City of Austin v. Travis Cty. Landfill

• Decision Date: 26 August 1999
• Parties: (Tex.App.-Austin 1999) City of Austin/Travis County Landfill Company, L.L.C., Appellants v. Travis County Landfill Company, L.L.C./City of Austin, Appellees NO. 03-98-00455-CV
• Court: Texas Court of Appeals

Page 191

25 S.W.3d 191 (Tex.App.-Austin 1999)

City of Austin/Travis County Landfill Company, L.L.C., Appellants v. Travis County Landfill Company, L.L.C./City of Austin, Appellees

NO. 03-98-00455-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

August 26, 1999

Rehearing Overruled September 14, 2000.

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT NO. 97-07362, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Chief Justice Aboussie, Justices Kidd and Patterson

MARILYN ABOUSSIE, Chief Justice.

This case involves the City of Austin's operation of the Austin-Bergstrom International Airport ("the airport"). A jury found the City of Austin ("City") liable to the Travis County Landfill Company, L.L.C. ("TCLC") for taking, by overflights, the airspace over TCLC's property, which is located approximately one-half mile south of one of the airport's two runways. The jury also found that, as a result, TCLC suffered $2,950,000 in damages. The City appeals the trial court judgment rendered in favor of TCLC; TCLC appeals the trial court's denial of its request for a permanent injunction and attorney's fees. We will affirm the trial court's judgment.

BACKGROUND

The City owns and operates the airport, which is located in southeast Travis County on a site formerly occupied by Bergstrom Air Force Base ("Bergstrom").¹ The airport came to be located on this site after the City's voters approved a May 1993 referendum to build a new municipal airport there. The City officially took ownership of the Bergstrom property during a September 1993 ceremony.

TCLC owns a 135-acre tract of land located approximately one-half mile south of airport runway 35L. This land is burdened by a "Perpetual Overflight Easement for Military Aircraft" (the "Easement") granted by TCLC's predecessors in title to the United States and its assigns. The Easement gives the grantee the right to prohibit or remove any obstacles from intruding into a certain amount of airspace above the subject property. The Easement also conveys "the right of unobstructed passage of all military aircraft and aircraft operated under military control . . . in all air space above the surface of the Grantors' property . . . ."² (Emphasis added.) The City informed the federal government that it planned to operate the Bergstrom property as a municipal airport subject to federal regulation, and thus needed a number of easements acquired by the Air Force during its operation of Bergstrom. The federal government therefore assigned the Easement burdening TCLC's land to the City. According to MikeMays TCLC's manager,³ the City asked TCLC to expand the Easement to permit overflights for all aircraft, rather than just military aircraft. Mays testified that TCLC refused the request because overflight rights are "a valuable asset" and TCLC did not feel that it "should have to donate [the rights] to the City." The City did not obtain or purchase an easement for civilian flights over TCLC's land.

The airport began commercial air cargo operations around June 30, 1997. TCLC sued the City, alleging that the City's operating and flying civilian operations through airspace over TCLC's land without permission constituted a taking of its property. See Tex. Const. art. I, 17 ("No person's property shall be taken, damaged or destroyed for . . . public use without adequate compensation being made."). TCLC requested the court to declare that the scope of the Easement did not include avigation rights for municipal airport purposes, and sought an injunction prohibiting the City from authorizing or directing overflights of the subject property until the City obtained legal overflight rights through condemnation proceedings or through purchase of an easement.⁴ TCLC also sought actual and exemplary damages for trespass and inverse condemnation, as well as attorney's fees.

By the time the parties presented their case to the jury, the airport had flown over six thousand non-military flights through the airspace above TCLC's property. The City's position throughout trial was that TCLC had no right to the airspace above its land; therefore, civilian overflights did not take or cause any harm to TCLC's property. The City argued below and argues now on appeal that TCLC's property instead was harmed by height restrictions already imposed on the property by federal aviation law, the Easement, and the City's Hazard Zoning Ordinance. The City reasons that because these height restrictions burdened TCLC's land before the airport began flying air cargo operations over the land, the City took nothing from TCLC when civilian operations commenced.

