What’s On Their Minds: Do Activities of Licensees Affect the Exclusivity of Adverse Possession? Don Koprivec et al. v. Rails-to-Trails of Wayne County.

On May 16, 2017, the Supreme Court of Ohio heard oral argument in the case of Don Koprivec et al. v. Rails-to-Trails of Wayne County, 2016-0704. This case was accepted on jurisdictional appeal and cross-appeal. At issue on appeal is whether the actions of licensees on property interrupts the “exclusive possession” of an adverse possessor. The issue raised in the cross-appeal is whether the deed created a fee simple determinable or absolute.

Case Background

This case is a dispute over property rights to an old abandoned railroad corridor (the “Disputed Property”) that spans over eight miles and runs through three parcels of land owned by the Koprivecs (purchased in 1981), Bilinoviches (purchased in 1996) and Koontzes, (purchased in 1998) (collectively, “Landowners”). From east to west, the Disputed Property abuts the northern section of the Koprivec property, travels through the Bilinovich property, and runs along the southern boundary of the Koontz property. (See helpful photo on p. 2 of Rails-to-Trails’ Brief).

In 2009, the non-profit organization, Rails-to-Trails of Wayne County (“Rails-to-Trails”), bought the Disputed Property from its predecessor in interest, Norfolk Southern Railway Company, successor by merger to Conrail Corporation (“the Railroad”), with the intent of converting it into a public trail.

The Bilinoviches and Koontzes (“Cross-Appellants”), purchased their properties from the Wiley Family. This land was subject to a deed originating in 1882 (“Bussard Deed”). These sections of the Disputed Property were originally conveyed by the Bussard family to the Akron Rail Road Company.

Since their purchases, all of the Landowners exercised control, and openly used the Disputed Property. The Cross-Appellants’ predecessor-in-interest (the Wiley family) exercised this same control. The area was regularly used and cared for by the Landowners, no trespassing signs were posted, structures were built, and there were multiple instances of “running out” or otherwise reporting trespassers who ventured onto the property.

By the 1970s, the Disputed Property was no longer used for trains. In 1988, the Railroad removed the rails, and in 1989 the Railroad removed the wooden ties. In the 1990’s and 2000’s, during the period of ownership by the Railroad, the area was inspected by a property manager of the railroad. Further, at some point during the Railroad ownership, AT&T and Sprint (“Licensees”) were granted a 15 year license, with two 15 year renewal options, to the Disputed Property to install and maintain fiber optic cables throughout the Disputed Property. In 2007, one of the Licensees conducted a brush clearing project, however, it is disputed whether this project extended to the Landowners’ property.

In February of 2011, the Landowners filed a declaratory judgment and action to quiet title to the Disputed Property on the grounds of adverse possession. They sought a declaration that they had adversely possessed the Disputed Property for the requisite time period and should be found to be record title holder of that property.

Rails-to-Trails counterclaimed for declaratory judgment, to quiet title and for trespass, essentially asking to be declared the sole, exclusive owner of the Disputed Property.  Both sides moved for summary judgment. The trial court granted summary judgment to Rails-to-Trails.

The case went to the Ninth District, which originally dismissed for lack of a final appealable order. The trial court again granted summary judgment to Rails-to-Trails, finding that the recorded licensing agreements between the Railroad and AT&T and Sprint to install and maintain fiber optic cable, the activities to maintain those cables, including a 2007 right-of-way brush clearing, and the inspection of the corridor by one of the Railroad’s employees all were enough to defeat the exclusivity element of adverse possession.  The trial court also refused to grant summary judgment to the Landowners on Rails-to-Trails counterclaims.

 Court of Appeals Decision

In a decision authored by Judge Schafer, with Judges Hensal and Moore concurring in the judgment only, the Ninth District reversed in part, finding that the trial court erred in granting summary judgment to Rails-to-Trails on the Landowners’ adverse possession claims and on its counterclaims for declaratory judgment and to quiet title. It held the license agreements and activities of utility company employees were insufficient as a matter of law to defeat the exclusivity prong of adverse possession. Judge Schafer’s opinion also found that the trial court did not err in denying summary judgment to the Koprivecs on their adverse possession claims, nor in denying summary judgment to the Koontzes and Bilinoviches on their reverter arguments based on language in the Bussard deed.  The appeals court found that the deed language created a fee simple absolute, not a fee simple determinable. The matter was remanded to the trial court for further proceedings.

