Romanoff Equities, Inc. v. United States

In the United States Court of Federal Claims
No. 11-374L*
(Filed: November 20, 2014)
OPINION ORIGINALLY FILED UNDER SEAL ON OCTOBER 20, 2014

)
ROMANOFF EQUITIES, INC., )
)
Plaintiff, )
) Summary Judgment; Rails to Trails;
v. ) Scope of Easement; Abandonment;
) New York Law
THE UNITED STATES, )
)
Defendant. )
)

Mark F. (“Thor”) Hearne, II, Clayton, Missouri, for plaintiffs. Meghan S.
Largent and Lindsay S.C. Brinton, Clayton, MO, and Debra J. Albin-Riley, Los
Angeles, CA, of counsel.

Emily M. Meeker, Environment & Natural Resources Division, United
States Department of Justice, Washington, DC, with whom were Robert G.
Dreher, Acting Assistant Attorney General and Kristine S. Tardiff, of counsel.

OPINION

FIRESTONE, Judge

This “Rails-to-Trails” case deals with the creation of the “Highline”

recreational trail in the City of New York (“New York City” or “the City”).

Plaintiff Romanoff Equities, Inc. (“Romanoff Equities”) claims that the United

States (“the government”) took its property interest in the elevated railroad right-

*
The case caption has been changed to reflect the remaining plaintiff in this case.
Further filings in this case shall be made under the remaining case number, No. 11-374.
Previous filings were made in the lead case, No. 11-333.
1

of-way that is now part of the Highline when the Surface Transportation Board

(“STB”), a federal agency, authorized the City to turn the right-of-way into an

elevated park. This court previously dismissed the claims of five other plaintiffs

on the grounds that they had waived any right to compensation from the United

States when they entered into Covenant Not to Sue Agreements with the City of

New York in exchange for certain development rights alongside the Highline.

West Chelsea Buildings, LLC v. United States, 109 Fed. Cl. 5, 28 (2013), aff’d,

554 F. App’x 942 (Fed. Cir. 2014), reh’g denied, petition for cert. filed. The court

also dismissed a sixth plaintiff, 437-51 West 13th Street, LLC (“West 13th Street,

LLC”), for lack of standing when the facts established the subject property was

owned by Romanoff Equities, a related company, at the time the alleged taking

occurred.1 Id. As the owner of the property encumbered by the easement at the

time of the alleged taking, Romanoff Equities is now the only remaining plaintiff

in the case.

Pending before the court are plaintiff’s motion for partial summary

judgment, ECF No. 94, and the government’s cross-motion for summary

judgment, ECF No. 99, filed pursuant to Rule 56 of the Rules of the United States

Court of Federal Claims (“RCFC”). In its motion, the government argues that it

did not take plaintiff’s property because the easement provided by plaintiff’s

1
The alleged taking occurred on June 13, 2005. Romanoff Equities transferred the
property encumbered by the easement to West 13th Street, LLC on August 25, 2005. At
the time of the transfer, Michael Romanoff was the President of Romanoff Equities and
Romanoff Equities became the sole owner of West 13th Street, LLC. Michael Romanoff
was and remains the manager of West 13th Street, LLC.
2

predecessor, the New York State Realty and Terminal Company, to the New York

Central Railroad Company for an elevated right-of-way for rail traffic

encompasses use of the property interest for a public trail and park. Further, the

government argues that the easement was not abandoned by the railroad prior to

the creation of the Highline. In the alternative, the government argues that, even if

there were a taking, plaintiff is bound by the Covenant Not to Sue Agreement

signed by Michael Romanoff, the owner of Romanoff Equities, as well as the

manager of West 13th Street, LLC, plaintiff’s successor in interest.

Plaintiff argues in its motion that the easement at issue does not extend to

use of the property for an elevated trail and park and, as a result, the government

committed a taking of plaintiff’s property interest. Additionally, plaintiff argues

that the easement had been abandoned before the creation of the Highline, at the

time that railroad use of the corridor ended. Plaintiff further argues that there are

genuine issues of material fact that preclude summary judgment on the issue of

whether Romanoff Equities is bound by the Covenant Not To Sue Agreement

entered into by its successor, West 13th Street, LLC.