The City's theory that TCLC's property is limited by height restrictions, rather than overflights, is based on the use to which TCLC intends to put the subject property. The trial evidence established that TCLC owns a permit to operate a Type IV landfill on its property. This permit allows dry waste to be deposited in the landfill, such as construction and remodeling rubble, tree clippings, and tires.

We begin with a short history of the development of the landfill project. An enterprise named 244 Joint Venture purchased the subject property in 1983. Because the subject property is adjacent to the City's Type I landfill,⁵ the members of 244 Joint Venture believed it could also be developed as a landfill. Therefore, they formed a partnership called the Travis County Landfill Company (the "Company") to obtain a permit to operate a Type IV landfill⁶ on the property. The Company obtained the permit in 1988. Because of a lull in building projects in the late 1980s, the Company determined that there was an insufficient stream of construction waste to justify the expense of opening a Type IV landfill at that time.

In 1992, the Company changed its business structure to become TCLC, the limited liability company that is a party to this case. The Federal Deposit Insurance Corporation closed the bank holding 244 Joint Venture's note and requested full payment of the note. TCLC paid the outstanding amount of the bank loan in December 1993, thus bringing under its ownership both an interest in the subject property and the landfill permit.

The appraisal experts for the City and TCLC both testified that, excluding the existence of the airport, the highest and best use of TCLC's land was a Type IV landfill vertically expanded beyond the existing permit. TCLC also presented the testimony of a professional engineer who stated that but for the airport it was "extremely likely" that the Texas Natural Resource Conservation Commission ("TNRCC") would grant a vertical expansion of the existing permit.

Both parties' appraisal experts explained that valuing the subject property as if the airport did not exist is the first step in determining the damages resulting from an alleged taking by a federally funded project, such as the airport. After determining the fair market value of the whole property, excluding from consideration the construction and operations of the airport, the appraisers determined the fair market value of the property immediately after the taking, considering the uses to which the remainder will be subjected. Both parties' appraisal experts agreed that, excluding the existence of the airport, the highest and best use of TCLC's land was a vertically expanded Type IV landfill. Furthermore, both parties' experts testified that, excluding from consideration the construction and operations of the airport, the fair market value of TCLC's property was $9,800,000. Both experts also expressed the opinion that the fair market value of the property decreased with the airport in operation. Two reasons identified by the experts for the decrease in value were: (1) TCLC's inability to vertically expand its landfill beyond the existing permit; and (2) the increased risk associated with operating a landfill adjacent to a municipal airport. The experts differed as to the effect of the increased risk. The City's expert testified that the remainder of TCLC's land, considering the airport operations, was worth $7,500,000, while TCLC's expert determined the remainder to be worth $6,200,000.

The trial court submitted both a liability and a damage question to the jury. The jury determined that the City took TCLC's airspace rights by overflights associated with the operation of the airport and determined the fair market value of the land after the taking to be $6,850,000, a sum between the two valuations presented by the experts.

The City moved for judgment notwithstanding the verdict, but the trial court denied the motion.⁷ The trial court rendered judgment for TCLC and awarded it $2,950,000 in damages, the difference found by the jury in the property's value before and after the taking. The court denied TCLC's request for injunctive relief and attorney's fees. TCLC asked the court to make findings of fact and conclusions of law in support of the final judgment. The trial court concluded as a matter of law that, "[b]eginning on or about June 30, 1997, TCLC's superadjacent [sic] airspace rights were taken by regular and frequent overflights conducted in connection with the operation of [the airport]." The City appeals the trial court judgment in six issues, arguing in the first five issues that the trial court erred by denying the grounds stated in its motion for judgment notwithstanding the verdict, and arguing in its sixth issue that the trial court erred in its charge to the jury. TCLC also appeals the trial court judgment. In two issues, TCLC contends that the trial court abused its discretion by failing to enjoin overflights by the airport pending the City's payment of compensation and by failing to award TCLC attorney's fees.

DISCUSSION

The City has consistently characterized TCLC's claim as a complaint that the height restrictions burdening its property prohibit it from expanding a landfill as high...