Dunellen, LLC v. Getty Properties Corp. , 567 F.3d 35 ( 2009 )

United States Court of Appeals
For the First Circuit
No. 08-2099
DUNELLEN, LLC,
Plaintiff, Appellant,
v.
GETTY PROPERTIES CORP.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Mary M. Lisi, U.S. District Judge]
Before
Boudin, Farris,* and Howard,
Circuit Judges.
Gerald J. Petros with whom Mitchell R. Edwards and Hinckley,
Allen & Snyder LLP were on brief for appellant.
Robert K. Taylor with whom James W. Ryan and Partridge Snow &
Hahn LLP were on brief for appellee.
June 1, 2009
*
Of the Ninth Circuit, sitting by designation
BOUDIN, Circuit Judge. This appeal requires us to answer
the question whether a pier in East Providence, Rhode Island, is--
as to the parties in this dispute--to be considered real property
("realty") and so subject to the law of easements or, because of an
agreement by the parties' predecessors-in-interest, is personal
property ("personalty"). Based on a prior decision of the Rhode
Island Supreme Court, we affirm the federal district court's
decision that the pier is personalty.
The history of the background transactions and relevant prior
litigation is remarkably complex, but can be severely truncated.
Like the district court, we think that the classification of the
property was settled earlier by statements of the Rhode Island
courts in cases involving the same property and the same parties or
their predecessors-in-interest. The chance that these precise
circumstances will recur is, happily, close to zero.
Plaintiff-appellant Dunellen, LLC, is the owner of the
Wilkesbarre Pier projecting into the Seekonk River in East
Providence, Rhode Island. The pier was built during the 1870's by
the Wilkesbarre Coal and Iron Company and was later acquired by the
Providence and Worcester Railroad Company ("P&W"). Initially, the
pier was used to offload coal from barges; today the pier is a
facility for offloading petroleum products from ships using two oil
pipelines running along the pier.
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As a result of numerous corporate transactions, agreements and
law suits over the past century, ownership of the land underlying
the pier at one point became separated from ownership of the pier;
but ownership of the pier and land underneath now belong solely to
Dunellen subject to rights of others to use the pier. One of those
others is defendant-appellee Getty Properties, which retains a
right to use the north side of the pier under a reservation of
rights contained in a 1941 deed.
Through state court litigation in the 1970s, Dunellen's own
predecessor P&W recovered ownership of the pier based on rights
contained in the same 1941 deed. Providence & Worcester Co. v.
Exxon Corp., 359 A.2d 329 (R.I. 1976). In that decision, the state
supreme court held that following the "consensus of the parties to
the 1941 deed," the pier was personalty and that P&W's exercise of
its reserved rights gave it a "fee simple to personalty, that is,
a conveyance of the totality of interests in the existing pier save
for defendants' right to use the north side of said pier." Id. at
341.
Getty had use of the pier under agreements with a predecessor
of Dunellen with Getty paying part of taxes and repairs; but in
2000 a dispute arose about repairs and Getty sued Dunellen's
predecessor. A jury awarded Getty damages for breach of contract
and, separately, the judge reaffirmed Getty's right to use the
north side of the pier--calling the right an "easement"-- despite
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the claim that this right had been abandoned or that Getty was
estopped to assert it. But the court declined to decide what
obligations Getty might have to contribute to costs independent of
an agreement.
After the law suit, Getty and Dunellen were unable to reach
a new agreement as to sharing of costs, and Getty has not used the
pier since early 2003. Dunellen thereafter made capital
improvements and repairs and unsuccessfully sought payment from
Getty of half the costs. Dunellen then brought the present suit
against Getty in federal district court, seeking both past costs
from Getty and a declaration that Getty would also be liable for a
share of future costs as long as it claimed a right to use the
north side of the pier.
On summary judgment, Getty prevailed. Dunellen LLC v. Getty
Props. Corp., 557 F. Supp. 2d 263 (D.R.I. 2008). The court
rejected Dunellen's judicial estoppel argument. Id. at 269-70.
The court also ruled that the 1976 Rhode Island Supreme Court
decision--that the pier was personalty--was binding on it. Id. at
270-71. Since Getty is not using the pier and was not at the time
Dunellen made improvements, the court said it had no obligation to
pay. Id. at 272. Dunellen now appeals.
