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Read the 26th Edition of CURB Update our bi-monthly newsletter.


Why Have Federal District and State Circuit Courts Failed to Follow Clear and Unambiguous Virginia Property Law? 

C.U.R.B. has been disappointed with the decisions by federal and state lower courts in our defense of property rights. Both law and facts support our position, so we question how the lower courts have got this so wrong? We have no further insight into a court’s decision other than words and writings, but we have doubts as to the fairness and objectivity of the system. One can search the web for articles that conclude our court system is either biased or unbiased. All C.U.R.B. can do is examine what we’ve experienced.

Judge Turk was the first Federal District Court judge to rule that APCO’s federal license and flowage easement gave it the right to remove decks and campers below the 800-foot contour on Smith Mountain Lake (See: APCO v. Longenecker (2001)). Later, Judge Moon’s and Judge Urbanski’s decisions cited Judge Turk’s 2001 ruling as precedent. It wasn’t until 15 years after Judge Turk’s error, six justices of the U.S. Fourth Circuit Court of Appeals ruled in Pressls’ and Nissens’ appeals: “since FERC only regulates APCO,” a property owner “cannot violate the Federal Power Act by building a dock.” The Fourth Circuit also cited the U.S. Supreme Court ruling in Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136 S. Ct. 1562 (2016) debunking APCO’s argument that Section 825p of the FPA granted ‘exclusive’ jurisdiction to federal courts to hear property law disputes with FERC licensees. Judge Moon’s Nissen and Pressl orders were vacated by the Fourth Circuit.

Injustice occurs when courts rely on bad precedent, without exercising fresh analysis of new facts and legal theories. Think Plessy v. Ferguson [segregation case]. Judge Turk’s error biased both Judge Moon and Urbanski’s decisions. Federal courts are limited by the U.S. Constitution to hear only matters involving constitutional and federal law (See: 28 U.S.C. § 1331). Federal District courts have no business hearing purely state property law cases.

In the Circuit Court of Franklin County, Virginia, recent decisions in Pressl and Nissen indicate that Judge Reynolds deferred to APCO’s federal license: “APCO must follow their license,” and ignored the U.S. Fourth Circuit rulings that sent Pressls case to his court to decide solely on Virginia property (easement) law. In his Pressl and Nissen orders, Judge Reynolds failed to cite Virginia property law to support his rulings, which is not surprising, as no precedent exists to support either.

American Electric Power is a major investor-owned electric utility in the United States of America, delivering electricity to more than five million customers in 11 states. Annual revenue for 2016 was reported at $16.4 billion. Operating as a subsidiary of AEP, APCO freely contributes to political campaigns and parties under its Political Action Committee, THE AMERICAN ELECTRIC POWER COMMITTEE FOR RESPONSIBLE GOVERNMENT. See: APCO Federal Contributions , APCO State Contributions. In addition, APCO employs three lobbyists and retains five consultants to draft legislation and influence state legislators. One might rightly debate the wisdom of a government regulated corporate monopoly ‘donating’ to political campaigns and charging customers, but that is a question for our legislators.

Virginia is one of eleven states that appoints judges via its legislature, rather than elect them. Arguments for or against judicial appointment can be made, but C.U.R.B. offers no advocacy for either methodology. The appointment of judges is determined by the political party in control of the state legislature. Can political contributions and lobbying impact the appointment and reappointment of judges? Can a judge be intimidated by a giant corporation? Can a judge be influenced by bad precedent? Can a judge be influenced by a law firm that has successfully placed former equity partners in judgeships? Does access to an unlimited source of funds affect judicial outcomes? These are questions to ponder.

No judge can be an expert in all law. Consequently, advocacy by trial attorneys is essential to our justice system. The ideal judge is one who listens unbiased, allows both-sides to fully develop its evidence, ultimately rules on the basis of the evidence and law, and does not rush to judgement before both-sides are heard.

