State v. Clear Channel Outdoor, Inc.

• Court: Court of Appeals of Texas
• Decided: July 31, 2008
• Docket: 14-07-00369-CV
• Status: Published

Opinion

Affirmed and Memorandum Opinion filed July 31, 2008

Affirmed and Memorandum Opinion filed July 31, 2008.

In The

Fourteenth Court of Appeals

____________

NO. 14-07-00369-CV

THE STATE OF TEXAS, Appellant

V.

CLEAR CHANNEL OUTDOOR, INC., Appellee

On Appeal from the County Civil Court at Law No. 3

Harris County, Texas

Trial Court Cause No. 856217

M E M O R A N D U M   O P I N I O N

The State of Texas instituted a condemnation action against various entities, including the owner of a leasehold interest who maintained a billboard on the condemned land.  Both the State and the lessee objected to the special commissioners= assessment of damages, and the lessee asserted an inverse-condemnation claim against the State in the trial court.  The State filed a plea to the jurisdiction, in which it claimed that the trial court had no subject-matter jurisdiction based on sovereign immunity and the lessee=s alleged failure to exhaust administrative remedies.  The State appeals the trial court=s denial of its plea.  We affirm the trial court=s order. 

I.  Factual and Procedural Background

          Appellant, The State of Texas, filed a petition in the trial court seeking to condemn a parcel of land for a state highway project.  Appellee Clear Channel Outdoor, Inc. (hereinafter AClear Channel@) held a leasehold interest in the land through the year 2019 and owned a billboard that was erected on the property in question.  In its petition for condemnation, the State named Clear Channel as a defendant. 

The trial court appointed special commissioners, who conducted a hearing and assessed damages under section 21.042 of the Texas Property Code.  Both Clear Channel and the State objected to the amount of compensation, triggering a trial de novo in the trial court.^[1]  In the State=s condemnation action, Clear Channel sought to obtain the full amount of adequate and just compensation to which Clear Channel claimed it was entitled under Article I, section 17 of the Texas Constitution, Chapter 21 of the Texas Property Code, and the Fifth Amendment to the United States Constitution.  Clear Channel also asserted an inverse-condemnation counterclaim seeking to recover compensation under Article I, section 17 of the Texas Constitution for the alleged taking, damaging, and destruction of all of Clear Channel=s property interests caused by or arising out of the State=s condemnation action.  

The State filed a plea to the jurisdiction, in which it claimed that the trial court lacked  subject-matter jurisdiction over the counterclaim based on sovereign immunity and Clear Channel=s alleged failure to exhaust administrative remedies. The trial court denied the State=s plea to the jurisdiction.  The State brings this appeal from the trial court=s order denying its plea to the jurisdiction.^[2]

II.  Issues For Review

On appeal, the State presents the following issues for review:

(1)     Whether a claim for damages to personal property, a billboard, falls under the waiver of sovereign immunity under Article I, section 17 of the Texas Constitution when the State has not taken ownership of the billboard and when the owner of the billboard is free to relocate and continue using the billboard with the assistance of the State but has declined to accept such assistance.

(2)     Whether a claim for damages to personal property, a billboard, falls under the waiver of sovereign immunity for condemnation damages of Chapter 21 of the Texas Property Code when the billboard is not a component of the claimant=s leasehold interest in the condemned real property.

(3)     Whether the State has waived sovereign immunity for alleged condemnation damages for lost advertising contracts.

(4)     Whether the Federal Uniform Relocation Act requires the State to condemn a billboard when the State condemns the real property that is the site of the billboard, thereby waiving sovereign immunity for condemnation damages to the billboard.

(5)     Whether either the Federal or Texas Highway Beautification Acts requires the State to condemn a billboard when the State condemns the real property that is the site of the billboard, thereby waiving sovereign immunity for condemnation damages to the billboard.

(6)     Whether the Texas Department of Transportation has exclusive jurisdiction over relocation assistance compensation for billboards displaced by condemnation when the condemnation is undertaken in furtherance of a highway development project.

(7)     Whether estoppel applies against the State for the purposes of establishing a waiver of sovereign immunity for condemnation damages to personal property, a billboard, under either Article I, section 17 of the Texas Constitution or Chapter 21 of the Texas Property Code.

