Louisville & Indiana Railroad Company v. Indiana Gas Company , 2005 Ind. LEXIS 532 ( 2005 )

ATTORNEYS FOR APPELLANT/CROSS-APPELLEE ATTORNEYS FOR APPELLEE/CROSS-APPELLANT
Thomas C. Bigley, Jr. R. Thomas Bodkin
Jason H. Guthrie Douglas A. Welp
Columbus, IN Evansville, IN
Jeffrey L. Beck
Columbus, IN
Robert Heidorn
Evansville, IN
In the
Indiana Supreme Court
_________________________________
No. 03S01-0401-CV-00009
LOUISVILLE & INDIANA RAILROAD COMPANY,
Appellant/Cross-Appellee (Plaintiff
below),
v.
INDIANA GAS COMPANY, INC.,
Appellee/Cross-Appellant
(Defendant below).
_________________________________
Appeal from the Bartholomew Superior Court, No. 03D02-0004-CP-50
The Honorable Kathleen Tighe Coriden, Judge
_________________________________
On Petition to Transfer from the Indiana Court of Appeals, No. 03A01-0210-CV-384
_________________________________
June 15, 2005
Shepard, Chief Justice.
Almost continually from the time of statehood, building Indiana’s economy has
necessitated constructing networks for the transport of people and product, energy and
communications. This litigation centers on one of perhaps thousands of points at which these
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networks intersect. A railroad contends that a gas company which has laid pipe along a county
road that crosses the tracks owes rent to the railroad for passing underneath. We conclude that
rent is not owed.
Facts and Case History
The basic facts are not controverted. County Roads 550 North and 400 South in
Bartholomew County each cross tracks of the Louisville & Indiana Railroad Company
(“Railroad”). These tracks rest on fee or right-of-way owned by the Railroad. Indiana Gas
Company, Inc. (“Indiana Gas”), a public utility, installed gas pipelines following the county
right-of-way along the two roads, thus crossing under the Railroad’s tracks. The Railroad says
that Indiana Gas installed the pipe without consent from or compensation to the Railroad.
The Railroad filed a four-count complaint: (1) trespass; (2) license rent; (3) quantum
meruit; and (4) quantum valebant. The parties filed cross-motions for summary judgment on the
trespass and license rent claims. The trial court concluded that the Railroad owned an easement
and held that one could not by definition commit trespass against the holder of an easement.
Thus, it granted partial summary judgment in favor of Indiana Gas on the trespass claim. The
court dismissed the remainder of the case based on its conclusion that jurisdiction over the
Railroad’s claims otherwise lay with the Indiana Utilities Regulatory Commission under Indiana
Code § 8-1-2-5, referred to by the parties as the “Joint Use Statute.” The parties cross-appealed,
and the Court of Appeals reversed and remanded for a trial on the merits. Louisville & Indiana
R.R. Co. v. Indiana Gas Co., 792 N.E.2d 885, 892 (Ind. Ct. App. 2003) vacated. We grant
transfer.
The order in which the parties’ contentions should be approached is a matter of some
substance. We have approached them in what seems to be the best dipositive order.
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I. What Does the Railroad Own?
The litigants have joined in extensive debate over whether the Railroad’s interest in the
land at issue is fee simple or merely an easement, and the rulings in the trial court and the Court
of Appeals reflect this emphasis. The nature of the Railroad’s ownership, the parties say, drives
several of the issues presented. For example, does one owe rent to the owner of a mere right-of-
way? Or, does application of the Joint Use Statute vary depending on the nature of the
Railroad’s interest?
This debate presents interesting questions of legal history. The Railroad’s operation
predates by several decades the adoption of general statutes on railroads and corporations. Its
corporate form and powers flow from legislative charters originally granted to “the Ohio and
Indianapolis Rail Road Company” in 1832 and from later legislative acts affecting the operation
of that company and its successors. 1 The legislature wrote statutes about the Railroad three
times before expressly authorizing “fee simple” ownership of property. The deeds at issue in this
case were acquired during the interval. Counsel thus contest whether references in those deeds
to the powers of the charter should be read as giving only an easement and whether the third
statute was “remedial” as we understand that doctrine today.
