Tourism businesses engage in legal battle

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Tourism businesses engage in legal battle

The Nantahala Outdoor Center. Donated photo

Two of Swain County’s largest tourism brands — Nantahala Outdoor Center and Great Smoky Mountains Railroad — are engaged in a lawsuit regarding right-of-way access over the railroad tracks.

NOC originally filed the lawsuit against GSMR on June 1, 2021, after a yearlong dispute over access to NOC property that requires crossing GSMR’s track. Last summer, GSMR allegedly tore up a road that allows NOC’s seasonal employees access to housing on what is called the West Hellards property.

The railroad claims the road was causing safety issues that were not being addressed by NOC and cited several instances where people have been injured, including a 2017 incident where a Georgia school bus carrying students pulled in front of an arriving passenger train at NOC causing a collision and injuries.

NOC claims the move to close the crossings was retaliatory because NOC refused to reach a new agreement with GSMR regarding annual payment for an easement.

“In late 2019, just before the COVID-19 pandemic began wreaking havoc throughout the world, GSMR came to NOC and demanded that the NOC sign a new agreement related to the use of the West Hellards Crossings, the East Hellards Crossing, the Appalachian Trail Crossing and the Lake Fontana Crossing and NOC’s existing improvements within the GSMR Rail Corridor despite NOC’s use of the Existing Improvements and Crossings long before GSMR acquired its interest in the GSMR Rail Corridor,” the complaint stated.

According to NOC’s amended complaint filed on June 1, the West Hellards property has been used for residential purposes since 1975 and is currently where 69 NOC employees live. There are two railroad crossings on the West Hellards property that allow the only access by vehicle to the residential area.

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When NOC took possession of that property back in 1975, the deed referenced the existing driveways and included rights to use the crossings to access the West Hellards property.

According to the complaint, the property had been used for residential purposes since the 1800s — long before the construction of the Murphy Branch Rail Corridor was completed.

NOC claims the railroad company “threatened” to immediately close and destroy the crossings and restrict NOC’s access if NOC did not come to an agreement with GSMR. The complaint states that NOC attempted in “good faith” to negotiate an agreement but that GSMR was not interested in negotiation for safety purposes.

“Instead, GSMR sought to use the threat of closure to force NOC to pay an exorbitant annual fee for a one-sided agreement that was not commercially reasonable that NOC was within its rights to reject,” the complaint stated.

NOC claims that on July 14, 2020, at the height of their tourism season, GSMR’s General Manager Kim Albritton informed NOC that the Lake Fontana Crossing would be closed the next day for “safety reasons.”

The closing of the Fontana crossing prevented NOC and its guests from accessing the lake property for several months, which NOC claims caused the business to lose substantial revenue.

On Friday, July 21, Albritton informed NOC President William Irving that GSMR would be closing both of the West Hellards crossings at 7 a.m. the next morning. NOC’s complaint claims that Albritton said the crossings would be destroyed by ripping out the pavement and features.

Irving allegedly told Albritton that he would not be able to locate and inform all 60 employees — some of which were quarantining due to COVID-19 exposure — on the property with only a 14-hour notice. Without notice, those employees would not have time to move their vehicles from the property before the crossings were destroyed. Those residents are now forced to park their vehicles along U.S. 19, which is not safe. N.C. Department of Transportation has already expressed concerns about the shoulder parking.

In an email from GSMR’s lawyer Robert Carpenter sent to NOC July 22, 2020, GSMR allegedly threatened to close the East Hellards crossing the following week unless NOC signed the “extortionate agreement” with GSMR. NOC claims the threat was withdrawn once NOC informed them the East crossing was located on U.S. Forest Service property.

“GSMR’s behavior shows that it will imminently close all the crossings for pretextual reasons and destroy the Center’s business and the value and marketability of the East Hellards Property and the West Hellards Property if there is no access to those properties from the adjoining highway,” the complaint stated.

NOC claims GSMR has also retaliated by placing “No Trespassing” and “No Parking” signs on NOC’s property, untruthfully accused NOC employees of vandalism and sabotage without any evidence and threatened employees with prosecution and jail time while employees have been engaged in basic operations on NOC property.

“GSMR has attempted to make these recent dramatic and catastrophic changes to the ways NOC and GSMR have historically operated, and in violation of NOC’s legal rights, in an attempt to extort NOC into accepting unfair and one-sided deal that GSMR may exploit on a whim,” the complaint states.

