Court Opinion

ID: 203848
Source: CourtListenerOpinion
Date Created: 2011-02-07 06:24:18+00
Date Added: 2024-06-11T17:27:39.945219
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 08-2099

                            DUNELLEN, LLC,

                         Plaintiff, Appellant,

                                  v.

                        GETTY PROPERTIES CORP.,

                         Defendant, Appellee.

             APPEAL FROM THE UNITED STATES DISTRICT COURT

                   FOR THE DISTRICT OF RHODE ISLAND

               [Hon. Mary M. Lisi, U.S. District Judge]

                                 Before
                      Boudin, Farris,* and Howard,
                            Circuit Judges.

     Gerald J. Petros with    whom Mitchell R. Edwards and Hinckley,
Allen & Snyder LLP were on    brief for appellant.
     Robert K. Taylor with    whom James W. Ryan and Partridge Snow &
Hahn LLP were on brief for    appellee.

                             June 1, 2009

     *
         Of the Ninth Circuit, sitting by designation
          BOUDIN, Circuit Judge. This appeal requires us to answer

the question whether a pier in East Providence, Rhode Island, is--

as to the parties in this dispute--to be considered real property

("realty") and so subject to the law of easements or, because of an

agreement by the parties' predecessors-in-interest, is personal

property ("personalty").    Based on a prior decision of the Rhode

Island Supreme Court, we affirm the federal district court's

decision that the pier is personalty.

     The history of the background transactions and relevant prior

litigation is remarkably complex, but can be severely truncated.

Like the district court, we think that the classification of the

property was settled earlier by statements of the Rhode Island

courts in cases involving the same property and the same parties or

their predecessors-in-interest.         The chance that these precise

circumstances will recur is, happily, close to zero.

     Plaintiff-appellant    Dunellen,     LLC,    is   the    owner    of    the

Wilkesbarre   Pier   projecting   into    the    Seekonk     River    in    East

Providence, Rhode Island.   The pier was built during the 1870's by

the Wilkesbarre Coal and Iron Company and was later acquired by the

Providence and Worcester Railroad Company ("P&W").           Initially, the

pier was used to offload coal from barges; today the pier is a

facility for offloading petroleum products from ships using two oil

pipelines running along the pier.

                                  -2-
       As a result of numerous corporate transactions, agreements and

law suits over the past century, ownership of the land underlying

the pier at one point became separated from ownership of the pier;

but ownership of the pier and land underneath now belong solely to

Dunellen subject to rights of others to use the pier.    One of those

others is defendant-appellee Getty Properties, which retains a

right to use the north side of the pier under a reservation of

rights contained in a 1941 deed.

       Through state court litigation in the 1970s, Dunellen's own

predecessor P&W recovered ownership of the pier based on rights

contained in the same 1941 deed.       Providence & Worcester Co. v.

Exxon Corp., 359 A.2d 329 (R.I. 1976).    In that decision, the state

supreme court held that following the "consensus of the parties to

the 1941 deed," the pier was personalty and that P&W's exercise of

its reserved rights gave it a "fee simple to personalty, that is,

a conveyance of the totality of interests in the existing pier save

for defendants' right to use the north side of said pier."    Id. at

341.

       Getty had use of the pier under agreements with a predecessor

of Dunellen with Getty paying part of taxes and repairs; but in

2000 a dispute arose about repairs and Getty sued Dunellen's

predecessor.    A jury awarded Getty damages for breach of contract

and, separately, the judge reaffirmed Getty's right to use the

north side of the pier--calling the right an "easement"-- despite

                                 -3-
the claim that this right had been abandoned or that Getty was

estopped to assert it.           But the court declined to decide what

obligations Getty might have to contribute to costs independent of

an agreement.

       After the law suit, Getty and Dunellen were unable to reach

a new agreement as to sharing of costs, and Getty has not used the

pier    since   early    2003.      Dunellen   thereafter    made   capital

improvements and repairs and unsuccessfully sought payment from

Getty of half the costs.         Dunellen then brought the present suit

against Getty in federal district court, seeking both past costs

from Getty and a declaration that Getty would also be liable for a

share of future costs as long as it claimed a right to use the

north side of the pier.

       On summary judgment, Getty prevailed.       Dunellen LLC v. Getty

Props. Corp., 557 F. Supp. 2d 263 (D.R.I. 2008).                The court

rejected Dunellen's judicial estoppel argument.             Id. at 269-70.

The court also ruled that the 1976 Rhode Island Supreme Court

decision--that the pier was personalty--was binding on it.           Id. at

270-71.   Since Getty is not using the pier and was not at the time

Dunellen made improvements, the court said it had no obligation to

pay.    Id. at 272.     Dunellen now appeals.

