Date: 02-11-2015

Case Style: Gordon J. Zielinski v. State of Oregon

Case Number: 269 Or App 143

Judge: Garrett

Court: Oregon Court of Appeals on appeal from the Circuit Court, Marion County

Plaintiff's Attorney: Jonathan M. Radmacher argued the cause for respondents.
With him on the brief were Katie Jo Johnson and
McEwen Gisvold LLP.

Defendant's Attorney: Patrick M. Ebbett, Senior Assistant Attorney General,
argued the cause for appellant. With him on the brief were
Ellen F. Rosenblum, Attorney General, and Anna M. Joyce,
Solicitor General.

Description: In this declaratory judgment action, plaintiffs seek
to compel the state to construct a railroad crossing on their
property according to the terms of a 1906 deed. The trial
court granted plaintiffs’ motion for summary judgment.
Because we agree with the state that plaintiffs’ claim is
untimely, we reverse and remand.
This case concerns a parcel of real property located
in Marion County. In 1906, the owner, Egan, conveyed to
the Oregon Electric Railway Company a 50-foot wide strip of
the land (the “right-of-way”) in exchange for $200. The deed
contained the following provision:
“The railroad company agrees to erect and maintain a lawful
fence on both sides of the right of way also to construct
and maintain one crossing when wanted by the grantor
and it is further agreed that said railroad will be operated
by overhead electric power only[.]”
It is undisputed that a crossing and fence at some
point were constructed, as contemplated by the deed. It is
also undisputed that, by the 1960s, both the fence and the
crossing were in a state of complete neglect and disrepair,
and that, by 2000, they had ceased to exist altogether.
The state acquired the right-of-way in 1998.
Plaintiffs acquired the Egan property in 2008. In 2009, plaintiffs
contacted the Oregon Department of Transportation
(ODOT) and demanded construction of a crossing and fence
pursuant to the 1906 deed. After ODOT refused, plaintiffs
brought this action seeking a declaration that the state is
obligated to reconstruct and maintain a crossing and fence.
Both parties moved for summary judgment. In a letter ruling,
the trial court granted plaintiffs’ motion:
“It is agreed by the parties that a fence was built and a
crossing constructed. It is further agreed that prior to the
1960s both the fence and the crossing were neglected and
came into complete disrepair. Nobody seemed to know how
or why this happened or if this was done with or without
everybody’s agreement.
“The defendant suggests that its predecessor breached
the agreement and the statute of limitations would have
run and this would affect the doctrine of laches. At this
Cite as 269 Or App 143 (2015) 145
point the court has no evidence that the defendant predecessor
breached the agreement. For all we know the plaintiffs’
[predecessor] abandon[ed] the crossing or agreed with
defendant’s predecessor that it was not needed at that time
but may be needed in the future. There are a myriad of
reasons for the crossing[’]s non usage.
“In this court’s opinion laches does not apply mainly
because the result[ ] does not disadvantage or prejudice the
defendant.
“The plain language of the deed is to ‘construct and
maintain one crossing when wanted.’ This wording does
not suggest any time limitation therefore the court shall
order a fence and crossing be built as the plaintiffs want at
the present time.
“I will grant summary judgment unless someone has
evidence of what went on in the past as to the crossing.”
In a motion for reconsideration, the state acknowledged
that no evidence could be found as to the reason why
the crossing ceased to exist, but argued that the absence of
such evidence illustrated why the doctrine of laches should
apply. The trial court denied the state’s motion and entered
judgment. The state appeals, assigning error only to the trial
court’s granting of plaintiffs’ motion for summary judgment.1
Summary judgment is appropriate when the moving
party has shown that there are no genuine issues of
material fact and that it is entitled to judgment as a matter
of law. Ivanov v. Farmers Ins. Co., 344 Or 421, 428, 185 P3d
417 (2008). As noted, the parties do not dispute the relevant
facts. They do, however, disagree about the applicable law.
F.N. Realty v. Oregon Shores Recreational Club, 133 Or App
339, 343, 891 P2d 671, rev den, 321 Or 284 (1995) (stating
that the correct interpretation of conditions, covenants, and
restrictions on real property is a question of law).
On appeal, the state offers three reasons why the
trial court should have denied plaintiffs’ motion for summary
judgment. The state argues that (1) the deed’s requirements
to “erect and maintain a lawful fence” and “construct
and maintain one crossing” were satisfied and do not entitle
1 Although the state also moved for summary judgment, the state does not
assign error to the trial court’s denial of the state’s motion.
146 Zielinski v. State of Oregon
plaintiffs to new construction; (2) the demand for new construction
was not made within a reasonable time after the
covenant was breached and is therefore barred by the doctrine
of laches; and (3) plaintiffs may not enforce the covenant
because it was breached long before they acquired the
property, and a breached covenant does not run with the
land. Plaintiffs argue that the state’s interpretation of the
deed’s requirements is too narrow and that the state misapprehends
the law of laches and affirmative covenants.
The state’s first contention is that the plain meaning
