Lone Star Gas Company, a Division of Enserch Corporation v. Manley D. McCright and Patricia McCright--Appeal from 40th District Court of Ellis County

IN THE

TENTH COURT OF APPEALS

No. 10-94-013-CV

LONE STAR GAS COMPANY,

A DIVISION OF ENSERCH CORPORATION,

Appellant

v.

MANLEY D. McCRIGHT AND

PATRICIA McCRIGHT,

Appellees

From the 40th District Court

Ellis County, Texas

Trial Court # 50896

O P I N I O N

Appellant Lone Star Gas Company (Lone Star) brings this appeal to contest the trial court's conclusion that it lacked jurisdiction to consider Lone Star's condemnation petition against appellees Manley and Patricia McCright (the McCrights). We will reverse and remand.

We will relate the facts in the light most favorable to the McCrights. On June 30, 1990, Manley McCright met with several Lone Star employees on his neighbor's property. One of these employees, Bill Murray, notified Mr. McCright that Lone Star intended to lay a pipeline near Mr. McCright's property but that his property would not be affected in any way.

On the morning of July 1, 1990, Mr. McCright noticed that some employees from Lone Star had cleared a number of trees from and had a placed a considerable amount of dirt on his property. When Mr. McCright objected to these actions, an employee of Lone Star, Jim Miller, informed him that a change in plans had been made and that Lone Star now planned to use his property for the storage of dirt.

On July 2, representatives from Lone Star attempted to negotiate a sum with the McCrights to compensate them for the trespass and any property taken. Lone Star's efforts proved unsuccessful and, on July 16, it filed a petition for condemnation in the Ellis County Court at Law seeking both a permanent and a temporary easement across the McCrights' property. See Tex. Prop. Code Ann. 21.012 (Vernon 1984) (hereafter 21.012). The trial court appointed three special commissioners pursuant to Tex. Prop. Code Ann. 21.014 (Vernon 1984) to assess the McCrights' damages. The McCrights found the sum calculated by the commissioners to be inadequate and rejected it, causing the petition to be brought before the court. They also filed a suit for trespass on July 19 against Lone Star in the Ellis County District Court. The two causes were consolidated in the Ellis County Court at Law on April 2, 1992; the consolidated cause was later transferred to the district court on April 21, 1993.

Before Lone Star's petition went to trial, the trial court, on March 8, 1993, held a hearing pursuant to State v. Hipp, 832 S.W.2d 71 (Tex. App. Austin 1992), rev'd on other grounds sub nom, State v. Dowd, 867 S.W.2d 781 (Tex. 1993), to determine whether it had jurisdiction over the proceedings. At the Hipp hearing, the trial court expanded the scope of inquiry beyond the four statutory prerequisites to a finding of jurisdiction under 21.012 to determine, also as a jurisdictional matter, whether Lone Star acted arbitrarily and capriciously in bringing its condemnation petition, an issue raised by the McCrights and contested by Lone Star in a motion for partial summary judgment. The court concluded Lone Star did act arbitrarily and capriciously with regard to the temporary, but not the permanent, easement. The court then dismissed both condemnation petitions but severed out the trespass action. The issue before us is whether a condemnor's acting arbitrarily and capriciously in pursuing a condemnation order is properly a jurisdictional question that should be decided by the trial court in a Hipp hearing. We conclude that it is not.

Section 21.012 provides:

(a) If ... a corporation with eminent domain authority ... wants to acquire real property for public use but is unable to agree with the owner of the property on the amount of damages, the condemning entity may begin a condemnation proceeding by filing a petition in the proper court.

(b) The petition must:

(1) describe the property to be condemned;

(2) state the purpose for which the entity intends to use the property;

(3) state the name of the owner of the property if the owner is known; and

(4) state that the entity and the property owner are unable to agree on the damages.

The question of whether the requirements of 21.012 and its predecessors were met has always been considered jurisdictional and, therefore, a question of law. Hipp, 832 S.W.2d at 75 (citing City of Austin v. Hall, 446 S.W.2d 330, 336 (Tex. Civ. App. Austin 1969, rev'd on other grounds, 450 S.W.2d 836 (Tex. 1970); City of Houston v. Derby, 215 S.W.2d 690, 692 (Tex. Civ. App. Galveston 1948, writ ref'd); Isaac v. City of Houston, 60 S.W.2d 543, 545-46 (Tex. Civ. App. Galveston 1933, writ dism'd)). But, because proper consideration of this issue often involves the weighing of facts, trial courts, before Hipp, would often proceed to a trial on merits, submit the jurisdictional questions of 21.012 to the jury, and then, if the jury answered that the requirements had not been met, dismiss the petition for want of jurisdiction. See Hipp, 832 S.W.2d at 75. The Austin Court of Appeals in Hipp, however, concluded that jurisdictional issues, even if they involve the consideration of fact questions, should always be decided by the court. Id. at 75-76. The Hipp court, therefore, due to a concern with conserving the resources of the court and the parties, determined that a pretrial hearing should be held in condemnation cases so that the trial court can take evidence on the jurisdictional requirements of 21.012 and determine whether jurisdiction lies before proceeding to a trial on the merits. Id.