We agree with the district court that the Rhode Island Supreme
Court said that the pier should be regarded as personalty and that
characterization should be respected. The characterization may
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surprise anyone raised on the common law rule that a fixture
becomes part of the real estate, a fixed pier being a classic
fixture. Prospecting Unlimited, Inc. v. Norberg, 376 A.2d 702, 705
(R.I. 1977); Butler v. Butler's Diner, Inc., 98 A.2d 875, 876 (R.I.
1953). But courts sometimes allow parties to agree that annexation
of personal property to real estate will not change its legal
character,1 which seemingly occurred incident to the 1941 deed.
However this may be, we will not decide afresh the
classification of a particular piece of property under state law
where, as here, the state's highest court has decided the very
issue in litigation that involved predecessor companies. Dunellen
argues that, as it now owns both the land and pier, this
unification should supplant the state court ruling; but for such a
claim Dunellen would have been better off suing in state court.
Porter v. Nutter, 913 F.2d 37, 40-41 (1st Cir. 1990).
Dunellen also invoked judicial estoppel. Indeed, courts have
recognized that where "a person has previously dealt with an
article as personal property, he may be estopped to subsequently
treat it as realty where the inconsistent position will result in
prejudice to one who has acted in justifiable reliance upon the
1
E.g., Hughes v. Young, 444 S.E.2d 248, 250 (N.C. App. 1994);
Blehm v. Ringering, 488 P.2d 798, 800-01 (Or. 1971) ("[p]arties may
agree that an annexed article shall be regarded as personalty"); 2
Tiffany, The Law of Real Property, § 612 (3d ed. 1939 & Supp. 2008-
09) ("The owner of a chattel and the owner of land may agree that
the annexation of the chattel to the land shall not change the
legal character of the chattel . . . .").
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apparent status of the article as personalty." Chermside Jr.,
Estoppel to Assert that Article Annexed to Realty is or is not A
Fixture, 60 A.L.R. 2d 1209 § 5[a] (1958) (citing cases).
But here it was Dunellen's predecessor that argued in prior
litigation that the pier was personalty and used that decision to
regain control of the pier. Providence and Worcester Co., 359 A.2d
at 341. Judicial estoppel, a somewhat malleable doctrine using
equitable principles, is mainly concerned with letting a party who
prevailed earlier on a position in court from reversing course in
later litigation. That description applies more to Dunellen than
to Getty and the district court did not err in refusing to apply
estoppel.
In its 2002 law suit, where it prevailed, Getty did describe
its right to use the pier as being "in the nature" of an easement;
but the qualifier suggests that the term was used as a reasonable
analogy; in fact, Getty also specifically referred to the 1976
Rhode Island Supreme Court decision characterizing the pier as
"personalty." The trial court in that case used the term
"easement" without the qualifier but, however read, the epithet
cannot overcome the state supreme court's characterization.
For similar reasons we reject Dunellen's argument that Getty
is collaterally estopped from asserting that its right to use the
pier constitutes personalty. Collateral estoppel precludes
relitigation of a settled matter where, inter alia, "the point was
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actually litigated in the earlier proceeding." Acevedo-Garcia v.
Monroig, 351 F.3d 547, 575-76 (1st Cir. 2003). In the 2002
litigation, the point that was actually litigated was whether Getty
had abandoned its right to use the pier.
Both parties agreed (and thus did not dispute) that the law of
easements provided a framework to determine that question. The
Court did not decide, nor did Getty concede, that the pier was no
longer personalty, so collateral estoppel cannot bar Getty's
present argument. Finally, Dunellen did not raise its collateral
estoppel argument in the district court so, in addition, the claim
is waived. Daigle v. Me. Med. Ctr., Inc., 14 F.3d 684, 687 (1st
Cir. 1994).
The real property label, carrying with it remnants of
medieval land law, would assist Dunellen although perhaps less than
it thinks. In general, one who holds an easement in real property
is required to make expenditures to keep the property in repair
and, often in proportion to use, to contribute to upkeep.
Restatement (Third) of Property: Servitudes § 4.13(1) (2000). It
is less clear that major improvements could be charged to a non-
using, non-consenting easement holder.
In any event, lacking the real property label, Dunellen had to
give us reason to think that Getty was liable to contribute to
upkeep and improvements with respect to an interest in personalty
that it was not using and Dunellen has pointed to nothing in Rhode
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Island law that creates such an obligation. If Getty exercises its
rights and the parties cannot agree on payment, Dunellen might
consider whether a state court would be the best forum to resolve
that dispute.
Affirmed.
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