID 2894. 4 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. The third and final relevant document (the “quitclaim deed”) was a quitclaim deed executed on October 12, 1994, conveying the Canfield Branch to Allied Erecting. It provided in relevant part: EXCEPTING AND RESERVING thereout and therefrom and unto the said Grantor [i.e., Conrail] a permanent, unconditional and exclusive easement on, over, across and through the Premises [i.e., the Canfield Branch] for vehicular and pedestrian roadway access purposes so that Grantor may have continuous ingress, egress and regress rights from Poland Avenue to Grantor’s Haselton Yard property; the rights shall expire upon Grantee [i.e., Allied Erecting] providing Grantor a new constructed roadway across property of the Grantee and when said roadway is constructed Grantor shall release such right. UNDER and SUBJECT, however, to . . . any easements or agreements of record or otherwise affecting the Premises, and to the state of facts which a personal inspection or accurate survey would disclose . . . . R. 125-3, PageID 2880. We will refer to the easement mentioned in the “excepting and reserving” clause as Norfolk Southern’s “reserved easement.” We will refer to the second clause quoted above as the “under and subject to” clause. C. Norfolk Southern Succeeds Conrail Prior to 1999, Conrail owned the Haselton Yard. In 1997, CSX Transportation, Inc. and Norfolk Southern’s parent company Norfolk Southern Corporation (“NSC”) filed a joint application with the United States Surface Transportation Board (the “Board”) to operate Conrail’s routes and assets. In 1999, Conrail conveyed the Haselton Yard, and all other Conrail property interests assigned by the Board to Norfolk Southern, to Pennsylvania Lines, LLC, which NSC had created for the purpose. In 2007, Norfolk Southern merged with Pennsylvania Lines and became the owner of all property interests previously held by Pennsylvania Lines, including the Haselton Yard. Norfolk Southern also took the place of Conrail with respect to the 1994 Canfield Branch conveyance. 5 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. D. The Dispute Because Allied Erecting employees were engaged in a project on AID property north of the Canfield Branch, they often drove across the Current Roadway in heavy vehicles such as bulldozers and large dump trucks called Euclids. For a period of over two years between approximately May 2011 and July 2013, these large machines crossed the Current Roadway practically every day. Over time, large and multitudinous potholes developed on the Current Roadway, and Norfolk Southern employees complained about the difficulty of driving to the Haselton Yard from Poland Avenue. Because neither Allied Erecting nor AID maintained the Current Roadway, Norfolk Southern began maintaining it. Norfolk Southern soon tired of maintaining the Current Roadway. In 2012, Norfolk Southern employee and property agent Virginia Caso King researched the ownership of the Current Roadway and learned about the 1994 Canfield Branch conveyance from Conrail to Allied Erecting. Upon finding the agreement and the quitclaim deed, King contacted Allied Erecting’s president, Ramun, and asked him about those documents. When Ramun stated that he did not remember the agreement and the quitclaim deed, King sent him those documents as well as a letter in which she paraphrased some of the documents’ terms. Upon receipt of the letter, Ramun was not inclined to admit that Allied Erecting had any obligations under the agreement or the quitclaim deed. Shortly after communicating with Ramun, King was transferred to a different Norfolk Southern territory. King’s successor in Youngstown, Eric Sylvester, reinitiated contact with Ramun, but Ramun maintained his previous position with regard to the agreement and the quitclaim deed. 6 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. E. Procedural History Norfolk Southern sued Allied Erecting in the Northern District of Ohio in February 2013. The complaint alleged a breach of contract and sought damages (Count 1), specific performance (Count 2), and a declaratory judgment that Norfolk Southern was entitled to a permanent, exclusive, and unconditional reserved easement over the Canfield Branch as well as a permanent, exclusive, and unconditional easement for a new roadway connecting Poland Avenue to the Haselton Yard, to be constructed at Allied Erecting’s expense and subject to Norfolk Southern’s approval (Count 3). Norfolk Southern also sought a declaration that Allied Erecting was obligated not to restrict Norfolk Southern’s use of the Current Roadway until the new roadway was approved.