The arbitrariness and capriciousness of the condemnor in exercising its eminent domain authority may be raised by a landowner as a defense in a condemnation proceeding. See Anderson v. Clajon Gas Co., 677 S.W.2d 702, 704 (Tex. App. Houston [1st Dist.] 1984, no writ); Joyce v. Texas Power & Light Co., 298 S.W. 627, 629 (Tex. Civ. App. El Paso 1927, no writ). Generally, the condemnor, in bringing his condemnation petition, is given absolute discretion in determining what property should be condemned for public use, and, therefore, it is generally not required either to plead or prove the necessity for the taking. Tex. Rev. Civ. Stat. Ann. arts. 1435, 1436 (Vernon 1980 & Supp. 1995); Coastal Indus. Water Auth. v. Celanese Corp. of Am., 592 S.W.2d 597, 600 (Tex. 1979); Anderson, 677 S.W.2d at 705. However, when the issue of fraud, bad faith, or the arbitrariness and capriciousness of the condemnor in bringing its condemnation proceedings against a particular landowner is raised by the landowner, the condemnor must then establish the necessity of its actions to rebut the accusations. See Anderson, 677 S.W.2d at 704-05; Bevly v. Tenngasco Gas Gathering Co., 638 S.W.2d 118, 121 (Tex. App. Corpus Christi 1982, writ ref'd n.r.e.).

The McCrights argue that the scope of Hipp hearings should be expanded to include a determination of whether the condemnor acted arbitrarily and capriciously when it is properly raised by the landowner. They contend the issue of arbitrariness and capriciousness is properly before the court in a Hipp hearing both because it involves a jurisdictional question and because it is justified by furthering the Hipp rationale of conserving judicial resources. We disagree with both contentions.

Section 21.012 provides the only jurisdictional requirements for a condemnor to have its petition for condemnation heard in a district court or a county court at law. See Tex. Prop. Code Ann. 21.012. The McCrights' assertion that the issue of arbitrariness and capriciousness is jurisdictional must fail in light of the authority which specifically states that arbitrariness and capriciousness is a question of fact. See Woodson Lumber Co. v. City of College Station, 752 S.W.2d 744, 748 (Tex. App. Houston [1st Dist. 1988, no writ); see also Ludewig v. Houston Pipeline Co., 773 S.W.2d 610, 614 (Tex. App. Corpus Christi 1989, writ denied); Tejas Gas Corp. v. Herrin, 705 S.W.2d 177, 180 (Tex. App. Texarkana 1985), reversed on other grounds, 716 S.W.2d 45 (Tex. 1986). Undoubtedly, deciding the issue of whether the jurisdictional requirements of 21.012 have been satisfied frequently involves the weighing of facts; however, the conclusion does not necessarily follow that the question of the arbitrariness and capriciousness of the condemnor's actions also is jurisdictional. Hipp, 832 S.W.2d at 75. The purpose of requiring the condemnor to plead and prove the several jurisdictional requirements of 21.012 is to prevent needless litigation. Id. (citing City of Nueces v. Rankin, 303 S.W.2d 455, 457 (Tex. Civ. App. Eastland 1957, no writ)). Section 21.012 forces the parties to attempt to reach an agreement on a sum in compensation for the taken property before a condemnation suit is brought into a court at law. Id. The question of the arbitrariness and capriciousness of the condemnor has nothing to do with the furtherance of this policy. The alleged arbitrariness and capriciousness of the condemnor in exercising its eminent domain authority goes to the very heart of a landowner's complaint. See Ludewig, 773 S.W.2d at 614; Houston Lighting & Power Co. v. Klein Indep. Sch. Dist., 739 S.W.2d 508, 514-15 (Tex. App. Houston [14th Dist.] 1987, writ denied). Corporations with eminent domain authority are allowed to condemn private landowners' property when it is necessary for the public good. Tex. Prop. Code Ann. 21.012. Moreover, these corporations are given the exclusive authority to determine what property will be condemned. Tex. Rev. Civ. Stat. Ann. arts. 1435, 1436; Anderson, 677 S.W.2d at 705. But when these condemnors act arbitrarily and capriciously in exercising their authority, they betray the very justification for their authority. See Anderson, 677 S.W.2d at 705. A pretrial hearing on the question of the court's jurisdiction to hear a condemnation petition cannot provide a sufficient forum to address the issue of whether a condemnor has unlawfully abused this authority by arbitrarily and capriciously excercising its eminent domain authority, thereby rendering its condemnation petition void.

Presuming the requirements of 21.012 and Hipp have otherwise been met, we reverse and remand for a trial on the merits. //

BOBBY L. CUMMINGS

Justice

Before Chief Justice Thomas,

Justice Cummings, and

Justice Vance

Reversed and remanded

Opinion delivered and filed April 26, 1995

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