Oddo et al v. Union Pacific Railroad Company et al

Filing 60

MEMORANDUM AND ORDER GRANTED 54 MOTION for Summary Judgment (Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)

United States District Court
Southern District of Texas

ENTERED
May 20, 2019

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
STACEY ODDO, a FEMME SOLE
and JOHN BURKLAND ET UX.,
Plaintiffs,
v.
UNION PACIFIC RAILROAD
COMPANY,
Defendant.

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David J. Bradley, Clerk

CIVIL ACTION NO. 4:17-03350

MEMORANDUM AND ORDER
Before the Court in this property dispute is Defendant Union Pacific
Railroad Company’s (“Union Pacific”) Motion for Summary Judgment (“Motion”)
[Doc. # 54]. Plaintiffs filed a response,1 and Union Pacific replied.2 The Motion is
ripe for decision. Based on the parties’ briefing, relevant matters of record, and
pertinent legal authority, the Court grants Union Pacific’s Motion.3

1

Stacey Oddo and John Burkland, Et Ux’s Response to Union Pacific Railroad’s
Motion for Summary Judgment and Motion for Declaratory Judgment
(“Response”) [Doc. # 56].

2

Union Pacific Railroad Company’s Reply in Support of Its Motion for Summary
Judgment (“Reply”) [Doc. # 58].

3

Union Pacific’s Opposed Motion to Strike/Exclude the Testimony of Juliene
Harrod [Doc. # 53] is denied as moot.

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I.

BACKGROUND
This lawsuit is a property dispute between two landowners and Defendant

Union Pacific.4

The relevant properties are five adjacent tracts located in

Seabrook, Texas. Of the five properties, three are owned by Plaintiff Stacey Oddo
(the “Oddo Tracts”) and two are owned by Plaintiff John Burkland (the “Burkland
Tracts”). Plaintiffs acquired all the relevant properties during and prior to 2007.5
A single right-of-way, the Seabrook Industrial Lead, crosses all five
properties. Ownership of the right-of-way has changed multiple times since it was
4

This background section is largely drawn from the factual allegations in Plaintiffs’
Third Amended Complaint. Plaintiffs’ Response restates the allegations contained
in their Third Amended Complaint. Plaintiffs’ only summary judgment evidence
attached to their Response is a set of recorded deeds. Plaintiffs do not cite
summary judgment evidence on the basic factual assertions alleged in their Third
Amended Complaint. For example, Plaintiffs do not cite evidence to support their
assertion that Union Pacific or its predecessor failed to maintain the railroad
station, that trains ceased running over Union Pacific’s right of way, or that Union
Pacific took actions in excess of the scope of the easement. Because Union
Pacific does not contend these are defects in Plaintiffs’ case, the Court, for its
summary judgment analysis, assumes that a genuine factual issue exists over these
allegations. See Deutsche Bank Nat’l Tr. Co. v. Cardona, No. 7:16-CV-448, 2017
WL 2999272, at *1 (S.D. Tex. Apr. 20, 2017) (holding that a party asserting that
certain facts cannot be genuinely disputed “has the initial responsibility of
informing the court of the basis for its motion and identifying those portions of the
pleadings and materials in the record, if any, which it believes demonstrate the
absence of a genuine [dispute] of material fact” (citing Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986))). See also FED. R. CIV. P. 56(c)(1).

5

See Special Warranty Deed dated May 23, 2007 [Doc. # 53-3]; Special Warranty
Deed dated May 23, 2007 [Doc. # 53-4]; Warranty Deed with Vendor’s Lien dated
June 28, 2000 [Doc. # 53-5]; General Warranty Deed dated May 11, 1994 [Doc.
# 54-8]; Special Warranty Deed dated March 9, 1995 [Doc. # 54-9].

