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Franks Inv. Co., L.L.C. v. Union Pacific Railroad Co.

United States Court of Appeals, Fifth Circuit

December 2, 2014

FRANKS INVESTMENT COMPANY, L.L.C., Plaintiff-Appellant,
v.
UNION PACIFIC RAILROAD COMPANY, Defendant-Appellee

Appeal from the United States District Court for the Western District of Louisiana.

For FRANKS INVESTMENT COMPANY, L.L.C., Plaintiff - Appellant: Michael H. Rubin, Esq., Juston Michael O'Brien, McGlinchey Stafford, P.L.L.C., Baton Rouge, LA; John M. Madison, Jr., Esq., Michael Allyn Stroud, Wiener, Weiss & Madison, A.P.C., Shreveport, LA.

For UNION PACIFIC RAILROAD COMPANY, Defendant - Appellee: William Hector Howard, III, Kathlyn Gloria Perez, Esq., Paul Lee Peyronnin, Esq., Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., New Orleans, LA.

Before DAVIS, DENNIS, and COSTA, Circuit Judges. JAMES L. DENNIS, Circuit Judge, dissenting.

OPINION

Page 1038

W. EUGENE DAVIS, Circuit Judge:

Plaintiff-Appellant Franks Investment Co., LLC (" Franks" ) appeals from the district court's final judgment granting the motion for summary judgment filed by Defendant-Appellee Union Pacific Railroad Co. (" Union Pacific" ) and dismissing Franks's claims with prejudice. For the reasons set out below, we AFFIRM.

FACTS AND PROCEEDINGS

This action is the latest in a series of legal battles between Franks and Union Pacific over whether Franks has the right to cross Union Pacific's train tracks on certain property in Caddo Parish originally owned by the Levy family at the turn of the 20th century. In 1902, the Levys sold a strip of land running through its tract to the Texas & Pacific Railway Company (" T& P" ). The deed required T& P to " put in all necessary crossings" and " not to obstruct drainage." In 1913, the Levys dedicated a road across their land to Caddo Parish, and agreed to " furnish the new posts" for this land on the condition that the Parish move a fence and " put in three crossings over ditches."

In 1923, the Levys and T& P completed another transaction, the deed to which is the focal point of this case (hereinafter the " 1923 deed" ). This transaction involved the sale of a larger and longer strip of land to T& P, and allowed the railroad company to move its tracks southwest. The 1923 deed contains the language directly at issue in this appeal. After stating the dimensions of the land, establishing the purchase price of $3,106, and granting the

Page 1039

property " unto said purchaser, its successors and assigns forever," the deed states:

It is understood and agreed that the said Texas & Pacific Railway Company shall fence said strip of ground and shall maintain said fence at its own expense and shall provide three crossings across said strip at the points indicated on said Blue Print hereto attached and made part hereof, and the said Texas and Pacific Railway hereby binds itself, its successors and assigns, to furnish proper drainage out-lets across the land hereinabove conveyed.[1]

Franks now owns a portion of the Levy property adjacent to the railroad tracks. Union Pacific owns the strip of railroad property previously owned by T& P. In 2007, Union Pacific began closing the crossings. Prior to the closing of the crossings, they were apparently being used for oil and gas operations on Franks's land. Franks is asserting a right to three separate crossings. Two of these crossings are within 10 to 12 feet of the locations shown in the blueprint attached to the 1923 deed, and one is more than 1,400 feet away from the location shown. Franks asserts that the crossings were in uncontested use for " over 70 years." Franks concedes that there are other points of access to the property.

