Court Opinion

ID: 9678867
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:34:36.878786+00
Date Added: 2024-06-11T18:17:08.584077
License: Public Domain

TOM GRAY, Chief Justice,
dissent to opinion on rehearing.
The majority’s original judgment must be withdrawn so that it can be “corrected.” As noted in my original dissenting opinion, the original judgment was demonstrably wrong. Trail Enters. v. City of Houston, No. 10-05-00382-CV, 2007 WL 4157244, at *4, 2007 Tex.App. LEXIS 9199, *9-12 (Tex.App.-Waco Nov. 21, 2007, no pet. h.) (Gray, C.J., dissenting). And while some of the errors may have been corrected, the opinion on reheating only confirms for me that the better course for addressing the issues that were not resolved due to the trial court’s determination that it had no jurisdiction is to remand this proceeding to the trial court. In this regard, I do not see how the City could have been expected, must less required, to complain on appeal about the trial court’s initial determination that there was a taking when the subsequent determination by the trial court that it had no jurisdiction was a determination that impliedly, if not expressly, set aside the initial determination and held that a taking had not yet occurred, thus depriving the court of jurisdiction.1 Likewise, I am concerned about how the City was to engage in any meaningful post-judgment practice when the only judgment ever rendered by the trial court was that it did not have jurisdiction — a victory for the City.2
The majority’s opinion on rehearing and corrected judgment, if correct, must be read as holding that on the record in this regulatory taking case, the City did not deprive Trail of all economically viable use of the property and, therefore, the City’s regulation did not result in a compensable taking under one of the applicable tests.3 *116See Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660 (Tex.2004). The fact that Trail continues to receive royalties from production and sale of oil and gas from the property establishes that some economic value for its interest therein was retained by Trail.
The question remains, however, whether the regulation was a compensable taking under the other applicable test; did it unreasonably interfere with Trail’s investment-backed expectation?4 It does not appear to me from the record in this proceeding that this question has been developed or resolved. As argued by Trail in its motion for rehearing, the jury verdict is only the difference in the value of minerals before and after the regulation. It was not determined if this was an unreasonable interference as defined by Sheffield and Mayhew. Sheffield, 140 S.W.3d at 677-679; Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 935-936 (Tex.1998).
I could spend much more time in the “sophistic Miltonian Bog” like I did in Sheffield but I know that it is not left to me to define what constitutes an island. See Sheffield, 140 S.W.3d at 671. It is sufficient for my purposes to note that neither the trial court, nor a majority of this Court, has gone through the rigorous analysis required by Sheffield to decide the fact issues and then to weigh and balance the factors in determining if there has been an unreasonable interference with “Trail’s” (actually this must be done as to each individual plaintiff) investment-backed expectation. This analysis cannot be done, and is not dependent, only upon the jury finding of the amount of the reduction in value of Trail’s investment as a result of the regulation on drilling.
Thus, my disagreement with the majority’s refusal to remand this proceeding spills over to some extent from the purely jurisdictional question to the question they implicitly decided by rendering judgment; whether this was a regulatory taking in the constitutional sense of the magnitude requiring compensation. As I spend more time with the record, and whatever time I can devote to it is minimal compared to the decade that the litigants have been dealing with it, I am more concerned about how the taxpayers, that would be the City of Houston, were to frame the issues in this appeal as it relates to issues that I believe should be addressed on remand.
Of course, the City of Houston had no way of knowing when this case was appealed that it would be transferred to this Court via a docket equalization order. It may have made a lot more sense to ask that it be directed to the 14th Court of Appeals to which the two prior appeals were taken. See Trail Enters. v. City of Houston, No. 14-01-00441-CV, 2002 WL 389448, 2002 Tex.App. LEXIS 1872 (Tex.App.-Houston [14th Dist.] March 14, 2002, no pet.) (opinion); Trail Enters. v. City of Houston, 957 S.W.2d 625 (Tex.App.-Houston [14th Dist.] 1997, pet. denied). But it was not. Further, and more importantly, there was no way the City of Houston could have reasonably anticipated that anything other than the jurisdictional issue would be resolved in this appeal as other issues were clearly left unresolved in the trial court due to the trial court’s ruling on jurisdiction. How was the City of Houston to anticipate that a majority of the Court would treat a motion for judgment on damages the same as a cross-motion for summary judgment on the whole case and use the cross-motion theory to then dispose of *117the entire proceeding? Under that analysis, even if it could apply, the “cross-motions” must be on the same issue. In this proceeding, one motion for summary judgment was on jurisdiction and the other motion, which is being treated as a motion for summary judgment, was for judgment on a jury verdict.
In the context in which the trial court was deciding the jurisdictional issue, there are some troubling issues remaining that I also do not believe were folly developed for and decided by the trial court. At this point, I must briefly digress to the facts of the case. There are multiple mineral interest owners involved in this proceeding. Some of them acquired their interest prior to an earlier ordinance that prevented drilling in the area. Those mineral owners subsequently sued the city for the effect of that ordinance when a drilling permit was denied and lost because they had not timely pursued their takings claim as to the effect of the ordinance. But then the area was annexed and after the City modified the ordinance, they contend that under the new ordinance, they are once again being prohibited from drilling.
