Metropolitan Transit Authority v. Graham

• Decision Date: 08 May 2003
• Docket Number: No. 14-02-00284-CV.,14-02-00284-CV.
• Citation: Metropolitan Transit Authority v. Graham, 105 S.W.3d 754 (Tex. App. 2003)
• Parties: METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, TEXAS, Appellant, v. Mary Francis Hofheinz GRAHAM, formerly known as Mary F. Hofheinz, Individually and as Executor of the Estate of Roy M. Hofheinz, Deceased, Roy M. Hofheinz, Jr., James Fred Hofheinz, Dene Hofheinz Anton, also known as Dene Hofheinz Mann and the Hofheinz Family Trust No. 2, Appellees.
• Court: Texas Court of Appeals

105 S.W.3d 754

METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, TEXAS, Appellant, v. Mary Francis Hofheinz GRAHAM, formerly known as Mary F. Hofheinz, Individually and as Executor of the Estate of Roy M. Hofheinz, Deceased, Roy M. Hofheinz, Jr., James Fred Hofheinz, Dene Hofheinz Anton, also known as Dene Hofheinz Mann and the Hofheinz Family Trust No. 2, Appellees.

No. 14-02-00284-CV.

Court of Appeals of Texas, Houston (14th Dist.).

May 8, 2003.

J. Mark Breeding, Houston, for appellant.

W. Allyn Hoaglund, Houston, for appellees.

Panel consists of Justices EDELMAN, SEYMORE, and GUZMAN.

OPINION

EVA M. GUZMAN, Justice.

Appellant Metropolitan Transit Authority of Harris County ("Metro") appeals the dismissal of its eminent domain proceeding against appellees Mary Francis Hofheinz Graham, formerly known as Mary F. Hofheinz, individually and as executor¹ of the Estate of Roy M. Hofheinz, Deceased, James Fred Hofheinz, and Dene Hofheinz Anton, also known as Dene Hofheinz Mann (collectively "the Adjudicated Owners"). Roy M. Hofheinz, Jr. and the Hofheinz Family Trust No. 2 (the latter entity being "the Trust"), named in the condemnation petition but not served with notice of the hearing, also appear as appellees (together "the Unserved Owners"). Finding the trial court erred in dismissing Metro's lawsuit for lack of jurisdiction, we reverse the dismissal and award of attorney's fees, and remand the case for further proceedings.

FACTUAL BACKGROUND

As part of the construction of the 7.5-mile light rail line running from downtown Houston to the Astrodome area, Metro sought to acquire a 1.65-acre tract of land owned by appellees. Metro began construction work on the property under a temporary right of entry agreement obtained from two of the appellees, however when purchase negotiations deteriorated, Metro initiated condemnation proceedings. Metro's original petition and statement in condemnation filed July 2001 named all of the appellees as owners of the property. The trial court appointed special commissioners pursuant to Section 21.014 of the Texas Property Code and set the required hearing, but Metro was unable to serve notice of the hearing on the two Unserved Owners. On September 26, 2001, the morning of the hearing, Metro filed a notice of absence of service advising the special commissioners that despite diligent efforts, it had not been able to serve Roy M. Hofheinz, Jr. and the Trust, and would be proceeding only against the owners of a 5/12 undivided interest in the property who had been served. After the hearing, the special commissioners entered an award as to the 5/12 undivided interests of the owners who had been served, but did not adjudicate the remaining 7/12 undivided interests of Roy M. Hofheinz, Jr. and the Trust. Metro then initiated a second condemnation proceeding in another court to acquire rights to the remaining 7/12 undivided interests, a proceeding not involved in this appeal.²

Following the trial court's approval of the special commissioners' award, Metro filed objections to the commissioners' findings under section 21.018 of the Texas Property Code, appealing the award and findings to the trial court. Shortly thereafter, the Adjudicated Owners and the Unserved Owners jointly filed a motion to dismiss the condemnation proceeding, arguing that lack of notice and service on the Unserved Owners deprived the special commissioners (and thus the trial court) of subject matter jurisdiction.³ After initially rejecting this argument, the trial court subsequently agreed and dismissed the original lawsuit for lack of jurisdiction. At the dismissal hearing, the court noted that although separate condemnation proceedings are not prohibited, Metro had opted to name all the undivided interest owners in one proceeding then failed to dismiss the two unserved parties prior to the special commissioners' hearing, thus violating the requirement that all parties be given notice of the hearing. In its findings of fact and conclusions of law, the trial court concluded that Metro failed to strictly comply with the Texas Property Code by failing to serve notice of the hearing on Roy M. Hofheinz, Jr. and the Trust or dismissing them prior to the hearing. This, in turn, deprived the commissioners of jurisdiction to proceed with the condemnation hearing and deprived the trial court of jurisdiction to proceed with the lawsuit. The dismissal order granted appellees attorney's fees and costs against Metro in an amount of $57,452.50.

