Show Me the Money for Violating an Easement

A cable television provider negotiated a “Joint Use Agreement” with Hill County Electric Cooperative, where it was able to attach its cable transmission lines to the electric poles, by compensating Hill County Electric of course. Marcus Cable later bought this cable TV provider.

This Joint Use Agreement only allowed Marcus Cable to attach its lines “to the extent [Hill County Electric] may lawfully do so.” In other words, if the easements held by Hill County Electric could be read to include cable TV lines, then Marcus Cable could use Hill County’s poles and easements and string up their lines; if not, Marcus Cable would have to buy an easement from the landowner across whose land they wanted to string their lines. It’s all about the money.

Apparently Marcus Cable decided to either take its chances, or to not pay close enough attention, because it just strung up its lines. They must have thought they were in the clear, but 7 years after running their lines across the Krohns’ land, the Krohns sued Marcus Cable, alleging Marcus Cable had no right to run their lines across the Krohn land. And they went for the jugular, suing for trespass, negligence, both actual and punitive damages, and they turned up the heat further by going after an injunction to force Marcus Cable to remove the lines. Marcus Cable had really put itself in a box and subjected itself to lots of uncertainty.

The easement agreement at issue had been given to Hill County Electric by H.W. and Ruth Curtis, in 1939. This easement transferred with the land through successive owners, to include the Krohns. It gave Hill County Electric the easement for the purpose of constructing and maintaining “an electric transmission or distribution line or system.”

Marcus Cable took the position that this easement grant included cable TV transmission lines. It said, basically, that:

(1) a television cable is a “line”,

(2) a television signal is “electric”,

(3) sending the signal is an “electric transmission, and

(4) transmitting it among a number of users is an “electric distribution.”

Thus, a television cable is within the exact words of the easement granted. Furthermore, television cables are nearly indistinguishable when laid right next to each other, especially many yards up in the air on a utility pole. And that argument got exactly one vote in the Texas Supreme Court.

Eight Texas Supreme Court justices voted for the landowner, ultimately holding that the easement at issue did not include cable TV lines. These justices basically characterized the cable TV lines as communications lines, not electrical lines. If the easement grant language had allowed lines for electrical and communications, such as phone lines, then Marcus Cable would have won. But, given the language of this easement, it was left only to hold a jury trial to determine the amount of money Marcus Cable owed for trespassing on the Krohns’ land. Intentionally. Ca-ching.

Here are the rules of easements as confirmed by the Texas Supremes in this case:

1. An easement is a nonpossessory interest in land that authorizes its holder to use the property for only particular purposes.

2. Easement agreements are interpreted to give effect to the intention of the parties ascertained from the language used in the agreement, or the circumstances surrounding the creation of the easement, and to carry out the purpose for which it was created.

3. Nothing passes by implication except what is reasonably necessary to fairly enjoy the rights expressly granted. If a particular purpose is not provided for in the grant, a use pursuing that purpose is not allowed.

4. The manner, frequency, and intensity of an easement’s use may change over time to accommodate technological development, but such changes must fall within the purposes for which the easement was created, as determined by the grant’s terms.

The public policies behind these rules of easements are to promote certainty in land transactions, and for owners to be assured that their conveyances will not be construed to undermine private-property rights.

For landowners giving easements, make sure the easements are limited in their grants as to what may and may not be put in the easement premises. Make sure you are compensated. And draw these grant provisions narrowly to make sure you are compensated yet again, and again, and again, every time the easement is used for additional or different purposes. Of course, if you’re acquiring the easement, pay once, and get everything, including the right to assign parts of your easement rights. Then you can be the one compensated over and over.

Marcus Cable Associates, LP, v. Krohn, Case No. 01-1291, Texas Supreme Court, decided November 5, 2002.

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