Court Opinion

ID: 9654891
Source: CourtListenerOpinion
Date Created: 2023-08-23 18:54:16.632739+00
Date Added: 2024-06-11T18:13:14.564579
License: Public Domain

TIM TAFT, Justice,
dissenting.
I respectfully dissent. I would conclude that the Zwahrs’ expert used flawed methodology and impermissibly considered the enhancement resulting from Exxon’s taking. Accordingly, I would conclude that his testimony was inadmissible, that it was therefore “no evidence,” that the trial court committed reversible error by permitting the expert to testify, and that we must reverse the judgment of the trial court without addressing Exxon’s charge-error complaints. This disposition would ordinarily require rendition of a take-nothing judgment in Exxon’s favor. But because Exxon stipulated, in oral argument, its willingness to pay the Zwahrs the *717amount awarded by the Fort Bend County Commissioners, I would reverse the judgment of the trial court, with instructions to render judgment for that amount.
Facts and Procedural History
The Zwahrs purchased a 49-acre tract of land in Fort Bend County in 1989. They paid $900 an acre, for a total of $44,408.43, and used the land for cotton farming. Since 1952, an underground pipeline easement had been in place across the northeast corner of the land. United Gas Pipeline Company was the first owner of the easement, and transferred it to Koch Gateway Pipeline Company in 1993. The pipe in the United/Koch easement is 30 inches in diameter, lies completely below ground level, and does not affect cotton farming on the surface.
In 1995, Exxon petitioned the Fort Bend County commissioners to condemn a 50-foot-wide strip on the Zwahrs’ property for an ethane pipeline. The strip of land Exxon condemned lies within the existing United/Koch easement and has a total surface acreage of 1.01 acre. After the Fort Bend County Commissioners set the compensation due the Zwahrs for Exxon’s taking at $2,264.90,1 Exxon deposited the full amount of the award in the registry of the court, and took possession of the easement on October 6,1995.
Exxon laid the pipeline early in 1996, as part of an eight and ⅝ inch diameter, ethane-carrying line that begins in Katy, Texas, and continues to Damon, Texas. On the Zwahrs’ property, the line is four feet below the surface, and is approximately 25 feet away from the existing United/Koch pipeline, which it parallels. The 1.01 acre condemned by Exxon overlaps the United/Koch easement by at least 80%. As with the United/Koch easement, the pipeline had no effect on the Zwahrs’ continued use of the surface to farm cotton.
The trial de novo in this case followed summary judgments confirming Exxon’s right to condemn. Under the live pleadings at trial, Exxon effectively modified its taking from 50 to just under 20 feet by authorizing other pipelines within its easement, provided that any pipe laid be placed at least 10 feet away from Exxon’s. The chief controversy during trial concerned the “highest and best use” of the 1.01 acre Exxon condemned. For Exxon’s experts, the land retained its character as farmland or rural residential land, and was not a “separate economic unit.” The Zwahrs’ expert maintained the 1.01 acre was a “separate economic unit,” whose highest and best use was as a pipeline easement, with a value independent from that of the surface acreage.
Exxon presented two experts who estimated the market value of the 1.01 acre taken based on a per acre cost of either $1,900 or $1,414, with the total amount due the Zwahrs either $1,727 or $707.2 The Zwahrs’ expert, Brad Kangieser, estimated the value of the actual 1.01 acre taken as follows: $26,398 for the easement itself and $9,679 for the right to assign the easement, for a total of $36,077. As the record reflects, however, even after Exxon took possession of the easement, Daniel Zwahr placed much the same value on the land as Exxon. In a bank-credit statement, and also in divorce papers, Zwahr stated the entire 40-acre tract was worth $50,000, or roughly $1,000 per acre — just $100 per acre more than the purchase price.
Over Exxon’s objections to the court’s charge, the jury awarded the Zwahrs $30,000 as the fair market value of the 1.01-acre easement and $10,000 as the fair market value of Exxon’s right to assign *718the easement. The only testimony that tends to support this verdict is Kangieser’s, although the actual amount the jury awarded exceeds Kangieser’s valuation. The trial court entered judgment on the verdict, after deducting the $2,264.90 Exxon had deposited into the registry of the court for the commissioners’ award, and overruled Exxon’s postverdict challenges to the legal and factual sufficiency of the evidence.
Admissibility of Kangieser’s Opinion Testimony
Exxon’s first two issues challenge the admissibility of Kangieser’s testimony concerning the value of the land. Exxon reurges the inadmissibility of Kangieser’s testimony in a portion of its fifth issue, which challenges the legal sufficiency of the evidence to support the verdict.
