Court Opinion

ID: 894949
Source: CourtListenerOpinion
Date Created: 2013-06-06 20:54:35.439387+00
Date Added: 2024-06-11T09:05:41.253162
License: Public Domain

IN THE SUPREME COURT OF TEXAS
 
════════════
No. 04-0431
════════════
 
PR Investments and Specialty 
Retailers, Inc., Petitioners,
 
v.
 
The State of Texas, 
Respondent
 
════════════════════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Fourteenth District of 
Texas
════════════════════════════════════════════════════
 
 
Argued March 21, 
2007
 
 
            
Justice Willett delivered 
the opinion of the Court.
 
            
In this condemnation case, we consider whether the trial court retains 
jurisdiction in proceedings under chapter 21 of the Property Code when the 
condemning authority’s road-design plan varies from what was considered by the 
special commissioners. We hold that a condemning authority’s decision to change 
the traffic-flow design (revising the road’s signs and stripes but not its 
intended use) does not divest the trial court of jurisdiction over the trial de 
novo. Accordingly, the trial court erred in dismissing the State’s condemnation 
action on jurisdictional grounds and in imposing more than $650,000 in fees and 
costs as a sanction. We affirm the court of appeals’ judgment.
 
I. Background
            
In 1997, the Texas Department of Transportation (TxDOT) filed a condemnation petition in a county court at 
law in Harris County, seeking to condemn a .3407-acre portion of a developed, 
twenty-three-acre tract owned by Petitioner PR Investments (PRI) bordering South 
Main Street (Highway 90A) in Houston. Petitioner Specialty Retailers, Inc. 
leased an office complex and distribution facility on PRI’s property. TxDOT condemned the .3407-acre strip in order to construct a 
frontage road along PRI’s property as part of TxDOT’s 
project to widen South Main Street and convert it from a four-lane, divided 
highway to a six-lane, controlled-access highway.
            
Under Property Code section 21.014, the court appointed three special 
commissioners to conduct an administrative hearing and assess the appropriate 
condemnation damages.
            
TxDOT’s initial design plan for the 
frontage road (the Corder Plan) included two one-way 
lanes that narrowed to a single lane at the driveway to PRI’s remaining 
property. Prior to the special commissioners’ hearing, however, and in response 
to concerns from PRI and Specialty Retailers about safe access to and from the 
property, TxDOT devised a new plan for striping and 
signing the road (the Sparks Plan) that would provide a dedicated deceleration 
and acceleration lane for vehicles entering and exiting the property.
            
The commissioners learned at the hearing that TxDOT would be following the Sparks Plan, and there is no 
evidence that TxDOT was not committed to the Sparks 
Plan at the time of the commissioners’ hearing. Specialty Retailers was 
satisfied with the Sparks Plan and did not participate in the hearing. PRI, 
however, offered evidence that the Sparks Plan would limit its ability to build 
additional driveways, thus impairing access and depressing the remaining 
property’s value. The commissioners assessed $166,000 in damages. TxDOT and PRI each appealed under section 21.018, returning 
the case to the county court at law for trial de novo.
            
Shortly before trial, TxDOT abandoned the 
Sparks Plan, which the commissioners had considered, in favor of the initial 
Corder Plan. TxDOT notified 
PRI of the change a few days before trial but did not notify Specialty 
Retailers. Petitioners contend that TxDOT’s reversion 
to the Corder Plan materially altered the compensation 
issues before the trial court and rendered the earlier special commissioners’ 
proceeding a worthless exercise. Petitioners cite the Property Code provisions 
that the amount of damages assessed turns in part on “the effect of the 
condemnation on the value of the property owner’s remaining property”[1] and that “the special commissioners shall 
admit evidence on . . . the use of the property for the purpose of the 
condemnation.”[2]
            
The trial court heard argument on whether it could or should proceed in 
light of TxDOT’s change in highway plans. It decided 
that TxDOT would not be allowed to try the case based 
on the Corder Plan, and that TxDOT could either dismiss the case and start over with a 
second administrative hearing, or try the case based on the Sparks Plan. TxDOT objected to this choice, because it believed the trial 
could proceed under the Corder Plan and because it had 
no intention of actually building the relevant portion of the highway under the 
Sparks Plan. Nonetheless, TxDOT stated that it would 
“proceed in protest” under the Sparks Plan. This position led to further debate 
about whether the case should proceed under a fiction. In the course of arguing 
whether and how to proceed, TxDOT repeatedly moved for 
a continuance. Petitioners moved for sanctions and for dismissal of the case, 
arguing that the court lacked jurisdiction to proceed. From the bench the court 
granted the motion for sanctions and the motion to dismiss for lack of 
jurisdiction.
            