III.  Standard of Review

We review a trial court=s ruling on a plea to the jurisdiction de novo.  Tex. Dep=t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).  When a party has filed a plea to the jurisdiction challenging the pleadings, a reviewing court must construe the pleadings liberally in favor of the pleader and look to the pleader=s intent.  See id.  If the facts alleged affirmatively demonstrate the trial court=s jurisdiction to hear the cause, the plea to the jurisdiction must be denied.  See id.  If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court=s jurisdiction, but do not affirmatively demonstrate incurable defects in the jurisdiction, the issue is one of pleading sufficiency, and the plaintiffs should be afforded the opportunity to amend.  See id.  If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing an opportunity to amend.  See id. at 227. 

If in its plea to the jurisdiction a party challenges the existence of jurisdictional facts, the reviewing court considers relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised, as the trial court is required to do.  See id.  If the evidence creates a fact question regarding the jurisdictional issue, then the plea to the jurisdiction must be denied.  See id. at 227B28.  However, if the relevant evidence is undisputed or fails to raise a fact question on the jurisdiction issue, then the court rules on the plea to the jurisdiction as a matter of law.  Id. at 228.  In ruling on a plea to the jurisdiction, a court does not consider the merits of the parties= claims.  See id. at 226B28; County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). 

In an interlocutory appeal from the denial of a plea to the jurisdiction, our review is limited to the grounds asserted in the plea that the trial court denied.  See State v. Fiesta Mart, Inc., 233 S.W.3d 50, 54 (Tex. App.CHouston [14th Dist.] 2007, pet. denied);  Austin Indep. Sch. Dist. v. Lowery, 212 S.W.3d 827, 834 (Tex. App.CAustin 2006, pet. denied); Brenham Hous. Auth. v. Davies, 158 S.W.3d 53, 61 (Tex. App.CHouston [14th Dist.] 2005, no pet.).

IV.  Analysis

A.      Did the property owner properly plead its counterclaim for inverse condemnation so as to bring it within the waiver of sovereign immunity under Article I, section 17 of the Texas Constitution?

In its first issue, the State asserts that Clear Channel failed to invoke the trial court=s subject-matter jurisdiction because the facts alleged in the counterclaim are not sufficient to show a compensable taking within the ambit of Article I, section 17 of the Texas Constitution (hereinafter ATakings Clause@).

The State is generally immune from suit absent an express waiver of its sovereign immunity.  State v. Holland, 221 S.W.3d 639, 643 (Tex. 2007).  However, sovereign immunity does not shield the State from a claim for compensation based upon a taking under the Takings Clause.  See Tex. Const. art. I, ' 17; Holland, 221 S.W.3d at 643.  The Takings Clause mandates that A[n]o person=s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person . . . .@  Tex. Const. art. I, ' 17.  Generally, the State compensates property owners before appropriating their property, either by paying a mutually agreed price or by paying the value as determined in a statutory condemnation proceeding.  See Westgate, Ltd. v. State, 843 S.W.2d 448, 452 (Tex. 1992).  If, however, the State appropriates property without paying adequate compensation, the property owner may recover the resulting damages through an inverse-condemnation claim.  See id.  An inverse condemnation may occur when the government physically appropriates or invades the property, or when it unreasonably interferes with the landowner=s right to use and enjoy the property, such as by restricting access or denying a permit for development.  See id.

To properly assert an inverse-condemnation claim against the State, a party must plead the following elements:  (1) the State intentionally performed an act in the exercise of its lawful authority; (2) that resulted in the taking, damaging, or destruction of the party=s property; (3) for public use.  See Gen. Servs. Comm=n v. Little-Tex Insulation Co., 39 S.W.3d 591, 598 (Tex. 2001); Steele v. City of Houston, 603 S.W.2d 786, 790B91 (Tex. 1980); see also State v. Hale, 146 S.W.2d 731, 736 (1941). 

In its counterclaim for inverse condemnation, Clear Channel states that it seeks to recover compensation under the Takings Clause for the taking, damaging, and destruction of all of its property interests, whether characterized as real or personal, tangible or intangible, caused by or arising out of the State=s condemnation in the trial court, including but not limited to, Clear Channel=s billboard, leasehold, permits, and advertising contracts.  Clear Channel alleges that A[t]he State intentionally exercised its power of eminent domain to take the property interest of Clear Channel for public use, specifically the expansion of the Katy Freeway.@  Clear Channel seeks the full amount of adequate compensation to which it is entitled under the Takings Clause.^[3] 

In reviewing the State=s challenge to Clear Channel=s pleadings, we construe the pleadings liberally in favor of Clear Channel and look to Clear Channel=s intent.  See Miranda, 133 S.W.3d at 226.  Under this standard of review, we conclude that, in its counterclaim, Clear Channel pleaded all the elements of an inverse-condemnation claim and alleged facts affirmatively demonstrating that the trial court has  jurisdiction to hear the claim because sovereign immunity has been waived under the Takings Clause.^[4]  See Miranda, 133 S.W.3d at 226; Steele, 603 S.W.2d at 791; Fiesta Mart, Inc., 233 S.W.3d at 56; Harris County v. Progressive Nat=l Bank, 93 S.W.3d 381, 384 (Tex. App.CHouston [14th Dist.] 2002, pet. denied).

