Partners v. Belt Ry. Co. of Chi.

2020 IL App (1st) 190836-U

COULAS VIKING PARTNERS, an Illinois General Partnership, Plaintiff-Appellant, v. THE BELT RAILWAY COMPANY OF CHICAGO, an Illinois Corporation,and INGREDION INC., a Delaware Corporation, Defendants-Appellees.

No. 1-19-0836

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT THIRD DIVISION

June 30, 2020

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Cook County.

No. 13 CH 28409

Honorable Celia G. Gamrath, Judge Presiding.

JUSTICE HOWSE delivered the judgment of the court.

Presiding Justice Ellis and Justice McBride concurred in the judgment.

ORDER

¶ 1 Held: The judgment of the circuit court of Cook County is affirmed; plaintiff's claims against defendant railroad and shipper are preempted by the federal Interstate Commerce Commission Termination Act which grants exclusive jurisdiction over regulation of transportation by railroad to the Surface Transportation Board; because all of plaintiff's claims have the effect of regulating transportation by rail the circuit court of Cook County lacks subject matter jurisdiction over the claims and defendants were entitled to summary judgment as a matter of law.

¶ 2 Plaintiff's complaint sought declaratory and injunctive relief (1) to declare that defendants do not possess any rights to use certain property for transportation by rail as defined by federal statute and (2) enjoining defendants' allegedly wrongful use and trespass of the property. The complaint also sought damages plaintiff allegedly suffered as a result of defendants' conduct. The complaint alleged defendants used the property by their possession and operation of a certain railroad track "on virtually a daily basis" without plaintiff's permission or authorization. The complaint alleged defendants "do not have any right, title or interest" in the property nor consent to use the subject property. Defendants moved for summary judgment on the ground plaintiff's complaint is preempted by federal statute. The circuit court of Cook County granted defendants' motion for summary judgment.

¶ 3 For the following reasons, we affirm.

¶ 4 BACKGROUND

¶ 5 In November 2016 plaintiff, Coulas Viking Partners (Viking), filed its third amended complaint (complaint) against defendants, the Belt Railway Company of Chicago (Belt) and Ingredion Incorporated (Ingredion) alleging defendants have used Viking's property without permission or authorization for years, that this use constitutes a trespass, and that defendants' use of the property has prevented Viking from enjoying the full benefits of ownership of its property, including using it, developing it, or selling it. The following is taken from the complaint.

¶ 6 Belt is an "intermediate switching terminal" railroad and Ingredion is a food, beverage brewing, and pharmaceutical ingredient manufacturer. Viking's property consists of 32 acres that has a railroad track (hereinafter, "the Argo track" or "track") running through it. The track was built before Viking acquired the property. In 1909, the prior owner entered into an agreement (hereinafter, "the 1909 Agreement") with Ingredion's predecessor, "Corn Products," granting Corn Products an easement on the property "for the construction, maintenance, and operation of the [track] on the [property.]" The parties recorded the easement and Viking attached a copy of the easement to the complaint. Viking's complaint alleged the easementstated that Corn Products could not assign the easement to anyone other than the Chicago Peoria Western Railway Company (Peoria Railway) without the owner's consent. Peoria Railway could assign the easement back to Corn Products. The complaint alleged that the easement stated that if any unauthorized assignment occurred (i.e., other than between Corn Products and Peoria Railway) without the owner's consent then the easement "shall cease." According to the complaint if that were to occur then the owner had "the right, at its election, to require the removal of the [track] from the Easement."

¶ 7 The complaint alleged Corn Products did assign the easement to Peoria Railway in 1909 and at no time did Peoria Railway ever assign the easement back to Corn Products or to Ingredion. Neither the previous owner nor any successor, including Viking, ever consented to a further assignment of the easement or to an assignment of the easement to Belt. The complaint alleged that in 1912 "an attempt was made" to assign the easement to Chicago and Western Indiana Railroad Company (Indiana Railroad). The complaint alleged the then owner of the property did not consent to that assignment. Therefore, Viking alleged, the assignment "was invalid, null and void" and "under the express terms of the 1909 Agreement, the Easement terminated." The property has been the subject of subsequent agreements in multiple years, but, the complaint alleged, none of those agreements modified the property owner's rights under the 1909 Agreement including "the right of consent established in that 1909 Agreement that was required to validly assign or transfer the Easement to a third party."

