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Motel 6 Inc. v. Pfile

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


decided: September 30, 1983.

MOTEL 6, INC., A DELAWARE CORPORATION, APPELLANT,
v.
IRA VERNON PFILE, A/K/A I. VERNON PFILE AND VIRGINIA V. PFILE, A/K/A M. VIRGINIA PFILE, APPELLEES

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA.

Gibbons, Becker, Circuit Judges and Lacey,*fn* District Judge.

Author: Becker

Opinion OF THE COURT

BECKER, Circuit Judge.

This appeal arises out of a diversity suit seeking recognition under Pennsylvania law of an implied easement of access to a sewage treatment plant. Appellant Motel 6, a Delaware corporation, owns a ninety-five unit motel in Belle Vernon, Pennsylvania, which it purchased from defendants Ira Vernon Pfile and Virginia V. Pfile. Motel 6 is unable to operate the motel because its only sewer connection is to a sewage plant owned and operated by the Pfiles, who refuse to service the motel.

Motel 6 originally built and operated the motel under a long-term lease agreement with the Pfiles, under which the Pfiles agreed to provide sewage service. After the motel was partly destroyed by fire, Motel 6 purchased the motel from the Pfiles and rebuilt it at a cost in excess of two million dollars. The purchase agreement, however, did not provide for sewage service. Alleging that no other sewer connection was available to the motel, Motel 6 sought a permanent injunction in the district court requiring the Pfiles to furnish sewage treatment. After trial, the court denied the injunction. Because we conclude that the district court misapplied the Pennsylvania law of implied easements, and that the record establishes that Motel 6 is entitled to relief as a matter of law, we will reverse. We will also remand for further proceedings to determine the compensation to which the Pfiles are entitled for access to their sewage treatment plant.

I.

The basic facts, most of which are uncontradicted, are set forth in the district court's findings of fact. In 1971 the Pfiles, who own several tracts of land and buildings in Belle Vernon, entered into an agreement with Motel 6. Motel 6 agreed to build a 95-unit motel on one of the Belle Vernon tracts, and to lease the newly built motel from the Pfiles for 65 years. Both the lease and the construction contract made the Pfiles solely responsible for providing sewage facilities to the motel. In the course of construction, sewage pipes were laid from the motel to the property line, which were subsequently connected to the Pfiles' sewage treatment plant 1,200 feet north of the motel. The connections were made across intervening tracts owned by the Pfiles.*fn1 The sewage plant serviced other establishments situated on land leased from the Pfiles and continues to serve those establishments.

Motel 6 operated the motel under the lease until December 31, 1977. During that time, the Pfiles provided sewage service as required by the lease. On that date, and again on January 2, 1978, accidental fires severely damaged the motel and rendered it uninhabitable. Under an agreement dated May 8, 1979, the parties agreed to terminate the lease and Motel 6 agreed to purchase the damaged motel and the land on which it sat.*fn2 The purchase was completed by delivery of a deed, dated and recorded on May 16, 1979. The matter of sewage disposal was never raised in the negotiations concerning the agreement to purchase, and it is not mentioned in either the agreement of sale or the deed.

In September 1979, while the motel was being rebuilt, Mr. Pfile informed Motel 6 that the transmittal of sewage from the motel to the Pfiles' sewage plant was continuing without permission, and allegedly without legal authority or right. The Pfiles subsequently demanded that Motel 6 purchase the plant for $250,000 and agree to service the other properties connected with the plant in perpetuity free of charge; Pfile threatened to cut off the motel's sewage service if an agreement to that effect was not reached. Motel 6 offered to pay a reasonable fee for continued use of Pfiles' plant, but the parties could not reach an agreement.

Motel 6 began operating the reconstructed motel on May 14, 1980. The Pfiles provided sewage service until the time of the trial in January 1981.*fn3 Service was discontinued in June of 1981, and has not been restored. The motel remains unoccupied. Labor troubles have plagued the motel, and have been a factor in its inability to operate. The motel cannot, however, be operated without sewage services.

Motel 6 applied to the Township of Rostraver for permission to construct a sewage treatment plant on its property, but the Township refused to grant the application because the Pfiles' sewage treatment plant had sufficient capacity to handle the motel's sewage requirements.*fn4 The closest public sewer line is two miles from the motel. In order to connect with this public system, Motel 6 would have to purchase easements over intervening land and lay pipe at a substantial cost, which was not quantified in the record.*fn5

The district court's discussion of the applicable law began with a reference to the doctrine of mutual mistake. The court stated that, although the failure of the parties to include in the agreement of sale a representation required by state law as to availability of sewage service in the agreement of sale was a result of mutual mistake,*fn6 the failure to provide that defendants would provide sewage treatment services for plaintiff was not a result of mutual mistake.

The district court made three other conclusions of law. First, the court wrote that "[a] servitude to defendants' sewage treatment facility was not continuous but depended on the need of the motel for the services, and was not self-acting but depended on the willingness of defendants to operate the facility." Second, the district court held that:

because defendant did not intend to create a permanent servitude to their sewage treatment facility in favor of that part of the property leased to plaintiff and because an implied easement is not necessary to the beneficial use of plaintiff's property, and because the servitude was not continuous and self-acting, plaintiff has not established its right to an easement by implication to defendants' treatment facility.

