Trail Enterprises, Inc. d/b/a Wilson Oil Company, Thomas G. Rogers, Catherine Baumann, Carolyn Whipple, Mrs. S. Kelley Bruce, John Hobbs Kelley, Mary Virginia Kelley Ingram, Daystar Oil & Gas Corporation, John Alexander, Rebecca Bruce Jones, v. The City of Houston--Appeal from Co Civil Ct at Law No 1 of Harris County

IN THE

TENTH COURT OF APPEALS

 

No. 10-05-00382-CV

Trail Enterprises, Inc. d/b/a

Wilson Oil Company, THOMAS G.

ROGERS, CATHERINE BAUMANN,

CAROLYN WHIPPLE, MRS. S. KELLEY

BRUCE, JOHN HOBBS KELLEY, MARY

VIRGINIA KELLY INGRAM, DAYSTAR

OIL AND GAS CORPORATION, JOHN

ALEXANDER, REBECCA BRUCE JONES,

ELEANOR BRUCE McREYNOLDS, ROBERT

D. BRUCE, AND INTERVENOR, MARY BRUCE

Appellants

v.

The City of Houston,

Appellee

 

 

From the County Civil Court at Law No. 1

Harris County, Texas

Trial Court No. 799234

Opinion ON REHEARING

 

This appeal concerns Trail Enterprises inverse-condemnation claim against the City of Houston. After we issued an opinion and judgment on November 21, 2007, both Trail and the City filed a motion for rehearing. We requested a response to each motion from the other party and now have both motions before us.

THE ALLEGATIONS

The City asserts four grounds for rehearing: (1) our reliance on Hallco Texas, Inc. v. McMullen County[1] is misplaced; (2) Mayhew v. Town of Sumnyvale[2] requires that Appellants show a rejected development plan and a denial of a variance from the controlling regulation; (3) a remand rather than rendition of judgment is the proper remedy because the exception for cross-motions for summary judgment is not presented; and (4) the trial court had not resolved the issue of liability prior to entering judgment on the ripeness question, and the City will be denied its post-trial remedies.

Trail asserts two issues on rehearing: (1) although we correctly reversed the trial court s judgment and rendered judgment for Trail, the judgment incorrectly awarded the City title to the oil and gas interests owned by Trail;[3] and (2) we erroneously allowed the City credit for sums received by Trail from their respective interests since November 5, 1997.

We will address the parties contentions in turn.

THE CITY S MOTION

The City s first two grounds urge reconsideration of our holding that the City is liable for an inverse condemnation. Our decision on that issue was unanimous, and we will not revisit it. See also Maguire Oil Co. v. City of Houston, ___ S.W.3d ___, 2007 WL 2990253 (Tex. App. Houston [14th Dist.] Oct. 11, 2007, no pet. h.). Grounds one and two are overruled.

The City s third and fourth grounds urge a remand for further trial court proceedings rather than a rendition of judgment. Rule of Appellate Procedure 43.3 requires us to render the judgment that the trial court should have rendered unless a remand is necessary for further proceedings or the interests of justice require a remand. Tex. R. App. P. 43.3. We believe neither exception is present in this case.

The City s third ground is premised on the notion that we were reviewing competing motions for summary judgment. However, both parties filed post-trial motions that were considered by the trial court. Trail says the cases cited by the City have no application because there has been a trial on the merits and points to the recitations in the trial court s judgment, entered more than five months after the jury trial. Those recitations show that the court considered:

The City s Motions for Summary Judgment; Trail s Response to the City s Motions for Summary Judgment/Plea to the Jurisdiction; Trail s Cross-Motion for Summary Judgment as to Jurisdiction; Trail s Motion to Reconsider the Court s Order Granting Reconsideration of the Court s Holding of a Taking; and Trail s Second Motion for Entry of Judgment.

The judgment also recites: The Court further found that enactment of Ordinance 97-1394 on November 5, 1997, by the City of Houston, resulted in an inverse condemnation of Plaintiff s property interest under Article I, 17 of the Constitution of the State of Texas. After stating the jury s findings, the judgment addresses the City s ripeness argument, finds in favor of the City, and dismisses the case without prejudice for lack of jurisdiction.