A. Admissibility vs. Sufficiency
Exxon contends Kangieser’s evaluation of the land was inadmissible and thus “no evidence” because: (1) he deviated from established legal precedent and acceptable methodology, and admittedly speculated in formulating his opinion of value; and (2) his evaluation is impermissibly premised on the land as a separate economic unit and on enhancement of the land due to Exxon’s taking.
Exxon relies on recent decisions that impose standards of reliability as a prerequisite to admissibility for expert testimony under rule.702. Tex.R. Evid. 702; Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 721-28 (Tex.1998); Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711-14 (Tex.1997); see also Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993); E.I. duPont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex.1995). Exxon also contends that established case law precludes Kangieser’s method of appraising the land. See United States v. 8.41 Acres of Land, 680 F.2d 388 (5th Cir.1982); Bauer v. Lavaca-Navidad River Auth., 704 S.W.2d 107 (Tex.App. — Corpus Christi 1985, writ ref'd n.r.e.).
Havner authorizes parties to challenge scientific opinion testimony on the grounds that it is unreliable, and therefore “no evidence.” See Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 409 (Tex.1998) (citing Havner, 953 S.W.2d at 706). A “no evidence” challenge will be sustained: (1) when there is a complete absence of evidence of a vital fact; (2) when rules of law or evidence preclude according weight to the only evidence offered to prove a vital fact; (3) when the evidence offered to prove a vital fact is no more than a scintilla; or (4) when the evidence conclusively establishes the opposite of the vital fact. Havner, 953 S.W.2d at 711.
Exxon’s challenge to Kangieser’s testimony relies on the second “no evidence” category. By challenging the reliability of Kangieser’s testimony, and therefore, its admissibility, Exxon contends the testimony is “no evidence” because a “a rule of law or evidence,” specifically rule 702, precludes giving the evidence any weight. See Maritime Overseas, 971 S.W.2d at 409; Havner, 953 S.W.2d at 711, 713. Accordingly, we begin our analysis of Exxon’s “no evidence” arguments by examining the reliability, and, therefore, the admissibility, of Kangieser’s testimony. See General Motors Corp. v. Sanchez, 997 S.W.2d 584, 590 (Tex.1999); Maritime Overseas, 971 S.W.2d at 410-11.3
*719B. Admissibility of Kangieser’s Expert Testimony
1. Vre-Daubert Challenges to Methodology
Texas courts have long rejected market-value appraisals based on improper methodology. E.g., State v. Walker, 441 S.W.2d 168 (Tex.1969) (vacating condemnation award premised on evidence of market value of facility on land adjacent to condemned land, but not damaged by the taking, and cost of razing and rebuilding that facility on the adjacent land); Texas Fruit Palace, Inc. v. City of Palestine, 842 S.W.2d 819, 323 (Tex.App. — Tyler 1992, writ denied) (holding that trial court properly rejected testimony of appraiser who conceded other appraisers did not use his method of evaluation); McAshan v. Delhi Gas Pipeline Corp., 739 S.W.2d 130, 131 (Tex.App. — San Antonio 1987, no writ) (holding that trial court properly excluded evidence of leases of compressor sites when highest and best use of condemned land was as pastureland).
2. Rule 702 and Daubert Challenges to Methodology
A witness may offer opinion testimony if “scientific, technical, or other specialized knowledge will assist the trier of fact,” and if the witness is “qualified as an expert by knowledge, skill, experience, training, or education.” Tex.R. Evid. 702. To be admissible, an expert must be qualified, and his opinion must be relevant and have a reliable basis. Gammill, 972 S.W.2d at 726; Robinson, 923 S.W.2d at 556-57; see City of Harlingen v. Estate of Sharboneau, 1 S.W.3d 282, 284-85 (Tex.App. — Corpus Christi 1999, pet. granted).4 The burden to establish reliability is on the proponent of the evidence. Gammill, 972 S.W.2d at 718-19. While the trial court’s broad discretion to determine admissibility will be reversed only if abused, e.g., Robinson, 923 S.W.2d at 558, it is the primary responsibility of the trial court to serve as “eviden-tiary gatekeeper” by screening out unreliable expert evidence. Sanchez, 997 S.W.2d at 590; Robinson, 923 S.W.2d at 556 (adopting Daubert criteria).
Among the non-exclusive factors that may be considered in determining the reliability of the basis of the expert’s opinion are:
(1) whether the theory can be and has been tested;
(2) whether the theory has been subjected to peer review;
(3) the potential rate of error of the theory; and
(4) the general acceptance of the theory in the relevant community.
