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GOTTSCHALK v. CONSOLIDATED R.R. CORP.

April 25, 1979

Philip E. GOTTSCHALK, Plaintiff,
v.
CONSOLIDATED RAILROAD CORPORATION, Defendant



The opinion of the court was delivered by: POLLACK

The defendant, Consolidated Railroad Corporation, has moved for summary judgment under Fed.R.Civ.P. 56. For the reasons shown hereafter, its motion will be granted in part and denied in part.

I.

 On September 11, 1976, a freight train operated by the defendant derailed, left the roadbed and destroyed buildings and other property of the plaintiff, who now sues for damages. The plaintiff's property was located on three parcels of land within the railroad's right of way that were leased by the defendant's predecessors to the plaintiff's predecessors and later conveyed to the plaintiff. The defendant asserts that each lease exculpates the lessor from liability for damage to property on the land, even if caused by negligence of the lessor. Pleading the asserted exculpatory clauses, the defendant moved for summary judgment.

 The plaintiff raised three arguments against the motion for summary judgment, two of which the Court has rejected, See 457 F. Supp. 377; 460 F. Supp. 592. The plaintiff's third argument is that the exculpatory clauses are unconscionable and therefore void under § 235-c(1) of the Real Property Law of New York. Pursuant to § 235-c(2) the Court held an evidentiary hearing on the conscionability of the exculpatory clauses.

 II.

 The first of the three parcels of land was leased from the predecessor of the defendant by the plaintiff's grandfather in 1937. The term of the lease was five years and the rent $ 32.00 per year. The lease provided:

 
Said Lessee for himself, his heirs, executors, administrators, successors and assigns, hereby assumes all risk of loss, damage or injury, by fire, accident, collision or otherwise to persons or property on said leased premises or in connection with the use thereof; and all risk of loss by fire to property of said Lessee, or in which he may be interested, on any neighboring premises owned or occupied by said Lessee to which fire shall be communicated from the leased premises, arising out of the condition or location of said leased premises, or the operation, maintenance or existence of the railroad operated by said Lessor, its successors or assigns, or any of its appurtenances; and agrees to indemnify and save harmless said Lessor, its successors and assigns, from all claims for any and all such loss, damage or injury, whether caused by the negligence of the said Lessor, its successors or assigns, or by the negligence of its or their servants, agents or employees, or otherwise.

 The plaintiff's father worked in his own father's business in 1937 and testified that his father entered the 1937 lease in order to relocate a nearby feed mill that stood in the way of a new highway soon to be built. He testified also:

 
There was no other place around there that he could. It was narrow valley there, a narrow place, and it had to be moved where the most room was and that was the ideal place there, where it was moved to.

 In 1942 and again in 1947, the 1937 lease was renewed for five years on the same terms. In 1952 the lease was renewed for five more years and the rent increased to $ 50 per year. In 1957 the lease was again renewed for an additional five years. Later in 1957, the 1937 lease was assigned by the plaintiff's grandfather to the plaintiff's father. In 1968 the rent under the lease was increased to $ 150 per year. In 1972 the 1937 lease was extended for a renewable term of one year and the rent increased to $ 200 per year.

 The plaintiff's grandfather leased the second parcel in 1949. The lease provided:

 
Lessee hereby assumes all risk of loss of or damage to property of Lessee, or property in which Lessee may be interested, upon or in the vicinity of the leased premises, arising from fire, whether due to the negligence of Lessor, the officers, agents or employes of Lessor, or otherwise. Lessee further hereby assumes all risk of any other loss of or damage to property and injury to or death of persons occurring on said leased premises or in connection with the use thereof, whether caused by the negligence of Lessor, the officers, agents or employes of Lessor, or otherwise. Lessee agrees to release, indemnify and save harmless Lessor from and against any and all loss, damage, injury or death hereinbefore assumed by Lessee, and from and against any and all claims, demands, actions, judgments, costs and expenses which may arise or result therefrom.

 The lease was for a renewable term of one year at an annual rent of $ 18. In 1957 this lease was assigned by the plaintiff's grandfather to the plaintiff's father. In 1968 the rent was increased to $ 60.

 In 1966 the plaintiff's father leased the third parcel. The lease was for a renewable term of one year at an annual rent of $ 25. The lease included the clause quoted ...


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