We determined that the trial court erred in finding the claims not to be ripe, then we assessed whether or not Trail was entitled to judgment on the jury s verdict. We determined that it was. Typically, when an order granting a summary judgment is reversed on appeal, the case is remanded for a trial. Here, the trial has occurred. We overrule ground three.

Ground four asserts that a remand is necessary for additional proceedings in the trial court, i.e., a final determination by the trial court on the issue of a taking and post-trial remedies available to the City. Trail again responds that the trial court s judgment recites that it had found that the ordinance resulted in an inverse condemnation of Trail s interests. Further, it says that all of the City s post-trial remedies were available.

We believe that the City s post-trial motion reasserting the ripeness question, described above, should be treated the same as a motion for judgment notwithstanding the verdict. Appellate Rule 38.2(b) requires that an appellee faced with an appeal from the grant of a motion for judgment n.o.v. bring forward by cross-point any issue or point that would have vitiated the verdict or that would have prevented an affirmance of the judgment if the trial court had rendered judgment on the verdict. Tex. R. App. P. 38.2(b). Failure to bring such a cross-point waives that complaint. Id. The City has waived its complaints about the verdict. We overrule ground four.

TRAIL S MOTION

In arguing its first issue concerning title, Trail reviews the language of the Final Judgment, the history of the litigation, the pleadings of the parties, and the trial court s determination of an inverse condemnation to conclude that only the right of reasonable access was inversely condemned by the City. Trail further points out that the City has never contended that it should be awarded fee simple title to all of Trail s oil and gas interests. The City urges that a judgment that does not grant title to the City will result in a windfall to Trail because it may well be able to further develop its mineral interests in the future. The City further points to the fact that Trail told the trial court that the City had effectively tak[en] the mineral estates and sought compensation because the mineral rights had been rendered valueless.

The parties remain poles apart on this issue. Neither has suggested alternate language to that used in our judgment. Thus, our question is: what interest, if any, should be awarded to the City as a result of the payment of damages awarded in this inverse condemnation suit?[4]

The Texas Constitution prohibits three distinct types of "takings" without adequate compensation: (1) taking, (2) damaging, and (3) destroying property. City of Dallas v. Jennings, 142 S.W.3d 310, 313 n.2 (Tex. 2004). In Hallco, the Supreme Court observed:

A regulation that deprives a property owner of all economically beneficial or productive use of the property "makes the regulation categorically a taking." [Citation omitted.] Lesser interferences, however, may also result in a taking. These types of regulatory actions require an "essentially ad hoc, factual inquir[y]...."

Hallco Texas, Inc. v. McMullen County, 221 S.W.3d 50, 56 (Tex. 2007) (quoting Penn Cent. Transp. Co. v. City of New York, 488 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978)). Here, the ordinance did not deprive Trail of all economically beneficial or productive use of the property, as evidenced by Trail s continued receipt of royalty payments after the date the ordinance was adopted.

The issue submitted to the jury, i.e., the difference in market value before and after the imposition of the ordinance, also contemplated a damaging of Trail s interests rather than a taking. The trial court s characterization as a taking is not necessarily determinative. Tarrant County Water Control & Imp. Dist. No. 1 v. Reid, 203 S.W.2d 290, 293 (Tex. Civ. App. Fort Worth 1947, writ ref d n.r.e.) ( The great weight of authority holds that where the owner's land which has been damaged is abutting to the land occupied by the project and/or is so situated with reference to the project that such owner's land suffers from injury by reason of the operation of the project, that a claim for such injury becomes one of 'damage' rather than of 'taking.' ); see also McCammon & Lang Lumber Co. v. Trinity & B.V. Ry., 104 Tex. 8, 133 S.W. 247, 248 (1911) (distinction between taking and damaging is provided in Art. 1, 17 of the Constitution); Queen City Land Co. v. State, 601 S.W.2d 527, 528 (Tex. Civ. App Austin 1980, writ ref d n.r.e.) (court erred in vesting fee simple title, as the petition in condemnation sought only an easement in and to the tract); City of Houston v. Hamons, 496 S.W.2d 662, 665 (Tex. Civ. App. Houston [14th Dist.] 1973, writ ref d n.r.e.) (determining to take the fee title to the defendants' property, rather than an easement, is subject to judicial review for 'palpable abuse' of the City's eminent domain power; City did not need and had no intention to use surface rights when air rights easement would serve the public purpose of the condemnation); Stiman v. City of Tyler, 443 S.W.2d 354, 358 (Tex. Civ. App. Tyler 1969, writ ref d n.r.e.) (some affirmative expression of a desire to condemn a fee must be made, either in the order of condemnation or by some other official act or order properly enacted by the governing body); Burgess v. City and County of Dallas Levee Imp. Dist., 155 S.W.2d 402, 403 (Tex. Civ. App. Eastland 1941, writ ref d w.o.m.) ( The general rule is that the nature of the estate in lands, constituting the subject matter upon which the power of eminent domain operates, is that of an easement. ).

