Court Opinion

ID: 9408309
Source: CourtListenerOpinion
Date Created: 2023-07-12 14:09:20.273873+00
Date Added: 2024-06-11T17:20:43.201461
License: Public Domain

THE STATE OF SOUTH CAROLINA
                        In The Court of Appeals

            Annie L. Myers, Billy R. Nobles, M. Elaine Nobles,
            James Lewis Willis, James and Lucille Mason, Joann
            Atkinson, Willie Clyde Smith, Clyde B. Broadwell, Jr.,
            and Stephen Pettigrew of Sawney Creek Farm, LLC,
            James Tuberfille, Dean Burton, Robert W. and Minnie O.
            New, Walter L. Anders, and Mary and Homer Martin,
            Respondents,

            v.

            Town of Calhoun Falls and Savannah Valley Trails, Inc.,
            Appellants.

            Appellate Case No. 2020-000578

                        Appeal From Abbeville County
                   Eugene C. Griffith, Jr., Circuit Court Judge

                              Opinion No. 5998
                  Submitted April 3, 2023 – Filed July 12, 2023

                                  AFFIRMED

            Douglas Lamar Bell, of McDonald Patrick Poston
            Hemphill & Roper, LLC, of Greenwood, for Appellants.

            Clarence Rauch Wise, of Greenwood, for Respondents.

WILLIAMS, C.J.: In this property dispute involving the abandonment of a
railway line, Annie Myers and other property owners (collectively, Respondents)
sought a judgment against Savannah Valley Trails, Inc. and the Town of Calhoun
Falls (collectively, SVT) declaring Respondents were the property owners in fee
simple of their respective properties, which were each subject to an easement held
by Seaboard System Railroad, Inc. (Railroad). On appeal, SVT argues (1) the trial
court lacked subject matter jurisdiction; (2) the doctrine of laches barred
Respondents' claims; and (3) the trial court erred in finding that when Railroad
abandoned the line at issue, the rights accompanying the previously granted
easements reverted back to Respondents. We affirm.

FACTS/PROCEDURAL HISTORY

At trial, the parties stipulated to the following facts. The properties at issue abut a
preexisting railway line extending approximately twenty-four miles from
McCormick County to Abbeville County (the line). In March 1878, the State
chartered the Savannah Valley Railroad Company (SVR) to construct the railroad.
Respondents' predecessors in title granted SVR a right-of-way on their respective
properties to allow the construction and operation of the railroad. The deeds
conveying the easements stated the following or something similar.1

             [The property owner] doth give grant bargain and sell
             unto the said Savannah Valley Rail Road Company and
             their successors and assigns the Right of Way over which
             to pass at all times . . . for the purpose of running
             erecting and establishing thereon a Railroad . . . upon
             condition and it is expressly understood that should the
             said Rail [R]oad contemplated as aforesaid be not
             erected and established on and along said strip, tract or
             parcel of land described in the above and foregoing
             indenture, then, said Indenture is to be wholly null and
             void and of no effect and the said [owner] for his heirs
             and assigns will warrant and defend the Title . . . .

(emphases added). Each successor in title received a deed subject to the easements
held by SVR and its successors and assigns. SVR transferred its interest to
Seaboard Coastline Railroad Company, which conveyed its interest to Railroad.

1
 The parties submitted one of the original easements, as a stipulated exhibit, to
serve as a representative example of the easements obtained by SVR.
In the late 1970s, Railroad decided to close the track and seek permission from the
Interstate Commerce Commission (ICC) 2 to abandon the line. On November 21,
1978, an ICC committee issued a decision allowing abandonment of the line. On
March 2, 1979, the ICC issued a final decision permitting Railroad to abandon the
line. In its decision, the ICC stated:

             (2) If the authority granted by this certificate and decision
             is exercised, [Railroad] shall submit two copies of the
             journal entries showing the retirement of the line from
             service, and shall advise this Commission in writing,
             immediately after abandonment of the line of railroad, of
             the date on which the abandonment actually took place.

             (3) If the authority granted in this certificate and decision
             is not exercised within one year from its effective date, it
             shall be of no further force and effect.

