DALLAS COUNTY COMMUNITY COLLEGE DISTRICT, Appellant v. CLEAR CHANNEL OUTDOOR, INC. F/K/A ELLER MEDIA COMPANY, Appellee

REVERSE and RENDER, REMAND; Opinion issued July 31, 2008
 
 
 
In The
Court of Appeals
Fifth District of Texas at Dallas
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No. 05-07-00701-CV
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DALLAS COUNTY COMMUNITY COLLEGE DISTRICT, Appellant
V.
CLEAR CHANNEL OUTDOOR, INC. F/K/A ELLER MEDIA COMPANY, Appellee
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On Appeal from the 192nd Judicial District Court
Dallas County, Texas
Trial Court Cause No. 05-11515-K
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MEMORANDUM OPINION
Before Justices Moseley, Francis, and Lang
Opinion By Justice Francis
        In this inverse condemnation case, we decide whether the trial court correctly determined that Dallas County Community College District's termination of a billboard lease was a “taking” of Clear Channel Outdoor, Inc. f/k/a Eller Media Company's property interest under Article I, Section 17 of the Texas Constitution. For reasons set out below, we conclude the District's actions did not constitute a taking as a matter of law. We therefore reverse the trial court's judgment and render judgment that Clear Channel take nothing on its claim for inverse condemnation and remand for further proceedings consistent with this opinion.
        In 1999, J.W. Jones entered into a five-year billboard lease agreement with Eller Media Company, Clear Channel's predecessor in interest, in property located at 500 N. Glenbrook Drive in Garland, Texas. Rent under the lease was $8,500 per year, and the lease renewed automatically unless either party gave proper notice of termination. In addition, the lease contained two provisions pertinent to this appeal: a termination on sale clause and a condemnation clause.
        Paragraph 5, the termination on sale clause, provided as follows:
 
        If at any time during the term of this lease, the property is sold to a third party bona fide purchaser, said purchaser shall have the right to terminate this Lease by giving notice to Eller not later than thirty (30) days following the date when the sale is completed. The purchaser shall, upon giving such notice of sale, provide Eller with acceptable evidence thereof, and return to Eller all rent pre-paid for the unexpired term. Eller shall remove its signs within one hundred (120) days after receipt of said notice and all sums due to be refunded or paid hereunder.
 
        Paragraph 9, the condemnation clause, provided as follows:
 
        In the event the Structures or any part thereof, or any portion of the Property, is condemned by proper authorities, or any right-of- way from which the Structures are visible is relocated, Eller shall have the right to relocate the Structures on Landlord's remaining property or to terminate this Lease upon not less than thirty (30) days' Notice and to receive all pre-paid rent for any unexpired term of this Lease. Any condemnation award for Structures shall accrue to Eller. If condemnation proceedings are initiated, Landlord shall use its best efforts to include Eller as a party thereto.
 
