Court Opinion

ID: 2927985
Source: CourtListenerOpinion
Date Created: 2015-09-12 00:56:39.536203+00
Date Added: 2024-06-11T15:22:28.583611
License: Public Domain

Motion for Rehearing Overruled; Affirmed; Opinion of May 2, 2002,
Withdrawn and Substitute Opinion filed July 25, 2002

Motion for Rehearing Overruled; Affirmed; Opinion of May 2, 2002, Withdrawn and Substitute Opinion filed July 25, 2002.
 
 
 
In The
 
Fourteenth Court of Appeals
___________
 
NO. 14-01-00094-CV
____________
 
WEINGARTEN REALTY INVESTORS, Appellant
 
V.
 
HARRIS COUNTY APPRAISAL DISTRICT, Appellee
 
______________________________________________________
 
On Appeal from
the 55th District Court
Harris County, Texas
Trial Court
Cause No. 99-43829
 
______________________________________________________
 
O P I N I O
N   O N  
M O T I O N   F O R   R E H E A R I N G

            We overrule
appellant Weingarten Realty Investors’s motion for
rehearing.  We withdraw the opinion
issued in this case on May 2,
 2002, and we substitute the following opinion in its place.
                                                              Introduction
            This is a
property-tax-appraisal case involving alleged unequal taxation of commercial
property owned by Weingarten Realty Investors. 
Weingarten appeals the trial court’s 

