[00:00:00] Speaker 05: 2019-1007 Peterson Industries versus the U.S. [00:00:41] Speaker 04: Mr. Gilson, please proceed. [00:00:45] Speaker 02: Good morning, Your Honor. [00:00:46] Speaker 02: As Judge Moore indicated, my name is James Gilson. [00:00:49] Speaker 02: I'm pleased to represent the appellant Peterson Industrial Properties in this matter. [00:00:54] Speaker 02: We're asking the court to reverse the granting of summary judgment to the government and to the denial of my client's motion. [00:01:03] Speaker 02: At issue in this case, it's a Tuckrack case. [00:01:07] Speaker 02: Contract at issue is a deed. [00:01:09] Speaker 05: Well, why isn't the contract unambiguous? [00:01:12] Speaker 05: It says certain rail lines, and it says as shown in Exhibit K, and there really isn't an argument that the southern access lines are shown in Exhibit K. So what's, I guess, what's [00:01:26] Speaker 05: What's the problem here that the contract doesn't seem ambiguous to me? [00:01:31] Speaker 05: So what is it exhibit k that you think is ambiguous? [00:01:33] Speaker 05: What do you think yes? [00:01:34] Speaker 02: Well the contract is your indicated says that we would get my client would get an easement to the rail classification yard and certain rail lines and as shown on exhibit k [00:01:46] Speaker 02: The Exhibit K, it says Appendix 124, it is just a map with lines on it. [00:01:55] Speaker 02: It doesn't identify any certain rail lines. [00:01:57] Speaker 02: It's just a map that's unmarked and designated in any way. [00:02:02] Speaker 05: But you haven't alleged that any of this map includes the southern access lines, have you? [00:02:09] Speaker 02: This map we admit the mess map does not show the southern access line But the map as it is doesn't identify what the other rail lines were either doesn't identify them, but I thought there were I thought that it is alleged in this case and and I didn't know what to be in dispute so tell me if I'm wrong that [00:02:30] Speaker 05: That the it does that this map does include two particular other rail lines Western and I can't remember the third I was main line main line They extend from the classification yard. [00:02:41] Speaker 02: Yes the main line in the western Pacific line were two lines that the government a witness that Mr.. Tom Turner identified in his deposition he identified those lines and the court [00:02:56] Speaker 02: relied or allowed the government's parole evidence to say that those other lines are the western line and the main line. [00:03:04] Speaker 05: Are you disputing that this picture shows the western and the main line? [00:03:09] Speaker 02: Yes, we are. [00:03:10] Speaker 02: We will make clarify. [00:03:13] Speaker 02: The Western Pacific line and the main line are included within the rail classification yard, but those lines extend beyond that yard into what we believe was the missing page 2 on Exhibit K into those southern access lines. [00:03:29] Speaker 05: So wait, so just so I understand, does the main line and the Western line sort of change names and become the southern access line, or is it a whole different line? [00:03:38] Speaker 02: It merges into what we've called the southern axis line. [00:03:41] Speaker 02: That was a term that we coined during the lawsuit to describe those lines that are the in and outbound lines and the combat lines. [00:03:48] Speaker 05: None of which are shown in this picture, though? [00:03:50] Speaker 02: No. [00:03:51] Speaker 02: They are not. [00:03:52] Speaker 02: But what's important is that this picture doesn't show the western line either. [00:03:56] Speaker 03: Your theory is that there's a page two to exhibit K that wasn't included with the deed. [00:04:02] Speaker 02: And that page two clearly shows what these certain rail lines were. [00:04:06] Speaker 03: Is that page two? [00:04:08] Speaker 02: Identify and annotate and say here's the southern access It identifies in bold those lines and that page 2 was page 2 of the memorandum of exhibit a to the memorandum of agreement was entered Into one week after this deed was entered into page 185 of the appendix am I looking at the right thing? [00:04:31] Speaker 02: I think it's page 131 of the appendix it may be in another place as well and [00:04:36] Speaker 02: 131 of the appendix. [00:04:46] Speaker 03: So you're saying there was basically a mistake. [00:04:48] Speaker 02: Yes. [00:04:49] Speaker 03: What we're saying is that when they refer to... But that, I don't know, I mean, that's a different theory, is it not, than whether this is ambiguous? [00:04:58] Speaker 02: Well, I think you get to it because when it refers to and [00:05:02] Speaker 02: Certain rail lines when you look at exhibit K. There's no certain rail lines are identified It's just a bunch of different lines there and so it it renders the reference in the deed