Emile A. Nassar, et al. v. Houston Independent School District--Appeal from Co Civil Ct at Law No 1 of Harris County

Opinion issued July 1, 2004

In The

Court of Appeals

For The

First District of Texas

NO. 01-03-00832-CV

EMILE A. NASSAR, Appellant

V.

HOUSTON INDEPENDENT SCHOOL DISTRICT, Appellee

On Appeal from County Civil Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 767,526

MEMORANDUM OPINION

In this eminent domain case, appellant, Emile A. Nassar, appeals the judgment award, which was based on the verdict of the jury. Nassar presents five issues in which he challenges the trial court s evidentiary rulings and its denial of his motion for continuance. // We affirm.

BACKGROUND

In the fall of 2000, Houston Independent School District (HISD) determined that Gregory-Lincoln School, a combined elementary and middle school in an antiquated building, should be replaced. According to the plan, a new Gregory-Lincoln facility would be built on land to be acquired adjacent to the old building, the old building would be razed, and a new High School for the Performing and Visual Arts would be built on the original Gregory-Lincoln site. To effect this plan, HISD began acquiring eight acres adjacent to Gregory-Lincoln School.

Nassar owned three tracts of land on Taft Street on which there were four residential buildings containing four rental units each. It is uncontested that these properties, located at 1401, 1407, 1505, and 1509 Taft Street, were well maintained and were among the finest of the properties acquired by HISD. On February 25, 2002, HISD, seeking to condemn the properties, filed a petition in condemnation, and in May 2002, a panel of special commissioners determined that the fair market value of the properties was $890,000. HISD deposited that amount into the registry of the court on May 20, 2002, an action that constituted the taking. Nassar objected to the award, and the case proceeded to a jury trial.

At trial, three of Nassar s former tenants, one of whom also did maintenance work for Nassar, testified regarding the good condition of their apartments and Nassar s performance as a landlord. They were not asked about and did not testify regarding the market value of the properties. They also were not asked about and did not testify regarding any enhancement of the properties value resulting from the Gregory-Lincoln project.

Nassar testified that he determined the value of similar properties in the eighties and nineties and 2002. He testified that there had been an increase in the value of his properties, but that the increase was not because of the Gregory-Lincoln project. He further testified that he had looked at other four-plexes near his properties in 2001 and 2002 and that he had entered into an earnest money contract on two multi-family properties near his Taft properties in May 2002 and had closed on those properties in June and July 2002.

HISD objected to any testimony regarding the value of those properties because they were purchased after May 20, 2002, the date of the taking. The trial court overruled the objection on the basis that Nassar had entered into the contract before the date of the taking. HISD then objected to the testimony on the ground that Nassar had known about the Gregory-Lincoln project for some time before May 2002 and that therefore the value of the properties was influenced by HISD s acquisition of eight acres near the properties. The trial court sustained this objection.

Nassar made an offer of proof in which he presented evidence of the sale of four multiple-family residences that had been excluded by the trial court. // Two of these buildings had been purchased by Nassar in June and July 2002, although the earnest money contracts had been executed in May 2002, before the date of the taking. The remaining two buildings had been purchased in March 2003. These properties had been sold at prices ranging from $76.07 to $91.58 per square foot and formed Nassar s basis for his valuation of his properties at $80.05 per square foot.

In his offer of proof, Nassar also offered a list of four vacant-land sales as part of the basis of his opinion. Two of these lots had been sold in 2001 and 2000, and evidence of these sales had been admitted into evidence. The other two lots had been sold in August and October 2002, and they were not admitted into evidence.

During his trial testimony, Nassar introduced evidence of extensive development in the area, including condominiums, townhouses and apartments. Nassar testified that, based on other sales that he considered to be comparable to the condemned properties and his knowledge from owning properties in the area, he believed that the total market value of his four four-plexes was $80.05 per square foot for a total of $1,153,628.

Matthew Deal, a real estate appraiser who testified on behalf of HISD, explained the different ways of determining the fair market value of real estate by sales comparison, by cost of land and improvements, and by income capitalization. Deal calculated the market value of Nassar s properties using these three methods and rendered his opinion that the properties value per square foot was $65, and the total market value of the properties was $890,000.

The jury found the following fair market values for Nassar s properties:

1401 Taft: $251,384

1407 Taft: 251,384

1505 Taft: 213,328

1509 Taft: 211,988

$928,084

The trial court rendered judgment on the verdict, and Nassar filed this appeal.

DISCUSSION

Standard of Review

We review Nassar s complaints regarding the exclusion of evidence and the denial of a continuance for abuse of discretion. See Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998) (stating that evidentiary rulings are committed to trial court s sound discretion); BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex. 2002) (stating that court will not disturb trial court s denial of motion for continuance absent clear abuse of discretion). A trial court abuses its discretion when it rules without regard for any guiding rules or principles. Owens-Corning Fiberglas, 972 S.W.2d at 43.

Exclusion of Evidence

In four issues, Nassar contends that the trial court abused its discretion in excluding Nassar s evidence regarding sales occurring after the date of the taking without expert testimony to establish that such sales did not reflect a value that was enhanced by the Gregory-Lincoln project, which was the reason for the taking. Nassar argues that his own testimony controverting HISD s claim of project enhancement should have been admitted, that his evidence of post-taking comparable sales should have been admitted, and that the taking of his property was subject to an exception to the rule against project enhancement.