judgment in favor of the Harris County Appraisal District
(“HCAD”).  We affirm the trial court’s
judgment.
                                   Factual and Procedural Background
            Weingarten purchased Champion’s Village Shopping
  Center in December 1998, for $36
million.  Champion’s Village is located
at FM 1960 and Champion Forest Drive in
Houston, Harris County, Texas, and contains approximately 400,000 square feet
of net rentable area.
            HCAD appraised Champion’s Village Shopping
  Center at $30 million for the 1999 tax
year.  Weingarten protested HCAD’s appraisal, and after exhausting its administrative
remedies, timely appealed to the district court.  In its petition, Weingarten made two claims
of entitlement to relief for the 1999 tax year under the Texas Tax Code.  Weingarten contended the appraised value of
Champion’s Village Shopping
  Center was in excess of its fair market
value under the Texas Constitution. 
Weingarten also contended the appraised value was unequal to the
appraised values of several comparable properties for purposes of ad valorem taxation.  Weingarten later nonsuited
the excessive-valuation appeal and proceeded to trial solely on its
unequal-appraisal claim.
            Before trial began, HCAD filed a
motion to exclude the testimony of Weingarten’s sole expert witness, David Dominy.  The motion,
filed under E.I. du
Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995),
raised four main arguments: (1) Dominy did not
consider fair market values in conducting his analysis; (2) in making his value
adjustments, Dominy did not consider the economic
characteristics of Champion’s Village Shopping Center or of the “assessment
comparables” that Dominy selected; (3) Dominy did not include a reasonable number of comparable
properties in his analysis; and (4) Dominy’s value
adjustments were not based upon any quantitative analysis.  In its third argument, HCAD raised objections
to the selectivity and substantive quality of the comparable properties as well
as to the quantity of them.  In its
fourth argument, HCAD objected to Dominy’s ipse dixit
used to make the required adjustments to the comparable properties under
section 42.26(d) of the Texas Tax Code.
            Rather than conduct a pretrial Robinson hearing, because it was a bench
trial, the trial court “carried the motion.” 
At trial, Dominy testified Champion’s Village
was unequally appraised and its equal-appraised value was $19,149,962 — more
than $10 million less than HCAD’s 1999
appraisal.  At the conclusion of the
one-day bench trial, the trial court requested post-trial briefs in lieu of
closing arguments.  Along with its brief,
Weingarten submitted additional evidence for purposes of HCAD’s
Robinson challenge — the affidavits
of Breck Bostwick and
Ronald Little.  About six weeks after the
trial, the court entered an order excluding the testimony of Dominy and simultaneously signed a take–nothing  judgment against Weingarten.  Weingarten filed a motion to reconsider and
motion for new trial.  The motion for new
trial was overruled by operation of law, and after a hearing on the motion to reconsider, the trial court entered no further orders.
Issues Presented
            Weingarten
presents three issues for review:  
            (1) Did the
trial court abuse its discretion in excluding Weingarten’s expert witness by
misinterpreting and misapplying section 42.26(d) of the Texas Tax Code?
            (2) Does Robinson apply to the trial court’s exclusion of Dominy’s testimony, and if it does, did the trial court
abuse its discretion in excluding Dominy’s testimony
under Robinson?
            (3) Is
Weingarten entitled to an award of reasonable attorney’s fees?  
Standard of Review
            We review an
order excluding an expert witness under an abuse-of-discretion standard.  Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 499 (Tex. 2001).  The trial
court abuses its discretion when its ruling is arbitrary, unreasonable, or made
without reference to any guiding rules or legal principles.  See Bocquet v. Herring, 972 S.W.2d 19, 21
(Tex.
1998).  We must uphold the trial court’s
evidentiary ruling if there is any legitimate basis for it.  Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
            The
trial court did not enter findings of fact or conclusions of law.  Therefore, we view the trial court’s judgment
as impliedly finding all the facts necessary to support its judgment.  See
Worford v. Stamper, 801
S.W.2d 108, 109 (Tex.
1990).  Weingarten also challenges the
trial court’s implied findings underlying the judgment and exclusion order by
contesting the legal and factual sufficiency of the evidence to support
them.  See  Worford, 801 S.W.2d at 109.  Under an abuse-of-discretion standard, legal
and factual sufficiency challenges are not independent grounds of error.  See
Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223,
226 (Tex. 1991); In re D.S., — S.W.3d —, 2002 WL 287738,
at *2 (Tex. App.—Houston [14th
Dist.] Feb. 28,
 2002, no pet.).
Analysis
            We begin by addressing HCAD’s contention that Weingarten waived a portion of the
argument it now brings on appeal.  In its
motion to exclude expert testimony, HCAD attacked the reliability of Dominy’s foundational data. 
On appeal, HCAD argues Weingarten waived review as to HCAD’s argument that Dominy’s
calculations are unreliable because they are based on only portions of
comparable retail centers.  HCAD claims
Weingarten did not specifically address this argument in its original
brief.  We disagree.  As Weingarten points out in its reply brief,
appellate courts treat an issue or point as covering every subsidiary question
that is fairly included in the issue or point. 
See Tex. R. App. P. 38.1(e);
see also Stephenson v. LeBouef, 16 S.W.3d 829,
843–44 (Tex. App.—Houston [14th
Dist.] 2000, pet. denied).  Weingarten’s
brief presented the following issue: 
“Whether the trial court abused its discretion in excluding Dominy’s testimony under Robinson?”  In Robinson, the Texas Supreme Court set
forth a two-part test governing the admissibility of expert testimony — (1) the
expert must be qualified; and (2) the testimony must be relevant and be based
on a reliable foundation.  See Robinson, 923
S.W.2d at 556.  An issue presented
for review that invokes Robinson also
invokes the reliability of an expert witness’s foundational data, which, in
this case, includes the quality of the comparable properties.  We conclude that Weingarten has sufficiently
assigned error on appeal.
   Is an expert witness insulated from a Robinson reliability challenge when a
statute
                                                     mandates the methodology?
 