In her separate concurrence, Judge Hensal sought to clarify the licenses at issue in this case. The licenses held by AT&T and Sprint were irrevocable during the 15 year terms. Because of this interest, she would find that the licenses were essentially easements, and therefore would not interrupt the adverse possessors’ exclusive use of the property.

Rails-to-Trails appealed, and the Bilinoviches and Koontzes (but not the Koprivecs) cross-appealed to the Supreme Court of Ohio.

Read the oral argument preview of the case here.

Key Precedent

Sperry v. Pond, 5 Ohio 387, 389 (1832) (A deed containing the language, “so far as” or “and no further,” creates a fee simple determinable. In this case a fee simple determinable was created with the phrases, “so long as. . . and no longer.”)

1835 Ohio Legislative Act, Sect. 3. (Incorporated and regulated the Akron Rail Road Company. Stated that the company “shall be capable in law of purchasing, holding, selling, leasing and conveying estates, real, personal and mixed, so far as the same shall be necessary for the purposes hereinafter mentioned, and no further . . .”) (emphasis added.)

In re Copps Chapel Methodist Episcopal Church, 120 Ohio St. 309, 310 (1929). (When a deed does not includes an express reverter clause, or provision of reversion “of the property to the heirs of the grantor,” a fee simple absolute is created. Using language like “so long as” merely creates a covenant, but is insufficient for reversion.)

Grace v. Koch, 81 Ohio St.3d 577, 580 (1998) (“to acquire title by adverse possession, a party must prove by clear and convincing evidence, exclusive possession and open, notorious, continuous, and adverse use for a period of twenty-one years.”)

Cronin v. Standish, 2006-Ohio-4293 (6th Dist.) (Third party’s installation of an underground utility on disputed property does not defeat an adverse possession claim.)

At Oral Argument

Arguing Counsel

Ralph E. Cascarilla, Walter|Haverfield LLP Cleveland, for Appellant/Cross-Appellee Rails-to-Trails of Wayne County.

Thomas H. Fusonie, Vorys, Sater, Seymour and Pease LLP, Columbus, for Appellees/Cross-Appellants Brian & Laura Bilinovich, Joseph & Michelle Koontz and Appellees Don & Carolyn Koprivec.

Rails-to-Trails Argument

Adverse Possession

The trial court judgment granting summary judgment to Rails-to-Trails should be reinstated.  The effect of the court of appeals decision is to enhance a disfavored cause of action under Ohio law. An adverse possessor has the burden of proof against the true owner and the true owner’s permitted users.  This case is about the latter. AT &T and Sprint, the permitted users, had recorded licenses. The court of appeals erroneously held as a matter of law that the activity of AT&T and Sprint cannot be considered in evaluating the adverse possession claim asserted in this case by the Landowners.

An adverse possessor cannot have exclusive use of the property where, as here, a permitted third party user has access, not only below ground, but with surface activities. There is no dispute about that. The record in this case is clear that there was a massive clearing of the entire right of way in 2007—that is undisputed in the record. There were three other occasions where similar clearing activities took place. That is sufficient to defeat the exclusivity element of an adverse possession claim.  An owner should be able to use agents to maintain property, particularly in a rural setting. If the reasoning of the court of appeals is adopted, that would mean an owner cannot have an agent go out and act on the owner’s behalf as an assertion of the owner’s dominion and control over rural property.  That would be bad policy to adopt.

In the context of third party users, the activities of agents, licensees, and parties with permission must be considered in analyzing the exclusivity prong, as well as the instruments by which their rights are granted.

The court should overrule Cronin because it was wrongly decided. Or the court can simply decide that the Ninth District decision is incorrectly analyzed and reached the wrong result.

Deed

A court must look to the four corners of the document in determining the intention of the parties. A deed should not have to be interpreted by engrafting a general reference to an 1835 organizational statute into a habendum clause. To require that parties divine the legislative intent of an 1835 statute, with the sketchy nature of legislative history and the actual language of the statute, is inappropriate in the context of a real property deed, particularly in the circumstances here, where it is not part of the granting clause. A fee simple determinable was not created here.

Landowners’ Argument as to Adverse Possession

Summary judgment was not warranted to Rails-to-Trails on the issue of adverse possession.

There are a number of genuine issues of material fact as to whether there were any activities by AT&T/Sprint or the Railroad during the 21 year period. The Landowners assert that any clearing that was done was done by them. As to the 2007 clearing, the brush clearing company manager testified that he could not say for certain that he was on the disputed property, and if it were already cleared, he would skip it. As to the 1996 clearing, there was no testimony that any clearing occurred on the Koontz or Koprivec sections, and if there was any clearing on the Bilinovich property it was done with Mr. Bilinovic’s permission, as if the Bilinoviches were the true owners. As to the fiber optic cables, they were laid before the 21-year period began to run, and Rails-to-Trials properly has never argued that the existence of fiber optic lines defeated adverse possession.

