KMS Retail Rowlett, LP F/K/A KMS Retail Huntsville, LP v. the City of Rowlett, Texas

559 S.W.3d 192
Court of Appeals of Texas·Decided July 19, 2017·No. 05-16-00402-CV·Published·Cited by 10 cases

Opinion

AFFIRMED; Opinion Filed July 19, 2017.

In The

Court of Appeals

Fifth District of Texas at Dallas No. 05-16-00402-CV

KMS RETAIL ROWLETT, LP F/K/A KMS RETAIL HUNTSVILLE, LP, Appellant V.

THE CITY OF ROWLETT, TEXAS, Appellee

On Appeal from the County Court at Law No. 4 Dallas County, Texas

Trial Court Cause No. CC-15-01323-D

MEMORANDUM OPINION

Before Justices Evans, Stoddart, and Boatright Opinion by Justice Evans

KMS Retail Rowlett, LP, f/k/a KMS Retail Huntsville, LP appeals the trial court’s

adverse rulings on cross-motions for summary judgment resulting in a final judgment awarding KMS stipulated damages of $31,662 for the City of Rowlett’s taking in fee simple of its private drainage, access, and utility easement (private road easement) for use as a public roadway. In three issues, KMS generally asserts the summary judgment evidence conclusively establishes, or creates a fact issue as to whether, the City’s taking was for a private use, specifically, to provide an economic benefit to a competing developer. KMS also challenges the trial court’s evidentiary rulings on its objections to the City’s summary judgment evidence and the denial of its request for attorney’s fees. For the reasons set forth below, we affirm the trial court’s judgment.

BACKGROUND

Central to this appeal is the validity of the City’s taking of KMS’s private road easement to convert it to a public roadway. At the location of this dispute, a Wal-Mart Supercenter is located to the west of KMS’s tract of land separated only by Kenwood Drive that generally runs north-south. East of KMS’s tract is land owned by Briarwood Armstrong, LLC on which a Sprouts grocery store later was developed. The private road easement the City condemned generally runs east-west parallel to Lakeview Parkway. Lakeview Parkway is on the southern border of the Wal-Mart and Briarwood tracts. The private road easement connects at approximately the mid-point of Briarwood’s tract to Kenwood Drive immediately across from an entrance to approximately the mid-point of Wal-Mart.

KMS’s undeveloped nine-acre tract is accessible from Kenwood Drive and is part of a commercial subdivision named Luke’s Landing. The condemned private road easement is located on KMS’s tract’s southern boundary. KMS built a private road on the easement in 2006 in conjunction with KMS’s sale of four commercial pad sites located on the southern edge of the private road easement. The southern boundary of those four commercial tracts is Lakeview Parkway. By the time of the condemnation proceeding, those four tracts had been developed into a Wells Fargo bank, Starbucks coffee shop, Chick-fil-A restaurant, and an Arby’s restaurant. Along Lakeview Parkway, Wal-Mart is west and Briarwood’s tract is east of those four retail businesses.

KMS did not complete construction of the private road all the way to end of the easement on the eastern edge of its subdivision in accordance with the easement in the Luke’s Landing’s recorded plat. Instead, KMS constructed the private road only to the fourth pad site. To complete the private road to the end of the easement, KMS would have had to construct a bridge across a flood plain. At the time the private road was constructed, however, the tract to the east

of KMS’s tract was undeveloped so the City allowed the development of the four pad sites without requiring completion of the private road.

Briarwood owns the twelve-acre tract abutting the east side of the KMS tract. In 2014, Briarwood entered into an Economic Development Incentive Agreement with the City in connection with Briarwood’s development of a Sprouts grocery store and other retail lots on its twelve-acre tract. Among other things, the agreement provided for an infrastructure grant to Briarwood for the design, construction, improvement and installation of a private circulation drive and drainage culvert providing for cross-access between its tract and the KMS tract. After Briarwood learned that it did not have legal authority to enter Luke’s Landing to construct the drive and drainage culvert, however, it approached KMS for permission. The parties were unable to reach an agreement. The City then sought to condemn the part of the private road easement on KMS’s tract and convert it into a public roadway that would allow vehicles to travel from Kenwood Drive across KMS’s tract to reach the Briarwood tract and vice versa.1 The City’s economic incentive agreement with Briarwood was amended to reduce Briarwood’s grant amount for the off-site culvert crossing to reflect the condemnation costs incurred by the City to convert the private road easement into a public street. Notably, the City sought to condemn only the boundaries of KMS’s existing private road easement, approximately a fifteen foot strip of land 691 feet in length, plus a thirty foot wide drainage swale crossing.2 After the City filed its condemnation petition, special commissioners conducted a hearing and awarded KMS damages of $31,662 for the taking. KMS filed an answer objecting to the award and moving to dismiss the eminent domain action, generally alleging the taking was not

1 Absent the condemnation, vehicles on the Briarwood tract would not be able to access Kenwood Drive via the KMS tract, but would have to exit onto Lakeview Parkway and travel west to Kenwood Drive.

2 Including voluntary transfers from the four, abutting property owners to the south, the total area consisted of a thirty-foot wide strip.

necessary for a public use and asserting the City’s determinations of necessity and public use were fraudulent, in bad faith, or arbitrary and capricious.

The parties filed competing motions for summary judgment regarding the propriety of the City’s exercise of eminent domain. In its motion, the City requested the trial court deny KMS’s illegal taking claims, confirm the special commissioners’ damage award, and award the City reasonable attorney’s fees. KMS moved for summary judgment seeking dismissal of the City’s eminent domain petition asserting the taking was not necessary for a public use and violated chapter 2206 of the government code. It also asserted the City’s determinations of public use and necessity were fraudulent, in bad faith, and arbitrary and capricious. The trial court granted in part the City’s summary judgment motion and denied KMS’s motion in its entirety, dismissing with prejudice KMS’s claims related to the alleged illegality of the taking and alleged fraud, bad faith, and arbitrariness. These rulings were incorporated into a final judgment in the City’s favor awarding KMS stipulated damages of $31,662.00 which was deposited into the registry of the court.3 This appeal followed.

ANALYSIS

A. Standard of Review We review a trial court’s summary judgment rulings de novo. See Travelers Ins. Co. v.

Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Both parties moved for summary judgment on traditional and no-evidence grounds. On their traditional summary judgments, each bears the burden of establishing that there are no issues of material fact and it is entitled to judgment as a matter of law. See City of Garland v. The Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000). With respect to the no-evidence motions for summary judgment, the non-movant must

3 The parties agreed that the amount of the monetary judgment would not be appealed by either party, but the damages stipulation did not waive or affect KMS’s right to appeal the issues addressed in the summary judgment rulings.

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KMS Retail Rowlett, LP F/K/A KMS Retail Huntsville, LP v. the City of Rowlett, Texas, 559 S.W.3d 192 (Tex. Ct. App. 2017).

559 S.W.3d 192 (KMS Retail Rowlett, LP F/K/A KMS Retail Huntsville, LP v. the City of Rowlett, Texas) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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