For the reasons discussed below, the court finds that the easement granted

by plaintiff’s predecessor to the railroad encompasses any lawful use, including

use of the easement for an elevated park such as the Highline. Further, the court

finds that the easement had not been abandoned by the railroad. As a result, the

government cannot be liable for a taking, and the court must deny plaintiff’s

motion and grant the government’s cross-motion.

3

I. STATEMENT OF FACTS

The following facts are not disputed unless otherwise noted. In June of

1932, New York State Realty and Terminal Company granted an easement to the

New York Central Railroad Company in consideration of one hundred dollars to

allow for the construction and maintenance of an elevated railroad corridor in the

airspace that has now become a part of the Highline. Pl.’s Mot. P. Summ. J., Ex.

A, at 1. The Railroad Company acquired the easement “as part of a plan to

eliminate dangerous railroad crossings at street level.” New York City Council, 4

A.D. 3d 85, 87 (N.Y. App. Div. 2004). The Easement states in relevant part:

[Grantor] does hereby grant and convey unto the Railroad Company, its
successors and assigns forever, the permanent and perpetual rights and
easements to construct, maintain and operate, without interference or right
of interference, its railroad and appurtenances within those portions of the
parcels of land herein described included between an upper plane and a
lower plane drawn at the respective elevations herein provided for as to
each such parcel, together with the exclusive use of the portion of the
parcels of land herein described included between said plane for railroad
purposes and for such other purposes as the Railroad Company, its
successors and assigns, may from time to time or at any time or times
desire to make use of the same, subject only to the permanent rights and
easement herein specifically reserved to the [Grantor], its successors and
assigns, in the portions of said parcels of land included between the said
respective planes.

Pl.’s Mot. P. Summ. J., Ex. A. Romanoff Equities acquired its interest in the

subject property in 1999. Am. Compl., Ex. K. Through a series of conveyances,

the easement conveyed to New York Central Railroad Company in 1932 was

transferred to CSX Transportation, Inc. (“CSX”), effective August 24, 2004. Am.

Compl., Exs. C-D. The railroad ceased operations in the mid-1970s. Consol. Rail

4

Corp. v. Interstate Commerce Comm’n, 29 F.3d 706, 709 (D.C. Cir. 1994). By

1982, Consolidated Rail Group (“Conrail”), then the owner, had removed the

stations and tracks on the corridor. Following that, various uses of the corridor

were proposed, including a highway and a waste disposal service. Id. Neither of

the projects were ultimately carried out. Id. In 1989, a group of property owners

submitted a third-party application seeking permission for the railroad to abandon

the easement, which Conrail opposed. West Chelsea, 109 Fed. Cl. at 10; see also

Chelsea Property Owners,7 I.C.C.2d 991, 992 (1991), rev’d, Chelsea Property

Owners, 8 I.C.C.2d 773, 794 (1992). Those proceedings were completed in 1994

with a finding that abandonment was permitted if the property owners posted a

surety bond, see Consol. Rail, 29 F.3d at 706, but no such bond was ever posted,

West Chelsea, 109 Fed. Cl. at 10.

In response to those property owners, a community non-profit formed

several years later under the name Friends of the High Line, Inc. and began

advocating for the use of the corridor as a public park. Id. In 2002, New York

City joined with that group to support a public park and entered into negotiations

with the property owners, CSX, Conrail, and other parties to achieve that goal. Id.

In those negotiations, both Conrail and CSX supported the issuance of a

Certificate of Interim Trail Use (“CITU”) to authorize rail banking and trail use

for the elevated right of way for the purpose of creating a public park. Def.’s

Reply in Supp. Mot. Summ. J., Ex. 1 at 4, Joint Supplemental Statement (“[CSX

and Conrail] have determined that a CITU is an appropriate mechanism to use for

5

the purpose of achieving the parties’ objectives with respect to the High Line.”).

On June 13, 2005, the STB issued a CITU for the elevated right of way which has

since become the Highline. Am. Compl., Ex. H. The City and CSX entered into a

Trail Use Agreement on November 4, 2005. Am. Compl., Ex. I.