After discovery, Norfolk Southern filed a motion for partial summary judgment. In its opposition to the motion, Allied Erecting argued (among other theories) that the “under and subject to” clause in the quitclaim deed made Norfolk Southern’s reserved easement subject to preexisting easements and agreements affecting the Canfield Branch. Allied Erecting argued that the Powers Deed created such a preexisting easement and gave it a right to cross the Canfield Branch at the Powers Crossing even if that meant crossing Norfolk Southern’s reserved easement. In its order denying Norfolk Southern’s motion, the district court mentioned, but did not address on the merits, Allied Erecting’s argument based on the Powers Deed. Instead, the district court denied Norfolk Southern’s motion on the ground that the terms “Current Roadway” and “easement” in the agreement and the quitclaim deed, respectively, were ambiguous. Because those two documents did not make clear where the “Current Roadway” and Norfolk Southern’s reserved easement across the Canfield Branch were supposed to be located, and Norfolk Southern and 7 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. Allied Erecting disagreed on these issues, a genuine dispute of material fact existed about the meaning of the agreement and the quitclaim deed. The case was set for trial, and both Norfolk Southern and Allied Erecting filed motions in limine relevant to this appeal. Norfolk Southern filed a motion to exclude any evidence Allied Erecting might try to present about its preexisting right to cross the Canfield Branch over Norfolk Southern’s reserved easement.1 Determining that Allied Erecting’s claim of a preexisting easement was an affirmative defense, the district court found that Allied Erecting had forfeited the argument by failing to raise it in its answer to the complaint. Therefore, the district court granted Norfolk Southern’s motion in limine. Norfolk Southern also filed a motion in limine to exclude evidence of Allied Erecting’s present and future plans for development of the Canfield Branch or surrounding parcels. The district court granted this motion too, reasoning that Allied Erecting had not shown that the asserted plans existed at the time of the Canfield Branch conveyance in 1994, so the plans were not relevant to the intent of the parties. Finally, Allied Erecting filed a motion in limine seeking to exclude any testimony by Norfolk Southern employees King and Sylvester relevant to the meaning of the agreement and the quitclaim deed. Allied Erecting argued that such testimony should be excluded because Conrail, not Norfolk Southern, had negotiated the terms of the Canfield Branch conveyance. Therefore, Norfolk Southern employees had no personal knowledge of the intent of the parties to the agreement and the quitclaim deed. Allied Erecting also argued that the testimony should be excluded because Norfolk Southern’s interpretation of the agreement and the quitclaim deed would 1 At the time, Allied Erecting was claiming not only an express easement based on the Powers Deed but also an easement by necessity and an easement by prior use. On appeal, Allied Erecting argues only that it has an express easement based on the Powers Deed. 8 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. produce the “manifestly absurd result” of “provid[ing] only cost and no benefit to Allied Erecting.” R. 104, PageID 2229, 2231. The district court granted Allied Erecting’s motion in part, stating that it would allow witnesses “who were not part of the 1994 contract negotiations” to “testify as to their understanding of the agreements to the extent that it is relevant to subsequent actions taken by” those witnesses. R. 159, PageID 3264. However, those witnesses would not be permitted to testify about “the intent of the original parties to the agreements.” Id. The district court did not address Allied Erecting’s “manifest absurdity” argument. 2. The Trial, Post-Trial Motions, Verdict, and Judgment Trial was held over five days in June and July 2015. Through witness testimony, the ambiguities as to the location of the “Current Roadway” referenced in the agreement and of the “easement” referenced in the quitclaim deed were resolved as follows: the “Current Roadway” was the dirt, gravel, and asphalt roadway that ran parallel to and then crossed the Canfield Branch and over which Norfolk Southern had a non-exclusive easement; the “easement” that the quitclaim deed reserved exclusively to Norfolk Southern was supposed to be over the pathway located on the Canfield Branch parallel to the disused railroad tracks. Testimony also established that Norfolk Southern generally did not use the pathway, as it was only ten to fifteen feet wide and was less suitable for traffic than the Current Roadway. Instead, Norfolk Southern employees generally used the Current Roadway to access the Haselton Yard from Poland Avenue, diverting onto the pathway only when necessary to avoid the potholes that developed on some parts of the Current Roadway. Most of the Norfolk Southern traffic on the Current Roadway consisted of passenger vehicles; vehicles used for work, such as a pickup truck; and a dump truck. 