Berthal O. Williams and Patricia Williams, Appellants-Plaintiffs,
The Indiana Rail Road Company, Appellee-Defendant
Appeal from the Sullivan Circuit Court. Lower Court Cause No. 77C01-1206-CC-332. The Honorable P.J. Pierson, Judge.
ATTORNEYS FOR APPELLANTS: Louis F. Britton, Charles H. Ray, Cox, Zwerner, Gambill, & Sullivan, LLP, Terre Haute, Indiana.
ATTORNEYS FOR APPELLEE: John C. Duffey, Heather L. Emenhiser, Stuart & Branigin, LLP, Lafayette, Indiana.
Pyle, Judge. Friedlander, J., concurs. Mathias, J., dissents with separate opinion.
Statement of the Case
[¶1] This appeal involves an " indenture" or agreement--dating back to 1901--between property owners and a railroad company. The indenture gave the railroad company a right to build and maintain a dam and the resulting accumulation of water on the landowners' property at a depth of fourteen to twenty feet so that the railroad could use it for railroad purposes. More than 100 years later, subsequent property owners--Berthal O. Williams (" Berthal" ) and Patricia Williams (" Patricia" ) (collectively " the Williamses" )--attempted to enforce that indenture with a subsequent railroad--the Indiana Rail Road Company (" IRR" )--and argued that IRR had breached the indenture. IRR moved for summary judgment, arguing
that: (1) the 1901 indenture between the original parties was merely a personal obligation and not a covenant that ran with the land; (2) even if it was, the express terms of the indenture did not impose a duty on it to maintain the pond at a specified depth; and (3) even if the indenture so required maintenance of a specific pond depth, the Williamses could not enforce it against IRR because any alleged breach occurred before the Williamses purchased the property, causing any such covenant to cease running with the land. The trial court summarily granted IRR's summary judgment motion.
[¶2] The Williamses now appeal that order and argue that the trial court erred by granting summary judgment to IRR because none of IRR's proposed arguments support that judgment. Because we conclude that the indenture was a covenant running with the land, that the terms set forth in the indenture required IRR to maintain the dam and the water level at a specified depth, and that the indenture contained a covenant, perpetual in nature, that did not cease upon a prior breach, we conclude that the trial court prematurely granted summary judgment. Accordingly, we reverse the trial court's judgment and remand for further proceedings.
[¶3] We reverse and remand.
[¶4] Whether the trial court erred by granting IRR's motion for summary judgment.
[¶5] In 1899, in a handwritten instrument, Lucy and Constantine Stewart (" the Stewarts" ) conveyed a " perpetual" right-of-way over their land in Sullivan County to Southern Indiana Railway Company (" Southern" ) for " railway purposes." (App. 38). This right-of-way was granted to Southern and " its successors and assigns[.]" (App. 38). The instrument conveying the right-of-way was recorded that same day.
[¶6] Two years later, in April 1901, the Stewarts, along with another couple, entered into an " Indenture" with Southern. The Indenture provided:
THIS INDENTURE MADE AND ENTERED INTO this 27th day of April in, 1901, by and between the Southern Indiana Railway Company, party of the first part, and Constantine W. Stewart and Lucy A. Stewart, husband and wife, and John W. Boston and Sarah A. Boston, husband and wife, parties of the second part, WITNESSETH:
That Whereas the said Constantine W. Stewart and wife and John W. Boston and wife, of the said parties of the second part are the owners of the following described real estate situate[d] in the County of Sullivan, State of Indiana, to-wit:
The South East Quarter (1/4) also the North East Quarter (1/4) of the South East Quarter (1/4) of Section One (1) Township Nine (9) North of Range Eight (8) West.
And [w]hereas the said party of the first part [Southern] is the owner of a right of way running through or adjacent to the said above described lands and whereas the said party of the first part [Southern] is desirous of erecting and
constructing and maintaining a dam on its said right of way for the purpose of accumulating a body of water to the end that it may use the same for railway and other purposes, which said dam it desires to erect and construct at or near a railroad bridge on its said right of way through and under which said bridge a stream of water flows and which said stream passes through the above described lands.