It is difficult to imagine the creation of such a substantial enterprise as a railroad without
buying land in fee, but knowing with confidence whether this was so would require considerable
effort. The meaning of these intertwined Nineteenth Century documents turns as much on
custom and practice as it does on Twenty-First Century rules of construction. While information
on such matters is knowable, it is not surprising that the scale of the present litigation has made it
diseconomic for the parties to pursue such an investigation.
1
These individual legislative charters were the ordinary method by which railroads took form under the
Indiana Constitution of 1816. See, e.g., 1851 Local Laws of Indiana, ch. 62, 96 (authorizing James
Emison, Chauncey Rose, Horace Shepard, and others to build a railroad from Vincennes to Terre Haute
and northward).
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These intriguing matters would certainly be central to resolving, say, a dispute between
grantee and grantor, but that is not the nature of the litigation before us. In the end, we conclude
that the statutory regimes applicable to this dispute lead to the same outcome regardless of the
nature of the Railroad’s ownership interest.
II. Dismissal for Lack of Jurisdiction
The Railroad seeks compensation for the use of its real estate interest under the theories
of license, quantum meruit and quantum valebant. The trial court determined that the Joint Use
Statute, Indiana Code § 8-1-2-5, governed these claims. That conclusion prompted it to dismiss
for lack of subject matter jurisdiction, saying that the proper venue for determining what might
be at stake was the Indiana Utility Regulatory Commission.
Both parties assault this holding. The Railroad appeals the dismissal and the trial court’s
failure to find that, pursuant to the statute, Indiana Gas should have sought permission from the
Railroad before installing its pipe under the Railroad’s tracks and must now pay reasonable
compensation. Indiana Gas appeals the trial court’s determination that the installation of its pipe
beneath the railroad tracks constituted a “joint use” of the Railroad’s facilities within the
meaning of the statute.
The Joint Use Statute at the heart of this debate provides:
Every public utility, and every municipality, and every person,
association, limited liability company, or corporation having
tracks, conduits, subways, poles, or other equipment on, over, or
under any street or highway shall for a reasonable compensation,
permit the use of the same by any other public utility or by a
municipality owning or operating a utility, whenever public
convenience and necessity require such use, and such use will not
result in irreparable injury to the owner or other users of such
equipment, nor in any substantial detriment to the service to be
rendered by such owners or other users.
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Ind. Code Ann. § 8-1-2-5(a) (West 2001)(emphasis added). The same section provides a method
for resolving disputes about particular joint uses or about compensation for such uses. The
language describing this procedure is helpful in defining the statute’s overall purpose:
In case of failure to agree upon such use or the conditions or
compensations for such use, or in case of failure to agree upon such
physical connection or connections, or the terms and conditions
upon which the same shall be made, any public utility or any
person, association, limited liability company, or corporation
interested may apply to the commission and if after investigation
the commission shall ascertain that public convenience and
necessity require such use or such physical connections, and that
such use or such physical connection or connections would not
result in irreparable injury to the owner or other users of such
equipment or the facilities of such public utilities, nor in any
substantial detriment to the service to be rendered by such owner or
other public utilities or other users of such equipment or facilities,
it shall by order direct that such use be permitted and prescribe
reasonable conditions and compensations for such joint use and
that such physical connection or connections be made and
determine how and within what time such connection or
connections shall be made, and by whom the expense of making
and maintaining such connection or connections shall be paid.
§ 8-1-2-5(b). These provisions focus by their own terms on allowing, for example, one utility to
use the poles of another, as when telephone companies and electric companies string lines along
the same corridor. The statute describes the end result as the “physical connection” of such
facilities. The apparent object is to require cooperation among enterprises using the public right-
of-way in order to maximize the use of existing equipment, minimize the need for duplicative
facilities, and facilitate the provision of multiple public services. The statute applies to “tracks,
conduits, subways, poles, or other equipment on, over, or under any street or highway.” It does
not make any mention of land. § 8-1-2-5(a). The statute contemplates that a public or municipal
utility might use existing equipment in the public right-of-way; it does not govern the use of the
right-of-way itself.