9 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. Likewise, although Allied Erecting employees generally used the Current Roadway to travel between parcels on the northern and southern sides of the Canfield Branch, they occasionally drove on parts of the pathway when it was convenient. All witnesses agreed that Allied Erecting had not conveyed an easement for a new roadway or built a new roadway for Norfolk Southern by the time of trial. At the close of the evidence, Norfolk Southern moved for partial summary judgment. Allied Erecting filed a memorandum in opposition to Norfolk Southern’s motion and also moved for judgment as a matter of law. The district court denied both motions and submitted the case to the jury. The jury returned its verdict on Count 1, Norfolk Southern’s claim for damages, through answers to interrogatories. It found that Allied Erecting had breached its contract with Norfolk Southern “[b]y failing to provide Norfolk Southern with a permanent, unconditional, and exclusive easement between Poland Avenue and the Haselton Yard;” “[b]y failing to construct a new roadway, providing access between Poland Avenue and the Haselton Yard for Norfolk Southern’s exclusive use, within ten years of the date of the agreement that John Ramun signed on October 10, 1994;” and “[b]y failing to convey a permanent, unconditional, and exclusive easement for the new roadway within ten years of the date of the agreement that John Ramun signed on October 10, 1994.” R. 173, PageID 3964. The jury awarded Norfolk Southern $223,424.30 in damages: $218,000 to cover the cost of a new roadway and $5,424.30 to compensate Norfolk Southern for its maintenance of the Current Roadway. Following the jury verdict, the district court entered judgment in favor of Norfolk Southern on Count 1 as well as Count 2 (specific performance) and Count 3 (declaration of rights). The district court found that Allied Erecting had breached the agreement by failing to convey a 10 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. permanent, unconditional, and exclusive easement to Norfolk Southern or build a new roadway, and that Allied Erecting’s failure to maintain the Current Roadway restricted Norfolk Southern’s use of that roadway, as prohibited by the agreement. Likewise, the district court found that Allied Erecting had not treated the reserved easement over the pathway as “exclusive to Norfolk Southern as required by the reservation language in the Second Agreement [i.e., the quitclaim deed].” R. 183, PageID 4043. Based on these findings, the district court held that “because the jury verdict included an award to Norfolk Southern for the cost of building a Replacement Roadway, Allied Erecting’s obligation to build a new roadway is extinguished.” Id. at PageID 4045. But Allied Erecting was still required to “convey to Norfolk Southern a permanent, unconditional, and exclusive easement for the purpose of a new roadway,” and the district court ordered the conveyance to be done within sixty days. Id. The district court also ordered Allied Erecting to satisfy the jury’s damages award within thirty days, to begin maintaining the Current Roadway, and to “cease using the Reserved Easement” over the pathway. Id. at PageID 4046. 3. Allied Erecting’s Motions for a New Trial or for Judgment Notwithstanding the Verdict After the district court entered its judgment, Allied Erecting filed motions for a new trial or, in the alternative, for judgment notwithstanding the verdict (“JNOV”), also known as a renewed motion for judgment as a matter of law. See Fed. R. Civ. P. 50(b). In its order denying the motions, the district court noted that Allied Erecting had commenced bankruptcy proceedings, had “reached an agreement in Bankruptcy Court” with Norfolk Southern about payment of the judgment, and had begun making payments. R. 209, PageID 4412. Therefore, the district court found that Allied Erecting’s motions were moot. 11 No. 18-3247, Norfolk S. Ry. Co. v. Allied Erecting & Dismantling Co., Inc. Allied Erecting appealed. It asks this court to reverse the district court’s denial of its motion for JNOV or, in the alternative, remand for a new trial.