In its final judgment that included findings of fact and conclusions of 
law, the trial court dismissed the case without prejudice, awarded Petitioners 
$650,651.47 (all their expert-witness and attorneys’ fees and expenses), and 
ordered TxDOT to surrender possession of the 
.3407-acre tract. In its conclusions of law, the court held that it “lacked 
jurisdiction to proceed” under the Corder Plan because 
“it was reasonable to conclude from the evidence and representations of counsel 
that the [Corder Plan] deprived the Property Owners of 
greater rights and imposed greater burdens on the remainder Property than did 
the [Sparks Plan].”
            
As independent bases for awarding Petitioners all their fees and 
expenses, the trial court concluded that such fees and expenses should be 
awarded: (1) because under Property Code section 21.0195(c) TxDOT failed “to bring the proceeding properly”; (2) as a 
sanction for filing a frivolous claim under Texas Rule of Civil Procedure 13, 
chapter 105 of the Civil Practice and Remedies Code (applicable to frivolous 
claims by a State agency), and the court’s inherent powers; and (3) as discovery 
sanctions under Texas Rule of Civil Procedure 215. Relevant to discovery 
sanctions, the trial court found that twelve experts had been deposed during 
discovery and that the examination of all of them was “done in reliance” on the 
Sparks Plan.
            
TxDOT appealed. A panel of the court of appeals 
affirmed,[3] holding that the trial court did not have 
jurisdiction to hear the case because the Corder Plan 
had not been considered by the special commissioners.[4] The panel also upheld the award of fees 
and expenses to Petitioners.[5]
            
Sitting en banc, the court of appeals withdrew the panel decision, and in 
a 5-4 decision reversed the trial court’s judgment and remanded the case for 
further proceedings.[6] The en banc court held that the trial 
court had jurisdiction to proceed under the Corder 
Plan.[7] It also held that fees and expenses were 
not properly awarded under Property Code section 21.0195, Rules 13 and 215, 
chapter 105 of the Civil Practice and Remedies Code, or the trial court’s 
inherent power.[8] The en banc court held that while TxDOT might have engaged in conduct warranting discovery 
sanctions, the award of fees and expenses was unjust and excessive; it remanded 
the case for further proceedings “including but not limited to the trial court’s 
consideration of what amount of monetary sanctions against the State would be 
just and not excessive.”[9]
II. Discussion
A. Trial Court Jurisdiction
            
The trial court held that TxDOT’s change in the 
road’s lane patterns after the special commissioners’ hearing deprived the court 
of jurisdiction to hear the case. PRI argues that the trial court’s 
jurisdictional ruling was correct because, in a condemnation proceeding, the 
trial court’s jurisdiction is “appellate” and therefore TxDOT is prohibited from changing the roadway design in a 
manner that materially alters the “compensation issues on appeal” to the trial 
court. It argues that “the trial court, acting as an appellate court, should 
refuse to address compensation facts materially different from those considered 
by the special commissioners” if doing so would prejudice the property owner and 
“deprive him of a meaningful hearing before the special commissioners.” PRI points out that Property Code section 21.018 is titled 
“Appeal from Commissioner’s Findings.” It also argues that in State v. 
Nelson we made reference to the county court’s “appellate” jurisdiction in a 
condemnation case.[10] Specialty Retailers essentially makes 
the same arguments.
            