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conveyed in the 1890s. Most recently, Union Pacific acquired it in 1998. In
August 2017, Union Pacific transferred its interest in the Seabrook Industrial Lead
to the Texas Department of Transportation (“TXDOT”).
Plaintiffs brought this lawsuit in Texas state court on September 16, 2017.6
Union Pacific timely removed to federal court based on diversity jurisdiction on
November 3, 2017.7
In their Third Amended Complaint, Plaintiffs allege that Union Pacific
lacked a valid interest in the right-of-way running over their properties to transfer
to TXDOT.8 Plaintiffs contend that the right-of-way through their properties was
destroyed when one of Union Pacific’s railroad predecessors demolished a railway
station in contravention of the relevant right-of-way grants. Plaintiffs bring claims
to quiet title and for declaratory judgment, seeking the right of way declared
invalid and vesting full title in Plaintiffs.9 Plaintiffs further assert a claim for
trespass, alleging Union Pacific and its predecessors exceeded the permissible
6

Plaintiffs’ Original Petition and Request for Disclosures [Doc. # 1-2].

7

Defendant Union Pacific Railroad Company’s Notice of Removal [Doc. # 1].

8

Plaintiffs’ Third Amended Original Petition [Doc. # 38].

9

In their Response, Plaintiffs request the alternative relief of a declaration that
Union Pacific lacks a fee simple interest in the property over which its easements
run. Plaintiffs did not request this relief in their Third Amended Complaint and no
request for such relief is properly before the Court.

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scope of the right-of-way by unlawfully granting underground easements to
pipeline companies, and by granting leases or licenses to non-railroad third parties
to occupy the surface of the easement.
On April 17, 2019, after the close of discovery, Union Pacific moved for
summary judgment on Plaintiffs three claims.
II.

SUMMARY JUDGMENT STANDARD
Under Federal Rule of Civil Procedure 56, “[a] party may move for

summary judgment, identifying each claim or defense—or the part of each claim or
defense—on which summary judgment is sought.”

FED. R. CIV. P. 56(a).

Summary judgment on a claim or part of a claim is appropriate “if the movant
shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Seacor Holdings, Inc. v. Commonwealth
Ins. Co., 635 F.3d 675, 680 (5th Cir. 2011) (quoting FED. R. CIV. P. 56(a)).
A party asserting that certain facts cannot be genuinely disputed “has the
initial responsibility of informing the court of the basis for its motion and
identifying those portions of the pleadings and materials in the record, if any,
which it believes demonstrate the absence of a genuine [dispute] of material fact.”
See Deutsche Bank Nat’l Tr. Co. v. Cardona, No. 7:16-CV-448, 2017 WL
2999272, at *1 (S.D. Tex. Apr. 20, 2017) (citing Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986)). See also FED. R. CIV. P. 56(c)(1). The moving party, however,
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“need not negate the elements of the nonmovant’s case.” Coastal Agric. Supply,
Inc. v. JP Morgan Chase Bank, N.A., 759 F.3d 498, 505 (5th Cir. 2014) (quoting
Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005)). Instead, the
moving party may meet its burden by pointing out “the absence of evidence
supporting the nonmoving party’s case.” Malacara v. Garber, 353 F.3d 393, 404
(5th Cir. 2003). If the moving party meets this initial burden, the burden shifts to
the nonmovant to set forth specific facts showing the existence of a genuine issue
for trial. See Brandon v. Sage Corp., 808 F.3d 266, 270 (5th Cir. 2015) (citing
Bayle v. Allstate Ins. Co., 615 F.3d 350, 355 (5th Cir. 2010)). “The court need
consider only the cited materials, but it may consider other materials in the record.”
FED. R. CIV. P. 56(c)(3).
III.

DISCUSSION
Union Pacific seeks summary judgment on Plaintiffs’ three claims: (1) quiet

title, (2) declaratory judgment, and (3) trespass. Union Pacific first argues the
Court should reject Plaintiffs’ attempt to have Union Pacific’s right-of-way over
Plaintiffs’ properties declared invalid. Union Pacific contends that this attempt
fails as a matter of law because the relevant right-of-way conveyances impose
covenants, not conditions, whose breach cannot cause termination of the
easements. Union Pacific further contends Plaintiffs’ trespass claim is time barred
because it was brought outside of the applicable two-year statute of limitations.
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Union Pacific’s positions are persuasive.

