Opinion issued June 3, 2014

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-12-00989-CV

———————————

GENE SMIRL D/B/A GENE’S PEARLAND EXXON AND 

GENE SMIRL D/B/A PEARLAND MOTOR COMPANY, Appellant

V.

THE STATE OF TEXAS AND 

RMJ MILLER REAL ESTATE HOLDINGS, LTD., Appellees

On Appeal from County Court at Law No. 1

Brazoria County, Texas

Trial Court Case No. CI042455

MEMORANDUM OPINION

Appellant, Gene Smirl, doing business as “Gene’s Pearland Exxon” and 

“Pearland Motor Company” (“Smirl”), challenges the trial court’s rendition of
2

summary judgment in favor of appellee, RMJ Miller Real Estate Holdings, Ltd. 

(“RMJ”),

1 in Smirl’s suit against RMJ to recover a portion of condemnation 

proceeds for the value of his lost leasehold interest in the subject property. In three

issues, Smirl contends that the trial court erred in granting RMJ summary 

judgment.

We affirm.

Background

RMJ was the fee owner of real property located at Main Street and 

Broadway in Pearland, Texas. In 1995, RMJ’s predecessors-in-interest2 leased the 

real property to Holland Davis3 to operate an automotive service station and usedcar sales business. The lease agreement had a primary term of fifteen years, 

beginning August 1, 1995 and ending July 31, 2010. Pursuant to the lease, Davis 

agreed to pay a rental rate of $1,500 per month for the first five-year period and

then renegotiate the rental rates in the two subsequent five-year periods. The lease 

provides, “It is distinctly understood and agreed . . . that any holding over after the 

expiration of this lease shall operate and be construed only as a tenancy from 

month to month.” It further provides that “[n]o acceptance of rent” or “delay in 

 1 Appellee, the State of Texas, has filed a letter of nonparticipation in this appeal.

2 Rosalie Miller Acree, Michalyn Ordeneaux, and Jacalyn DeLange are not parties 

to this appeal.

3 Davis is not a party to this appeal.
3

enforcing any obligation shall be construed as a waiver of any default” and “shall 

not act as a waiver of [RMJ’s] right to enforce the default provisions.” And any 

assignment of the lease required RMJ’s approval. 

In July 2002, Davis sold the automotive business, namely, the “equipment, 

fixtures, goodwill, inventory, trade names, and other intangible assets,” to Smirl. 

And Davis assigned his leasehold interest in the real property to Smirl. In the 

assignment agreement, which RMJ approved, RMJ and Smirl agreed to the 

following terms:

1. The Lease term shall be for a period of Ten (10) years, beginning 

on July 1, 2002, at the monthly rental of $2,000 per month payable

on the 1st day of each month for the first Five (5) year[] period. 

2. The second Five (5) year period beginning on July 1, 2007, 

shall be at a monthly rental to be negotiated by the parties 

based upon fair market value of rentals in the area. 

3. For and in consideration of Ten and No/100 ($10.00) Dollars, the 

Lessee is granted an option to extend the lease for an additional

Five (5) year period at the conclusion of the initial Ten (10) year 

term. Said option shall be exercised by giving notice of intent to 

exercise the option in writing to the Lessor within 90 days from the 

expiration of the initial term. The monthly rental for the option 

period shall be at a rate determined by the parties based upon fair 

market value of rentals in the area.

4. All other terms of the Lease . . . shall remain in full effect.

(Emphasis added.) The parties dispute whether they affirmatively negotiated the 

monthly rental for the second five-year period as emphasized above. Nevertheless, 

during the two years that followed, Smirl continued to pay rent in the amount of

$2,000 each month. 
4

On May 11, 2009, the State of Texas, acting through the Texas 

Transportation Commission, filed a statutory condemnation action to acquire 

0.0519 acres of land from the 0.543-acre property for the expansion of a highway. 

The trial court appointed special commissioners to assess the condemnation 

damages. The commissioners assessed the condemnation damages at $140,899 at 

a hearing attended by RMJ and Smirl. Smirl timely filed an objection to the 

commissioners’ award.