Assuming that TxDOT’s pretrial shift to the 
Corder Plan altered facts relevant to the compensation 
due Petitioners for the taking of their property, this change of plans did not 
divest the trial court of jurisdiction to hear the case. There is no requirement 
that, for the trial court to retain jurisdiction over a condemnation case, all 
material facts relevant to damages must remain static after the special 
commissioners have ruled.
            
The trial court’s function in a condemnation proceeding is “appellate” in 
the sense that the case is first considered by the special commissioners, and 
hence, as we noted in Nelson, the court’s jurisdiction “is appellate as 
distinguished from original or concurrent.”[11] The court’s jurisdiction is not, 
however, “appellate” in the sense that the evidence is fixed in the record of 
the proceedings below and the court is confined to that paper record, as 
ordinarily occurs when an appellate court reviews a case. Quite the opposite, 
the statutory scheme makes no provision for the commissioners’ hearing to be 
recorded, and provides that “[i]f a party files an 
objection to the findings of the special commissioners, the court shall cite the 
adverse party and try the case in the same manner as other civil causes.”[12] In other words, the proceedings that 
occurred before the special commissioners are not considered, and the case is 
tried to the court de novo. There is no option typically available to an 
appellate tribunal to simply affirm the special commissioners’ award; instead, 
“[u]pon the filing of objections, the Special 
Commissioners’ award is vacated and the administrative proceeding converts into 
a normal pending cause . . . .”[13] We agree with TxDOT that it is incongruous to label the trial court as 
appellate in the ordinary sense “given that its function is not to review and 
correct, but to determine the value of the property anew.”
            
A trial de novo, conducted “in the same manner as other civil causes,” is 
not confined to the same evidence that was presented at the administrative 
phase. By analogy, the statute governing judicial review of final decisions of 
state agencies provides that if judicial review is by trial de novo, “the 
reviewing court shall try each issue of fact and law in the manner that applies 
to other civil suits in this state as though there had not been an intervening 
agency action or decision,” and generally may not even “admit in evidence the 
fact of prior state agency action.”[14] Similarly, in a condemnation case, the 
commissioners’ award is generally not admissible in the trial court 
proceeding.[15]
            
Further, under a trial conducted “in the same manner as other civil 
causes,” the plaintiff is allowed to amend its petition, and we permitted in 
Nelson an agreed trial amendment made after the special commissioners’ 
hearing.[16] If Petitioners were correct that the 
trial court lacked subject-matter jurisdiction—in their words, the “power to 
proceed”—under the Corder Plan, the parties could not 
try the case under the Corder Plan even by 
agreement.[17]
            
There is no statutory requirement that TxDOT 
must specify its exact lane-configuration plans for the highway and is bound by 
those plans throughout the condemnation proceeding. A condemning authority may 
initiate a condemnation proceeding if it “wants to acquire real property for 
public use but is unable to agree with the owner of the property on the amount 
of damages . . . by filing a petition in the proper court.”[18] Jurisdiction over condemnation cases is 
conferred on district courts and county courts at law.[19] The petition for condemnation must:
 
(1) describe the property to be condemned;
 
(2) state the purpose for which the entity intends to use the 
property;
 
(3) state the name of the owner of the property if the owner is 
known; and
 
(4) state that the entity and the property owner are unable to 
agree on the damages.[20]
 
 
            
Even as to these statutory requirements, we held in Hubenak v. San Jacinto Gas Transmission Co. 
that the “unable to agree” requirement is not jurisdictional, and a failure 
to meet this requirement may be remedied by abating the proceeding for a 
reasonable period to allow the condemnor to meet the 
requirement.[21]
            
In Nelson, we stated that the statutory requirement that the 
condemning authority describe the property to be condemned is the step by which 
“jurisdiction over the subject matter involved is acquired.”[22] We held that even as to this statutorily 
required, jurisdictional step, the State may in the course of the trial before 
the county court amend the description of the property to include additional 
land it intends to acquire, when done by stipulation of the parties and “without 
material prejudice to the landowner.”[23] Nelson does not support 
Petitioners’ contention that TxDOT cannot change its 
precise road-design plans if such a change has an effect on the owner’s 
recoverable damages. Nelson nowhere suggests that the trial court is 
precluded from considering new “compensation facts” or “compensation issues.” 
Again, there is no statutory requirement that TxDOT 
even mention its plans for the condemned property beyond stating “the purpose 
for which the entity intends to use the property.”[24] TxDOT met that 
requirement when it stated in its petition that its purpose was to acquire the 
land “as a part of the State highway system to be constructed, reconstructed, 
maintained and operated thereon.”[25] The change in TxDOT’s plans for the roadway’s signs, striping, and the 
like did not under Nelson “inject entirely new subject matter into the 
proceedings”[26] so as to divest the trial court of 
jurisdiction.
            
