Court Opinion

ID: 2649297
Source: CourtListenerOpinion
Date Created: 2014-01-15 16:12:33.477108+00
Date Added: 2024-06-11T12:33:03.744319
License: Public Domain

STATE OF WEST VIRGINIA

                          SUPREME COURT OF APPEALS

CDS Family Trust, LLC, a Delaware                                                 FILED
Limited Liability Company,                                                      January 15, 2014
                                                                             RORY L. PERRY II, CLERK
Plaintiff Below, Petitioner                                                SUPREME COURT OF APPEALS
                                                                               OF WEST VIRGINIA

vs) No. 13-0376 (Grant County 11-C-46)

ICG, Inc., Vindex Energy Corp., a
West Virginia Corporation, and
CSX Transportation, Inc.
Defendants Below, Respondents

                              MEMORANDUM DECISION
        Petitioner CDS Family Trust, LLC (“CDS”), by counsel Timothy M. Miller and
Benjamin W. Price, appeals from the March 11, 2013 order of the Circuit Court of Grant County
that granted Respondent CSX Transportation, Inc.’s (“CSX”) motion for summary judgment and
Respondents ICG, Inc., and Vindex Energy Corporation’s (“Vindex”) motions for partial
summary judgment. Respondent CSX appears by Andrew S. Zettle. Respondents ICG, Inc., and
Vindex appear by John Philip Melick, Christina T. Brumley, and James Matthew Davis.

        This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.

        CDS is a Delaware limited liability company that owns certain real estate in Grant
County, West Virginia. Vindex is a West Virginia Corporation that operated a coal load out
facility in Grant County that sits on real estate adjoining property owned by CDS. ICG, Inc. is
the parent company of Vindex. CSX is a Virginia corporation that transported coal by rail on
behalf of Vindex across property owned by CDS.

        The primary issue before the Court is the dispute between CDS and CSX over the right of
CSX to use a railroad track across property owned by CDS. We find that issue is resolved by an
agreement between the parties’ predecessors that expressly creates an easement for CSX’s
railroad operations over the subject property. The circuit court relied upon the uncontroverted
language of the agreement to award summary judgment in favor of CSX. We agree that the
agreement creates an easement over the property. The secondary issue we address is whether
Vindex has standing to counterclaim for declaratory and injunctive relief against CDS to request
the circuit court to order a supplemental deed to the property in question. We find that Vindex

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does have standing to pursue this counterclaim because it is seeking to enforce its predecessor in
interest’s rights. We therefore affirm the decision of the circuit court.

                                Factual and Procedural History

        While owned by brothers Carl, Carmen, and Warren DelSignore, Buffalo Coal Company
(Buffalo) entered into a mine track agreement (Agreement) with the Baltimore and Ohio
Railroad Company (B & O) dated September 3, 1984, contemplating construction of a railroad
track onto property owned by Buffalo for the use of a load-out facility, and granting B & O the
right to use and control that track free of charge. CDS and Vindex are both successors in interest
of Buffalo. CSX is successor in interest of B & O. The Agreement states, in part:

               The term “mine track”, as used herein, shall mean all of that track having a
       length of approximately nine thousand twelve and eight-tenths feet (9,012.8’), . . .
       and shall include supporting structures and appurtenances used in connection with
       said track.

               Said mine track is owned and shall be maintained by the Railroad, and
       Railroad shall have the absolute right to control the use of the same and to use, for
       Railroad purposes and without cost to it, the whole or any part of said mine track
       whenever, in the sole judgment of Railroad such use does not materially affect the
       use of said mine track by Operator. . . .

              Operator will promptly remove [earth, rock, coal, slate, or any other
       material], and shall be liable for any damages caused by the presence of such
       materials on the track or land of Railroad.

                Railroad may, at its own expense, extend, rearrange, alter, relocate, or
       reconstruct mine track or change the elevation thereof, and this agreement shall
       apply to any and all extensions or additions or relocations of, the aforesaid mine
       track . . .

