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KAYFIRST CORP. v. WASHINGTON TERMINAL CO.

February 8, 1993

KAYFIRST CORPORATION, Plaintiff,
v.
WASHINGTON TERMINAL COMPANY, et al., Defendants.



The opinion of the court was delivered by: GEORGE H. REVERCOMB

MEMORANDUM OPINION AND ORDER

 This is an action for trespass, originally filed in the Superior Court for the District of Columbia and removed to this Court by defendant Washington Metropolitan Area Transit Authority ("WMATA"). Jurisdiction rests on the WMATA Compact, D.C. Code § 1-2440 (codifying Act of Nov. 6, 1966, Pub. L. No. 89-774, § 4, 80 Stat. 1324, 1353).

 The Court has before it the first of two rounds of summary judgment motions. *fn1" The motions in this first round are: 1) the Motion for Partial Summary Judgment of plaintiff KayFirst Corporation, Inc. ("KayFirst"), addressed to WMATA's liability for trespass as claimed in Count I of KayFirst's Second Amended Complaint; 2) WMATA's Motion for Summary Judgment against KayFirst, seeking dismissal of KayFirst's trespass claim against WMATA; and 3) the Motion for Summary Judgment of defendant Chicago Title Insurance Company ("Chicago Title") on KayFirst's breach of contract claim against Chicago Title contained in Count III of the Second Amended Complaint. *fn2" The only questions before the Court at this time, therefore, are those concerning the liability of WMATA and Chicago Title, respectively, to KayFirst. The potential liability of other parties, and the determination of damages (if any), await another day.

 The Court has carefully reviewed the motions papers and supporting exhibits filed by these three parties, and has heard from their counsel at oral argument. Additionally, the Court has examined an abstract of title on the properties in question, which WMATA compiled at the Court's request, as well as a response to that abstract from Chicago Title. On the basis of this review, the Court finds as follows.

 I. Background

 Resolution of the present round of motions turns on whether a subterranean foundation step footing to a retaining wall, constructed between 1905 and 1907, constitutes a trespass and a substantial encroachment on KayFirst's land. The invaded property is a triangular parcel of land north of Union Station in the District of Columbia, acquired by KayFirst in 1988 and to which it holds title. This piece of land is described in its deed as Parcel 4. Parcel 4 is adjacent to another parcel of land owned by defendant WMATA, which it acquired in 1973 during construction of the Metro Rail Red Line (the Red Line tracks pass over this second parcel today). The parcel of property to which WMATA now holds title is described in its deed as Parcel 14.

 On the boundary between Parcels 4 and 14, although standing on the WMATA-owned property, is a retaining wall which helps support the elevated Red Line tracks. On a horizontal plane, beginning 4 feet below the surface of the ground and extending to a depth of 13 feet, is a step footing to this retaining wall that extends some 7 feet into KayFirst's property. The retaining wall was built at some time between August 1903 and October 1907 along the eastern border of what became Parcel 14 at the direction of the Baltimore and Ohio Railroad Company ("B&O") for the Washington Terminal Company ("WTC") during the construction of Union Station and its elevated rail yard. See Rumpf Aff. P 6; WMATA's Mem. in Supp. of Mot. for Summ. J. at 4.

 Through a complicated series of deed transfers in the early 1900s, the real estate that came to comprise Parcels 4 and 14 was assembled by the Real Estate and Improvement Company of Baltimore City ("RE&I"), at the time a wholly-owned subsidiary of the B&O, *fn3" and WTC, with the boundary between the two parcels dividing along the face of the retaining wall. As a consequence of these conveyances, WTC came to hold title to property containing Parcel 14 by five deeds, each from a different grantor, dated and recorded between May, 1903, and January, 1905. WTC continued to hold title to this property until 1973, when it conveyed Parcel 14 to WMATA in fee simple by special warranty deed dated May 7, 1973, and recorded June 5, 1975. WMATA was at the time engaged in acquiring property on which to construct the Red Line for the Metro Rail system. There is no dispute at this juncture that WMATA presently holds title to Parcel 14.

