Justia Landlord - Tenant Opinion SummariesArticles Posted in US Court of Appeals for the Tenth Circuit
LKL Associates, et al. v. Union Pacific Railroad Co.
The Union Pacific Railroad charged Heber Rentals, LC (“Heber”) and L.K.L. Associates, Inc. (“L.K.L.”) rent under a lease that allowed L.K.L. to continue operating a building materials supply business on land that was owned in fee by Heber—and leased to L.K.L.—but encumbered by Union Pacific’s right of way. After the Supreme Court stated in 2014 that railroad rights of way like Union Pacific’s were “nonpossessory” easements, L.K.L. and Heber stopped paying rent and filed suit against Union Pacific. In addition to requesting declaratory relief, L.K.L. and Heber sought to have their leases rescinded and to receive restitution for rent already paid. Union Pacific brought counterclaims arising out of their nonpayment. On summary judgment, the district court held that Union Pacific’s easement, while nonpossessory, gave it exclusive use and possession rights “insofar as Union Pacific elected to use the land subject to its easement for a railroad purpose.” Although it found that the lease agreements served no railroad purpose, it denied the rescission claim as “untimely and redundant.” In a follow-up order, it ruled that L.K.L. and Heber had abandoned their remaining claims. The district court also rejected all of Union Pacific’s counterclaims. The Tenth Circuit agreed with Union Pacific that its right of way included the unqualified right to exclude L.K.L. and Heber, but the Court agreed with L.K.L. and Heber that their leases were invalid. “Even if the incidental use doctrine applies, neither the leases nor the underlying business conduct furthered a railroad purpose, as the easement requires.” The Court: reversed the district court’s declaratory judgment rulings to the extent they are inconsistent with the Court’s opinion; affirmed the district court’s ruling that the rescission claim was time-barred; affirmed the district court’s rejection of Union Pacific’s counterclaim for breach of contract; reversed its rejection of Union Pacific’s other substantive counterclaims; and reversed the district court’s finding of abandonment. The matter was remanded for further proceedings. View "LKL Associates, et al. v. Union Pacific Railroad Co." on Justia Law
United States v. Turley
Richard Turley appealed the grant of summary judgment in favor of the United States, acting on behalf of the United States Postal Service, awarding specific performance of an option to purchase real estate from Turley. The purchase option was contained in a lease of the premises that the Postal Service had renewed on several occasions. Turley argued on appeal: (1) the lease had expired when the Postal Service attempted to exercise the purchase option because he had not received notice that the government was exercising its final option to renew the lease; (2) even if the lease was renewed, the Postal Service did not properly exercise the purchase option because it continued to negotiate for a new lease after it purported to exercise the option; and (3) equity precluded enforcement of the purchase option because the Postal Service attempted to use the purchase option as leverage to negotiate a better lease agreement. The Tenth Circuit was not persuaded. The Court found the lease-renewal option was properly exercised when the notice was delivered to the proper address, even though Turley refused to retrieve it. And Turley has presented no legal or equitable doctrine that would forbid a party who exercises (and is bound by) an option to purchase from pursuing an alternative arrangement. View "United States v. Turley" on Justia Law