PRESENT: Kinser, C.J., Lemons, Millette, Mims, McClanahan, and Powell, JJ., and Russell, S.J.
NORFOLK SOUTHERN RAILWAY COMPANY OPINION BY v. Record No. 131066 JUSTICE ELIZABETH A. McCLANAHAN APRIL 17, 2014 E. A. BREEDEN, INC.
FROM THE CIRCUIT COURT OF ROCKINGHAM COUNTY James V. Lane, Judge
Norfolk Southern Railway Company (Norfolk Southern) appeals
from the judgment of the circuit court granting permanent
injunctive relief to E. A. Breeden, Inc. (Breeden) requiring
Norfolk Southern to restore a private grade crossing over its
railway tracks in Rockingham County. We will affirm the
judgment of the circuit court.
I. BACKGROUND
The current action involves a private grade crossing across
Norfolk Southern's railway tracks created pursuant to a crossing
agreement dated March 26, 1940, and recorded in the circuit
court clerk's office of Rockingham County (Crossing Agreement).
The Crossing Agreement was entered into by the owners of the
156-acre T. L. Yancey estate (Yanceys) and Norfolk & Western
Railway Company (Norfolk & Western), a predecessor to Norfolk
Southern.
Pursuant to the Crossing Agreement, Norfolk & Western
agreed to construct and maintain a new private grade crossing
for use by the Yanceys in exchange for the Yanceys' agreement to release their rights to the two then existing private crossings
that were to be abandoned. 1 The Crossing Agreement expressly
"grant[ed] unto the [Yanceys] the right and privilege of a
private grade crossing about 18 feet in width, over, upon and
across the right of way and tracks of [Norfolk & Western]" and
obligated Norfolk & Western "to construct and maintain the said
crossing.". The Crossing Agreement specifically provided:
[The Yanceys] covenant and agree that the private crossing to be constructed hereunder shall be used solely in their own interest and for their own benefit, and that they will indemnify and save harmless the Railway Company from any and all claims for damage or injury to person, including death, or property, resulting from their use of said grade crossing.
In addition, the Crossing Agreement stated that it "shall be
binding upon the heirs, executors, administrators, successors
and assigns of the parties hereto."
In 1996, Breeden acquired title to a 2.56 acre tract that
was originally a part of the T. L. Yancey estate tract and, in
1999, leased a house and yard located upon this tract to Todd
and Michelle Ditton. In 2001, Todd Ditton was injured when his
vehicle was struck by a Norfolk Southern train at the crossing.
1 At the time the Crossing Agreement was entered into, the Yancey Estate was located on both sides of the railroad tracks and had access to a public road, now State Route 642, and U.S. Highway No. 12, now U.S. Route 340, located on the opposite side of the railroad tracks from State Route 642. 2 Ditton filed an action against Norfolk Southern and the parties
settled the action in 2005.
In 2006, Norfolk Southern filed an action against Breeden
seeking to recover the settlement amount as well as the costs
and attorney's fees associated with the Ditton litigation based
on the indemnity clause of the Crossing Agreement
(indemnification litigation). The circuit court ruled that
Norfolk Southern was not entitled to indemnification or
contribution from Breeden. In reaching its decision, the
circuit court ruled that the Crossing Agreement was a covenant
running with the land, and that Ditton, as lessee of Breeden,
was a successor to the Crossing Agreement and had a right to use
the crossing.
The circuit court further ruled that Ditton's use of the
crossing was not attributable to Breeden and, therefore, Breeden
was not obligated under the Crossing Agreement to indemnify
Norfolk Southern for the costs incurred and damages paid by
Norfolk Southern arising from Ditton's use of the crossing.
Norfolk Southern filed a petition for appeal with this Court,
which petition was refused by an unpublished Order. See Norfolk
Southern Railway Company v. E. A. Breeden, Inc., Record No.
080429 (June 13, 2008).
