Weems & Kelsey Management Company No.2, Ltd v. Union Pacific Railroad Company

Texas Court of Appeals, 1st District (Houston)·Decided August 31, 2026·No. 01-24-00110-CV·Published

Opinion

Opinion issued August 31, 2026

In The

Court of Appeals

For The

First District of Texas

fee—sued Marathon and Blanchard for trespass in connection with the presence of the pipeline on the land. The jury found that Marathon and Blanchard were not trespassing and separately, that they had a prescriptive easement over the property. The trial court entered a take nothing judgment against Weems.

On appeal, Weems argues that (1) the trial was compromised by admission of the special commissioners’ award issued in the condemnation proceeding, the submission of a jury question related to the award, and the trial court’s failure to instruct the jury that Weems owned the property in fee, (2) there is insufficient evidence supporting the jury’s finding that Marathon and Blanchard had a prescriptive easement over the property, and (3) the trial court erred in not awarding Weems damages on its trespass claim against Marathon and Blanchard.

In two cross-points on appeal, Marathon and Blanchard argue that the trial court erred by (1) denying their motion for directed verdict on Weems’ trespass claim because the claim was barred by limitations, and (2) construing two deeds involving the property as conveying to the grantee a railroad easement rather than a fee simple interest in the property.

We affirm the trial court’s judgment.

Background

In 1901, Weems & Kelsey Management Company No. 2, Ltd.’s (“Weems”)

predecessors-in-interest executed two deeds granting Galveston Houston and

Northern Railway Co. a one-mile-long and 100-foot-wide tract of land in Galveston County, Texas “for right of way and Railway purposes.”1 Southern Pacific Transportation Company (“Southern Pacific”) later acquired the right-of-way from Galveston Houston and Northen Railway and began operating a line of the Southern Pacific Railroad.

In 1972—while Southern Pacific was still operating its rail line—Weems purchased a largely undeveloped 639-acre parcel of land abutting the right-of-way (“W&K Parcel”).2 At the time, the W&K Parcel included a cow pasture, a powerline, and some pipelines. Over the next four decades, Weems negotiated easement agreements for several additional pipelines to be installed on the W&K Parcel. In time, most of the W&K Parcel was sold for residential development, leaving a corner tract and a mile-long pipeline corridor surrounded by development.

1 The right-of-way was granted in two half-mile segments by two deeds dated 1900 and 1901 (the “1901 deeds”). The parties to the appeal disagree over whether the 1901 deeds conveyed to the railroad company a railroad easement or a fee simple interest in the property. Marathon and Blanchard maintain that the deeds conveyed a fee simple interest, while Weems contends they conveyed only a railroad easement. At some point in the litigation, the parties agreed to have the trial court resolve that issue of law under Rule of Civil Procedure 166(g), and the trial court concluded that the 1901 deeds conveyed a railroad easement and that ownership of the property had reverted to Weems. It is unclear whether that interlocutory order remained unmodified at the time of trial. Weems argues that the order remained and merged with the final judgment, and Marathon challenges the order in a cross-point arguing that the trial court erred in concluding that the 1901 deeds conveyed only a railroad easement. Given our disposition, we need not resolve this dispute. For purpose of our analysis, we refer to the conveyances as a right-of-way.

2 The W&K Parcel ran along the southwest line of the right-of-way.

In 1977 or 1978, Gulf Oil Corporation approached Weems about obtaining an easement to install a pipeline on the W&K Parcel. Rather than installing the pipeline on the W&K Parcel, however, Gulf Oil obtained a licensing agreement for the pipeline from Southern Pacific. Gulf Oil installed the pipeline on the right-of-way that bordered the W&K Parcel and ran along State Highway 146.

Although the right-of-way had been an active freight corridor when Weems purchased the W&K Parcel in 1972, about ten years later, Southern Pacific began discontinuing rail operations on the right-of-way by removing tracks and dismantling infrastructure. Sometime later, in September 1996, Union Pacific Railroad (“Union Pacific”) acquired Southern Pacific’s interest in the right-of-way. At that time, Union Pacific also filed an application with the Surface Transportation Board (“STB”)—the federal administrative agency charged with regulating rail transportation—for permission to abandon its common carrier obligations associated with the rail line on the right-of-way. The STB granted Union Pacific conditional approval of its application in 1996.3

3 The STB is the federal administrative agency with exclusive jurisdiction over the regulation of rail transportation under the Interstate Commerce Commission Termination Act. See In re Union Pac. R.R. Co., 582 S.W.3d 548, 552 (Tex. App.—

Houston [14th Dist.] 2018, no pet.); see also 49 U.S.C. § 10501(b). A railroad company cannot terminate rail service without consent from the STB. To obtain consent to terminate rail service, a railroad company may apply for permission to discontinue service, seek permission to terminate through abandonment proceedings, or file a request for an exemption from abandonment proceedings. See 49 U.S.C. § 10903. If the STB grants the railroad company’s application without imposing conditions, the rail line is removed from the national transportation

In 2009—while Union Pacific’s application with the STB remained pending—Weems’ general partner, Mavis Kelsey, filed an affidavit in the Galveston County real property records asserting unencumbered ownership of the right-of-way, reasoning that because Union Pacific had abandoned the one-mile-long, 100-foot- wide right-of-way, the western half of the right-of-way—a 50-feet-wide tract abutting the W&K Parcel (“Property”)—had reverted to Weems under common law.4 Consistent with the 2009 affidavit, Weems began exercising purported rights over the Property, but it did not at that time contact the pipeline owner to assert its

system, and the railroad’s common carrier obligations for the line and the STB’s jurisdiction terminate. Baros v. Tex. Mexican Ry. Co., 400 F.3d 228, 234–35 (5th Cir. 2005); Chi. Coating Co. v. United States, 892 F.3d 1164, 1165 (Fed. Cir. 2018).

“In contrast, where an abandonment is conditional, the STB retains jurisdiction over a railroad right-of-way until it has been abandoned pursuant to the conditions imposed by the agency” and the STB “retains exclusive, plenary jurisdiction to determine whether there has been an abandonment sufficient to terminate its jurisdiction.” Baros, 400 F.3d at 234–35.

4 Sometime after execution of the 1901 deeds, the tracts on either side of the right-ofway were sold off creating a “strip.” As noted, Weems argued that Union Pacific held only a railroad easement over the right-of-way and therefore when Union Pacific abandoned the right-of-way, the Property—the western half of the right-ofway —reverted to Weems. Marathon argued that the 1901 deeds conveyed a fee simple interest to Union Pacific’s predecessor-in-interest, and thus, Weems did not acquire title to the Property. Marathon concedes, however, that if the 1901 deeds conveyed a railroad easement—as Weems argues—then Weems at some point acquired a fee simple interest in the Property. For purposes of our analysis, we assume, without deciding, that the 1901 deeds conveyed a railroad easement and that at some point prior to the filing of the underlying suit, Weems acquired a fee simple interest in the Property.

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