Finally, the district court concluded that defendants were under no other legal duty to provide plaintiff with sewage treatment services. The court therefore entered, on February 18, 1981, an order denying injunctive relief.*fn7

In its brief, Motel 6 urges five alternative theories supporting its entitlement to permanent injunctive relief. Those theories are easement by necessity, easement by implication, easement by estoppel, reformation of the agreement of sale to provide for continued sewage service to the motel for a reasonable fee, and relief under § 7.1 of the Pennsylvania Sewage Facilities Act, Pa. Stat. Ann. tit. 35, § 750.7a (Purdon 1977). Because we find that Motel 6 is entitled on this record to judgment on the basis of an implied easement, we need not discuss the other legal theories.*fn8

II

A.

In the briefs filed on this appeal, both parties cited Spaeder v. Tabak, 170 Pa. Super. 392, 395, 85 A.2d 654, 656 (1952), as stating the Pennsylvania law on implied easements.*fn9 The district court also appears to have relied on Spaeder, although it cited no authority. In Spaeder, the court formulated the following test:

To establish an easement by implication on the severance of the unity of ownership in an estate there must be (1) a separation of the title, (2) such continuous and obvious use before the separation as to show an intention to make the alleged easement permanent, (3) the easement must be necessary to the beneficial enjoyment of the land granted or retained; and (4) the servitude should be continuous and self-acting.

170 Pa. Super. at 395, 85 A.2d at 656, (quoting DePietro v. Triano, 167 Pa. Super. 29, 31-32, 74 A.2d 710, 711 (1950)); see also Becker v. Rittenhouse, 297 Pa. 317, 319, 147 A. 51, 53 (1929).

More recent Pennsylvania authority, however, has rejected the apparent requirement of the Spaeder test that there be both necessity and continuous and obvious use in order to imply an easement. In Burns Manufacturing Co. v. Boehm, 467 Pa. 307, 356 A.2d 763 (1976), the Pennsylvania Supreme Court stated "easements by implied reservation are to be distinguished from easements which are implied on the grounds of necessity. . . . Easements by implied reservation . . . are based on the theory that continuous use of a permanent right of way gives rise to the implication that the parties intended that such use would continue, notwithstanding the absence of necessity for the use." Id. at 314 n.4, 356 A.2d at 767 n.4. Although Burns involved an easement retained upon sale of part of the land, as opposed to an easement created upon passage of the part of land benefited by the easement, the court in Burns stated that this distinction is irrelevant. Id. at 314, 356 A.2d at 767 (quoting Tosh v. Witts, 381 Pa. 255, 261, 113 A.2d 226, 228 (1955)).

There is thus conflicting Pennsylvania authority on the question whether necessity is required to imply an easement. See Schwoyer v. Smith, 388 Pa. 637, 643, 131 A.2d 385, 389 (1957); Thomas v. Deliere, 241 Pa. Super. 1, 359 A.2d 398, 400 n.2 (1976) ("It is well-established that evidence of long continued prior use is, in itself, insufficient to justify the implication of an easement on severance"). This confusion is compounded by the most recent Pennsylvania superior court decisions on the implication of easements, which have applied the test formulated in Section 476 of the Restatement of Property (1944). The Restatement test requires consideration of necessity as one element in a balancing test. See Flaherty v. DeHaven, 302 Pa. Super. 412, 419-20, 448 A.2d 1108, 1112 (1982); Ecenbarger v. Lesoine, 293 Pa. Super. 230, 239-40, 438 A.2d 969, 973 (1980).*fn10 All of the tests look for circumstances that evidence the intent of the parties.*fn11 In Flaherty, the most recent Pennsylvania case on the subject, the court stated "as the degree of necessity decreases, the need to refer to other factors suggestive of an intent to create an easement increases substantially." 302 Pa. Super. at 419, 448 A.2d at 1112. Necessity under this test is apparently not an absolute requirement, but one of several indicia of intent.

Given the manifest lack of clarity in the Pennsylvania caselaw, it is our duty, as a federal court sitting in diversity, to make a prediction as to what law the Pennsylvania Supreme Court would apply under these circumstances. Becker v. Interstate Properties, 569 F.2d 1203, 1205-06 (3d Cir. 1977), cert. denied, 436 U.S. 906, 56 L. Ed. 2d 404, 98 S. Ct. 2237 (1978). Burns is the most recent decision of the Pennsylvania Supreme Court on this question. Therefore, we will apply the Burns test to the facts found by the district court to determine whether, as a matter of law, Motel 6 is entitled to the easement it seeks.*fn12

B.

The court in Burns stated the test for implying an easement as follows:*fn13

Where an owner of land subjects part of it to an open, visible, permanent and continuous servitude or easement in favor of another part and then aliens either, the purchaser takes subject to the burden or the benefit as the case may be, and this irrespective of whether or not the easement constituted a necessary right of way.

