Pappas Restaurants, Inc. and Pappas Bar-B-Q, Inc. v. State of Texas

• Court: Court of Appeals of Texas
• Decided: July 14, 2016
• Docket: 01-15-00001-CV
• Status: Published

Opinion

Opinion issued July 14, 2016

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-15-00001-CV ——————————— PAPPAS RESTAURANTS, INC. AND PAPPAS BAR-B-Q, INC., Appellants V. STATE OF TEXAS, Appellee

On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Case No. 1043062

MEMORANDUM OPINION

Appellants Pappas Restaurants, Inc. and Pappas Bar-B-Q, Inc. appeal the

trial court’s judgment adopting the award of the special commissioners in the

underlying condemnation proceeding. In two issues, they contend that the court

erred by entering a final judgment “in absence of objection.” First, they argue that they made a timely objection to the special commissioners’ award by filing a

notice of appearance of counsel, which indicated their intention to challenge the

award, and they later filed substantive objections, which they assert related back to

the earlier filing. Second, they contend that the deadline for filing objections was

tolled by the clerk’s failure to send notice of the commissioners’ award to their

counsel of record. In a third issue, they contend that the court erred by denying

their motion for new trial, which challenged the jurisdiction of the special

commissioners on the grounds that the State did not strictly comply with statutory

notice provisions.

We affirm. The appearance of counsel did not identify any “grounds” for

objection, and therefore it did not constitute a “statement of objections” as required

to initiate an appeal from the commissioners’ findings. TEX. PROP. CODE

§ 21.018(a). The Pappas entities were served properly with notice of the

commissioners’ award because the statute specifically authorizes service to be

made directly on the parties as an alternative to serving counsel of record, id.

§ 21.049, so the deadline for filing an objection was not tolled. Finally, we cannot

entertain the challenge to the authority of the special commissioners because in the

absence of timely filed objections, the trial court had a ministerial duty to enter a

judgment implementing the special commissioners’ award, which, under the

circumstances, was unappealable.

2 Background

The State of Texas filed a petition to condemn 0.043 acres of land (1,873

square feet) owned by Pappas Restaurants, Inc. and Pappas Bar-B-Q, Inc.

(collectively, “Pappas”) for the purpose of expanding and improving Highway 290.

The trial court appointed three special commissioners to assess the value of the

land. Two weeks later, attorneys Frank Markantonis and Anna Sabayrac Marchand

filed a notice of appearance on behalf of both Pappas entities. The notice stated

that the attorneys had been retained to represent Pappas Restaurants and Pappas

Bar-B-Q and that they were making an appearance on behalf of their clients.

The special commissioners scheduled a hearing to determine damages. A

notice of the hearing was sent to Alysia E. Perry, the registered agent for both of

the Pappas entities. The special commissioners found that the value of the

condemned land was $58,936, and they rendered their findings on the date of the

hearing. The award listed the parties to be notified, including Perry as the

registered agent for Pappas.

The award was filed with the county clerk. On the same day the award was

filed, the county clerk sent notices of the award by registered mail, and the return

receipts appear in the appellate record. These notices were addressed to

representatives of all parties, including Perry, as registered agent for Pappas, but no

3 separate notice was sent to the Pappas attorneys, Markantonis and Marchand, who

shared the same mailing address as Perry, Pappas’s registered agent.

The day after the special commissioners’ award was filed with the county

clerk, Pappas Restaurants filed a notice of appearance of substitute counsel, which

stated that H. Dixon Montague and Don C. Griffin had replaced Markantonis and

Marchand as “attorneys-in-charge,” and they would “be responsible for the suit

and shall be the attorneys to receive all communications from the court and other

parties.” The notice of appearance of counsel made no mention of the special

commissioners’ award. No separate notice of the commissioners’ award was sent

to these new attorneys of record for Pappas Restaurants.

The State deposited the amount of the damages award, $58,936, with the

trial court clerk, and Pappas Restaurants filed a motion to withdraw the deposited

funds. Then, two months after the special commissioners rendered their award,

Pappas Restaurants filed objections and exceptions, arguing that the award was

inadequate and that the special commissioners had not applied the correct measure

of damages in determining compensation. Pappas Restaurants also demanded a

jury trial.

The court granted the motion to withdraw funds and set the case for trial.

Before the trial date, the State’s attorney prepared and filed a “Judgment of Court

in Absence of Objection,” proposing a finding that the special commissioners’

4 award had been filed with the clerk and that no objections to the special

commissioners’ award “were filed within the time provided by law.” The trial

court signed this proposed judgment and sent notice to all counsel of record.