of the deed does not require the state to build a new crossing
and fence. “In interpreting a deed, our objective is to
ascertain the meaning that most likely was intended by the
parties who entered into it.” James B. House Living Trust v.
Thompson, 230 Or App 595, 600, 217 P3d 228 (2009). To do
so, we look first to the text of the deed itself “considering its
text in the context of the document as a whole.” Id. The state
argues that the obligation to build and maintain a crossing
and a fence was “already satisfied” and that “[n]othing in
the text of the deed required the covenantor to accede to
requests for the construction of a new crossing and a new
fence after the structures originally built under the terms of
the covenant no longer existed.” The state also reasons that
“maintain” means “to keep in a state of repair, efficiency, or
validity : preserve from failure or decline,” Webster’s Third
New Int’l Dictionary 1362 (unabridged ed 2002)—which cannot
be accomplished for structures that no longer exist—and
cannot be interpreted to include reconstruction. Plaintiffs
counter that the state and its predecessors had an ongoing
obligation to provide for one crossing and one fence and that
reconstruction can be “a type of necessary maintenance.”
To the extent that the state takes a categorical
position that “maintain” cannot encompass a requirement
to reconstruct, we disagree. “Maintain” can have a more
expansive meaning than the state suggests. The same dictionary
cited by the state also defines “maintain” to mean
“to provide for : bear the expense of.” Webster’s, at 1362.2
2 At the time that the 1906 deed was drafted, “maintain” also encompassed
that more expansive meaning, Webster’s Int’l Dictionary of the English Language
884 (unabridged ed 1907) (defining “maintain” to include “[t]o bear the expense
of; to support; to keep up; to supply with what is needed”).
Cite as 269 Or App 143 (2015) 147
As such, and viewed in context, the intent of the original
parties can be understood to contemplate that the grantee
would construct and ensure the continued existence of one
crossing and one fence. A corollary to that intent would be
that, under some circumstances (e.g., if the grantee simply
ignored routine maintenance), the grantee might have
to undertake substantial or even complete reconstruction
to fulfill its obligation. The question, therefore, is whether
the obligation to “construct and maintain” encompasses an
obligation to rebuild the crossing and fence under these circumstances—
where the structures ceased to exist several
decades ago, with no apparent complaint from the grantor
or his successors until plaintiffs contacted ODOT in 2009.
That brings us to the state’s laches defense. To
prevail under that doctrine, a defendant ordinarily must
show that (1) the plaintiff delayed raising the claim for an
unreasonable period of time, (2) from when the plaintiff had
knowledge of the relevant facts, and (3) the defendant was
substantially prejudiced by the delay. Fontana v. Steenson,
145 Or App 229, 232, 929 P2d 336 (1996) (citing Mattson
v. Commercial Credit Business Loans, 301 Or 407, 419, 723
P2d 996 (1986). Plaintiffs argue that the state failed to
prove any of those elements. At least as to the third element,
prejudice, the state concedes that it did not present affirmative
evidence of prejudice below, but the state argues that it
did not have to. Laches was presumptively established, the
state reasons, by the length of time that elapsed since the
covenant was breached, which shifted the burden to plaintiffs
to prove that laches does not apply.
The state relies on the principle that the analogous
statute of limitations for an action at law may be used to
establish a presumptively reasonable period in which the
plaintiff must bring a claim, and that, when that period
has expired, “there is a rebuttable presumption that the elements
of laches have been sufficiently proven.” Fontana, 145
Or App at 232; see also Eichner v. Anderson, 229 Or App
495, 499, 212 P3d 521, rev den, 347 Or 258 (2009) (“When an
action is commenced after the analogous statute of limitations
period has run, the plaintiff bears the burden to prove
the absence of laches.”). The analogous statute of limitations
that applies to the breach of a 1906 deed is 10 years. See
148 Zielinski v. State of Oregon
ORS 12.070 (applying to actions upon “sealed instruments”
executed before 1965).
Plaintiffs argue that the analogous statute of limitations
establishes only a presumptively reasonable period.
That is, plaintiffs appear to contend that the passage of
time creates a rebuttable presumption in a defendant’s favor
only as to the first and second elements of laches, and that
defendant continues to bear the burden of proving prejudice.
That is an incorrect interpretation of Fontana, where, citing
prior cases, we explained that, after the analogous limitations
period has expired, “there is a rebuttable presumption
that the elements of laches have been sufficiently proven.”
145 Or App at 232 (emphasis added); see also Rise v. Steckel,
59 Or App 675, 684, 652 P2d 364, rev den, 294 Or 212 (1982)
(“When an action is commenced after the expiration of the
analogous statute of limitations, the plaintiff has the burden
to prove the absence of laches.”).
Fontana involved, among other things, a claim for
an accounting of a partnership (“Partnership A”). The analogous
statute of limitations was six years, and Partnership
A had been dissolved more than six years earlier. 145 Or