(Strikeout in original.)
        The lease renewed for a five-year term on March 1, 2004. About one year later, on March 9, the District notified Jones by letter of its intent to purchase the property for an education center operated through Eastfield College. The District stated it was “not inclined to use the legally prescribed options” available for acquiring the land, but wanted to move quickly to determine Jones's “intent.” Further, the letter warned that without Jones's agreement, the District would “begin moving to acquire your land through the procedure of Eminent Domain.”
        Jones testified by affidavit that, after receiving the letter, he entered good-faith negotiations with the District for the sale of the property. Jones testified he did not accept the District's original offer, but instead negotiated a different price and “voluntarily” sold the property. Jones further testified that throughout the process, he “did not fear or feel threatened” that the District would use its power of eminent domain and “entered into the sale voluntarily and of [his] own free will.”
        The sale closed on May 19, 1999, and the conveyance was made subject to the “[r]ights of tenants in possession pursuant to an unrecorded lease by and between J.W. Jones and Eller Media Company . . ..” By letter dated the same day, the District notified Clear Channel that it had purchased the property and, pursuant to Paragraph 5 of the lease, was terminating the lease. The District requested Clear Channel to advise it of the date it would remove the signs. Further, the District advised Clear Channel if the signs were removed by the date through which pre-paid rent had been made, a pro-rated portion of that rent would be returned. Clear Channel did not remove its signs, instead advising the District that its acquisition of the property constituted a condemnation of Clear Channel's” existing and anticipated rights to continue its leasehold and outdoor advertising operations at the location” and seeking “appropriate compensation.”
        Subsequently, the District brought a declaratory judgment action, seeking declarations that (1) the termination clause in Paragraph 5 of the lease was enforceable, (2) the termination did not constitute inverse condemnation, and (3) it properly terminated the lease. Additionally, the District brought various claims to recover all revenue and profits Clear Channel received due to its use of the billboard after the lease was terminated. Clear Channel denied the allegations and counterclaimed for inverse condemnation and attorney's fees.
        Both parties moved for summary judgment on the taking issue. The District argued that Paragraph 5 of the lease controlled, reasoning that it was a third-party bona fide purchaser and terminated the lease as allowed by the contract and its action therefore was not a taking. Clear Channel argued that the District's acquisition of the property was not “voluntary” and termination of its lease constituted a taking of its property.
        The trial court granted Clear Channel's motion for summary judgment, determining the District's termination of the lease was a condemnation of Clear Channel's property interests without just compensation in violation of Article I, Section 17 of the Texas Constitution. After hearing evidence on damages, the trial court awarded Clear Channel $360,000 in damages, plus attorney's fees. The trial court offset the damages by $23,000, which represented the value of the use of the property by Clear Channel during the pendency of this case, bringing the total damage award to $337,000.
        The District raises five issues on appeal generally contending the trial court erred in granting Clear Channel's motion for summary judgment on the takings issue and in denying its motion, admitting certain evidence at the trial on damages, denying discovery, and determining the amount of damages owed to the District for Clear Channel's continuing operation of the signs.
        We review the trial court's grant of summary judgment de novo to determine whether the movant's right to prevail is established as a matter of law. Joe v. Two Thirty-Nine Joint Venture, 145 S.W.3d 150, 156 (Tex. 2004). When both sides move for summary judgment and the trial court grants one and denies the other, we examine both sides' summary judgment evidence and determine all questions presented. See Comm'rs Court of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex. 1997); Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988). We should then render the judgment the trial court should have rendered.   See Footnote 1  Agan, 940 S.W.2d at 81.
        The takings clause mandates that “[n]o person's property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person.” Tex. Const. art. I, § 17. To establish a takings claim under Article I, Section 17, the claimant must show that a governmental actor acted intentionally to take or damage property for a public use. State v. Holland, 221 S.W.3d 639, 643 (Tex. 2007); Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex. 2001). For a taking to exist, the government must intend to act under its sovereign powers, which include eminent domain. City of Dallas v. VSC, LLC, 242 S.W.3d 584, 593 (Tex. App.-Dallas 2008, pet. filed ) (op. on reh'g). But, when the government is acting within a color of right to take or withhold property in a contractual situation, it is acting akin to a private citizen and not under any sovereign powers. Little-Tex Insulation, 39 S.W.3d at 599. “In this situation, the State does not have the intent to take under its eminent domain powers; the State only has an intent to act within the scope of the contract.” Id.
         Under its first two issues, the District contends the trial court erred in determining that its termination of the lease constituted a taking. The District argues it was acting pursuant to its contractual rights when it terminated the lease and thus there was no taking. We agree.
        Paragraph 5 of the lease provided that if the property was sold to a third-party bona fide purchaser, the purchaser had the right to terminate the lease by following the procedures set forth in that paragraph. A person who acquires property in good faith, for value, and without notice of any third-party claim or interest is a bona fide purchaser. Fletcher v. Minton, 217 S.W.3d 755, 758 (Tex. App.-Dallas 2007, no pet. ).
        The undisputed evidence shows the the following. The District notified Jones of its interest in his property. After good-faith negotiations, the parties agreed upon a purchase price, with Jones achieving a higher price than originally offered by the District. The District then purchased the tract, subject to Clear Channel's rights under the lease. On the same day the sale closed, the District invoked Paragraph 5 of the lease as a bona fide purchaser, a provision agreed to by Clear Channel (or its predecessor in interest), and notified Clear Channel it was terminating the lease. This evidence establishes that the District was a third-party bona fide purchaser of the property. In other words, the District was acting as any private party could, and not a sovereign, in exercising its rights under the lease, and its assertion of that right was not a taking.
        In reaching this conclusion, we reject any suggestion by Clear Channel that Jones's sale of his property was not voluntary and that Paragraph 9 of the lease, the condemnation clause, controls. Only a condemnation of the property triggered Paragraph 9. A condemnation of property is the procedure by which the governmental entity compels the transfer of property, from a private owner, for public use. Brownlow v. State, No. 14-07-00547-CV, 2008 WL 313622, *2 (Tex. App.-Houston [14th Dist. 2008, no pet. h. ). The procedure for condemning property is set out in Chapter 21 of the Texas Property Code. See Tex. Prop. Code Ann. § 21.012-016 (Vernon 2004 & Supp. 2007). The process begins by the condemning authority filing a statement in the proper court. Id. at § 21.012.
        Here, the undisputed evidence shows the District did not compel the transfer of the property from Jones or institute any proceedings. To the contrary, Jones testified he voluntarily and willingly sold the property to the District after negotiating a purchase price and further said he did not “fear or feel threatened” that the District would use its power of eminent domain. Under these circumstances, we conclude the undisputed evidence showed the sale between Jones and the District was voluntary. Because there was no condemnation of the property, Paragraph 9 does not apply.
        We conclude the trial court erred in determining that the District's actions in acquiring the land from Jones and giving notice of termination under the lease was a taking. Moreover, we conclude the District established the termination clause was enforceable. We sustain the District's first and second issues.         Our disposition of these issues makes it unnecessary to address issues three and four, which address matters related to the admission of expert testimony on damages and denial of discovery, both related to damages from a taking.
        A fifth issue raises the question of the District's claims for damages under theories of money had and received, conversion, constructive trust, and accounting, all arising out of Clear Channel's “continuing operation of the signs on the Property.” Because the judgment was predicated on a finding that the property was taken, and we have concluded otherwise, we remand these claims to the trial court.
        We reverse the trial court's judgment and render judgment that Clear Channel take nothing on its claim for inverse condemnation. We remand the cause for further proceedings consistent with this opinion.
 
 
                                                          
                                                          MOLLY FRANCIS
                                                          JUSTICE
 
070701F.P05
 
Footnote 1 We note that the trial court's judgment does not specifically deny the District's motion for summary judgment; however, in some cases, a ruling can be implied. Tex. R. App. P. 33.1(a)(2)(A); Frank's Int'l, Inc. v. Smith Int'l, Inc., 249 S.W.3d 557, 567 (Tex. App.-Houston [1st Dist] 2008, no pet. ). Here, the record shows both motions were set on the same day, and the legal issue was whether termination of the lease was a taking. The trial court resolved the issue in Clear Channel's favor. This ruling necessarily denied the District's motion on the same issue.