State v. Bristol Hotel Asset Co.

• Decision Date: 29 November 2001
• Docket Number: No. 00-1146.,00-1146.
• Citation: 65 S.W.3d 638
• Parties: The STATE of Texas, Petitioner, v. BRISTOL HOTEL ASSET COMPANY, Nomura Asset Capital Corporation, and Comptroller of Public Accounts, Respondents.
• Court: Texas Supreme Court

65 S.W.3d 638

The STATE of Texas, Petitioner, v. BRISTOL HOTEL ASSET COMPANY, Nomura Asset Capital Corporation, and Comptroller of Public Accounts, Respondents.

No. 00-1146.

Supreme Court of Texas.

Argued October 10, 2001.

November 29, 2001.

As Corrected on Denial of Rehearing February 14, 2002.

Jeffrey S. Boyd, Ronda Leigh Neff, Cavitt Wendlandt, Office of Atty. Gen., John Cornyn, Atty. Gen., Andy Taylor, Locke Liddell & Sapp, Grady Click, Office of Atty. Gen., Howard G. Baldwin, Deputy Atty. Gen., Susan Desmarais Bonnen, Office of Atty. Gen., Austin, for petitioner.

John N. McClish, Womack & McClish, Austin, Linda J. McKinnis, CT Corp. Systems, Dallas, for respondents.

Justice ENOCH delivered the opinion of the Court, in which Chief Justice PHILLIPS, Justice HECHT, Justice OWEN, Justice O'NEILL, and Justice JEFFERSON join.

The issue in this case is whether an executed return of service filed with the special commissioners in administrative condemnation proceedings is evidence that notice of the hearing before the special commissioners was properly served. We conclude that, like a return of service of a citation or a certificate of service in judicial proceedings, a return of service of notice in administrative condemnation proceedings that satisfies the statutory requirements is prima facie evidence of the facts recited therein. Thus, the court of appeals erred in affirming the trial court's judgment dismissing this case.¹ We therefore reverse the court of appeals' judgment and remand this case to the trial court for further proceedings consistent with this opinion.

In 1997, the State began condemnation proceedings against Bristol Hotel Asset Company and others, seeking to acquire a ten-foot wide strip of land for a road project. On March 25, 1998, special commissioners appointed by the trial court held a hearing to determine the damages resulting from the condemnation. More than eleven days before the hearing, the commissioners issued notice to each party of the date, time and place for the hearing, as required by the Property Code.² The return of service stated:

The (attached) Notice came to my hand on the 17th day of February, 1998, at 10 o'clock A.M., and I served it at 11:25 o'clock A.M. on the 26th day of February, 1998, at 14295 Midway Rd., Dallas, TX 75244 by delivering a copy of the same, by ____ to J. Peter Kline, President, Agent for Service for Bristol Hotel Asset Company, Fee Owner, together with a copy of the First Amended Petition attached thereto.

I am a person competent to testify.

The return was signed and sworn to before a notary public by Susan Kelly, a Texas Department of Transportation employee.

Bristol did not appear at the commissioners' hearing, although Bristol acknowledges being aware of the hearing several days before it took place. After taking evidence, the commissioners awarded Bristol $196,674. Thereafter, Bristol filed objections to the award and a verified plea to the jurisdiction in the trial court. Bristol's plea to the jurisdiction alleged that it had not been properly served with notice of the commissioners' hearing, and that the State failed to engage in good faith negotiations.

A hearing on Bristol's plea to the jurisdiction was set for April 20, 1999. On April 16, the State requested a continuance. After the parties agreed that all discovery responses would be "frozen" and no new witnesses would be designated, the trial court reset the hearing for May 24.

At the hearing, the State offered the executed return of service from the commissioners' file as proof that Bristol had been properly served with notice of the commissioners' hearing. The trial court sustained Bristol's objection to the notice as hearsay. The State then attempted to call Susan Kelly to testify to the facts contained in the return. Bristol objected to Kelly's testimony because the State had not identified her in its interrogatory answers as a person with relevant knowledge and had agreed not to designate any new witnesses. The trial court again sustained the objection and denied the State's request for a continuance. Thereafter, the trial court allowed Kelly to testify in an offer of proof, and also allowed the State to introduce the return for bill of review purposes. After hearing testimony from Bristol on its attorneys' fees, the trial court dismissed the condemnation suit and rendered judgment for Bristol for its attorneys' fees and costs.