            In its second issue, Weingarten
argues that an expert witness is insulated from a Robinson reliability challenge when a statute mandates the
methodology used by the expert. Weingarten cites Rushing v. Kansas City S. Ry. Co., 185
F.3d 496, 506–07 (5th Cir. 1999), for this proposition.  Weingarten claims this court is required to
hold Dominy’s testimony reliable as a matter of law
because Dominy employed a statutorily mandated
methodology, specifically, section 42.26(d) of the Texas Tax Code.  In Rushing,
the Fifth Circuit was concerned with the admissibility of an expert’s affidavit
in an appeal of a partial summary judgment. 
See id.  The opponent argued against admissibility
based on the expert’s qualifications and the reliability of his testing
methods.  Id.  The proponent responded that the expert
precisely followed techniques mandated by Noise Control Act regulations.  Id.  Unlike this case, there was no direct
challenge to the reliability of the underlying facts or data employed by the
expert in conducting the sound-level testing.  
See id.  We do not find Rushing persuasive or controlling in this case; its reliability
challenge focused on qualifications and methodology, not underlying data.  See id.  Reliability of methodology is only one facet
of the reliable foundation required to admit expert testimony under Texas Rule
of Evidence 702.  See Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d
706, 713–14 (Tex.
1997).  If a statute requires a certain
methodology, then use of that methodology alone would not be unreliable.  However, Dominy’s
use of a statutorily mandated methodology does not insulate Dominy’s
testimony from the Robinson
requirements.  Therefore, we consider
whether Dominy’s testimony satisfied Robinson.
                                           Did
the trial court abuse its discretion 
                                in excluding Dominy’s testimony
under Robinson?
 
            Unreliable
expert testimony is of no evidentiary value. 
See Havner,
953 S.W.2d at 712. 
Texas Rule of Evidence 702 requires that all expert testimony, not just
scientific evidence, be relevant and reliable before it is admitted.  Gammill v. Jack Williams Chevrolet, Inc., 972
S.W.2d 713, 727 (Tex. 1998).  As noted
above, for expert testimony to be admissible: 
(1) the expert must be qualified; and (2) the testimony must be relevant
and be based on a reliable foundation.  Robinson, 923 S.W.2d at
556.  The trial court makes the
initial determination about whether the expert and the proffered testimony meet
these requirements.  Id.  The trial court may exclude the expert
testimony if there is too great an analytical gap between the data and the
opinion proffered.  Gammill, 972 S.W.2d at 727.   
            The trial court’s gate-keeping
function does not supplant cross-examination as the “traditional and
appropriate means of attacking shaky but admissible evidence.”  Id. at 728.  The availability
of cross-examination, however, does not relieve the trial court of its
threshold responsibility under Rule 702 to ensure that an expert’s testimony
both rests on a reliable foundation and is relevant to the task at hand.  Id.  In ruling on  reliability, the
trial court is not to determine whether the expert’s conclusions are correct;
rather, it determines whether the expert’s analysis is reliable.  Robinson,
923 S.W.2d at 557; Gammill, 972 S.W.2d at
727–28.  Instead of focusing on the
expert’s conclusions, the trial court focuses on the reliability of the
principles, research, and methods underlying them, as well as on the expert’s
reasoning and methodology.  Robinson, 923 S.W.2d
at 557.  If the foundational data
underlying opinion testimony is unreliable, an opinion drawn from that data is
likewise unreliable.  Havner, 953 S.W.2d at 714.  Unreliable expert testimony is legally no
evidence.  Id. 
            In Robinson, the Texas Supreme Court identified six nonexclusive
factors to determine whether an expert’s testimony is reliable and thus
admissible.  See Robinson, 923 S.W.2d at 557.  But in Gammill, our high court recognized that the Robinson factors may not apply to certain testimony.  See Gammill, 972 S.W.2d at 726.  In non-scientific cases, it is impossible to
set out specific criteria for evaluating the reliability of expert testimony,
and, ultimately, the trial court has discretion to determine how to assess
reliability.  See Kroger Co. v.
Betancourt, 996 S.W.2d 353, 362 (Tex.
App.—Houston [14th Dist.] 1999, pet. denied).  Reliability is an admissibility issue for the
trial court, not a weight–of–the–evidence issue for the fact finder.  See General Motors Corp. v. Sanchez,
997 S.W.2d 584, 590 (Tex. 1999).
            In this case, because the trial
court carried HCAD’s motion to exclude, Dominy testified as if his opinions were admitted
evidence.  The main avenue for HCAD to
challenge the reliability of Dominy’s testimony was
on cross-examination; on appeal, this does not mean that Dominy’s
testimony can only be challenged by sufficiency-of-the-evidence issues as
opposed to admissibility.  In its
cross-examination, HCAD extensively challenged the foundational data Dominy used in making his unequal-appraisal
calculations.  HCAD demonstrated the
“comparable properties” Dominy used to perform his
equal-and-uniform valuation analysis were questionably “comparable” and
questionably “appropriately adjusted” for several reasons such that any opinion
drawn from them would be unreliable. 
During its cross-examination of Dominy, HCAD
showed:
!         Dominy’s “comparable properties” were significantly smaller
retail centers with 105,897 to 258,513 of square feet of improvements compared
to the  407,013 square feet of
improvements in Champion’s Village Shopping Center;
!         Nine
of the ten “comparable properties” used had per-square-foot appraised values
significantly lower than Champion’s Village; 

