In re Lazy W Dist. No. 1

• Decision Date: 27 May 2016
• Docket Number: NO. 15–0117,15–0117
• Citation: 493 S.W.3d 538
• Parties: In re Lazy W District No. 1, Relator
• Court: Texas Supreme Court

493 S.W.3d 538

In re Lazy W District No. 1, Relator

NO. 15–0117

Supreme Court of Texas.

Argued March 9, 2016

Opinion delivered: May 27, 2016

M. Keith Dollahite, M. Keith Dollahite, P.C., Tyler TX, Evan (Van) Lane Shaw, Colleen Meyer, Law Offices of Van Shaw, Dallas TX, Martin Ray Bennett, Kugle Skelton & Bennett, P.C., Athens TX, Robert Greenlaw Haiman, Remington Hotels, LP, Dallas TX, for Relators.

Barbara E. Rosenberg, Assistant City Attorney, North Dallas TX, Rance L. Craft, Office of the Attorney General, Austin TX, for Amicus Curiae parties.

Hal R. Ray Jr., Michael L. Atchley II, Pope, Hardwicke, Christie Schell, Kelly & Ray, LLP, Fort Worth TX, Tom Henson, Ramey & Flock, P.C., Tyler TX, Real Parties in Interest.

Monty Bennett, Intervenor.

Christopher Daniel Tinsley, Attorney at Law, Athens TX, Jeffrey Lee Coe, Law Office of Jeffrey L. Coe, Palestine TX, Other Interested Parties.

CHIEF JUSTICE HECHT delivered the opinion of the Court.

This original mandamus proceeding involves two governmental entities, one of which petitioned for condemnation of a water pipeline easement across the other's land. The condemnee asserted governmental immunity, and the trial court refused to proceed further without deciding whether the case should be dismissed. The next step would be for the trial court to appoint special commissioners to make an initial determination of the value of the property to be taken. The trial court is not to interfere in the commissioners' proceedings and does not become involved again until the commissioners file their award. The court of appeals granted mandamus relief, holding that the trial court must defer ruling on the immunity issue until after the commissioners file their award and a party objects.¹ We disagree and conditionally grant relief.

The Tarrant Regional Water District (“the Water District”) supplies water to some two million Texans across 11 counties, including residents of the cities of Fort Worth and Arlington. Created in 1924,² the Water District is a governmental agency³ with the power of eminent domain.⁴ In 2010, after years of studies and negotiations, the Water District and the City of Dallas approved a financing agreement to build a 150–mile pipeline to transport water owned by Dallas in Lake Palestine to the Dallas/Fort Worth area to meet its growing needs. This undertaking—the Integrated Pipeline Project—is expected to take 20 years to complete and cost $2.3 billion.⁵ Construction began in 2014.

The proposed route crosses a corner of the 1,000–acre Lazy W Ranch located some five miles northwest of the City of Athens in Henderson County. Project plans call for a 150–foot–wide underground easement, about 3,375 feet long, covering 11.623 acres of the Ranch. The Ranch's principal, Monty Bennett, a Dallas hotelier, opposed running the pipeline through the Ranch and promised to “vigorously fight” it. In 2011, he obtained legislation creating the Lazy W District No. 1 (“the Lazy W”), a municipal utility district.⁶ The Lazy W is comprised entirely of the Ranch, which it acquired in 2013. It owns no other property. Bennett is president of the Lazy W's board of directors. In March 2013, Bennett sued the Water District for violating the Texas Open Meetings Act. A divided court of appeals dismissed the action on the ground that the Water District was immune from suit.⁷ Also in 2013, Bennett supported a slate of three candidates for the Water District's five-member board, two of whom lost to incumbents.⁸ In 2015, he tried again, unsuccessfully, to replace two incumbent board members who support the Project's use of the Ranch.⁹ Bennett also dedicated a small cemetery on the Ranch in the proposed path of the pipeline to thwart the Water District's plan.¹⁰

The Water District offered the Lazy W $169,218 for the easement, and when the offer was rejected, petitioned for condemnation in the district court. The day after the petition was filed, without notice to the Lazy W, the district court appointed three special commissioners to determine the value of the proposed easement.¹¹ When the Lazy W learned of the order, and before the commissioners' hearing, it filed a plea to the jurisdiction, asserting its immunity as a governmental entity¹² and requesting that the appointments be vacated and the petition dismissed. The district court vacated its appointment of the special commissioners and, after briefing and argument, issued an order declining to appoint special commissioners before hearing and ruling on the Lazy W's plea.