The State also makes the following assertions:

!       The State has not taken ownership or possession of Clear Channel=s billboard.

!       The State has not harmed or destroyed the billboard.

!       The State has not impaired Clear Channel=s use of the billboard, because, among other things, the amortization plan in section 4617 of the Houston Building Code is constitutional and its enforcement against Clear Channel would allow Clear Channel to continue to earn income from the operation of its billboard at a new location for ten years under a special operating permit.^[5]

!       The State never intended to take or destroy the billboard because it initiated this condemnation project with the intent to offer Clear Channel relocation assistance in connection with the removal and possible relocation of Clear Channel=s billboard.

On appeal, the State does not provide any record citations to evidence in support of these assertions.  Nor has the State provided any argument, analysis, or record citations in support of an argument that it conclusively proved these matters in an alleged challenge to the existence of jurisdictional facts.  See Miranda, 133 S.W.3d at 227.  Therefore, we conclude that the State has waived these assertions.  See Tex. R. App. P. 38.1(h); San Saba Energy, L.P. v. Crawford, 171 S.W.3d 323, 337 (Tex. App.CHouston [14th Dist.] 2005, no pet.).  In any event, our record reflects that the State did not present evidence to the trial court in support of its plea to the jurisdiction in an attempt to conclusively prove these matters and negate the existence of jurisdictional facts.  Given that we are reviewing the trial court=s ruling on a plea to the jurisdiction and that we are not dealing with a challenge to jurisdictional facts, any inquiry into the evidentiary support for these assertions would be an impermissible inquiry into the merits of Clear Channel=s claims.  See Fiesta Mart, Inc., 233 S.W.3d at 55B56. 

Finally, the State asserts that Clear Channel has consented to any alleged taking or  damaging of Clear Channel=s billboard.  However, consent is an affirmative defense that the State has the burden to plead and to prove.  See City of Houston v. Crabb, 905 S.W.2d 669, 674B75 (Tex. App.CHouston [14th Dist.] 1995, no writ).  In its inverse-condemnation claim, Clear Channel did not have to plead lack of consent, and it did not do so.  See id.  The State correctly notes that, if Clear Channel=s pleading affirmatively showed that Clear Channel had consented to the alleged taking, then Clear Channel would have failed to properly allege an inverse-condemnation claim and the trial court would lack subject-matter jurisdiction over the claim.  However, in its pleading, Clear Channel does not claim to have consented to the alleged taking, and Clear Channel does not allege any facts that, if true, would constitute consent to the alleged taking.  Therefore, the issue of consent is not relevant to the trial court=s ruling on the State=s plea to the jurisdiction.^[6]  See Fiesta Mart, Inc., 233 S.W.3d at 55B56; Crabb, 905 S.W.2d at 674B75.

Finding no merit in the arguments asserted, we overrule the State=s first issue.^[7]

B.      Does the property owner=s failure to pursue relocation benefits deprive the trial court of subject-matter jurisdiction over the inverse-condemnation claim?

In its sixth issue, the State asserts that Clear Channel=s failure to pursue administrative remedies precludes Clear Channel=s recovery of any relocation benefits that are available under administrative regulations promulgated by the Texas Department of Transportation.  Because Clear Channel has not sought these benefits, the State claims that the trial court lacks jurisdiction over Clear Channel=s inverse-condemnation claim.  The State has cited no authority holding that failure to pursue these relocation benefits precludes a trial court from having jurisdiction over an inverse-condemnation claim, and this court has held to the contrary.^[8]  See Fiesta Mart, Inc., 233 S.W.3d at 57.  Accordingly, we overrule the State=s sixth issue.^[9]

V.  Conclusion

 Under the applicable standard of review, we conclude that Clear Channel incorporated  all of the elements of an inverse-condemnation claim in its counterclaim and alleged facts affirmatively demonstrating the trial court=s subject-matter jurisdiction.  In addition, we conclude that Clear Channel=s failure to pursue relocation benefits does not deprive the trial court of subject-matter jurisdiction.  Having concluded that the State=s arguments lack merit, we affirm the trial court=s order denying the State=s plea to the jurisdiction.