Pappas Restaurants filed a motion for new trial and reurged its objections to

the special commissioners’ award. Pappas Bar-B-Q also filed a motion for new

trial, adopting by reference the arguments made by Pappas Restaurants. The trial

court denied both motions for new trial, and both Pappas entities appealed.

Analysis

Pappas challenges the condemnation award in three issues. The first issue

argues that objections were timely filed for two reasons: the notice of appearance

of substitute counsel should be construed as an objection to the award, and the

later-filed objections related back to the appearance of substitute counsel. The

second issue argues that the time for filing objections was tolled by the clerk’s

failure to send notice of the special commissioners’ award to their counsel of

record.

In a third issue, Pappas argues that the court erred by denying their motions

for new trial, which alleged that the special commissioners lacked jurisdiction

because the State did not strictly comply with notice requirements pertaining to the

condemnation proceeding. Specifically, they contend that there is no evidence that

the original notice of the special commissioners’ hearing was returned to the

5 commissioners by the person who served process, as required by Section 21.016 of

the Texas Property Code.

The State contends that the notice of appearance of counsel was not an

objection and therefore the later-filed objections do not relate back to it. The State

further contends that if this court agrees that no objections were timely filed, we

must dismiss this appeal for want of appellate jurisdiction.

I. Eminent-domain procedures

To resolve the issues presented in this appeal, we must consider whether the

statutory eminent-domain procedures were followed. This is a question of law

which we review de novo. E.g., City of Austin v. Whittington, 384 S.W.3d 766, 778

(Tex. 2012).

Chapter 21 of the Texas Property Code governs eminent-domain

proceedings. “The Texas eminent-domain scheme is a two-part process that begins

with an administrative proceeding followed, if necessary, by a judicial one.” City

of Tyler v. Beck, 196 S.W.3d 784, 786 (Tex. 2006). The administrative phase of

condemnation proceedings is initiated by an entity with eminent-domain authority

when it wishes to acquire property but cannot reach an agreement with the property

owner as to compensation. TEX. PROP. CODE § 21.012(a), (b); see Musquiz v.

Harris Cty. Flood Control Dist., 31 S.W.3d 664, 666–67 (Tex. App.—Houston

[1st Dist.] 2000, no pet.). The condemning entity files a petition in an appropriate

6 court, which then appoints three special commissioners to determine an appropriate

amount of compensation. See TEX. PROP. CODE §§ 21.001, 21.012–.015; Beck, 196

S.W.3d at 786. The special commissioners must schedule a hearing to assess

damages. TEX. PROP. CODE § 21.015.

Each party to the proceeding must be served with notice of the time and

place of the special commissioners’ hearing. Id. § 21.016(a). Among other

procedural requirements, the person who serves notice must return the original and

a return of service to the special commissioners on or before the date of hearing.

Id. § 21.016(c). “Unless notice has been properly served in accordance with the

statute, the commissioners have no jurisdiction to assess damages or do anything

that would declare a condemnation of the property.” State v. Bristol Hotel Asset

Co., 65 S.W.3d 638, 641 (Tex. 2001). “[A] return of service of notice of a

commissioners hearing that strictly complies with section 21.016 of the Property

Code is prima facie evidence that the condemnee has been served with the notice

in compliance with the statute.” Id. at 642. “When the State introduces such a

return,” the burden shifts to the condemnee to “offer evidence that it was not

served to raise a fact issue.” Id.

The special commissioners must file with the court “a written statement of

their decision stating the damages.” TEX. PROP. CODE § 21.048. The clerk of the

court must “send notice of the decision by certified or registered United States

7 mail, return receipt requested, to the parties in the proceeding, or to their attorneys

of record, at their addresses of record.” See id. § 21.049. When the condemning

entity is satisfied with the award, it may obtain possession of the property by

paying the amount of the award to the property owner, depositing that amount of

money in the court’s registry, or posting a sufficient bond. See id. § 21.021(a);

Musquiz, 31 S.W.3d at 666–67.

Either party may challenge the special commissioners’ award by filing “a

written statement of the objections and their grounds” in the trial court. TEX. PROP.

