INDUSTRIAL PROPERTIES CORPORATION, Appellant v. THE CITY OF DALLAS, TEXAS and THE CITY OF FORT WORTH, TEXAS, Appellee s

REVERSE and REMAND and Opinion filed on November 10, 1989
 
 
S
In The
Court of Appeals
Fifth District of Texas at Dallas
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No. 05-88-01143-CV
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INDUSTRIAL PROPERTIES CORPORATION, Appellant
V.
THE CITY OF DALLAS, TEXAS and THE CITY OF FORT WORTH, TEXAS, Appellee
s
 
 
.................................................................
On Appeal from 95th Civil District Court
Dallas County, Texas
Trial Court Cause No. 85-10161-D
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O P I N I O N
Before Justices Howell, Rowe and Kinkeade
Opinion By Justice Kinkeade
        Industrial Properties Corporation appeals the denial of its motion for summary judgment and the granting of a summary judgment to the cities of Dallas and Fort Worth in this trespass to try title action. IPC argues that the trial court erred in denying IPC's motion for summary judgment because, as a matter of law, IPC established the essential elements of a trespass to try title action. IPC further argues that the trial court erred in granting the cities' motion for summary judgment because, as a matter of law, the cities failed to negate the essential elements of IPC's trespass to try title action. Because genuine issues of fact remain regarding whether the cities used the railroad rights-of-way as designated in the granting deeds' reverter clause, we reverse and remand.
FACTS
        In 1928, several owners of the land reclaimed by the Trinity River levee project joined together to form a unified industrial development. These owners donated their acreage to newly-formed IPC in exchange for a pro rata share of the stock in the company.
        From the beginning, IPC designed the Trinity Industrial District as a master planned industrial district. In 1946, pursuant to the master plan, IPC granted Rock Island Railroad the rights-of-way for specified lead and industry tracks. Each deed conveying these rights-of-way contained the following reverter clause:
            This conveyance is given for the purpose of the Grantee constructing lead and industry railroad tracks, on the properties hereinabove described, to service certain properties located in the Trinity Industrial District. Should the Grantee, its successors or assigns fail to use such properties for such purposes or should the Grantee, its successors or assigns abandon the use of said properties for such purposes, then this deed shall be null and void and of no force or effect and title to the properties hereinabove described shall ipso facto revert to and be vested in the Grantor, its successors or assigns.
        As the district grew and developed, Rock Island constructed a network of lead and industry tracks and provided service to the district's businesses. In 1979, however, Rock Island filed bankruptcy and ceased all operations within the district. In 1982, Rock Island's bankruptcy trustee granted an operating easement on all of Rock Island's trackage in and between the cities to the Missouri-Kansas-Texas Railroad. MKT never provided service to the district along the rights-of-ways deeded to Rock Island by IPC. In 1984, Rock Island's bankruptcy trustee deeded all of Rock Island's Dallas/Fort Worth system to the cities for future mass transit purposes. Subsequently, the cities executed a long term lease in favor of MKT, which allowed them the right to continue freight service throughout the system.
        IPC continues to represent the original owners and remains the caretaker of the district. IPC received no notice from the bankruptcy court, Rock Island, or the cities of the purported sale of the rights-of-way to the cities. IPC first learned of the sale when a City of Dallas representative sought, as the successor to Rock Island's interest, the consent of IPC's president to the transfer of a portion of the rights-of-way from Rock Island's bankruptcy trustee to the cities. The cities requested IPC's consent because of the cities inability to obtain title insurance that, in effect certified that the reverter clauses did not place a burden upon the cities' title to the rights-of-way. IPC refused to consent to the transfer and brought this action under the reverter clause of the original deeds.
SUMMARY JUDGMENT
        Summary judgment may be rendered only if the pleadings, depositions, admissions, and affidavits show (1) that there is no genuine issue as to any material fact and (2) that the moving party is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a. On appeal the court determines whether the summary judgment proof establishes as a matter of law that no genuine issue of fact remains as to an essential element of IPC's trespass to try title action. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex. 1970). A summary judgment seeks to eliminate patently unmeritorious claims and untenable defenses, not to deny a party his right to a full hearing on the merits of any real issue of fact. Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952).
        Under rule 166a, both plaintiff and defendant may simultaneously move for summary judgment. When both parties move for summary judgment, each party must carry its own burden, and neither can prevail because of the failure of the other to discharge its burden. Federal Deposit Ins. Corp. v. Attayi, 745 S.W.2d 939, 948 (Tex. App.--Houston [1st Dist.] 1988, no writ). To prevail on a summary judgment, a plaintiff as movant must conclusively prove all of the elements of the cause of action as a matter of law. Traylor v. Unitedbank Orange, 675 S.W.2d 802, 804 (Tex. App.--Beaumont 1984, writ ref'd n.r.e.); Tex. R. Civ. P. 166a. On the other hand, a defendant movant must either (1) disprove at least one element of plaintiff's theory of recovery or (2) plead and conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff's cause of action. Traylor v. Unitedbank Orange, 675 S.W.2d at 804.
Trespass to Try Title Action
        To recover in a trespass to try title action, the plaintiff must establish the superiority of his title. The plaintiff may establish this by proving (1) a regular chain of conveyances from the sovereign, (2) a superior title out of a common source, (3) title by limitations, or (4) prior unabandoned possession. Land v. Turner, 377 S.W.2d 181, 183 (Tex. 1964). To establish its superior title, IPC asserts that the cities triggered the granting deeds' reverter clause by failing to use or by abandoning the use of the rights-or-way. Accordingly, IPC contends the rights-of-way reverted back to IPC's possession.
 
