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CSX Transportation, Inc. v. Baltimore and Annapolis Railroad Co.

United States District Court, D. South Carolina, Florence Division

May 24, 2017

CSX Transportation, Inc., Plaintiff,
v.
The Baltimore and Annapolis Railroad Company d/b/a Carolina Southern Railroad Company d/b/a Waccamaw Coast Line Railroad Company, Defendant.

          ORDER

          R. Bryan Harwell United States District Judge

         This matter is before the Court on a motion for summary judgment [ECF No. 64] filed by Defendant, The Baltimore and Annapolis Railroad Company d/b/a Carolina Southern Railroad Company d/b/a Waccamaw Coast Line Railroad Company (hereinafter “B&A”), on September 29, 2016. For the reasons stated below, B&A's motion for summary judgment granted in part and denied in part.[1]

         Factual Background

         In this case, Plaintiff CSX Transportation, Inc. (“CSX”) seeks reimbursement from Defendant B&A for the cost of replacing the Mullins Railroad Crossing. CSX contends that B&A is responsible for the cost of replacing the Mullins Crossing pursuant to a March 27, 1987 agreement originally made between CSX and Duval Transportation of the Carolinas, Inc. Alternatively, CSX contends that B&A is responsible for the cost of replacing the Mullins Crossing based on unjust enrichment and S.C. Code Ann. § 58-17-2620.

         By way of background, B&A, d/b/a Carolina Southern Railroad Co., purchased the Conway-Mullins rail line from Mid-Atlantic Railroad in or about 1995. Mid-Atlantic Railroad was the successor to Duval Transportation of the Carolinas, Inc., (“Duval Transportation”). The Conway-Mullins line spans approximately 100 miles and runs east to west from Chadbourn, North Carolina to Mullins, South Carolina. In Chadbourn, the rail line then travels south to Conway, South Carolina before ending in Myrtle Beach. B&A's track crosses CSX's mainline track at the Mullins Crossing. The Mullins Crossing is the only access point for B&A railcars to access the national rail system or the portion of B&A's track that is located west of the crossing. Interchange tracks are used at the Mullins Crossing so that B&A can interchange rail cars with CSX and access the national rail system.

         CSX alleges that at the time of B&A's purchase of the Conway-Mullins line, CSX and Duval Transportation were operating under (1) an Interchange Agreement [ECF No. 77-4]; and (2) a Crossing Agreement [ECF No. 77-3] that covers maintenance and replacement of a crossing. The Interchange agreement provided terms for the interchange of rail cars between CSX and Duval Transportation (the “Interchange Agreement”). The Crossing Agreement provided Duval Transportation with the right to access and cross the Mullins Crossing in order to access tracks located west of the crossing (including the interchange tracks) and to interchange rail cars with CSX (the “Crossing Agreement”). CSX has attached a copy of these agreements to its response to B&A's motion for summary judgment.

         When B&A purchased the Conway-Mullins line, the original agreements (Interchange and Crossing Agreements) between CSX and Duval were amended to replace Duval Transportation with B&A. See [Letter Agreements, ECF No. 77-5]. Initially, the letter agreements that substituted B&A for Duval Transportation were only temporary extensions of the original Interchange and Crossing Agreements and were intended to remain in effect only until the parties could draft new agreements. The temporary extensions of the Interchange and Crossing Agreements were set to expire on May 8, 1995, which was 90 days after B&A's acquisition of the Conway-Mullins line. [April 10, 1995 Letter Agreement, ECF No. 77-5, at 9]. A letter agreement dated April 10, 1995, extended the Interchange and Crossing Agreements until November 8, 1995, so that replacement agreements could be drafted. Id. A subsequent letter agreement dated November 17, 1995, extended the Interchange and Crossing Agreements until May 8, 1996. See [ECF No. 77-5, at 11]. However, CSX alleges the Crossing and Interchange Agreements were intended to remain in operation until such time as the parties could come to terms on new agreements, which never happened. Because no new agreements were ever reached between CSX and B&A, CSX alleges the parties continued to operate under the terms of the original Interchange and Crossing Agreement. CSX contends that B&A understood that CSX was under the belief that the Crossing Agreement was in effect and that CSX had only intended to provide B&A with access to the Mullins Crossing pursuant to the terms of that agreement.

         Because rail tracks are subject to wear and tear from rail traffic, they need to be periodically inspected and repaired to conform to Federal Railroad Association (“FRA”) guidelines. If tracks deteriorate to a point where they cannot be repaired, they must be replaced.

         B&A states in its brief that it ceased operations in 2011 due to an embargo by the FRA. However, Jason Pippen, General Manager with B&A, testified that B&A continued to service some customers through 2014. [Pippen Dep., ECF No. 77-1, at 13]. CSX states that B&A had mostly ceased operations by 2014 due to its failure to properly maintain the Mullins-Conway line within the guidelines mandated by the FRA.

         In 2014, CSX, through its engineering department, determined that the Mullins Crossing needed to be either replaced or removed due to its deteriorated condition in order to conform to FRA guidelines. The cost to CSX to remove or “straight-line” the crossing was estimated at $25, 000.00. [Brubeck Dep., ECF No. 77-7, at 39-40]. Before removing the crossing, CSX approached B&A in order to allow B&A to decide whether the crossing should be removed or replaced. Id. at 37-38; Kellerman Dep., ECF No. 77-2, at 12-13. B&A did not agree to allow CSX to remove the Mullins Crossing. Kellerman Dep. 12-13. Leonard Kellerman, who worked as the short line liaison for CSX, testified that B&A communicated to him that they did not want the Mullins Crossing removed because removal would diminish the value of the Mullins-Conway line, which B&A was trying to sell. Kellerman Dep. 14-15. CSX then replaced the crossing at a cost of approximately $160, 000 and invoiced the replacement costs to B&A pursuant to the Crossing Agreement, which remains unpaid.

         Summary Judgment Standard

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) (2010). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . .; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1).

         When no genuine issue of any material fact exists, summary judgment is appropriate. See Shealy v. Winston, 929 F.2d 1009, 1011 (4th Cir. 1991). The facts and inferences to be drawn from the evidence must be viewed in the light most favorable to the non-moving party. Id. However, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         "Once the moving party has met [its] burden, the nonmoving party must come forward with some evidence beyond the mere allegations contained in the pleadings to show that there is a genuine issue for trial." Baber v. Hospital Corp. of Am., 977 F.2d 872, 874-75 (4th Cir. 1992). The nonmoving party may not rely on beliefs, conjecture, unsupported speculation, or conclusory allegations to defeat a motion for summary judgment. See Baber, 977 F.2d at 875. Rather, the nonmoving party is required to submit evidence of specific facts by way of affidavits, depositions, interrogatories, ...


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