Franks Investment Co, L.L.C. v. Union Pacific Rail
2014 U.S. App. LEXIS 22663, 2014 WL 6774313, 772 F.3d 1037 (2014)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
When a deed contains multiple obligations in the same provision, and one obligation explicitly binds the obligor's 'successors and assigns' while another does not, the omission of such language indicates an intent to create only a personal obligation, which rebuts the legal presumption that a right benefiting land is a predial servitude.
Facts:
- In 1923, the Levy family sold a strip of land that bisected their property to the Texas & Pacific Railway Company (T&P).
- The deed of sale contained a single sentence describing T&P's obligations.
- The first part of the sentence required T&P to 'provide three crossings' across the strip of land at designated points.
- The second part of the same sentence specified that T&P, 'its successors and assigns,' were bound to furnish proper drainage outlets.
- Franks Investment Co. eventually acquired a portion of the Levy family's property adjacent to the railroad tracks.
- Union Pacific Railroad Co. became the successor in interest to T&P, owning and operating the railroad on the strip of land.
- In 2007, Union Pacific began closing the crossings that Franks had been using for its oil and gas operations.
- Franks concedes that there are other points of access to its property.
Procedural Posture:
- Franks Investment Co. previously filed a possessory action against Union Pacific Railroad Co. in the U.S. District Court for the Western District of Louisiana.
- After a bench trial in that prior action, the district court ruled against Franks, finding it was merely a 'precarious possessor.'
- The U.S. Court of Appeals for the Fifth Circuit affirmed the district court's judgment in the possessory action.
- Franks then filed the current petitory action in the U.S. District Court for the Western District of Louisiana, claiming ownership of the right to the crossings.
- Union Pacific moved for summary judgment, arguing the 1923 deed did not create a predial servitude.
- The district court granted summary judgment in favor of Union Pacific and dismissed Franks's claims with prejudice.
- Franks Investment Co., as appellant, appealed the grant of summary judgment to the U.S. Court of Appeals for the Fifth Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a clause in a 1923 deed requiring a railway company to 'provide three crossings' create a predial servitude binding on the company's successors in interest, when a separate clause in the same sentence explicitly binds the company and its 'successors and assigns' to a different obligation?
Opinions:
Majority - W. Eugene Davis
No, the clause did not create a predial servitude binding on successors. Louisiana law requires courts to interpret all clauses of a contract together to determine the parties' intent and to avoid rendering any language as mere surplusage. The parties to the 1923 deed demonstrated that they knew how to create an obligation binding on successors by explicitly using the phrase 'successors and assigns' for the drainage obligation within the same sentence as the crossings obligation. The deliberate omission of this language from the crossings clause shows a clear intent that the duty to provide crossings was a personal obligation of the original railway company only. This specific textual evidence of intent rebuts the general legal presumption that a right benefiting an estate is a predial servitude.
Dissenting - James L. Dennis
Yes, the clause created a predial servitude. Under the applicable Louisiana Civil Code, a right of passage is a servitude, and it is legally presumed to be a predial (real) servitude if it confers a 'real advantage to an estate,' as these crossings clearly did by connecting the bisected plantation. This strong presumption is not rebutted by the inclusion of 'successors and assigns' language in a separate, distinct obligation regarding drainage. The parties reasonably relied on the legal presumption for the crossings and had no reason to believe the omission of that specific language was necessary to create a property right that runs with the land, rather than a mere personal obligation.
Analysis:
This decision emphasizes a crucial principle of contract interpretation where specific textual evidence of intent can override general legal presumptions. By applying a variation of the expressio unius est exclusio alterius canon, the court signaled that the selective use of legal terms of art, like 'successors and assigns,' provides powerful insight into the parties' intentions. The ruling serves as a cautionary tale for drafters, highlighting the importance of consistency and explicit language when creating rights intended to run with the land. It potentially narrows the application of Louisiana's strong legal presumption in favor of predial servitudes in cases where a contract contains conflicting textual clues.
