Opinion ID: 895007
Heading Depth: 2
Heading Rank: 1

Heading: Dismissal of the Lawsuit

Text: FKM argues that the University, by amending its pleadings to reduce the amount of property it sought to condemn, introduced new compensation issues into the suit and thereby destroyed the trial court's appellate jurisdiction. FKM also argues that the trial court properly dismissed the suit because the University lacked any public necessity for condemning only the smaller tract and because the University failed to negotiate damages as to the smaller tract. We agree with the court of appeals that none of the grounds warranted dismissal.
FKM contends that State v. Nelson, 160 Tex. 515, 334 S.W.2d 788 (1960), limits the trial court's appellate jurisdiction in condemnation cases to those compensation issues raised before the special commissioners. It asserts that when the University so drastically reduced the amount of property sought, it introduced materially different compensation issues  the value of the smaller tract and injury to the remaining tract  than those the special commissioners considered. See TEX. PROP.CODE §§ 21.041, 21.042. We recently rejected those arguments in PR Investments v. State, 251 S.W.3d 472, 479 (2008), although that case did not involve a change in the area of property taken. [3] In that case, we reviewed Nelson and the statutory framework for condemnation proceedings and rejected the view that the trial court can consider only the matters, evidence, and compensation issues presented to the commissioners. We explained that once a party files objections to the commissioners' findings and seeks de novo review in the trial court, pursuant to section 21.018(b), the case is to be tried in the same manner as other civil cases. That includes allowing amendments to pleadings. We held that the trial court's de novo proceeding is not limited to the exact compensation facts and issues presented to the commissioners. Id. at 475. In Nelson and earlier in Texas Power & Light Co. v. Cole, 158 Tex. 495, 313 S.W.2d 524 (1958), we recognized that a condemnor can, after the administrative phase, reduce the amount of property it seeks and that such a change does not divest the trial court of jurisdiction. Nelson, 334 S.W.2d at 790; Cole, 313 S.W.2d at 529-31; see also Thompson v. Janes, 151 Tex. 495, 251 S.W.2d 953, 954-55 (1952) ([T]he condemning agency is accorded the right to dismiss as to a portion of the land when it decides that its purpose may be accomplished with less land than was initially sought.). FKM contends that these cases only allow such an amendment if the landowner will not be prejudiced. We agree that Nelson and Cole contain language to the effect that amendment is allowed if it will not prejudice the landowner. [4] We do not think, however, that FKM established such prejudice as would preclude the University from amending its pleadings. First, a landowner ordinarily will not be harmed if a condemning authority decides to take less land since the landowner gets to keep the land it did not want to sell to begin with, and the landowner is entitled to be fully compensated for damages suffered as a result of whatever property is eventually taken. [5] Except for a small strip of land the University now seeks to condemn, FKM gets to keep the property it refused to sell the University. In regard to expenses FKM incurred in litigating because the University originally sought to take the larger tract, FKM may recover those expenses the Legislature has provided for, as we discuss below. [6] Even if recovery of expenses is unavailable, however, FKM does not persuade us that a condemnor may not amend its petition to seek a smaller tract. Such a rule would restrict the use of amended petitions in condemnation proceedings, contrary to section 21.018(b)'s specification that suit is to proceed in the same manner as other civil causes. As we noted in PR Investments, under a trial conducted `in the same manner as other civil cases,' the plaintiff is allowed to amend the petition, and we permitted in Nelson an agreed trial amendment made after the special commissioners' hearing. 251 S.W.3d at 476. The court of appeals in this case correctly noted that as in other civil cases, an eminent domain proceeding is subject to the rules of civil procedure, and these rules permit parties to amend their pleadings and also to dismiss some or all of their claims. 178 S.W.3d at 5 (citing Rose v. State, 497 S.W.2d 444, 445-46 (Tex.1973)); see also City of Houston v. Biggers, 380 S.W.2d 700, 705 (Tex.Civ.App.