Gilbert Wheeler, Inc. v. Enbridge Pipelines (East Texas), L.P.

449 S.W.3d 474, 57 Tex. Sup. Ct. J. 1465, 2014 Tex. LEXIS 767, 2014 WL 4252273
CourtTexas Supreme Court
DecidedAugust 29, 2014
Docket13-0234
StatusPublished
Cited by81 cases

This text of 449 S.W.3d 474 (Gilbert Wheeler, Inc. v. Enbridge Pipelines (East Texas), L.P.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gilbert Wheeler, Inc. v. Enbridge Pipelines (East Texas), L.P., 449 S.W.3d 474, 57 Tex. Sup. Ct. J. 1465, 2014 Tex. LEXIS 767, 2014 WL 4252273 (Tex. 2014).

Opinion

Justice LEHRMANN

delivered the opinion of the Court.

This case presents various issues regarding the proper manner of compensating a landowner for the destruction of trees on his property. As a general rule, when an injury to real property is temporary, the owner is entitled to damages commensurate with the cost of restoring his property, but when an injury to the same property is permanent, the owner is entitled to damages commensurate with the loss in the fair market value to the property as a whole. In today’s case, we consider whether this general rule applies when the wrongful conduct causing the injury stems from breach of contract rather than tort. Concluding that it does, we also review a common law exception to this general rule, which under certain circumstances entitles the landowner to damages in keeping with the intrinsic value of the trees that were destroyed. Because we conclude that the exception properly applies in this case, and hold that any error in the jury charge related to such damages was harmless, we reverse the judgment of the court of appeals and remand the case to that court to address the remaining issues.

I. Facts

The Wheeler family, by way of closely held corporation Gilbert Wheeler, Inc. (Wheeler), owns a 153-acre tract of land in Shelby County called “the Mountain.” The property, which the Wheelers use as a family retreat, is heavily wooded and tran *477 sected by a natural stream. When En-bridge Pipelines, L.P. determined that it needed to construct a pipeline across the property, it engaged INA Field Services to approach Wheeler about obtaining an easement. Wheeler agreed to grant Enbridge a right of way, but insisted that Enbridge install the pipeline by boring underground in order to preserve the trees on the property. Wheeler agreed to a contract that reflected this stipulation in explicit terms. Because this was an unusual provision, Enbridge was required to specifically approve the contract.

Soon after the parties executed the agreement, Enbridge hired a construction company to build the pipeline, but failed to inform the contractors about the provision requiring them to use the boring method to install the pipeline. As a result, in clearing the right of way the construction company cut down several hundred feet of trees and bulldozed the ground. In the process, the workers also channelized the stream that once meandered through the woods.

Wheeler sued Enbridge for breach of contract and trespass. The suit proceeded to a jury trial, and the court charged the jury on both claims. Enbridge objected to the trespass submission, arguing that Wheeler’s claims sounded only in contract. Enbridge also requested a question concerning whether the damage to the Mountain was temporary or permanent, contending that the question was a necessary predicate to determine whether the jury should award damages commensurate with the cost to restore the trees and stream or damages commensurate with the loss in the Mountain’s fair market value. Wheeler contended that the distinction was irrelevant. Ultimately, the trial court submitted the charge without the question, and the jury found Enbridge liable for the damage to Wheeler’s property on both trespass and breach-of-contract theories. In conjunction with the breach-of-contract claim, the jury awarded $800,000 to compensate Wheeler for the reasonable cost to restore the property. In conjunction with the trespass claim, the jury found no loss in the Mountain’s fair market value and awarded Wheeler $288,000 in damages for the intrinsic value of the trees Enbridge destroyed. Wheeler elected to recover the damages awarded for breach of contract.

Enbridge appealed, arguing that the trial court erred in failing to submit the predicate question of whether the injury to the Mountain was temporary or permanent. Enbridge also contended that the injury was permanent as a matter of law, that cost-to-restore damages were therefore improperly awarded, and that Wheeler could not recover damages for the intrinsic value of the trees because that measure of damages was unavailable and not properly submitted to the jury in any event. Wheeler countered that the temporary-versus-permanent distinction did not apply because its case sounded in contract. Wheeler argued in the alternative that it could recover for the intrinsic value of the trees destroyed without respect to the temporary-versus-permanent distinction. The court of appeals agreed with En-bridge and held that, because Wheeler had failed to secure a finding as to whether the injury to the property was temporary or permanent, Wheeler had waived its entitlement to a damage award. For that reason, the court of appeals rendered a take-nothing judgment in Enbridge’s favor. Wheeler petitioned this Court for review.

II. Analysis

Wheeler’s petition raises broad concerns about the boundaries of the temporary-versus-permanent distinction and its application to the calculation of damages for injury to real property. In order to re *478 solve the confusion surrounding this distinction, we take this opportunity to clarify its contours.

A. Temporary-Y ersus-Permanent Injury to Real Property

Applying the distinction between temporary and permanent injury to real property has proven a vexing task for litigants and courts alike. After all, injury to real property often appears permanent in the sense that the exact real estate in question — a demolished house or destroyed tree — no longer exists. However, as discussed below, the law recognizes that such items frequently can be replaced in an adequate manner, rendering the landowner suitably compensated. To further complicate matters, Texas courts have attempted to categorize various aspects of a legal claim, including a party’s conduct, an event or occurrence, a condition, an injury or harm, and the damages resulting from an injury or harm, as either temporary or permanent.

Further muddling things are the multiple purposes served by characterizing an injury, to real property as temporary or permanent. The distinction guides courts in determining: “(1) whether damages are available for future or only past injuries; (2) whether one or a series of suits is required; and (3) whether claims accrue (and thus limitations begins) with the first or each subsequent injury.” Schneider Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 275 (Tex.2004). The present case illustrates a fourth application of the distinction: it guides the proper measure of damages for injury to real property. 1 To that end, we have applied the distinction in evaluating real-property damages across many different theories of liability. See, e.g., Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 921 (Tex.2013) (trespass); Natural Gas Pipeline Co. v. Justiss, 397 S.W.3d 150, 152 (Tex.2012) (nuisance); State v. Bristol Hotel Asset Co., 293 S.W.3d 170, 172 (Tex.2009) (eminent domain); Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227

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Bluebook (online)
449 S.W.3d 474, 57 Tex. Sup. Ct. J. 1465, 2014 Tex. LEXIS 767, 2014 WL 4252273, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gilbert-wheeler-inc-v-enbridge-pipelines-east-texas-lp-tex-2014.