Franks previously brought a possessory action against Union Pacific seeking to restore its use of four railroad crossings over Union Pacific's track.[2] After an appeal to this court sitting en banc to determine whether Franks's claims were federally preempted,[3] the district court ruled, following a bench trial, that because Franks did not possess the crossings adversely to Union Pacific's ownership, it was merely a " precarious possessor." [4] We affirmed in a short per curiam opinion.[5]

Franks filed this petitory action next,[6] claiming actual ownership of the rights to the three crossings referred to in the 1923 deed, rather than mere possession. Franks argued that the 1923 deed transferring the property from the Levys to T& P gave the Levys a predial servitude in the crossings. A predial servitude is " a charge on a servient estate for the benefit of a dominant estate." [7]

Union Pacific moved to dismiss, asserting that the deed, by its plain language, did not create a predial servitude, and that any servitude that was conveyed via the deed was strictly personal to the Levys,

Page 1040

ending when they transferred the land. Declining to adopt the magistrate judge's recommendation to grant the motion to dismiss, the district court denied the motion in order to develop the facts of the case. After some written discovery and depositions, Union Pacific moved for summary judgment, arguing that the language could have created a personal servitude only, and, in the alternative, that any predial servitude that the court would find should be limited in scope to agricultural use.

The district court noted that discovery did not produce any information bearing " on the legal interpretation of the 1923 deed." [8] The court cited a number of Louisiana cases finding the existence of a predial servitude in a single clause based on a presumption established under Louisiana law.[9] It noted, however, that none of those cases " presented an additional clause, such as the drainage clause [in the 1923 deed], that had to be considered in interpreting the contract." [10] The drainage clause specifically binds T& P and " its successors and assigns" to furnish drainage.[11] The clauses obligating T& P to provide fencing and passage contained no such language.[12]

According to the district court, without the drainage clause and its specific " successors and assigns" language, " [t]he general principles regarding the interpretation of servitudes suggests [sic] that the crossing clause, standing alone, would create a predial servitude." [13] But given the existence of the drainage clause, reading the right of passage as a predial servitude would " render the successors and assigns language in the drainage clause merely empty surplusage, which should be avoided." [14] Moreover, Franks conceded below that " [t]he use of the phrase 'successors and assigns' in the 1923 act was either 'bad lawyering' or surplusage." [15] The court concluded that the language was " unambiguous," and refused to " attempt to substitute its judgment about what the parties meant or intended." [16] It therefore granted Union Pacific's motion for summary judgment and dismissed Franks's claims with prejudice.[17]

On appeal, Franks argues that the district court erred in denying the existence of a predial servitude in the three crossings.

STANDARD OF REVIEW

This court " review[s] a district court's grant of summary judgment de novo," applying the usual standards under Fed.R.Civ.P. 56.[18] The panel must resolve ambiguities in favor of the non-moving party.[19]

DISCUSSION

This case turns on interpretation of the 1923 deed. " A document purporting to

Page 1041

create a predial servitude is interpreted in accordance with both the general rules of contract construction as well as in accordance with specific rules of construction for instruments that purport to create servitudes." [20] We apply the law in effect in 1923, at the time the deed was confected,[21] which was the Revised Civil Code of Louisiana of 1870 (hereinafter " RCC" ). The RCC was amended in the 1970s, resulting in the modern Louisiana Civil Code, but both the district court and the parties agree that the same result should obtain under the law in effect in 1923 or today.[22] Although Franks points to different language in the RCC compared to the current version of the Civil Code, it has not pointed to any material difference which would alter the district court's reasoning or the result it reached. Nevertheless, because the law of 1923 is the applicable law, we primarily address the relevant provisions of the RCC, citing wherever possible the modern equivalent in the Civil Code.

I. Principles of Contract Interpretation

In 1923, as now,[23] the main goal of contract interpretation under Louisiana law is determining the common intent of the parties:

Legal agreements having the effects of law upon the parties, none but the parties can abrogate or modify them. Upon this principle are established the following rules:
First --That no general or special legislative act can be so construed as to avoid or modify a legal contract previously made;
Second --That courts are bound to give legal effect to all such contracts according to the true intent of all the parties;
Third --That the intent is to be determined by the words of the contract, when these are clear and explicit and lead to no absurd consequences;
Fourth --That it is the common intent of the parties--that is, the intention of all--that is to be sought for; if there was a difference in this intent, there was no common consent and, consequently, no contract.[24]

To that end, we interpret words using their " general and popular use," [25] unless they are " [t]erms of art or technical phrases," in which case they " are to be interpreted according to their received meaning with those who profess the art or profession to which they belong." [26] " When there is a doubt as to the true sense of the

Page 1042

words of a contract, they may be explained by referring to other words or phrases used in making the ...


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