To meet the exclusivity prong of adverse possession, exclusive use does not have to be exclusive of everybody. It has to be exclusive as to anyone coming on and asserting dominion.

Every case that has addressed the issue of the use of utilities under a license or an easement has held that their use does not defeat the exclusivity element of adverse possession, and this court should do the same. Rails-to-Trails cannot point to a single case that holds otherwise.

Bilinoviches’ and Koontzes’ Argument as to the Deed

The Bilinovich and Koontz property are traced back to the Bussard deed, which created a fee simple determinable because it has limiting and reversionary language within its habendum clause. This is a Railroad deed.  Railroads were limited by statute as to the kinds of estates they could own. This Railroad, by its incorporating act, could acquire only fee simple determinables, so the habendum clause is consistent with that limitation on a Railroad. Even without a habendum clause, it would still be a fee simple determinable by the law at the time. The incorporating act controls the rights of the parties here. The habendum clause makes it clear, and confirms, that the act controls, and that under the act the Railroad could only purchase and convey a fee simple determinable. Once the revisionary interest was triggered, and there was no dispute that that occurred here, it reverts to the abutting landowners.

Under this particular deed and this act, this is a fee simple determinable. There’s no question that the reversionary act has been triggered and no question that the limiting and reversionary language has been incorporated into the deed. So the Koontzes and the Bilinoviches have the property by reversion under the Bussard deed, which completely moots Rails-to-Trails’ appeals as to them.

What Was On Their Minds

Adverse Possession

What is the distinguishing aspect of this case that we need to clarify in the field of adverse possession, asked Justice O’Donnell? What do we write here?

Exclusivity

This case is about exclusivity is it not, asked Justice O’Neill? How can it be an exclusive use if somebody is under the land using it?

Is it undisputed that AT &T/Sprint had use of this corridor, and went on the corridor to maintain their interests several times to break this chain of years, asked Chief Justice O’Connor? But the Landowners who are seeking the adverse possession say, yeah that happened but that’s irrelevant because it wasn’t enough to break our 21 year control over this land? But do the clearing and the activity that was maintained during this time period defeat the exclusivity element of the landowners? Was the corridor cleared? By whom?

Rights and Activities of Licensees

Is the limitation of the use of the leaseholder relevant here, asked Justice O’Neill?

Do the activities of AT&T and Sprint defeat adverse possession as a matter of law or do they create a fact issue that needs to go back to the trial court, asked Justice Fischer?

What was the term of the license, asked Justice O’Donnell? What was necessary to renew the 15 years? Were all the licenses recorded? And were they licenses, not easements?

The Fiber Optic Cables

Is the fact that there was or was not maintenance on the surface of the land relevant here if there is no dispute that there is fiber optic cable in this land that was granted by the property owner, asked Justice O’Neill? Why does maintenance of the land have anything to do with this? If the adjacent property owners say, it’s my land right now and I have exclusive use of it, and I’ve had exclusive use for 21 years, how do they get around the fact that they already gave away to another party the right to have optical cables in that land? If I buy property with cables in it, can I go there with my backhoe and start tearing them up and say, I am the exclusive owner? What if it were an underground pipeline?  Would that make a difference?

How were the fiber optics placed on the land, asked Chief Justice O’Connor? (Landowners’ answer: they were placed on the land before the 21 year period at issue here.)

The Cronin Decision

Should Cronin be distinguished, asked Justice O’Donnell?

Must Cronin be overruled to support the position of Rails-to-Trails, asked Justice O’Neill?

Disputed Facts

Aren’t there factual disputes to be worked out by the trial court about what activities occurred, when, and how much, asked Justice DeWine, commenting that presumably summary judgment was reversed because there seemed to be lots of factual disputes identified by the trial court. Isn’t there a factual dispute about Mr. Jackson’s inspection, at least as to the Koontz and Kopervich properties? Shouldn’t that be decided by a trial court, and not on summary judgment?