Sanchez, 997 S.W.2d at 590; see Gammill, 972 S.W.2d at 720; Robinson, 923 S.W.2d at 557.5 The trial court’s discretion extends to determining which of the Daubert factors reasonably measures whether an expert’s opinion is reliable, and whether other factors might apply. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167, 1174-75, 1176, 143 L.Ed.2d 238 (1999). The most relevant factor here is the fourth, whether Kangieser’s method of appraising condemned land was generally accepted in Texas.
Moreover, the trial court’s rule 702 ga-tekeeping function applies as well to technical, “skill- or experience-based” methodology or observation, and other specialized *720knowledge, and not merely to the application of scientific principles. See Kumho Tire, 119 S.Ct. at 1176 (tire failure analyst). The Daubert criteria thus supplant the well-settled standards that have long determined the reliability, and, therefore, the admissibility, of expert evaluations in a Texas condemnation case.
C. Market Value
The Texas Constitution guarantees adequate compensation to landowners whose property is condemned. Tex. Const, art. I, § 17. Adequate compensation means just compensation, and implies fair market value of the property. City of Houston v. Religious of the Sacred Heart, 811 S.W.2d 734, 736 (Tex.App. — Houston [1st Dist.] 1991), aff'd, 836 S.W.2d 606 (Tex.1992). Market value is the price that a buyer, who wishes, but is not obligated, to buy, would pay a seller who wishes, but is not obligated, to sell. Taub v. City of Deer Park, 882 S.W.2d 824, 827 (Tex.1994); Walker, 441 S.W.2d at 170 & n. 1; Bauer, 704 S.W.2d at 110.
1. Time of Taking — “Before and After,” but not “Enhancement”
The market value of the land taken for a pipeline easement is determined as of the time of taking. Heddin v. Delhi Gas Pipeline Co., 522 S.W.2d 886, 888 (Tex.1975). When, as here, only a portion of the land is taken for an easement, a “partial taking” occurs. In a partial taking case, market value is measured by the difference between the market value of the land actually condemned and the difference, if any, in the market value of the remaining land immediately before and after the taking. Taub, 882 S.W.2d at 827; Bauer, 704 S.W.2d at 109; 8.41 Acres of Land, 680 F.2d at 391-92 & n. 5.
Except in narrow circumstances that do not apply here, it is settled law that market value may not consider “project enhancement,” i.e., any change in the value of the remaining land that results from the taking. Fuller v. State, 461 S.W.2d 595, 598 (Tex.1970); State v. Carpenter, 126 Tex. 604, 89 S.W.2d 194, 201 (1936); McAshan, 739 S.W.2d at 131; see Religious of the Sacred Heart, 811 S.W.2d at 737; (rejecting consideration of the project that initiated the condemnation as either increasing or diminishing market value of the remainder).
2. Existing Use Presumed Highest and Best Use
Market value considers the highest and best use to which the land is adaptable. Bauer, 704 S.W.2d at 109; McAshan, 739 S.W.2d at 131. The existing use of the land, in this ease, cotton farming, is its presumed highest and best use. McAshan, 739 S.W.2d at 131; 8.41 Acres of Land, 680 F.2d at 394. The presumption is re-buttable on the landowner’s showing a reasonable probability, as of the time of taking, that the property was adaptable and needed, or would likely be needed in the near future, for the potential use. McAshan, 739 S.W.2d at 131; 8.41 Acres of Land, 680 F.2d at 394-95. Here, the use proposed by the Zwahrs’ expert, Kangieser, was a pipeline easement.
D. Effective Severance — Highest and Best Use as Pipeline Easement
Texas has long permitted landowners to show that land condemned as an easement has been effectively severed from the remaining, parent tract, and therefore has a different value from the remainder. See Bauer, 704 S.W.2d at 109; 8.41 Acres of Land, 680 F.2d at 392 n. 5 (noting Texas law). When a severance occurs, the land is evaluated as a separate economic unit, without reference to the remainder, in which case the “before and after” method, which considers the remainder, does not apply. See Bauer, 704 S.W.2d at 109.
Exxon contends that, unless certain conditions exist, in a partial taking case, a market-value appraisal may not consider a pipeline easement as the highest and best use of the land taken, as Kangieser did here. Exxon maintains the necessary conditions do not exist here, that this is *721therefore a partial-takings case, and that Kangieser’s methodology is flawed and therefore inadmissible because he evaluated the Zwahrs’ land as a separate economic unit. I agree.