In two issues, Metro contends the dismissal was inappropriate because (1) appellees lacked standing to seek dismissal; and (2) the trial court erred in ruling it had no jurisdiction.

ANALYSIS

Texas has enacted a comprehensive statutory scheme governing the State's eminent domain power, setting forth jurisdictional requirements that must be met before it can condemn private property for public use. See TEX. PROP.CODE §§ 21.001-.065. Condemnation proceedings have two distinct phases. The first phase is administrative, involving a hearing before three special commissioners appointed by the trial court. Id. §§ 21.014-.015. After a hearing, the commissioners enter findings and determine condemnation damages due the property owner. Id. §§ 21.014, 21.018. If any party timely files an objection to the commissioners' award, the award is vacated and the case proceeds to the second phase as any other judicial proceeding in the trial court. Id. § 21.018; State v. Blackstock, 879 S.W.2d 125, 126 Tex.App.-Houston [14th Dist.] (1994), writ denied.

As recently confirmed by the Texas Supreme Court, proceedings to condemn private land for public use are special in character, and a party attempting to establish its right to condemn must show strict compliance with chapter 21 of the Texas Property Code. State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 641 (Tex. 2002). All parties to the proceeding are entitled to notice of the time and place of the hearing, and the requirement that notice of the commissioners' hearing be served on a party is equivalent to the requirement in ordinary judicial proceedings that citation be properly served on a defendant. Id.

In Bristol, the supreme court stated, "Unless notice has been properly served in accordance with the statute, the commissioners have no jurisdiction to assess damages or do anything that would declare a condemnation of the property." Id. Appellees rely on this language to support their contention that the trial court properly dismissed Metro's condemnation action. In essence, appellees contend the court lacked jurisdiction because (1) all owners must be named and served in one proceeding; and (2) not all of the named owners were served in this case.

Subject Matter Jurisdiction — Failure to Serve all Owners

Regarding Metro's jurisdiction issue, appellees first argue that the trial court lacked jurisdiction over the condemnation proceeding because Metro failed to serve all owners with notice of the commissioners' hearing. Implicit in this argument is the assertion that jurisdiction is not acquired unless all owners are named and served in one condemnation proceeding. Because the only evidence presented at the dismissal hearing pertained to costs and attorney's fees, the validity of the dismissal must be determined solely as a matter of law. Lo-Vaca Gathering Co. v. Earp, 487 S.W.2d 789, 790 (Tex.Civ.App.-El Paso 1972, no writ).

It is undisputed that all appellees except the two Unserved Owners were properly served with notice of the hearing, and that the commissioners' award only involved the 5/12 undivided interests of the appellees who were properly served, leaving untouched the undivided 7/12 ownership interests of the Unserved Owners. Although the Texas Supreme Court has yet to address the jurisdictional aspects of proceeding against less than all owners of undivided property interests in a condemnation proceeding, we find guidance in cases allowing condemnation actions to proceed in the absence of all owners when, as here, the rights of the unserved owners were not adjudicated or harmed. Noteworthy is the Lo-Vaca case wherein the court stated:

The failure of a condemnor to join an owner of an interest in the land renders ineffectual the proceedings as to interest of the party not joined. Such failure, however, should not invalidate the entire proceedings insofar as the interest of the parties who are properly designated and made parties to the proceedings.

487 S.W.2d at 790 (emphasis added). Had the commissioners proceeded to adjudicate the 7/12 undivided interests of the Unserved Owners, a different case would be presented, as Lo-Vaca would recognize the impropriety of adjudicating interests of property owners not before the court. See also City of Houston v. Kunze, 153 Tex. 42, 262 S.W.2d 947, 951 (1953) (holding as void condemnation proceedings involving property rights of parties not properly served with notice). Because Metro notified the commissioners and the other parties it would be proceeding only against the owners who had been served and no action was taken against the Unserved Owners, Lo-Vaca supports the commissioners' actions regarding the Adjudicated Owners in absence of the Unserved Owners.

Similarly, the decision of Elliott v. Joseph, 163 Tex. 71, 351 S.W.2d 879, 884 (1961), is helpful in its holding that all persons having an interest in the property must be made parties in order for the condemning authority to obtain complete title. As noted, Metro acquired only the property interests of the Adjudicated Owners, not title to the entirety, and a second proceeding was initiated to acquire the interests of the Unserved Owners. The special commissioners below did not adjudicate the undivided property interests of the unserved appellees, and appellees do not allege they have been harmed by the proceedings below. Appellees do not cite, nor have we identified, any controlling authority depriving the court of jurisdiction...