City of Abilene v. Burk Royalty Company

• Decision Date: 28 July 1971
• Docket Number: No. B--2507,B--2507
• Parties: CITY OF ABILENE, Petitioner, v. BURK ROYALTY COMPANY, Respondent.
• Court: Texas Supreme Court

Page 643

470 S.W.2d 643

CITY OF ABILENE, Petitioner, v. BURK ROYALTY COMPANY, Respondent.

No. B--2507.

Supreme Court of Texas.

July 28, 1971.

Whitten & Butler, Don R. Butler and Ben Niedecken, Jr., Abilene, for petitioner.

Nennings, Montgomery & Dies, Frank Jennings, Graham, for respondent.

STEAKLEY, Justice.

Burk Royalty Company brought this inverse condemnation proceeding against the City of Abilene. It alleged a taking or permanent damaging by the City of Burk's interests in the Chapman Waterflood Unit in connection with improvements in the airport runway facilities of the City. The City filed a condemnation cross-action for a clearance easement required for actual airport operations, conditioned upon a determination that there had been a taking or damaging of Burk's property during the period the new runways were under construction. Trial was to a jury whose findings will be noticed later. Judgment was for Burk in the sum of $88,000, with six per cent interest from August 7, 1968, together with $2,688 representing loss of production from two wells, and the City was awarded the clearance easement conditionally sought. The court of civil appeals affirmed. 460 S.W.2d 220. The City is petitioner here.

Burk acquired the oil and gas leases comprising the waterflood unit from C. E. Chapman and others on November 1, 1964 for the purpose of conducting secondary recovery operations by means of water flooding. Additional small interests were acquired thereafter. A unit agreement dated August 1, 1966 forming the Chapman Waterflood Unit went into effect July 1, 1967 upon approval by a sufficient number of the interested parties. Water injections were commenced in one well in February, 1967. In May, 1967, the City notified Burk of its plans to expand its airport facilities in a manner which would involve the waterflood unit and on June 27, 1968, contracted for construction of the new facilities. Actual construction commenced in July, 1968.

There were ten producing wells and three injection wells in the Chapman Waterflood Unit, five of which were affected by the construction activities. In the course of construction it became necessary to relocate a tank battery and the transmission lines of the Taylor Electric Cooperative, Inc. which furnished electrical power to these wells. The tank battery was relocated at the expense of the City and with the permission of Burk. Arrangements were made by the City with the Taylor Electric Cooperative, Inc. for a relocation of the transmission lines outside the new runway and clearance area. To accomplish this purpose, the lines were disconnected to all of the wells in the airport portion of the waterflood unit on August 7, 1968, and thereafter, electrical service was restored to all of the wells with the exception of two identified as the Gilmore No. 1 and the Manahan No. A--2. These two wells remained disconnected, the reason for which is unclear. It was not shown either that Burk requested the Taylor Electric Cooperative, Inc. to reconnect the wells or that the latter refused to do so. There is some indication of a controversy between Burk and the City with reference to the expense which would have been incurred incident to a later reconnection of the wells.

There were other disruptions to Burk's operations. On one occasion Burk reported the loss of pipe which was discovered to have been moved by employees of the City. The pipe was returned to a convenient location for Burk. On other occasions construction machinery engaged in the airport project broke two oil flow lines resulting in a loss of oil. Some difficulties were also experienced by employees of Burk in reaching the pumps at some of the wells. This appears to have been caused by damage to the roads incident to the construction project and by the election of fences and the inconvenient location of gates.

The judgment of the trial court recited the findings of the jury as follows:

SPECIAL ISSUE NO. 1: That the fair market value of Burk Royalty Co.'s interest in the Chapman Waterflood Unit immediately before August 7, 1968, disregarding any affect (sic) which the expansion or proposed expansion of the airport may have had on said property, was $98,000.00.

SPECIAL ISSUE NO. 2: That the fair market value of Burk Royalty Co.'s interest in the Chapman Waterflood Unit immediately after August 7, 1968, taking into consideration the easement being condemned by the City of Abilene in its cross-action, was $10,000.00.

SPECIAL ISSUE NO. 3: That the Gilmore-Nelson No. 1 well was shut down on or about August 7, 1968.

SPECIAL ISSUE NO. 4: That said well was shut down in connection with the expansion of the City of Abilene's airport.

SPECIAL ISSUE NO. 5: That the value of Burk Royalty Co.'s interest in the oil which would have been produced from said well from August 7, 1968, to the time of trial, had the well not been shut down, was $1,008.00.

SPECIAL ISSUE NO. 6: That the Manahan A--2 well was shut down on or about August 7, 1968.

SPECIAL ISSUE NO. 7: That said well was shut down in connection with the expansion of the City of Abilene's airport.

SPECIAL ISSUE NO. 8: That the value of Burk Royalty Co.'s interest in the oil which would have been produced from said well from August 7, 1968, to the time of trial, had the well not been shut down, was $1,680.00.

SPECIAL ISSUE NO. 9: That the City of Abilene did not prohibit the supply of elecricity to the Gilmore-Nelson No. 1 well and the Manahan A-2 well.

The City objected to the submission of Special Issues No. 1 and 2 for the reason, among others, of the omission of any issue inquiring if there had been a taking, damaging or destroying of Burk's property; also, for the reason that the issues inquired of a time in August, 1968, which was not the date of trial. Thereafter, the City moved for judgment non obstante veredicto, and to dismiss its cross-action in eminent domain. The basic premise of these motions, and of the City's points of error here, was the absence of a finding or a showing that there had been an appropriation or taking of Burk's property in August, 1968, particularly in view of the jury finding that the City did not prohibit the supply of electricity to the two wells which remained disconnected. However, the trial court granted Burk's motion to disregard the answer...