               Operator shall keep said mine track clear of obstructions and shall not
       place or permit to be placed, or to remain, any structure, equipment, material,
       object, excavation, or obstruction of any kind, either temporary or permanent,
       within the clear space . . .

               Except as herein otherwise provided, the term of this agreement shall be
       for one month from the date hereof, and thereafter, from month to month upon the
       same terms until terminated, it being understood and agreed that either party shall
       have the right to terminate the same at the end of the original term or at any time
       thereafter by giving to the other party not less than thirty (30) days’ notice in
       writing, but such termination shall not affect nor impair any liability or
       obligations incurred hereunder prior to such termination, nor shall such
       termination affect or impair Railroad’s ownership and control of said mine track.

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               This agreement shall be binding upon the successors and assigns of the
       parties hereto respectively.

A plat of the line extension was attached to the Agreement illustrating the rail line extension
from the current track.

       As we noted above, CDS and Vindex are both successors in interest of Buffalo through a
complex series of transactions and a bankruptcy order involving Buffalo’s assets.1 CSX is
successor in interest of B & O.

        On July 18, 2011, CDS sued ICG, Inc., Vindex, and CSX, alleging that they had been
operating on the property of CDS without lawful right. Vindex answered and counterclaimed for
declaratory and injunctive relief against CDS, and requested the circuit court to order CDS or a
special commissioner to execute the supplemental deed as covenanted in the 2001 deed between
CDS and Buffalo. Vindex argued that it acquired the right to enforce the covenant from Buffalo

       1
         Carl survived Carmen and Warren DelSignore, and thus became the owner of Buffalo.
In his will, Carl created CDS. The trustees of CDS negotiated the sale of Buffalo with the late
Charles R. Howdershelt and Gerald W. Ramsburg, and their C & G Energy Group, Inc. The
acquisition was effected through several written agreements, including a February 28, 2001,
Stock Purchase Agreement in which the trustees of CDS, as the sellers of Buffalo, expressly
represented to C & G that the 1984 Agreement was a Buffalo asset, that Buffalo was in
compliance with and enjoyed quiet possession of the mine track agreement and that the
agreement was in full force and effect. CDS also acquired from Buffalo over 1,000 acres in
Grant and Tucker Counties, from which Buffalo accepted the property on which Buffalo would
continue operations, including use of the load out. CDS and Buffalo each thought – incorrectly –
that the section of railroad track required for unit trains to access the load out was captured in the
description of the property excepted from the Buffalo deed to CDS.
        Buffalo and CDS covenanted to “jointly commission a survey of the excepted tracts and
thereafter join in the execution and recording of a supplemental deed particularly describing that
property.” Throughout the period of C & G’s ownership, Buffalo claimed in good faith all of the
property, loaded unit trains, including for Vindex, and used the railroad facilities from 2002 to
2006. From the time that C & G acquired Buffalo in January 2001 until January 2007, the new
owners believed that Buffalo owned all of the relevant property and enjoyed all of the rights in
the 1984 Agreement. CDS questioned none of this use, so Buffalo never required CDS to jointly
commission a survey to support the supplemental deed.
        Buffalo filed a Chapter 11 bankruptcy petition on May 5, 2006. CDS participated in
Buffalo’s bankruptcy proceedings, and approved the January 30, 2007, conveyance from Buffalo
to Vindex of the property excepted by Buffalo from its 2001 deed to CDS. Under § 2.1 of the
agreement, which was filed with and approved by the bankruptcy court after notice to all
interested parties, Buffalo conveyed to Vindex all of its right, title, and interest in “[a]ll real
property and interests in real property owned by Buffalo Coal Company located in Grant and
Tucker Counties, West Virginia,” and the “[r]ights reserved by Buffalo in the 2001 [d]eed.” The
transfer was consummated on January 19, 2007, with a deed and separate assignment to all of
Buffalo’s right, title, and interest in the 1984 Agreement.

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in 2007, following the bankruptcy proceedings.

