United States District Court, N.D. Ohio, Western Division
MEMORANDUM OPINION AND ORDER
JEFFREY J. HELMICK UNITED STATES DISTRICT JUDGE.
perhaps is not an exaggeration to say the parties to this
litigation agree on only two things: (1) there are two
conveyer bridges connecting two warehouses, divided by a
railroad track, in Ottawa, Ohio; and (2) no one wants the
bridges to be there anymore. There is substantial
disagreement on nearly everything else, including the primary
questions presented by the parties' motions for summary
judgment which are currently before me - who owns the
bridges, who is responsible for removing them, and who, if
anyone, is responsible for compensating another party for any
damage which results from the presence, removal, or both, of
Distribution, LLC; Ottawa OH, LLC (“Ottawa”);
Philips Electronics North America Corporation
(“Philips”); Genessee & Wyoming, Inc.; and,
First American Title Insurance Company each have filed
motions for summary judgment on a variety of claims,
counter-claims, and cross-claims. (Doc. No. 250, 251, 252,
256, 257, and 258).
1970, Philips entered into an agreement with the
Detroit, Toledo and Ironton Railroad (the “Detroit
Railroad”). Under this agreement, the Detroit Railroad
granted Philips an easement to construct, use, and maintain a
conveyer bridge between two warehouses in Ottawa, Ohio, which
Philips owned (along with other buildings and additional,
adjoining real property) and which were separated by the
Detroit Railroad's railroad tracks (the “Easement
Agreement”). (Doc. No. 251-2 at 47-51). The conveyer
bridge was designed to transfer pallets of material between
the two warehouses. The Easement Agreement approved specific
plans for the construction of the conveyer bridge and
required Philips to make changes to the conveyer bridge if
necessitated by changes made to the railroad tracks. (Doc.
No. 251-2 at 47-51).
1986, Philips and the Grand Trunk Western Railroad Company,
which had replaced the Detroit Railroad as the entity in
control of the railroad tracks, entered into a license
agreement for the construction of a second conveyer bridge
between Philips' warehouses (the “License
Agreement”). (Doc. No. 251-2 at 43-46). The License
Agreement has an initial term of one year, and automatically
renews for additional one-year terms, unless the agreement is
terminated upon 60 days' written notice. (Doc. No. 251-2
at 43). That agreement also provides that, upon the
termination of the License Agreement, the Licensee is
“to remove all Licensee's material from the
premises of the [railroad] and to leave the same in a neat,
clean and level condition.” (Id.).
state of affairs continued without substantial change until
October 11, 2005, when Philips sold all of the real property
it owned at 700 N. Pratt Street in Ottawa, Ohio, along with
all personal property located on the premises, to DBI
Partners, LLC. DBI then split off a portion of this property,
which it sold to Pandora on January 24, 2006. This portion,
which DBI transferred to Pandora through a limited warranty
deed, is located to the east of the railroad tracks over
which the conveyer bridges pass (the “Pandora
Pandora also executed a document titled “Encroachment
Agreement.” (Doc. No. 251-7). The Encroachment
Agreement was recorded in the Putnam County, Ohio
Recorder's Office on the same day as the deed to the
Pandora Property, and states that DBI and Pandora
“agree that the two (2) existing conveyers shown on the
Topographic Survey [dated January 16, 2006 and prepared in
connection with the purchase and sale of the Pandora
Property] shall remain the sole property of DBI . . .
.” (Doc. No. 251-7 at 1). The Encroachment Agreement
also requires DBI to assume the cost of repairing and
maintaining the conveyer bridges, and to obtain Pandora's
prior written consent before removing them. (Id.).
Further, the Encroachment Agreement permitted Pandora to
demand DBI remove the conveyer bridges and repair any
resulting damage to the Pandora Property. (Id.).
DBI sold another portion of property to Ottawa. (Doc. No.
252-10). This portion, which DBI also transferred through a
limited warranty deed, is located to the west of the railroad
tracks over which the conveyer bridges pass (the
Borer, then an attorney and title agent based in Putnam
County, Ohio, assisted with first the Philips sale to DBI and
the later DBI sales to Pandora and Ottawa. For each
transaction, Borer issued title insurance commitments and
title insurance policies underwritten by First American.
after Ottawa and DBI completed the purchase and sale of the
Ottawa Property, Pandora requested that Ottawa repair the
conveyer bridges, asserting Ottawa had assumed DBI's
responsibility to do so under the Encroachment Agreement.
Ottawa refused, contending it had not purchased the conveyer
bridges and that it did not have any obligations under the
Encroachment Agreement because Ottawa was not a party to that
agreement. Pandora, Ottawa, DBI, and Borer attempted to
resolve the dispute over the conveyer bridges throughout
2007, but those discussions ultimately were unsuccessful. By
early 2008, DBI ceased participating in the discussions, and
further attempts by Pandora and Ottawa to informally resolve
the dispute also failed.
subsequently filed suit in November 2012, initiating a stream
of pleadings. Pandora initially named Ottawa and DBI as
defendants. (Doc. No. 1). Ottawa answered the complaint and
filed a counterclaim against Pandora, (Doc. No. 13), but DBI
failed to respond to the complaint and Pandora obtained a
default judgment against DBI. (Doc. No. 62). Pandora later
amended its complaint to add claims against Philips and
Genesee & Wyoming. (Doc. No. 25). Ottawa amended its
counterclaim against Pandora, added a crossclaim against DBI,
and filed a third-party complaint against First American,
Philips, and Genesee & Wyoming. (Doc. No. 26). Ottawa
later amended its third-party complaint and its crossclaim.
(Doc. No. 48).
asserted a crossclaim against Ottawa, DBI, and Genesee &
Wyoming, and a counterclaim against Pandora, (Doc. No. 56),
but subsequently dismissed those claims without prejudice.