Railroad subsequently removed the tracks. On February 25, 1980, Railroad sent a
letter to the ICC stating, "In compliance with the second ordering paragraphs of
this Certificate and Decision, please be advised that this track was abandoned as of
February 15, 1980." The exact date Railroad ceased operations is unknown, but
the parties stipulate the tracks were completely removed from the railway corridor
by the date of the February 25, 1980 letter.

Railroad subsequently conveyed its property interest by quitclaim deed to Clarks
Hill – Russell Authority of South Carolina (Clarks Hill). Clarks Hill then
conveyed its property located in McCormick County to the Ninety-Six District
Resource Conservation and Development Council, Inc., which conveyed the
property to SVT on June 28, 2012. Clarks Hill also conveyed its property located
in Abbeville County, via quitclaim deed, to the Town of Calhoun Falls on April 12,
2012.

After the 1980 letter acknowledging compliance with the abandonment
requirements, neither Railroad nor Respondents made any permanent
improvements to the properties.3 On July 5, 2016, the McCormick County
property owners filed an action seeking declaratory relief as to property rights

2
 The ICC is now called the Surface Transportation Board (STB).
3
 The parties acknowledge one of the property owners installed a minor structure
on his property.
regarding the previously granted easements, after SVT began construction of a
walking trail on the former railway line.4 The Abbeville County property owners
similarly filed suit on March 29, 2018, and the trial court consolidated the matters
with consent of the parties.

On November 14, 2019, the trial court held a bench trial and took the matters under
advisement. Following the trial, the parties submitted briefs at the request of the
court. On February 21, 2020, the trial court issued two orders finding (1) Railroad
abandoned the line; (2) when Railroad abandoned the line, the easements
terminated and the associated property rights reverted to Respondents; and (3) the
doctrine of laches did not bar Respondents' claims. This appeal followed.

ISSUES ON APPEAL

I. Did the trial court have subject matter jurisdiction?

II. Did the trial court err in declaring Railroad abandoned the line and
    Respondents were the owners of the disputed property?

STANDARD OF REVIEW

"In an action at law, tried without a jury, the appellate court standard of review
extends only to the correction of errors of law." Okatie River, L.L.C. v. Se. Site
Prep, L.L.C., 353 S.C. 327, 334, 577 S.E.2d 468, 472 (Ct. App. 2003). "Questions
regarding credibility and the weight of the evidence are exclusively for the trial
court." Regions Bank v. Strawn, 399 S.C. 530, 537, 732 S.E.2d 230, 234 (Ct. App.
2012). "The nature of the underlying issue determines whether a suit for
declaratory judgment is legal or equitable." Eldridge v. City of Greenwood, 331
S.C. 398, 416, 503 S.E.2d 191, 200 (Ct. App. 1998). The present case involves the
determination of title to real property, which is a question of law. See id. ("The
dispositive question in this case concerns the determination of title to real property,
which is a legal issue."). "Moreover, while the scope or extent of an easement is a
question in equity, the existence of an easement is a factual question in an action at

4
  The National Trail System Act, 16 U.S.C. §§ 1241-1251, "provides an alternative
to abandoning a railroad right-of-way [that] allows a railroad to negotiate with a
state, municipality, or private group (the 'trail operator') to assume financial and
managerial responsibility for operating the railroad right-of-way as a recreational
trail." Caldwell v. United States, 391 F.3d 1226, 1229 (Fed. Cir. 2004).
law." Id. "It follows that termination of an easement by abandonment is a factual
question in an action at law as well." Id.

LAW/ANALYSIS

I.    SUBJECT MATTER JURISDICTION

SVT argues the trial court erred in exercising subject matter jurisdiction over the
property dispute because Respondents failed to prove Railroad abandoned the line
in compliance with the ICC's order. Specifically, SVT asserts Respondents failed
to present evidence showing Railroad submitted the requested journal entries
illustrating the retirement of the line. SVT therefore contends Railroad never
abandoned the line and the trial court's order should be vacated for lack of subject
matter jurisdiction because the STB's jurisdiction preempts the jurisdiction of the
trial court. We disagree.