At some time subsequent to the conclusion of the
indemnification litigation, Norfolk Southern removed the private
3 crossing. Breeden filed a complaint against Norfolk Southern
seeking a permanent injunction requiring Norfolk Southern to
replace and maintain the crossing. Breeden also sought
compensatory and punitive damages alleging breach of contract,
tortious interference with the right of way, and nuisance.
Norfolk Southern filed a demurrer to the complaint on the
grounds that the prior rulings of the circuit court established,
as a matter of law, that Breeden materially breached the
Crossing Agreement and was not entitled to enforce it because
Breeden permitted use by Ditton that was not solely in Breeden's
interest and not solely for Breeden's benefit. Overruling the
demurrer, the circuit court held that based on its previous
rulings that Ditton was a successor in interest under the terms
of the Crossing Agreement and his use of the crossing was
independent of Breeden, it could not rule that Breeden
materially breached the Crossing Agreement as a matter of law. 2
Breeden filed a motion for summary judgment seeking a
judgment that Norfolk Southern was obligated to maintain the
crossing and an order requiring Norfolk Southern to replace the
private crossing on the grounds that the circuit court's prior
holdings were binding under principles of collateral estoppel.
2 The circuit court sustained Norfolk Southern's demurrer to the claim for tortious interference and punitive damages. 4 Norfolk Southern opposed the motion for summary judgment on the
grounds that there were genuine issues of material fact as to
whether Breeden sustained actual injury or damages to recover on
a breach of contract claim and that Breeden was not entitled to
injunctive relief because it had not presented evidence of
irreparable harm and lack of an adequate remedy at law. In
addition, Norfolk Southern argued that Breeden's motion for
summary judgment failed to address the affirmative defenses
raised by Norfolk Southern, including estoppel, laches, unclean
hands, and first material breach.
The circuit court denied Breeden's motion for summary
judgment and held an evidentiary hearing on Breeden's request
for permanent injunctive relief. Upon consideration of the
evidence presented at the hearing and certain concessions made
by Norfolk Southern, the circuit court granted the request for
injunctive relief requiring Norfolk Southern to replace the
crossing.
II. ANALYSIS
A. First Material Breach
Norfolk Southern argues that the circuit court erred in
overruling the demurrer and enforcing the Crossing Agreement
because Breeden committed the first material breach of the
Crossing Agreement, thereby precluding Breeden from enforcing
the agreement. See, e.g., Countryside Orthopaedics, P.C. v.
5 Peyton, 261 Va. 142, 154, 541 S.E.2d 279, 285 (2001); Horton v.
Horton, 254 Va. 111, 115-16, 487 S.E.2d 200, 203-04 (1997).
We have not previously applied the doctrine of first
material breach to vested property rights granted under a real
covenant. Indeed, this doctrine is ill-suited to address
situations in which the covenantor seeks to excuse its
unilateral termination of real property interests held by other
landowners. Nevertheless, the circuit court did not err in
concluding there was no material breach by Breeden. In
previously determining the enforceability of the indemnity
clause of the Crossing Agreement in the indemnification
litigation, the circuit court ruled that the Crossing Agreement
is a valid covenant running with the land such that Breeden, as
a successor to the Yanceys, was entitled to the use and benefits
of the crossing. 3 Additionally, the circuit court ruled that
Ditton, as Breeden's lessee, was a successor under the terms of
3 Both parties asserted that the circuit court's prior rulings were binding in the current litigation under principles of collateral estoppel, and the circuit court agreed with these assertions. Neither party has assigned error to the circuit court's ruling in this case that it was bound by its previous rulings that the Crossing Agreement was a covenant running with the land and that Breeden and its lessee were successors under the Crossing Agreement. Therefore, we will not revisit those issues. See Rule 5:25 (no ruling of the trial court will be considered "as a basis for reversal" unless objection stated).
6 the Crossing Agreement and, therefore, had a legal right to
utilize the crossing independent of whether Breeden permitted
such use by Ditton. The circuit court further ruled that
"Ditton's use of the crossing did not solely benefit [Breeden]
but benefited Ditton independently." Since the Crossing
Agreement expressly "grant[ed] unto the [Yanceys and their
successors] the right and privilege" to use the crossing "solely
in their own interest and for their own benefit," Ditton's use
of the crossing for his own benefit was not a violation of the
Crossing Agreement.