Now, [t]herefore, in consideration of the benefits accruing to said owners of said lands and in further consideration of the right which is hereby granted unto said owners of stocking the pond or accumulation of water occasioned by the erection and construction of said dam with game fish, the parties of the first part [Southern] will also assist in stocking [the] pond with fish and the right of said owners and others, by their consent, to take fish from said pond, and the further consideration of the right which is hereby granted to said owners to use said water for farm or other purposes, and the right to cut and use or dispose of ice therefrom, and the right to use said accumulation of water for boating purposes, the said parties of the second part [the Stewarts and the Bostons] hereby grants [sic] unto the said party of the first part [Southern] the right to construct and maintain at or near the bridge aforesaid a dam which shall be not less than fourteen feet or more than twenty feet in height and of sufficient length to properly and effectually dam the water flowing through the said stream so as to acquire an accumulation of water of a depth of not less than fourteen or more than twenty feet at its deepest point, and so as to cause an accumulation of water which may cover whatever portion of said above described lands as the said dam so constructed may reasonably cause to be overflowed, except that the overflow shall not cut off access to a strip of land on the north east part of said land, and the said owners of said lands hereby grant unto the said party of the first part [Southern] the right to maintain the said dam and said accumulation of water on said lands, with the further right to use the above described lands for public gatherings and pic-nic purposes, it being understood that the parties of the second part [the Stewarts and the Bostons] in the boating, pic-nic and public gathering purposes hereinbefore granted to them shall have the right of all revenue derived therefrom. It is understood that the said second party [the Stewarts and the Bostons] may, at his option, terminate the right to have pic-nic and public gatherings on said lands.
It is further agreed by the parties hereto that said first part [Southern] shall construct a wife fence around said pond or body of water, within ten feet of the water line of said pond, the fence to be maintained by the first party [Southern].
IN WITNESS WHEREOF, The Southern Indiana Railway Company has caused in duplicate its corporate name to be hereunto subscribed by its President, and its corporate seal to be affixed and attested by its secretary, this 27th day of April 1901. And the parties of the second party [the Stewarts] have hereunto set their hands and seals this 27th day of April 1901.
(App. 39) (emphases added). Thereafter, Southern constructed a dam, Hickory
Dam, on its right-of-way. At some later point, Southern also built a water tower and pump adjacent to the dam. The Indenture was later recorded in January 1945.
[¶7] In November 2005, the Williamses purchased property east of and adjacent to the railroad's right-of-way from Alice Jane Schollaert via a warranty deed. The legal descriptions for the two tracts of land conveyed contained references to the railroad right-of-way as a boundary line for the tracts of land. Additionally, the warranty deed provides that it is " [s]ubject to any and all easements, agreements and restrictions of record." (App. 86).
[¶8] In May 2006, IRR acquired the railroad, including the right-of-way, through a quit claim deed and easement agreement with Soo Line Railroad Company d/b/a Canadian Pacific Railway. After IRR acquired the right-of-way, it did not use the pond or any water from the pond.
[¶9] In August 2008, Berthal sent a letter to IRR to notify it that there was a " large sink hole" near the dam and railroad that, in Berthal's opinion, was " undermining the integrity of [IRR's] dam and the overlying rail tracks." (App. 65). In the letter, Berthal opined that the " dangerous condition" of the sink hole would " eventually result [in] a significant surface, subsidence, possibly the washout of the dam, and potentially a catastrophic derailment." (App. 65). Berthal also referenced the Indenture entered into by IRR's and Berthal's " predecessors" as well as the dam and " resulting lake" that were " created under" the 1901 Indenture. Berthal stated that this " agreement provides for certain obligations to maintain the lake" and alleged that these obligations were now IRR's obligations. (App. 65). In his letter, Berthal stated that the overflow water from the dam was " exiting the lake through the sink hole" and that the sink hole had been there since at least 2004. (App. 65).