Subject matter jurisdiction is a court's "power to hear and determine cases of the
general class to which the proceedings in question belong." Simmons v. Simmons,
370 S.C. 109, 113, 634 S.E.2d 1, 3 (Ct. App. 2006) (quoting Watson v.
Watson, 319 S.C. 92, 93, 460 S.E.2d 394, 395 (1995)). "Claims of lack of subject
matter jurisdiction may be raised at any time, and subject matter jurisdiction may
not be waived by filing responsive pleadings or otherwise consenting to the
jurisdiction of a particular court." Eldridge, 331 S.C. at 408, 503 S.E.2d at 196.

             A railroad that receives authority from the Board to
             abandon a line (in a regulated abandonment proceeding
             under 49 U.S.C. 10903, or by individual or class
             exemption issued under 49 U.S.C. 10502) shall file a
             notice of consummation with the Board to signify that it
             has exercised the authority granted and fully abandoned
             the line (e.g., discontinued operations, salvaged the
             track, canceled tariffs, and intends that the property be
             removed from the interstate rail network). The notice
             shall provide the name of the STB proceeding and its
             docket number, a brief description of the line, and a
             statement that the railroad has consummated, or fully
             exercised, the abandonment authority on a certain date.
             The notice shall be filed within 1 year of the service date
             of the decision permitting the abandonment (assuming
             that the railroad intends to consummate the
             abandonment). . . . If, after 1 year from the date of
             service of a decision permitting abandonment,
             consummation has not been effected by the railroad's
             filing of a notice of consummation, and there are no legal
             or regulatory barriers to consummation, the authority to
             abandon will automatically expire. In that event, a new
             proceeding would have to be instituted if the railroad
             wants to abandon the line.

49 C.F.R. § 1152.29(e)(2) (emphasis added).

"Even though preemption involves subject matter jurisdiction, the party claiming
preemption bears the burden of proving it." Eldridge, 331 S.C. at 411, 503 S.E.2d
at 197. Therefore, SVT bears the burden of proving Railroad's abandonment of the
line was incomplete. We find it failed to do so. On March 2, 1979, Railroad
received a certificate of abandonment from the ICC. In compliance with
abandonment requirements, Railroad sent a letter to the ICC on February 25, 1980,
including the docket number for the abandonment, a brief description of the line,
and a statement indicating the line was officially abandoned on February 15, 1980.
Although the record does not contain any further reference to the journal entries
requested in the certificate of abandonment, SVT failed to show Railroad did not
comply with the request. In fact, the record does not contain any evidence
showing further involvement or communication from the ICC after the issuance of
the certificate of abandonment. Thus, we hold the trial court did not err in
exercising its subject matter jurisdiction and in finding Railroad abandoned the line
in 1980. See Eldridge, 331 S.C. at 414, 503 S.E.2d at 199 ("The ICC's
jurisdiction . . . terminated upon issuance of the certificate of abandonment, and
resolution of what interests the agreements and conveyances transferred is a matter
for state law.").

II.   DECLARATORY JUDGMENT

      A.     Laches

SVT argues the trial court erred in finding the doctrine of laches did not bar
Respondents' claims. SVT contends the trial court erred in finding SVT failed to
sufficiently demonstrate prejudice should Respondents be allowed to pursue their
claims.
"Laches is an equitable doctrine defined as 'neglect for an unreasonable and
unexplained length of time, under circumstances affording opportunity for
diligence, to do what in law should have been done.'" Historic Charleston
Holdings, LLC v. Mallon, 381 S.C. 417, 432, 673 S.E.2d 448, 456 (2009) (quoting
Hallums v. Hallums, 296 S.C. 195, 198, 371 S.E.2d 525, 527 (1988)). "In order to
establish laches as a defense, a party must show that the complaining party
unreasonably delayed its assertion of a right, resulting in prejudice to the party
asserting the defense of laches." Id. "The party seeking to establish waiver or
laches has the burden of proof." Jenkins v. Refuge Temple Church of God in
Christ, Inc., 424 S.C. 320, 334, 818 S.E.2d 13, 20 (Ct. App. 2018). "The failure to
assert a right 'does not come into existence until there is a reason or situation that
demands assertion.'" Mid-State Tr., II v. Wright, 323 S.C. 303, 307, 474 S.E.2d
421, 423 (1996) (quoting Ex parte Stokes, 256 S.C. 260, 266, 182 S.E.2d 306, 309
(1971)). "Moreover, the party asserting laches must show it has been materially
prejudiced by the other party's delay." Id.