a three paragraph a 3c and exhibit K Inherently ambiguous because it refers to certain rail lines that aren't identified and so you can get it identified But but if a skilled artisan or a skilled person reading this or basically anyone reading this would know that [00:05:26] Speaker 05: Because I mean they're going for as they clearly specify the railroad classification yard well There's got to be a line coming to and from it right because people aren't putting the trucks on their back and carrying them over So there's got to be lines coming to and from it so those are the lines that are covered That's our point that the government's interpretation leads to an absurd result because what is what good is having this rail lines and having an easement just to run in back and forth within the [00:05:52] Speaker 02: Within the industrial park there has to be a manner of egress and ingress and that's what exactly what these southern access lines Do that's what all the parole evidence clearly showed that there was intended that they would have an easement also to these southern access I guess isn't there [00:06:11] Speaker 03: first inquiry, first line inquiry, and that's to try to figure out whether the deed itself is somehow ambiguous. [00:06:19] Speaker 03: And then only after you succeed in establishing that there's some kind of ambiguity can we then start consulting extrinsic evidence to try to figure out what might have been the intent of the parties. [00:06:32] Speaker 03: And so, as I understand it, that's the real problem you have is [00:06:38] Speaker 03: is that if you look at the deed along with Exhibit K, it looks unambiguous as to what it covers and doesn't cover. [00:06:48] Speaker 02: When you look at Exhibit K, you cannot tell what these uncertain rail lines are. [00:06:53] Speaker 02: It's not it's mark judge. [00:06:55] Speaker 02: Wolski. [00:06:55] Speaker 02: There was initial judge assigned to this case He says wouldn't we need some extrinsic evidence and to understand if something is not clearly mark I can't tell from just looking at exhibit k What is meant there must be some extrinsic evidence to help interpret this otherwise. [00:07:10] Speaker 03: It's ambiguous well at most that's [00:07:12] Speaker 03: to interpret the understanding of that one figure that is Exhibit K. It's not to introduce possible other pages and then go figure out what those other non-included pages are. [00:07:29] Speaker 02: Once you determine that Exhibit K is ambiguous because it doesn't clearly identify the other rail lines, then you're allowed to look at the parole evidence. [00:07:37] Speaker 02: You're not limited just to Exhibit K, but what is... I guess that's the question. [00:07:41] Speaker 03: How far do you get to run? [00:07:44] Speaker 03: looking around for any possible other attachment that you would want to include into the deed. [00:07:50] Speaker 02: We're not asking the court to go very far afield. [00:07:53] Speaker 02: The very next day after this deed was recorded, on January 7, there was a letter that was written from the Army to the depot saying that we're going to give you an easement [00:08:04] Speaker 02: To the classification yard as well as to certain rail lines and attached to that And one week later they entered into this memorandum of agreement that had an exhibit a that had those other rail lines clearly identified And that's that's this exhibit Appendix 131 where it has those other rail lines clearly identified in bold that's on the original so [00:08:30] Speaker 02: Without the government's interpretation, it leads to an unreasonable result. [00:08:35] Speaker 02: And on its face, we submit that this Exhibit K was inherently ambiguous. [00:08:41] Speaker 02: And the court should have allowed us to be able to put on this extrinsic evidence, because it allowed the government to put on its extrinsic evidence about that these other lines referred to the main line and the Western Pacific line. [00:08:54] Speaker 02: And so the court was unfair in that regard. [00:08:57] Speaker 02: And we think that it was error. [00:08:59] Speaker 02: But submit also, Your Honors, that there is additional evidence that with regard to this was ambiguous. [00:09:11] Speaker 02: There was a license agreement that was entered into in the year 2000 and 2008 with respect to other successors to the original property. [00:09:20] Speaker 02: And those exhibits to those licenses also clearly identify these southern access lines. [00:09:27] Speaker 02: I'd like to also address, finally, the no-cost argument, Your Honors. [00:09:35] Speaker 02: Section 18 of the deed provides that all deeds and easements contemplated would be granted at no cost by the grantor to the grantee. [00:09:51] Speaker 02: And the government has interpreted this to say that does not apply to the successors and the signs. [00:09:57] Speaker 