       We agree with the district court that the Rhode Island Supreme

Court said that the pier should be regarded as personalty and that

characterization should be respected.           The characterization may

                                     -4-
surprise anyone raised on the common law rule that a fixture

becomes part of the real estate, a fixed pier being a classic

fixture. Prospecting Unlimited, Inc. v. Norberg, 376 A.2d 702, 705

(R.I. 1977); Butler v. Butler's Diner, Inc., 98 A.2d 875, 876 (R.I.

1953). But courts sometimes allow parties to agree that annexation

of personal property to real estate will not change its legal

character,1 which seemingly occurred incident to the 1941 deed.

     However     this    may       be,   we    will    not    decide     afresh   the

classification of a particular piece of property under state law

where, as here, the state's highest court has decided the very

issue in litigation that involved predecessor companies.                    Dunellen

argues   that,   as     it   now    owns      both    the   land   and   pier,    this

unification should supplant the state court ruling; but for such a

claim Dunellen would have been better off suing in state court.

Porter v. Nutter, 913 F.2d 37, 40-41 (1st Cir. 1990).

     Dunellen also invoked judicial estoppel.                 Indeed, courts have

recognized that where "a person has previously dealt with an

article as personal property, he may be estopped to subsequently

treat it as realty where the inconsistent position will result in

prejudice to one who has acted in justifiable reliance upon the

     1
      E.g., Hughes v. Young, 444 S.E.2d 248, 250 (N.C. App. 1994);
Blehm v. Ringering, 488 P.2d 798, 800-01 (Or. 1971) ("[p]arties may
agree that an annexed article shall be regarded as personalty"); 2
Tiffany, The Law of Real Property, § 612 (3d ed. 1939 & Supp. 2008-
09) ("The owner of a chattel and the owner of land may agree that
the annexation of the chattel to the land shall not change the
legal character of the chattel . . . .").

                                         -5-
apparent status of the article as personalty."               Chermside Jr.,

Estoppel to Assert that Article Annexed to Realty is or is not A

Fixture, 60 A.L.R. 2d 1209 § 5[a] (1958) (citing cases).

       But here it was Dunellen's predecessor that argued in prior

litigation that the pier was personalty and used that decision to

regain control of the pier. Providence and Worcester Co., 359 A.2d

at 341.     Judicial estoppel, a somewhat malleable doctrine using

equitable principles, is mainly concerned with letting a party who

prevailed earlier on a position in court from reversing course in

later litigation.     That description applies more to Dunellen than

to Getty and the district court did not err in refusing to apply

estoppel.

       In its 2002 law suit, where it prevailed, Getty did describe

its right to use the pier as being "in the nature" of an easement;

but the qualifier suggests that the term was used as a reasonable

analogy; in fact, Getty also specifically referred to the 1976

Rhode Island Supreme Court decision characterizing the pier as

"personalty."     The   trial   court     in   that   case   used   the   term

"easement" without the qualifier but, however read, the epithet

cannot overcome the state supreme court's characterization.

       For similar reasons we reject Dunellen's argument that Getty

is collaterally estopped from asserting that its right to use the

pier    constitutes   personalty.       Collateral     estoppel     precludes

relitigation of a settled matter where, inter alia, "the point was

                                    -6-
actually litigated in the earlier proceeding."               Acevedo-Garcia v.

Monroig, 351 F.3d 547, 575-76 (1st Cir. 2003).                      In the 2002

litigation, the point that was actually litigated was whether Getty

had abandoned its right to use the pier.

       Both parties agreed (and thus did not dispute) that the law of

easements provided a framework to determine that question.                    The

Court did not decide, nor did Getty concede, that the pier was no

longer   personalty,      so    collateral     estoppel   cannot    bar   Getty's

present argument.       Finally, Dunellen did not raise its collateral

estoppel argument in the district court so, in addition, the claim

is waived.     Daigle v. Me. Med. Ctr., Inc., 14 F.3d 684, 687 (1st

Cir. 1994).

       The   real    property   label,    carrying    with   it    remnants   of

medieval land law, would assist Dunellen although perhaps less than

it thinks.     In general, one who holds an easement in real property

is required to make expenditures to keep the property in repair

and,   often    in    proportion    to    use,   to   contribute     to   upkeep.

Restatement (Third) of Property: Servitudes § 4.13(1) (2000).                 It

is less clear that major improvements could be charged to a non-

using, non-consenting easement holder.

       In any event, lacking the real property label, Dunellen had to

give us reason to think that Getty was liable to contribute to

upkeep and improvements with respect to an interest in personalty

that it was not using and Dunellen has pointed to nothing in Rhode

                                         -7-
Island law that creates such an obligation. If Getty exercises its

rights and the parties cannot agree on payment, Dunellen might

consider whether a state court would be the best forum to resolve

that dispute.

     Affirmed.

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