in Re J. Adams, LLC

• Court: Court of Appeals of Texas
• Decided: November 17, 2016
• Docket: 09-16-00290-CV
• Status: Published

Opinion

In The

Court of Appeals Ninth District of Texas at Beaumont _________________ NO. 09-16-00290-CV _________________

IN RE J. ADAMS, LLC

________________________________________________________________________

Original Proceeding County Court at Law No. 1 of Jefferson County, Texas Trial Cause No. 125,421 ________________________________________________________________________

MEMORANDUM OPINION

In this mandamus proceeding, J. Adams, LLC (Adams) contends the trial

court abused its discretion by granting Jefferson County’s (the County) motion for

new trial after Adams refused to accept a remittitur in a condemnation case. In its

order granting the new trial, the trial court found that the jury’s award to Adams of

“the difference between the market value of Plaintiff’s whole property before the

taking and the market value of Plaintiff’s remaining property after the taking and

cost[] to cure damages as presented by the evidence separately and additionally

permits a double recovery which is not permitted under Texas law.” According to

1 Adams, “[b]ecause [Adams’s expert’s] estimated cost to cure mitigated damages

distinct from the decrease in market value of the remaining property that resulted

from the County’s taking, the inclusion of these damages did not constitute a

double recovery.” Adams argues that factually sufficient evidence supports the

jury’s verdict, and that a trial court cannot grant a new trial conditioned on a

party’s refusal to accept a remittitur if factually-sufficient evidence supported the

jury’s verdict. See In re Columbia Med. Ctr. of Las Colinas, 290 S.W.3d 204, 210

(Tex. 2009) (orig. proceeding) (citing Larson v. Cactus Util. Co., 730 S.W.2d 640,

641 (Tex. 1987). We deny the petition for a writ of mandamus.

Underlying Facts

In September of 2010, the County filed Plaintiff’s Statement and Petition of

Condemnation against Adams to acquire property in Jefferson County with

existing road frontage on Frint Road. As part of a project to expand or improve

LaBelle Road, the County condemned three parcels totaling 4.21 acres out of

Adams’s 69 acre tract. The only issue at trial pertained to damages. In estimating

the market value of the property, Adams’s expert, Wayne Baer, reasoned that the

land was comprised of two separate economic units: (1) approximately eight acres

of frontage along Frint Road containing the original location of a sandblasting and

painting facility and (2) approximately sixty-one acres with frontage along Chance

2 Drive where Adams decided to relocate a new sandblasting and painting facility.

The separate economic units were depicted by Adams’s real estate appraiser as

follows:

The County condemned three parcels--parcel 28A, 28B, and 28C--totaling

4.21 acres out of the 69-acre parent tract owned by Adams. Parcels 28B and 28C

are located within the 8 acres and parcel 28A crosses the 61.005 acres. Adams’s

expert depicted the parcels as follows:

3 The primary dispute between the parties at the trial pertained to the calculation and

amount of the alleged damage to the remainder of the property after the partial

taking.

Adams’s principal owner, Judd Adams, testified at trial that operating the

sandblasting and painting facility at its original location on the 69-acre tract could

result in overspray claims from individuals travelling along the proposed alignment

of the road on Parcel 28A. Concluding that the taking rendered the original paint

and sandblasting facility unusable for its original use, Adams built a new

sandblasting and painting facility elsewhere on the remainder of the 69-acre tract at

4 a cost of approximately $180,000. Judd Adams also testified that after the County

filed the condemnation suit, Adams sold the former sandblasting and painting

facility and approximately six to eight acres1 of land adjacent thereto to a pipe

fabricator for $150,000.

