Railroad company sues property manager for loss of two locomotives

PHILADELPHIA - A national transportation company says the owners of a business complex near the

Philadelphia Airport refused to return two locomotives that were loaned to former warehouse tenants, according to a breach of contract suit filed at the U.S. District Court for the Eastern District of Pennsylvania.

Representatives from CSX Transportation, Inc., headquartered in Jacksonville, Fla., seek damages in excess of $75,000 for the loss of the locomotives plus the amount of their depreciation while in the possession of defendant Castleway Properties, LLC.

According to the complaint, CSX loaned the two decommissioned locomotives in 2006 to the Academy of Industrial Training (AIT), a nonprofit organization that provided training in locomotive repair and education to unemployed individuals in the Philadelphia region seeking to enter the field of railroad maintenance.

AIT's training center was located at the Airport Business Complex in Tinicum Township, connected to Conrail's main railroad by a side track. The organization did not own the property, but made rental payments to Tinicum Industrial Partners, LP. According to the complaint, CSX and AIT reached an agreement that the locomotives would be returned when they were no longer of use.

On Sept. 28, 2006, Tinicum Industrial Partners sold the property to Castleway, which acquired all of the tenants, including AIT. The new owners permitted AIT to keep the locomotives on the tracks.

In 2010, CSX found out that AIT was no longer in operation and began the regulatory process with Conrail to reacquire and relocate the locomotives. The companies took several months to complete the paperwork and gain approval, but when representatives from Conrail arrived to move the locomotives, the defendants allegedly denied entry onto the premises.

According to the complaint, Castleway demanded more than $100,000 from CSX as payment for storage of the machines. The claim says that this incident was the first time any party mentioned any fees for storage. CSX claims that the locomotives were not, in fact, stored on the premises but on loan for practical use by a former tenant of the business park.

"Upon the sale of the business complex to Castleway," the complaint says, "the defendants did not ask for the removal of the locomotives, but instead continued to allow the placement of the locomotives upon the business complex's tracks. Castleway raised no objection to CSX regarding the placement of the locomotives upon acquiring the ownership of the business complex."

The complaint says that no contract or agreement has been made or discussed regarding storage of the locomotives. Castleway's refusal to allow Conrail to transport the locomotives off the premises, the property management company continues to have possession of the machines, constituting an unjust enrichment for Castleway, according to the claim.

CSX is represented by Timothy Frey of Keenan Cohen & Merrick, PC in Jenkintown.