Th Investments, Inc. v. Kirby Inland Marine

• Decision Date: 01 February 2007
• Docket Number: No. 14-05-00204-CV.,14-05-00204-CV.
• Citation: 218 S.W.3d 173
• Parties: TH INVESTMENTS, INC., Appellant, v. KIRBY INLAND MARINE, L.P. and Port of Houston Authority of Harris County, Texas, Appellees.
• Court: Texas Court of Appeals

218 S.W.3d 173

TH INVESTMENTS, INC., Appellant, v. KIRBY INLAND MARINE, L.P. and Port of Houston Authority of Harris County, Texas, Appellees.

No. 14-05-00204-CV.

Court of Appeals of Texas, Houston (14th Dist.).

February 1, 2007.

Andrew Lovell Strong, Arthur L. Schechter, David E. Harrell, John L. Hill, Roland Garcia Jr., Houston, and Michael V. Powell, Dallas, for appellants.

Catherine B. Smith, Daniel V. Flatten, David H. Brown, James S. Barrick, John James Michael, Mark E. Lowes, and Murry B. Cohen, Houston, for appellees.

Panel consists of Justices HUDSON, FOWLER, and SEYMORE.

CORRECTED OPINION

WANDA McKEE FOWLER, Justice.

We originally issued our opinion affirming the trial court's judgment on January 9, 2007. On Kirby Inland Marine, L.P.,'s unopposed motion to correct the opinion, we withdraw our previous opinion and substitute this corrected opinion in its place.¹

This appeal by a private landowner, TH Investments ("THI") against the Port of Houston Authority and Kirby Inland Marine, asks us to decide who owns two tracts of property on the Old River and the San Jacinto River. As will be discussed in greater detail below, both rivers are subject to the tides. Three broad issues—and many sub-issues—are presented.

The first two issues pertain to the first tract, Tract 1. We first must determine whether the State has gained ownership of it because the property is covered by shallow tidal waters. Second, we are asked to decide if the location the trial court chose for the southern boundary of Tract 1 coincides with the boundary set by the original 1838 survey of the property. The third issue involves Tract 2. We are asked to decide whether THI owns Tract 2. In the body of the opinion we will address the many sub-issues, but for purposes of this overview, we hold the following regarding the three broad issues. First, the State did gain ownership of Tract 1 because it became submerged as a result of indistinguishable effects of erosion and subsidence. Therefore, the trial court correctly ruled that the Port owns Tract 1. Second, the southern boundary set by the trial court for Tract 1 is the same as boundary set by the original 1838 survey. Third, as the trial court held, THI does not own Tract 2. In short, we affirm the trial court's rulings.

Factual and Procedural Background

The property lies near the confluence of the Old River and the San Jacinto River, east of Houston near Channelview, in Harris County, Texas. Tract 1, which historically consisted of 27 acres, is now a "flat," almost completely submerged beneath the waters of the two rivers.² Occasionally Tract 1 becomes exposed during the fall and winter months during low tide when a north wind blows. Tract 2 is a small parcel of land to the east consisting of 6.1 acres variously described as an island or a strip of riverbank. The two tracts are sometimes identified by their acreage as "the 27 Acre Tract" and "the 6.1 Acre Tract." The area around the property is subject to significant commercial maritime use, as well as occasional use for recreational purposes by pleasure craft and for fishing.

What follows are the relevant facts framing the dispute; more specific details are developed in the discussion of the issues.

THI's Purchase of the Property

In November 2002, THI acquired record title to Tract 1 by a non-warranty deed from the record owners, known collectively as the "Carter Heirs," and acquired Tract 2 by quitclam deed from the Carter Heirs. The contract of sale for Tract 1 included an "Addendum for Coastal Area Property," which provided to THI the following notice:

NOTICE REGARDING COASTAL AREA PROPERTY

1. The real property described in and subject to this contract adjoins and shares a common boundary with the tidally influenced submerged lands of the state. The boundary is subject to change and can be determined accurately only by a survey on the ground made by a licensed state land surveyor in accordance with the original grant from the sovereign. The owner of the property described in this contract may gain or lose portions of the tract because of changes in the boundary.

* * *

3. State law prohibits the use, encumbrance, construction, or placing of any structure in, on, or over state-owned submerged lands below the applicable tide line, without proper permission.

4. The purchaser or grantee is hereby advised to seek the advice of an attorney or other qualified person as to the legal nature and effect of the facts set forth in this notice on the property described in and subject to this contract. Information regarding the location of the applicable tide line as to the property described in and subject to this contract may be obtained from the surveying division of the General Land Office in Austin.