Adams’s real estate appraiser, Wayne Baer, testified that the sandblasting

and painting facility contributed $351,433 in value to the property before the

taking, and after the taking, the contributory value of the improvements is

$175,716. According to Baer, the fifty percent diminution in contributory value

was in addition to the cost to cure that Adams incurred by relocating the

improvements, which Baer estimated to be $199,868. Baer testified that unless his

calculation included cost to cure as a component of damages, the value of the

remaining improvements would be diminished even more. According to Baer,

without relocating the facility, in his opinion the original sandblasting site would

have no value or negative value because the improvements would have to be

removed to restore the property to a different highest and best use. In addition to

damages of $80,248 for the part taken, Baer testified that Adams was also entitled

to $175,716 for the damage to the remainder and $199,868 for the cost to cure. The

total damage amount due, according to Baer, is $455,832. 1 The testimony in the record appears to reference six, eight, and ten acres being sold by Adams along with the old sandblasting and painting facility. 5 The County’s real estate appraiser, Stephen Duplantis, testified at trial that

he estimated the total compensation at $88,500. According to the record, prior to

trial the County hired another real estate appraiser, Jimmy Bishop, to perform a

real estate appraisal and provide a report. Bishop prepared two reports and an

addendum, but Bishop was not available to testify at trial. The County engaged

Duplantis to review the other appraisals and to testify at trial. Both Baer and

Duplantis referenced Bishop’s report and addendum in their testimony to the jury.

Bishop’s addendum provides his estimate of the just compensation due to

Adams as $125,000 for Parcel 28-A, $72,000 for Parcel 28-B, and $3,885 for

Parcel 28-C, for a total compensation of $201,000. Duplantis agreed with part of

Bishop’s appraisal and disagreed with other parts of Bishop’s appraisal. Duplantis

testified that the just compensation for the three parcels should be $88,500.

The jury was asked one question:

Jury Question No. 1 By a preponderance of the evidence, what do you find to be the difference between the market value of Plaintiff’s whole property before the County’s taking on December 20, 2010, and the market value of Plaintiff’s remaining property after the taking, giving consideration to the uses to which the condemned parts are to be subjected?

The jury was instructed that it could “consider necessary modifications to the

remaining property resulting from the condemnation, if any, in determining the

6 market value of the remaining property after the taking.” The jury returned a

verdict in the amount of $455,832.

After the verdict, the County filed a motion to disregard the jury’s finding,

arguing that Adams could not recover cost to cure as a separate item of damage

and that the jury’s award to Adams of both the diminution in market value and the

cost to cure constituted a double recovery. The County requested a remittitur in the

amount of $199,868 and entry of judgment in the amount of $255,964. On May 19,

2016, the trial court entered judgment on the jury’s verdict. However, the trial

court simultaneously entered a Suggestion of Remittitur or Alternatively New

Trial, concluding that allowing Adams to recover the difference in the market

value of its property before and after the taking, including cost-to-cure damages,

“permits a double recovery which is not permitted.” Under the trial court’s

suggestion of remittitur, Adams was required to accept the remittitur or be

subjected to a new trial. Adams did not accept the suggestion of remittitur. The

County then filed a motion for new trial on several grounds. On June 8, 2016, the

trial court set aside its May 19, 2016 judgment on the verdict and ordered a new

trial based on the grounds suggested in the County’s motion for new trial. Adams

then filed a Petition for Writ of Mandamus with this Court.

7 In ordering a new trial, the trial court found that “under the circumstances of

the case,” the “cost[] to cure damages” amounted to an improper recovery,

resulting in “an erroneous measure of damage in excess of [the expert’s]

determination of the loss of value to the remainder resulting from the taking.” The

trial court also concluded that “[b]oth the double recovery and the errors in

allowing consideration by the jury of an improper element of damages[]” could be

cured by a remittitur but the “Plaintiff has elected not to file the suggested

remittitur necessitating the granting of a new trial.”

