Taub v. City of Deer Park

• Decision Date: 08 September 1994
• Docket Number: No. D-1589,D-1589
• Citation: 882 S.W.2d 824
• Parties: Henry J.N. TAUB, Petitioner, v. CITY OF DEER PARK, Respondent.
• Court: Texas Supreme Court

Page 824

882 S.W.2d 824

Henry J.N. TAUB, Petitioner, v. CITY OF DEER PARK, Respondent.

No. D-1589.

Supreme Court of Texas.

Argued Jan. 18, 1994.

Decided June 22, 1994.

Rehearing Overruled Sept. 8, 1994.

Joe G. Roady, Houston, for petitioner.

Marvin B. Peterson, Houston, P.B. Dover, Deer Park, Sheryl Sikes Roper and William A. Olson, Jr., Houston, for respondent.

SPECTOR, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, HIGHTOWER, HECHT, DOGGETT, CORNYN, GAMMAGE and ENOCH, Justices, join.

This case presents two issues involving rights of land ownership: first, whether a city's refusal to rezone property amounts to an unconstitutional taking; and second, whether a landowner is entitled to recover for damages to the remainder of property when the portion taken divides the remainder tract in half. The court of appeals approved the trial court's ruling, which upheld the refusal to rezone and awarded no remainder damages in the condemnation. 1994 WL 394095. ¹ We affirm the court of appeals' judgment on the rezoning issue; but on the issue of remainder damages, we conclude that the court of appeals misapplied the law on special benefits. Consequently, we reverse the court of appeals' judgment in part and remand the cause to that court for further consideration.

I.

In 1978, the City of Deer Park filed two eminent domain proceedings on a tract of land owned by Henry J.N. Taub. The City sought 2.4691 acres for street improvements from the southern portion of the tract and another 14.5616 acres to construct drainage ditch structures which would run along the southeastern side of the tract, extend across the tract to the western edge, and then continue along the northwestern section of the tract.

In 1980, Taub filed an application to rezone the southern 69.6684 acres of the parent tract from single-family residential (SF-1) to multi-family residential (MF-1). The northern 49.55 acres of the tract had previously been rezoned from SF-1 to Industrial Parks-1.

In meetings before the Zoning and Planning Commission and the City Council, Taub presented evidence that his tract could not be profitably developed for single-family residential use and that there was a demand in Deer Park for multi-family housing. Deer Park residents, as well as city and school officials, strenuously objected to Taub's rezoning proposal. There was testimony that rezoning Taub's tract for multi-family residential use would require new city facilities and personnel; would cause traffic, water, and sewer problems; and would prevent the City from providing adequate fire, police, or school facilities for the project. After considering the evidence, the Zoning and Planning Commission voted unanimously to deny Taub's application. The City Council accepted the recommendation of the Zoning Commission and denied the request.

In the condemnation proceedings, the special commissioners valued the property to be taken at $7,000 per acre, based on single-family residential use. Accordingly, they awarded Taub $18,500 for the street taking and $217,000 for the ditch taking. Taub objected to this valuation and filed a separate suit against the City, asserting that the property taken should be valued on the basis of multi-family rather than single-family zoning. The condemnation actions were transferred to the district court and were later consolidated with Taub's suit.

After a bench trial, the trial court rendered judgment for the City, finding that the City's refusal to rezone was not unreasonable or arbitrary and that there was no damage to the remainder of Taub's land as a result of the taking. The court of appeals affirmed.

II.

Taub argues that the City has effectively taken his property by refusing to rezone it from single-family to multi-family residential use, thus preventing him from profitably developing the property. We disagree.

An act short of actual physical invasion, appropriation, or occupation can amount to a compensable taking when a governmental agency has imposed restrictions that constitute an unreasonable interference with the landowner's right to use and enjoy the property. See City of Austin v. Teague, 570 S.W.2d 389, 393 (Tex.1978); DuPuy v. City of Waco, 396 S.W.2d 103, 108 (Tex.1965); Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922), cited in Lucas v. South Carolina Coastal Council, 505 U.S. 1003, ----, 112 S.Ct. 2886, 2892, 120 L.Ed.2d 798 (1992). While it is impossible to state categorical rules for such cases, important considerations are whether property has been rendered "wholly useless," or whether its value has been totally destroyed. Teague, 570 S.W.2d at 393 (citing Armstrong v. United States, 364 U.S. 40, 48, 80 S.Ct. 1563, 1568, 4 L.Ed.2d 1554 (1960) (although not every governmental act affecting property constitutes a taking, "total destruction by the Government of all value of [certain] liens" is a taking)).

