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State v. Hess

July 29, 2004

STATE OF MINNESOTA, THROUGH ITS DEPARTMENT OF NATURAL RESOURCES, APPELLANT,
v.
DUWAYNE HESS, ET AL., RESPONDENTS, THE FIRST NATIONAL BANK OF BEMIDJI, DEFENDANT.



Heard, considered, and decided by the court en banc.

SYLLABUS BY THE COURT

Deed written in 1898 conveying land to a railroad company "for Right of Way and for Railway purposes" conveyed an interest in fee simple determinable.

The Marketable Title Act, Minn. Stat. § 541.023 (2002), extinguished an interest in possibility of reverter because appellant's interest in fee simple determinable constitutes a "claim of title based upon a source of title" of record at least 40 years and no notice of claim based on the possibility of reverter has been filed of record.

Reversed.

The opinion of the court was delivered by: Anderson, Paul H., Justice.

Dissenting, Blatz, C.J.

Took no part, Hanson, J.

OPINION

Appellant State of Minnesota, through its Department of Natural Resources (DNR), brought this quiet title action to determine ownership of a strip of land formerly used as a railroad corridor and currently used as part of the Paul Bunyan State Trail. Respondents Duwayne Hess, Brian M. Sandberg, and Amelia A. Sandberg claim ownership of parts of the old railroad corridor, which corridor passes through and borders their real property in Hubbard County. The issue before us is whether an 1898 deed, which purports to convey the land used for the railroad corridor to a railroad company for right of way and for railway purposes, conveys an easement or a fee simple determinable. The district court granted summary judgment for the state, concluding that the 1898 deed conveyed a fee simple determinable and that the Marketable Title Act, Minn. Stat. § 541.023 (2002), extinguished any subsequent limitation on the conveyance. The court of appeals reversed, holding that the 1898 deed conveyed only an easement. We reverse the court of appeals.

On April 1, 1898, Thomas B. Walker*fn1 and his wife Harriet G. Walker, and W.T. Joyce and Clotilde G. Joyce, conveyed their interests in the real property in question to the Brainerd and Northern Minnesota Railway Company "for and in consideration of" one dollar. The signed deed, written by hand, states that the grantors hereby grant, bargain, sell and convey unto the said company, its successors and assigns, a strip, belt or piece of land, one hundred feet, wide, extending across the following lands in Cass and Hubbard Counties, State of Minnesota, described as follows to wit * * *.

Following a detailed description of the property conveyed and also following language conveying the right to erect snow fences up to 150 feet from the center line of the railway, the deed states that the grantors hereby release all damages and claims thereto, to all --- lands,*fn2 by reason of or occasioned by the Location, construction, or operation of a Railway over and upon the premises hereby conveyed. And the said Harriet G. Walker and --- hereby --- their rights of dower in the tracts hereby conveyed.*fn3

Provided that this Grant or Conveyance shall continue in force[, so]*fn4 long as the said strips of land shall be used for Right of Way and for Railway purposes; but to cease and terminate if the Railway is removed from the said strips.

Now, more than a century after this deed was executed, we must determine the meaning of the foregoing language as used by the grantors and grantees.

The Walker/Joyce deed was recorded in Hubbard County on February 7, 1900. On June 29, 1901, the Brainerd and Northern Minnesota Railway Company conveyed its interest in the subject property to the Minnesota and International Railway Company, later known as the Burlington Northern Railway Company (BNRC). This deed was recorded on August 1, 1901. BNRC thus became the successor in title to the Brainerd and Northern Minnesota Railway Company's interest in the subject property and used it as the corridor for a railroad line.

In 1985, BNRC discontinued service on 193.12 miles of its railroad line between Brainerd and Bemidji and between Bemidji and International Falls. It did so after it received a certificate of abandonment from the Interstate Commerce Commission (ICC) allowing discontinued service on the rail line. During the abandonment proceeding, the Minnesota Department of Transportation (MnDOT) requested a 120-day public use condition that would allow it to negotiate for the acquisition of approximately seven miles of the 193.12-mile corridor for trail use and 30 miles to be set aside for a potential tourist rail line. When the ICC granted the certificate of abandonment, it found that "[p]ortions of the right-of-way are suitable for other public purposes." However, the ICC denied MnDOT's request to declare the segment of the property between Bemidji and International Falls "suitable for public use for acquisition as part of the State Rail Bank Program."*fn5 The ICC noted that a "public use" did not include keeping the track and materials intact for future rail freight use and that MnDOT had failed to submit the required information for seeking a public use condition.

After the ICC granted BNRC's request for abandonment of portions of its railroad line, BNRC unsuccessfully attempted to sell the Brainerd/Bemidji corridor as a tourist railway line. No tourist line was ever established. BNRC then removed the tracks, bridges, and ties from the corridor in either 1986 or 1987. In 1988, the Minnesota Legislature authorized the DNR to purchase the corridor between Baxter and Bemidji in order to create the Paul Bunyan State Trail. BNRC subsequently conveyed the corridor to the DNR by a quitclaim deed dated September 13, 1991, which deed was recorded December 31, 1991. Consideration for the corridor was $1.526 million. The DNR opened the Paul Bunyan State Trail for public use in December 1991. The trail extends approximately 90 miles from Baxter to Bemidji, passing through Crow Wing, Cass, Hubbard, and Beltrami Counties. Residents and tourists presently use the trail for hiking, bicycling, horseback riding, and snowmobile riding.