The Court therefore grants

summary judgment on Plaintiffs’ three claims.
A.

The Court Will Dismiss Plaintiffs’ Quiet Title and Declaratory
Judgment Claims

Plaintiffs cite and attach to their Response a transcription of a grant dated
April 2, 1895, which Plaintiffs label the “Nicholson Grant.”10 The parties agree
that the Nicholson Grant runs over one of the Burkland Tracts.11 The Nicholson
Grant conveyed to the La Porte and Houston Railway Company Corporation a
right-of-way easement “on the condition that said railway company construct and
maintain a station at a convenient point along the right of way hereby conveyed.”
Plaintiffs contend this language creates a condition subsequent to the
conveyance and that one of Union Pacific’s predecessors at some point breached
by demolishing the train station.

In response, Union Pacific argues that the

10

See Doc. # 56-1.

11

Motion at 7 & n.16. Plaintiffs attach several other grants and deeds to their
Response. Union Pacific correctly observes that Plaintiffs attach no summary
judgment evidence to their Response or cite record evidence suggesting any of
these grants correspond with their tracts. Even assuming the deeds correspond
with some of the Plaintiffs’ properties, their contention that the easements
contained in the deeds have been terminated fails as a matter of law. The only
grant that arguably imposes a condition, what the Plaintiffs label the “Tod Grant”
[Doc. # 56-6], requires the grantee only to build a railroad depot and station. The
Tod Grant does not require the grantee railroad to maintain the built station.
Plaintiffs neither allege nor cite record evidence indicating a railroad depot and
station were not built.

