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Biery v. United States

United States Court of Appeals, Federal Circuit

June 4, 2014

DOROTHY L. BIERY, JULIA R. CHALFANT ETVIR TRUST, K.A.K. FARMS, INC., AMERICAN PACKAGING CORPORATION, AND COLLINS INDUSTRIES, INC., Plaintiffs-Appellants,
v.
UNITED STATES, Defendant-Appellee GORDON HOLLOWAY, as successor and representative of decedent, GEORGE A. HOLLOWAY, AND STACY E. JUDY TRUST, Plaintiffs,

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[Copyrighted Material Omitted]

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Appeal from the United States Court of Federal Claims in No. 07-CV-0693, Judge Nancy B. Firestone.

AFFIRMED-IN-PART, REVERSED-IN-PART, AND REMANDED.

MARK F. (THOR) HEARNE, II, Arent Fox, LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were MEGHAN S. LARGENT, LINDSAY S.C. BRINTON, and STEPHEN S. DAVIS. Of counsel was DEBRA J. ALBIN-RILEY, of Los Angeles, California.

NINA ROBERTSON, Attorney, Appellate Section, Environmental and Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief was ROBERT G. DREHER, Acting Assistant Attorney General.

Before PROST,[*] Chief Judge, SCHALL and O'MALLEY, Circuit Judges.

OPINION

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Schall, Circuit Judge

Plaintiffs-Appellants Dorothy L. Biery, the Julia R. Chalfant Etvir Trust, K.A.K. Farms, Inc., American Packaging Corporation, and Collins Industries, Inc., are landowners in Kansas. Each of them owns land abutting a 2.88-mile stretch of rail corridor near the City of South Hutchinson, Kansas. In the late nineteenth and early twentieth centuries, their predecessors in interest granted various deeds covering that land to the Hutchinson & Southern Railroad Company. The Burlington Northern and Santa Fe Railway (" BNSF" ) eventually succeeded to the interests of that railroad. Up until 2004, the corridor served the operations of the BNSF. Plaintiffs-Appellants brought this action in the United States Court of Federal Claims, alleging that the subsequent conversion of the corridor to a recreational trail pursuant to the National Trail Systems Act (" Trails Act" ), 16 U.S.C. § 1247(d), constituted a taking of their several property interests in the land underlying the corridor. As a result, they claimed, they were entitled to compensation under the Fifth Amendment.

On April 9, 2013, pursuant to Rule 54(b) of the Rules of the United States Court of Federal Claims (" RCFC" ), the Court of Federal Claims entered judgment in favor of the government on plaintiffs-appellants' claims. Biery v. United States, Nos. 07-693L, 07-675L (Fed. Cl. Apr. 9, 2013). The court did so after ruling on summary judgment that none of the plaintiffs-appellants possessed a fee-simple property interest in the land underlying the rail corridor that could be the subject of a taking. Biery v. United States, Nos. 07-693L, 07-675L (Fed. Cl. Aug. 20, 2009) (" Initial Decision " ). The court concluded that the land had been conveyed to the BNSF's predecessor in fee simple, contrary to plaintiff-appellants' claims that the several conveyances at issue had only granted easements. Plaintiffs-Appellants now appeal from the court's judgment.[1]

For the reasons set forth below, we conclude as follows: (1) The underlying land claimed by plaintiffs-appellants Julia R. Chalfant Etvir Trust and K.A.K. Farms, Inc. (" Chalfant" ) was conveyed to the BNSF's predecessor in fee simple. Chalfant thus has no compensable property interest in the land. (2) The underlying land claimed by plaintiff-appellant Dorothy L. Biery (" Biery" ) was not conveyed to the BNSF's predecessor in fee simple. Rather, the railroad's predecessor was only granted an easement over the land. Biery thus retains fee-simple title to the land, a compensable property interest. (3) On the present record, it is not clear whether the underlying land claimed by plaintiffs-appellants American Packaging Corporation and Collins Industries, Inc. (" American Packaging" ) was held by the BNSF's predecessor in fee simple or whether the BNSF's predecessor simply held an easement over the land. Of the three deeds at issue for American Packaging, the first-in-time granted the railroad's predecessor

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only an easement over the land. The two subsequent deeds, though, conveyed fee-simple interests. The effect of these deeds, however, is clouded by chain-of-title questions. Thus, we cannot presently say whether American Packaging holds fee-simple title to the land, a compensable property interest. Accordingly, we affirm the judgment of the Court of Federal Claims as it relates to Chalfant, but reverse it as it relates to Biery and American Packaging. The case is remanded to the court for further proceedings.

