by Joanna Waugh e-mail to: jwaugh7596@aol.com

In January 10th, 1996, the 6th Circuit Court of Appeals in Cincinnati upheld a Western Michigan district court ruling in Belka vs. Penn Central, case number 93-2457. This suit, filed in October 1993, granted quiet title of a 30.5 mile stretch of abandoned rail corridor between Otsego and Byron Center, Michigan to 98 reversionary property owners. Belka is unique because the lower court applied the "doctrine of impossibility" to its decision. Performance of an act is said to be "impossible" when the physical means to accomplish it are destroyed, have deteriorated, or are no longer available. In Belka, Judge Robert Holmes Bell determined that future use of the corridor as a railroad was impossible due to Penn Central's actions.

Background When the Regional Rail Reorganization (3R) Act consolidated failing railroad companies in the mid-1970's, Penn Central acquired the Kalamazoo to Grand Rapids line. The route had already fallen into disuse, and had been targeted by 3R's Final System Plan for conversion to recreational trails. Rails, ties, and associated equipment were removed in the late 1970's. Penn Central offered the corridor to the State of Michigan and nearby communities under the state's 1976 Transportation Preservation Act. Like its federal counterparts, the Michigan law was implemented to provide every opportunity to preserve rights-of-way for future railroad use by temporarily converting them to recreational trails. The corridor, however, was not acquired by any state or local government body. Penn Central then began to dispose of it in portions. Twelve miles went to Conrail near Otsego, 8 miles were developed as trails in Kent County, and an additional three miles of intermittent segments were conveyed by sale and/or condemnation between 1983 and 1991. Trouble then erupted over title to a section between Otsego and Byron Center, where Kent Trails ended. Penn Central claimed it held fee simple title to the right-of-way between the two towns. A closer inspection, however, revealed the railroad held only easement rights. The issue was further complicated by the fact that the right-of-way grants, dating to 1869, lacked a defeasance clause -- a legal stipulation of the conditions under which the railroad easement interests would be terminated. Penn Central insisted it held the easements in perpetuity because the grants stipulated "999 years." Property owners insisted all easements terminated when the rail line was officially abandoned. The situation came to a boil in October of 1993 when Michigan's Department of Natural Resources offered to purchase the corridor for recreational trail development.

Abandonment determined

It was left to Judge Bell to determine whether the easement had been abandoned, and all railroad property interests in it extinguished. Court documents state that, "as a general rule, an easement granted for a particular purpose terminates as soon as the purpose . . . ceases to exist, is abandoned, or is rendered impossible." A mere showing of nonuse did not constitute abandonment. Even Interstate Commerce Commission abandonment approval under the 3R's Act was nothing more than "abandonment in the railroad law sense, not in the property law sense." Wrote Judge Bell: "It is state law, rather than federal law, that determines abandonment for property law purposes." And it was under state property law that extinguished easements reverted to property owners.

"To prove abandonment of an easement under Michigan law," declared Judge Bell, "plaintiffs must show both nonuse and some clear decisive act showing an intent to abandon and release the right." Penn Central argued it had not abandoned the easement because it continued to pay property taxes on the right-of-way. Because of this argument, the court carefully examined all of Penn Central's actions and concluded: "In this case . . . federal abandonment, removal of tracks, inability to operate a railroad, and efforts to sell the right-of-way, in conjunction with actual sale of portions of the right of way . . . combine to show an unmistakable intent to abandon the use of the right of way for railroad purposes."

Impossibility

Penn Central argued that the court should not adopt too narrow a definition of "railroad purposes." It pointed to a broader interpretation -- recreational trails -- that had become public policy. National and state trails acts had been designed to preserve railroad rights-of-way for future reactivation as rail service. Never mind, said Penn Central, that it had already sold portions of the right-of-way. A more important public purpose needed to be considered.

Judge Bell replied: "By giving up their easement for rails, [Penn Central] also gave up an argument for an easement for trails. The court cannot accept Defendant's . . . arguments . . . when their own actions . . . have undermined that policy." Then Judge Bell dropped a bombshell. "Even if an easement is not intentionally abandoned," he wrote, "it may still terminate when the purposes for which it was granted become impossible. [T]he right-of-way in the present case has been extinguished by impossibility of use because the sale and condemnation of portions of the right-of-way prevents . . . future use for railroad purposes."

"[T]he underlying principle of the rails to trails statutes is the preservation of the rail corridor for future rail use. if future rail use is no longer a possibility, the public policy underlying those statutes does not apply."

Accordingly, Judge Bell declared the right-of-way extinguished under Michigan property law and title granted to the plaintiffs. Penn Central appealed his decision to the U.S. Court of Appeals, which did an odd thing. it certified two questions about the case to the Michigan Supreme Court:

"1. Under Michigan law, did the defendants' actions constitute an abandonment of their easement?

"2. Under Michigan law, did the defendants' easement terminate because the purposes for which it was granted became impossible?"

On November 1, 1995, the Michigan Supreme Court declined to answer. Subsequently, the Court of Appeals affirmed Judge Bell's decision.

What does the Belka case mean for property owners?

While the Belka case did not hinge specifically on the federal rails to trails law, 16 U.S.C. 1247(d), Judge Bell did mention 1247(d) in his decision. Judge Bell mentioned the wording of the U.S. House Report on 1247(d) which says ". . . when the route itself remains intact for future railroad purposes", see Preseault v. ICC, 494 U.S. 1 at page 8. Judge Bell then asked the question, how can you perserve a route when you sell or give away portions of the right of way?

Not every abandonment will have the same facts as the Belka case, but many abandonment that have already happened have this same set of facts, i.e., some of the right of way was either sold or exchanged for other uses other than a trail. It is possible under certain circumstances to reopen past abandonments when new case law or facts become available.

Dick Welsh, Executive Director of the National Association of Reversionary Property Owners (NARPO), is a good place to start your inquiry to see if a future, present or past abandonment might fit into the facts of the Belka case. Dick knows many good attorneys around the country that can be of help. You can contact Dick at 206-392-1024 after 8AM Pacific time zone, not any earlier. Dick's e-mail address is dick@halcyon.com NARPO's home page address on the internet is http://www.halcyon.com/dick/