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language creates a covenant, and that the remedy for its breach, if it occurred, is
damages and not termination of the easement. See Dilbeck v. Bill Gaynier, Inc.,
368 S.W.2d 804, 807 (Tex. Civ. App.—Dallas 1963, writ ref’d n.r.e.) (“The chief
distinction between a covenant and a condition subsequent has to do with the
remedy in the event of a breach. If a covenant, the remedy is an action for
damages, but the breach of a condition subsequent results in a forfeiture of the
estate.”). The Court concludes that the Nicholson Grant imposes a covenant, not a
condition subsequent. Thus, breach of the covenant, if it occurred, cannot result in
termination of the easement.
Texas courts have a “strong constructional preference for restrictive
covenants as opposed to conditions subsequent” and “will construe anything less
than clear, plain and unequivocal language as creating merely a restrictive
covenant.” See Humphrey v. C.G. Jung Educ. Ctr. of Hous., 714 F.2d 477, 483
(5th Cir. 1983); Hearne v. Bradshaw, 312 S.W.2d 948, 951 (Tex. 1958)
(“Conditions subsequent are not favored by the courts, and the promise or
obligation of the grantee will be construed as a covenant unless an intention to
create a conditional estate is clearly and unequivocally revealed by the language of
the instrument.”); Tex. Elec. Ry. Co. v. Neal, 252 S.W.2d 451, 456 (Tex. 1952)
(“Conditions and limitations that work forfeiture or termination of title are not
favored, and in case of doubtful language the promise or obligation of the grantee
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will be construed to be a covenant.”); KIT Projects, LLC v. PLT P’ship, 479
S.W.3d 519, 526 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (“Because
conditions tend to be harsh in operation, conditions are not favored in the law.”).
“The use of the technical word ‘condition’ or ‘covenant’ in the deed is not
determinative of the character of the clause or provision to which it refers.”
Dilbeck, 368 S.W.2d at 807 (emphasis added).
In Neal, the Texas Supreme Court construed analogous language to the
Nicholson Grant as creating a covenant, not a condition. See 252 S.W.2d at 456.
There, the right-of-way grant in question provided that the conveyance was done
“upon the further condition and consideration that” the grantee would establish and
maintain a stop on the granted right of way. See id. at 453. The Court found the
grant’s language doubtful, despite its use of the term “condition” because it did
“not expressly provide that title shall revert to the grantor in case of
nonperformance on the part of the grantee” or “provide that title shall terminate
when the stop is no longer maintained.” See id. at 456. In accord with Neal, Texas
courts have required some words indicating that the conveyed interest terminates
or reverts upon breach to conclude that the parties intended to impose a condition.
See Ogilvie v. Hill, 563 S.W.2d 846, 849 (Tex. Civ. App.—Texarkana 1978, writ
ref’d n.r.e.) (“The contract here contains no stipulation for termination or forfeiture
with reference to the road obligation. In those circumstances the provision will be
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construed to be not a condition but a covenant . . . .”); Rosek v. Kotzur, 267 S.W.
759, 761-62 (Tex. Civ. App.—San Antonio 1924, no writ) (“It is well settled by a
long line of authorities . . . , that before a promise will be treated as a ‘condition
subsequent,’ to destroy the conveyance, it must clearly appear by apt language in
the very conveyance itself, and it must provide that such breach would operate to
destroy the estate and reinvest it in the grantor.” (emphasis added)).
Here, similarly to the grant in Neal, the Nicholson Grant does not “expressly
provide that title shall revert to the grantor in case of nonperformance on the part
of the grantee” or “provide that title shall terminate when the [station] is no longer
maintained.” See 252 S.W.2d at 456. See also Ogilvie, 563 S.W.2d at 849; Rosek,
267 S.W. at 761-62. While the Nicholson Grant does state that the grant of the
right-of-way is “made on the condition” that the station be maintained, the use of
the word “condition” is not determinative, as demonstrated in Neal. See Neal, 252
S.W.2d at 456; Dilbeck, 368 S.W.2d at 807. Plaintiffs identify no other features of
the grant, other than the “condition” language, indicating that the parties’
predecessors intended to create a condition rather than a covenant. Because the
Nicholson Grant imposes a covenant, not a condition, the alleged breach of the
covenant cannot, as a matter of law, cause the easement’s termination.

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B.

The Court Dismisses Plaintiffs’ Trespass Claim Because It Is
Barred By the Applicable Statute of Limitations

Plaintiffs bring a claim for trespass, alleging that Union Pacific’s conduct
exceeded the scope of its right-of-way easements by unlawfully granting
underground easements and authorizing non-railroad third parties to occupy the
surface of the easement. Union Pacific contends Plaintiffs’ trespass claim is barred
under Texas’s two-year statute of limitation period. See TEX. CIV. PRAC. & REM.
CODE ANN. § 16.003(a). In response, Plaintiffs do not contest that they had notice
of Union Pacific’s and its predecessors’ allegedly violative conduct more than two
years before filing suit. Plaintiffs, however, contend that their trespass claim is not
time barred under Texas’s “discovery rule” because they had no actual notice that
Union Pacific and its predecessors were not fee simple owners of the property in
question.12 Plaintiffs do not contest that the relevant deeds they cite as conveying
only rights-of-way were properly recorded. Instead, Plaintiffs argue that the grants
are old and they only discovered the grants shortly before filing suit.
Plaintiffs’ invocation of the discovery rule is unpersuasive.

The Court

concludes that Plaintiffs had constructive notice of the limited scope of Union
12

Plaintiffs also appear to contend that a “fraud exception” to the two-year
limitations period is applicable. The Court is unpersuaded. Plaintiffs cite no
authority for this point. Moreover, Plaintiffs allege no fraudulent concealment by
Union Pacific, an cite no record evidence indicating fraudulent concealment, other
than Union Pacific’s allegedly violative conduct itself.

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Pacific’s rights more than two years before filing suit.