Petitioners argue that if TxDOT is allowed to 
change the highway’s lane design after the commissioners have ruled, this would 
render the legislatively mandated administrative proceeding before the special 
commissioners a meaningless step. This argument has some force, but does not 
persuade us that the trial court lost jurisdiction to proceed merely because 
TxDOT decided to alter the precise roadway features of 
the Sparks Plan. The administrative step affords the parties an opportunity in 
many instances to present their case in a relatively streamlined fashion and to 
resolve their differences short of a full-blown court trial, thus sparing the 
parties and the courts the burdens of a trial. Such pretrial settlements should 
be encouraged.[27] As we recognized in Nelson, at 
the administrative phase “the parties often accept the commissioners’ decision 
or settle their differences shortly after the award is made. . . . Many eminent 
domain proceedings are thus brought to a prompt and reasonably satisfactory 
conclusion with a minimum of expense and inconvenience to the parties.”[28] Such a settlement is possible even where 
the roadway plans change. Here, an amicable and expeditious resolution did not 
occur. However, the difficulties encountered in this particular case do not 
persuade us that a court loses jurisdiction when material facts pertaining to 
damages change, or that requiring the parties to start over with a new 
administrative proceeding in every such case is jurisdictionally required or 
more consistent with legislative purpose.
            
Under Petitioners’ understanding of the trial court’s “appellate” 
jurisdiction, it is easy to imagine cases where some new and material 
“compensation fact,” such as new comparable sales data or other changes in 
general real estate market conditions, would derail the trial court proceeding 
if admitted. Petitioners’ approach would be workable if the factual record made 
at the commissioner’s hearing were fixed, but the statutory scheme calls for 
just the opposite—a trial de novo in the trial court[29] where the commissioners’ award is not 
even admissible as evidence of damages.[30] It is true that TxDOT itself changed the facts by changing its roadway plans 
for the condemned property, but condemning authorities are allowed to do so. 
They sometimes change their plans long after the condemnation process is 
completed, leaving the owner of the remaining property to pursue a claim for 
inverse condemnation if the value of that property is diminished.[31]
            
In sum, the relevant statutes and case law do not require TxDOT to specify in its petition the precise signs, 
striping, lanes, and the like that it intends to construct when it condemns 
property for road construction. Nor is TxDOT 
prohibited from changing those design specifics after the special commissioners’ 
hearing, even if the change of plans will affect the value of the property 
owner’s remaining tract. Such a change of plans does not divest the trial court 
of jurisdiction to proceed after the special commissioners have ruled and to 
“try the case in the same manner as other civil causes.”[32] In these circumstances the statutory 
scheme does not require TxDOT to start over with a new 
petition, a new hearing before the special commissioners, and payment to 
Petitioners of all the fees and expenses they incurred in the first 
administrative proceeding.
B. Discretion to Dismiss
            
Petitioners argue that even if the trial court had jurisdiction to 
proceed with the case, it nevertheless had discretion to dismiss it given the 
circumstances. We disagree. The trial court had jurisdiction to try the case de 
novo and was obliged to exercise that jurisdiction: “[I]t is a time-honored 
maxim of the Anglo-American common-law tradition that a court possessed of 
jurisdiction generally must exercise it.”[33] We think this maxim applies with equal 
if not greater force where the Legislature has by statute expressly created 
trial court jurisdiction to hear the dispute. Unless the dismissal was an 
appropriate sanction for improper conduct, a contention we reject below, the 
trial court should have exercised its jurisdiction to decide the case on the 
merits.
            
