Golden Corral Corp. and ZG GC Austin L.L.C. v. Noble Austin Apartments L.L.C. D/B/A Ladera Apartment Homes

Court of Appeals of Texas·Decided July 9, 2021·No. 03-19-00463-CV·Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-19-00463-CV

Golden Corral Corp. and ZG GC Austin L.L.C., Appellants

v.

Noble Austin Apartments L.L.C. d/b/a Ladera Apartment Homes, Appellee

FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-16-001957, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING

MEMORANDUM OPINION

Golden Corral Corp. and ZG GC Austin L.L.C. (collectively, Golden Corral)

appeal from a judgment in favor of Noble Austin Apartments L.L.C. d/b/a Ladera Apartment

Homes (Ladera). The trial court rendered judgment consistent with the jury verdict finding

Golden Corral liable for violating section 11.086(a) of the Texas Water Code and finding

damages in the amounts of $160,000 in repair costs; $52,000 in loss of use of property; and

$835,000 in diminished value of property. On appeal, Golden Corral challenges the legal

sufficiency of the evidence supporting the liability finding and the damages findings as to the

repair costs and the diminished value of property but does not challenge the evidence supporting

the damages finding as to loss of use. We conclude that legally sufficient evidence supports the

liability finding, that no evidence supports the damages award for diminished value of property,

and that legally sufficient evidence supports some but not all of the damages award for repair costs, and we therefore suggest a remittitur of $120,228.54 for the unliquidated damages award

for repair costs. Accordingly, we reverse and render a take nothing judgment on damages for

diminished value of property; we reform the trial court’s judgment as to the damages award for

repair costs; and, as reformed, we affirm the judgment (other than the diminished value damages

award) conditioned on Ladera filing this remittitur within 30 days of the date of this opinion.

BACKGROUND

In 2014, Ladera purchased an 11-building apartment complex (the Ladera

Property) and signed an apartment management agreement with the company GREP South, LP

(Greystar) to manage the apartments. Building 11—the relevant building for this appeal—is in

the northwest corner of the Ladera Property. At the time of the purchase, the lot to the west

contained a public drainage easement and the lot to the north was undeveloped. In 2015, Golden

Corral constructed a restaurant on the northern lot. The restaurant includes a concrete parking

lot, rain gardens, and an earthen swale (a manmade shallow ditch). During rainfall, rainwater

would flow from the concrete parking lot into the rain gardens. To prevent direct dispersion of

pollutants, the rain gardens were designed to retain rainwater until they fill to a certain point, and

the rainwater would then exit an opening called a “weir,” enter the swale, and travel along the

property line to the public drainage easement. During rainfall in May 2015, October 2015,

May 2016, and August 2017, two units in building 11 experienced flooding and damage.

In May 2016, Ladera sued Golden Corral for violating section 11.086(a) of the

Texas Water Code.1 See Tex. Water Code § 11.086(a) (prohibiting diverting, impounding, or

permitting diversion or impoundment of natural flow of surface waters in manner that damages

1 Ladera also sued for nuisance, negligence, and gross negligence, but the jury verdict does not support these claims and they are not at issue in this appeal. 2 property of another by overflow of water diverted or impounded). Ladera alleged that “water

cannot exit from the impervious area on the [Golden Corral] Restaurant premises except by

runoff over the edges of the surrounding concrete surface”; Golden Corral “utilize[d] concrete to

divert water and inadequate ‘rain gardens’ to impound water”; “impounded surface water in

inadequate collection and retention ‘rain gardens’ which overflowed into an area where swales

were either nonexistent, inadequate or both”; and “due to a swale which is either nonexistent or

of inadequate capacity, water rushes on to and causes flooding to [Ladera’s] property.” In

January 2019, the case was tried before a jury over four days. The jury found that Golden Corral

did “divert or impound the natural flow of surface waters, or permit a diversion or impounding of

it to continue, in a manner that damaged the Ladera Property by the overflow of the water

diverted or impounded,” assigning 95% responsibility to Golden Corral and 5% responsibility to

Ladera. The jury found damages in the amounts of $160,000 in repair costs; $52,000 in loss of

use of property; and $835,000 in diminished value of property. The trial court rendered

judgment consistent with the verdict, and Golden Corral perfected this appeal.

DISCUSSION

On appeal, Golden Corral raises three issues. First, it challenges the legal

sufficiency of the evidence supporting the jury finding that it violated section 11.086(a). Second,

it challenges the legal sufficiency of the property owner’s testimony to support the $835,000

amount of diminution of the property’s value, arguing that the testimony was “nothing more than

speculative, conclusory testimony.” Third, it challenges the legal sufficiency of the evidence

supporting the reasonableness of the $160,000 amount in repair costs.

3 Section 11.086

Section 11.086(a) provides: “No person may divert or impound the natural flow

of surface waters in this state, or permit a diversion or impounding by him to continue, in a

manner that damages the property of another by the overflow of the water diverted or

impounded.” Tex. Water Code § 11.086(a); see Kraft v. Langford, 565 S.W.2d 223, 229 (Tex.

1978) (noting elements for statutory claim are “(1) a diversion or impoundment of surface water

which (2) causes (3) damage to the property of the plaintiff landowner”). As the party seeking

affirmative relief, Ladera bore the burden of proof at trial. See Vance v. My Apartment Steak

House of San Antonio, Inc., 677 S.W.2d 480, 482 (Tex. 1984) (“It is a well-accepted postulate of

the common law that a civil litigant who asserts an affirmative claim for relief has the burden to

persuade the finder of fact of the existence of each element of his cause of action.”).

On appeal, Golden Corral does not challenge the jury finding that it diverted or

impounded waters “in a manner that damaged the Ladera Property by the overflow of the water

diverted or impounded.”2 Instead, it challenges only the legal sufficiency of the evidence

supporting the finding that the waters at issue are “surface waters,” arguing:

The evidence at trial conclusively established that the rain water at issue in the case was not “surface water” as it has “been altered by the hands of man so that it flows in greater quantities or in a directed, accelerated or condensed manner”’ and is “under control by a ditch, tank, pond, or pipe” or similar structure—namely the rain gardens and/or the associated swale on the Golden Corral property.

The term “surface waters” in section 11.086 is not statutorily defined, although judicial

definitions have been provided. See Hopkins v. State, No. 03-03-00499-CV, 2006 WL 1126224, 2 Golden Corral frames the rain events as “unprecedented,” but this is irrelevant.

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Golden Corral Corp. and ZG GC Austin L.L.C. v. Noble Austin Apartments L.L.C. D/B/A Ladera Apartment Homes, (Tex. Ct. App. 2021).

Golden Corral Corp. and ZG GC Austin L.L.C. v. Noble Austin Apartments L.L.C. D/B/A Ladera Apartment Homes (Golden Corral Corp. and ZG GC Austin L.L.C. v. Noble Austin Apartments L.L.C. D/B/A Ladera Apartment Homes) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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