4

On November 27, 2009, Smirl, by agreement of the parties, intervened in the 

condemnation suit, asserting an inverse condemnation claim against the State and 

seeking damages for his lost leasehold interest, lost personal property, and 

uncompensated moving expenses. He alleged that the State’s condemnation of the 

real property had resulted in the taking of his own property, including his 

leasehold, billboard, canopies, permits, pumps, and storage tanks. Smirl also 

sought apportionment of any condemnation damages awarded to RMJ. In order to 

 4 Condemnation proceedings have two distinct phases. Metro. Transit Auth. Harris 

Cnty., Texas v. Graham, 105 S.W.3d 754, 757 (Tex. App.—Houston [14th Dist.] 

2003, pet. denied). The first phase is administrative and involves a hearing before 

three special commissioners appointed by the trial court. Id.; see TEX. PROP. CODE 

ANN. §§ 21.014–.015 (Vernon Supp. 2013). The commissioners enter findings 

and determine the damages owed to the property owner. Graham, 105 S.W.3d at 

757. If any party timely files an objection to the commissioners’ award, it is 

vacated and the case proceeds to the second phase as any other judicial proceeding 

in the trial court. TEX. PROP. CODE ANN. § 21.018 (Vernon 2004); Graham, 105 

S.W.3d at 757. 
5

value the extent of his leasehold interest, Smirl sought a declaration that he and 

RMJ were in “the second five-year period” of the lease. 

RMJ filed a cross claim against Smirl, seeking a declaration that the lease 

terminated on June 30, 2007 because Smirl had failed or refused to renegotiate the 

rental rate for the second five-year period of the lease. RMJ asserted that Smirl’s 

possession of the premises continued as a month-to-month holdover tenancy when 

Smirl breached the lease by failing to renegotiate the rental rate as agreed.

RMJ then moved for summary judgment on Smirl’s claim for apportionment 

of the condemnation proceeds on the ground that, after adequate time for 

discovery, “Smirl ha[d] produced no evidence of the value of the use and 

occupancy of the leasehold for the remainder of the lease term.” RMJ also moved 

for summary judgment on its cross claim for declaratory judgment, arguing that

“[t]he Lease expired as a matter of law on June 30, 2007” because “Smirl failed to 

perform a condition for renewal,” namely, he “refus[ed] to negotiate the rental rate 

for the additional five-year term.” It asserted that “[b]y continuing to occupy the 

property after expiration of the first five-year extension, Smirl became a holdover 

tenant.” And it noted that the lease expressly provides that “any holding over by 

[Smirl] of the property after the expiration of [the lease] shall operate and be 

construed only as a tenancy from month-to-month.” RMJ attached to its motion
6

the lease, the assignment, and the affidavit of Michalyn Ordeneaux, general partner 

of RMJ, who testified that,

Towards the end of the first five-year extension period, we contacted 

[Smirl] to negotiate rent for the second five-year extension period. 

Despite his attorney’s prior statement that the market rent was as

much as $8,000 per month, [Smirl] refused to negotiate a new rental 

rate based on fair market value of rentals in the area. Instead, he 

continued to pay just $2,000 per month. Since the taking in this case, 

[Smirl] has vacated the premises and ceased to make any rent 

payments.

In his response, Smirl argued that RMJ’s no-evidence motion should be 

denied because “there exists more than a scintilla of evidence in support of the 

value of the use and occupancy of the leasehold for the remainder of the lease term 

or of the value of [Smirl’s] right to renew the lease.” Smirl further argued that the 

Assignment provided for a ten-year period, and it required only that the parties 

negotiate the monthly rental rate based on fair market value for the second fiveyear period. Smirl asserted that RMJ continued to accept $2,000 in rental 

payments each month without objection. Smirl attached to his response his 

affidavit, in which he testified that,

[b]ased on market research, the fair market value of the remaining 

lease term is approximately $576,000 as determined by the following:

The fair market monthly rent for a comparable lease is 

approximately $8,000. Because [Smirl] paid $2,000 under the 

terms of [the lease], [Smirl] enjoyed a difference in value of 

$6,000/month. Accordingly, [Smirl] enjoyed $72,000 in value 

under [the lease] for 12 months, or a 1 year period. 
7

Consequently, there were 8 years left on the [lease] which 

amounts to $72,000 per year in value lost by [Smirl].