At the time the CITU was issued on June 13, 2005, Romanoff Equities

owned the property encumbered by the easement in fee simple absolute. On that

same date, Michael Romanoff, [ . . . ], formed a new entity named 437-51 West

13th Street, LLC. Def.’s Mot. Summ. J., Exs. 2, 4. Michael Romanoff [ . . . ].

Def.’s Mot. Summ. J., Ex. 1, Tr. 33:4-18. Thereafter, on August 25, 2005,

Romanoff Equities transferred the property encumbered by the railroad easement

to West 13th Street, LLC. Id. at 25:9-24. The Real Property Transfer Report filed

in connection with the transfer identifies the transfer as a “Sale Between Related

Companies or Partners in Business” and states that “One of the Buyers is also the

Seller.” Def.’s Mot. Summ. J., Ex. 2 at 30. The Report identifies the assessed

value of the property as $800,100; however, no monetary consideration was paid

by West West 13th Street, LLC to Romanoff Equities for the property. Id.

[ . . . ]. In December 2008, West 13th Street, LLC filed applications for

zoning variances with the New York City Board of Standards and Appeals. See

Def.’s Mot. Summ. J., Ex. 3 at 1. Although the property was not within the area

rezoned by New York City in connection with creation of the Highline, West 13th

Street, LLC eventually secured several zoning variances allowing for additional

6

retail use and greater floor area for the property than would have otherwise been

allowed under the existing zoning. Id. at 1-2, 6.

On May 15, 2009, Michael Romanoff, in his capacity as manager of West

13th Street, LLC, entered into a Release, Waiver, and Covenant Not to Sue

Agreement with New York City, which stated that West 13th Street, LLC will not

“sue or join any action seeking compensation from . . . The United States or any of

its departments or agencies with respect to the Highline CITU.” Def.’s Mot.

Summ. J., Ex. 6. This agreement is identical to the agreements signed by the other

property owners along the Highline, which this court in its prior opinion found to

bar those plaintiffs from seeking compensation from the United States. Id.; West

Chelsea, 109 Fed. Cl. at 12. West 13th Street, LLC also granted a separate

easement to New York City granting it “the right to develop the Highline for

Public Space, with reasonable access to the Highline across the property, with

such right being a restriction in perpetuity . . . .” Def.’s Mot. Summ. J., Ex. 2,

Quitclaim, Consent & Easement.

Sometime after West 13th Street, LLC signed the Agreement and granted

the easement to the City, West 13th Street LLC received the above-noted zoning

improving the value of the property. See Def.’s Mot. Summ. J., Ex. 3 at 1-2, 6. In

late 2010 or early 2011, [ . . . ] the property was sold to 860 Washington Street,

LLC. Def.’s Mot. Summ. J., Ex. 1. The deed was signed by Michael Romanoff as

the authorized signatory for West 13th Street, LLC. Id. The Real Property

Transfer Report filed with New York City in connection with the transfer

7

identifies the “Full Sale Price” as $81,000,000. Id. The parties dispute the degree

to which the Highline affected the value of the property, with plaintiff claiming

that it would have been more valuable if it were not encumbered and the

government claiming that it would have been much less valuable as it would not

have received the same zoning adjustments.

II. DISCUSSION

A. Standard of Review

The standard of review when considering a motion for summary judgment

is well-settled. The court’s role is “to determine whether there is a general issue

for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). It is not the

court’s role to “weigh the evidence and determine the truth of the matter.” Id.

RCFC 56 provides that “[s]ummary judgment is appropriate where there is no

genuine dispute as to any material fact and the moving party is entitled to

judgment as a matter of law.” RCFC 56; see also Ellamae Phillips Co. v. United

States, 564 F.3d 1367, 1371 (Fed. Cir. 2009).

B. The Easement Encompasses Use of the Easement for the Highline

The Federal Circuit has explained that a taking occurs “when government

action destroys state-defined property rights by converting a railway easement to a

recreational trail, if trail use is outside the scope of the original railway easement.”