Notwithstanding Ditton's right under the Crossing Agreement
to use the crossing as a successor for his own benefit, Norfolk
Southern argues that Breeden breached the Crossing Agreement by
allowing its lessee to use the crossing in a means that was not
solely in Breeden's own interest or for Breeden's own benefit.
Norfolk Southern's argument, however, has no merit because the
Crossing Agreement did not prohibit the conveyance or lease of
the property benefiting from the crossing and did not require
that the use of the crossing be excluded from any conveyance or
lease of the property benefiting from the crossing. To the
contrary, the Crossing Agreement provided it was "binding upon
the heirs, executors, administrators, successors and assigns of
the parties hereto." Therefore, the Crossing Agreement did not
obligate Breeden to preclude its lessee from using the crossing
7 for the lessee's benefit and Breeden cannot be deemed to have
breached the Crossing Agreement in not preventing such use. 4
B. Injunctive Relief
Norfolk Southern also argues the circuit court erred in
granting the injunction without requiring Breeden to prove harm
and without balancing the equities. "[T]he decision to grant or
deny an injunction is within the discretion of the trial court,
and it will not be disturbed on appeal unless it is plainly
wrong." Snead v. C&S Props. Holding Co., 279 Va. 607, 613, 692
S.E.2d 212, 215 (2010).
At the hearing, Breeden introduced evidence regarding its
use of the crossing and safety concerns caused by the removal of
the crossing due to the lack of ingress or egress during times
of high water or flooding that blocked other access. Although
Norfolk Southern proffered evidence through cross-examination of
Breeden's witness regarding the lease payments received by
Breeden before and after the removal of the crossing and an
appraisal obtained by Breeden estimating a diminution in value
4 If Norfolk Southern believed that Breeden's action in leasing the property without placing restrictions on the use of the crossing increased the burden originally contemplated by the parties under the Crossing Agreement, its remedy was to seek equitable relief against Breeden, not to remove the crossing, thereby terminating the rights of all landowners that were parties to or successors under the agreement. 8 of $7,500 resulting from the removal of the crossing, the
circuit court disallowed the evidence.
When Breeden began to introduce evidence relevant to
whether it had acquiesced in the removal of the crossing or
whether it was guilty of laches in failing to object to the
removal of the crossing, Norfolk Southern conceded it was not
contesting those issues. In fact, Norfolk Southern did not
bring witnesses to the hearing. Norfolk Southern argued it was
defending the request for an injunction on the grounds that
Breeden had not suffered any injury, that any harm was
outweighed by the burden to Norfolk Southern if the crossing is
installed, and that Breeden had an adequate remedy at law. In
light of those concessions, the circuit court determined no
further evidence from Breeden was necessary. The circuit court
ruled that the Crossing Agreement was specifically enforceable
and that it would order Norfolk Southern to reinstall the
crossing. 5
We have previously held that an injunction is the
appropriate remedy for enforcement of a real property right.
See, e.g., Snead, 279 Va. at 608, 616, 692 S.E.2d at 212, 216;
5 Acting on Breeden's representation that it would no longer seek damages on its claim for breach of contract, the circuit court ordered the removal of the scheduled trial from its docket. 9 Pizzarelle v. Dempsey, 259 Va. 521, 532, 526 S.E.2d 260, 266
(2000); Sonoma Development, Inc. v. Miller, 258 Va. 163, 169-70,
515 S.E.2d 577, 580-81 (1999); Boerner v. McCallister, 197 Va.
169, 172, 89 S.E.2d 23, 25 (1955). This is so because the
violation of a real property interest is deemed "'irreparable
and the owner protected in the enjoyment of his property whether
such be sentimental or pecuniary.'" Levisa Coal Co. v.