02: We submit that that construction is unreasonable. [00:10:00] Speaker 02: Because nowhere in the deed is there mentioned that their costs would be assessed to the RDA or anyone else. [00:10:08] Speaker 02: And nowhere in the deed is there a specific reservation of rights expressly stating that the RDA transferee would have to pay for the easements. [00:10:17] Speaker 02: This interpretation is contrary to the BRAC law that assigned these [00:10:24] Speaker 02: this tool base to the government of Twilla and That was for the very purpose of economic development these the first sentence in the easement at issue here in section a3 Needs to be read as a whole in terms of both sentences in section a3a the first sentence it says the railroad classification yard and certain rail lines and [00:10:51] Speaker 02: Located on army retained property as shown on exhibit a are available for joint use With the grantor by the grantee and his successors and assigns and then it goes on in the second sentence to say that a non-exclusive easement for use of such Facilities will be under a separate agreement clearly by the first sentence of the key paragraph at issue of [00:11:17] Speaker 02: there was a present vestment of joint use rights. [00:11:21] Speaker 02: And the easement was merely the mechanism by which those joint use rights would be vested. [00:11:27] Speaker 01: Doesn't the deed define grantee as the redevelopment agency? [00:11:33] Speaker 01: It doesn't say. [00:11:34] Speaker 01: It doesn't define grantee to include successors. [00:11:38] Speaker 02: Yes. [00:11:39] Speaker 02: I think that's right. [00:11:40] Speaker 02: Clearly, the RDA was the only grantee. [00:11:43] Speaker 01: Do you want us to read that into the deed? [00:11:46] Speaker 02: Well, any easement that's granted to a grantee, it becomes a vested right. [00:11:51] Speaker 02: And so when the grantee then assigns it, they assign what they have. [00:11:55] Speaker 02: It would then be the grantee's right to assign. [00:11:59] Speaker 01: And my client... Hopefully, but in this case, it seems that perhaps another explanation is that the government was reserving the right to charge the potential grantees for the access to the easement. [00:12:15] Speaker 02: That's what the government has argued, but I think that that interpretation assumes too much. [00:12:20] Speaker 02: Just by the fact that they didn't say end successors and assigns every time they referred to the grantee doesn't mean that the omission was intended to mean that we're going to in fact charge successors and assigns. [00:12:33] Speaker 02: These easements run with the land and they are presumed to be able to be freely alienable from one property owner to the other. [00:12:43] Speaker 02: And a subsequent grantee of an easement shouldn't have to pay royalties or a fee to the original grantee unless the original grantor specifically reserved the right to say, [00:12:57] Speaker 02: you know, this easement is just limited just to you, and any subsequent person is going to have to pay me a royalty or pay me a license fee. [00:13:05] Speaker 02: That is not expressly stated anywhere in this deed. [00:13:08] Speaker 01: But the deed does express grantee and the successors in different parts of the deed. [00:13:13] Speaker 01: But in the provision that you're concerned about, it doesn't go on just as a grantee. [00:13:17] Speaker 01: It doesn't say any successors. [00:13:20] Speaker 02: Well, it does under no cost. [00:13:22] Speaker 01: You find that the parties understood, you know, [00:13:28] Speaker 01: the role of the successors to the grantee, then they probably would not have stated this the way that they did. [00:13:36] Speaker 02: There are many provisions in the deed where they didn't also say a successors and a science. [00:13:41] Speaker 02: I think there's just as a, you know, extra language that's required. [00:13:45] Speaker 01: You're not concerned about those sections. [00:13:47] Speaker 01: You're concerned about this one. [00:13:48] Speaker 01: And this one, your magic words are missing. [00:13:53] Speaker 02: In A3, though, they weren't missing. [00:13:55] Speaker 02: They said that the joint use rights in regard to these facilities, the class yard, and the other certain rail lines are available currently now for joint use by the RDA and its successors in the science. [00:14:10] Speaker 02: So it was a vested right in the grantee and its successors. [00:14:16] Speaker 04: Mr. Gilson, you've used almost all your rebuttal time. [00:14:18] Speaker 02: Yeah, I better sit down. [00:14:22] Speaker 04: Very good. [00:14:23] Speaker 04: Am I saying that right? [00:14:24] Speaker 00: You are. [00:14:24] Speaker 00: Thank you, Your Honor. [00:14:25] Speaker 05: Please proceed. [00:14:36] Speaker 00: May it please the Court. [00:14:38] Speaker 00: This Court should