1. No Severance as Pipeline — 8.41 Acres of Land
In 8.41 Acres of Land, the United States Department of Energy condemned land, owned by two corporations, for use as a pipeline. 680 F.2d at 890. Much of the surface area was leased for grazing, but there was a factory on the land of one of the corporations, and several large chemical companies had plants in the same area. 680 F.2d at 390, 393. The government’s expert maintained the highest and best use for both tracts was as industrial plant sites, worth $3,500 per acre. 680 F.2d at 391.
As here, the corporations’ experts maintained the highest and best use of the land was as a pipeline easement, worth from $16,000 to $19,000 per acre. Id. By valuing the condemned land differently from the parent tracts, the corporations’ experts effectively severed the condemned land from the original tracts. Id. at 392-393.6 Kangieser used the same methodology here in evaluating the 1.01-acre strip as a “separate economic unit.”
The United States Court of Appeals for the Fifth Circuit rejected this method of evaluation because the land taken, like the parent tract, was used as pastureland, and was thus identical to, and integrated with, the parent tract. 8.41 Acres of Land, 680 F.2d at 393. Effective severance of the condemned tracts never occurred because there was no evidence of actual steps taken to sever the tracts. Id. at 394. Mere speculation about their “potential” use as pipeline easement, much less the landowners’ hope that would happen, were not sufficient to effectively sever the tracts. Id. at 393-94. Accordingly, there was no basis for evaluating the tracts as pipeline rather than as pastureland or industrial land. Id. at 394. Because the corporations could not show a reasonable possibility that the land was adaptable and needed in the future for pipeline, they did not overcome the presumption that the existing use was the highest and best. See id. at 394-95.
2. Severance as Pipeline: Bauer
The landowner’s evidence was sufficient to overcome the presumption in Bauer, however, in which the river authority maintained it condemned pastureland, as in 8.41 Acres of Land, and not pipeline easement. See Bauer, 704 S.W.2d at 109. Distinguishing 841 Acres of Land, the Corpus Christi Court of Appeals concluded the trial court had erroneously excluded evidence that an easement corridor was the highest and best use of the land. Bauer, 704 S.W.2d at 108. While there were no established pipeline corridors in 841 Acres of Land, three were in place on Bauer’s land. Bauer, 704 S.W.2d at 109-10. Bauer, a career-professional with 35 years’ experience in purchasing and laying rights-of-way, had personally negotiated the sales of these pipelines, and was actively developing his land to maximize its use as pipeline easement by planning to add to the existing pipelines. Id. at 108-09, 111. In the opinion of Bauer’s real estate appraiser, a pipeline corridor already existed on the land the river authority condemned; even the authority’s appraiser evaluated the land as an easement corridor, effectively severed from the remaining pastureland. Id. at 109. Because an effective severance had occurred, there was no basis to exclude expert testimony on the value of the land as easement corridor. Id. at 109-10. Bauer’s evidence of comparable sales of pipeline easements in the well-defined and established corridor was likewise erroneously excluded. Id. at 111-13.
*722E. Implications for Kangieser’s Testimony
1. No “Separate Economic Unit” Here
The considerations supporting effective severance as a “separate economic unit” in Bauer are not present here. Despite the United/Koch easement in place since 1952, there is no evidence of any steps taken to develop the land as pipeline easement, and thus warrant considering the land as severed from the Zwahrs’ remaining 49 acres. The evidence shows just the opposite: The Zwahrs fanned cotton on the land and used it for that purpose only. Moreover, Daniel Zwahr’s own estimates of the value of the entire tract, even after Exxon’s taking, are consistent with that single, unified use. Accordingly, as in 841 Acres of Land, no circumstances supported Kan-gieser’s opinion that the land constituted a separate economic unit, used as a pipeline easement, that had been effectively severed from the remainder of the tract, used as farmland. As in 841 Acres of Land, Kangieser’s reliance on the “separate economic unit” method of evaluation was therefore misplaced.
2. Improper Reliance on Project Enhancement
My interpretation of Kangieser’s testimony, as a whole, is that he premised his valuation of the tract on the fact of Exxon’s condemnation. Kangieser’s opinion testimony is therefore flawed because it is premised, without justification, on enhancement to the Zwahrs’ land as a result of the taking. See Fuller, 461 S.W.2d at 598; Religious of the Sacred Heart, 811 S.W.2d at 737.
