Face Challenges Confidently

094 Orange County, Inc. v. Citgo Pipeline Co.

Tuesday, September 8th, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Orange County, Inc. v. Citgo Pipeline Company, 934 S.W.2d 472 (Tex. App. – Beaumont 1996, writ denied), considers the alienability of a partial interest in a pipeline easement. A landowner expects to be compensated for an easement, because the easement is a burden on the land. A landowner who has been compensated for an easement does not expect that the burden on the land will be significantly increased beyond what was contemplated when the easement was granted. In this case, an easement was granted in 1943 to Citgo’s predecessor for a 12″ pipeline, which was constructed. In 1952, an easement was granted to Citgo for the construction, maintenance and operation of “pipelines” and providing that additional compensation would be paid for each additional pipeline. A 20″ pipeline was constructed. In 1987, Citgo assigned the 12″ pipeline and an undivided ½ interest in the easement. Orange County contended that the easement could not be partially assigned.
Although there may be a conflict in Texas law, this court adopted what it called the modern view that commercial easements are partially alienable when the assignment does not burden the underlying land beyond what was contemplated in the original easement grant. The court was persuaded that the easement contemplated multiple pipelines, that each pipeline triggered additional compensation to the landowner, and the landowner had presented no evidence of additional burden.
Orange County contended that the easement was not an exclusive easement, and therefore apportionability of the easement should not be assumed in the absence of clear indication to the contrary. The court rejected this argument and found that the easement was an exclusive easement in gross as to pipelines. It quoted with approval the following relevant language from the Restatement:
“Though apportionability may be to the disadvantage of the possessor of the servient tenement, the fact that he is excluded from making the use authorized by the easement, plus the fact that apportionability increases the value of the easement to its owner tends to the inference in the usual case that the easement was intended in its creation to be apportionable. This inference is very strong in cases where an increase in use is in fact advantageous to the possessor of the servient tenement.”
The significance of the case is that it highlights the importance of the language used in the grant as permitting or limiting future uses of the easement to operations which may not have been anticipated by the parties.