apply its longstanding rules of contract interpretation and enforce the unambiguous terms of the deed in question. [00:14:45] Speaker 00: The deed plainly promises a future easement at no cost to the original grantee only. [00:14:51] Speaker 00: The deed begins by defining the term grantee as the redevelopment agency of Twilley City, unless otherwise specifically provided herein. [00:14:58] Speaker 00: This definition alone means that whenever the deed refers to the grantee without any additions or modifications, that reference is to the RDA and not any other entities or individuals. [00:15:09] Speaker 05: What about the fact that certain rail lines isn't specific but then you look at Exhibit K and those rail lines aren't demarcated on Exhibit K either? [00:15:19] Speaker 00: Right. [00:15:20] Speaker 00: And that goes to Appellant's argument that the court needed extrinsic evidence to figure out what these other lines are called. [00:15:26] Speaker 00: And it is correct that Exhibit K does not identify the Western Pacific line and the main line by name. [00:15:32] Speaker 00: We submit to the court that that's not necessary. [00:15:34] Speaker 00: The court can just as well call them the A line and the B line or the left line and the right line. [00:15:38] Speaker 00: The only thing that matters is that these two lines are depicted on Exhibit K and the southern access lines, which Appellant's [00:15:46] Speaker 00: are trying to incorporate it into the definition of certain rail lines, they undisputedly do not appear on Exhibit K. How do we know where it stops? [00:15:56] Speaker 05: And what I mean by that is the certain rail lines shown in Exhibit K, how do we know where the Western and the main line cease to be the Western and the main line? [00:16:09] Speaker 05: Where does it cut off? [00:16:11] Speaker 05: Certainly, I don't think you're alleging that the easement stops at the edge of the picture, right? [00:16:16] Speaker 05: You're saying they have an easement on that whole line, whatever the whole line is, correct? [00:16:21] Speaker 00: Just to clarify, Your Honor, there is no easement. [00:16:23] Speaker 00: There is joint use rights that were granted pursuant to the deed. [00:16:26] Speaker 05: OK, thank you. [00:16:26] Speaker 05: But whatever. [00:16:27] Speaker 05: The rights to use don't stop at the border of my picture, do they? [00:16:30] Speaker 00: We believe that it does, Your Honor. [00:16:31] Speaker 00: Absolutely. [00:16:32] Speaker 05: Oh, you believe it does. [00:16:32] Speaker 05: You believe, even to the extent that they have the right to use the Western in the main line, it is only as far as this picture shows and not an inch further. [00:16:40] Speaker 00: We believe so. [00:16:42] Speaker 00: Exhibit K is clear on its face. [00:16:44] Speaker 05: I didn't understand that. [00:16:45] Speaker 05: I thought that the government, I guess I thought your argument was that they have the western and the main line, which are the lines that originate here in this rail yard, but they can't go beyond those two lines. [00:16:57] Speaker 00: Well, so the way it's worked for almost 20 years is the southern access lines provide access to the rail classification yard as well as the main line and western Pacific line. [00:17:07] Speaker 00: Different successors in interest to the RDA, including the Peterson Group, have had a contract with the Army in which they pay Army personnel to move their rail cars, the appellants' rail cars, through the southern access lines and into the rail classification yard. [00:17:26] Speaker 00: That's the way it worked with every single successor in interest to the RDA, and that's the way it's worked with the Peterson Group. [00:17:32] Speaker 00: So the appellants can use [00:17:36] Speaker 00: the main line and Western Pacific line beyond Exhibit K, but to do that, they have to use Army services. [00:17:47] Speaker 00: Now, I think it's undisputed here that the deed [00:17:52] Speaker 00: expressly limits the phrase certain rail lines to Exhibit K. And it's also undisputed that the southern access lines are not on Exhibit K. Together, those two facts mean that they cannot get either a joint use right or an easement to the southern access lines pursuant to the deed. [00:18:12] Speaker 05: When it says certain rail lines in the deed as shown on Exhibit K, you think I should interpret it to only the portion of the line that's shown on Exhibit K? [00:18:21] Speaker 05: I'm just still a little perplexed by this argument. [00:18:23] Speaker 05: I thought that it included everything that would. [00:18:27] Speaker 05: I guess I'm starting to think maybe there's ambiguity here after all. [00:18:31] Speaker 05: And I didn't come in thinking that. [00:18:32] Speaker 05: But I thought when I read certain rail lines, it meant [00:18:37] Speaker 05: those lines, not just