Extrapolating from these principles, we believe that Trail is correct in its assertion that the City is not entitled to fee simple title to interests that it has damaged but not taken. Accordingly, we will withdraw our judgment and issue a corrected judgment.

In Tarrant Regional Water Dist. v. Gragg, the trial court awarded the District a permanent and perpetual flowage easement over the property based on the trial court s finding that an inverse condemnation had occurred on a specific date and jury findings of market value immediately before and immediately after the condemnation. Tarrant Regional Water Dist. v. Gragg, 151 S.W.3d 546, 550 (Tex. 2004) (describing easement); Tarrant Regional Water Dist. v. Gragg, 43 S.W.3d 608, 613 (Tex. App. Waco 2001) (describing the date of taking and the easement), aff d, 151 S.W.3d 546 (Tex. 2004). Here, however, it is Ordinance 97-1394 enacted by the City that restricts Trail s ability to enjoy the full benefits or productive use of its interests. As far as the record shows, that Ordinance remains in effect, and control of Trail s access to its mineral interests effectively rests in the City s hands. Thus, we find that an award of an interest in Trail s property is not justified and should not be made. Trail s first rehearing issue is sustained.

Trail s second issue addresses the credit we gave the City for sums received by Trail on its interests after the date of inverse condemnation by the ordinance. The City s response does not address this issue. For the same reasons expressed above concerning no award of an interest in the property, we agree with Trail. Thus, Trail s second rehearing issue is sustained and our corrected judgment will delete the credit.

CONCLUSION

We have overruled the City s grounds for rehearing and sustained Trail s issues. Trail s motion for rehearing is granted. Tex. R. App. P. 49.3. Our judgment dated November 21, 2007, is withdrawn. Without further briefing or oral argument, we again sustain Trail s original issues one through six, reverse the trial court s judgment, and based on the trial court s finding that an inverse condemnation occurred and on the jury s verdict, render judgment that:

Plaintiffs have and recover of and from the City of Houston the sum of SIXTEEN MILLION EIGHT HUNDRED FORTY-NINE THOUSAND NINTY-NINE AND 37/100 DOLLARS ($16,849,099.37), together with pre-judgment interest thereon at the rate of 5% per annum from November 5, 1997, to date of this judgment, and post-judgment interest at the maximum rate provided by law from the date of this judgment until paid; and The City of Houston pay all costs of this proceeding, including costs incurred in the trial court and in this court.

BILL VANCE

Justice

Before Chief Justice Gray,

Justice Vance, and

Justice Reyna

(Chief Justice Gray dissenting)

Appellants Motion for Rehearing granted

Appellee s Motion for Rehearing denied

Judgment reversed and rendered

Opinion delivered and filed April 9, 2008

[CVPM]

 

[1] 221 S.W.3d 50 (Tex. 2006).

[2] 964 S.W.2d 922 (Tex. 1988).

[3] We refer to all of the Appellants collectively as Trail, as we did in our original opinion.

[4] Although not directly applicable, we note that section 21.045 provides that, except where otherwise provided by law, the interest acquired by a condemnor in an eminent domain proceeding under chapter 21 does not include fee simple title. Tex. Prop. Code Ann. 21.045 (Vernon 2000).