Ladd v. United States, 630 F.3d 1015, 1019 (Fed. Cir. 2010). In Ellamae Phillips,

the Federal Circuit identified a three-step inquiry to determine whether the federal

government is liable to pay just compensation. 564 F.3d at 1373 (citing Preseault

8

v. United States, 100 F.3d 1525, 1533 (Fed. Cir. 1996)). First, the court must

determine “who owns the strip of land involved, specifically, whether the railroad

acquired only an easement or obtained a fee simple estate.” Id. Second, the court

must determine “if the railroad acquired only an easement, were the terms of the

easement limited for railroad purposes, or did they include future use as a public

recreational trail (scope of the easement).” Id. Third, the court must determine

whether, “even if the grant of the railroad’s easement was broad enough to

encompass a recreational trail, had this easement terminated prior to the alleged

taking so that the property owner at the time held a fee simple by the easement

(abandonment of the easement).” Id. To resolve these issues, the court is required

to apply state law. See Presault v. Interstate Commerce Comm’n, 494 U.S. 1, 20

(1990) (O’Connor, J., concurring) (“The nature of the property interest and the

question of abandonment are routinely determined based upon state law.”); Macy

Elevator, Inc. v. United States, 97 Fed. Cl. 708, 718 (2011) (“Because real

property rights arise from state law, the extent of the plaintiffs’ property interests

in the right-of-way depend on the law of the state in which the property is

located.”). Here, applying New York state law to the issues presented, the court

finds as follows.

The government’s liability turns on whether the subject easement is broad

enough to encompass use of the easement for the Highline. If the easement is not

broad enough to encompass the Highline, the court need not look further to find a

taking. If the easement is broad enough to encompass the Highline, the court will

9

also be required to determine whether the easement was abandoned prior to the

alleged taking.

We begin our evaluation with the language of the easement. Dowd v. Ahr,

583 N.E.2d 198, 200 (N.Y. 1991) (“Easements by express grant are construed to

give effect to the parties’ intent, as manifested by the language of the grant.”

(citing 2 Warren’s Weed, New York Law of Real Property, Easements, §§ 3.02,

17.03 (4th ed.))). The subject deed states that it is to be used “for railroad

purposes and for such other purposes as the Railroad Company, its successors and

assigns, may from time to time or at any time or times desire to make of the same .

. . .” Pl.’s Mot. P. Summ. J., Ex. A (emphasis added). Under New York law, the

court’s inquiry into a general easement must focus on what uses were

contemplated when the easement was granted. Lewis v. Young, 705 N.E.2d 649,

660 (N.Y. 1998) (“express easements are defined by the intent, or object, of the

parties” (citing Dowd, 583 N.E.2d at 911)); see also Phillips v. Jacobsen, 499

N.Y.S.2d 428, 429 (N.Y. App. Div. 1986) (“An easement granted in general terms

must be construed to include any reasonable use to which it may be devoted,

provided the use is lawful and is one contemplated by the grant.” (emphasis

added) (citing Missionary Soc’y v. Evrotas, 175 N.E. 523 (N.Y. 1931))). In

addition, the easement “owner cannot ‘materially increase the burden of the

servient estate[] or impose new and additional burdens on the servient estate[]

from that which was originally allowed. Gates v. AT&T, 956 N.Y.S.2d 589, 591

(2012) (alteration in original) (citations omitted).

10

 Taking into account New York law, the court finds that the easement

granted in this case was quite broad, and explicitly granted an easement “for

railroad purposes and for such other purposes as the Railroad Company, its

successors and assigns, may from time to time or at any time desire to make use of

the same.” Pl.’s Mot. P. Summ. J., Ex. A (emphasis added). Such terms clearly

and unambiguously contemplate that the easement may be used for purposes

beyond the railroad purposes for which it was initially used. Further, as the

easement authorized the Railroad Company’s successors and assigns to use the

corridor for “such other purposes as [they] may . . . desire,” use of the corridor for

a public park would by the plain terms of the easement appear to be clearly within

the scope of the easement, absent evidence that the new easement is not lawful or

imposes some significant new burden on the servient estate. There is no question

here that the Highline is a lawful project.2 Plaintiff has not made any allegation to

support a finding that use of the corridor for the Highline will impose significant

new burdens on the servient estate. Moreover, having agreed to allow the

Railroad, its successors and assigns to use the corridor for any lawful purpose, it is

irrelevant that the parties at the time the easement was granted could not foresee

use of the corridor for a public trail and park. Regardless of whether the easement