NOC claims it isn’t the only company GSMR has tried to get a bigger payout to cross the tracks. In exhibit FF — Private Way License — GSMR charged $175,000 to the licensee, which was one-third of the cost GSMR paid NCDOT for the entire rail corridor for a 6-foot-wide pedestrian crossing over the tracks.

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Great Smoky Mountains Railroad runs from Great Smoky Mountains Railroad runs from the train depot in Bryson City out through the Nantahala Gorge along the river. File photo

At a recent Swain County Commissioner meeting, Commissioner Kenneth Parton told the board he’d heard complaints from several long-time residents along the GSMR tracks claiming they’ve recently received letters from the railroad asking for a licensing fee to cross the tracks to access their private property.

When asked for clarification via email, Albritton said GSMR has always issued licenses and agreements for adjacent property owners to cross over or utilize railroad property.

“Over time, properties have changed purpose, expanded, or have been sold and these agreements have not been updated. There are no new letters sent to property owners that have not changed the purpose, expanded, or have not been sold,” she said. “Great Smoky Mountains Railroad goal is to work with property owners to ensure crossings and usage of GSMR land is documented with current information.”

NOC requested a declaratory judgment to settle the dispute and forbid GSMR from closing the track crossings to its properties. NOC also requested GSMR compensate NOC for damages and attorney fees.

GSMR responded with a counterclaim and motion to dismiss on July 30, 2021. GSMR lawyers denied a majority of NOC’s claims.

GSMR claims the two crossings to East Hellards property and the crossing at West Hellards property presents safety risks to the plaintiffs, the railroad and the public. The railroad also claims that the private road East Hellards Road intersects railroad tracks without authorization of the railroad within the railroad’s right-of-way easement.

GSMR claims that NOC has a building very close to the tracks currently being used as a “Paddle School” that presents a safety risk. In addition, the railroad claims it converted a railcar into a bathroom at its own expense and placed it on the center’s property and the railroad right-of-way for the shared use, but that the NOC has locked the bathroom to exclude the railroad from using it “in retaliation for taking needed safety measures.”

The railroad admitted to taking necessary safety measures in July 2020 by closing access to railroad property and provided notice to NOC.

However, GSMR claims NOC repeatedly rejected the railroad’s attempts to enter into a reasonable agreement designed to address the railroad’s safety concerns and “staunchly refuse to acknowledge the well-established legal rights of the Railroad thereby leaving the railroad no choice but to take safety measures to prevent the repeated unauthorized, unsupervised and unsafe trespassing in and around the railroad tracks with said safety measures including the placing of ‘No Trespassing’ and ‘No Parking’ signage near the railroad tracks.”

Based on the counterclaim, NOC is expanding usage on its properties for financial gain and therefore a new agreement with the railroad is needed. GSMR claims NOC has been using the right-of-way property without any written agreement between the parties with respect to the use and for the significant financial gain of the NOC entities.

GSMR also argues that the residences NOC refers to do not comply with the “housing” statutes because it more resembles camping quarters and only houses seasonal employees — not year around Swain County residents.

“The NOC entities, these employees and the employees’ invitees access the housing by and through three separate unauthorized places that intersect the railroad tracks,” the railroad’s counterclaim stated.

GSMR claims NOC employees and their guests regularly socialize, consume alcohol and congregate around the railroad tracks and that railroad equipment was vandalized in 2019 when it was parked around the Hellards property.

Safety concerns GSMR listed include NOC patrons crawling under the train to reach the other side, walk the tracks with their dogs or while consuming alcohol, do not move in the face of an oncoming train and run along the tracks in order to outrace an incoming train — just to name a few.

GSMR claims NOC has ignored the railroad’s concerns and complaints, which date back to 1996.

“In North Carolina and according to Federal Railroad Association public records, 27 people died from railroad trespass related injuries in 2019 and 13 died in 2020,” the counterclaim stated. “In total and including fatalities, there were 36 trespasser causalities in 2019 and 24 in 2020.”

The railroad seeks an agreement with NOC to minimize and mitigate safety issue with the use of railroad property. GSMR claims that its efforts to reach an agreement are documented in 1997 when the railroad proposed a license agreement to NOC for its right-of-way.

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