Former Chief Justice of the Virginia Supreme Court, Cynthia D. Kinser wrote in ASSURANCE DATA, INC. v. John MALYEVAC (2013): “Because a demurrer cannot be used to decide on the merits [of a case] ... we will reverse the circuit court's judgment. This case is an example in which the trial court “incorrectly ... short-circuited litigation pretrial and ... decided the dispute without permitting the parties to reach a trial on the merits.””

Current Virginia Supreme Court Justice Elizabeth A. McClanahan, in reversing the lower circuit court’s decision in Mount Aldie, LLC v. Land Trust of Va., Inc. (2017) wrote: “Under Rule 3:20, summary judgment “shall not be entered” unless no “material fact is genuinely in dispute” on a controlling issue or issues ... an instrument [easement] will be deemed unambiguous if its provisions are ‘capable of only one reasonable construction ... Furthermore, ‘the whole of a deed and all its parts should be considered together’ in order to determine the controlling intent. ... Our presumption is always that the parties “were trying to accomplish something rational. Common sense is as much a part of contract interpretation as is the dictionary or the arsenal of canons.’”

Recall that Judge Reynolds sustained APCO’s demurrer on the merits in Pressl v APCO. In APCO v. Nissen, he did not consider all parts of the easement, wrongly concluded that APCO’s flowage easement was unambiguous, and granted APCO summary judgement when multiple material facts were clearly in dispute. Thus, in his rush to judgement he “... short-circuited litigation pretrial and ... decided the dispute without permitting the parties to reach a trial on the merits.”



“Common sense is as much a part of contract interpretation as is the dictionary ...”

On June 16, 2017 APCO’s Motion for Summary Judgement was heard by Judge Reynolds of the Franklin County Circuit Court. His Final Order is short, does not include a forwarding letter, cites no Virginia case law precedent, and notably does not contain any of the judge’s musings about the ‘stupidity’ of the easement and the landowners that signed it, or the blowing political winds from Washington regarding government over-regulation and uncompensated taking of property. The absence of any Virginia case law precedent in his order is not surprising, as no precedent exists that supports this ruling.

The transcript is markedly different from the Final Order. In the transcript Judge Reynolds caved into APCO’s insistence that that the Federal Energy Regulatory Commission (FERC) dictates are driving shoreline regulations, and that APCO must comply with its license and enforce its Shoreline Management Plan (SMP). In doing so Judge Reynolds disregarded the ruling from the U.S. Fourth Circuit Court of Appeals in Pressl v APCO, which concluded that FERC only regulates APCO and a property owner cannot violate the Federal Power Act by building a dock.

Judge Reynolds commits his most egregious error by ignoring the FERC license requirement for APCO to first obtain all necessary property rights. Instead of ruling purely on Virginia property law, which requires analysis of the intent of the parties when the easement was granted, reading the easement agreement in total, and recognizing shoreline owner and APCO behavior during the first 43 years of project operation, Judge Reynolds referred to the FERC license and APCO’s SMP to determine what is reasonable. Even the FERC recognizes and clearly states that a federal license cannot change property rights.

Judge Reynolds also determined that a single paragraph of the flowage easement grants APCO such broad rights the easement is tantamount to fee ownership and can eradicate all retained rights of the landowner. “But as I [Reynolds] read the flowage easement, it is almost indecipherable to figure out any way it could be different in any meaningful way than a fee simple. I mean, it gives Appalachian so much authority. ... But the right to cross the land -- I mean, they could land a canoe, right?” Judge Reynolds ignored the fact APCO stood by as 6,500 shoreline docks and multiple buildings were constructed prior to shoreline management. Absurd!