!         Dominy used only ten “comparable properties” even though
there were 191 retail centers existing in the northwest quadrant of Harris County, where Champion’s Village Shopping Center was located;
!         Dominy carved out portions of the comparable retail centers
due to disparate ownership and, in fact, used only portions of the “comparable
properties” selected in his equal-and-uniform analysis;
!         The
adjustments Dominy made to the “comparable
properties” considered only physical characteristics of condition, age, size
and location; and
!         The
amount of the percentage adjustment for each characteristic of the “comparable
properties” that differed from Champion’s Village was subjective.
 
            This testimony constitutes a
sufficient basis for the trial court to have rejected Dominy’s
testimony as unreliable, based upon the quality of the “comparable properties.”
Though not unbridled, the trial court had great latitude in ruling on the
admissibility of an expert appraiser’s testimony based upon underlying facts or
data.  See, e.g., Pape v. Guadalupe-Blanco River Auth., 48
S.W.3d 908, 916 (Tex. App.—Austin 2001, pet. denied) (upholding exclusion of
comparable sales in condemnation proceeding); Boswell v. Brazos Elec. Power Co-op., Inc., 910 S.W.2d 593, 602–03
(Tex. App.—Fort Worth 1995, writ denied) (upholding exclusion of appraisal
report); Southwestern Bell v. Ramsey,
542 S.W.2d 466, 476 (Tex. Civ. App.—Tyler 1976, writ ref’d n.r.e.) (upholding
admission of comparable sales in eminent-domain proceeding).  We find ample support in the record for the
trial court, in its role as “gatekeeper,” to have concluded that Dominy’s testimony was inadmissible because Dominy lacked a reliable foundation for his opinions.  As a result, the trial court’s exclusion of Dominy’s testimony was not arbitrary or without reference
to any guiding rules or legal principles.  
Therefore, the trial court did not abuse its discretion.  We overrule Weingarten’s second issue.
                        Did the trial court
exclude Dominy’s testimony based on an
  improper
interpretation and application of section 42.26(d) of the Texas Tax Code?
 
            In its first issue, Weingarten
argues the trial court abused its discretion in interpreting and applying
section 42.26(d) of the Texas Tax Code to exclude Weingarten’s expert
testimony.  Essentially, Weingarten
claims the trial court rejected the methodology of the statute if it excluded Dominy.  We begin
with a review of the statute and this court’s opinion in Harris County Appraisal Dist. v. United Investors Realty Trust, 47
S.W.3d 648, 653 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).  
 