Consolidation Coal Co., 276 Va. 44, 62, 662 S.E.2d 44, 54 (2008)
(quoting Boerner, 197 Va. at 172, 89 S.E.2d at 25)). 6 In such a
case, we have noted "that the question was not one of
reasonableness, nor was it a case in which the equities should
be balanced." Snead, 279 Va. at 615, 692 S.E.2d at 216.
We have also recognized that a party seeking to enforce a
real covenant is generally entitled to the equitable remedy
requested upon showing the validity of the covenant and its
breach. Perel v. Brannan, 267 Va. 691, 700, 594 S.E.2d 899, 904
(2004). See, e.g., Sonoma Development, 258 Va. at 169-70, 515
S.E.2d at 580-81 (evidence with regard to an appropriate remedy
in equity is unnecessary where a restrictive covenant was valid
and the breaching party had notice of the covenant); Marks v.
6 In recognizing that an injury to a real property right is deemed irreparable, we contrasted injunctions sought to enforce a contract right concerning personal property from injunctions sought to enforce a real property right. Levisa Coal, 276 Va. at 61-62, 662 S.E.2d at 53-54. 10 Wingfield, 229 Va. 573, 577, 331 S.E.2d 463, 465 (1985) (trial
court erred in denying injunction to enforce restrictive
covenant where restrictions were reasonable and enforceable);
Spilling v. Hutcheson, 111 Va. 179, 183, 68 S.E. 250, 252 (1910)
("The injunction in this case is granted almost as a matter of
course upon a breach of the covenant. The amount of damages,
and even the fact that the plaintiff has sustained any pecuniary
damages, are wholly immaterial.").
A defendant may avoid the imposition of the equitable
remedy sought for violation of a real covenant "if such a remedy
would create a hardship or injustice that is out of proportion
to the relief sought, if performance by the defendant would be
impossible, or if the enforcement of the decree would be
unusually difficult for the court." Perel, 267 Va. at 700, 594
S.E.2d at 904-05 (footnotes omitted). "However, on the
questions of hardship, injustice, or impossibility, the
defendant bears the burden of providing the elements of the
defense." Id. at 700, 594 S.E.2d at 905. Nevertheless, "[t]he
doctrine of 'balancing of equities' must be viewed in light of
our long-standing pronouncement that a private landowner is to
be protected for injuries he may sustain 'even though inflicted
by forces which constitute factors in our material development
and growth.'" Blue Ridge Poultry & Egg Co. v. Clark, 211 Va.
139, 144, 176 S.E.2d 323, 327 (1970) (quoting Townsend v.
11 Norfolk Ry. & Light Co., 105 Va. 22, 49, 52 S.E. 970, 979
(1906)).
Based on the rulings of the circuit court in the
indemnification litigation, Breeden was the successor in
interest to the Crossing Agreement, a valid covenant running
with the land, under which Norfolk Southern was obligated to
construct and maintain the private grade crossing. It is
undisputed that Norfolk Southern had notice of the covenant and
removed the crossing to which Breeden was granted "the right and
privilege." Therefore, Breeden was entitled to an injunction
requiring the replacement of the crossing unless Norfolk
Southern proved "such a remedy would create a hardship or
injustice that is out of proportion to the relief sought, if
performance by the defendant would be impossible, or if the
enforcement of the decree would be unusually difficult for the
court." Perel, 267 Va. at 700, 594 S.E.2d at 904-05 (footnotes
omitted).
