Venture Properties of Boardman, Inc. v. Boardman Steel, Inc.

895 N.E.2d 569, 177 Ohio App. 3d 572, 2008 Ohio 3088
CourtOhio Court of Appeals
DecidedJune 17, 2008
DocketNo. 07 MA 149.
StatusPublished

This text of 895 N.E.2d 569 (Venture Properties of Boardman, Inc. v. Boardman Steel, Inc.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Venture Properties of Boardman, Inc. v. Boardman Steel, Inc., 895 N.E.2d 569, 177 Ohio App. 3d 572, 2008 Ohio 3088 (Ohio Ct. App. 2008).

Opinion

Vukovich, Judge.

{¶ 1} Plaintiffs-appellants Venture Properties of Boardman, Inc. (“VPB”) and Railroad Ventures, Inc. (“RVI”) appeal the decision of Mahoning County Court No. 5, which essentially dismissed its forcible-entry-and-detainer action in favor of defendant-appellee Boardman Steel, Inc. The main issue presented on appeal is whether appellants have a possessory interest in the land subject to the four licenses in which Boardman Steel is the licensee and thus whether they have standing to proceed as plaintiffs in this action. However, such issue cannot be reached without the presence of the party alleged by Boardman Steel to have a prevailing interest in the land underlying the licenses. Consequently, the judgment of the trial court is reversed, and this case is remanded for joinder of the Columbiana County Port Authority (“CCPA”).

*574 STATEMENT OF THE CASE

{¶ 2} In 1975, Youngstown & Southern Railway Company granted to Board-man Steel a license to have constructed and to use a private grade crossing over its railroad in order to reach Southern Boulevard from Boardman Steel’s building located on the east side of the tracks. As licensee, Boardman Steel was required to pay a base annual rent of $100 due by July 1 of each year and an additional sum due by July 15 of each year calculable by a formula that utilized a price index published by the Bureau of Labor Statistics. Boardman Steel was also required to obtain liability insurance in certain listed amounts and to provide a copy of the policy to the licensor with a certifícate of endorsement that the insurer would notify said licensor ten days before cancellation. The license provided that it was not perpetual, that it was for the sole convenience of Boardman Steel, and that it shall continue only as long as Boardman Steel uses the crossing, provided that Boardman Steel complies with all the terms, conditions, and covenants of the license.

{¶ 3} Y & S Railway also granted to Boardman Steel licenses to construct and use gas, water, and sewer lines that would run under the tracks at the crossing. Boardman Steel had to pay $25 per year for each of the three lines. These licenses were revocable by the licensor with 60 days notice to Boardman Steel. The licenses also specified that if after termination, Boardman Steel failed to remove its property from the land, it would be considered a trespasser, and the licensor would remove the property at the expense of Boardman Steel.

{¶ 4} In 1996, Y & S Railway transferred the railroad realty and all its attendant rights therein to RVI. On October 14, 1997, RVI sent notice to Boardman Steel terminating the grade-crossing license for failure to pay annual rent in accordance with the terms of the license. RVI also sent notices terminating the gas, sewer, and water line licenses. Boardman Steel did not vacate the land and has continued using the licenses without paying rent and/or licensing fees, notwithstanding its further receipt of rent invoices in 1998 and 1999.

{¶ 5} In 1998, RVI initiated an action before the Surface Transportation Board (“STB”) in order to abandon the railroad line. The Columbiana County Port Authority (“CCPA”) intervened with an offer to purchase the line, and the STB agreed that RVI would sell the line to CCPA. In October 1999, prior to its sale of the line to CCPA, RVI assigned to its affiliate VPB all its right, title and interest in listed third-party agreements which burdened the railroad line realty.

{¶ 6} CCPA sought to have RVI’s transfer of its rights under the licensing agreements rejected. However, the STB denied CCPA’s request and allowed RVI and VPB to retain their rights under 156 of the licensing agreements *575 (including the four Boardman Steel licenses) because CCPA was aware of these transfers prior to the sale. The STB then reduced CCPA’s purchase price by the appraised value of the licenses. Railroad Ventures, Inc. (Jan. 7, 2000), STB Docket No. AB 556 (Sub. No. 2X), 2000 WL 1125904, affirmed in Railroad Ventures, Inc. v. STB (C.A.6, 2002), 299 F.3d 523. The 2001 deed of the railroad realty to CCPA specifically stated that it was subject to the decisions of the STB in the aforementioned docket number.

{¶ 7} CCPA then requested reconsideration or clarification of the extent of the licenses transferred. Specifically, VPB had converted a license with a 25-year term (renewable for 25 years) into a permanent easement in exchange for $25,000 from the licensee. CCPA argued that, under the STB’s prior decisions, RVI and/or VPB are only permitted to retain the income from the existing licenses and that only CCPA, as the fee owner of the real estate under the line, has the ability to enter new agreements extending the burden on the land.

{¶ 8} The STB determined that renewal of the 156 licensing agreements or conversion of term-limited licenses to permanent easements is permissible as long as the grantee’s rights are not expanded in a manner that would interfere with the railway operations. The STB noted that CCPA had already complained about RVI’s pre-sale conversion of such a license to a permanent easement. The STB stated that it is evident that its prior decision did not expect the licenses to become CCPA’s property at the end of their terms, citing the fact that when it credited CCPA with the value of the licenses retained by RVI, the STB did not differentiate between those that had been converted into permanent easements and those that had not. The STB stated that RVI and/or VPB have “an ownership interest” in the 156 licenses and that CCPA never received an interest in these licenses. The STB pointed out that although the circuit court reviewing the STB’s first decision ordered RVI to transfer a fee-simple interest in the line, the court specifically excluded the 156 licenses from that transfer because these property interests were not conveyed to CCPA. Railroad Ventures, Inc. (Dec. 15, 2005), STB Docket No. AB 556 (Sub. No. 2X) 13-15, 2005 WL 3437630.

{¶ 9} As a result, VPB sent a 2006 invoice to Boardman Steel for past rent. On July 7, 2006, VPB sent a notice requesting Boardman Steel to leave the premises of the grade crossing. On July 14, 2006, VPB and RVI (collectively, “plaintiffs,” whose individual rights are not distinguished at this time) filed a forcible-entry-and-detainer action against Boardman Steel seeking restitution of the grade crossing. On August 30, 2006, plaintiffs amended their complaint to have Boardman Steel remove and cease use of the gas, water, and sewer line licenses. They attached the four licenses, the various termination notices and the instrument assigning the licenses from RVI to VPB.

*576 {¶ 10} On September 15, 2006, Boardman Steel filed a Civ.R. 12(B) motion to dismiss based upon failure to state a claim, failure to join a necessary party, and statute of limitations. First, Boardman Steel pointed to the 1999 assignment contract between RVI and VPB. Although it mostly refers to the licenses as “Third Party Agreements,” at one point it refers to them as “Third Party Agreements now or hereafter in effect” (with emphasis added by Boardman Steel). Boardman Steel believes that this latter wording would not encompass the Boardman Steel licenses because those licenses had been terminated by RVI in October 1997.

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Bluebook (online)
895 N.E.2d 569, 177 Ohio App. 3d 572, 2008 Ohio 3088, Counsel Stack Legal Research, https://law.counselstack.com/opinion/venture-properties-of-boardman-inc-v-boardman-steel-inc-ohioctapp-2008.