¶ 8 Today, the track is used to connect Ingredion's manufacturing facility, which sits to the northwest of Viking's property, with Belt's railway yard, which sits to the southeast of Viking's property. The railway yard is "a switching and terminal point that serves a number of different railroads, and in which a great number of railroad track lines come together and areinterconnected." Defendants move railway cars from Belt's yard to Ingredion's manufacturing facility on the track on Viking's property. Defendants also park railway cars on the track "for hours at a time." Viking leases the portion of its property north of the railroad track to a manufacturing and storage operation. The complaint alleges that neither Viking nor its lessee can "develop or make reasonable use of" Viking's property south of the track (hereinafter, the "undeveloped parcel") "because of Defendants' wrongful actions." Later, the complaint alleges the railway track prevents Viking or its lessee from enjoying the undeveloped parcel because the track makes it inaccessible. The track "is below grade for much of its length," there "is no reasonable or practical way to cross over" the track, and the only reasonable access to the undeveloped parcel is from land Viking does not own.

¶ 9 Viking's complaint specifically alleges as follows:

"There is no valid, existing agreement or deed that grants Belt Railway or Ingredion an easement or right to use the Viking Property, to own or operate the [track] that is built upon that Property. There is no agreement in which third-party beneficiary rights are granted to Ingredion, Corn Products or any other of its predecessors in interest, and, there is no contract or agreement between Viking Partners and Defendants that grants them a right to use the Viking Property to own or operate the [track] that is built upon that Property."

Viking alleges that by the time it acquired all of the property the easement had been terminated because "a prohibited assignment *** had been attempted and no consent had ever been given, and none recorded," any subsequent purported assignment to Belt was invalid and of no effect because at the time Belt claims that it was assigned the easement the easement had terminated,and there was no further assignment of the easement that was recorded or of which Viking had actual or constructive notice.

¶ 10 Viking's complaint alleges it took the property without actual or constructive notice of a purported easement in a 1914 agreement with Belt therefore that agreement "does not create any rights that Belt Railway can assert against Viking Partners." Viking's complaint alleges that in 2006 it attempted to negotiate an easement with Belt that would provide Viking compensation for Belt's use of the property but Belt refused to enter into any such easement agreement; thus, in 2009 Viking sent Belt a letter stating that permissive use of the property upon which the Argo track was built would be withdrawn as of November 1, 2009 and, accordingly, as of that date Belt's "use of the property upon which the [Argo track] is built was unauthorized and without the permission of Viking Partners, and a violation of Viking Partners' rights in the Property." The complaint alleges Belt does not have a prescriptive easement because it has not used the property without permission or a claim of title that is inconsistent with that of Viking Partners or its predecessor in title for the required statutory period of 20 years.

¶ 11 Viking's complaint sought a declaratory judgment against Belt and Ingredion "declaring that Defendants Belt Railway and Ingredion do not have any legal right or interest, including an easement, to use the Viking Property upon which the [Argo track] is built" (Count I); a judgment awarding Viking damages for intentional trespass and enjoining Belt and Ingredion from continued trespass on the property (Count II); and an injunction ordering Belt and Ingredion to "surrender possession of the Viking Property upon which the [track] is built" and awarding Viking damages for rent and profits (Count III).

¶ 12 In 2017 Belt filed a motion for summary judgment on plaintiff's complaint on the sole ground that "all of the claims of and remedies requested by [Viking] are preempted" by theInterstate Commerce Commission Termination Act (Termination Act or Act). Belt's motion argued that under the Termination Act the Surface Transportation Board (Board) "maintains 'exclusive' jurisdiction over 'transportation by rail carriers[,]' and the remedies the Board could order 'with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.' [Citation.]"

"The jurisdiction of the Board over—

2) the construction, acquisition, operation,

...