Breeden presented evidence regarding its use of the
crossing, including its need to access the crossing during
periods of high water. Norfolk Southern did not present its own
witnesses at the hearing but argued only that Breeden was not
actually injured, that any injury was outweighed by the burden
to Norfolk Southern, and that Breeden had an adequate remedy at
12 law. The only evidence Norfolk Southern sought to introduce,
which was through cross-examination of Breeden's witness, was
the evidence regarding diminution in value and Breeden's lease
payments. However, Breeden was not required to prove damages or
an inadequate remedy at law. See Sonoma Development, 258 Va. at
169-70, 515 S.E.2d at 580-81; Spilling v. Hutcheson, 111 Va. at
183, 68 S.E. at 252; see also Springer v. Gaddy, 172 Va. 533,
542, 2 S.E.2d 355, 358-59 (1939) ("An owner whose land is
subject to equitable restrictions cannot violate them, and when
suit is brought against him relieve his property from the
restriction by the payment of damages.") (internal quotation
marks omitted). Furthermore, Norfolk Southern did not seek to
present evidence as to the hardship or burden that would be
imposed by enforcement of the covenant. 7 Accordingly, the
7 The decision in Perel does not support the view that this case should be remanded for the circuit court to take evidence regarding the appropriateness of an injunction. The circuit court in Perel denied the request for an injunction on the ground that the retaining wall did not violate the covenants. We reversed, holding that the retaining wall did violate the covenants and remanded the case to permit the homeowners to prove that removal of the retaining wall would create a hardship. Perel, 267 Va. at 702, 594 S.E.2d at 905. In this case, Breeden proved the breach of a valid real covenant, and Norfolk Southern did not seek to present any evidence of hardship in the circuit court. Similarly, in Levisa Coal, which did not involve a real covenant, the circuit court denied injunctive relief on the ground that Levisa Coal did not prove a violation of a real property interest. Holding that the circuit erred in its ruling, we remanded the case for the circuit court 13 circuit court did not abuse its discretion in ordering the
requested injunctive relief. 8
C. Right to a Jury
Norfolk Southern contends that the circuit court erred in
hearing Breeden's request for a permanent injunction prior to
the trial scheduled for Breeden's breach of contract claim
because it deprived Norfolk Southern of its right to a jury.
When the circuit court scheduled the hearing on Breeden's
request for an injunction, Norfolk Southern made an objection to
the circuit court's decision to proceed with the injunction
hearing prior to the scheduled trial, which the circuit court
overruled. Thereafter, Norfolk Southern filed a motion to
reconsider on the grounds that the court's action violated Rule
to consider Levisa Coal's request for an injunction. Levisa Coal, 276 Va. at 59, 662 S.E.2d at 52. 8 Norfolk Southern also argues that because the covenant was affirmative rather than negative, the principles this Court has applied to restrictive covenants are inapplicable. We have recognized that affirmative covenants respecting real property interests will run with the land. See Chesapeake & Ohio Ry. Co. v. Willis, 200 Va. 299, 303-04, 105 S.E.2d 833, 837 (1958) (covenant to build fence was covenant running with the land and was enforceable unless broken by predecessors in title). We have not previously made any distinction between the enforceability of affirmative covenants and negative covenants and see no reason to do so here. See, e.g., Recco v. Chesapeake & Ohio Ry. Co., 32 S.E.2d 449, 453-54 (W.Va. 1944) (landowners entitled to seek specific performance compelling railroad to rebuild crossing pursuant to covenant in 1870 deed, and court will not balance the equities where a vested property right will be destroyed by violation of covenants). 14 3:22(e) and deprived Norfolk Southern of its right to a jury
trial on issues of fact common to the claims for injunctive
relief and damages. The circuit court denied the motion to
reconsider and proceeded with a hearing on Breeden's request for
a permanent injunction.
It is well-established that a party has no right to a jury
trial on a claim for equitable relief. "[W]hen a party seeks
injunctive relief, he must sue in equity. In equity, a litigant
has no constitutional right to trial by jury, and, absent a plea
in equity, no statutory right." Wright v. Castles, 232 Va. 218,
222, 349 S.E.2d 125, 128 (1986) (citations omitted); see also
Code § 8.01-336(D). Norfolk Southern did not file a plea in
equity. Therefore, Norfolk Southern did not have a
constitutional or statutory right to a jury on Breeden's claim
for injunctive relief.
While acknowledging that it had no right to a jury on the
claim for injunctive relief, Norfolk Southern contends that the
circuit court violated Rule 3:22(e) because the circuit court
resolved factual disputes that were at issue in the breach of
contract claim. Rule 3:22(e) provides:
In any case when there are both jury and non-jury issues to be tried, the court shall adopt trial procedures and a sequence of proceedings to assure that all issues properly heard by the jury are decided by it, and applicable factual determinations by
15 the jury shall be used by the judge in resolving the non-jury issues in the case.