In its order, the trial court found the issue of laches was a close question, noting
Respondents' failure to assert their rights for approximately thirty years was
unreasonable. However, the court ultimately found SVT failed to show it suffered
prejudice from Respondents' delay. It stated:

             The Defendants have constructed a portion of the trail
             project, erecting signs and restoring a bridge on a portion
             of the trail. The Defendants assert that they have secured
             grants and incurred indebtedness for the project, although
             those amounts are not in evidence. Nothing is in
             evidence to show specific amounts spent or set aside for
             work on the subject property. The Defendants also assert
             in their brief that they face potential liability if the trail is
             not completed. The specifics of said liability are not in
             evidence. . . . The Court notes that a portion of the trail
             has been completed. There is no evidence of the funds
             required to complete the trail on the subject property or
             whether this money has been obtained or spent on the
             portions affected by this Order.

Initially, we note SVT failed to plead laches as an affirmative defense in its answer
and counterclaim. See Earthscapes Unlimited, Inc. v. Ulbrich, 390 S.C. 609, 615,
703 S.E.2d 221, 224 (2010) ("A party in replying to a preceding pleading shall
affirmatively set forth his or her defenses."); Rule 12(b), SCRCP ("Every defense,
in law or fact, to a cause of action in any pleading . . . shall be asserted in the
responsive pleading thereto . . . ."). Thus, the trial court could have declined to
address the defense. Nevertheless, we agree that SVT failed to present evidence
that would equip the trial court to make a finding of prejudice beyond mere
conjecture. Accordingly, we affirm the trial court on this issue.

      B.     Declaratory Relief

SVT argues the trial court erred in granting Respondents declaratory relief. SVT
asserts the trial court erred in finding Railroad abandoned the line. SVT
additionally argues the trial court erred in finding Respondents owned the disputed
properties in fee simple because SVT owned the properties under color of title.
SVT contends Respondents failed to show what property rights Railroad possessed
because they only admitted one deed as an exhibit. We disagree.

As discussed above, the trial court did not err in finding Railroad abandoned the
line in 1980. Railroad ceased operations, sought permission for abandonment from
the ICC, removed the tracks from the railway corridor, and transferred its property
interests. Further, nothing in the record indicates Railroad failed to comply with
the requirements of the certificate of abandonment. Thus, pursuant to our
precedent, the easement rights Railroad held on Respondents' properties reverted to
Respondents at the time of abandonment. See Eldridge, 331 S.C. at 422, 503
S.E.2d at 203 (affirming the trial court's ruling that the railroad's abandonment of
the railway line extinguished the easements granted for construction and operation
of the railroad); id. ("To hold otherwise would effectively gut the longstanding rule
that an easement is extinguished upon the railroad's abandonment of the right of
way for railway purposes."). Therefore, the trial court properly granted
Respondents declaratory relief as to the rights of the properties abutting the former
railway line. Accordingly, we affirm the trial court.

Regarding SVT's challenge to the trial court's use of the representative easement
deed, this argument is unpreserved for appellate review as SVT failed to challenge
the use of the deed when it was admitted by the parties as a stipulated exhibit. See
Lucas v. Rawl Fam. Ltd. P'ship, 359 S.C. 505, 510–11, 598 S.E.2d 712, 715 (2004)
("It is well settled that, but for a very few exceptional circumstances, an appellate
court cannot address an issue unless it was raised to and ruled upon by the trial
court.").

CONCLUSION
Accordingly, the orders of the trial court are

AFFIRMED. 5

GEATHERS and VERDIN, JJ., concur.

5
    We decide this case without oral argument pursuant to Rule 215, SCACR.