Blog Ohio Real Estate Law / 07.18.2016

Watch Your Language: Maintain does not mean Relocate

By Stephen D. Richman

(Watch your Language [with easements] & Say What You Mean, Precisely or a Judge Will Tell You What You Meant #11)

Watch Your Language. As established in other “Watch Your Language” articles for this Blog, as a general rule, courts will uphold language in commercial agreements, unless it is contrary to statutory law or public policy. They traditionally presume that commercial parties are on more of an equal playing field and are more sophisticated concerning commercial real estate transactions, since both will usually have attorneys to review their documents. Because of this judicial deference to “commercial language”, you must say what you mean, precisely, or a judge will decide what you meant. This principle is just as true with regard to easements, as it is with contracts, leases and other commercial documents.

Easements in General. An “easement” is basically a right to use the property of another for a specific purpose. Most common are drive/access easements and utility easements. While there are limited exceptions, the vast majority of easements are created by separate written instruments (or are contained within deeds) and are recorded. Some easements are personal in nature and only apply while the burdened landowner owns the property, and others are “perpetual” and burden the land forever.

Easements will either spell out the specific rights to use the property granted to the easement “holder” (e.g. right to use the property to place above-ground or below ground electric lines), or be “blanket” in nature and not be limited as to use. Many easements will also contain 1) restrictions for the benefit of the easement holder which burden the land described as the “easement premises” (e.g., no buildings may be constructed upon the easement area); and  2) obligations imposed upon the easement holder for the benefit of the burdened landowner (e.g., requirements such as maintenance of the easement premises, and relocation of such premises or the facilities within the easement premises).

Because of the possibility of easements existing forever, and the potential for unintended consequences due to a court misinterpreting easement language, “don’t try this (easement review/analysis/negotiation) at home”, without legal counsel.

Easement rights, for example often do not go far enough. If you need to install a storm water drainage pipe on your neighbor’s property (assuming the neighbor consents) you need to insist upon much more than the right to install the piping. The easement should also include the right to construct, remove, reinstall, reconstruct, operate, enlarge, supplement, repair, inspect, maintain and relocate such storm water drainage pipes as well as the right to permit storm water to flow through such piping. Similarly, easement obligations are often drafted in general terms, with the parties assuming intent is clear. The relatively recent case of Aqua Ohio Inc. v. Allied Indus. Dev. Corp., 2014-Ohio-1473 (7th Dist. Ct. of App., Mahoning Cty.) helps to reinforce the need to be specific and leave as little as possible to “interpretive chance.”

Aqua Ohio Inc. v. Allied Indus. Dev. Corp.  In the “Aqua Ohio” case, Aqua had an easement right to lay and maintain an 18” waterline across land owned by Lake Erie & Eastern Railway Company (which land was later sold to Allied). The easement agreement specifically required the easement holder to lay the pipeline so as not to interfere with railroad tracks on the property and to maintain such pipeline.

A number of years later, the waterline began leaking and flooded portions of Allied’s property. The leaking was eventually remedied but Allied (presumably still concerned) took the position that the waterline interfered with its plans for the property and that the easement holder needed to and was required to relocate the waterline. While the procedural facts are a bit muddled, the court of appeals upheld the lower court’s judgment in favor of Aqua, based on what the courts claimed was the plain and ordinary meaning of the language used in the contract. The 7th District Court of Appeals held that Aqua was only prohibited from interfering with the tracks when it laid pipeline, because that is specifically what the contract called for. Allied alleged that per the contract, any time Allied determined that the waterline was interfering with the development of the property, the waterline would have to be removed and relocated. As clearly stated by the court, “Reading of the contract in the manner Allied suggests ignores the plain language of the contract and is illogical.

Also important to the court was that the plain language of the easement agreement was consistent, throughout. In the remedies section of the agreement, damages were only allowable if they resulted from the “improper maintenance, operation and/or use of the waterline.” There was no specific mention of “interference damages.”

Couldn’t Allied have taken the position that removal of the pipeline was part of Aqua’s duty to maintain? It is certainly possible that the original owner of the burdened property intended that to be the case. The court, however would have no part in writing presumed intent into the contract.  That is the opposite of what Ohio law (and most other jurisdictions) require of a court when interpreting commercial contracts. As aptly summarized by the court in Aqua, “When the language of a written contract is clear, a court may look no further than the writing itself to find the intent of the parties. In addition, we will look to the plain and ordinary meaning of the language used in the contract unless another meaning is clearly apparent from the contents of the agreementThe word ‘maintain’ is not defined by the agreement, therefore, we must use the ordinary meaning of the word. Maintain means, ‘To preserve or keep in a given existing condition, as of efficiency or good repair.’ Webster’s II New Riverside University Dictionary 717 (1984). This does not mean relocate or move. As such, we will not read such language into the contract.”

What is the moral of this story? As with all of our “Watch Your Language posts, it is the same moral, just a different story. Namely, regarding easements, leases, deeds and other commercial contracts, courts are not psychic mind readers; they are “literal translators”, so say what you mean, precisely, or a judge will decide what you meant.