Petitioners argue that the trial court had discretion to dismiss the case 
and award fees and expenses under section 21.0195(c) of the Property Code, 
applicable to TxDOT-related condemnation proceedings, 
because of TxDOT’s failure “to bring the proceeding 
properly.”[34] TxDOT did not 
fail to bring the proceeding properly. As explained above, the trial court had 
jurisdiction to hear the case. TxDOT met the section 
21.012 requirements for bringing the condemnation petition. TxDOT and Petitioners timely lodged the case in the trial 
court after the administrative hearing in accordance with section 21.018. TxDOT may have failed to timely amend its discovery 
responses and/or may have failed to comply with the trial court’s docket control 
orders, as described below, but such routine failures in the course of trial 
court proceedings are subject to the remedies available under the rules of civil 
procedure automatically applicable to condemnation proceedings, which the court 
tries “in the same manner as other civil causes” under section 21.018(b). These 
lapses do not constitute a failure “to bring the proceeding properly” in the 
first instance under section 21.0195(c). TxDOT brought 
the condemnation suit properly by complying with all jurisdictional and 
procedural requirements for bringing the suit.
C. Discovery Sanctions
            
Petitioners contend that even if the trial court had jurisdiction to hear 
the case, the court of appeals should not have reversed the trial court’s award 
of sanctions. They argue that the trial court’s dismissal of the case and award 
of all their fees and expenses were proper discovery sanctions. We agree with 
the court of appeals that a remand on this issue is warranted so that the trial 
court can reconsider its award of monetary sanctions in light of our explication 
of its jurisdiction.
            
TxDOT does not dispute that it might be subject 
to monetary sanctions for failing to timely supplement its discovery responses 
so that Petitioners were fairly apprised before trial that TxDOT was abandoning the Sparks Plan and returning to the 
Corder Plan.[35] However, a discovery sanction “should be 
no more severe than necessary to satisfy its legitimate purposes,” and “courts 
must consider the availability of less stringent sanctions and whether such 
lesser sanctions would fully promote compliance.”[36] Assuming that sanctions are warranted, a 
lesser sanction might include a continuance as requested by TxDOT, together with monetary sanctions for whatever 
additional preparation Petitioners needed to present evidence on their damages 
under the Corder Plan. Even where a party fails to 
establish good cause for its failure to timely amend discovery responses, the 
court may grant a continuance to allow for supplementation of discovery 
responses or further discovery in response to the supplementation.[37]
            
The trial court concluded that: (1) “the sanctions imposed are just and 
not excessive”; (2) it “made sufficient efforts to avoid imposition of 
sanctions”; and (3) “no lesser sanction based on the State’s conduct was 
available to the Court.” But “[t]he punishment should fit the crime,”[38] and the extreme sanction 
imposed—dismissal of the case and the award of all of Petitioners’ fees and 
expenses—would only be warranted as a discovery sanction if dismissal were 
necessary and the entirety of fees and expenses incurred were required to remedy 
“the prejudice caused the innocent party.”[39] The trial court apparently thought so 
because it concluded that TxDOT should be required to 
start the condemnation proceeding over from scratch, filing a new petition and 
conducting a new administrative hearing before new commissioners. As explained 
above, this conclusion was premised on the trial court’s erroneous belief that 
it lacked jurisdiction to hear the case under the Corder Plan and could not grant a lesser sanction. We 
therefore agree with the en banc court of appeals that the trial court’s award 
of sanctions should be reversed, and that a remand for further consideration of 
sanctions is warranted.
III. Conclusion
            
We affirm the court of appeals’ judgment. A trial court does not lose 
jurisdiction over a condemnation proceeding when a condemnor alters its road-design plan after the special 
commissioners’ hearing.
 
                                                                        
___________________________________
                                                                        
Don R. Willett
                                                                        
Justice
 
Opinion delivered: February 15, 2008

[1]
Tex. Prop. Code § 21.042(c).

[2]
Id. § 
21.041(4).

[3] 132 S.W.3d 55, 
68.

[4]
Id. at 
57, 62, 67.

[5]
Id. at 
67.

