State v. McCarley

• Decision Date: 20 December 2007
• Docket Number: No. 03-07-00069-CV.,03-07-00069-CV.
• Citation: 247 S.W.3d 323
• Parties: The STATE of Texas, Appellant, v. Lloyd S. McCARLEY et al., Appellee.
• Court: Texas Court of Appeals

247 S.W.3d 323

The STATE of Texas, Appellant, v. Lloyd S. McCARLEY et al., Appellee.

No. 03-07-00069-CV.

Court of Appeals of Texas, Austin.

December 20, 2007.

Rehearing Overruled February 21, 2008.

Sherry L. Peel, Asst. Atty. Gen., Austin, TX, for Appellant.

John McClish, Womack, McClish, Wall & Foster, P.C., Austin, TX, for Appellee.

Before Justices PATTERSON, PURYEAR and PEMBERTON.

OPINION

BOB PEMBERTON, Justice.

The State of Texas appeals from a judgment in a statutory condemnation proceeding awarding Lloyd McCarley $366,820 as just compensation for the State's taking of 836 square feet from his property for use in the Texas Department of Transportation's construction of the State Highway 45 toll road project. The judgment was based on a jury's verdict on a single issue inquiring as to the amount of damages. The jury awarded $371,000. The trial court credited the State's prior deposit of the amount of the special commissioner's award in order to take possession— $4,180—to yield the judgment amount.

The State argues that the evidence is legally and factually insufficient to support the jury's damages award. At trial, McCarley presented proof that the State's use of his property severely diminished the value of his remainder by altering its drainage in a manner making it impossible for him to meet the City of Austin's requirements for obtaining the permits necessary to develop it. The State urges that such damages "do not arise from the condemnation of the 836 square feet or to the uses which will be made by TxDOT of the 836 square feet [but] arise from an alleged use of TxDOT's existing right of way," and, consequently, are not compensable. See State, City of Austin v. Schmidt, 867 S.W.2d 769, 777-79 (Tex.1993). Based on that same premise, the State argues that McCarley has asserted only an inverse condemnation claim. See Tex. Const. art. I, § 17; City of Austin v. Casiraghi, 656 S.W.2d 576, 579-80 (Tex.App.-Austin 1983, no pet.).¹ It brings several issues challenging whether McCarley's "inverse condemnation claim" is ripe where the property has not actually flooded and McCarley has not applied for and been denied a development permit, see Hubler v. City of Corpus Christi, 564 S.W.2d 816, 822-23 (Tex.Civ.App.-Corpus Christi 1978, writ ref'd n.r.e.); whether McCarley properly pled and proved the intent element of an inverse condemnation claim, see City of Dallas v. Jennings, 142 S.W.2d 310, 314 (Tex.2004); and whether McCarley retained a justiciable interest in his "inverse condemnation claim."

Because we conclude that the evidence was legally and factually sufficient to support the jury's award of $371,000 as damages for the State's statutory condemnation of McCarley's property, we will affirm the trial court's judgment.

To address the State's challenge to the jury's damages award, we apply the familiar standards of legal and factual sufficiency review.² With each, the starting point of our analysis—barring a preserved and valid complaint of charge error—is the charge actually submitted to the jury. Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000) (legal sufficiency); Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 762 (Tex.2003).(factual sufficiency); Ancira Enters., Inc. v. Fischer, 178 S.W.3d 82, 93 (Tex.App.-Austin 2005, no pet.). The State brings no complaint of charge error on appeal.

The sole issue submitted to the jury inquired:

On September 16, 2003 [the date the State took possession of the property], what was the difference between (a) the fair market value of the landowner's whole property before the taking, excluding any consideration of the condemnation or proposed project and (b) the fair market value of the remainder only, after the taking, giving consideration to the uses to which the condemned part is to be subjected.

* * *

Answer by stating the difference in Fair Market Value in dollars and cents.

The jury was given the following definitions:

"Fair Market Value" means the price which the property would bring when it is offered for sale by one who desires, but is not obligated to sell, and is bought by one who is under no necessity of buying it, taking into account all of the uses to which it is reasonably adaptable and for which it either is or in all reasonable probability will become available within a reasonable future period. In making your determination of Fair Market Value, you will consider the "Highest and Best Use" of the land involved. "Highest and Best Use" means that legal use to which the property could have been adapted on the date of taking, or within the reasonably foreseeable future thereafter which was legally permissible, physically possible, financially feasible, and provided the owner with the greatest net return.