-Houston 1964, writ ref'd n.r.e.) (Attorneys fees, costs of experts and other expenses in preparation for trial are merely incidental expenses. . . . The incurring of them is not such prejudice as to require the condemnor to take property it decides it can do without.). We also disagree with FKM that it was prejudiced because the amended petition depriv[ed] FKM of the statutorily-mandated hearing before the special commissioners on the issues of compensation. PR Investments necessarily rejects this argument, by our holding that a change in compensation facts after the special commissioners' award generally does not destroy trial court jurisdiction over a properly-filed condemnation case. FKM separately argues that even if the trial court is not required to dismiss the case due to a change in compensation issues, it should have discretion to dismiss. We expressly rejected this argument in PR Investments, 251 S.W.3d at 479. There may be circumstances under which a landowner could establish prejudice of the sort that would preclude a condemning authority from seeking a smaller tract, such as if the condemnor had taken possession of the larger tract and irreparably altered it in a manner that would be injurious to the landowner. For example, in Cole, we distinguished an earlier case where the condemning authority was completing a dam and reservoir that would submerge the land in issue. 313 S.W.2d at 529 (discussing Brazos River Conservation & Reclamation Dist. v. Allen, 141 Tex. 208, 171 S.W.2d 842 (1943)). And in Thompson, we held that a landowner would be prejudiced if a condemnor reduced the amount of land sought to be condemned but did not relinquish the part no longer sought to be condemned. 252 S.W.2d at 955. This case does not present a similar situation. There is no allegation here that the University has physically changed the land, much less permanently or injuriously altered it. Further, since the University filed its second amended petition in 2001, FKM has had possession of the entire property except for the five foot strip.
In its motion to dismiss, FKM also contended that the University did not have a public necessity for taking the smaller tract. There was no evidence introduced at the hearing on FKM's motion, but evidence filed in support of and in opposition to the University's motion for summary judgment was before the court. [7] The trial court is allowed to conduct a hearing on a plea to the jurisdiction or motion to dismiss for lack of jurisdiction in a manner similar to how it hears a summary judgment motion, and may consider affidavits and other summary judgment-type evidence. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227 (Tex.2004). If the evidence presents a fact question on the jurisdictional issue, the motion should be denied. See id. at 228. Here there was evidence before the trial court that the University had a public necessity for the taking. Education Code section 111.38, specifically applicable to the University, provides that [t]he board [of the University] has the power of eminent domain to acquire for the use of the [U]niversity any land necessary and proper for carrying out its purposes as a state-supported institution of higher education. FKM claimed that the reason stated in the minutes of the February 19, 1998 Board meeting for the condemnation  that the property was needed to obtain a right-of-way over State Highway 35  was false because the University had already obtained such right-of-way. However, the University offered evidence that (1) the Board agenda for this item also provided that the acquisition of the larger tract in conjunction with two others in the same area will complete the acquisition of the east campus areas, and (2) the Board met and approved the acquisition of the property for multiple reasons, including not only the right-of-way, but also as part of an established Master Plan, the need to address a campus parking shortage, and the University's need for the tract as a future building site. FKM claimed that Ron Shoup, the University's director of campus planning and real estate, stated in a memorandum that the property was not needed, but the University offered the affidavit of a higher-ranking official, Vice Chancellor Harris, who stated that Shoup was not authorized to speak for or bind the University on this matter. The University further submitted the affidavit of Shoup himself, who attested that his statement had been misinterpreted, that it was made in the context of an earlier proposal for FKM to develop the property for retail use, and that based on his knowledge of the University's needs, the acquisition of the FKM property constituted a public necessity in that it provided the University with land upon which to construct needed buildings, was needed to enable the closure of a busy thoroughfare, i.e., Calhoun Road, and enabled the University to establish an architecturally and aesthetically desirable eastern border to its campus. [8] We further note that the Shoup memorandum was equivocal, stating at one point that the University did not need the FKM property, but then qualifying that statement by stating [t]his is not to say it could not be utilized. Shoup testified in his deposition that the FKM tract was part of an ongoing eastward expansion project, that properties were acquired as part of this plan for future expansion and future growth of the University and very wisely so, and that the plan for the FKM tract was that it would be landscaped with parking and potentially an entrance there. A memorandum from an associate vice chancellor stated that the tract was needed to provide a clearly bounded eastern edge to the campus. The Board's determination that the University needed the larger tract for a legitimate university purpose raised a fact issue regarding FKM's motion to dismiss. Where a