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Kelly v. Enbridge Inc.

May 16, 2008

CARLISLE KELLY AND DEANNA KELLY, PLAINTIFFS,
v.
ENBRIDGE (U.S.) INC., DEFENDANT.



The opinion of the court was delivered by: Jeanne E. Scott, U.S. District Judge

OPINION

This matter comes before the Court on the Motion for Summary Judgment by Enbridge (U.S.) Inc. (Enbridge US) (d/e 36) (Enbridge US Motion); the Motion for Summary Judgment by Enbridge Pipelines (Illinois) LLC (Enbridge LLC) (d/e 38) (Enbridge LLC Motion); Plaintiffs' Motion for Summary Judgment (d/e 40); and Plaintiffs' Motion to Strike all Filings by Non-Party Enbridge Pipelines (Illinois) LLC and/or Alternative Dismiss Enbridge Pipelines (Illinois) LLC's Counterclaim and/or Alternative Motion for Summary Judgment (d/e 41).

As set forth below, the undisputed competent evidence shows that Enbridge LLC intends to build a pipeline (Pipeline) across Illinois, and intends to build a section of the Pipeline across Plaintiffs Carlisle Kelly and Deanna Kelly's property in DeWitt County, Illinois (Property). The Kellys brought this action against Enbridge US to secure a declaratory judgment that Enbridge US has no right to build the Pipeline across the Property. Enbridge LLC, not Enbridge US, however, intends to construct the Pipeline. Enbridge US does not assert a right to build the Pipeline on the Property and does not intend to build a Pipeline across the Property; hence, there is no dispute between these two parties that would entitle the Kellys to declaratory relief.

The competent evidence, further, shows that Enbridge LLC holds a valid easement (Easement) on the Property, and the Easement authorizes Enbridge LLC to enter the Property to construct and maintain the Pipeline. Enbridge LLC is, thus, also entitled to summary judgment.

STATEMENT OF FACTS

In 1939, the Kellys' predecessors in title to the Property conveyed the Easement to the Texas Empire Pipeline Company. The Easement authorized the holder of the Easement "the right to lay, operate and maintain a pipe line for the transportation of oil, gas, gasoline and/or other fluids, the grantee selecting the route, upon, over and through the following described land, . . . ." Memorandum in Support of Motion for Summary Judgment by Enbridge Pipelines (Illinois) LLC (Enbridge LLC Memorandum) (d/e 39), Exhibits A and B, Easements executed July 11, 1939 (collectively Easement). The Easement further authorized the holder "the right to lay, operate and maintain, adjacent to and parallel with the first, a second pipe line, . . . ." Id. The Easement would continue to exist "so long as such pipe lines or other structures are maintained; . . . ." Id.

One pipeline was built across the Property in the 1940s (Existing Pipeline). The Existing Pipeline comes out of the ground for several feet on the Property to go over a creek. Opposition to Motion for Summary Judgment by Enbridge (U.S.) Inc. (d/e 49), Exhibit E, Affidavit of Carlisle Kelly (Kelly Affidavit), attached photograph. Building a pipeline over a stream, rather than under, was a common building technique at the time the Existing Pipeline was constructed. Enbridge LLC Memorandum, Exhibit I, Deposition of Timothy Anderson (Anderson Deposition), at 38-39. Pipelines with exposed sections over water crossings are often encountered. Enbridge LLC Memorandum, Exhibit J, Deposition of John Kobasa (Kobasa Deposition), attached Deposition Exhibit 1, Expert Report of John D. Kobasa, at 3.*fn1

Enbridge LLC acquired the Easement, and the Existing Pipeline, on December 15, 2006, through the purchase of the membership interests in Central Illinois Pipeline Company LLC (CIPC), and then a merger of the two companies. Enbridge LLC Memorandum, Exhibits A-D, Certified copies of chain of title documents for the Easement, and Exhibits E-F, Certificates of Merger; Exhibit G, Deposition of Douglas Aller, at 4-5, 44-45. Enbridge LLC has applied to the Illinois Commerce Commission (Commission) for permission to build the Pipeline across the Property as the second pipeline allowed pursuant to the Easement.