The Court therefore

concludes that Plaintiffs’ trespass claim is time barred.
“Trespass to real property requires a showing of an unauthorized physical
entry onto another’s property by some person or thing.” Yalamanchili v. Mousa,
316 S.W.3d 33, 40 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). The
statute of limitations for trespass to real property is two years from the date the
cause of action accrues. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). “A
trespass cause of action accrues upon discovery of the first physical invasion of the
thing on the plaintiff’s property.” Yalamanchili, 316 S.W.3d at 40.
“The discovery rule is a limited exception to strict compliance with the
statute of limitations.” Comput. Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453,
457 (Tex. 1996). “Texas courts generally apply the discovery rule to causes of
action for damage to property,” such as trespass claims.

See W.W. Laubach

Tr./The Georgetown Corp. v. The Georgetown Corp./W.W. Laubach Tr., 80
S.W.3d 149, 159 (Tex. App.—Austin 2002, pet. denied). The rule “defers accrual
of a cause of action until the plaintiff knew or, exercising reasonable diligence,
should have known of the facts giving rise to the cause of action.” Comput.
Assocs. Int’l, 918 S.W.2d at 457.
“Constructive notice is notice the law imputes to a person not having
personal information or knowledge.” Hue Nguyen v. Chapa, 305 S.W.3d 316, 324
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(Tex. App.—Houston [14th Dist.] 2009, pet. denied). “Constructive notice creates
an irrebuttable presumption of actual notice.” HECI Expl. Co. v. Neel, 982 S.W.2d
881, 887 (Tex. 1998). The Texas Property Code provides that an “instrument that
is properly recorded in the proper county is . . . notice to all persons of the
existence of the instrument.” TEX. PROP. CODE ANN. § 13.002. This section also
“provides all persons . . . with notice of the deed’s contents as well.” See Cosgrove
v. Cade, 468 S.W.3d 32, 34 (Tex. 2015). Purchasers of real property are deemed
to have constructive notice of matters reflected in real property records chain of
title. See Noble Mortg. & Inv., LLC v. D & M Vision Inv., LLC, 340 S.W.3d 65, 76
(Tex. App.—Houston [1st Dist.] 2011, no pet.) (“Recorded instruments in a
grantee’s chain of title generally establish an irrebuttable presumption of notice.”);
Jones v. Fuller, 856 S.W.2d 597, 603 (Tex. App.—Waco 1993, writ denied) (“A
purchaser of real property is constructively charged with notice of the existence of
instruments recorded in the county where the property is situated and of
instruments constituting his chain of title, whether or not they are recorded. Thus,
an instrument that is properly recorded in the proper county is notice to all persons
of its existence.” (internal citations omitted)).
Here, Plaintiffs argue that the relevant grants were old and they did not
discover them until shortly before this litigation.

Plaintiffs, however, do not

contests that the relevant deeds produced in this litigation were properly recorded
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and were previously discoverable through reasonable diligence. These deeds put
Plaintiffs on constructive notice of the scope of Union Pacific’s rights when
Plaintiffs purchased the relevant properties. Plaintiffs trespass claim is time barred
because Plaintiffs had constructive notice of the scope of Union Pacific’s easement
when Plaintiffs obtained the relevant properties, which occurred more than two
years before Plaintiffs sued. Accordingly, the Court grants summary judgment in
favor of Union Pacific on Plaintiffs’ trespass claim.
IV.

CONCLUSION AND ORDER
For the foregoing reasons, Union Pacific is entitled to summary judgment on

Plaintiffs’ quiet title, declaratory judgment, and trespass claims. It is therefore
ORDERED that Defendant Union Pacific’s Motion for Summary Judgment
[Doc. # 54] is GRANTED and Plaintiffs’ claims are DISMISSED with
prejudice.
A final, appealable order will separately issue.
20th
SIGNED at Houston, Texas, this ___ day of May, 2019.

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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