CODE § 21.018(a); see Beck, 196 S.W.3d at 786. Objections must be filed “on or

before the first Monday following the 20th day after the day the commissioners file

their findings with the court.” TEX. PROP. CODE § 21.018(a). “Upon the filing of

objections, the award is vacated and the administrative proceeding converts into a

judicial proceeding.” Beck, 196 S.W.3d at 786 (citing Denton Cty. v. Brammer,

361 S.W.2d 198, 200 (Tex. 1962)). Absent timely filed objections, the court has a

ministerial duty to enter judgment in accordance with the special commissioners’

award. Tex. Dep’t of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 167–

68 (Tex. 2013) (citing Pearson v. State, 315 S.W.2d 935, 938 (Tex. 1958)). Such a

judgment is not appealable. See Pearson, 315 S.W.2d at 938; Musquiz, 31 S.W.3d

at 667.

8 II. Timeliness of objections

In the first two issues, Pappas argues that the trial court erred by entering

judgment “in the absence of objection” and by finding “that no objections” to the

decision of the special commissioners “were filed within the time provided by

law.” In the first issue, Pappas contends that appearance of substitute counsel, filed

on the day after the special commissioners’ award was filed, was itself an objection

to the award. Pappas further contends that the formal objections filed two months

later related back to the appearance of substitute counsel, as an amendment to that

filing. In the second issue, Pappas argues that the time for filing an amendment

was tolled because the court clerk served notice of the special commissioners’

award on the registered agent for service of process and not on their counsel of

record. For all these reasons, Pappas argues that timely objections to the special

commissioners’ award were filed.

A. Effect of appearance of substitute counsel

The special commissioners rendered their findings and award on July 22,

2014, and that document was filed with the clerk three days later on July 25.

Objections to the award were due the Monday following the expiration of 20 days

after July 25, which was August 18, 2014. See TEX. PROP. CODE § 21.018(a). Only

one document was filed by any party between July 25 and August 18: the notice of

appearance of substitute counsel filed by Pappas Restaurants. That notice provided

9 the names of the new attorneys who would be representing Pappas Restaurants. It

stated, in its entirety:

COMES NOW Pappas Restaurants, Inc. (“Pappas Restaurant”), Defendant herein, and files its Notice of Appearance of Substitute Counsel and pursuant to Texas Rule of Civil Procedure 9, designates H. Dixon Montague and Don C. Griffin of Vinson & Elkins LLP as its attorneys-in-charge in place of Anna Sabayrac Marchand and Frank Markatonis.

Mr. Montague and Mr. Griffin will be responsible for the suit and shall be the attorneys to receive all communications from the court and from other parties. In the event of dismissal, Pappas Restaurant asserts its claim for attorneys’ fees and other expenses pursuant to Texas Property Code § 21.0195.

Notice of this designation has been provided to all other parties pursuant to Texas Rule of Civil Procedure 21a.

Objections to a special commissioners’ award are registered “by filing a

written statement of the objections and their grounds.” Id. § 21.018(a); Beck, 196

S.W.3d at 786. The appearance of substitute counsel filed by Pappas Restaurants

did not mention the special commissioners’ award. It did not state that Pappas

Restaurants objected to the award. And it did not provide any ground for an

objection. Moreover, because it was filed only by Pappas Restaurants, nothing in

this document could be construed as an objection by Pappas Bar-B-Q.

Pappas argues that the notice of appearance of substitute counsel

communicated dissatisfaction with the special commissioners’ award by stating

that the new attorneys would be responsible for “the suit.” Pappas reasons that

10 because the judicial phase of condemnation proceedings begins with the filing of

objections to the commissioners’ findings and award, see Beck, 196 S.W.3d at 786,

the reference to “the suit” was an objection and declaration of intention to proceed

with the judicial phase of the condemnation proceedings. Similarly, Pappas

contends that reference to the Rules of Civil Procedure and a contingent claim for

attorneys’ fees under Section 21.0195 of the Property Code necessarily implied an

intent to move into judicial proceedings because the Rules of Civil Procedure do

not apply in the administrative proceeding. And Pappas further argues that the

substitution of counsel would have been futile were it not also an objection.

To the extent that these features of the appearance of substitute counsel

foreshadowed an intended judicial proceeding, the notice nevertheless did not

satisfy the statute’s requirements to initiate an appeal from the commissioners’

findings. A statement suggesting that the party wishes to proceed to the judicial

proceeding is not sufficient; the statute requires that such a party file “a written

statement of the objections and their grounds.” TEX. PROP. CODE § 21.018(a). The

statute does not mandate use of particular words, but it does require that the

appealing party identify the substance of the complaint by stating the “grounds” for

its objections. Id. Nothing in the notice of appearance filed by the substitute

counsel for Pappas Restaurants informed the court or other parties of the grounds

11 for objecting to the commissioners’ award. As such, it did not comply with the

statutory procedure for objecting to the commissioners’ findings. See id.

