756 S.E.2d 420
Va.2014Background
- In 1940 the Yancey estate and Norfolk & Western (predecessor to Norfolk Southern) executed a recorded Crossing Agreement granting a private 18-foot grade crossing and obligating the railroad to construct and maintain it; the agreement ran with the land and included an indemnity clause and a provision that the crossing be used "solely in [the landowners'] own interest and for their own benefit."
- Breeden acquired a portion of the Yancey tract in 1996 and leased it to the Dittons; in 2001 Todd Ditton was struck at the crossing and later settled his suit with Norfolk Southern.
- Norfolk Southern sought indemnity from Breeden for the settlement; in prior litigation the circuit court held the Crossing Agreement was a covenant running with the land and that Ditton, as lessee, was a successor entitled to use the crossing independently of Breeden.
- After that litigation, Norfolk Southern removed the private crossing; Breeden sued seeking a permanent injunction ordering Norfolk Southern to restore and maintain the crossing and also sought damages; Norfolk Southern defended on multiple grounds including first material breach, laches, estoppel, and lack of irreparable harm.
- The circuit court denied Breeden’s summary judgment, held an injunction hearing (with Norfolk Southern largely conceding laches/estoppel and presenting no witnesses), and ordered Norfolk Southern to reinstall the crossing; the Supreme Court of Virginia affirmed.
Issues
| Issue | Breeden's Argument | Norfolk Southern's Argument | Held |
|---|---|---|---|
| Whether Breeden committed the first material breach of the Crossing Agreement, barring enforcement | Breeden argued prior rulings established the covenant runs with the land and Ditton was a successor with independent rights, so Breeden did not materially breach | Norfolk Southern argued Breeden breached by leasing without limiting tenant use, triggering first material breach doctrine | Court: No material breach by Breeden; doctrine ill-suited for real covenants and prior rulings established Ditton’s independent right to use, so Breeden not barred |
| Whether Breeden was entitled to injunctive relief restoring the crossing | Breeden: covenant valid and breached; injunctive relief appropriate for violation of real property rights; proof of damages not required | Norfolk Southern: Breeden must prove irreparable harm, lack of adequate remedy at law, and equities must be balanced; enforcement would impose undue burden | Court: Injunction proper. Real property rights are deemed irreparable; Breeden need not prove monetary damages; Norfolk Southern bore burden to prove hardship and did not present evidence |
| Whether holding an injunction hearing before jury trial violated Norfolk Southern’s right to jury or Rule 3:22(e) | Breeden: equitable claim; court may decide injunction before jury trial on damages | Norfolk Southern: hearing resolved facts common to jury issues in breach-of-contract claim and violated Rule 3:22(e) and jury right | Court: No violation. No statutory or constitutional right to jury on equitable injunction; Rule 3:22(e) inapplicable because no common factual determinations required for damages at injunction hearing |
| Whether sanctions (attorney’s fees) were warranted under Code § 8.01-271.1 because Norfolk Southern failed to present evidence at the injunction hearing | Breeden: Opponent asserted genuine issues of fact in pleadings but produced no evidence at hearing, making hearing unnecessary | Norfolk Southern: Pleadings and defenses were well-grounded and it chose trial strategy not to present witnesses to avoid waiver; defenses had legal basis | Court: Denial of sanctions affirmed. Pleadings were reasonably grounded; no abuse of discretion by trial court |
Key Cases Cited
- Snead v. C&S Props. Holding Co., 279 Va. 607 (Va. 2010) (trial court’s discretionary denial or grant of injunction reviewed for abuse of discretion)
- Levisa Coal Co. v. Consolidation Coal Co., 276 Va. 44 (Va. 2008) (injunction is extraordinary; court may deny when hardship to defendant or public outweighs injury)
- Perel v. Brannan, 267 Va. 691 (Va. 2004) (party seeking enforcement of restrictive covenant must prove validity and breach; defendant may avoid injunction by showing disproportionate hardship)
- Spilling v. Hutcheson, 111 Va. 179 (Va. 1910) (historical principle that injunctions to enforce real covenants often granted without proof of pecuniary damages)
- Sonoma Dev., Inc. v. Miller, 258 Va. 163 (Va. 1999) (injunction appropriate to enforce a real property right without proof of monetary damages)
- Countryside Orthopaedics, P.C. v. Peyton, 261 Va. 142 (Va. 2001) (doctrine of first material breach discussed in contract context)