IPC's - Motion for Summary Judgment
        To prevail on its motion for summary judgment, IPC must establish as a matter of law that the cities failed to use or abandoned the use of the rights-of-way. Additionally, by moving for summary judgment, IPC assumes the burden of proving that no genuine issue of fact remains regarding its superior title and its entitlement to the judgment prayed for as a matter of law. Risinger v. Fidelity and Deposit Co. of Maryland, 437 S.W.2d 294, 296 (Tex. App.--Dallas 1969, no writ). IPC's summary judgment evidence included affidavits, depositions, and the contracts and deeds entered into between IPC and Rock Island.
        In determining the correctness of a court's ruling on a motion for summary judgment, the reviewing court must accept as true the non-movant's version of the facts and the court must make every reasonable inference in the non-movant's favor. Gulbenkian v. Penn, 252 S.W.2d at 931. IPC contends that the deeds' reverter clause clearly imposes both a construction requirement and a use requirement. Specifically, the clause required Rock Island to construct lead and industry track and to service certain properties located in the Trinity Industrial District. IPC asserts that by not running a single rail car on the rights-of-way for six years, Rock Island and its successors failed to use the rights-of-way for rail purposes. Further, IPC asserts that Rock Island and its successors abandoned the use of the rights-of-way. Currently impassable in some locations, the trackage serves as a spare parts yard for MKT and consists of loose, uneven rails and rotting ties. Additionally, the City of Dallas has paved over the rails at five locations where they cross city streets, making all the tracks beyond the crossings inaccessible to trains. Furthermore, IPC contends that the cities and their lessee, MKT, evidenced their abandonment by never attempting to use the rights-of-way and by not having a present plan to provide rail freight service to the district.
        After reviewing all of IPC's summary judgment proof, we conclude that the deeds' reverter clause imposes both a construction requirement and a use requirement. We are unable, however, to determine as a matter of law that the cities and their predecessors failed to use or that they abandoned the use of the rights-of-way as required by the granting deeds' reverter clause. IPC failed to show that no genuine issue of fact remained regarding its superior title; accordingly, the trial court correctly denied IPC's motion for summary judgment.
The Cities' Motion for Summary Judgment
        To prevail on their motion for summary judgment, the cities must establish their superior title by disproving at least one element of IPC's trespass to try title action. Traylor v. Unitedbank Orange, 675 S.W.2d at 804. The cities contend that IPC needed to raise its claim to the rights-of-way in the bankruptcy court prior to the closing of the sale of the property to the cities. Accordingly, the cities urge that IPC's remedy, if any, must be pursued against the proceeds of the sale rather than against the property to which the cities now claim title. IPC received no notice from the court or any of the interested parties regarding the sale of the property to the cities. Since IPC received no opportunity to bring its reversionary interest before the bankruptcy court, that court lacked jurisdiction to dispose of this interest. Calloway v. Benton, 336 U.S. 132, 142-143 (1948).
        The cities also contend that the reverter clauses died by their own terms twenty-five years after the deeds were signed. The cities base this contention on language contained in each of the deeds conveying the rights-of-way from IPC to Rock Island. The twenty-five year restriction relied on by the cities refers only to the three covenants immediately proceeding the restriction. These three covenants deal with the ability of IPC to regulate construction requirements of buildings and outside walls; use of the premises if that use constitutes a nuisance; and the frontage requirements for loading docks for a period of twenty-five years unless otherwise renewed. After reviewing the pertinent language in the context of the entire deed, we conclude that the reverter clause remains unaffected by the twenty-five year restriction cited by the cities.
        Further, the cities contend that the deeds' reverter clause unambiguously imposed only a construction requirement, not a use requirement. Therefore, the cities assert that since Rock Island constructed the required tracks, the deeds' reverter clause remains untriggered. The pertinent language in the clause provides:
            This conveyance is given for the purpose of the Grantee constructing lead and industry tracks, on the properties hereinabove describe, to service certain properties located in the Trinity Industrial District.
After analyzing the construction of this passage, the Court finds that the deeds' reverter clause imposed both a construction requirement and a service or use requirement upon Rock Island and its successors.
        Finally, the cities urge that if the court construes the deeds' reverter clause to impose both a construction requirement and a use requirement, the court should then interpret the clauses' restrictions against IPC, the grantor. See Link v. Texas Pharmacal Co., 276 S.W.2d 903, 906 (Tex. App.--San Antonio, no writ). The cities contend that although a period of nonuse has occurred, this fact alone insufficiently establishes abandonment. In Texas the facts must affirmatively establish an intent to abandon. Strauch v. Coastal States Crude Gathering Co., 424 S.W.2d 677, 683 (Tex. App.--Corpus Christi 1968, writ denied). The cities state that a party must rely on a combination of circumstances to prove intent to abandon and that IPC relies solely on nonuse of the tracks over the last several years and the resulting deterioration of the tracks. Further, the cities contend that the paving over of the tracks does not make their prescribed use impossible and that the continued presence of some tracks evidences an intention not to abandon. Finally, the cities argue that even though they have made no express plans to use the rights-of-way for mass transit and freight operations, they have also made no plans to the contrary.
        After reviewing all of the summary judgment proof, we determine that genuine issues of fact remain regarding whether the cities' actions triggered the deeds' reverter clause. Because the cities failed to establish as a matter of law that they used the rights-of-way as contemplated by the deeds' reverter clause, they are not entitled to summary judgment. Because IPC failed to establish as a matter of law that the cities did not use the rights-of-way as comtemplated by the deed's reverter clause, IPC is not entitled to summary judgment. Accordingly, we reverse and remand for further proceedings.
 
 
 
 
                                                          
                                                          Ed Kinkeade
                                                          Justice
 
 
 
DO NOT PUBLISH
TEX. R. APP. P. 90.
 
881143OF.U05
 
 
File Date[11-15-89]
File Name[881143OF]