2
In this connection, plaintiff’s contention that use of the property for a park would have
been illegal while the corridor was used for railroad purposes does not make use of the
easement for the Highline now illegal. Regardless of whether third parties walking on
rail tracks were potentially liable for criminal trespass under New York’s penal code
while the railroad was operating, now that the easement owner has converted the corridor
to a trail and public recreational use, the penal code does not apply and use of the
easement for walking is not illegal.
11

included numerous pages devoted to railroad-related issues, the easement grant

contemplated by its terms was not limited to railroad purposes and the court

cannot read that purpose into the easement. Rather, the easement by its terms

recognized that other uses might be “desired” and explicitly permitted such uses so

long as the uses fit within the physical specifications of the easement.

Unlike the cases cited by plaintiff to support its argument that the easement

is limited to railroad uses, the easement in this case includes no language limiting

the purpose of the use that may be made. For example, plaintiff refers the court to

Ledley v. D.J. & N.A. Management, Ltd., in which the court found that a “very

broad” easement was limited to “a right-of-way and [the ability] to pass and repass

over the defendant’s property.” 643 N.Y.S.2d 675, 676 (N.Y. App. Div. 1996).

However, the easement in that case did not include the open-ended grant that is at

issue in this case, but rather provided only the “right to pass and repass over the

right-of-way across the adjoining lands.” Id. After reviewing the New York cases

cited by the parties, the court finds that Missionary Society contains an easement

that is most analogous to the one at issue in this case. In that case, the court found

that “[t]he phrase ‘for all other lawful purposes’ compels an extension of

defendant’s right beyond the limits of ordinary passage by horses and vehicles of

all kinds.” 256 N.Y. at 90. More directly, the court found that, “[b]eing in general

terms, [the easement] must be construed to include any reasonable use to which

the land may be devoted.” Id. at 89-90 (citing Jones, Law of Easements § 374;

Abbott v. Butler, 59 N.H. 317 (1879)). In addition to finding that pedestrian

12

access was permitted, the court went on to find that the laying of water pipes was

permitted as well. Id. (citing Thompson v. Orange & Rockland Elec. Co., 254

N.Y. 366, 369 (1930). Compared to Missionary Society, the language of the

easement in this case is even broader. As a result, the court finds that use of the

easement for a public trail and recreation and for certain other associated activities

fits within the broad scope of the subject easement.

In this connection, the court disagrees with plaintiff that allowing use of the

easement for the Highline amounts to converting the subject easement into a fee

estate, contrary to New York law. The subject easement is limited by its express

terms to “those portions of the parcels of land herein described included between

an upper plane and a lower plane drawn at the respective elevations herein

provided for as to each such parcel,” which necessarily limit the scope of what can

be done with the easement. Pl.’s Mot. P. Summ. J., Ex. A. Thus, while the terms

of the easement are broad in terms of use, they are not limitless and the physical

bounds set in the easement ensure that the subject easement is not converted to a

fee estate.

Finally, the court disagrees with plaintiff that New York City’s decision to

obtain a new easement to explicitly incorporate the use of the corridor for the

Highline as public space does not mean that the subject easement was not broad

enough to encompass the Highline in the first instance. First, the court is not

bound by New York City’s actions or its reading of the easement. Second, as the

government argues, there are plausible reasons for New York City to acquire a

13

new easement beyond the original easement that do not imply that it believed the

easement to only permit railroad use. For example, it may have desired the

easement because it believed that property owners were likely to sue irrespective

of its interpretation of the original easement and wished to avoid such suits.

Finally, New York City’s decision to acquire new easements on top of the existing

easements is simply irrelevant in considering whether the original easement

encompasses use of plaintiff’s easement for the Highline. New York City

acquired the easement after plaintiff gave away his interest in the easement to

West 13th Street, LLC and therefore the New York City easement has no bearing

on this case.

In sum, the court finds that it is compelled by the plain language of the

easement to agree with the government and finds that the subject easement

encompasses use of the property for the Highline.

