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Home of Economy v. Burlington Northern Santa Fe Railroad

March 19, 2010

HOME OF ECONOMY, A NORTH DAKOTA CORPORATION, PLAINTIFF AND APPELLANT
v.
BURLINGTON NORTHERN SANTA FE RAILROAD, A NATIONAL RAILROAD CORPORATION, DEFENDANT AND APPELLEE



Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Joel D. Medd, Judge.

The opinion of the court was delivered by: Kapsner, Justice.

AFFIRMED.

[¶1] Home of Economy appeals from a judgment dismissing its claim for damages and an injunction requiring Burlington Northern Santa Fe Railroad (BNSF) to reopen a grade crossing. We hold the district court correctly placed the burden of proof on Home of Economy and was not clearly erroneous to find Home of Economy failed to prove the existence of a public road by prescription. We also hold the district court was not clearly erroneous to find Home of Economy failed to establish an easement by estoppel. We affirm the judgment.

I.

[¶2] BNSF operates a spur line connecting BNSF's main line with the State Mill and Elevator and other businesses in north Grand Forks. A portion of the spur line runs parallel to property owned by Home of Economy. The parties refer to the portion of Home of Economy's property that abuts the spur line as the "Olson property" because Home of Economy purchased it in 1994 from Clifford Olson, whose family had owned the property for nearly six decades. The Olson property is located between the spur line and Home of Economy's Grand Forks store.

[¶3] Prior to 2003, a grade crossing provided access from State Mill Road across the spur line to the Olson property and Home of Economy's parking lot. Without first gaining permission from Home of Economy or any public entity, BNSF closed the grade crossing in 2003. Home of Economy sued BNSF in state district court for damages and an injunction ordering BNSF to re-open the crossing. Home of Economy claimed BNSF could not unilaterally close the grade crossing because longstanding public use of the crossing created a public road by prescription under N.D.C.C. § 24-07-01. Home of Economy also claimed it enjoyed an easement by estoppel due to its reliance upon BNSF's representations that the crossing would remain open.

[¶4] BNSF filed a motion to dismiss, arguing state courts did not have jurisdiction over railroad crossings. The district court granted BNSF's motion, and Home of Economy appealed to this Court. We determined state courts have jurisdiction and remanded the case back to district court. Home of Economy v. Burlington N. Santa Fe R.R., 2005 ND 74, 694 N.W.2d 840. BNSF then filed a motion for summary judgment, arguing in part that Home of Economy failed to prove the existence of a public road by prescription or its entitlement to an easement by estoppel. The district court granted BNSF's motion, and Home of Economy again appealed to this Court. In Home of Economy v. Burlington N. Santa Fe R.R., 2007 ND 127, 736 N.W.2d 780, we reversed the summary judgment and remanded the case back to district court.

[¶5] The district court held a bench trial in February 2009 to determine whether a public road had been created by prescription and whether Home of Economy enjoyed an easement by estoppel to use the grade crossing. The parties stipulated to sixteen facts, including: BNSF owns the right-of-way over which the disputed grade crossing existed; when Home of Economy purchased the Olson property, the contract did not mention the grade crossing; Home of Economy's customers could access its store from State Mill Road by using the grade crossing; before eliminating the crossing, BNSF routinely maintained it by replacing planks on either side of and in between the rails; BNSF's maintenance facilitated vehicular traffic over the crossing; and government maps do not indicate a public grade crossing at the location of the disputed crossing.

[¶6] The parties also stipulated to the introduction of Clifford Olson's deposition testimony. Olson testified he recalls the grade crossing as far back as 1925. Olson testified his father acquired the Olson property in 1934 and later deeded it to him. Olson stated the grade crossing provided the only means of public access to the Olson property until Highway 81 was constructed in 1952. After Highway 81 opened, Olson stated the public could drive from State Mill Road to Highway 81 by using the grade crossing and cutting across his property. However, Olson testified he constructed a fence and several buildings on the property that obstructed the public's ability to use the Olson property to get from State Mill Road to Highway 81. Nevertheless, Olson stated the public continued to use the grade crossing when accessing his property from State Mill Road. When he owned the property, Olson testified BNSF maintained the actual grade crossing, though he would maintain the road leading to it. Olson stated he did not have any agreement with BNSF to perform such maintenance, nor was he aware of any such agreement between the previous owners and the railroad. Olson testified the grade crossing remained continuously open from the time he first owned the property until he sold it to Home of Economy in 1994.

[¶7] Wade Pearson, president of Home of Economy, stated one of the main reasons the company purchased the Olson property was to facilitate public access to its store from State Mill Road. Upon acquiring the Olson property, Pearson testified Home of Economy tore down several buildings that obstructed use of the crossing. He also stated Home of Economy improved the road leading to the grade crossing to allow better access into the store's parking lot. Pearson estimated thirty customers drove across the grade crossing and into Home of Economy's parking lot each day. He testified Home of Economy's furniture truck also regularly passed over the crossing.

[¶8] In addition, Pearson testified he received a telephone call from a BNSF representative in late 1994, shortly after Home of Economy purchased the Olson property. Pearson stated the representative told him BNSF was planning to close the grade crossing. Pearson testified he told the BNSF representative the railroad cannot close the crossing, and the representative "backed off on that idea right away." Pearson stated the representative then said BNSF wanted to put a stop sign at the grade crossing for safety reasons, and he told the representative Home of Economy did not object. Pearson testified a stop sign appeared at the crossing shortly thereafter. Pearson stated he had no further conversations with BNSF prior to the railroad closing the grade crossing in June 2003. On cross examination, Pearson testified Home of Economy does not have any maps or written documentation establishing the existence of an easement across the grade crossing.

[¶9] Robert Roy, former director of grade crossing safety for BNSF, testified he personally made the decision to close the disputed grade crossing. He stated the grade crossing created public safety concerns because it was randomly used by both the public and railroad and did not have any warning devices. Roy testified that, as part of the process of closing a grade crossing, BNSF reviewed its records to look for written documentation providing licenses or easements to use the crossing. Roy testified BNSF did not find documentation mentioning licenses or easements regarding the disputed grade crossing, but also admitted BNSF did not find any documentation stating the railroad gave the public permission to use the crossing. Nevertheless, Roy stated "the railroad was allowing use of the crossing."

[¶10] Peiter Hjertstedt, BNSF terminal manager for Grand Forks, also testified. He stated BNSF runs an average of two trains per day on the spur line abutting the Olson property. Hjertstedt testified the trains pass along the spur line at variable times, because the schedule depends upon orders for the day. Had BNSF not closed the disputed grade crossing, Hjertstedt stated rail cars would regularly block the crossing and prevent vehicles from using it. Hjertstedt testified BNSF routinely maintains the spur line, the surrounding right-of-way, and existing grade crossings. He said BNSF does not permit private parties to maintain grade crossings or rights-of-way. On cross-examination, Hjertstedt testified he has no firsthand knowledge of the disputed grade crossing before its closure.

[ΒΆ11] The district court found Home of Economy failed to establish the existence of a public road by prescription or an easement by estoppel. The district court denied Home of Economy's claim for a public road by prescription because it found the company failed to prove the public's use of the grade crossing was hostile and adverse to BNSF. As the district court stated: "The crossing was used by the public, customers, to access HOE when BNSF was not using its spur line, which makes the use of the crossing permissive." The district court also found: "The telephone conversation in 1994 between BNSF and HOE does not establish that the use of the crossing by HOE customers was hostile and adverse." The district court denied Home of Economy's claim for an easement by estoppel because it found "BNSF made no promises or representations, or acted in a way ...


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