In the present case, Taub's land is not rendered completely useless or deprived of all economically beneficial use. While the development of the property is limited in scope, it is not altogether precluded. The testimony Taub offered at trial was simply that the land could not be profitably developed when zoned for single-family use. The takings clause, however, does not charge the government with guaranteeing the profitability of every piece of land subject to its authority. Purchasing and developing real estate carries with it certain financial risks, and it is not the government's duty to underwrite this risk as an extension of obligations under the takings clause. Taub has failed to show, under these circumstances, a sufficiently severe economic impact. We need not decide whether a more restrictive ordinance would constitute a taking; we simply hold, under the circumstances of this case, that the City's refusal to rezone places no constitutional burden on Taub's property. See Lucas, 505 U.S. at ----, 112 S.Ct. at 2888 (under federal takings clause, addressing a prohibition on any habitable structures on a landowner's land).

Taub asserts that the City's dual role as both a rezoning authority and a condemning authority proves that it acted to its own advantage, in violation of City of Austin v. Teague, 570 S.W.2d at 393. Under Teague, a landowner may recover damages when the government, acting in the role of an ostensibly neutral arbiter, acts for its own advantage against a landowner's economic interest.

The possibility of conflict is present whenever a governmental entity becomes involved in both condemning and appraising land. We recently addressed this conflict in State v. Biggar, 873 S.W.2d 11 (Tex.1994), in which we held that the State of Texas improperly used its discretion as arbiter to gain an advantage as the purchaser of land in condemnation proceedings and that this amounted to an unconstitutional taking of property. The landowners in Biggar provided evidence that the State denied a routine easement exchange in order to reduce the cost of acquiring a portion of the Biggar tract. Taub, by contrast, presented no evidence at trial which would show that the City denied his zoning request for the purpose of lowering his property's value for the condemnation proceeding. Instead, he argued primarily that he could not profitably develop his property under the current single-family use ordinance. Without evidence that the City acted to serve its own advantage, we are unwilling to find the refusal to rezone invalid under this theory.

III.

Apart from the takings issue, Taub contends that the court of appeals erred in holding that there were no damages to the remainder of his property. The proposed ditch would divide the tract roughly in half. Taub's expert testified that the cost of building one bridge to unify the tract would be roughly $105,000, and that this amount represented the difference in the value of the remainder before and after the taking. Taub claims that the cost of constructing a bridge to reestablish access to the divided tract fairly and accurately represents the damage he suffered.

The City responds that the proper measure of damages to the remainder is not the cost of building a bridge to unify the tract; rather, it is the difference in the market value of the remainder immediately before and after the taking. See State v. Carpenter, 126 Tex. 604, 89 S.W.2d 194, 201 (Tex.Comm'n App.1936, judgm't adopted). There are no damages to the remainder of property, the City contends, when access is reasonable, rather than naturally or substantially impaired. See City of Waco v. Texland Corp., 425 S.W.2d 374, 376 (Tex.Civ.App.--Waco 1968), aff'd, 446 S.W.2d 1 (Tex.1969). In this case, the remainder tracts still have access to public streets. Finally, the City argues in favor of the court of appeals' holding that any harm suffered by Taub is offset by the ditch, which the City claims provides a special benefit to Taub's property by decreasing its susceptibility to flooding.

We agree with the City of Deer Park that the proper measure of damages for taking only part of a tract is the market value of the land actually appropriated and the difference, if any, in the market value of the remainder immediately before and immediately after the taking. See State v. Carpenter, 89 S.W.2d at 197. Market value is the price the property would bring in a transaction between a willing seller and a willing buyer. See id. at 202. The effect of condemnation on the value of the owner's remaining property is to be included in determining damages to the owner. TEX.PROP.CODE ANN. §...