Opinion
No. 2-383 / 01-0944
Filed September 11, 2002
Appeal from the Iowa District Court for Cerro Gordo County, Jon Stuart Scoles, Judge.
A railway historical society appeals a district court order of specific performance requiring it to sell an antique railroad car to the railroad company. AFFIRMED.
Charles Biebesheimer of Stillman, Goranson, Stone Lovell, Clear Lake, for appellant.
Charles Levad of Levad Law Office, Mason City, for appellee.
Considered by Vogel, P.J., and Miller and Vaitheswaran, JJ.
Iowa Traction Railroad entered into a contract with the Mason City and Clear Lake Electrical Railroad Historical Society ("Historical Society") to preserve and operate an antique electric railroad car. Under the contract, if the Historical Society had "no further operational use" for the car, it was to be sold to Iowa Traction for $15,000. The contract also stated that Iowa Traction would provide free periodic inspections, advice, and consultation on the condition of the car, with maintenance costs to be borne by the Historical Society.
The car is referred to as "CNSM 727."
The pertinent contract provision states:
In the event of the demise, or cessation of active functioning of the [Historical Society] or, if [the Historical Society] has no further operational use for CNSM 727 as demonstrated by no operational activity during any consecutive twelve month period, and/or mutually agreed upon consent of [the Historical Society] and Clear Lake Bank and Trust, the car will be sold to [Iowa Traction] by [the Historical Society] for the sum of $15,000.00, plus the cost of necessary material invested to rehabilitate and restore the car. Maintenance cost required to keep the operational and under current FRA compliance are excluded.(Emphasis added).
During one of the inspections, the president of Iowa Traction, David Johnson, found a "machining mark," reflecting a problem that he opined could eventually destroy the traction motor. He decided to monitor the situation. At a subsequent inspection, he determined that the car's condition had deteriorated to the point that he could no longer certify it as operational. In 1998, Johnson pulled the car's inspection and certification record, or "blue card."
Pursuant to the contract, Iowa Traction sought to buy the car from the Historical Society. When the Historical Society refused to sell it, Iowa Traction filed an action for specific performance of the contract. Following trial, the district court ordered the Historical Society to sell the car to Iowa Traction. This appeal followed.
As an action for specific performance is an equitable action, our review is de novo. Breitbach v. Christenson, 541 N.W.2d 840, 843 (Iowa 1995).
The primary question on appeal is whether the Historical Society had "no further operational use" for the car. The district court concluded it did not. We agree.
As noted, Johnson decertified the car in 1998. In his words, this meant, "[y]ou better not get caught by an FRA inspector operating a locomotive on your railroad without a blue card." The car was in fact not appreciably used after the blue card was pulled. The Historical Society had already stopped offering paid weekend rides and was only providing free train rides twice a year. Johnson stated even these ended. The president of the Iowa Chapter of the National Railway Historical Society confirmed Johnson's testimony based on his monthly visits to the grounds of the Historical Society. He categorically stated, "I had never seen the car operate since 1997." Even a board member of the Mason City and Clear Lake Historical Society agreed that the car had not operated on Iowa Traction railroad tracks since the blue card was pulled. Although he stated the car was run along the Historical Society's own three-quarter mile track after that date, he conceded this was only done as part of a spring and possible fall inspection of the track and he noted even those limited runs stopped in 2000.
As there is overwhelming evidence that the Historical Society had "no further operational use" for the car, Iowa Traction was entitled to buy it. We affirm the district court's order granting specific performance of the contract. We find it unnecessary to address the remaining arguments raised by the Historical Society.
AFFIRMED.