Tex. Gen. Land Office v. Porretto

• Decision Date: 15 December 2011
• Docket Number: No. 01–09–00520–CV.,01–09–00520–CV.
• Citation: 369 S.W.3d 276
• Parties: TEXAS GENERAL LAND OFFICE and Jerry Patterson, in his official capacity as Texas Land Commissioner, Appellants, v. Sonya PORRETTO and Rosemarie Porretto, Appellees.
• Court: Texas Court of Appeals

369 S.W.3d 276

TEXAS GENERAL LAND OFFICE and Jerry Patterson, in his official capacity as Texas Land Commissioner, Appellants,

v.Sonya PORRETTO and Rosemarie Porretto, Appellees.

No. 01–09–00520–CV.

Court of Appeals of Texas,

Houston (1st Dist.).

Dec. 15, 2011.

Levon G. Hovnatanian, Bruce E. Ramage, Martin, Disiere, Jefferson & Wisdom, L.L.P., Houston, TX, for Appellants.

Andrew Mytelka, Stephen G. Schulz, Greer, Herz & Adams LLP, Kelly Ann Fayette Clarke, Galveston, TX, Jeffrey Wells Oppel, Oppel, Goldberg & Williams, P.L.L.C., Houston, TX, for Appellees.

Panel consists of Justices KEYES, HIGLEY, and BLAND.

OPINION ON REHEARING

JANE BLAND, Justice.

A little more than fifty years ago, the Porretto family began acquiring tracts of beachfront property on Galveston Island, gulfward of the seawall. The family eventually came to own property along the shoreline between 6th and 27th Streets. They turned the property between 6th and 10th Streets into Porretto Beach and provided paid parking and concessions for beachgoers. They did not develop the tracts between 10th and 27th Streets, known as Porretto Beach West (PBW).

In 1994, the State, acting through the Texas General Land Office (GLO), leased the public land between 10th and 61st Streets—referred to in the lease as “submerged property”—to the City of Galveston for a beach replenishment project. Beginning in 2001, the Porrettos unsuccessfully attempted to sell their property. Citing a cloud on their title as the reason, the Porrettos then sued the GLO and Jerry Patterson, its commissioner, as well as several Galveston municipal officeholders. In the suit, the Porrettos alleged interference with their good title to beachfront property and a governmental taking of their land in violation of the Texas Constitution.

In our first encounter with this case, we reversed the trial court's ruling dismissing the case for lack of jurisdiction. See Porretto v. Patterson, 251 S.W.3d 701, 701 (Tex.App.-Houston [1st Dist.] 2007, no pet.)( Porretto I ). On remand, the State amended its jurisdictional plea and adduced evidence to support it. The trial court denied the amended plea and tried the title dispute and takings claim to the bench. The trial court quieted title in favor of the Porrettos. It further concluded that certain State actions amounted to a taking without adequate compensation, in violation of article 1, section 17 of the Texas Constitution. The trial court then submitted issues regarding property valuation and attorney's fees to a jury. The trial court entered a judgment on the jury's verdict and declared title to the contested property in favor of the Porrettos.

In this appeal, the State contends that the trial court lacked subject matter jurisdiction over the Porrettos' request for declaratory relief, because Commissioner Patterson was immune from suit for the functional equivalent of a trespass to try title claim. The State further contends that the trial court erred in concluding that the Porrettos own all of the contested property and that Chapter 61 of the Texas Natural Resource Code (the Open Beaches Act) is an unconstitutional ex post facto law. It challenges the trial court and the jury findings as legally insufficient. The State also appeals the trial court's imposition of discovery sanctions. We grant rehearing, withdraw our earlier opinion, and issue this one in its stead. Our disposition remains unchanged.

We conclude that the trial court erred in declaring that the Porrettos hold title to the contested property that is submerged under the Gulf of Mexico. As a result, the trial court erred in denying the State's amended plea to the jurisdiction with respect to this state-owned property. Because the Porrettos did not identify the scope of their private landholdings to exclude state-owned submerged land, the trial court's improper declaration of title is fatal to their inverse condemnation claims, as is the absence of any state action by these defendants that constitutes a taking. The trial court erred in entering judgment declaring the Open Beaches Act unconstitutional because the Porrettos' challenge to it was not ripe for adjudication. Finally, the trial court erred in imposing discovery sanctions against the State. We therefore reverse.