In this case, Indiana Gas installed pipes in the public right-of-way, crossing beneath the
railroad tracks. Because Indiana Gas did not use the tracks or other equipment of the Railroad,
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we are hard-pressed to see how the Joint Use Statute applies. Thus, the Railroad is not entitled to
compensation under the statute. 2
III. Right of Way Statute
Indiana Gas contends that it was entitled to lay its pipes by virtue of a different section of
the Code:
Public and municipally owned utilities are authorized to construct,
operate, and maintain their poles, facilities, appliances, and fixtures
upon, along, under, and across any of the public roads, highways,
and waters outside of municipalities, as long as they do not
interfere with the ordinary and normal public use of the roadway . .
..
Ind. Code Ann. § 8-20-1-28 (West 2001). Indiana Gas is, of course, a public utility. Section 28
therefore seems, in relatively straightforward terms, to authorize it to enter upon the county right-
of-way and install the pipe along the roadway.
Over several generations, the courts have understood this statute as contemplating that
the public utility would not need to compensate the landowner, inasmuch as such a use does not
place an additional burden on the subservient land. As we said in Fox v. Ohio Valley Gas Corp.:
At the time easements for our early highways were condemned, the
way was used for the passage of foot passengers, animals, and
animal-drawn conveyances only, and yet, as gas for fuel,
telephones, and electricity came into use, the easements were
construed as intended to be broad enough to permit the laying of
pipes and the installation of poles and wires in, upon, and under the
streets and highways, and it was concluded that such a use cast no
burden upon the fee beyond that which was contemplated and paid
for in the original taking.
2
Furthermore, because the statute does not apply, it was error for the trial court to dismiss the license,
quantum meruit and quantum valebant counts for lack of subject matter based upon the statute.
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250 Ind. 111, 118, 235 N.E.2d 168, 172 (1968) (quoting New York Cent. R.R. Co. v. Yarian,
219 Ind. 477, 484-85, 39 N.E.2d 604, 606 (1942)) (emphasis added). See also Deetz v. Northern
Ind. Fuel & Light Co., 545 N.E.2d 1103 (Ind. Ct. App. 1989)(gas company did not need
landowner’s consent to install pipeline in county right-of-way and landowner did not suffer any
legal damages from such installation).
The nature of the Railroad’s interest in the land transversed by the county right-of-way
does not affect this result. In Fox the court held that a fee owner was not entitled to additional
compensation when a gas company laid pipe in the county right-of-way that crossed his land.
Fox, 250 Ind. at 117-19, 235 N.E.2d at 172-73. If the Railroad owns the land in fee, Fox applies
directly, and the Railroad is not entitled to compensation beyond what it, or its predecessor in
interest, received when the right-of-way was established. If the Railroad possesses an easement,
it does not posses rights greater than that of the underlying fee owner. These are among the
reasons we observed above that deciding the nature of the Railroad’s interest was not pivotal to
resolution of the present case.
Because Indiana Gas was authorized both by statute and by Fox to enter onto the county
right-of-way to install the pipe, summary judgment in favor of Indiana Gas on the trespass count
was appropriate, and we therefore affirm it. Similarly, because the statutorily authorized pipeline
does not place an additional burden on the land, the Railroad is not entitled to compensation, and
the trial court should have granted summary judgment in favor of Indiana Gas on the license rent
issue. 3
Having said that, we observe that section 28 makes the user responsible for burdens it
imposes on the “ordinary and normal public use of the roadway.” § 8-20-1-28. We presume that
common law precepts would likewise serve to protect the interests of the Railroad in the
continued peaceful and efficient use of its tracks to facilitate commerce. For these reasons,
consultation about the nature and timing of construction at such intersections is obviously in the
3
The quantum meruit and quantum valebant counts seem aimed mostly toward the same types of relief as
the license rent and trespass claims and are likely resolvable on similar grounds, but Indiana Gas did not
seek summary judgment on those counts. Those counts were not subject to dismissal on grounds they
should have been submitted to the IURC.
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best financial interest of all concerned (as utility company signs sometimes say, “Call before you
dig.”).
Conclusion
We affirm the trial court’s grant of summary judgment on the trespass claim and its
dismissal of the license rent claim. We reverse its dismissal of the claims for quantum meruit
and quantum valebant.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.
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