      The circuit court succinctly summarized the substance of the dispute between CDS,
Vindex and ICG, Inc.:

       41. At the outset of the analysis, it is important to note the degree of trespass CDS
       Family Trust alleges. In its letter to ICG, Inc. regarding the disputed tracks, CDS
       Family Trust stated that “[a]ssuming that the railroad tracks siding runs NE to SW
       to the load out facility, then continuing maybe 15 train cars further SW, the
       Vindex property line ends and thereafter the cars go onto Trust Property.” Dunn
       Letter, p. 2, ¶ 1 (January 31, 2009). Accordingly, it would appear that CDS
       Family Trust claims that “old” Buffalo Coal Company reserved unto itself the
       entirety of the railroad track including that which serviced the load out facility,
       but failed to reserve the remainder of the track and siding which would have
       allowed it to efficiently utilize the load out facility and load the rail cars with coal.
       A curious action since the remaining mine track and siding terminates almost
       immediately on the property CDS Family Trust claims was deeded to it by “old”
       Buffalo Coal Company.

       The circuit court recognized that the resolution of the disputes between CDS and CSX
involved an interpretation of the terms of the 1984 Agreement between B & O and Buffalo:

       [CSX] request[s] that this Court grant summary judgment on the basis that CSX
       has a valid easement over the property in question irrespective of the dispute
       between CDS Family Trust and Vindex as to its ownership and inasmuch as CSX
       has control over its shipping lines, then ICG and Vindex are both entitled to use
       same at [CSX’s] discretion.

       CSX moved for summary judgment on the basis of the 1984 Agreement. Vindex, as
shipper of CSX, joined in CSX’s motion. CDS moved for summary judgment, arguing, as to
Vindex, (1) that Vindex is not a successor in interest to Buffalo; (2) that Vindex lacks a deed or
will conveying interest to the property as required by West Virginia Code § 36-1-1; (3) that
Vindex is a stranger to the 2001 deed; and (4) that Vindex was not a bona fide purchaser.

       The circuit court denied CDS’s motion, finding that CSX has a valid easement, and that
Vindex as a CSX shipper has the right to the mine track. The circuit court treated Count 1 of
Vindex’s counterclaim as an action to quiet title “to the properties owned by Vindex,” noting that
Vindex had submitted a plat showing the properties it acquired from Buffalo in 2007, and
ordered CDS to file its own survey if it opposed Vindex’s, at which point the dispute would be
resolved.

       Thus, the only questions remaining before the circuit court were: (1) the precise
description of the property;2 and (2) Count 2 of Vindex’s counterclaim, which concerns CDS’s

       2
          The circuit court treated Vindex’s request for declaratory judgment as a motion to quiet
title, and held:
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use of a haul road that has no relationship to the matters raised by CDS in this appeal.

       CDS appeals from the March 11, 2013, order3 of the circuit court which granted CSX’s
motion for summary judgment and the motions of Vindex and ICG for partial summary
judgment. The dispositive ruling, with respect to CDS’s claims against CSX, is that “CSX has a
valid easement agreement over the entirety of the mine track.” The circuit court also denied
CDS’s motion for summary judgment on its counterclaim against Vindex.

                                       Standard of Review

        We begin our analysis by acknowledging this Court’s standard of review. We previously
held that “[a] circuit court’s entry of summary judgment is reviewed de novo.” Syl. Pt. 1, Painter
v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994). “A motion for summary judgment should be
granted only when it is clear that there is no genuine issue of fact to be tried and inquiry
concerning the facts is not desirable to clarify the application of the law.” Syl. Pt. 3, Aetna Cas.
& Sur. Co. v. Federal Ins. Co., 148 W.Va. 160, 133 S.E.2d 770 (1963). Further, “[s]ummary
judgment is appropriate if, from the totality of the evidence presented, the record could not lead a
rational trier of fact to find for the nonmoving party, such as where the nonmoving party has
failed to make a sufficient showing on an essential element of the case that it has the burden to
prove.” Syl. Pt. 2, Williams v. Precision Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (1995).