Judge Reynolds ruled that the flowage easement was clear and unambiguous. However, the Va. Supreme Ct. says: “[a]n instrument will be deemed unambiguous if its provisions are ‘capable of only one reasonable construction.’” APCO also argues the flowage easement is unambiguous, but simultaneously creates ambiguity by insisting their license and SMP must be considered when interpreting the easement as to what is reasonable. APCO's July 3, 1959 plea to Franklin Co. supervisors to establish building codes for shoreline construction shows APCO never expected to regulate shoreline construction, which plainly contradicts APCO's current position and creates further ambiguity. Judge Reynolds misread the easement and stated one must obtain APCO’s permission to build a dock, when the easement clearly states an APCO permit is not required for recreational uses. APCO argued that the flowage easement does not grant anyone the right to build a dock. However, the flowage easement clearly does not restrict anyone from building a dock, so long as it does not interfere with APCO’s right to overflow. Forty-plus years of non-regulation and 6,500 docks and multiple buildings constructed on shorelines is evidence that APCO continued to overflow and operate the dam and power station. Any ambiguity, by law, must be resolved in favor of the Nissens’ rights, as APCO was the author of the document.

Again, Judge Reynolds failed to follow the rules of the Va. Supreme Ct. by prematurely and wrongly granting APCO summary judgement. First consider Rule 3:20: “... Summary judgment shall not be entered if any material fact is genuinely in dispute.” The Court in granting summary judgement denied Nissens’ motion to continue discovery to develop the evidence for trial. The Nissens presented a litany of material facts that were clearly in dispute, yet the Court violated Rule 3:20 and granted summary judgement anyway.

Judge Reynolds ignored fresh law against his ruling in Nissen; see March 2nd, 2017 ruling by the Va. Supreme Ct in Mount Aldie, LLC v. Land Trust of Va., Inc., 293 Va. 190, 796 S.E.2d 549 (2017) for further guidance and precedence. Quoting this ruling:

“... However, summary judgment “shall not be entered” unless no “material fact is genuinely in dispute” on a controlling issue or issues ... It therefore strains credulity to believe that the parties to the Easement intended for the provisions ... [of the easement] to control the landowner’s permitted activities within the buffer ... Our presumption is always that the parties “were trying to accomplish something rational. Common sense is as much a part of contract interpretation as is the dictionary or the arsenal of canons.” quoting Fishman v. LaSalle Nat'l Bank, 247 F.3d 300, 302 (1st Cir. 2001) (internal citation omitted)). This case presents genuine issues of disputed material fact over whether [plaintiff] breached the Easement as [defendant] claims, thereby precluding an award of partial summary judgment to [defendant]. Only after both sides are allowed to fully and fairly present their evidence to a factfinder can those issues be resolved through the application of the plain language of ... of the Easement as here construed.”

The Nissens filed their Notice of Appeal to the Va. Supreme Ct. on August 7th, 2017. Read the Key Documents in their entirety Nissen Litigation.



All Property Owners Should be Concerned
Over $1.0 Billion in Private Investment is at Risk

Judge Reynolds clearly does not recognize the impact his decisions hold for SML property owners.  There are thousands of structures and improvements (unidentified to FERC) built without an APCO permit, below the 800-foot contour, known as 'encroachments.'  These encroachments include: marina work buildings, marina boat slip rentals, restaurants, golf course greens and holes, the 36-unit Vista Pointe Resort, swimming pools, decks, homes and parts of homes, the causeway to Contentment Island, well-over 1.5 million linear feet of riprap, seawalls, bulkheads, beaches, access paths/roads, private boat ramps and some 6,400 residential docks.  Judge Reynols believes the flowage easement is nearly the equivalent of fee ownership and APCO can remove anything.  If this were true, (which it is not according to the Va. Supreme Court) then every property owner has just had his property below the 800-foot contour seized, without being compensated.  Judge Reynolds’ rulings in Pressl and Nissen places over $1B of improvements at the risk of changing FERC requirements and APCO’s discretion.  Consider the losses if APCO removed Vista Point Condo's ($10,8M+), all riprap ($150M+), 6,400 residential docks ($480M+), these alone would amount to over $640,000,000. The loss of residential and commercial property values would be enormous, and all future investment and economic growth would end.

Taking property without paying is theft. Claiming one has federal regulatory authority, when it has none, is a lie. Coercing a landowner to sign a permit claiming federal regulatory authority, when untrue, is extortion.