November 2011 Vol. 4, No. 10




Hochstetler Living Trust v Friends of the Pumpkinvine Nature Trail, Inc, 947 NE 2d 928 (Ind Ct App, 2011).

Facts:Friends of the Pumpkinvine Nature Trail, Inc. (Nature Trail) is a not-for-profit corporation in Indiana dedicated to creating nature trails along a former railroad line called the Pumpkinvine that ran from Goshen to Shipshewanna. The part of the Pumpkinvine at issue in this case is an 80-foot wide tract (the disputed tract) adjacent to the northern border of a farm owned by Hochstetler Living Trust (the Trust). The railroad line was established in 1899 and, after a series of conveyances over the years, was eventually transferred to the Penn Central Corporation, which removed the tracks in 1981. In 1993, Nature Trail purchased 17 miles of the Pumpkinvine, including the disputed tract, from Penn Central for $100,000.

At the time of the sale, Penn Central was the defendant in a class action lawsuit which sought to determine the ownership of the abandoned rail lines. The Trust was a member of the class suing Penn Central. The class action was settled in 2001 and the parties agreed that Penn Central owned only an easement in the disputed tract and did not own it in fee simple. In 2008, Nature Trail brought suit against the Trust seeking to quiet title. Nature Trail argued that it had acquired the disputed tract from Penn Central by the 1993 sale. The Trust argued that the class action settlement had established that the Trust owned the disputed tract in fee simple. The trial court found in favor of Nature Trail and the Trust appealed.

Holding:Affirmed. The first issue that the court of appeals discussed was whether Penn Central had an easement or owned the property in fee simple. The court looked at the 1899 deed that originally conveyed the land for use as a railroad line. If the original deed conveyed an easement, then that easement was extinguished when Penn Central abandoned the line, and the entire land would now be owned by the successors of the original landowner, the Trust. If the original conveyance was in fee simple, then Penn Central continued to own the land after abandoning it, and it was successfully sold to Nature Trail. The trial court found that the original conveyance had been in fee simple and thus Nature Trail was now the owner of the disputed tract. Ultimately, the court of appeals agreed with the findings of the trial court and held that Nature Trail did own the land in fee simple. The court concluded that the original deed conveyed a "strip of land" and did not say anything about any specific use that would limit the conveyance to an easement.

However, the Trust also argued that the court should not have considered Nature Trail's argument because the matter had already been settled in the settlement agreement and Nature Trail was precluded from raising the same claim again. The court dismissed this argument because the settlement agreement specifically contained a clause that excluded title disputes like the one between the Trust and Nature Trail from the scope of the agreement. The clause stated that title disputes occurring over "conveyances of portions of the Settlement Corridors prior to the entry of this judgment" were not within the scope of the settlement agreement and had to be resolved separately. The court of appeals held that "the current title dispute clearly falls within the scope of this exclusionary clause."

Therefore, because Nature Trail was not precluded from bringing the current action to quiet title, and because the court found that Nature Trail did hold a fee simple interest in the disputed tract, the judgment of the trial court was affirmed.

© ATG|Casenotes/Bulletin 1111_v4n10

[Last update: 11-18-11]