Other owners of the mineral interest included in the label “Trail” acquired their interest (in 2002) after the new ordinance was in effect and with a full understanding of the ordinance’s potential impact on their ability to drill new wells. Nevertheless, they were willing to purchase an interest. Why? Because there are producing wells on the property that they believed could be made even more productive. Thus, this purchase and their development plan using existing wells cuts strongly against the argument that the regulation deprived the owners of all economic value (they were able to sell a partial interest), or unreasonably deprived the owners of their investment-backed expectations. And in case I failed to mention, these old wells appear to have been productive throughout this entire period; note the majority’s “correction” of the judgment for the credit they had previously allowed to the City for this production.
There also remains the issue of whether there is any location on the lease from which new wells can be drilled that are outside the area subject to the drilling restriction. This is the specific argument made by the City, which they argued must be decided first, to determine if the trial court has jurisdiction. Their argument is that until a permit for a specific location is applied for and rejected, the taking claim is not ripe for decision. But now remember what happened in Trail I, in which the City prevailed on a limitations defense because the taking under the prior ordinance was not tested until after a specific application had been rejected, and you understand why Trail does not now simply make an application for a permit and proceed from there. See Trail Enters. v. City of Houston, 957 S.W.2d 625 (Tex.App.-Houston [14th Dist.] 1997, pet. denied).
Additionally, based on Trail’s evidence and the jury’s answer to the damages question, roughly one-third of the value of the property remains. But this is based on the “developed” value. If we are to compare the remaining value absent any development, in essence the market value after the alleged taking by the regulations, to the owner’s investment in the property to determine the extent of the interference with their investment, which is the comparison made by the Supreme Court in Sheffield, we need a lot more information before we can hold there was a compensa-ble taking because it appears the value after the ordinance was passed far exceeds the cost of the investment when it was originally made. Sheffield, 140 S.W.3d at 677-679. And if we are to render the judgment on this record, based on what *118the trial court “should have” rendered, I would have to deny Trail recovery because they have failed to establish the extent of the interference with their investment because they have not established what that investment was as to each plaintiff.
One reason I believe that the jurisdictional issue of permit-application-and-denial was not more clearly developed by the City until after trial is that Trad’s valuation/damages model is based on an intensive and comprehensive drilling plan, not just one or two wells. This was clear from the development proposals presented by Trail’s experts. It was not until trial that the intensity of those drilling proposals was fully presented and considered in light of the developing case law and that it was realized that some restrictions, reasonable restrictions, on the placement of wells would not necessarily deny the owners all access to their minerals (to say nothing of the wells already drilled and producing).
If Trail submitted a development plan comparable to those presented at trial by their experts, and upon which the differ-enee-in-value damages were based, there is little question that the plan, as presented, would be prohibited by the City ordinance. But that alone does not constitute a com-pensable taking, nor does it take the presentation of that plan and having it rejected to give the trial court jurisdiction. And while I note that Trail used this aggressive and comprehensive drilling plan to determine value, unlike the developer in May-hew, I found no support that absent the regulation Trad actually planned to engage in that comprehensive development plan.
It is the coming together of all of these issues and the need to resolve them in a more logical sequence that causes me to know that, at the very least, this proceeding should be remanded. While I could spend a good deal more of my life sorting out some of these nagging questions, a majority of the Court has reached their decision and I have been unable to persuade them of my position. Thus, rather than follow every issue out to its proper conclusion, I will yield to a more timely result, note my dissent, and leave it to the parties to convince the next court, or the next, that we are all wrong and this proceeding is not ripe for a takings claim, or that we are correct in that determination as to ripeness, but that there are other issues that need to be resolved by the trial court upon proper development and in a proper sequence to obtain judicial review, thus warranting a remand of the proceeding.
Based on the foregoing, I continue to believe that a remand for further proceedings is the proper judgment and must, therefore, respectfully continue to dissent to the majority’s judgment that does not remand this proceeding to the trial court; thus, I note my dissent to the opinion on rehearing and the corrected judgment.

. The majority uses the magic phrase on page 4 of its opinion that a pleading should "be treated” as something else. All types of alarm bells should sound when a reader sees these words in an opinion. I am not saying that it is always wrong for a document to “be treated” as something else. But when used properly, it is usually done to save a party from an improperly labeled document.

. As to grounds one and two in the City's motion for rehearing, the majority skips over them noting that we were unanimous in our prior rulings on those issues. I pause only to note that this is a red herring. We have been unanimously wrong before, so that is not justification for not addressing those issues.

.The majority confuses taking or damage with a compensable taking by assuming that all takings and all damages are compensable. They are not. The trial court determined there had been a taking. But in this regulatory taking case, the question remains whether it was a compensable taking or, in the lan*116guage of the majority, compensable ''damage.”

. I do not address the third test discussed in Sheffield, that the regulation "did not substantially advance the City’s legitimate interest.”