C. The Corridor Was Not Abandoned Prior to the STB’s Actions

Having determined that use of the easement for the Highline fits within the

scope of the easement, the court now turns to whether the corridor had been

abandoned by the railroad prior to the issuance of the CITU, in which case there

may still be a taking. In order to demonstrate abandonment under New York law,

a plaintiff must “establish both an intention to abandon and also some overt act or

failure to act which carries the implication that the owner neither claims nor

retains any interest in the easement.” Gerbig v. Zumpano, 7 N.Y.2d 327, 331

(N.Y. App. Div. 1960) (citing Loening v. Red Spring Land Co., 94 N.Y.S.2d 568

14

(1949)). It is not enough to demonstrate “mere nonuse.” Spier v. Horowitz, 791

N.Y.S.2d 156, 158 (N.Y. App. Div. 2005).

While there is no disagreement that the subject corridor was no longer

being used for railroad purposes, there is no indication that CSX or Conrail

intended to abandon its easement under New York law. As the easement is broad

enough to encompass any use desired by the grantee, the cessation of railroad

activities is not enough to demonstrate an intent to abandon. Instead, the burden is

on the plaintiff to show that the easement holder had intended to relinquish any

use of the easement. Here, as discussed above, CSX and Conrail both desired to

make use of the easement following the cessation of rail use. Both railroads

participated in negotiations regarding the creation of the Highline in support of the

project and CSX continues to claim that it holds an interest in the easement.

Def.’s Reply in Supp. Mot. Summ. J., Ex. 1 at 2-3, Joint Supplemental Statement

(detailing the status of Highline negotiations in 2004, involving the City, CSX,

Conrail, the property owners, and other parties). Further, prior to the conception

of the Highline, Conrail sought to make use of the easement for a highway and for

a waste disposal service and defended the easement against property owners

seeking permission for abandonment in front of the Interstate Commerce

Commission (“ICC”), a predecessor to the STB, from 1989 to 1994. See Consol.

Rail, 29 F.3d at 706; Chelsea Property Owners, 7 I.C.C.2d at 992.3 While none of

3
In that proceeding, the ICC found that abandonment was permitted subject to the
posting of a surety bond by the property owners. Chelsea Property Owners, 8 I.C.C.2d
15

Conrail’s plans for usage of the easement were successful, they nonetheless

demonstrate an intent to retain an interest in the easement and to find a potential

use, as permitted by the easement.

In support of its argument that the easement was abandoned, plaintiff relies

on several cases in which courts found abandonment at the cessation of railroad

use, Presault, 100 F.3d at 1554, and Rogers v. United States, 101 Fed. Cl. 287, 295

(2011). However, those cases differ from the present case in important ways, as

the findings of abandonment in both cases were based on elements that are not

present in this case. In Preseault, the court found that an easement for railroad

purposes was abandoned when the railroad tracks were removed. 100 F.3d at

1554. In this case, as discussed above, the subject easement authorized more than

railroad use, making the function of the railroad tracks irrelevant. In Rogers, the

court applied Florida law to find that the deed itself provided that the easement

would be abandoned when it was no longer used for railroad purposes. 101 Fed.

Cl. at 291, 295-96. In this case, no such language exists.

As plaintiff has not presented any evidence that the easement’s grantee

demonstrated an intent to abandon the easement accompanied by an overt act or

failure to act, the court must conclude that the easement was not abandoned.

Indeed, the record demonstrates the opposite, as both CSX and previous owners

have played an active role in plans and proceedings involving the corridor. As a

773, 794 (1992), aff’d, 29 F.3d 706, 715; see also West Chelsea, 109 Fed. Cl. at 9-10.
The ICC did not find that the corridor was abandoned, and the conditions required for
abandonment were never met.
16

result, in such circumstances under New York law, the easement did not terminate

prior to the actions of the STB.

III. CONCLUSION

For the foregoing reasons, plaintiff’s motion for partial summary judgment

is DENIED and the government’s motion for summary judgment is GRANTED

with respect to the issues of the scope of the easement and the abandonment of the

easement. The Clerk is directed to enter final judgment for the United States.4

IT IS SO ORDERED.

s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge

4
Having concluded that there was no taking, the court has no occasion to reach the
government’s alternative arguments.
17