Pan Am Railways has indicated that it will proceed with plans to pass liability insurance costs on to local landowners, just three weeks after its representatives said the company would not do so.

Legislators and affected landowners expressed disappointment with the decision, which could result in added insurance costs statewide for property owners who cross railroad tracks to reach their private property. 

“Given the inaction regarding the present legislation, I trust that you can understand why we are taking this step,” Pan Am Vice President Cynthia Scarano wrote in an email to Rep. Dennis Keschl, R-Belgrade, on Wednesday.

In February, Keschl introduced the issue of liability insurance for accidents at railroad crossings to the state Judiciary Committee. Legislators hoped to find common ground between the railroad and property owners who held crossing agreements with the railroad to reach their land.

In 2012, the railroad sent letters to property owners in Belgrade, telling them that in order to maintain agreements to cross the railroad tracks, they were required to buy millions of dollars’ worth of insurance coverage. Railroad representatives have said that while property owners in Belgrade were the first to receive such letters, the company plans to pursue similar agreements with every crossing agreement holder in the state.

After property owners raised an outcry, Scarano said Pan Am would shelve the plans until a legislative resolution was found, a statement which she reiterated on April 5.

In Wednesday’s email, Scarano said that, because the issue won’t be resolved during the current legislative session, “we must take the necessary steps to address private crossing maintenance and liability concerns in an appropriate manner at this time.”

When the bill was first introduced in February, a quick compromise appeared possible. Initial conversations revolved around the idea of absolving railroads of responsibility for accidents at private crossings, which would eliminate the motivation to pass insurance requirements on to private property owners. In exchange, the railroad agreed, in principle, to limit the maintenance fees it charged to landowners in those crossing agreements.

However, the process stalled temporarily, in part because the Maine Trial Lawyers Association objected to the idea of eliminating railroad liability. In late March, citing the issue’s complexity, legislators decided to create a task force to craft a compromise, extending the timetable into the next legislative session.

In her email to Keschl, Scarano said Pan Am “will continue to work with yourself, the residents and Maine Legislature in good faith, and will continue to monitor the status of this legislation going forward.”

Keschl expressed disappointment with Pan Am’s decision.

“They had said that they would hold off until we could work through trying to get their liability reduced,” he said. “That puts a number of folks in the Belgrade area in a difficult situation.”

In some cases, many landowners use a single crossing for access to their respective properties, but the railroad has a crossing agreement with only one of those landowners. In such cases, the railroad is requiring that person to buy the insurance rather than try to pursue new agreements with all of the individuals who use the crossing.

Keschl said the situation could lead to lawsuits between neighbors who disagree about the extent to which those costs should be shared.

“It becomes an issue between the neighbor who is paying for the insurance and the neighbor who is crossing the tracks without the crossing agreement,” he said.

Keschl said he doesn’t understand why the railroad thought it had to move forward so quickly, after years of inaction.

“They’ve gone a long time without having liability crossings, so I think it’s disappointing they’re moving in that direction,” he said. “For many of these people, they never had to pay, and suddenly it comes up. There’s no transition. There’s no nothing.”

Keschl said he doesn’t know what the price tag will be for property owners to carry a $10 million insurance policy.

“No one really knows what the cost of that insurance is,” he said.

Disappointment in Pan Am was also expressed by Winslow resident Kathleen Cassidy, who owns a camp in Belgrade with her husband and who has been active on the issue.

“They’re attempting to pit neighbors against neighbors,” she said.

She reiterated previous calls for a solution that is fair, equitable and consistent.

A message left for Scarano at her office was not returned as of press time.

Matt Hongoltz-Hetling — 861-9287
mhhetling@centralmaine.com