Background

Henry Porretto acquired property along the Gulf shore between 6th and 27th Streets through a series of purchases beginning in 1959.¹ The title to these tracts traces back to the Menard Grant, an 1838 conveyance of the eastern end of Galveston by the Republic of Texas to Michael B. Menard. See generally City of Galveston v. Menard, 23 Tex. 349, 1859 WL 6290, *30, *32 (1859). When the Republic conveyed the property to Menard, the entire conveyance was dry land, but much of it is now submerged beneath the Gulf of Mexico.

In 1994, the City of Galveston—which is no longer a party to this case—embarked on a beach renourishment project to replenish and increase the size of the sandy area along the Gulf shore for public recreational use. To this end, the State entered into a ten-year lease with the City for “State Submerged Gulf of Mexico Tracts ... adjacent to and along the Galveston Seawall from the centerline of 10th Street, extended, to the centerline of 103rd Street, extended.” (emphasis added.) The lease includes a map that generally depicts the span of land included in the proposed beach replenishment project where the City later expected to deposit “beach quality sand in and on said submerged land for beach replenishment and restoration ....” (emphasis added.)

The lease recites that “[t]he uplands property littoral to the submerged lands subject to this lease are owned by the County of Galveston,” and specifies that the lease has no effect on the county's rights or obligations to own and maintain the seawall. The lease also contains an agreement that the City of Galveston would:

cause surveys to be performed by a Licensed State Land Surveyor to locate and document the line of highest annual tide ... continuing along the length of the submerged lands subject to this lease ..., and the line of mean high tide along the length of the submerged lands subject [to the lease]. Each survey shall be subject to acceptance and approval by the [State].

During the project's development stage, a public dispute arose concerning the assertion of property rights on and around the affected part of the beach. In response to a public query about proposed jet-ski concessions, a GLO staff attorney wrote in a June 23, 1997 letter that:

the State does not recognize any claim of private ownership of land in front of the seawall. I have previously directed your attention to Galveston v. Menard and the cases cited therein and pointed out that the pre-project survey of the line of high water clearly shows it to be up on the seawall. The requirement of the park board that the concessionaire obtain consent of “certain adjacent property owners” and the recitations of the Consent form itself ascribe some credence to these specious claims in derogation of the State position and are, therefore, not acceptable.

As the dispute became more heated, the Galveston County Daily News published a series of articles regarding disputes over property ownership in front of the seawall, culminating in an opinion piece by the GLO's senior deputy commissioner and general counsel explaining that, based on the 1940 Texas Supreme Court case of City of Galveston v. Mann—“which found that there had been no fast land in front of the seawall for a period in excess of 20 years and recognized the State's ownership of the submerged land due to erosion”—the State took the position that it owned all of the property seaward of the seawall. See135 Tex. 319, 143 S.W.2d 1028, 1033 (1940). Individuals representing the State made similar claims at several public meetings of the Galveston Park Board. The State directed the Galveston County Appraisal District [GCAD] to change their records to show state ownership of submerged lands.

In the meantime, the Porrettos made unsuccessful attempts to sell their property. In 2001, the Porrettos met with a group of investors that expressed interest in building a hotel and boardwalk on the Porretto Beach property. In 2006, the Porrettos again sought to sell Porretto Beach to a developer who was interested in constructing a high-rise condominium on the property. Concerns about present and future ownership of the beachfront, however, dissuaded the prospective purchasers.

The trial court found that the Porrettos held title to all of the Porretto Beach and PBW property that the Menard Grant originally had conveyed, including the portions of that property that undisputedly are submerged beneath the Gulf of Mexico. The trial court also held that the State's actions effected a taking of the Porrettos' property. The jury found the values of Porretto Beach and PBW, respectively, before and after the dates on which the trial court found that the taking had occurred. The trial court declared title in favor of the Porrettos and held that the Open Beaches Act was an unconstitutional ex post facto law whose regulations did not apply to the Porrettos' property. It also awarded the Porrettos the takings damages found by the jury, as well as their attorney's fees as a sanction in connection with a discovery dispute with the State. This appeal followed.

Discussion

I. Subject-matter jurisdiction

A. Standard of review

Subject-matter jurisdiction is essential for a court to have the authority to resolve a case, and a trial court lacks jurisdiction over a governmental unit that is immune from suit. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex.1993). A party may challenge a court's subject-matter jurisdiction by filing a plea to the jurisdiction. See Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 639 (Tex.1999). We review de novo a trial court's ruling on a jurisdictional plea. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922,...