Railroad Case Law Update

 

An unambiguous deed granting fee simple title to a railroad does not convey an easement

The Florida Supreme Court last month reviewed a question certified to the Court by the United States Court of Appeals for the Federal Circuit: Notwithstanding a deed that conveys land in fee simple from a private party to a railroad corporation, does Florida law (Sec. 2241, FS), state policy, or factual considerations – such as whether the railroad surveys land, lays track or begins to operate trains prior to the conveyance of a deed – limit the railroad’s interest in the property?  In all three cases, the Supreme Court held that the answer is no.

In this case, the abutting property owners claimed that the prior conveyances of fee simple title to the railroad by predecessors in title were merely easements for a railroad right-of-way and that upon abandonment of the right-of-way, the abutting property owners should regain full title to the property. The Federal Circuit reviewed the deeds by which the interests were conveyed and found that the property owners did not own any property interests in the corridor and therefore were not entitled to compensation.

In looking at whether other legislative, policy or factual considerations might affect this holding, the Florida Supreme Court addressed the many arguments raised by the Appellant, and did not support any of them.

  • Florida law allows railroads to hold fee simple title to land acquired for the purpose of laying track. In Florida, a deed granting fee title for the purpose of a railroad right-of-way is granting fee title, not an easement.
  • Eminent domain case holdings, in which the railroad’s interest is received only to fulfill the purpose of the taking, do not apply here, because the deeds in this case were conveyed “by bargain and sale” and not through the potentially coercive process of eminent domain.
  • The amount of consideration paid for the property does not affect the validity of the deed. “The language of the deed determines the nature of the estate conveyed,” not the value of the property.
  • Because of the clear language of the deed, there could be no presumption in this case that the owner of abutting property actually owned to the center of the railroad corridor, like in a subdivision. “The Appellants’ predecessors were the grantors, and if they intended to grant only easements their deeds would have said so.”
  • The fact that the railroad company surveyed the land (which it is authorized by law to do) and located a route for the tract before it had the property, did not affect the property interest the railroad obtained through the deeds.
  • No law was found to support an argument that a valid deed is rendered invalid by the fact that the grantee was already occupying the property. And because the deed was unambiguous as to the grantor’s intent, no extrinsic evidence, if it was even available, could be used to rebut the presumption of that intent.

Rogers v. The United States of America, Case No. SC14-1465 (Fla. Nov. 5, 2015) (J. Canady)

Statute of Limitation on Utility Fees/Assessments Runs from Enactment of Ordinance

The 4th District Court of Appeals recently issued an opinion holding that a statute of limitations begins to run when a new utility fee ordinance is initially enacted, not when the fee is reassessed and placed on the tax roll each year. In 2005, the City adopted an ordinance creating a stormwater utility and providing for the levy of fees against all property in the City based on each property’s proportionate amount of runoff, as determined by the amount of impervious space on the property.  In 2011, a class action was filed to challenge the ordinance and to seek a refund of assessed fees for 2007-2012.  The parties agreed that a 4-year statute of limitations was applicable, but disagreed as to when it began to run. Looking to decisions from the 5th and 4th Districts, the Court found that the utility fee was similar to an assessment. An assessment is a “creature of statute” and is not subject to annual review “simply because it chose to allow the landowners the convenience of paying their assessment obligations in equal annual installments.” Rather, finding that the statute of limitations runs from the time the assessment is created balances ‘the property owners’ right to adequate notice against the district’s need for certainty in its decisions and economic affairs.”

The case was remanded to the trial court to decertify the class action.

City of Fort Pierce v. Australian Properties LLC, Case No. 4D14-2728 (4th DCA. Nov. 12, 2015) (J. May)

Prescriptive Easements Require Adverse Use

In this case, the 5th DCA held that use of an easement for vehicular traffic was a permanent easement, not a prescriptive easement, because use of the easement was not adverse; in fact, the easement was set out in the lease.

“The law does not favor the acquisition of prescriptive rights, use or possession of another’s land is presumed to be subordinate to the owner’s title, and with the owner’s permission; and the burden is on the claimant to prove that such use or possession is adverse.”

5730 Lake Underhill, LLC v. Smith-Horner, LLP, Case No. 5D14-2564 (5th DCA. Nov. 6, 2015) (Per Curiam)

Is a City entitled to recover attorney fees and costs for successfully defending a Bert Harris claim?

Yes, says the 5th DCA.  The Appellant property owner appealed a decision by the trial court granting attorney fees to the City under the Bert J. Harris Private Property Rights Act, and the City filed a motion for costs.  The Court upheld the trial court’s decision and further found that the City was entitled to legal costs since the trial court had found that was no taking of the Appellant’s property. The Appellant looked to the eminent domain statute and argued that the City was required to pay “all reasonable costs incurred in the defense of the proceedings in the circuit court” despite the fact that no taking was found. The Court, however, agreed with the City that the statute granting costs to prevailing parties in a civil action was applicable in this case.  The Court looked to Department of Transportation v Gefen, 636 So. 2d 1345 (Fla. 1994), which held that under the provision granting attorneys’ fees in an eminent domain case, “a landowner claiming inverse condemnation is only entitled to appellate attorney’s fees if the claim is ultimately successful.” Finding that Gefen would lead to a similar result with legal costs, the Court concluded that where no taking occurred, the general civil statute will apply and the City was thus eligible to recover costs.

Caribbean Condominium v. The City of Flagler Beach, Case No. 5D14-205 (5th DCA. Sept. 18, 2015)


Anne Pollack practices in the areas of land use, real estate, environmental and governmental relations, and represents both private and governmental clients in connection with the sale, acquisition and development of real estate. She has resided in the Tampa Bay area since moving from the San Francisco area in 2003.