 As for Parcel 4, part of this property was conveyed to RE&I by three deeds, dated, respectively, May 15, 1902, October 10, 1902, and May 15, 1902, from one George E. Fleming, et ux., all of which were recorded in November, 1902. The balance of what became Parcel 4 was conveyed to RE&I from WTC by deed dated February 1, 1904, and recorded January 11, 1905. KayFirst acquired title to Parcel 4 from RE&I and Mt. Clare Properties, Inc. ("Mt. Clare") by deed dated October 26, 1988, and recorded the next day. *fn4" KayFirst contends -- and it is undisputed -- that it purchased Parcel 4 for commercial development purposes, including the construction of office and retail space and underground parking facilities, and that the footing precludes the construction of this project as planned. See Pl.'s Mem. in Supp. of Mot. for Summ. J. at 2.

 II. Analysis

 A. The KayFirst and WMATA Motions

 The Court discerns no material facts in dispute among the parties. Rather, the disputes are ones of law or have to do with the legal consequences to be derived from undisputed facts, thereby making summary judgment appropriate. See Anderson v. Liberty Lobby, 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1976) ("Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment").

 KayFirst maintains that, at the time it acquired Parcel 4, it was unaware of the existence of the footing, which was only revealed during the course of test excavations on the site in January 1989. See Pl.'s Mem. in Supp. of Mot. for Summ. J. at 2. Prior to that time, KayFirst claims it had no actual or constructive notice of the footing and that no facts and circumstances existed which would give rise to a duty to inquire. See Clay Properties, Inc. v. Washington Post Co., 604 A.2d 890, 897 (D.C. 1992). KayFirst further claims that the encroachment precludes the construction project it had planned for the site. It concludes that the encroachment is a trespass, which D.C. law recognizes as "'an invasion of the interest in the exclusive possession of land,'" Carrigan v. Purkhiser, 466 A.2d 1243, 1243 (D.C. 1983) (quoting Restatement (Second) of Torts § 821D, comment d); W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 13, at 77, 82-83 (5th ed. 1984), for which WMATA, as the owner of the adjacent property containing the retaining wall to which the step footing is attached, is liable.

 As KayFirst recognizes, the encroachment is not actionable as a trespass if WMATA possesses an enforceable easement right to maintain the step footing on the KayFirst property. This argument forms the basis of WMATA's summary judgment motion. WMATA argues, with reference to the step footing, that it has easement rights over Parcel 4 on three, alternative theories: 1) that its deed to Parcel 14, recorded in 1975, included "easements and appurtenances" language in the deed habendum which constituted an express grant of an appurtenant easement in Parcel 4 for the Parcel 14 retaining wall, of which KayFirst had record notice; 2) that an easement by necessity was created for the step footing either at the time the retaining wall was built or at the time Parcel 14 was conveyed to WMATA in 1973; or 3) that an easement by prescription arose by adverse possession in WTC as against RE&I fifteen years after the construction of the step footing in 1907. Additionally, WMATA argues that KayFirst's action is time-barred under the case of L'Enfant Plaza East, Inc. v. McShain, 359 A.2d 5 (D.C. 1976).

 Moreover, the Court discerns no basis for holding KayFirst to notice of the step footing. WMATA argues that KayFirst must be held to record notice of the deeds in Parcel 14's chain of title because, by two trust agreements in 1906 and a third in 1942, the beneficial ownership of Parcel 4 was conveyed to WTC and others. See WMATA's Mem. in Supp. of Mot. for Summ. J. at 20. Pursuant to these trust agreements, WMATA argues, RE&I held no more than bare legal title to Parcel 4, while WMATA's grantor WTC held "full dominion and control" of that piece of property as well as full title to Parcel 14. Id. at 22. It is undisputed, however, that none of these trust agreements were recorded, see Newman Aff. PP 6-7, and that, therefore, they are not effective against KayFirst if KayFirst is a subsequent bona fide purchaser without notice of outstanding claims of third parties. See D.C. Code § 45-801. KayFirst can be held to inquiry notice "of all facts and outstanding interests which a reasonable inquiry would have revealed." Clay Properties, 604 A.2d at 895. There is no dispute that the step footing is not visible on the site and that it was not disclosed to KayFirst prior to settlement despite its efforts to ascertain the state of the title and the condition of the property. These efforts included a survey, obtaining affidavits from its grantors in addition to a title report, and undertaking an environmental engineering study to determine the extent of possible contamination on the site. The Court does not believe that WMATA's evidence, including the two ...


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