BELTLINE LITIGATION – 2003 TOP TEN CASE OF NOTE

The Top Ten Real Property Cases of 2003
By Steven D. Atlee & David A. Campbell
©2004. All Rights Reserved.

The California Real Property Journal annually reviews the top real property cases from the state, federal, and bankruptcy courts.

ALAMEDA BELT LINE v. THE CITY OF ALAMEDA

In 1918, the City of Alameda (City) constructed a municipal belt line railroad to serve a new and developing industrial area. In 1924, the City sold the railroad to the Western Pacific Railroad for $30,000, on the condition that a new corporation was formed to own and operate the belt line railroad. That corporation was the Alameda Belt Line (ABL). The City retained an option to repurchase the railroad “including all extensions thereof, for a sum equal to the original cost, together with the cost of any and all additional investments and extensions made therein.” The City had to give at least one year’s notice of its intent to exercise the repurchase option.

In 1999, the City learned ABL was cutting back operations and selling parcels of its property, including a particular piece that ABL was about to sell for $18 million. The City passed an ordinance on November 2, 1999 notifying the world of its intent to repurchase the railroad and all extensions thereof on December 4, 2000, pursuant to the terms of the parties’ 1924 agreement.

ABL filed for injunctive relief, declaratory relief, and inverse condemnation. The City filed an amended cross-complaint seeking a declaration that the 1924 agreement gave it a valid, present contractual right to repurchase the railroad and all of its extensions.

The trial court granted ABL's motion for summary judgment, holding that the repurchase option was unenforceable on the grounds it lacked sufficient specificity to comply with the Statute of Frauds. The City appealed.

» Continued

Close Window