The jury was thus instructed to calculate McCarley's damages by comparing the fair market value of his property before and after the taking, reflecting both the loss of the part taken plus any diminution of the remainder's value. See Westgate, Ltd. v. State, 843 S.W.2d 448, 456-57 (Tex.1992) (explaining that this form of submission is appropriate in cases where the part taken is difficult to value as severed land and there is no evidence that the condemnation increased the remainder's value).

The charge further directed the jury that, when calculating these measures of fair market value, its ultimate focus should be the price the property would have brought in a transaction between a willing seller and willing buyer at the time. See City of Austin v. Cannizzo, 153 Tex. 324, 267 S.W.2d 808, 812-15 (1954); State v. Carpenter, 126 Tex. 604, 89 S.W.2d 194, 200 (1936). To that end, Texas courts have long held it appropriate, as a general rule, for a jury to consider "all factors ... which would reasonably be given weight in negotiations between a seller and a buyer" of the property. Cannizzo, 267 S.W.2d at 814; Carpenter, 89 S.W.2d at 200 ("Generally, it may be said that it is proper as touching the matter of the value and depreciation in value to admit evidence upon all such matters as suitability and adaptability, surroundings, conditions before and after, and all circumstances which tend to increase or diminish the present market value."). Thus, the jury may consider current and reasonably probable future potential uses of the property, as well as consequential damages that it is reasonably foreseeable will result from the condemnor's uses of the condemned property, as such factors would ordinarily be given weight by willing buyers and sellers and, therefore, would be reflected in the property's fair market value. See Spindor v. Lo-Vaca Gathering Co., 529 S.W.2d 63, 65-66 (Tex.1975); Cannizzo, 267 S.W.2d at 814-15. Conversely, purely speculative potential uses or injuries are not probative of fair market value. Id. at 814 (willing seller-willing buyer test of market value "exclude[s] consideration of purely speculative uses to which the property might be adaptable but wholly unavailable but would permit consideration of all uses to which the property was reasonable adaptable and for which, or in reasonable probability would become, available within a reasonable time."); Carpenter, 89 S.W.2d at 200 ("Evidence ... relating to remote, speculative, and conjectural uses, as well as injuries, which are not reflected in the present market value of the property" should be excluded); see also Texas Elec. Serv. Co. v. Campbell, 161 Tex. 77, 336 S.W.2d 742, 744-45 (1960) (testimony that it was "possibly probable" that town would later expand so as to make property suitable for industrial uses was not probative of the property's fair market value).³

These principles, in part, enable a landowner to recover all reasonably foreseeable consequential damages from the taking in the statutory condemnation proceeding and not be "burdened with the delay and expense of future lawsuits." White v. Natural Gas Pipeline Co. of Am., 444 S.W.2d 298, 301 (Tex.1969). In fact, a landowner's failure to seek all reasonably foreseeable damages in the condemnation proceeding may bar his future claims for those damages. See City of La Grange v. Pieratt, 142 Tex. 23, 175 S.W.2d 243, 244-46 (1943)⁴; see also Casiraghi, 656 S.W.2d at 579 (Tex.App.-Austin 1983, no pet.) ("In eminent domain proceedings the property owner is given a single opportunity to recover damages for the taking of his property for public use.").

The jury heard evidence that, at relevant times, McCarley had owned two adjacent undeveloped lots totaling approximately 1.75 acres in size. One lot, approximately 1.0106 acres in size, was situated at the corner of Ranch Road 620, a busy thoroughfare that ran generally east-west at that location, and Lyndhurst Street, which ran generally north-south until it ended at its intersection with 620. Both roads were originally at grade level. The second lot, roughly .7381 acres in size, sat immediately south of the first lot, its east side fronting Lyndhurst. As of the date of taking, the property was partially within the City of Austin, and the rest within the City's extraterritorial jurisdiction.

McCarley presented evidence that although he had not yet developed the property, he had previously performed extensive planning and permitting in anticipation of developing it for commercial uses. In 1996, McCarley hired a land planner, Richard Crank, and an engineer, Curtis Wilson, to complete a subdivision of the property and obtain the necessary permits to develop the site. Wilson obtained general retail zoning for the portion within the Austin city limits. Crank prepared the necessary applications and obtained approval for a two-lot subdivision with a front-lot retail development and rear-lot office development. Wilson engineered a utility plan for water and wastewater service, which was approved, as well as a plan for stormwater abatement that was approved by the Texas Natural Resource and Conservation Commission. Wilson also designed a stormwater drainage and...