State v. Schmidt

Decision Date13 February 1991
Docket NumberNo. 3-90-154-CV,3-90-154-CV
Citation805 S.W.2d 25
PartiesSTATE of Texas and City of Austin, Appellants, v. Robert M. SCHMIDT and Richard A. Massman, Co-Trustees of the Leon A. Schmidt Children's Trust Number One, Appellees.
CourtTexas Court of Appeals

James Noble Johnson, Asst. City Atty., Austin, for appellants.

Stephen I. Adler, Barron & Adler, Austin, for appellees.

Before CARROLL, C.J., and POWERS and JONES, JJ.

POWERS, Justice.

In a statutory-condemnation action, the State of Texas and the City of Austin recovered title to a small part of a tract of land owned by Robert M. Schmidt and Richard A. Massman. The trial-court judgment awarded Schmidt and Massman a sum equal to the stipulated market value of the part taken ($7,559.00) plus the depreciation in value of the remainder as found by the jury ($74,880.00). Tex.Prop.Code Ann. § 21.042(b), (c) (1984). The State and the City appeal. We will affirm the judgment.

We refer hereafter to the litigants as Schmidt and the City, omitting any mention of the State and Massman merely for convenience and clarity.

THE CONTROVERSY

Schmidt's parcel adjoins 75 feet of the east right-of-way line of U.S. Highway 183 in Austin. Two tenants operate businesses in a building near the rear of Schmidt's parcel. The area is devoted to commercial uses. An appended drawing illustrates the general circumstances surrounding the controversy. At the present time, motor vehicles may travel rather directly between Schmidt's parcel and the existing traffic lanes of Highway 183.

The City intends, however, to convert Highway 183 to a controlled-access highway. To eliminate grade crossings, the City will raise the main traffic lanes about 37 feet. These elevated lanes will connect at intervals to ramps. The ramps will connect in turn to parallel frontage roads on either side, and by them to the general system of public streets in Austin. After completion of the project, Schmidt's parcel will adjoin one of the frontage roads. Motor vehicles on the main traffic lanes will then have only indirect passage, via the frontage roads and ramps, to and from Schmidt's tract.

Because of certain federal regulations, the planned conversion of Highway 183 to a controlled-access highway cannot be accomplished unless the existing right-of-way is widened by approximately six feet where it adjoins Schmidt's parcel. To acquire this narrow strip across the front of Schmidt's tract, the City initiated a statutory-condemnation proceeding under Chapter 21 of the Texas Property Code. As indicated in the appended drawing, no structures or parking spaces lie within the narrow strip.

After a hearing, the special commissioners awarded only the market value of the narrow strip in the sum of $7,559.00. Objections having been taken to their award, a trial de novo followed in the county court at law. The parties stipulated that $7,559.00 was the market value of the narrow strip to be acquired by the City. The trial proceeded on Schmidt's claim for injury to the remainder of his tract.

At the conclusion of the evidence, the jury were asked to find the amount of any decrease in the fair market value of the remainder, immediately after the condemnation, considering all of the uses to which the narrow strip will or may be put. They answered $74,880.00. In its final judgment the court awarded Schmidt that sum together with the stipulated amount of $7,559.00. The City challenges on appeal the $74,880.00 awarded as damages for injury to the remainder.

The City contends we must reverse the trial-court judgment because that court erroneously admitted evidence of the following: (1) the completed project will require an increased "circuity of travel" between the main traffic lanes and Schmidt's tract; (2) raising the main traffic lanes will divert traffic from the streets and roads serving the Schmidt property at ground level; (3) elevating the main traffic lanes will make Schmidt's tract less visible from the main traffic lanes; and (4) construction activities associated with the project will interfere with the use of Schmidt's tract during the lengthy period of construction. 1

The City argues that the four factors are not "property" within the meaning of either the condemnation statutes (Tex.Prop.Code Ann. §§ 21.001-.065 (1984 & Supp.1991)) or the constitutional guarantee that an owner's "property" shall not be taken, damaged, destroyed, or appropriated for public use without compensation (Tex. Const.Ann. art. I, § 17 (1984)). Consequently, the City argues, no compensation can be awarded for the four items, and the evidence showing them was inadmissible because it was irrelevant as a matter of law after the parties agreed upon the fair market value of the narrow strip, the only "property" acquired by the City in its condemnation action.