[¶10] Approximately two years later, in June 2010, Berthal sent IRR another letter regarding the sink hole and his concerns regarding it. Berthal also stated that " the sink hole is allowing the water level of the lake to fall 1 to 2 feet below an overflow device installed by Canadian Pacific Railway in 2004" and " to a level significantly below the level which the Railroad is required to maintain[.]" (App. 67). Berthal also stated that, pursuant to the Indenture, IRR was required to " maintain an accumulation of water of a depth of not less than 14 nor more than 20 feet at its deepest point in the pool of the lake created by the dam." (App. 67).
[¶11] On June 4, 2012, the Williamses filed a complaint against IRR and then filed an amended complaint on November 5, 2012. In their amended complaint, the Williamses--citing to the Indenture entered by their " predecessor-in-interest" and IRR's " predecessor-in-interest" -- asserted that " [i]n consideration for permitting Southern to construct the dam and create and use the pond upon the Real Estate, Southern agreed, among other things, to maintain the dam and pond once constructed in accordance with the requirements specified in the Indentured Agreement." (App. 16). Thus, the Williamses alleged that IRR, as successor to Southern, was required but had " refuse[d]" to maintain the dam and the pond
as specified in the Indenture between the parties' predecessors-in-interest. (App. 17). They sought " an injunction and judgment against [IRR] to repair the dam and to bring the pond into compliance with the requirements of the Indentured Agreement[.]" (App. 17). In other words, the Williamses sought to have the trial court order IRR to maintain the pond on the Williamses' property so that it would be at a depth of at least fourteen feet. Additionally, they sought damages " in an amount sufficient to compensate [them] for their loss[.]" (App. 17).
[¶12] Thereafter, IRR filed a motion for summary judgment, arguing that: (1) the 1901 Indenture between the original parties was not a covenant that ran with the land; (2) even if it was, the express terms of the Indenture did not impose a duty on IRR to maintain the pond at a specified depth; and (3) even if the Indenture so required, the Williamses could not enforce the Indenture against IRR because any alleged breach occurred before the Williamses purchased the property, causing any such covenant to cease running with the land.
[¶13] In its designated evidence, IRR included an affidavit from Jennifer Born (" Born" ), an historian who served as a consultant for IRR to conduct research about the railroad in Indiana, wrote a book about the history of Indiana railroads, and assisted IRR in the organization of its historic archives. In her affidavit, Born explained the history of steam engines and the importance of railroads being able to use or acquire a water source to power its steam engines. She explained that in 1901--when the Indenture was entered--railroads operating in Indiana, including Southern, used locomotives powered by steam. Born further explained that in order to obtain water sources for their steam locomotive, railroads frequently entered into agreements with landowners to obtain water from an existing water source or to create a pool of water from which they could take water. She attested that the Indenture was " consistent with the agreements railroads entered into with property owners to provide a water source for their locomotives." (App. 60). Finally, she explained that by the late 1930's, railroads in Indiana began using diesel engines and that they had not used steam engines since 1954. She also attested that Southern's water tower and pump, which would have been used to " siphon and hold water from the pond[,]" had not been used since 1954. (App. 61).
[¶14] IRR also included an affidavit from its vice-president of engineering, Peter Ray (" Ray" ), who attested that IRR had not used the pond or any water from the pond since it acquired the railroad right-of-way in 2006. Ray also attested that the dam was " structurally sound and [was] periodically inspected and maintained by [IRR] in accordance with the requirements set forth in 49 C.F.R. Part 213." (App. 64). Additionally, Ray attested that the " trackage and right-of-way (the 'dam') [were] periodically inspected" by the FRA [Federal Railroad Administration] for compliance with 49 C.F.R. Part 213 (" Track Safety Standards)" and that this inspecting agency had " not taken any exceptions to the maintenance and condition of this trackage and right-of-way." (App. 64).
[¶15] Thereafter, the Williamses filed a response to IRR's summary judgment motion as well as a cross-motion for summary judgment. As part of its cross-motion, the Williamses argued that IRR breached the Indenture by refusing to maintain the dam and by causing the pond's water level to go below fourteen feet. The ...