Under the plain language of the Rule, it only applies when there
are jury issues to be tried. Although Breeden's breach of
contract claim required it to prove damages resulting from the
breach, Breeden was not required to prove monetary damages or
quantify the harm resulting from the removal of the crossing to
seek an injunction. See Sonoma Development, 258 Va. at 169-70,
515 S.E.2d at 580-81; Spilling, 111 Va. at 183, 68 S.E. at 252.
Therefore, there were no factual determinations before the
circuit court at the injunction hearing that were common to the
breach of contract claim. Accordingly, Rule 3:22(e) was not
applicable.
D. Breeden's Motion for Attorney's Fees as Sanctions
Following the injunction hearing, Breeden moved for
reimbursement of attorney's fees pursuant to the sanction
provisions of Code § 8.01-271.1 on the grounds that Norfolk
Southern asserted there were genuine issues of material facts in
dispute in opposition to the motion for summary judgment but
failed to produce any evidence at the hearing on the injunction
to support its defenses to the injunction, thus rendering the
injunction hearing unnecessary. Finding no violation of Code §
8.01-271.1, the circuit court denied Breeden's motion. Breeden
assigns cross-error to this ruling and contends the circuit
16 court abused its discretion in denying its motion for attorney's
fees.
In response to Breeden's motion for summary judgment,
Norfolk Southern filed an opposition in which it asserted that
Breeden must prove damages as an essential element of its case,
and irreparable harm and lack of an adequate remedy at law for
an injunction, all of which were in dispute. Additionally,
Norfolk Southern asserted that there were affirmative defenses
pled by it, including the doctrine of first material breach,
estoppel, laches, and unclean hands on which issues of fact
remained. Although Norfolk Southern did not contest laches and
estoppel at the hearing, it insisted that the circuit court
should determine whether Breeden proved actual injury and lack
of an adequate remedy at law. Norfolk Southern also argued the
circuit court should weigh the burden to Norfolk Southern if
injunctive relief was awarded against the harm to Breeden if it
was not awarded.
Code § 8.01-271.1 provides, in pertinent part, that
signature of an attorney on any pleading, written motion, or
other writing constitutes a certificate that "to the best of his
knowledge, information and belief, formed after reasonable
inquiry, it is well grounded in fact and is warranted by
existing law or a good faith argument for the extension,
17 modification, or reversal of existing law" and that "it is not
interposed for any improper purpose, such as to harass or to
cause unnecessary delay or needless increase in the cost of
litigation." The circuit court's decision to deny the motion
for sanctions will only be reversed for an abuse of discretion.
Northern Va. Real Estate v. Martins, 283 Va. 86, 103, 720 S.E.2d
121, 129 (2012).
The circuit court found that "[Norfolk Southern's]
pleadings, written motions, and other papers were all well
grounded in fact and warranted by existing law and that they
were not interposed for any improper purpose." The circuit
court further found that because Norfolk Southern believed that
it was improper to bifurcate the injunction hearing and trial on
damages, it "chose not to call company witnesses because it did
not want to run the risk of a claim of waiver based on having
presented evidence outside the scope of [Breeden's] proof."
Therefore, according to the circuit court, Norfolk Southern's
"trial strategy" decisions were also "well grounded and not done
with any improper purpose."
We cannot conclude the circuit court abused its discretion.
Norfolk Southern opposed the motion for summary judgment, among
other reasons, on the grounds that Breeden was required to prove
actual damages and an inadequate remedy at law on which it
18 asserted there were disputed issues of fact. Norfolk Southern
continues to maintain on appeal that the circuit court erred in
failing to require proof of actual injury, the lack of an
adequate remedy at law, and in failing to balance the equities
in considering the injunction. Although Norfolk Southern chose
not to call its corporate witnesses and contest the issues of
laches and estoppel at the injunction hearing and did not
prevail on its arguments regarding Breeden's burden to prove
damages, there is no evidence that Norfolk Southern's asserted
defenses were not well-grounded or interposed for an improper
purpose.