(Doc. No. 64). Pandora then filed a second amended complaint,
(Doc. No. 65), Ottawa amended its third-party complaint
against First American, (Doc. No. 67), and First American
asserted a counterclaim against Ottawa. (Doc. No. 72).
later filed a third amended complaint, dropping its claims
against Genesee & Wyoming, after the railroad assigned
its claims to Pandora. (Doc. No. 131). Pandora then filed a
fourth amended complaint, (Doc. No. 205), and Ottawa further
amended its third-party complaint against First American.
(Doc. No. 212).
judgment is appropriate if the movant demonstrates there is
no genuine dispute of material fact and that the movant is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
All evidence must be viewed in the light most favorable to
the nonmovant, White v. Baxter Healthcare Corp., 533
F.3d 381, 390 (6th Cir. 2008), and all reasonable inferences
are drawn in the nonmovant's favor. Rose v. State
Farm Fire & Cas. Co., 766 F.3d 532, 535 (6th Cir.
2014). A factual dispute is genuine if a reasonable jury
could resolve the dispute and return a verdict in the
nonmovant's favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A disputed fact is
material only if its resolution might affect the outcome of
the case under the governing substantive law. Rogers v.
O'Donnell, 737 F.3d 1026, 1030 (6th Cir. 2013).
remaining party in this litigation has filed for summary
judgment. First American seeks summary judgment on the claims
asserted in Ottawa's third-party complaint as well as on
First American's counterclaim against Ottawa. (Doc. No.
250). Pandora seeks summary judgment on all claims in dispute
between itself and Ottawa. (Doc. No. 251). Genesee &
Wyoming also seeks summary judgment on Ottawa's claims
against it. (Doc. No. 252). Philips requests summary judgment
on all claims asserted against it by Pandora and Ottawa.
(Doc. No. 256). Ottawa seeks summary judgment on
Pandora's claims against it, (Doc. No. 257), and on its
claims against First American. (Doc. No. 258).
issue of who owns the conveyer bridges is the starting point
for analyzing any of the parties' claims, and the answer
to the ownership question begins with determining the proper
characterization of the conveyer bridges.
American law has long adhered to the “simple and
natural classification of property into the obvious and
universal distinction of things moveable and things
immovable, things tangible and things intangible, ”
Teaff v. Hewitt, 1 Ohio St. 511, 526 (1853), there
remain some items which do not fit neatly into one category
or the other and which in fact may move between the
categories. Property that once was moveable may be attached
to immoveable property in such a way that the law treats the
formerly-moveable property as immoveable. More specifically,
items of personal property, like metal and rubber, may be
converted into fixtures and then treated as real property.
property may be converted into a fixture if the following
criteria are met: “(1) [a]ctual annexation to the
realty or something appurtenant thereto; (2) appropriation to
the use or purpose of the realty with which it is connected;
and (3) the intention of the party making the annexation to
make the article a permanent accession to the
freehold.” Zangerle v. Standard Oil Co. of
Ohio, 60 N.E.2d 52, 56 (Ohio 1945).
first criterion, considered “the least important,
” requires a “very slight” physical
connection of the personal property and the real property.
Holland Furnace Co. v. Trumbull Savings & Loan
Co., 19 N.E.2d 273, 275 (Ohio 1939). The conveyer
bridges were secured to the warehouses on the Pandora
Property and the Ottawa Property and could not be easily
removed. Therefore, I conclude the conveyer bridges satisfy
the first factor of the fixture formulation. See, e.g.,
Masheter v. Boehm, 295 N.E.2d 917, 920 (Ohio Ct. App.
1973) (“Masheter I”) (noting
“[t]he chattel may be bolted or screwed in place . . .
.”) (rev'd on other grounds).
second criterion has received a relatively-lower amount of
attention from courts applying these factors, but generally
seeks to distinguish “between chattels primarily
devoted to the business conducted on the premises and
chattels devoted primarily to the realty itself.”
Masheter v. Boehm, 307 N.E.2d 533, 538 (Ohio 1974)
(“Masheter II”). The conveyer bridges
were not used merely for the idiosyncratic purposes of
Philip's business. Cf. Wheeling-Pittsburgh Steel
Corp. v. Bd. of Revision, 271 N.E.2d 861 (Ohio 1971)
(holding the caging system of an egg production facility was
personal property, not a fixture); Roseville Pottery,
Inc. v. Cnty. Bd. of Revision, 77 N.E.2d 608 (Ohio 1948)
(pottery kilns attached to concrete slabs were not fixtures).
Instead, they were installed for the general purpose of
connecting two buildings and offered benefits to subsequent
owners of the real property. See, e.g., Zangerle v.
Standard Oil, 60 N.E.2d at 54 (citing
“driveways” and “bridges” as an
example of property permanently attached to real property
which could benefit later owners even if those owners were
involved in a different business); Masheter II, 307
N.E.2d at 538 (“[A]rticles annexed to the premises so
as to become a part of it, even though of benefit to any and
all businesses which might be carried on there, take on the
legal characteristics of real property.”)
final criterion requires a court to determine whether the
article was intended to be permanently annexed to the real
property. “[I]t is not necessarily the real intention
of the owner of the chattel which governs. His apparent or
legal intention to make it a fixture is sufficient.”
Holland Furnace Co., 19 N.E.2d at 275. This
may be inferred from the nature of the article affixed, the
relation and situation of the party making the annexation,
the structure and mode of annexation, the purpose and use for
which the annexation is made, the utility in use or the
indispensability of the combination when the chattel is once
attached to the realty in the use of the whole, and the
relationship of the owner of the chattel to ...