467 Pa. at 314, 356 A.2d at 767 (quoting Tosh v. Witts, 381 Pa. 255, 258, 113 A.2d 226, 228 (1955)).*fn14 There can be no dispute that the use involved here satisfies the requirements of Burns that an implied easement be "open" and "visible." Like the sewage system at issue in Bryn Mawr Hotel Co. v. Baldwin, 12 Montg. Co. L. Rep. 145, 149 (1896), the system here was of a "notorious character." That the underground pipes may not have been "visible" in the literal sense is beside the point, because the existence of the sewage connection was known to the parties. See Geissel v. Supplee, 95 Pa. Super. 358, 360 (1929), (finding an easement in the use of a water pipeline when such use was "notorious" and "know[n] to both parties.")

Under Burns, an implied easement must also be "permanent and continuous." In Pennsylvania, the "test of a continuous easement is whether or not it is of a nature adapted to continuous use." Nauman v. Treen Box Co., 280 Pa. 97, 101, 124 A. 349, 350 (1924). The Nauman Court noted that under the common law a "drain, however infrequently used, was always held to be "[a continuous easement]." 280 Pa. at 101, 124 A. at 350. See also Phillips v. Phillips, 48 Pa. 178, 186 (1864) ("It may be granted that the continuance of drains, water-pipes, and mill-races may more distinctly indicate their permanent and essential nature than a mere private way. . . ."). Cf. 3 R. Powell, The Law of Real Property § 411, at 34-86 (P. Rohan ed. 1981) (dismissing the argument that a road must be constantly used to be continuous: the "same argument might have been (but never has been) applied to sewers which could be said to be in use only when the plumbing fixtures have been operated). The sewer connection involved here certainly satisfy Nauman and Phillips.

Pennsylvania law concerning the permanence of easements creates a presumption that, as long as there is nothing in the present circumstances to indicate that the right-of-way was intended to be non-permanent, it is intended to be permanent. Burns, 467 Pa. at 315 n.5, 356 A.2d at 767 n.5; Philadelphia Steel Abrasive Co. v. Louis J. Gedicke Sons, 343 Pa. 524, 527-28, 23 A.2d 490, 492 (1942). Here, there is nothing in the record that would negate the presumption of permanence. See also Dzmura v. Gyurik, 41 Pa. Super. 398, 401 (1909) (finding an implied easement in a sewer connection, the court noted that the installation of sewage lines by the original property owner constituted a "permanent improvement" on the property). Indeed, the presumption of permanence seems eminently appropriate given the nature of the usage here.*fn15

In sum, on the uncontested facts in the record, the Pfiles subjected part of their property (the sewage treatment plant) to an open, visible, continuous, and permanent easement in favor of another part (the motel) and then sold the latter.*fn16 All of the elements of the Burns test, therefore, are met. Additionally, we note that there is no language in the agreement of sale that would tend to negate the implication that the easement for sewage treatment services was intended to continue after Motel 6 purchased the property. See Burns, 467 Pa. at 315 n.6, 356 A.2d at 768 n.6. Having satisfied the Burns test, which is the test that the district court should have applied, Motel 6 is entitled to the benefit of a sewage plant easement.*fn17

The Pfiles have argued that this case turns on the absence of a provision for sewer treatment services in the agreement of sale, which allegedly reflects the intention of the parties about sewage service. This argument misconceives the origin and nature of an implied easement. "What determines the existence of an easement is the intention as implied and manifested by the acts of the parties. . . ." Heffley v. Lohr, 149 Pa. Super. 586, 591, 27 A.2d 275, 278 (1942) (citing Liquid Carbonic Co. v. Wallace, 219 Pa. 457, 68 A. 1021 (1908)). See also supra note 9. The Burns test governs the application of those factors. If the test is satisfied, the court imputes the intent to the parties, despite the absence of express language in the agreement.*fn18

The Pfiles have also argued that the relief requested is improper because it would require an injunction mandating the performance of a personal service. Motel 6 rejoins that an injunction in its favor would not be inconsistent with Pennsylvania case law, which permits enforcement of easements requiring collateral services by the servient tenant. The cases of Heffley v. Lohr, 149 Pa. Super. 586, 27 A.2d 275 (1942), and Mullen v. Vollrath, 4 Chester County Reporter 213, exceptions dismissed, 4 Chester County Reporter 306 (1949) involved servitudes for water services.*fn19 In both cases, injunctions were granted, without limit as to time, that required the defendants in those cases to continue operating the water pumping facilities.

We agree with Motel 6's position on this point. The sewage service requested is not a "personal service" in the sense that performance of a labor contract would be. The Pfiles' sewage treatment plant has sufficient capacity to handle the sewage from Motel 6. The Pfiles are entitled to appropriate compensation, and any injunction must be limited to requiring the Pfiles to provide service to Motel 6 as long as their sewage treatment plant remains in operation. The injunction requested here, therefore, is less burdensome than those provided in earlier Pennsylvania cases.*fn20

Having determined that Motel 6 is entitled to an injunction to enforce its easement for sewer services, which shall continue for as long as the Pfiles continue to operate the sewage treatment plant, we will reverse the judgment of the district court with directions to enter an order consistent with this opinion, and we will remand the case for determination of the proper compensation to which the Pfiles are entitled for the easement.


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