Deed Language

How can Copps Chappel be distinguished, asked Justice French? Didn’t the deed in that case also have limiting language in it? Which language exactly is the reversionary language? Are only this deed and this transaction at issue, not a bright line rule? Isn’t the specific language—“ under and by virtue of the several acts of the Legislature of the State of Ohio, incorporating and regulating said Akron Branch Rail Road Company”—isn’t that at least notice that you have to go back and figure out what does that law specifically do with the Akron Branch Rail Road Company? Doesn’t the granting clause say, “assigns forever for the purpose of constructing and using thereon a Rail Road and other works connected therewith?” How difficult was it to find the 1835 legislative act?

Do you have to go from the deed to the statute to figure out what the deed says, asked Chief Justice O’Connor? What year are we talking about? Is it the Landowners’ position that the Railroad could not have a fee simple interest in any real estate that it acquired? (answer: yes, it was.)

The words “no further” do not say revert, forfeit, or return, noted Justice Fischer, commenting that it just says “no further.”

If the deed didn’t have a habendum clause would it still be a fee simple determinable, asked Justice DeWine? So a subsequent transferee cannot rely upon the language of the deed—it has to go back and research what the law was to set up the Railroad? Isn’t it true that under traditional principles, if there is a conflict between the granting and habendum clauses the granting clause controls?

How it Looks from the Bleachers

To Professor Emerita Bettman

Like a win for the Landowners on adverse possession, but not by the deed (which was only argued by the Bilinoviches and Koontzes).  When I say “win,” I mean a majority clearly isn’t buying the trial court decision granting summary judgment to Rails-to-Trials. But I don’t think the court is going to give the Landowners a win as a matter of law, although I can see why the Landowners might think they should. To me, the various disputed activities don’t really challenge dominion.

I think the high court will agree with the lead opinion from the appeals court that license agreements and activities of utility company employees are insufficient as a matter of law to defeat the exclusivity prong of adverse possession.   That holding would be an important one, favoring the Landowners.  But after that, the court will probably agree with the appeals court that there are factual disputes about other activities, such as brush clearing and inspection of the corridor by a railroad employee that need to be resolved to determine if the 21-year exclusivity period was met or broken. Justice DeWine seemed most strongly inclined in that direction, and Justice Fischer also seemed to be leaning that way.  The whole underground fiber optic cable thing, seemingly of great importance to Justice O’Neill, seems to be a red herring, particularly if it was laid before the 21 year period even started, although above-ground maintenance could certainly be relevant.

As for the deed, I thought Mr. Fusonie’s history lesson about railroads not being allowed to own estates other than fee simple determinables was both fascinating and elegantly delivered.  He certainly caught the fancy of Justice French, who was by far the most interested in this issue, and seemed to agree with his argument.  I confess to getting a bit lost in the weeds here, but I think a majority is going to agree with the court of appeals that Bussard deed  does not contain the language of forfeiture or reversion, and thus created a fee simple absolute, not determinable.

My compliments to both counsel for a beautifully delivered argument. I have a feeling when I first told my student contributors we were going to do a case on adverse possession, eyes rolled, and yet I’ve always found this an intriguing subject.  When I was on the appeals court we actually decided several such cases.

To Student Contributor Jefferson Kisor

This case was incredibly fact-intensive, and riddled with disputes. The “clearing activity” in 2007 was just one of the issues discussed. The Bilinoviches did not contest that this occurred on the section of land abutting their property. However, the licensees allegedly asked Mr. Bilinovich’s permission to enter the property and treated him as the “true owner.” Furthermore, the Koontzes and Koprivecs disputed that the licensees did any “clearing” on their respective sections. Justice DeWine appeared very hesitant about reinstating summary judgment. His questions continually went back to the factual issues, referencing different instances in the record. Even though adverse possession is generally disfavored, I believe that Mr. Fusonie convinced the Court that summary judgment was improper. The mere existence of the license does not sever the adverse possessors’ exclusive possession, especially since these licensees were not asserting their dominion over the property. I am confident that the Court will find a genuine issue of material fact and remand this case to the trial court. Also, by remanding the case, the Court could avoid the difficulty of distinguishing this case from Cronin.

As the argument went on, I was worried that the cross-appeal would never be discussed. Thankfully, Justice French was eager to question both attorneys about it. Despite Mr. Fusonie’s attempts to distinguish the reversionary language present in the Bussard Deed from In re Copps Chapel Methodist Church, Justice French appeared to be his only supporter. On the other hand, Justice DeWine and Chief Justice O’Connor intimated that the absence of the “purpose” language in the granting clause was controlling. I believe the Court will affirm the Ninth District’s finding that the Bussard Deed created a fee simple absolute.

 

 

 

 

 

 

 

 

 

 

 

 

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