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Vulcan Lands, Inc. v. Chicago Title and Trust Co.

May 13, 2008

VULCAN LANDS, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
v.
CHICAGO TITLE AND TRUST CO., AS T/U/T/A 1097435 DATED APRIL 14, 1992, JOHN SHAW, AND UNKNOWN OWNERS AND BENEFICIARIES, DEFENDANTS.



The opinion of the court was delivered by: David H. Coar United States District Judge

HONORABLE DAVID H. COAR

MEMORANDUM OPINION AND ORDER

Plaintiff Vulcan Lands, Inc. ("Vulcan" or "Plaintiff") brought this action for declaratory and injunctive relief against Defendants Chicago Title and Trust Co. as trustee ("Chicago Title"), John Shaw ("Defendant" for purposes of this opinion), and other unknown parties (collectively "Defendants"). Now before this Court is Defendant John Shaw's motion to dismiss or in the alternative to stay proceedings (Docket No. 15). Defendant has advanced several grounds according to which he believes this case should be disposed of, including: (1) failure to establish the requisite amount in controversy for assertion of 28 U.S.C. § 1332 subject matter jurisdiction; (2) propriety of abstention in light of parallel state court proceedings, pursuant to Colorado River Water Conservation Dist. v. U. S., 424 U.S. 800, 96 S.Ct. 1236 (1976); and failure to state a claim for which relief can be granted, pursuant to Fed. R. Civ. P. 12(b)(6).

For the reasons stated below, Defendant's motion is DENIED in part and GRANTED in part.

1. FACTS*fn1

Plaintiff Vulcan owns a parcel of land consisting of approximately 234 acres in Lisbon Township, Kendall County, Illinois, some part of which it plans to develop into a new limestone quarry site. While this parcel is made up of two separately surveyed parcels, for simplicity's sake this Court is concerned only with Parcel 1 ("the Vulcan Property"). South of this parcel is another belonging to a trust administered by Chicago Title for Shaw's benefit ("the Shaw Property"). The Shaw Property consists of approximately 385 acres which are leased out for a limestone quarry operation. The two properties are located in Section 28, Township 35 North, Range 7 East of the Third Principal Meridian ("Section 28"). In different conveyances and at different points in time, either Joliet Road or the half section line of Section 28 served as a dividing line across the west half of the Section; the half section line was generally used in formal conveyances, while parties' possession and use of property was divided by Joliet Road, separating land now possessed by Vulcan to the north ("North Tract") and that which Shaw possesses to the south ("South Tract").*fn2 The incongruent methods for dividing this land have created the present conflict.

The North and South Tracts altogether were previously owned by members of the Hall family. Early on, the public had use of a length of Joliet Road traveling across the Halls' land by prescriptive easement. In 1958, the Halls entered into an agreement with Kendall County wherein the Halls conveyed easements to the County for Joliet Road pursuant to deed ("1958 Hall Deeds"). The 1958 Hall Deeds conveyed a 70 foot strip of land described as follows:

A strip of land along a portion of half section line of sec. 28, twp. 35 N., R. 7E, of 3rd P.M. in Kendall County from Sts. 120 21 to Sts. 132 72 said strip being of a uniform width of 70 ft. one half lying North and one half lying South of the centerline of Roadway Improvement. (Compl. Ex. D (emphasis added).) However, while this conveyance assumed that the section line and the centerline of the already existing roadway were coterminous, Joliet Road in fact fell approximately forty feet to the south. See attached diagram infra p. 22. As a result, when the Halls' land was later divided into the North and South Tracts, based on the 1958 Hall Deeds, the mistaken assumption they contained would ultimately result in the present conflict; while use and possession of the parcels on either side of Joliet Road predictably extended up to the edge of the road and public easement, conveyances divided the parcels according to the section line, so that the titles allowed for a five foot strip of land north of the roadway that was actually part of the land to the south.

By 1968, William C. Peart, Nora Peart, and/or other members of the Peart family owned all of the land referenced as the Vulcan Property through a series of purchases. The deeds of conveyance purported to grant the Pearts title to the northwest quarter of Section 28. Upon obtaining this title, the family used the entire North Tract for a home and a farm. At some point in the property's history, either the Peart family or previous owners established a fence line approximately 35 feet north of the center line of Joliet Road. Between 1968 and 2006, the family utilized the center line of Joliet Road as the southern boundary of the property; they apparently believed that there was no difference between the road's center line and the half section line that in fact runs parallel to and north of the road.

The land that the Peart family expanded onto is approximately five feet in width and runs between the Section Line (intended to serve as the southern edge of the parcel in the 1958 Hall Deeds) and the northern edge of Joliet Road (amounting to the effective dividing line between the North and South Tracts at the center of Joliet Road less half the permanent easement). This strip of land is the subject of the dispute in this case ("Subject Property"). Between 1968 and 2006 the Peart family acted toward the Subject Property as if it were a part of its deeded property. Over the course of those years the family possessed the land, paid all assessed real estate taxes, and used the land in a manner consistent with farming and living. In 2006 William J. Peart (presumably the son of William C. Peart, hereinafter "Peart") sold his interest in the Vulcan Property to Vulcan. Since then, Vulcan has acted as if it possessed all of the North Tract -- both the Vulcan Property and the Subject Property -- by using the land, continually possessing it, and paying taxes on it. Vulcan intends to develop a limestone quarry on the North Tract.

There is no indication that Shaw or any predecessor in interest related to the South Tract claimed ownership over the Subject Property. Despite a 1971 survey that revealed the discrepancy between Joliet Road and the center line of Section 28, no action was taken to correct the boundary. At all relevant times, the Shaw property had constructed on it a fence, running approximately 35 feet south of Joliet Road's center line. At no point has Shaw paid taxes on the Subject Property or otherwise acted as the owner of it.