In its brief, Pappas relies on City of Houston v. Huber, 311 S.W.2d 488

(Tex. Civ. App.—Houston 1958, no writ), for the supposed proposition that “the

condemnee who is dissatisfied with the award of the special commissioners and

who makes a timely objection thereto need not allege the damages sustained are

inadequate or particularize the elements thereof.” That considerably overstates the

significance of Huber, in which the city sued several property owners, including

Huber, to condemn their properties. Huber, 311 S.W.2d at 489. The special

commissioners’ award stated a total amount of compensation to be awarded, but

the property owners were unable to apportion the damages among them. Id. at 491.

Several of the owners filed objections, but Huber did not. See id.

The court of appeals determined that in light of the unapportioned award,

which put the property owners in the position of being adverse to each other, an

objection properly filed by any one owner was sufficient to vacate the

administrative award and advance the condemnation proceeding to the judicial

phase of trial de novo on the merits. See id. at 491–92. Because several owners had

filed objections, all of the owners were entitled to participate in the judicial

proceeding. See id. at 491. The court of appeals also explained that it was not

necessary for Huber, who filed no objection, or any of the other owners to

12 “particularize as to his damages” in an objection because the statute required the

trial court to conduct a de novo trial to resolve these issues. Id. at 493.

Notably, the court of appeals in Huber did not hold that a document that did

not purport to be an objection or state the grounds for an objection should be

construed as an objection for the purpose of advancing a condemnation proceeding

from the administrative to the judicial phase. Instead, it held that a property owner

who had not objected could take advantage of the new judicial proceeding initiated

by another property owner’s valid objection. See id. Thus, Huber does not support

the argument that the notice of appearance of substitute counsel was a valid

objection.

We conclude that the notice of appearance of substitute counsel was not an

objection to the special commissioners’ award in satisfaction of Property Code

section 21.018(a).

B. Effect of late-filed objections

Pappas Restaurants eventually did file written objections to the special

commissioners’ award in a document that alleged two different grounds:

inadequacy of compensation and the commissioners’ failure to apply the correct

measure of damages. This document was filed well over a month after the statutory

deadline for filing objections, and thus, standing alone, it was untimely. See TEX.

PROP. CODE § 21.018(a).

13 Pappas contends that any deficiency in the appearance of substitute counsel

as an objection was cured by the later filed “further objections.” We have rejected

the argument that the appearance of substitute counsel qualified as an “objection,”

such that its deficiencies could be considered cured by the later filing. For its

relation-back argument, Pappas relies on Sinclair v. City of Center, 107 S.W.2d

921 (Tex. Civ. App.—Beaumont 1937, writ ref’d). In Sinclair, the court of appeals

held that later-filed “objection and exceptions” related back to timely-filed

“objection and exceptions” because they did no more than correct a “mere

irregularity,” which was the party’s failure to sign the earlier document. Sinclair,

107 S.W.2d at 922. The late-filed objections filed by Pappas Restaurants did more

than correct a mere irregularity—they were the original and untimely attempt to

file a written statement of objections and their grounds. We conclude that the

untimely-filed objections did not “relate back” to the notice of appearance of

substitute counsel, and we overrule Pappas’s first issue.

C. Tolling of time for filing objections

In its second issue, Pappas argues that the time for filing objections to the

special commissioners’ award was tolled because the clerk failed to serve the

attorneys of record with notice of the commissioners’ decision.

The Property Code requires the clerk of court to “send notice of the

decision” by the special commissioners “by certified or registered United States

14 mail, return receipt requested, to the parties in the proceeding, or to their attorneys

of record, at their addresses of record.” TEX. PROP. CODE § 21.049. It is undisputed

that the clerk served notice of the special commissioners’ decision on Alysia E.

Perry, the registered agent for both Pappas Restaurants and Pappas Bar-B-Q.