App at 232 (citing ORS 12.080 (providing a six-year statute
of limitations for breach of contract)). We affirmed the trial
court’s grant of summary judgment against the plaintiff,
reasoning that the
“defendants needed only to offer uncontroverted evidence
of the date of the partnership’s dissolution in order to make
a prima facie showing of laches as to plaintiff’s accounting
claim on Partnership A. Plaintiff offered no evidence
to contradict that presumption, and therefore, there were
no genuine issues of material fact regarding defendants’
laches defense as to Partnership A. The trial court did
not err in granting summary judgment on the accounting
claim for Partnership A.”
Id. at 233. Thus, once the analogous statute of limitations
period has elapsed, all of the elements of laches, including
prejudice, are presumed.3
3 In discussing a second partnership, Partnership B, as to which the accounting
claim had been filed within the last six years, the court addressed whether
defendants had been prejudiced by the delay. Id. at 234. The fact that the court
Cite as 269 Or App 143 (2015) 149
Plaintiffs brought this action on December 12,
2011. We agree with the state that, under Fontana, if plaintiffs’
claim arose more than 10 years before that date, then
the state benefits from a rebuttable presumption that laches
applies, and plaintiffs must prove that it does not. The state
argues that the claim arose when the crossing and fence
ceased to be functional. There is no dispute that they had
ceased to exist by 2000. Accordingly, the state argues, plaintiffs’
predecessors necessarily knew more than 10 years prior
to December 12, 2011, that the covenant had been breached.
Plaintiffs make two arguments in response. Neither
is availing. First, plaintiffs argue that “[c]onstructive notice
of the relevant facts is not sufficient to trigger whatever statute
of limitations serves as the presumptively reasonable
period.” Frasier v. Nolan, 195 Or App 211, 216, 98 P3d 392
(2004). Rather, full or actual knowledge of the relevant facts
is required. That is a correct statement of the law, but it
does not help plaintiffs, whose predecessors had full knowledge
of the relevant facts related to breach of the covenant
as soon as the railway crossing and fence deteriorated to the
point of being unusable. Plaintiffs make no argument as to
why a person with knowledge of (1) the covenant to “maintain”
the crossing and fence and (2) the obvious failure to do
so needed any more information to be aware of the breach.
Plaintiffs’ second argument is that the terms of the
covenant contain no temporal limitation; the grantee was
required to construct and maintain one crossing “when
wanted.” Thus, according to plaintiffs’ interpretation of the
deed, the covenant could not be breached simply by failing
to maintain the fence and crossing; rather, the failure to
maintain must have occurred at a time when the owner
“wanted” those improvements to be maintained. Therefore,
plaintiffs reason, the history of neglect and disuse is irrelevant
because there was no breach until plaintiffs made a
demand for performance that was refused.
It is true that, “[w]here the covenant requires the
performance of an affirmative act or acts, the statute of
did not similarly address prejudice as to Partnership A illustrates the applicability
of the rebuttable presumption as to all of the elements of laches, including
prejudice.
150 Zielinski v. State of Oregon
limitations governing an action for breach of the covenant
does not begin to run until there has been a demand for performance
by one entitled to such performance.” Covenants,
Conditions, and Restrictions, 20 Am Jur 2d § 44 (2005).
Plaintiffs’ argument, however, ignores the fact that performance
was demanded, and provided, long ago. The
grantee got what he bargained for—the construction of a
crossing and fence, which were maintained for some time.
The grantee was entitled to the ongoing maintenance of
that crossing and fence and had a claim for breach when
the grantor failed in that duty. Decades later, however, for
whatever reason, the grantee or its successors had allowed
the crossing and fence to enter into a state of decrepitude
without complaint (as far as this record shows). One of two
things must be true. First, the grantor’s performance may
have been excused because the covenant was abandoned. Id.
at § 228; Norby v. Sec. Line Drainage Dist., 159 Or 80, 88, 76
P2d 966 (1938) (holding that a covenant to build and maintain
a well ended when the plaintiffs abandoned the well for
another source of water). Alternatively, the grantee simply
sat on his rights.
Plaintiffs’ interpretation of the covenant would
mean, in effect, that the grantor would be required to rebuild
a crossing and fence an unlimited number of times, in perpetuity,
depending on the desires of the grantee’s successors
at a particular time. A more natural and reasonable interpretation
of the covenant is that the grantor undertook to
construct the fence and crossing a single time and to maintain
them for as long as the grantee desired.4

* * *

4 Our conclusion obviates the need to address the state’s third argument,
that plaintiff may not sue to enforce a covenant that was breached before they
acquired the property.

Outcome: For the foregoing reasons, we conclude that the trial
court erred in granting plaintiffs’ motion for summary judgment.

Reversed and remanded.

Plaintiff's Experts:

Defendant's Experts:

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