On August 10, 1977, respondents Brian and Amelia Sandberg acquired a parcel of land in Hubbard County lying east of and bordering the railroad corridor at issue here. At the time of this acquisition, the railroad line was still operational. On July 29, 1993, the Sandbergs acquired an adjoining parcel of land that is bisected by the Paul Bunyan State Trail. On October 11, 1995, the Sandbergs acquired a third parcel of land east of and bordering the trail. The trail was visible and open for public use at the time of the Sandbergs' second and third acquisitions.

On December 8, 1992, respondent Duwayne Hess acquired approximately 210 acres of real property in Hubbard County that is partially adjacent to and is partially bisected by the Paul Bunyan State Trail. The trail was visible and open for public use at the time that Hess acquired his property.

In October 1998, the Sandbergs and Hess began blockading the Paul Bunyan State Trail where it crossed their respective properties. The blockade caused the trail to be disjointed and caused public users to travel onto private property to get back onto the trail. The DNR received numerous complaints from trail users expressing frustration with having to go around the blockaded portions. In May 2002, construction equipment was spotted on the Sandbergs' property adjacent to the trail. According to a DNR employee, it appeared that excavation work had taken place, resulting in the removal of trees and bushes. Topsoil was removed from and stockpiled onto the trail. Apparently, the Sandbergs were building a driveway. The record reflects that it is not necessary for the Sandbergs to use the trail to access their property.

In February 2002, appellant State of Minnesota, through the DNR, initiated this quiet title action, seeking a declaration that the DNR owns the parts of the Paul Bunyan State Trail being blockaded by the Sandbergs and Hess. On May 31, 2002, the Hubbard County District Court issued a temporary injunction prohibiting the Sandbergs from driving vehicles on the trail, digging in the right-of-way, and using the trail as a driveway. The parties filed cross motions for summary judgment. On October 9, 2002, the court issued an Order and Memorandum granting the DNR's motion for summary judgment and denying the Sandbergs' and Hess's motion for summary judgment. The court concluded that the DNR owns the property in question in fee simple. On July 29, 2003, the court of appeals reversed the district court. State ex rel. Dept. of Natural Res. v. Hess, 665 N.W.2d 560 (Minn. App. 2003). The DNR petitioned for review and we granted that petition.

On review of a grant of summary judgment, we review de novo whether there are any genuine issues of material fact and whether the district court erred in its application of the law. Wartnick v. Moss & Barnett, 490 N.W.2d 108, 112 (Minn. 1992). The facts of this case are largely undisputed and both parties urge that summary judgment should have been granted in their favor.

The DNR urges us to reverse the court of appeals and adopt the district court's conclusions of law. The district court concluded that the 1898 Walker/Joyce deed conveyed a fee simple determinable, subject to the limitation "so long as the said strips of land shall be used for Right of Way and for Railway purposes; but to cease and terminate if the Railway is removed from the said strips." Having concluded that the interest conveyed in 1898 was a fee simple determinable, the court went on to conclude that the DNR owns the subject property in fee simple. It did so because notice of a claim to the contrary was not given within 40 years of the 1898 deed; thus, all limitations on the conveyance were extinguished in accordance with the Marketable Title Act, Minn. Stat. § 541.023 (2002).

Hess and the Sandbergs urge us to affirm the court of appeals, which concluded that the 1898 Walker/Joyce deed created an easement for a right of way rather than a fee simple determinable. After concluding that the 1898 deed conveyed an easement, the court of appeals went on to conclude that the BNRC abandoned its easement when it ceased railway operations and removed its tracks from the corridor following receipt of the certificate of abandonment from the ICC. Based on these conclusions, the court of appeals held that the district court erred in its interpretation of the law and Hess and the Sandbergs were the fee owners of the land in question.

I.

The issue before us requires us to take a close examination at what constitutes an easement and what constitutes a fee simple determinable. A fee simple determinable is an interest in real property subject to the limitation that the property reverts to the grantor upon the occurrence of a specified event. Consol. Sch. Dist. No. 102 v. Walter, 243 Minn. 159, 163, 66 N.W.2d 881, 884 (1954). A fee simple determinable is typically conveyed through language with the operative words "until," "so long as," or "during," which indicate that the grantor retains a possibility of reverter upon the occurrence of the stated event or condition. See id. at 163 n.14, 66 N.W.2d at 884 n.13; see also 2 Powell on Real Property ¶ 187 (1989). An easement, in contrast, is an entitlement to the use or enjoyment of the land rather than an interest in the real property itself. See Minneapolis Athletic Club v. Cohler, 287 Minn. 254, 258, 177 N.W.2d 786, 789 (1970) (citing Restatement (First) of Property, § 450 (1944)). An easement does not convey an estate; rather, it passes only a right of use. See Walter, 243 Minn. at 161, 66 N.W.2d at 883 (citing Restatement (First) of Property, § 471 (1944)).

A. Prior Case Law

We have considered deeds that convey an interest in a strip of land to a railroad company before. In Chambers v. Great Northern Power Co., 100 Minn. 214, 219, 110 N.W. 1128, 1129-30 (1907), we held that title to land acquired in condemnation proceedings for right of way purposes was in the nature of either an easement or a fee simple determinable. We concluded in Chambers that "a mere easement was granted," rather than a fee simple absolute. Id. at 219, 110 N.W. at 1129-30. We recognized, however, that the distinction between an easement and a fee simple determinable was immaterial to the resolution of the case.

It [is] immaterial whether the title amounted to a mere easement, or a qualified or terminable fee. Whatever the nature of the title, it would terminate whenever the company failed to perform the very function which it was ...


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