The Project-Enhancement Rule

Compensation for land taken by eminent domain is measured by the fair-market value of the land at the time of the taking. Exxon Pipeline Co. v. Zwahr, 88 S.W.3d 623, 627 (Tex. 2002). In determining fair-market value, the project-enhancement rule provides that the factfinder may not consider any enhancement to the value of the landowner s property that results from the taking itself. Id. The objective is to make the landowner whole. Id. at 628. The determination of the cutoff date for project enhancement is a matter for the trial court and must generally precede any determination of comparability of sales. City of Fort Worth v. Corbin, 504 S.W.2d 828, 831 (Tex. 1974). When an objection to evidence of a sale is made on the ground that the value was affected by the project, the burden is on the party offering the testimony to develop facts showing that the project did not affect the property s value. State v. Bryan, 518 S.W.2d 928, 932 (Tex. Civ. App. Houston [1st Dist.] 1975, no writ). Until such a showing is made, the trial court has no discretion to admit the evidence. Id.

In this case, when HISD objected to Nassar s evidence of the value of properties sold after the date of the taking, Nassar did not attempt to offer any evidence that the value was not affected by the project other than his own opinion that it was not. He admitted that he did not have any education or training as an appraiser, and he did not offer any expert testimony on his own behalf. Nassar s offer of proof did not include any facts that would establish that the value of the properties after May 20, 2002 was not affected by the Gregory-Lincoln project. Therefore, Nassar did not carry his burden, and the trial court did not abuse its discretion in excluding Nassar s evidence of property sales after May 20, 2002.

The trial court also excluded evidence of two sales in which Nassar entered into the contract before May 20. The court agreed with HISD that Nassar had notice of the condemnation for some time before May 20. Although the market value of condemned property is to be determined as of the date of the taking of the property, that value should not include enhancement that is brought about by the project that occasioned the condemnation. Zwahr, 88 S.W.3d at 628; Barshop v. City of Houston, 442 S.W.2d 682, 685 (Tex. 1969).

HISD filed its petition in condemnation in February 2002. Nassar entered into an earnest money contract on the two properties in May 2002. Thus, he was aware of the Gregory-Lincoln project when he contracted for the properties. That Nassar was aware of the project when he contracted for the properties is at least some indication that the value of these properties was affected by the project. Therefore, the trial court did not abuse its discretion in excluding evidence of these two purchases to establish the fair market value of the condemned properties.

Exceptions to the Project-Enhancement Rule

Nassar also argues that his condemned properties are subject to an exception to the project-enhancement rule. Nassar contends that a condemnor is required to pay the enhanced value of a property when it is taken for expansion of the public improvement or for purposes incidental to it. To support this contention, Nassar cites Fuller v. State, 461 S.W.2d 595 (Tex. 1970); City of Dallas v. Shackelford, 199 S.W.2d 503 (Tex. 1947); and McAshan v. Delhi Pipeline Corp., 739 S.W.2d 130 (Tex. App. San Antonio 1987, no writ).

Generally, there are two exceptions to the project-enhancement rule: (1) when the land taken is not within the original scope of the project, but was needed for expansion or for purposes incidental to the project and (2) when the general location of the project is fixed, but the exact location or the extent of the project is uncertain. Barshop, 442 S.W.2d at 685. The reviewing courts in Fuller and McAshan, while stating the exceptions to the rule, concluded that those cases did not fall within the exceptions. Fuller, 461 S.W.2d at 598; McAshan, 739 S.W.2d at 131. These cases do not hold that the condemnor is required to pay an enhanced value under any circumstances. They do not support Nassar s contention.

In Shackelford, the City, on December 10, 1941, designated a 10-block area to be condemned for the construction of a public market. Shackelford, 199 S.W.2d at 504. However, the City authorized taking only a portion of the designated area. Id. That portion was acquired and the market was built. Id. Because of the country s involvement in World War II, further development plans were put on hold. Id. Approximately three years later, the City authorized acquisition of the remainder of the designated area and argued that the fair market value should be determined as of 1941. Id. The supreme court determined that, although the remaining area was in the original designation, it was not clear when, if ever, that property would be taken. Id. In the interim, that property had benefitted in value as a result of improvements made by the City. Id. at 506 The supreme court concluded that, in determining the value of the property on the date it was taken, the jury could take into consideration the enhanced value of the property. Id. Thus, the court did not decide Shackleford based on one of the general exceptions, but on the uncertainty and delay of the taking. See Barshop, 442 S.W.2d at 685.

The taking of Nassar s property did not qualify for any of the exceptions to the project-enhancement rule. The property was within the original scope of the project, the location and extent of the project were fixed and certain, and there was no delay or uncertainty in the taking.

Because Nassar offered no evidence to establish that the value of the properties sold after February 2002, the date by which he had notice of the condemnation and the Gregory-Lincoln project, was not influenced by the Gregory-Lincoln project, we hold that the trial court did not abuse its discretion in excluding evidence of those sales. Accordingly, we overrule Nassar s first four issues.

Denial of Motion for Continuance

In his fifth issue, Nassar contends that the trial court abused its discretion in denying Nassar s motion for continuance. No continuance shall be granted except for sufficient cause supported by affidavit, or by consent of the parties, or by operation of law. Tex. R. Civ. P. 251. The record does not contain a motion for continuance or an affidavit. Because Nassar did not comply with rule 251, the trial court did not abuse its discretion in denying the motion. See Tex. R. Civ. P. 251; see also Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986) (recognizing presumption that trial court does not abuse discretion in denying motion for continuance if motion not supported by affidavit). We overrule Nassar s fifth issue.

CONCLUSION

We affirm the judgment of the trial court.

Sam Nuchia

Justice

Panel consists of Justices Nuchia, Alcala, and Higley.