            In 1997, the Texas Legislature
enacted section 42.26(d) of the Texas Tax Code, which states: 
The District Court shall grant relief on the ground that a property is
appraised unequally if the appraised value of the property exceeds the median
appraised value of a reasonable number of comparable properties appropriately
adjusted.
Tex. Tax Code § 42.26(d).  In order to perform the calculation under
this statute, the appraisal expert determines a reasonable number of comparable
properties.  Then, the expert takes the
appraised value of those properties from the public record, and appropriately
adjusts them to the subject property. 
Thereafter, the appropriately adjusted comparable properties are arrayed
and a median is determined.  United Investors Realty Trust, 47 S.W.3d at 653.
            In United Investors Realty Trust, this court noted that section
42.26(d) became law on January 1,
 1998, enacted as part of the Taxpayer’s Bill of Rights.  See
id. at 652. 
It was intended to facilitate tax remedies for property owners.  Id.  In using the methodology mandated by this new
avenue for ad valorem
tax relief, this court rejected any requirement of independent market-value
appraisals of comparable properties, appraisal ratios, or a statistical sample
of comparable properties.  See id. at
653.  The proper application of section
42.26(d) does not mandate consideration of market value.  Id. at 654.  Weingarten and HCAD have made several
arguments to the trial court, similar to issues presented in United Investors Realty Trust.  These arguments question the proper
interpretation of the Texas Tax Code and what factors an expert appraisal
witness should consider in forming an unequal-appraisal opinion.  HCAD asserts that section 42.26(d) requires
consideration of independent market value of comparable properties.  This court rejected that argument in United Investors Realty Trust.  See id.
at 653.  By
statute, appraised value is market value. 
See Tex. Tax Code §
23.01(a). 
Furthermore, if a conflict exists between taxation at market value and
equal and uniform taxation, equal and uniform taxation must prevail.  United
Investors Realty Trust, 47 S.W.3d at 654.
            Dominy’s
methodology complied with section 42.26(d).
 Counsel for Weingarten
systematically led Dominy through the statute as Dominy made his calculations to form opinions of unequal
appraisal and a value for an equal appraisal. 
There was nothing about his methodology that contravened section
42.26(d).  See id.  Many of HCAD’s arguments in its motion to exclude in the trial
court were not proper grounds for exclusion of Dominy’s
testimony; however, the lack of a reliable foundation under Robinson was a proper objection, and, as
discussed above, the trial court did not abuse its discretion in excluding Dominy’s testimony on that basis.  
            Nothing in the record indicates the
trial court rejected the methodology of section 42.26(d).  There are no findings of fact or conclusions
of law.  Therefore, this court must
affirm the judgment if it can be upheld on any legal theory that finds support
in the evidence.  See Curtiss v. Comm’n for Lawyer Discipline, 20 S.W.3d 227, 231 (Tex. App.—Houston [14th Dist.] 2000, no pet.); Vickery
v. Comm’n for Lawyer Discipline, 5 S.W.3d 241,
258 (Tex. App.—Houston [14th Dist.] 1999, pet. denied).  Weingarten
tries to isolate the trial court’s discretion in excluding evidence to an
erroneous interpretation of section 42.26, essentially characterizing HCAD’s arguments as an attack on this court’s opinion in
United Investors Realty Trust.  We
disagree. Although HCAD asserted objections that conflict with section 42.26(d)
and with United Investors Realty Trust, those were not its only objections in
this case.  HCAD also moved to exclude Dominy’s testimony based on the lack of reliability in his
foundational data and the way he selected comparable properties.  Inasmuch as we have affirmed the trial court’s
exclusion of Dominy’s testimony on this basis,
Weingarten’s first issue does not assert reversible error, and is therefore
overruled.
                                      Was
Weingarten entitled to attorney’s fees?
            Finally, in its third issue,
Weingarten argues it was entitled to an award of attorney’s fees.  Because Weingarten has not prevailed in this
case, it is not entitled to attorney’s fees under the Texas Tax Code.  See Tex. Tax Code § 42.29; Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 79 (Tex. 1992).  Accordingly,
we overrule Weingarten’s third issue.
            We affirm the trial court’s
judgment.
 
 
                                                                                    
                                                                        /s/        Kem Thompson
Frost
                                                                                    Justice
 
Judgment
rendered and Opinion filed July 25,
 2002.
Panel
consists of Chief Justice Brister and Justices Anderson and Frost.
Publish—Tex. R. App. P. 47.3(b).