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Sinclair Transp. Co. v. Sandberg

Court of Appeals of Colorado, Second Division

June 5, 2014

Sinclair Transportation Company, d/b/a Sinclair Pipeline Company, a Wyoming corporation, Plaintiff-Appellee,
Lauren Sandberg, Kay F. Sandberg, Ivar E. Larson, and Donna M. Larson, Defendants-Appellants

Page 925

Weld County District Court No. 12CV907. Honorable Daniel S. Maus, Judge.

Faegre Baker Daniels, LLP, John R. Sperber, Brandee L. Caswell, Sarah M. Kellner, Denver, Colorado, for Plaintiff-Appellee.

Dean & Reid, LLC, Daniel W. Dean, Fort Collins, Colorado; Polsinelli, PC, Bennett L. Cohen, Denver, Colorado, for Defendants-Appellants.

Opinion by JUDGE DAILEY. Casebolt and Berger, JJ., concur.


Page 926

Opinion Modified and Petition for Rehearing DENIED


[¶1] In this declaratory judgment action, brought in the aftermath of an unsuccessful condemnation proceeding, defendants, Lauren Sandberg, Kay F. Sandberg, Ivar E. Larson, and Donna M. Larson (collectively, the landowners), appeal the district court's order granting partial summary judgment in favor of plaintiff, Sinclair Transportation

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Company d/b/a Sinclair Pipeline Company (Sinclair). We affirm.

I. Background

[¶2] Sinclair owns a pipeline system that transports petroleum products from Wyoming to Denver. To operate this system, Sinclair uses an easement that passes through the landowners' properties.

[¶3] The easement, which was created by agreement in 1963, provided its owner and " its successors and assigns" with the right to " construct, maintain, inspect, operate, protect, repair, replace, change the size of, and remove" a single, six-inch pipeline across the landowners' property (the original pipeline).

[¶4] Sinclair claimed ownership of the easement as a result of a series of sales and assignments. In 2006, it approached the landowners to propose amending the easement to allow it to build a second, ten-inch pipeline on the property (the new pipeline). When the landowners declined, Sinclair sought to acquire the right to install a second pipeline through a condemnation proceeding.

[¶5] The district court determined that Sinclair had the authority to condemn the property for the additional pipeline. In 2007, Sinclair installed the new pipeline but did not put it into use. Ultimately, however, the supreme court concluded that Sinclair did not have statutory condemnation authority under section 38-5-105, C.R.S. 2013. See Larson v. Sinclair Transp. Co., 284 P.3d 42, 2012 CO 36, ¶ 1.

[¶6] Thereafter, Sinclair abandoned the condemnation proceeding and instituted the present declaratory judgment action under C.R.C.P. 57 and section 13-51-106, C.R.S. 2013, to determine its rights under the easement and to prevent the landowners from unilaterally removing the new pipeline from their properties. Accordingly, the district court dismissed the condemnation proceeding and informed the parties that all remaining claims, including any claims by the landowners for surface damage caused by the installation of the new pipeline, would be addressed in the present case.[1]

[¶7] Shortly after, the landowners filed several counterclaims in the declaratory judgment action.

[¶8] Upon Sinclair's motion for partial summary judgment, the district court determined that, as a matter of law, Sinclair had the right to treat the new pipeline as a replacement of the original one so long as it removed the original one. The district court certified its partial summary judgment order as a final judgment under C.R.C.P. 54(b) for purposes of appeal.

[¶9] The landowners did not initially move to stay the district court's order pending appeal. Consequently, Sinclair removed the original pipeline and began using the new one. Four months after the court issued its summary judgment order, the landowners moved to stay the order. The court denied the motion because Sinclair had " already fully executed" the order and there " was nothing left . . . to stay."

II. Mootness

[¶10] Sinclair asserts that the landowners' appeal is moot because they failed to timely seek a temporary injunction or stay of the court's order allowing the use of the new pipeline and the removal of the original one. We disagree.

[¶11] If an issue has become moot because of subsequent events, an appellate court will ordinarily decline to render an opinion as to the merits of an appeal. See Am. Family Mut. Ins. Co. v. Centura Health-St. Anthony Cent. Hosp., 46 P.3d 490, 493 (Colo. App. 2002). A case is moot when the relief granted by the court would not have a practical effect upon an actual and existing controversy. Stell v. Boulder Cnty. Dep't of Soc. Servs., 92 P.3d 910, 914 (Colo. 2004).