Smirl also attached his sales contract with Davis, the lease, the assignment, an 

unexecuted lease agreement from 2007, a list of his monthly rent payments, and 

the State’s amended petition for condemnation.

After a hearing, the trial court granted RMJ’s no-evidence summaryjudgment motion on Smirl’s claim for apportionment of the condemnation 

proceeds. The trial court also granted RMJ a declaration that “[a]s of July 1, 2007, 

the leasehold interest of [Smirl] became a month-to-month tenancy” as a matter of 

law.

Subsequently, RMJ and the State executed a compromise agreement, 

wherein the State agreed to pay RMJ $341,250 in total compensation. In its final 

judgment, which incorporates RMJ’s summary judgments, the trial court 

concluded that, pursuant to the compromise agreement, the State is entitled to fee 

simple title in the real property and RMJ is entitled to the sum of $341,250 for the 

condemnation of the property and for damages to the remainder of the adjacent 

property.

5

 5 Pursuant to the “undivided-fee rule,” when real property has been “carved into 

different interests, the property is valued for condemnation purposes as if it were 

owned by a single party.” State v. Cent. Expressway Sign Assoc’s, 302 S.W.3d 

866, 873 (Tex. 2009). “The purpose of the rule is to award full compensation for 

the land itself, and not for the sum of the different parts.” Id. The fact-finder first 

determines the market value of the entire property, then apportions the market 

value between the fee owner and the lessee. Id. A condemnor has no interest in 
8

Standard of Review

After an adequate time for discovery, the party without the burden of proof 

may move for summary judgment, with or without presenting evidence, on the 

basis that there is no evidence to support an essential element of the non-moving 

party’s claim. TEX. R. CIV. P. 166a(i); Johnson v. Brewer & Pritchard, P.C., 73 

S.W.3d 193, 207 (Tex. 2002). The movant must specifically state the element as to 

which there is no evidence. TEX. R. CIV. P. 166a(i). The burden then shifts to the 

non-movant to produce evidence that raises a fact issue on the challenged element. 

See Johnson, 73 S.W.3d at 207.

To defeat a no-evidence motion, “the respondent is not required to marshal 

its proof; its response need only point out evidence that raises a fact issue on the 

challenged elements.” TEX. R. CIV. P. 166a(i) cmt. “A no evidence point will be 

sustained when (a) there is a complete absence of evidence of a vital fact, (b) the 

court is barred by rules of law or of evidence from giving weight to the only 

evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact 

is no more than a mere scintilla, or (d) the evidence conclusively establishes the 

opposite of the vital fact.” King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 

(Tex. 2003). When determining if more than a scintilla of evidence has been 

 

the apportionment of condemnation damages. Texas Pig Stands, Inc. v. Krueger, 

441 S.W.2d 940, 945 (Tex. Civ. App.—San Antonio 1969, writ ref’d n.r.e.). Here, 

the State has filed a letter of nonparticipation in the appeal.
9

produced, the evidence must be viewed in the light most favorable to the nonmovant. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). More 

than a scintilla exists when the evidence “rises to a level that would enable 

reasonable and fair-minded people to differ in their conclusions.” Id. Conversely, 

“[w]hen the evidence offered to prove a vital fact is so weak as to do no more than 

create a mere surmise or suspicion of its existence, the evidence is no more than a 

scintilla and, in legal effect, is no evidence.” Id.

Apportionment of the Condemnation Proceeds

In his third issue, Smirl argues that the trial court erred in granting RMJ 

summary judgment on the ground that there is no evidence to support his claim for 

apportionment of the condemnation proceeds because his affidavit constitutes 

“more than sufficient evidence [of] the fair market value of the remaining lease.”6

 

It is well-settled that a lessee is entitled, as a matter of law, to share in a 

condemnation award when part of its leasehold interest is lost by condemnation. 