III. CONCLUSION
For the foregoing reasons, we will affirm the judgment of
the circuit court.
Affirmed.
SENIOR JUSTICE RUSSELL, with whom JUSTICE LEMONS and JUSTICE MILLETTE join, dissenting.
The following essential facts are undisputed: The
predecessors in title of the present parties entered into a
"Crossing Agreement" in 1940 that granted reciprocal benefits
and imposed reciprocal obligations upon them. The Railroad's
benefit was the consolidation of two former crossings into one.
The landowners' benefit was the Railroad's obligation to provide
a new, unguarded crossing over its right-of-way to the
19 landowners' property and to maintain it in perpetuity. The
landowners' reciprocal obligation was to ensure that the
crossing was a private one that "shall be used solely in their
own interest and for their own benefit." The landowners also
agreed to "indemnify and save harmless the [Railroad] from any
and all claims for damage or injury to [any] person, including
death, or property, resulting from their use of said grade
crossing." The landowners also agreed that "the said private
crossing shall not be converted at their demand or request or
with their consent into a public crossing." The agreement was
made binding upon the parties' "heirs, executors,
administrators, successors and assigns." The agreement was
recorded among the land records and constitutes a covenant
running with the land.
The present parties both insist upon their benefits under
the 1940 agreement, but both have refused to honor the
reciprocal obligations it imposes upon them. First, the present
owner leased a part of the property to a residential tenant
without imposing any limitation on the tenant's right to use the
crossing. The tenant was injured while using the crossing and
sued the Railroad. The Railroad settled the case with the
tenant and claimed indemnity from the owner under the 1940
agreement. The circuit court held that the indemnity agreement
was inapplicable because the tenant had an independent right to
20 use the crossing and that his use at the time of the accident
was not as agent or for the benefit of the owner. The Railroad,
taking the position that the owner was now accepting all of its
benefits under the 1940 agreement while successfully evading all
its reciprocal obligations, closed the crossing. Such was the
posture of the case when it came before the circuit court on the
owner's claim for a permanent injunction.
Permanent injunctions and decrees of specific performance
are the most drastic remedies courts of equity are empowered to
award, but they are nevertheless equitable remedies. They are
to be imposed only where, after careful consideration of the
facts and circumstances of each particular case, the chancellor
determines that such remedy is necessary to attain the most
equitable result.
Here, the circuit court refused to hear evidence of the
facts and circumstances relating to the propriety of an
injunction, apparently because the court regarded injunctive
relief automatically justified by the owner's showing that the
Railroad had closed the crossing. The court may have relied on
statements we made in an earlier case involving breach of a
restrictive covenant, where we said that in such a case an
injunction is granted "almost as a matter of course" and that
"[t]he amount of damages, and even the fact that the plaintiff
ha[d] sustained any pecuniary damages, are wholly immaterial."
21 Spilling v. Hutcheson, 111 Va. 179, 183, 68 S.E. 250, 252
(1910).
In a recent case involving a retaining wall erected in
breach of a restrictive covenant, however, we departed from the
sweeping language in Spilling. In Perel v. Brannan, 267 Va.
694, 594 S.E.2d 899 (2004), we said:
While the retaining wall is clearly in violation of the covenants, [the plaintiff] is not automatically entitled to have the retaining wall removed. When parties have a dispute over an alleged violation of a restrictive covenant, the plaintiff, or covenantee, may file suit in the court for equitable enforcement of the restrictive covenant. A restrictive covenant may be enforced by injunctive relief or through specific performance. The party seeking enforcement . . . bears the burden of proving the validity and meaning of the covenant [and that it] has been violated by the acts of the defendant. . . . .