statute vests a governmental agency with discretionary authority to condemn property, we have held that the agency's determination of public necessity is presumptively correct, absent proof by the landowner of the agency's fraud or proof that the condemning authority acted arbitrarily or capriciously. See Hous. Auth. of City of Dallas v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 88 (1940) (The law is well established in this state that where the power of eminent domain is granted, a determination by the condemnor of the necessity for acquiring certain property is conclusive in the absence of fraud.) [9] FKM does not challenge this standard. FKM's motion to dismiss and evidence before the trial court in connection with that motion were not conclusive proof that the University's determination of public necessity was fraudulent, arbitrary, or capricious. FKM argues that the suit was properly dismissed because the University failed to offer any proof that its governing board had declared a public necessity for the taking of the five-foot wide strip of property sought. We agree with FKM that Education Code section 111.38 requires the Board to authorize condemnation of property, since section 111.38 only grants the power of eminent domain to the Board itself. [10] FKM points out that at the hearing on its motion to dismiss the University's counsel conceded that the board did not pass a separate resolution specifically authorizing condemnation of the smaller tract. We do not agree with FKM, however, that a separate Board resolution is necessary every time a condemnor decides to acquire less property than it originally sought. FKM does not reference a statutory or procedural requirement for its position, and a resolution authorizing condemnation of a whole tract of land necessarily authorizes condemnation of the separate parts that comprise the whole. We see no reason that the Board could not vote to condemn a tract of land for public use then depend on and allow its agents, subject to the Board's supervision and approval, to determine that less than the whole tract would suffice to fulfill the Board's purposes or would fit within the University's budget. And if the Board does so, then it could reasonably depend on the agents to negotiate for less than the whole tract or, if suit has been filed as in this case, amend its condemnation petition to seek a smaller tract. There is no indication in this record that the Board has ever disavowed the actions of University officers and attorneys handling the condemnation proceeding. The University's counsel represented to the trial court at the hearing on the motion to dismiss that the court would hear testimony that at some point the Board of Regents made the determination that they couldn't afford the risk [of seeking the whole tract] because of the rapidly increasing numbers put on the property by FKM. The Board resolution authorizing condemnation of the larger tract, together with the other evidence described above, is evidence that condemnation of the smaller portion of the property was necessary and proper for carrying out the purposes of the University of Houston System as a state-supported institution of higher education under section 111.38 of the Education Code. And we have noted, `[w]hen the use is public, the necessity or expediency of appropriating any particular property is not a subject of judicial cognizance.' Higginbotham, 143 S.W.2d at 89 (quoting Imperial Irrigation Co. v. Jayne, 104 Tex. 395, 138 S.W. 575, 587 (1911)); see also Boom Co. v. Patterson, 98 U.S. 403, 406, 25 L.Ed. 206 (1878). If a landowner can establish that the ultimate taking of a smaller tract of land that comprised part of a larger tract originally sought to be condemned is fraudulent, without a true public purpose, and intended solely to avoid fully dismissing the entire condemnation proceeding so as to avoid paying the landowner's expenses under statutory provisions, then the landowner could be entitled to dismissal. But the evidence before the trial court at the time it heard FKM's motions did not conclusively establish these matters so as to warrant dismissal of the proceeding.
FKM contends the trial court was authorized to dismiss the suit because the University failed to negotiate with FKM to purchase the smaller tract. We disagree. FKM does not claim that the University did not offer to purchase the larger tract prior to filing suit. The Property Code requires that the condemning authority state in its petition that the authority and the property owner are unable to agree on damages. TEX. PROP.CODE § 21.012(b)(4). The provision clearly contemplates that the condemnor negotiate with the property owner prior to filing suit. However, the Property Code does not require a condemning authority to continue negotiating after suit is filed. FKM also does not refer us to a rule by which other civil suits are tried that requires negotiation after pleadings are amended to seek different relief from that sought in preceding pleadings. There is no basis for a ruling that the University's failure to negotiate after amending its petition divested the trial court of jurisdiction and authorized dismissal of the suit.