Motiva Enters., L.L.C. v. McCrabb, 248 S.W.3d 211, 214 (Tex. App.—Houston 

[1st Dist.] 2007, pet. denied); see also Texaco Ref. & Mktg., Inc. v. Crown Plaza 

Grp., 845 S.W.2d 340, 342 (Tex. App.—Houston [1st Dist.] 1992, no writ). Both 

the fee owner and lessee are entitled to share in the award according to their 

 6 By his petition in intervention, Smirl sought damages for his lost leasehold 

interest, lost personal property, and uncompensated moving expenses. On appeal,

however, his argument concerns only his lost leasehold interest.
10

respective interests. Texaco Ref. & Mktg., Inc., 845 S.W.2d at 342. Unless a lease 

provides that it terminates upon condemnation, the tenant will recover 

compensation for the unexpired term. Motiva Enters., L.L.C., 248 S.W.3d at 214.

A lessee has the burden to establish prima facie proof of its ownership 

interest in the subject property and the value of that interest. Soc’y of Mary’s 

Stars, Inc. v. State, 748 S.W.2d 320, 323 (Tex. App.—Fort Worth 1988, writ 

denied). A lessee is “entitled to receive compensation for the difference, if any, 

between the market rental and the contract rental for the balance” of the term.

Texas Pig Stands, Inc. v. Krueger, 441 S.W.2d 940, 945 (Tex. Civ. App.—San 

Antonio 1969, writ ref’d n.r.e.). 

Here, the lease does not state that it terminates upon condemnation. See 

Texaco Ref. & Mktg., Inc., 845 S.W.2d at 342. Further, nothing in the lease 

reflects that Smirl waived his right to compensation. See id. Thus, Smirl is 

entitled to a portion of the condemnation award from RMJ for the value of his 

interest, if any. See Motiva Enters., L.L.C., 248 S.W.3d at 214.

Smirl argues on appeal, as he did in the trial court, that his affidavit

testimony, quoted above, constitutes “more than sufficient evidence that the fair 

market value of the remaining lease was approximately $576,000” and “that the 

fair market rent for a comparable lease was approximately $8,000 based on market 

research.”
11

RMJ argues that Smirl’s testimony “amounted to no evidence of damages 

for the loss of Smirl’s claimed leasehold interest” because his “testimony failed to 

show how he was qualified or competent to determine market value issues such as 

fair market monthly rent.” It also argues that “Smirl’s testimony was conclusory” 

because he “failed to set forth any facts that would support the statements made” in 

that he failed to include or describe any of the referenced “market research” on 

which his conclusion of either the fair market value of the lease or of the fair 

market value of the remaining lease term was based. Rather, “Smirl simply 

concluded a market rent of $8,000 per month.” 

Even if we were to assume without deciding that Smirl was qualified to 

testify as the owner of the leasehold, we conclude that his affidavit testimony is 

conclusory and speculative, and, therefore, constitutes no evidence of the valuation 

of his leasehold interest.

Because property-owner testimony is the functional equivalent of expert 

testimony, it is judged by the same standards. Natural Gas Pipeline Co. of Am. v. 

Justiss, 397 S.W.3d 150, 157 (Tex. 2012). As with expert testimony, property 

valuations may not be based solely on a property owner’s ipse dixit. Id. at 159.

“The valuation must be substantiated; a naked assertion of ‘market value’ is not 

enough.” Id. The property owner “must provide the factual basis on which his 

opinion rests.” Id. (emphasis added). Evidence of comparable leasehold values, 
12

appraisals, online resources, and any other relevant factors may be offered to 

support the claim. See id.; Texas Fruit Palace, Inc. v. City of Palestine, 842 

S.W.2d 319, 323 (Tex. App.—Tyler 1992, writ denied) (“The measure of value of 

a leasehold estate is the value of the use and occupancy of the leasehold for the 

remainder of the tenant’s term, less the agreed rent; the values are determined by 

the usual willing buyer, willing seller rule.”). The owner’s testimony may be 

challenged on cross-examination or refuted with independent evidence. Justiss, 

397 S.W.3d at 159. However, “even if unchallenged, the testimony must support a 

verdict, and conclusory or speculative statements do not.” Id. An expert’s 

testimony is conclusory as a matter of law if he “simply state[s] a conclusion 

without any explanation.” Id. at 156 (citing Arkoma Basin Exploration Co. v. FMF 

Assocs. 1990–A, Ltd., 249 S.W.3d 380, 389 (Tex. 2008)). Testimony is speculative 

if it is based on guesswork or conjecture. Id.