A defendant may avoid imposition of the remedy requested if such a remedy would create a hardship or injustice that is out of proportion to the relief sought, if performance by the defendant would be impossible, or if the enforcement of the decree would be unusually difficult for the court. However, on the questions of hardship, injustice, or impossibility, the defendant bears the burden of proving the elements of the defense . . . . [I]t is for the defendant to show by way of defense that it is no longer able to perform the covenant consistently with its duty to the public in general, or that performance thereof will be burdensome and oppressive or otherwise inequitable.
22 Id. at 699-701, 594 S.E.2d at 904-05 (citations, footnotes, and
internal quotation marks omitted) (emphasis added). We
concluded by remanding the case to the circuit court with
specific instructions to hear evidence concerning the remedy to
be ordered. Id. at 702, 594 S.E.2d at 905.
After Perel, we considered a case that, like the present
case, involved a continuing trespass. In Levisa Coal Co. v.
Consolidation Coal Co., 276 Va. 44, 662 S.E.2d 44 (2008), we
said:
Under traditional equitable principles, a chancellor may enjoin a continuing trespass. However, even in a case involving a continuing trespass the guiding principle which remains constant is that the granting of an injunction is an extraordinary remedy and rests on the sound judicial discretion to be exercised upon consideration of the nature and circumstances of a particular case. Thus, in a case of a continuing trespass, such as the present case, we have stated that if "the loss entailed upon [the trespasser] would be excessively out of proportion to the injury suffered by [the owner], or a serious detriment to the public, a court of equity might very properly deny the injunction and leave the parties to settle their differences in a court of law." *
* The present case involves both of the last two questions. Because of the result in the indemnity action, the Railroad will be exposed in the future to liability for injuries sustained by any tenant or tenant's invitee using the crossing without any protection from the indemnity for which its predecessor bargained in 1940. Judges are not prescient and the results of future changes, such as population growth and density, changes in land use and the need for additional rail capacity and traffic cannot be foreseen. If, for instance, a tenant should 23 We have also observed that unless a party is entitled to an injunction pursuant to a statute, a party must establish the "traditional prerequisites, i.e., irreparable harm and lack of an adequate remedy at law" before a request for injunctive relief will be sustained.
276 Va. at 61, 662 S.E.2d at 53 (citations and some quotation
marks omitted).
In Levisa Coal, as in Perel, we remanded the case to the circuit
court with specific direction to grant the parties the
opportunity to present evidence on the question whether
injunctive relief would be appropriate under the facts and
circumstances of the case. Id. at 63, 662 S.E.2d at 54.
Here, the owner's complaint included counts for damages at
law as well as equitable relief. The case was set for a two-day
jury trial on all issues to begin on March 7, 2013. After
denying the owner's motion for summary judgment, the court, over
the Railroad's objection, granted a motion by the owner to set
the case for trial on the issue of injunctive relief only, to
begin on February 27, 2013, eight days before the jury trial.
At that proceeding, the court refused to afford the parties
an opportunity to present evidence of the facts and
circumstances of the case, ruling, before the owner's evidence
decide to hold a political rally on the property, or if the present residence were succeeded by apartment or condominium buildings, the Railroad's exposure to liability claims would increase exponentially and the crossing would become a "serious detriment to the public." 24 was completed, that any further evidence offered by either party
would be immaterial. The court essentially took the view that
the undisputed fact that the Railroad had closed the crossing
automatically required entry of a permanent injunction.
In my view, the circuit court erred in disregarding the
traditional equitable principles made specific in Perel and
Levisa Coal. The parties should have been afforded an
opportunity to present evidence of all the relevant
circumstances that might inform the chancellor's discretion in
determining the appropriate remedy. I would make the same
disposition we made in those cases, reverse the decree and
remand the case to the circuit court with direction to afford
the parties a full opportunity to present evidence.
On remand, if any material issues of fact are disputed, the
parties would be entitled to jury trial of those issues pursuant
to Rule 3:22(e). If the court should decide to leave the
parties to their legal remedies, their constitutional right to
jury trial would, of course, be unimpaired.
For the foregoing reasons, I respectfully dissent.