Pavlik v. Consolidation Coal Co.
456 F.2d 378 (1972)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An easement granted for a specific operational purpose, such as the transportation of a substance, terminates under a defeasance clause for non-use if the primary operational activity ceases for the specified period, even if the underlying infrastructure is maintained in a stand-by condition.
Facts:
- In 1956, Fred S. and Frances M. Wellman granted an easement to Pittsburgh Consolidation Coal Company for the purpose of 'constructing, maintaining, operating, altering, repairing, replacing and removing one pipe line for the transportation of coal slurry.'
- The easement contained a defeasance clause stating that if the pipeline ceased to be used for its specified purpose for one year, the grantee's rights would terminate automatically.
- The pipeline was constructed in 1957 and operated continuously to transport coal slurry until August 1963.
- In May 1963, Consolidation Coal entered into an agreement with its customer to place the pipeline in an inactive, 'stand-by' condition due to newly reduced rail freight rates, ceasing the transportation of coal slurry.
- After deactivation, Consolidation Coal sought and paid for 15 separate supplemental agreements with the Wellmans' successors, the Pavliks, to extend the one-year period of the defeasance clause.
- The final extension expired on May 27, 1967, and no further extensions were granted.
- During the period of the extensions, Consolidation Coal was also negotiating with the Pavliks to amend the easement to permit the transport of other products and remove the time limitation for non-use.
Procedural Posture:
- The Pavliks filed a suit in an Ohio state court seeking a declaration of rights under the easement.
- Consolidation Coal Company removed the case to the United States District Court and filed counterclaims.
- The U.S. District Court, ruling on a record of stipulated facts, held that the easement was not terminated.
- The Pavliks, as appellants, appealed the District Court's decision to the United States Court of Appeals for the Sixth 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 maintaining a coal slurry pipeline in a ready, but inactive, state for over a year constitute 'use' sufficient to prevent termination of an easement under a defeasance clause that triggers if the pipeline 'shall cease to be used for the purpose set forth herein'?
Opinions:
Majority - Edwards, Circuit Judge
No. Maintaining a pipeline in a stand-by condition does not constitute 'use' for the purpose of 'transportation of coal slurry' as intended by the easement's defeasance clause. The court reasoned that the plain language of the contract is unambiguous: the singular 'purpose' referred to in the defeasance clause is the 'transportation of coal slurry.' When this active transportation ceased for over a year, the defeasance clause became fully operative. This interpretation is supported by the contract as a whole, including the meager price paid for the easement, which suggests the parties intended strict, pro-grantor terms. Most importantly, the parties' subsequent conduct—specifically, Consolidation's repeated requests and payments for extensions of the defeasance clause—demonstrates that Consolidation itself understood that mere maintenance without active transportation constituted non-use that would trigger termination.
Dissenting - McCree, Circuit Judge
Yes. Maintaining the pipeline constitutes a valid use under the easement, which was granted for multiple purposes including not just 'operating' but also 'maintaining.' The majority improperly isolates 'operating' as the sole purpose of the easement from the seven purposes listed in the granting clause. Since the pipeline was being maintained for the transportation of coal slurry, there was no cessation of use. Furthermore, the extension agreements do not prove a contrary interpretation; they were executed to preserve the status quo during negotiations for expanded use and should be considered inadmissible evidence of settlement talks. The low consideration paid for the easement is also not relevant, as the grantor retained the valuable right to force the grantee to relocate the pipeline at will.
Analysis:
This decision emphasizes that in contract interpretation, the specific, operational purpose of an agreement can override more general boilerplate language, especially in the context of a defeasance clause. It establishes that 'use' can be interpreted to mean active operational function rather than passive maintenance or potential for use. The case serves as a critical precedent on the weight given to the subsequent conduct of parties in interpreting their original intent, showing that actions taken to avoid a contract's negative consequences can be used as evidence of that contract's meaning. Future drafters of easements with similar clauses must now explicitly define whether 'use' includes periods of inactivity or standby status to avoid forfeiture.
Unlock the full brief for Pavlik v. Consolidation Coal Co.