F. Consequences
1. Kangieser’s Testimony Erroneously Admitted
I would hold that the trial court erred by overruling Exxon’s objections that Kangieser’s testimony was inadmissible because it was unreliable. His methodology was flawed because there were no circumstances that warranted considering a pipeline easement as the highest and best use of the 1.01-acre portion of the Zwahrs’ 49-acre tract of farmland. Kangieser’s methodology was equally flawed because he did not observe the prohibition against basing his evaluation on enhancement resulting from Exxon’s taking. For these reasons, under the fourth Daubert factor, which predominates here, as well as under well-settled law, Kangieser used methodology that does not apply to this partial-taking case, and thus cannot meet the test of general acceptance. Kangieser’s testimony was, therefore, unreliable and inadmissible under rule 702 of the Rules of Evidence, and the trial court abused its discretion by admitting it over Exxon’s objection. This error harmed Exxon because Kangieser’s testimony is the only evidence that approximates the jury’s damage award. See Tex.R.App. P. 44.1(a).
2. No Evidence and Rendition
Because Kangieser’s testimony was inadmissible under rule 702, which precluded according it any weight, his testimony is “no evidence” under Havner’s second category. See Havner, 953 S.W.2d at 711. Without Kangieser’s testimony, there is no evidence to support the damages awarded by the judgment. Accordingly, the Zwahrs did not overcome the presumption that their use of their 49 acres as farmland is the highest and best use of their land. When the reviewing court determines that the only evidence supporting a verdict is “no evidence” that should have been excluded under Daubert, the reviewing court does not violate the plaintiffs right to jury trial by rendering judgment for the defendant. Weisgram v. Marley Co., 528 U.S. 440, 120 S.Ct. 1011, 1018, 145 L.Ed.2d 958 (2000) (reconciling conflict on this issue in federal courts of appeal).
In 8.41 Acres of Land, the Fifth Circuit concluded that the corporate landowners had the opportunity to prove the value of their land, but did not meet their burden because their evidence did not conform to the correct methodology and was therefore *723inadmissible. See 680 F.2d at 895. Here, the Zwahrs had the same opportunity and did not meet their burden. Just as the Fifth Circuit found no reason to remand for a new trial to determine the market value of the corporations’ tracts in 8.J+1 Acres of Land, I find no reason to remand here. Although Exxon presented two experts who did not agree on the value of the land, counsel for Exxon stipulated, in oral argument, that it was willing to pay the Zwahrs the amount awarded by the Fort Bend County Commissioners, currently on deposit with the registry of the trial court. Accordingly, I would grant that relief. See TexRApp. P. 43.6.
I would sustain Exxon’s first and second issues and the portion of its fifth issue that challenges the legal sufficiency of the evidence to support the jury’s verdict. Having thus concluded that “no evidence” supports the jury’s verdict, I find no need to address Exxon’s remaining points of error.
Conclusion
I would reverse the judgment of the trial court and remand the cause for entry of judgment in favor of the Zwahrs in the amount of the Fort Bend County Commissioners’ award.

. The commissioners’ award recognizes the Zwahrs’ lienholder, the Union State Bank, East Bernard.

. Each expert reduced his estimate of value by a percentage allocable to the Zwahrs’ retained use of the surface of the land. The first expert used a 10% reduction; the second expert used a 50% reduction.

. A party who challenges the reliability, and thus, the admissibility, of expert testimony must preserve error by objecting before trial, or when the evidence is offered at trial, and may not rely on a later motion to strike or a postverdict challenge to the legal sufficiency of the evidence. Maritime Overseas, 971 S.W.2d at 409. A timely objection allows the trial court to perform its gatekeeper role, and provides the proponent of the evidence an opportunity to cure any defect that may exist, thus preventing trial by ambush. Id. Exxon objected to Kangieser’s testimony even before trial began, by a motion in limine urging the trial court to strike the testimony in its entirety, and reurged its objections during trial by *719conducting a voir dire of Kangieser, concerning the basis of his testimony, by moving to strike the testimony as impermissibly premised on product enhancement, and by objecting to the Zwahrs’ demonstrative evidence on the same basis. Exxon also objected that the Zwahrs’ cross-examination of Exxon’s expert was impermissibly premised on product enhancement. These timely objections preserved Exxon’s Daubert/Robinson/Havner challenge.

. Argued September 13, 2000.

. Gammill and Robinson list two additional, non-exclusive factors: the non-judicial uses made of the theory or technique, and the extent to which the technique relies on the subjective interpretation of the expert. Gammill, 972 S.W.2d at 720; Robinson, 923 S.W.2d at 557.

. Because severance implies a total taking, the corporations’ experts did not use the "before and after” method, which controls partial taking cases. 680 F.2d at 394.