[6] 180 S.W.3d 654, 663-64, 
676.

[7]
Id. at 
676.

[8]
Id.

[9]
Id.

[10] 334 S.W.2d 788, 791 (Tex. 1960).

[11] Id.

[12] Tex. Prop. Code § 21.018(b).

[13] Amason 
v. Natural Gas Pipeline Co., 682 S.W.2d 240, 242 (Tex. 1984).

[14] Tex. Gov’t Code § 2001.173(a).

[15] State v. Hilton, 412 S.W.2d 41, 42 
(Tex. 
1967).

[16] Nelson, 334 S.W.2d 
at 792.

[17] See Univ. of Tex. Sw. 
Med. Ctr. v. Loutzenhiser, 140 S.W.3d 351, 358 
(Tex. 2004) 
(stating that subject matter jurisdiction cannot be conferred by consent or 
waiver).

[18] Tex. Prop. Code § 21.012(a).

[19] Id. § 21.001.

[20] Id. § 21.012(b). A fifth requirement, 
not applicable to the pending case, now mandates that the petition must “if 
applicable, state that the entity provided the property owner with the 
landowner’s bill of rights statement in accordance with Section 21.0112.” Act of 
May 25, 2007, 80th Leg., R.S., ch. 1201, § 4, sec. 
21.012(b)(5), 2007 Tex. Gen. Laws 4072, 4073.

[21] 141 S.W.3d 172, 183-84, 191 (Tex. 2004).

[22] State v. Nelson, 334 S.W.2d 788, 790 
(Tex. 
1960).

[23] Id. at 792.

[24] Tex. Prop. Code § 21.012(b)(2).

[25] See Coastal Indus. Water Auth. v. 
Celanese Corp. of Am., 592 S.W.2d 597, 600 (Tex. 1979) (holding that 
condemning authority’s statement in petition that purpose of condemned easement 
was “for the transportation of water and other facilities and uses incidental 
thereto or in connection therewith for Trinity Water Conveyance System” was 
adequate and that further allegations of purpose were unnecessary); Ex Parte 
Edmonds, 383 S.W.2d 579, 581 (Tex. 1964) (rejecting argument that county 
court lacked jurisdiction because petition’s statement that intended use of land 
was “for the purpose of constructing and maintaining drainage easements” was 
insufficient to allow commissioners to establish damages to the property owner’s 
remaining land).

[26] 334 S.W.2d at 
792.

[27] See Tex. Civ. Prac. & Rem. Code § 
154.002 (“It is the policy of this state to encourage the peaceable resolution 
of disputes . . . and the early settlement of pending litigation through 
voluntary settlement procedures.”).

[28] 334 S.W.2d at 
791.

[29] See Elliot v. Joseph, 351 S.W.2d 
879, 880 (Tex. 
1961) (stating that in condemnation suit “[t]he trial in the county court is a 
de novo appellate proceeding”).

[30] See State v. Hilton, 412 S.W.2d 41, 42 (Tex. 
1967).

[31] See, e.g., State v. Delaney, 
197 S.W.3d 297 (Tex. 2006) (per curiam).

[32] Tex. Prop. Code § 21.018(b).

[33] Ohio v. WyandotteChems. 
Corp., 401 
U.S. 493, 496-97 
(1971).

[34] Section 21.0195(c) provides:
 
If a court dismisses a condemnation proceeding on the 
motion of the department or as a result of the failure of the department to 
bring the proceeding properly, the court shall make an allowance to the property 
owner for the value of the department's use of the property while in possession 
of the property, any damage that the condemnation has caused to the property 
owner, and any expenses the property owner has incurred in connection with the 
condemnation, including reasonable and necessary fees for 
attorneys.

[35] Sanctions might also be warranted for TxDOT’s failure to meet deadlines under the trial court’s 
docket control orders, including the deadline for moving for a continuance. 

[36] TransAmerican Natural Gas Corp. v. Powell, 811 
S.W.2d 913, 917 (Tex. 1991).

[37] Tex. R. Civ. P. 193.6(c).

[38] TransAmerican, 811 S.W.2d at 
917.

[39] Id.