We will set out below the particulars of the City's argument. We observe here, however, that the argument mixes indiscriminately the rules which govern two distinctly different elements of a condemnation action: (1) the substantive rules applicable to a determination of whether the owner has a legal right to compensation; and (2) the substantive and evidentiary rules applicable to a calculation of the owner's compensation once he has established a legal right to it. See City of Austin v. Teague, 570 S.W.2d 389, 394 (Tex.1978); City of Abilene v. Downs, 367 S.W.2d 153, 160 (Tex.1963). We shall unmix them in the discussion that follows.

AN OWNER'S LEGAL RIGHT TO COMPENSATION

An owner acquires a legal right to compensation when he sustains a legal injury respecting his "property." Under the condemnation statutes, this occurs when a condemnor acquires title to the whole or a part of the owner's "property." (§ 21.012(b)(1), §§ 21.042-.062). Under the Texas Constitution, this occurs when the owner's "property" is taken, damaged, destroyed, or appropriated for public use (art. 1, § 17).

The "property" susceptible to condemnation, under the statutes and the constitution, embraces "every estate or use in the land capable of segregation and ownership such as incorporeal hereditaments and other rights and privileges incidental to the land and necessary to a complete title." Rayburn, Texas Law of Condemnation § 48(4), at 136 (1960). See Houston North Shore Ry. Co. v. Tyrrell, 128 Tex. 248, 98 S.W.2d 786, 793 (1936); McInnis v. Brown County Water Improvement Dist. No. 1, 41 S.W.2d 741, 744 (Tex.Civ.App.1931, writ ref'd); Moody, Condemnation of Land for Highway or Expressway, 33 Texas L.Rev. 357, 362-67 (1955). Because "property" includes, for condemnation purposes, incorporeal property, in addition to tangible property, the former kinds of property are susceptible to legal injury and a corresponding legal right to compensation in a condemnation action. See, e.g., Teague, 570 S.W.2d at 394 (right of lawful "development"); State v. Meyer, 403 S.W.2d 366 (Tex.1966) (right of "access" to public streets); Downs, 367 S.W.2d 153 (right to use and enjoyment free of "nuisance"); City of Amarillo v. Stockton, 158 Tex. 275, 310 S.W.2d 737 (1958) (right to "lateral support"); McGee Irrigating Ditch Co. v. Hudson, 85 Tex. 587, 22 S.W. 967 (1893) ("riparian" right to take water). As pointed out below, however, not every incident of land ownership rises to the dignity of "incorporeal property." The term "incorporeal property" includes only those incidents of land ownership which the law does recognize as legally enforceable rights or choses in action.

In a statutory-condemnation action, the condemnor's petition may expressly claim or deny an intention to acquire certain incorporeal property, or the parties may dispute whether incorporeal property is necessarily encompassed in the taking of the owner's physical land under the facts and circumstances of the particular case. See, e.g., State v. Frost, 456 S.W.2d 245, 256 (Tex.Civ.App.1970, writ ref'd n.r.e.) and State v. Meyers, 292 S.W.2d 933, 936 (Tex.Civ.App.1956, writ ref'd n.r.e.) (right of "access" to public streets).

In an inverse-condemnation action, the owner may sue for compensation on allegations that his incorporeal property has in fact been taken, damaged, destroyed, or appropriated for public use. See, e.g., City of Austin v. Avenue Corp., 704 S.W.2d 11 (Tex.1986) (right of "access" to public streets). To establish his legal right to compensation, however, the owner must first establish two subsidiary propositions: (1) that his affected interest is indeed incorporeal property, or a legally recognized and enforceable right or chose in action; and (2) that such property has, by the defendant's actions, been taken, damaged, destroyed, or appropriated for public use. McNamara, Inverse Condemnation: A Sophistic "Miltonian" Bog, 31 Baylor L.Rev. 443 (1979).

An owner of land may establish that, in yet another way, he has sustained a legal injury respecting his "property," giving rise to a corresponding legal right to compensation for the injury. Such an injury may occur when the actions taken by a public authority, within its own property limits, subject the owner's adjoining land to an additional servitude, charge, or burden--the nuisance in Downs, for example. More to the point in the present case, such an effect may occur because of actions taken by a public authority within the physical right-of-way through which its road passes. Having once acquired the right-of-way, a public authority may ordinarily raise or otherwise alter the road without thereby violating any legal right held by the owner of adjoining land, even though this may seriously diminish the attractiveness of the adjoining land and interfere with the owner's convenience and use of it, thus reducing its value. State v. Brewer, 141 Tex. 1, 169 S.W.2d 468 (1943). The theory of this general rule of non-liability rests upon the premise that such changes were reasonably foreseeable when the right-of-way was originally acquired, at which time...

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