2. ANALYSIS

Defendant argues that this case should be dismissed based on: (a) lack of subject matter jurisdiction; (b) propriety of abstention; (c) failure to join a necessary party; and (d) failure to state a claim. In the alternative, Defendant argues that the case should be stayed pending resolution of the parallel state court action.

a. Amount in Controversy

Defendant maintains that this Court lacks subject matter jurisdiction because the $75,000 amount in controversy requirement of 28 U.C.C. § 1332 is not met, and that dismissal is therefore appropriate pursuant to Fed. R. Civ. P. 12(b)(1). The Parties generally agree that the amount in controversy is to be determined by evaluating the value attributable to the Subject Property. Defendant, however, maintains that Plaintiff has failed to properly calculate that value, insofar as it should be based solely on the per-acre price of the property multiplied by the total area of the Subject Property. In the alternative, Defendant argues that there is insufficient support for Plaintiff's estimate of the value of the property. Neither of these arguments is compelling.

In a suit for declaratory or injunctive relief, "the amount in controversy is measured by the value of the object of the litigation." Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). The Seventh Circuit requires that either of two perspectives be used to determine the "value of the object" -- "what the plaintiff stands to gain, or what it would cost the defendant to meet the plaintiff's demand." Macken ex rel. Macken v. Jensen, 333 F.3d 797, 799-800 (7th Cir. 2003); see also Uhl v. Thoroughbred Tech. and Telecomm., Inc., 309 F.3d 978, 983 (7th Cir. 2002) ("[I]t is established that the jurisdictional amount should be assessed looking at either the benefit to the plaintiff or the cost to the defendant of the requested relief-the so-called 'either viewpoint' rule.").

Defendant ignores this settled Seventh Circuit principle, and therefore fails to acknowledge that determining the value of the Subject Property to Plaintiff is an acceptable means of satisfying the required amount in controversy. See Uhl, 309 F.3d at 983-84 (considering pecuniary consequences to the parties). Plaintiff has provided evidence that denial of its claim over the disputed land would amount to a loss of $4,915,400.00 to its planned use of the land as a quarry. (See Pl.'s Resp. Ex. C ("Sheridan Aff.").) This evidence, if supported, satisfies the amount in controversy required for finding subject matter jurisdiction under 28 U.S.C. § 1332. See Glover v. PremierBank, 59 Fed.Appx. 850, 852 (7th Cir. 2003) (plaintiff must provide "competent proof" that it has satisfied the required amount in controversy).

However, Defendant claims that this estimate is unsupported, in that Plaintiff has not provided sufficient evidentiary support, and has not considered potential alternative uses for the land should his claim over the Subject Property fail. Admittedly, Plaintiff has advanced only a single affidavit, written by appraiser and real estate agent Arthur Sheridan. (See Sheridan Aff.) Also, the affiant provides little basis for his conclusion that the loss of access to Joliet Road would result in a net loss of nearly $5 million. However, at this early stage a sworn affidavit, so high above the required minimum value and absent any countervailing evidence, provides "competent proof" of value. Defendant asks this Court to require affiant to "substantiate his opinion," but cites only an appellate decision requiring an expert to be more thorough in its analysis at summary judgment. See Winters v. Fru-Con Inc., 498 F.3d 734 (7th Cir. 2007). Defendant also cedes much ground by pointing to all of the determinants of value that the affiant might have considered in its analysis, yet provides no evidence of its own as to what these values might be. The Home Depot, Inc. v. Rickher, 2006 WL 1727749 at *1 (May 22, 2006 7th Cir. 2006) (requiring that the Plaintiff's claim of damages be disproved "to a legal certainty") (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938)). At this early stage in the proceedings, there is no reason to doubt a signed affidavit attesting to the value of this controversy for Plaintiff.

Defendant repeatedly returns to its argument that Plaintiff wrongly conflates the potential decrease in value of the Vulcan property with that of the value of the small strip of land in dispute: "[Plaintiff] summarily concludes that because the value of its property is decreased by almost $5 million, the value of the strip must be over $75,000,000....[B]ecause plaintiff has failed to provide competent proof that the disputed Strip[sic] has a value in excess of $75,000.00, the action should be dismissed for lack of subject matter jurisdiction." This misstates the only relevant question at this stage, which is the value of the controversy, not the value of the strip of land at its center. Because Plaintiff has advanced sufficient proof to show that it stands to lose approximately $5 million on its intended use of the Vulcan property upon denial of relief, the amount in controversy is satisfied.

Defendant's motion to dismiss for lack of subject matter jurisdiction is DENIED.

b. Peart as a Necessary Party

Because this Court finds it proper to stay this action, as discussed below, it is unnecessary to determine at this time whether dismissal under either Fed. R. Civ. P. 12(b)(6) or 12(b)(7) is warranted. Nonetheless, before addressing the determinative question of abstention, it is practical to first discuss in general terms whether Peart -- as the prior owner and potential adverse possessor of the property in question -- is necessary to this action. It must first be noted that Peart seems to have disclaimed any and all interest in the Subject Property. (See Compl. ¶ 27; Pl.'s Resp. Ex. E (Peart's State Court Mot. to Dismiss)). However, this Court must still consider the nature of Plaintiff's claims to determine what Peart's involvement in the case would be.

Plaintiff seeks declaratory and injunctive relief that would make it the rightful owner of the Subject Property. Any such relief is to be achieved by way of: reformation of the conveyance to Vulcan (Count I); adverse possession under color of title and payment of taxes (Count II); or adverse possession via conventional means (Count II). Peart's role, if any, is different with respect to each of these three approaches, ...


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