While conceding that the Texas Rules of Civil Procedure were not “directly

applicable” during the administrative phase of proceedings, including service of

the commissioners’ award, Pappas contends we should treat Rule 8 as a persuasive

authority and find that service on “the parties” was insufficient when their

attorneys had filed appearances. Cf. TEX. R. CIV. P. 8 (requiring communications in

judicial proceedings to be sent to attorney, as opposed to represented party). We

decline the invitation to use an inapplicable rule of procedure to depart from the

plain and unambiguous text of a directly applicable statute. See John v. State, 826

S.W.2d 138, 140 (Tex. 1992) (finding that because the language of Property Code

Section 21.049 “is clear and unambiguous, it should be enforced as written, giving

its terms their usual and ordinary meaning, and without resorting to the rules of

construction”). We hold that the clerk of court properly may serve notice of the

special commissioners’ decision on the parties in the proceeding, at their addresses

of record. TEX. PROP. CODE § 21.049; accord Oncor Elec. Delivery Co., LLC v.

Brockriede, Nos. 02-13-00071-CV & 02-13-00072-CV, 2013 WL 6564276, at *1–

2 (Tex. App.—Fort Worth Dec. 12, 2013, no pet.) (mem. op.).

15 Pappas attempts to distinguish a Fort Worth Court of Appeals decision that

reached the same conclusion, arguing that there was no appearance of counsel on

the record in Oncor Electric Delivery Co., LLC v. Brockriede, Nos. 02-13-00071-

CV & 02-13-00072-CV, 2013 WL 6564276 (Tex. App.—Fort Worth Dec. 12,

2013, no pet.) (mem. op.), while attorneys did appear in this case. But the Oncor

opinion referred to the property owners’ “counsel of record.” See Oncor, 2013 WL

6564276, at *1–2. In addition, this distinction is immaterial because the analysis in

Oncor was based on the text of the statute, and it was not contingent on whether

there had been an appearance of counsel. See id.

Finally while Pappas relies on several cases for the proposition that service

only on a represented party is insufficient, none of those cases arise from

condemnation proceedings or implicate the special statutory procedures used in

such cases. See In re Household Fin. Corp. III, No. 14-08-00673-CV, 2008 WL

5220542, at *8 (Tex. App.—Houston [14th Dist.] 2008, orig. proceeding) (petition

for writ of mandamus from case seeking excess tax-sale proceeds); Lester v.

Capital Indus., Inc., 153 S.W.3d 93, 96–97 (Tex. App.—San Antonio 2004, no

pet.) (breach of contract); Morin v. Boecker, 122 S.W.3d 911, 914 (Tex. App.—

Corpus Christi 2003, no pet.) (forcible entry and detainer); Osborn v. Osborn, 961

S.W.2d 408, 411 (Tex. App.—Houston [1st Dist.] 1997, pet. denied) (default

16 judgment); Rolon v. Rolon, 907 S.W.2d 670, 671 (Tex. App.—Beaumont 1995, no

pet.) (divorce).

Because service solely on a represented party satisfies the requirements of

Section 21.049, and it is undisputed that Pappas was served with notice of the

commissioners’ award, we hold that the time for filing objections was not tolled.

We overrule the second issue.

III. Jurisdiction of special commissioners

In the third issue, Pappas argues that the trial court erred by denying a

motion for new trial which asserted that the special commissioners lacked

jurisdiction. On appeal, they argue that the State presented no evidence that it

strictly complied with statutory notice-of-hearing requirements. They assert that

the State’s failure to strictly comply with the statute deprived the commissioners of

jurisdiction. They further argue that because the special commissioners lacked

jurisdiction, the trial court’s order adopting the special commissioners’ award is

void.

The State contends that this court lacks jurisdiction to consider this issue

because no appeal may be taken from the trial court’s judgment on the special

commissioners’ award. We agree. The foregoing analysis establishes that Pappas

never initiated an appeal from the special commissioners’ findings, which is the

catalyst for transforming the administrative part of the condemnation proceeding

17 into a judicial proceeding. See Beck, 196 S.W.3d at 786; Brammer, 361 S.W.2d at

200. In the absence of timely filed objections, the court had a ministerial duty to

enter judgment in accordance with the special commissioners’ award, which is

unappealable. See Pearson, 315 S.W.2d at 938; Musquiz, 31 S.W.3d at 666–67.

Accordingly, we overrule the third issue.

Conclusion

Pappas failed to timely file objections to the special commissioners’ award.

As such, the trial court had a ministerial duty to “adopt the commissioners’

findings as the judgment of the court, record the judgment in the minutes of the

court, and issue the process necessary to enforce the judgment.” TEX. PROP. CODE

§ 21.061. We hold that the court correctly entered judgment in this case in the

absence of objections, and we affirm the judgment of the trial court.

Michael Massengale Justice

Panel consists of Justices Keyes, Massengale, and Lloyd.