Enbridge US and Enbridge LLC are separate companies, both affiliated with a Canadian parent corporation, Enbridge, Inc. Enbridge US Motion, Exhibit A, Deposition of Joel W. Kanvik, at 6-8. As described above, Enbridge LLC acquired the Easement and intends to construct and operate the Pipeline. Enbridge US is a holding company that owns interests in other companies, but does not own any interest in Enbridge LLC. Id., at 7.

The Existing Pipeline was not in use when Enbridge LLC acquired the Easement. The Existing Pipeline was last used to transport fertilizer. Anderson Deposition, at 8. The Existing Pipeline has been hydrotested in 1983, 1984, and 1992-93 by Enbridge LLC's predecessors in title. Hydrotesting is a process that involves pumping water through the pipeline to check for leaks and strength. Anderson Deposition, at 30-31, 49; Enbridge LLC Memorandum, Exhibit H, Deposition of Marcus G. Garrison (Garrison Deposition), at 22. The Existing Pipeline passed the tests. Anderson Deposition, at 31; Garrison Deposition, at 45.

In the 1990's, a prior owner of the Easement spent $1.5 million to upgrade the Existing Pipeline. Garrison Deposition, at 37, 48. CIPC acquired the Easement and the Existing Pipeline in 2004. CIPC determined at that time that the Existing Pipeline was in good condition. Id., at 23, 26, 33, 48. CIPC thereafter replaced the warning signs along the Existing Pipeline twice and turned the power back on for the line's cathodic protection system. Id., at 47-48, 56-58, 62. The cathodic protection system is an electrical system that prevents corrosion. Id., at 59. The protection system had been off for about two years. Id., at 60-65. On January 31, 2008, Enbridge Inc.'s Area Supervisor, Timothy Anderson, conducted testing of the Existing Pipeline immediately north and south of the Property, including ultrasonic testing, and determined that the Existing Pipeline was in good condition. Anderson Deposition, at 11, 17-19, 28-29, 31-32, 36, 43-44, 57-60, 66-69.

According to the Kellys' expert witness, William Kallberg, the Existing Pipeline has not been maintained for the purpose of carrying hazardous liquids or gases, such as petroleum products or natural gas. Response to Motion for Summary Judgment Filed on Behalf of Enbridge Pipelines (Illinois) LLC (d/e 51), Exhibit A, Deposition of William Kallberg (Kallberg Deposition), at 46-47, 63, 69. He stated in his deposition that the terms of the grant of Easement would allow the Existing Pipeline to be used for carrying other fluids, such as water. Kallberg Deposition, at 74. He offered no opinion concerning whether the Existing Pipeline was properly maintained to transport water or other fluids that were not hazardous. Enbridge Inc.'s Area Supervisor Anderson testified that the Existing Pipeline was in good condition and could be placed back into service immediately to carry water. Anderson Deposition, at 44-46.

On August 27, 2007, the Kellys filed this action in DeWitt County, Illinois, Circuit Court. The Kellys alleged that Enbridge US was attempting to build the Pipeline across the Property. They asked for a declaratory judgment that Enbridge US had no right to enter the Property without the Kellys' permission, and further, that Enbridge US's entry onto the Property constituted criminal trespass. Notice of Removal (d/e 1), Exhibit 1, Complaint for Declaratory Judgment.

The Kellys then filed a Motion for a Temporary Restraining Order and Preliminary Injunctive Relief to prohibit Enbridge US from entering the Property or building the Pipeline across the Property. Notice of Removal, Exhibit 2, Plaintiffs' Emergency Motion for Temporary Restraining Order and Preliminary Injunction. Enbridge LLC appeared at the hearing on the request for a TRO. Plaintiffs' Second Emergency Motion for Temporary Restraining Order and Preliminary Injunction (d/e 9) (Second TRO Motion), attached Report of Proceedings on August 29, 2007 (Transcript), at 2. Enbridge LLC's counsel explained at the hearing that Enbridge LLC was the proper party defendant because it owned the Easement and intended to construct the Pipeline across the Property. Id., at 13. Enbridge LLC, ...


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