                                            Discussion

        On appeal, CDS raises five assignments of error relating to its trespass claims: (1) that the
circuit court erred in holding that the Agreement grants to CSX a permanent and irrevocable
easement across the real property owned by CDS; (2) that the circuit court erred in relying upon
Article XI, Section 9 of the Constitution of West Virginia4 to conclude that the mine track

       To resolve the boundary line issue, the Court will treat the request for Declaratory
       Judgment as one to quiet title to the properties owned by Vindex. Inasmuch as
       Vindex already completed its survey, the Court will allow 30 days for the CDS
       Family Trust to commission a survey of their properties in the disputed boundary
       areas. Should CDS Family Trust decline to commission a survey of the area or
       fail to do so in a timely fashion, this Court will appoint a special commissioner to
       issue the deed requested by Vindex.

The boundary line dispute remains pending and is not the subject of this appeal.
       3
          The circuit court entered a combined order applicable to this case and a separate action
between CDS, ICG, Inc., and Vindex involving a coal lease agreement (Civil Action No. 12-C-8)
that is subject of a separate appeal before this Court No. 13-0375.
       4
         West Virginia Constitution Article XI, Section 9 provides that railroads in West Virginia
“are hereby declared public highways and shall be free to all persons for the transportation of
their persons and property thereon, under such regulations as shall be prescribed by law[.]” In
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agreement created a public highway across the private property owned by CDS; (3) that the
circuit court erred in holding that CSX and Vindex may cross over and through the private
property owned by CDS in order to access a private coal load out facility located on property
owned by Vindex; (4) that the circuit court erred by ruling that the Agreement cannot be
terminated by CDS despite the express termination clause; and (5) that the circuit court erred in
determining that the Agreement conveyed an interest in the land or an easement through the
private property owned by CDS.

         After careful review of this matter, we find that all of the issues raised by CDS pertaining
to its trespass claims can be resolved by determining whether the Agreement created an easement
over the property.5 For the following reasons, we find that Agreement created an easement to

Syllabus Point 5 of A & M Properties v. Norfolk Southern Corporation, 203 W.Va. 189, 506
S.E.2d 632 (1998), this Court held that, under West Virginia Constitution Article XI, Section 9,
no interest in a railroad trackway can be established by way of adverse possession, prescriptive
easement or equitable estoppel, so long as the trackway continues to be used for railroad
purposes.
       5
           Black’s Law Dictionary (8th ed. 2004) defines an “easement” as:

       An interest in land owned by another person, consisting of the right to use or
       control the land, or an area above or below it, for a specific limited purpose (such
       as to cross it for access to a public road). The land benefitting from an easement is
       called the dominant estate; the land burdened by an easement is called the servient
       estate. Unlike a lease or license, an easement may last forever, but it does not give
       the holder the right to possess, take from, improve, or sell the land. The primary
       recognized easements are (1) a right-of-way, (2) a right of entry for any purpose
       relating to the dominant estate, (3) a right to the support of land and buildings, (4)
       a right of light and air, (5) a right to water, (6) a right to do some act that would
       otherwise amount to a nuisance, and (7) a right to place or keep something on the
       servient estate.

       We gave a similar definition of the term in Town of Paden City v. Felton, 136 W.Va. 127,
136, 66 S.E.2d 280, 286 (1951), where we stated (with citations omitted):

       An easement in real estate is an interest in land and for every such easement there
       must be two distinct estates or tenements, the dominant to which the right
       belongs, and the servient upon which the obligation rests. It is an incorporeal
       hereditament and may be created in various ways. The general rule, subject to
       several exceptions, is that an easement can be created only by grant, express or
       implied, or by prescription, which presupposes a grant. An easement may,
       however, be created by agreement or covenant as well as by grant. Many
       authorities say that, as an exception to the general rule just stated, an easement
       may sometimes be created by estoppel. One eminent authority states that an
       easement may be created or acquired by six different methods: express grant,
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“control and use” the mine track for railway purposes. CSX is the successor of B & O, and
possesses the rights granted by Buffalo to the B & O in the Agreement. Therefore, CSX is
operating lawfully under the Agreement and CDS’s trespass claims fail.