/s/      Kem Thompson Frost

Justice

Judgment rendered and Memorandum Opinion filed July 31, 2008.

Panel consists of Justices Fowler, Frost, and Seymore.

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^[1]  See PR Investments v. State, 251 S.W.3d 472, 476 (Tex. 2008).

^[2]  See Tex. Civ. Prac. & Rem. Code. Ann. ' 51.014(a)(8) (Vernon Supp. 2007).

^[3]  Clear Channel also seeks the full amount of just and adequate compensation to which it is entitled under the Fifth Amendment to the United States Constitution; however, that claim is not an issue in this appeal.

^[4]  In its plea to the jurisdiction, the State challenged the sufficiency of Clear Channel=s pleadings. However, the State did not attach any evidence to its plea to the jurisdiction, and the State did not challenge the existence of any jurisdictional facts in its plea.  The State subsequently filed a combined brief in support of its plea to the jurisdiction and response in opposition to Clear Channel=s motion for summary judgment.  Although the State did attach evidence to this document, the State made it clear that this evidence was attached in support of its response in opposition to Clear Channel=s motion for summary judgment. 

^[5]  To the extent the State may be arguing that Clear Channel has been adequately compensated due to the availability of relocation assistance, this argument would not be relevant to the jurisdictional inquiry because adequate compensation is an affirmative defense that the State has the burden to plead and prove.  See City of Houston v. Crabb, 905 S.W.2d 669, 674B75 (Tex. App.CHouston [14th Dist.] 1995, no writ).  Clear Channel does not have to plead inadequate compensation as part of its inverse-condemnation claim.  See id.

^[6]  In any event, we note that the State did not plead consent in the trial court, nor did it present evidence conclusively proving consent.

^[7]  In its second issue, the State asserts that Clear Channel=s inverse-condemnation claim does not fall under the waiver of sovereign immunity contained in Chapter 21 of the Texas Property Code.  Clear Channel does not assert that there is a waiver of sovereign immunity under Chapter 21; therefore, we overrule the second issue.  In its third issue, the State asserts it has not waived sovereign immunity for a separate award of alleged damages based on lost advertising contracts.  However, the State did not assert this ground in its plea to the jurisdiction.  Accordingly, we overrule the third issue.  See Fiesta Mart, Inc., 233 S.W.3d at 54;  Lowery, 212 S.W.3d at 834; Davies, 158 S.W.3d at 61.  In its fourth and fifth issues, the State asserts that three statutes do not require the State to condemn Clear Channel=s billboard and thereby waive sovereign immunity.  Clear Channel does not argue that these statutes require the State to condemn its billboard and has not based its assertion that sovereign immunity is waived on these statutes.  Accordingly, we overrule the State=s fourth and fifth issues. 

^[8] The State also asserts that the billboard was personal property at the time of the condemnation rather than a fixture that was part of the real property.  However, this issue is not before this court because the State did not assert this ground in its plea to the jurisdiction.  See Fiesta Mart, Inc., 233 S.W.3d at 54;  Lowery, 212 S.W.3d at 834; Davies, 158 S.W.3d at 61.  Moreover, any inquiry into this issue would be an impermissible inquiry into the merits of Clear Channel=s claims.  See Fiesta Mart, Inc., 233 S.W.3d at 55B56.  The State also asserts that, under sections 203.051 and 203.052 of the Texas Transportation Code, the State has no authority to condemn personal property such as Clear Channel=s billboard.  The State did not assert this ground in its plea to the jurisdiction and therefore we may not consider it.  See Fiesta Mart, Inc., 233 S.W.3d at 54; Davies, 158 S.W.3d at 61.  In addition, it is not clear how this alleged lack of authority would deprive the trial court of subject-matter jurisdiction over Clear Channel=s inverse-condemnation claim. 

^[9]  In its seventh issue, the State asserts that Clear Channel cannot use estoppel to create a waiver of sovereign immunity that otherwise would not be available.  The State did not assert this ground in its plea to the jurisdiction.  See Fiesta Mart, Inc., 233 S.W.3d at 54; Davies, 158 S.W.3d at 61.  In addition, Clear Channel is not asserting a waiver of sovereign immunity based on estoppel.