Standard of Review

A trial court’s order granting a new trial may be reviewed by an appellate

court in a mandamus proceeding. See In re United Scaffolding, Inc., 377 S.W.3d

685, 688-89 (Tex. 2012) (orig. proceeding). A writ of mandamus will issue to

correct a clear abuse of discretion committed by a trial court in granting a new

trial. In re Whataburger Rests. LP, 429 S.W.3d 597, 598 (Tex. 2014) (orig.

proceeding) (per curiam) (citing In re Toyota Motor Sales, U.S.A., Inc., 407

S.W.3d 746, 756-57 (Tex. 2014) (orig. proceeding)). The Texas Supreme Court

has stated:

[A] trial court does not abuse its discretion so long as its stated reason for granting a new trial (1) is a reason for which a new trial is legally appropriate (such as a well-defined legal standard or a defect that probably resulted in an improper verdict); and (2) is specific enough 8 to indicate that the trial court did not simply parrot a pro forma template, but rather derived the articulated reasons from the particular facts and circumstances of the case at hand.

Toyota, 407 S.W.3d at 756-57 (emphasis in original) (quoting United Scaffolding,

377 S.W.3d at 688-89). A new trial order “cannot stand[,]” however, when the

“trial court’s articulated reasons are not supported by the underlying record.” Id. at

758. The appellate court continues to apply “the abuse-of-discretion standard . . . to

merits review just as it does in all mandamus proceedings.” In re Bent, 487 S.W.3d

170, 178 (Tex. 2016).

Arguments of Parties

In this mandamus proceeding, Adams argues that the trial court abused its

discretion in conditioning a new trial upon Adams’s failure to accept a remittitur

when “factually sufficient evidence supported the jury’s verdict” that the loss to

the remainder of Adams’s property was $455,832. The County disagrees and

argues that Adams’s expert improperly calculated damages and that Adams has

been allowed a duplicate recovery.

Damages Available in a Partial Taking

The measure of compensation in a partial taking is “‘the market value of the

part taken plus damage to the remainder caused by the condemnation.’” State v.

Petropoulos, 346 S.W.3d 525, 530 (Tex. 2011) (quoting Westgate, Ltd. v. State,

9 843 S.W.2d 448, 456 (Tex. 1992)). Determination of the fair market value of the

remainder property requires measuring the difference between the value of the

property immediately before and immediately after the taking. Exxon Pipeline Co.

v. Zwahr, 88 S.W.3d 623, 627 (Tex. 2002). Evidence and testimony regarding the

cost to relocate certain facilities or improvements may be admissible, “not as a

separate element of damage, but as information that could be used by the jury to

arrive at the diminished value of the remainder tract after the taking, if any.” City

of Sugar Land v. Home & Hearth Sugarland, L.P., 215 S.W.3d 503, 514 (Tex.

App.—Eastland 2007, pet. denied). Cost to cure is a method of decreasing the

amount of damages below the diminution in market value, not increasing the

damages beyond the diminution in market value caused by the taking. Id. “This

approach allows the property owner to recover the cost to cure the portion of the

damage that can be cured, plus any diminution in value to the remainder which

cannot be cured, when the total of those two is less than the overall diminution in

value of the remainder uncured.” 4A Nichols, Eminent Domain, § 14.02[3][d].

To be admissible evidence upon which the jury may base its award of

damages, the expert’s calculation must be based upon a reliable methodology. See

E.I. du Pont de Nemours and Co., Inc. v. Robinson, 923 S.W.2d 549, 558 (Tex.

1995). To the extent that Baer calculated cost to cure as a distinct element of

10 damage separate from the diminution in the fair market value of the improvements,

the trial court reasonably could have concluded that Baer’s testimony had been

improperly admitted before the jury and was factually insufficient to support the

damage award because his methodology was unreliable. See Home & Hearth

Sugarland, 215 S.W.3d at 510. After reviewing Adams’s petition, the record, and

the response filed by the real party in interest, Jefferson County, as well as the

reply brief, we conclude that the trial court provided a reasonably specific and

valid explanation for granting the motion for new trial that is supported by the

record. See Toyota, 407 S.W.3d at 759-60. Accordingly, we deny the petition for a

writ of mandamus.

PETITION DENIED.

PER CURIAM

Submitted on September 23, 2016 Opinion Delivered November 17, 2016

Before McKeithen, C.J., Kreger and Johnson, JJ.