Background

I.

Legal Framework

The Fifth Amendment to the Constitution provides that private property shall not " be taken for public use, without just compensation." U.S. Const. amend. V. The first issue to be addressed in a takings case is whether the claimant has a cognizable interest in the property that allegedly was taken. Air Pegasus of D.C, Inc. v. United States, 424 F.3d 1206, 1212 (Fed. Cir. 2005). If the claimant does not have such an interest, that is the end of the matter. Id. at 1212-13. The court does not then proceed to the next step in the analysis, which is to determine whether there was a taking. Id.

As noted, in 2004, the stretch of rail corridor at issue was converted to a public trail pursuant to the Trails Act. If, prior to the conversion, the BNSF held fee-simple title to the land underlying the corridor, then, for their part, plaintiffs-appellants possess no compensable property interests. That is because the railroad's fee-simple title would constitute complete ownership in the land. 1 Tiffany Real Prop. § 27 (3d ed. 2013). If, however, the BNSF held only easements over the land, then plaintiffs-appellants retained a fee-simple interest in the land. Under those circumstances, if the BNSF's conversion of the railroad tracks to a recreational trail was outside the scope of the easements and thus constituted abandonment, then the BNSF would have lost its interest because " if the beneficiary of [an] easement abandons it, the easement disappears, and the landowner resumes his full and unencumbered interest in the land." Marvin M. Brandt Revocable Trust v. United States, 134 S.Ct. 1257, 1265, 188 L.Ed.2d 272 (2014) (citing Smith v. Townsend, 148 U.S. 490, 499, 13 S.Ct. 634, 37 L.Ed. 533 (1893)). In short, if plaintiffs-appellants hold fee-simple title to the land, they may potentially have a compensable property interest for purposes of a takings claim.

The issue in this case is whether the deeds from the late nineteenth and early twentieth century, upon which the BNSF's interest was predicated, granted fee-simple interests to the railroad's predecessor, or merely easements. We therefore begin by briefly setting forth the conveyances that are relevant to the claim of each of the several plaintiffs-appellants. We then turn to the events leading up to this lawsuit and the subsequent proceedings in the Court of Federal Claims.

II.

A. Chalfant Appellants

The Chalfant appellants claim the land referenced in the deed from Julia Fair (the " Julia Fair deed" ) to the Hutchinson & Southern Railroad in the late nineteenth century. In 1889, a condemnation decree declared a right-of-way for the Hutchinson, Oklahoma & Gulf Railroad across land owned by Thomas Fair. It is undisputed that the railroad took only an easement over the land at that time. The condemnation decree does not mention Thomas's

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wife, Julia Fair. After the condemnation, the Hutchinson, Oklahoma & Gulf Railroad merged with the Hutchinson & Southern Railroad Company. In 1899, after Thomas Fair had died, Julia Fair executed a quitclaim deed to the Hutchinson & Southern Railroad for the same land that was subject to the earlier condemnation proceeding. The relevant language from the deed states that, for $3,500, Ms. Fair transferred the following interest to the railroad:

A strip of land one hundred < 100> feet wide being fifty < 50> feet on each side of the center line of the railroad of the Hutchinson & Southern Railway as the same is now located and constructed[2] over and across section thirty five < 35> township twenty three < 23> range six < 6> with the appurtenances and all the estate, title and interest of the said parties of the first part therein.

Joint Appendix (" J.A." ) 703-04, 918.

B. Biery Appellant

Appellant Biery claims the land referenced in the deed from the Phillips Investment Company (the " Phillips deed" ) to the Hutchinson & Southern Railroad. Similar to the land claimed by Chalfant, the land claimed by Biery was originally subject to condemnation proceedings. In 1899, the Phillips Investment Company executed an indenture in favor of the Hutchinson & Southern Railroad on a preprinted form titled " Right of Way Deed." [3] In ...


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