[¶12] Here, following the court's entry of the order of partial summary judgment, Sinclair removed the original pipeline and put the new pipeline into use. The company argues, citing Zoning Board of Adjustment v. DeVilbiss, 729 P.2d 353 (Colo. 1986), and

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Kester v. Miami-Yoder Joint School Dist. No. 60, 146 Colo. 230, 361 P.2d 124 (1961), that the landowners' appeal is moot because even if the court erred in entering summary judgment, it would be

inequitable and unduly burdensome to force Sinclair to reinstall the [original pipeline] and then remove the [new pipeline], only to repeat the whole process again when Sinclair exercised its recognized right under the Easement to " replace and change the size of" a pipeline by re-installing the [new pipeline] it just removed.

[¶13] The problem with Sinclair's argument is that it assumes that Sinclair would ultimately, at least, be entitled to exercise a right under the easement to " replace and change the size of" the original pipeline. But the point of the landowners' appeal is to deny that very right by arguing, inter alia, that Sinclair was not the proper party to enforce a right, if such a right existed; or, alternatively, that no right existed or is enforceable, either because the easement was not assignable to Sinclair or because parts of it had expired or been abandoned. If the landowners were ultimately to succeed on any of these assertions, various remedies could conceivably return the parties to their prior positions and compensate the landowners for ongoing trespasses committed by Sinclair. See Hunter v. Mansell, 240 P.3d 469, 479 (Colo. App. 2010) ( " [T]he traditional and preferred equitable remedy for a continuing trespass is a mandatory injunction requiring the removal of the encroachment." ); Hawley v. Mowatt, 160 P.3d 421, 425 (Colo. App. 2007) ( " [I]n a continuing trespass case, a plaintiff may recover all past damages suffered during the applicable limitations period as a result of the defendant's trespass . . . ." ).

[¶14] Because, depending upon the outcome of the appeal, a meaningful remedy may still be available for the landowners, we conclude that their appeal is not moot.

III. Summary Judgment Ruling

[¶15] The landowners contend that the district court erroneously granted partial summary judgment to Sinclair because (1) Sinclair was not indisputably shown to have standing to assert rights under the 1963 easement agreement; (2) factual disputes existed as to whether, in any event, Sinclair had complied with conditions precedent to enlarging the pipeline; (3) Sinclair could not install the replacement pipeline without first either removing the original one or having the court consider the equitable remedy of relocating the easement; (4) the terms of the 1963 agreement allowing Sinclair to replace or enlarge the pipeline were not, as a matter of law, enforceable because they had been abandoned when Sinclair initiated the condemnation proceeding or because they had expired as a result of changed social conditions; and (5) several other miscellaneous reasons. We are not persuaded.

[¶16] We review a summary judgment ruling de novo. Brodeur v. Am. Home Assurance Co., 169 P.3d 139, 146 (Colo. 2007).

[¶17] " 'The purpose of the summary judgment " is to permit the parties to pierce the formal allegations of the pleadings and save the time and expense connected with a trial when, as a matter of law, based on undisputed facts, one party could not prevail." '" Roberts v. Am. Family Mut. Ins. Co., 144 P.3d 546, 548 (Colo. 2006) (quoting Mount Emmons Mining Co. v. Town of Crested Butte, 690 P.2d 231, 238 (Colo. 1984)). Because summary judgment is a drastic remedy, however, it is appropriate only where there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c); Sanchez v. Moosburger, 187 P.3d 1185, 1187 (Colo. App. 2008).

[¶18] " Factual disputes will not defeat an entry of summary judgment if the disputed facts are not material to the outcome of the case." Svanidze v. Kirkendall, 169 P.3d 262, 264 (Colo. App. 2007). A material fact is one that will affect the outcome of the case. W. Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155, 1158 (Colo. App. 2008).

[¶19] " In addition to concerning a material fact, the issue in dispute must be 'genuine.' To avoid summary judgment, the evidence presented in opposition to such a motion must therefore be sufficient to demonstrate that a reasonable jury could return a verdict for the non-moving party."

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Andersen v. Lindenbaum, 160 P.3d 237, 239 (Colo. 2007) (quoting, with approval, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); see Anderson, 477 U.S. at 249-50 ( " If the evidence [opposing summary judgment] is merely colorable or is not significantly ...

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