(emphasis added). When he signed the contract for sale, THI's president, Earl Thrift, neither read the deeds himself nor engaged counsel to do so.

When THI purchased the land from the Carter Heirs in 2002, the Carter Heirs also assigned to THI a lease with Kirby Inland Marine, L.P. THI, which intended to start its own barge fleeting business, then informed Kirby that it would either have to vacate the area and remove any improvements made or start paying $35,000 monthly in rent.³ When Kirby did not agree to THI's demands, THI terminated the lease and threatened to evict Kirby.

The Lawsuit

As a result of THI's actions, Kirby filed suit against THI to enjoin it from interfering with Kirby's business operations and to obtain a declaratory judgment that the State of Texas—not THI—owned Tract 1.⁴ Kirby later joined the Port, asserting that the State conveyed ownership of the property to the Port by statute.⁵ Eventually, the posture of the case evolved into, primarily, an action by THI on its counterclaims and cross-claims for trespass to try title to Tract 1 and Tract 2. THI claimed record title to both tracts, and Kirby claimed ownership of Tract 2. The Port claimed that it owned any part of Tract 1 or 2 that was below mean high tide or was raised above mean high tide by artificial means or "self-help."

The trial court tried the issues in two phases. Phase 1 was a bench trial with THI as plaintiff on its trespass to try title action involving Tract 1; the parties presented evidence on the ownership and boundaries of the tract. The trial court heard two weeks of evidence from numerous witnesses and received many exhibits into evidence. At the conclusion of the trial, the court entered detailed findings of fact and conclusions of law. It found that THI never owned Tract 1 and that ownership of Tract 1 passed to the Port, as successor to the State of Texas, because the tract became submerged below the line of mean high tide. The court also set the southern boundary for Tract 1.

Following the bench trial, Phase 2 proceeded on Tract 2. The court considered the parties' cross-motions for summary judgment as to ownership of the tract. The court granted the Port's and Kirby's motions for summary judgment on THI's claim of record title to Tract 2, denying THI's claim of ownership. The trial court did not determine who owned Tract 2; it held only that THI did not own it.

At the conclusion of phase 2, the trial court signed a final judgment incorporating its earlier orders and attaching as an exhibit its findings of fact and conclusions of law entered after Phase 1. This appeal followed.

I. Part 1: Ownership of Tract 1

We turn now to the first general area of contention, the ownership of Tract 1. In Part 1 of its brief, THI claims that it, not the Port, owns Tract 1 because this case falls within an exception to the general rule that the State owns all property covered by tide waters. This claim is based on two concepts it argues apply here and on several allegedly erroneous findings of fact the trial court entered. The two concepts are that (1) private owners can own property under tide waters, and (2) if the property is submerged under tide waters because of subsidence, the general rule that the state owns submerged lands does not apply.

THI interweaves these two concepts throughout six issues:

(1) the trial court erred by holding that THI lost its riparian land to the Port as the land subsided and most of it became shallowly submerged beneath the waters of the Old River;

(2) the trial court erred by not following Coastal Industrial Water Authority v. York, 532 S.W.[2d] 949 (Tex.1979);

(3) the trial court's ruling constitutes a taking in violation of the Texas and United States Constitutions;

(4) no evidence or insufficient evidence supports the trial court's finding reciting that the extent to which subsidence versus erosion contributed to the submergence of Tract 1 cannot be determined, or alternatively, the trial court misplaced the burden of proof and applied incorrect legal standards;

(5) no evidence or insufficient evidence supports the trial court's findings that a boundary of Tract 1 described as "the meanders of Old River" cannot now be identified or located, and that the tract cannot be distinguished from the bed of Old River, or alternatively, the trial court applied the wrong standard; and

(6) no evidence or insufficient evidence supports the trial court's findings that the entirety of Tract 1 became submerged at some time in the past and that the portions of the tract that now lie above mean high water re-emerged as the result of the deposit of dredge spoils by Kirby and its predecessor, Western Towing.

Before we address THI's specific issues and the two concepts underlying them, we will review generally the law that applies to riparian and littoral owners.⁶

A. Tract 1 is Under Tidal Waters which Typically are Owned by the State.

1. The State Presumptively Owns Lands Lying under Tidal Waters.

Generally, "[t]he soil covered by the bays, inlets, and arms of the Gulf of Mexico within tidewater limits belongs to the State, and constitutes public property that is held in trust for the use and benefit of all ...