In Justiss, the court held that because the landowners did not provide any 

factual bases for their valuations, their testimony was conclusory and, therefore,

constituted no evidence. Id. at 159–61. Although one property owner

demonstrated his familiarity with area market values, he failed to explain the 

factual basis behind his determination that his property suffered a $400,000 

decrease in value. Id. at 161. His bare statement that it was “based on property 

sales around in the area” was insufficient. Id.; cf. Arkoma, 249 S.W.3d at 389 
13

(holding that expert’s “cursory” testimony did not make his opinion conclusory, 

because accompanying exhibit explained the basis for his conclusion). 

Here, Smirl testified that “[b]ased on market research, the fair market value 

of the remaining lease term is approximately $576,000” and “[t]he fair market 

monthly rent for a comparable lease is approximately $8,000.” (Emphasis added.) 

Thus, he made the bare assertion that his valuation was based on “market research” 

and did not offer any factual bases or evidence of nearby valuations, appraisals, 

online resources, and any other relevant factors to support his claim. See id. at 

159, 161. As such, his valuation is conclusory. See id. at 161. Further, Smirl 

couched his valuations in terms of approximations. An opinion cast in terms of 

approximations and unsupported by any relevant facts leading to or supporting 

such approximation is conjectural. Stinson v. Cravens, Dargan & Co., 579 S.W.2d 

298, 299 (Tex. Civ. App.—Dallas 1979, no writ); see also Justiss, 397 S.W.3d at 

158–59 (citing Trinity River Estates, L.P. v. DiFonzo, No. 2–08–393–CV, 2009 

WL 1506928, at *4 (Tex. App.—Fort Worth May 28, 2009, no pet.) (mem. op.) 

(affirming no-evidence summary judgment where owner’s affidavit, stating his 

property had been damaged “between $1.8 and $2.2 million dollars based upon the 

reduction in value of the overall site,” failed to state basis for opinion)).

Smirl argues that RMJ failed to object in the trial court to the sufficiency of 

his affidavit testimony. There is a distinction between challenges to an expert’s 
14

scientific methodology and “no evidence challenges where, on the face of the 

record, the evidence lacked probative value.” Coastal Transp. Co. v. Crown Cent. 

Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004). When an expert’s underlying 

methodology is challenged, the trial court “necessarily looks beyond what the 

expert said” to evaluate the reliability of the expert’s opinion. Id. Thus, an 

objection is required so that the trial court can conduct the analysis. Id. When, as 

here, however, the testimony is challenged as conclusory or speculative, and,

therefore, as non-probative on its face, there is no need to go beyond the face of the 

record to test its reliability, and a party may challenge the legal sufficiency of the 

evidence even in the absence of an objection to its admissibility. Id. at 232–33.

We conclude that Smirl did not meet his burden to bring forward more than 

a scintilla of probative evidence to raise a genuine issue of material fact regarding 

the valuation of his leasehold interest. See Justiss, 397 S.W.3d at 158–59; 

Chapman, 118 S.W.3d at 751. Thus, we hold that the trial court did not err in 

granting RMJ summary judgment on the ground that Smirl produced no evidence 

“of the value of the use and occupancy of the leasehold for the remainder of the 

lease term.”

Accordingly, we overrule Smirl’s third issue. 

Having upheld the trial court’s ruling on no-evidence grounds, we need not 

address whether Smirl raised a genuine issue of material fact regarding the nature 
15

of the tenancy supporting his valuation. See Ford Motor Co. v. Ridgway, 135 

S.W.3d 598, 600 (Tex. 2004). Accordingly, we do not reach Smirl’s first and 

second issues.

Conclusion

We affirm the judgment of the trial court.

Terry Jennings

Justice 

Panel consists of Justices Jennings, Sharp, and Brown.

Justice Sharp, concurring in judgment only.