the portion of those lines shown on Exhibit K, because it doesn't say the portion shown on Exhibit K, so I guess I'm confused. [00:18:47] Speaker 00: Just to clarify one thing, the main line and the Western Pacific line [00:18:51] Speaker 00: Once you go beyond Exhibit K, they turned into other lines by other names. [00:18:58] Speaker 00: They don't continue past Exhibit K very much if they do at all. [00:19:03] Speaker 00: Really, the main line and Western Pacific line are shown on Exhibit K. It's the vast majority of those lines, and possibly those entire lines are shown on Exhibit K. In fact, I believe that the southern access lines connect to the main line and Western Pacific line [00:19:20] Speaker 00: in a portion of the area that is not shown on Exhibit K. But again, Your Honor, just to clarify the lack of ambiguity, Exhibit K is what it is. [00:19:30] Speaker 00: Whether the court calls it Main Line and Western Pacific Line or something else, the southern access lines, which appellants are trying to get access to, they are not depicted on Exhibit K. And therefore, the phrase certain rail lines cannot possibly refer to those lines. [00:19:44] Speaker 00: I got it. [00:19:49] Speaker 00: The other issue is whether the Peterson group, as a successor in interest to the original grantee, whether they get an easement pursuant to Section A3C of the deed. [00:20:03] Speaker 00: And there, I explained that the definition of the term grantee is as positive of this issue. [00:20:09] Speaker 00: But the deed also goes on to refer to the grantee in some portions and the grantee, comma, and its successors and assigns in other portions. [00:20:17] Speaker 00: And the expressio unius canon of contract interpretation allows us to surmise that the original parties to the deed intended for some portions to apply to the RDA only, and other portions applied to successors in interest as well. [00:20:32] Speaker 00: If there are no further questions, we ask that the court affirm the trial court's decision below. [00:20:37] Speaker 05: Thank you very much. [00:20:39] Speaker 05: Mr. Gilson, you have a little bit of time left. [00:20:46] Speaker 02: Thank you, your honor. [00:20:47] Speaker 02: I think it is obvious that when you look at Exhibit K, it's unclear what these certain rail lines are. [00:20:54] Speaker 02: And the government, through its parole evidence, has tried to explain what they think those certain rail lines are. [00:21:00] Speaker 02: But under the government's interpretation, [00:21:05] Speaker 02: The easement stops at the end of that map, and that leads to what we argued is not a tenable rational result because what good is railroad lines? [00:21:16] Speaker 04: You're landlocked. [00:21:16] Speaker 02: You're landlocked. [00:21:17] Speaker 02: And so we have an easement by necessity. [00:21:19] Speaker 02: In essence, our interpretation is the only reasonable one, and that's supported by all the parole evidence. [00:21:25] Speaker 02: The government's own negotiator, Dorinda Benson Ware, [00:21:28] Speaker 02: Acknowledge that that when she looked at exhibit a to the moa that was entered into that same month She says yes, that is the lines that was contemplated by the deed She admitted that in her deposition the letter that was issued the day after on January 7th acknowledged that so we're just asking there is some reason why the second page wasn't [00:21:52] Speaker 03: part of the deed, the alleged second page? [00:21:55] Speaker 02: We think it was a Scrivener's error. [00:21:56] Speaker 02: It was a simple mistake, because without it, we're landlocked. [00:22:01] Speaker 03: Well, I understand that, but I mean... [00:22:05] Speaker 03: Maybe this type of mistake, that's a different doctrine than whether the deed is ambiguous or not. [00:22:13] Speaker 03: And that's the question that we're faced with today. [00:22:16] Speaker 02: Well, I think you can get there, Your Honor, by looking at Exhibit K on itself as ambiguous. [00:22:21] Speaker 02: That allows you to get to this extrinsic evidence immediately. [00:22:25] Speaker 03: There's no dispute that Exhibit K doesn't illustrate any portion of the southern access line. [00:22:34] Speaker 02: Right that's that's true, but exhibit K on itself is ambiguous in 2014 they did grant an easement to my client Recognizing that we had the rights to the classification yard. [00:22:46] Speaker 02: They simply didn't extend it to the southern access line It's it's about the money they want army wants to charge for us to use it when we say we bought it This is successor. [00:22:55] Speaker 02: I see my time is Thank you very much. [00:22:58] Speaker 02: Thank you very much. [00:22:59] Speaker 05: I think both counsel the case is submitted [00:23:06] Speaker 02: The honorable court is adjourned for tomorrow morning. [00:23:08] Speaker 02: It's an o'clock a.m.