The State appealed, arguing that the trial court abused its discretion by refusing to admit the return as evidence of service, and further erred when it excluded Kelly's testimony. The court of appeals affirmed the trial court's judgment, concluding that "[t]he State cannot rely solely on the documentation of return of service to prove service was made ... because such evidence is hearsay when service was executed to provide notice of a commissioner's hearing."³ The court of appeals relied on Baird v. Sam Houston Electric Cooperative, Inc.⁴ and Rotello v. Brazos County Water Control & Improvement District No. 1⁵ for the proposition that the presumption of proper service that attaches to a return of service of citation in a judicial proceeding does not attach to a return in the context of service of notice of a commissioners' hearing.⁶ Rather, the court stated, the condemnor must prove proper service through the testimony of the person effecting service.⁷ Further determining that the trial court did not err when it excluded Kelly's testimony, the court of appeals affirmed the trial court's judgment.

We granted the State's petition for review to determine the requirements for proof of notice in a condemnation proceeding. The State argues that: 1) the return should have been admitted as prima facie evidence that notice was served; 2) the trial court abused its discretion in refusing to admit Kelly's testimony because Bristol would not have been surprised or prejudiced by that testimony even though the State had not identified her in its interrogatory answers; and 3) the trial court abused its discretion by dismissing the case without considering the standards for death penalty sanctions set forth in Trans-American Natural Gas Corporation v. Powell.⁸ Because of our resolution of the first issue, we do not reach the other two. Neither the trial court nor the court of appeals addressed the good-faith negotiations issue that Bristol asserted in its plea, and that issue is not before us.

Proceedings to condemn land are special in character, and the party attempting to establish its right to condemn must show strict compliance with the law authorizing private property to be taken for public use.⁹ Currently, that law is set out in Chapter 21 of the Texas Property Code. A condemnation proceeding begins when the condemnor files a petition with the appropriate trial court.¹⁰ After the petition is filed, the trial court appoints three special commissioners to assess the condemnee's damages.¹¹ The commissioners must schedule a hearing.¹² All parties to the proceeding are entitled to notice of the time and place of the hearing, which must be served not later than eleven days before the hearing date.¹³ Anyone competent to testify may serve notice, and must return the original notice plus a return of service to the commissioners on or before the hearing date.¹⁴ 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.¹⁵

A party may challenge the commissioners' findings by filing written objections with the trial court.¹⁶ Here, Bristol did so, challenging the commissioners' jurisdiction on the grounds that Bristol had not been properly notified of the commissioners' hearing. It is the State's burden to prove notice in compliance with the statute in order to establish the commissioners' jurisdiction.¹⁷

The requirement that notice of the commissioners' hearing be served finds a parallel in ordinary judicial proceedings with the requirement that citation be properly served on the defendant.¹⁸ The person completing service must execute a verified return of service, which must be filed with the court.¹⁹ The return of service in judicial proceedings "has long been considered prima facie evidence of the facts recited therein."²⁰

Bristol argues, citing the Houston court of appeals' opinions in Baird and Rotello, that because the commissioners' proceedings are administrative rather than judicial, and because service of notice of the commissioners' hearing is not an official duty of the sheriff or constable, the return of service in this case is not entitled to the same weight as a return of service of a citation.²¹ But this distinction is not persuasive. Under our civil procedure rules, a citation need not be served by a sheriff or constable. It can be served by anyone over eighteen whom the court has authorized to do so, as long as the person is not a party and has no interest in the suit's outcome.²² Thus, a citation is issued by the court and served by someone authorized by the court. Similarly, the commissioners, who are court-appointed, issue the notice of hearing, which by statute may be served by anyone competent to testify.²³ In either circumstance, the effect is exactly the same—service is performed at the state's direction and with the state's authorization. Consequently, the return in this case, which was executed by a person competent to testify and sworn to before a notary public, is entitled to be treated the same as a return in a judicial proceeding, at least to the extent of establishing prima facie that service occurred.²⁴ We therefore disapprove of Baird and Rotello to the extent that they hold otherwise.

The only potentially significant distinction between return of a citation and the return in condemnation proceedings is that the former must be verified while the latter need not be.²⁵ In this regard, we note ...