The Water District sought mandamus relief in the court of appeals. That court held that “the trial court was without jurisdiction to refuse to appoint special commissioners”, that the Lazy W's plea of immunity was premature, and that the trial court's only course was to ignore the plea until after an objection to the commissioners' award.¹³ The court of appeals directed the trial court to appoint special commissioners and allow them to proceed.¹⁴

The Lazy W petitioned this Court for mandamus relief against the court of appeals. We stayed all proceedings in the trial court¹⁵ and set the matter for oral argument.¹⁶

The exercise of eminent domain authority is governed by Chapter 21 of the Property Code.¹⁷ The condemnor must first make a bona fide offer to acquire the property.¹⁸ If the condemnor and the landowner cannot agree on the value of the property, the condemnor may file a petition containing specified allegations¹⁹ in the proper court²⁰ in the county in which the land is located.²¹ The condemnor must send the landowner a copy of the petition by certified mail.²² Section 21.014(a)

provides in part:

The judge of a court in which a condemnation petition is filed or to which an eminent domain case is assigned shall appoint three disinterested real property owners who reside in the county as special commissioners to assess the damages of the owner of the property being condemned.²³

The special commissioners hold a hearing, gather evidence, determine just compensation for the landowner, and file their award with the court.²⁴ The landowner may, but need not, participate in proceedings before the commissioners.²⁵ If no party timely files an objection to the award, the trial court adopts the commissioners' findings as the judgment of the court.²⁶ If a timely objection is filed, the trial court must vacate the award, cite the parties adverse to the condemnor, and proceed to try all matters in issue as in any other civil cause.²⁷ The condemnor is nevertheless entitled to immediate possession of the property on payment of the commissioners' award.²⁸ The condemnor may move to dismiss the proceeding, without limitation, before the commissioners issue their award.²⁹

We have said that condemnation proceedings have two parts. The first part, involving the commissioners, we have characterized as administrative.³⁰ It is essentially an official, compulsory mediation of the value dispute with the goal of avoiding a trial. We have said that trial courts lack jurisdiction to interfere with proceedings pending before the commissioners.³¹ The second part of condemnation proceedings, following a proper objection to the commissioners' award, we have deemed judicial.³² The commissioners' proceedings are ignored³³ and the court has jurisdiction to proceed as in any other case.³⁴

Based on these precedents, the Water District contends that the trial court in this case cannot rule on the Lazy W's plea to the jurisdiction until the commissioners issue their award. The Water District also points to Section 21.014

, requiring that when a condemnation case is filed, the court “shall” appoint commissioners. The Water District argues that this provision limits a court's jurisdiction from the time a condemnation case is filed until the commissioners' award issues to one thing: appointing commissioners. We disagree.

Section 21.014

is certainly mandatory, but it is not restrictive. It requires the court to appoint commissioners, but it does not forbid any other action. The court need not make those appointments, for example, when the condemnor immediately dismisses the case. Statements in our opinions can be read broadly to suggest that the administrative phase of the proceeding begins immediately when the case is filed and must be free of judicial interference.³⁵ But we have also held that a condemnee can challenge the trial court's jurisdiction to appoint the special commissioners if the condemnation petition fails to properly identify the land sought to be condemned.³⁶ Also, if a petition is filed in an improper court, that court is not authorized to appoint special commissioners, and any order to that effect could be deemed void.³⁷

“Courts always have jurisdiction to determine their own jurisdiction”.³⁸ “[A]ll courts bear the affirmative obligation ‘to ascertain that subject matter jurisdiction exists regardless of whether the parties have questioned it.’ ”³⁹ A trial court “must determine at its earliest opportunity whether it has the constitutional or statutory authority to decide the case before allowing the litigation to proceed.”⁴⁰ We have never held that a trial court in a condemnation case is powerless to determine its own subject matter jurisdiction before appointing commissioners. The Property Code does not limit the trial court's power or responsibility to determine its jurisdiction, nor do we think it could. For the Legislature to attempt to authorize a court to act without subject matter jurisdiction would violate the constitutional separation of powers.⁴¹

As our cases reflect, it is important that the special commissioners convene and render an award expeditiously and without interference from the trial court. But the special commissioners' proceeding should not be a probable waste of time and effort. Governmental immunity from suit “implicates a court's subject-matter jurisdiction over pending claims, and without jurisdiction the court cannot proceed at all in any cause”.⁴² The trial court had...