        Unlike certain railroad sidetrack agreements that grant limited right to the railroad to
conduct operations to serve a specific customer for a limited duration of time, the Agreement in
the instant case granted the railroad a permanent right to conduct railroad operations that would
serve any of the railroad’s future customers. The Agreement explicitly states that the “mine track
is owned” by the railroad; and the Agreement provided that the railroad shall have “the absolute
right to control the use of the same and to use, for Railroad purposes and without cost to it, the
whole or any part of said mine track whenever, in the sole judgment of Railroad such use does
not materially affect the use of said mine track by operator.” The Agreement further provided
that the “Railroad may, at its own expense, extend, rearrange, alter, relocate, or reconstruct mine
tack or change the elevation thereof.” The railroad was thus granted the right, at the railroad’s
expense, to modify the mine track in such a manner as the railroad may deem appropriate to
eliminate any interference that its railroad operations may cause to the operator’s operations, and
to allow the track to be devoted by the railroad for any future railway purposes, “without cost to
it.”

        The Agreement made clear that the railroad’s ownership and right to use the track for
railroad purposes were not dependent upon a continuing customer relationship with Buffalo, or
its successors or assigns, by specifically providing that termination of the Agreement shall not
“affect or impair Railroad’s ownership and control of said mine track.” The railroad thus
obtained a permanent right to control the use of the mine tracks that extended its railway line,
and to use the railway tracks for any railroad purposes, without incurring any costs for such use.

        Therefore, we find that the Agreement created an easement to control and use the mine
track for railway purposes. In Syllabus Point 1 of Post v. Bailey, 110 W.Va. 504, 159 S.E. 524
(1931) we recognized that “[a]n easement may be created by covenant or agreement as well as
by grant.”6
        Furthermore, the Agreement specifically provides that it “shall be binding upon the
successors and assigns of the parties hereto respectively,” and further provides that the
termination of the Agreement shall not “affect or impair Railroad’s ownership and control of said

       reservation or exception in a deed, implied grant, prescription, a statutory
       proceeding usually under the power of eminent domain, and estoppel.

(Emphasis supplied). See Newman v. Michel, 224 W.Va. 735, 740-41 n.3, 688 S.E.2d 610, 615­
16 n.3 (2009).
       6
        CDS contends that the easement must fail because the Agreement is not a “deed” or
“will” and thus cannot convey an interest in real property consistent with West Virginia Code §
36-1-1. We find this argument unpersuasive because in West Virginia Code § 36-3-5a, the
Legislature specifically recognized that easements may be created by instruments other than
deeds.

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mine track.” The Agreement expressly differentiated between the contract for rail service that
could be terminated upon thirty-day written notice, and the continuing easement of the railroad
to use and control the mine track that would survive the termination of the service obligations.

        The remaining assignment of error raised by CDS is that the circuit court erred in failing
to recognize that Vindex lacked standing to assert a counterclaim against CDS to require the
issuance of a supplemental deed. We find this assignment of error lacks merit. To resolve this
boundary line dispute, the circuit court treated the request for declaratory judgment as one to
quiet title to the properties owned by Vindex. An action to quiet title is “now a universal
procedure to determine disputed titles to land[.]” Marthens v. B & O Railroad Co., 170 W.Va.
33, 38 n.2, 289 S.E.2d 706, 712 n.2 (1982). Furthermore, Vindex is seeking to enforce its
predecessor in interest’s rights by requiring a supplemental deed, and it acquired that right
through § 2.1 of its 2007 asset purchase agreement with Buffalo.

                                           Conclusion

        In view of the foregoing, we find that summary judgment was appropriate in this case.
We also find that Vindex has standing to file an action to quiet title to its property. We therefore
affirm the March 11, 2013 order of the Circuit Court of Grant County.

                                                                                         Affirmed.

ISSUED: January 10, 2014

CONCURRED IN BY:

Chief Justice Robin Jean Davis
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II

DISSENTING:

Justice Brent D. Benjamin

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