State v. Heal

884 S.W.2d 864, 1994 Tex. App. LEXIS 2592, 1994 WL 469324

• Court: Court of Appeals of Texas
• Decided: August 31, 1994
• Docket: 05-93-00867-CV
• Status: Published

Opinions

OPINION

THOMAS, Justice.

We must decide whether homeowners who have part of their land taken by power of eminent domain for a highway construction project must be compensated for the diminution in value to the remainder caused by traffic increases. A jury awarded John and Marie Heal $50,000 in damages for the land taken and the diminution in value to their remaining residential property. The State of Texas and City of Dallas (collectively, the State) raise four points of error on appeal, asserting the trial court erred in allowing the jury to consider traffic projections for the year 2010, the closing of nearby city streets, and an appraisal report as bearing on the value of the Heals’ remaining property. The State also urges the trial court erred in denying its amended motion for new trial. We affirm the trial court’s judgment.

FACTUAL BACKGROUND

1. The Controversy

The State filed a petition seeking to condemn 436 square feet of the Heals’ 11,200-square-foot residential lot in connection with a major reconstruction project on North Central Expressway. The lot is improved with a single-family home. The Heals have lived at the location, 7933 Southwestern Boulevard, since 1983. Their properly is on the south side of the street and is the third lot west of Central. The two lots between the Heals’ property and Central’s service road are also improved with single-family homes.

The date of the taking was March 27,1989. The land taken is triangular in shape. The parcel is about seventy feet long: at its easternmost end, the depth is eleven and one-half feet; at its westernmost end, the depth is about one foot. The taking results in an irregular-shaped lot.

Special commissioners were appointed to' hear the case. The commissioners awarded the Heals $10,900. The Heals objected to the award and appealed to the county court-at-law. The case was tried to a jury. The Heals produced expert testimony on the diminished value of the remaining property. The State also presented expert testimony. The jury determined that the value of the part taken was $6,853, and the diminution in value to the remainder was $43,147.

2. The Project

The Heals’ property was taken in connection with what is referred to as the middle portion of the North Central reconstruction project. This portion of the project calls for doubling Central’s traffic lanes from four to eight and increasing the southbound service road approaching Southwestern from three to four lanes. Additionally, Southwestern will be reconfigured. The 436 square feet of land acquired from the Heals will be used for a transitional widening of Southwestern as it approaches Central’s southbound service road. The two-lane collector- street will be expanded to five lanes, two westbound lanes and three eastbound lanes. The widening will allow the intersection to align with a new and larger bridge that will be installed on Southwestern.

The Heals’ property is the last lot directly affected by the transition. The State does not plan to widen Southwestern west of the Heals’ property. Thus, vehicles heading east in front of the Heals’ property will find a widening of the roadway, while those traveling west from Central will see the road narrow. Consequently, the reconfigured road will form a “bottleneck” directly in front of the Heals’ property.

Also in connection with the project, the State will erect a thirteen- to fourteen-foot-high wall to reduce the noise caused by increased traffic. The wall will begin south of Southwestern and provide a noise barrier for persons living on the interior streets between Southwestern and Lovers Lane. Persons living on Southwestern will not benefit from the wall. Because of the sound barrier, the State closed all interior streets feeding onto the southbound service road between Southwestern and Lovers Lane. Traffic from those interior streets will be rerouted onto Southwestern or Lovers Lane. The middle portion of the project is scheduled for completion in the year 2000.

DAMAGES TO THE REMAINDER

1. Parties’ Contentions

The State contends the trial court committed reversible error by allowing the jury to consider traffic projections for the year 2010 and the closing of the five interior roads as factors diminishing the value of the remaining property. The State argues that State v. Schmidt, 867 S.W.2d 769 (Tex.1993), cert. denied, — U.S. —, 114 S.Ct. 2741, 129 L.Ed.2d 861 (1994), and its progeny preclude the jury from considering such evidence in determining diminished market value.

The Heals counter that the amount of traffic passing a residential lot is relevant to a determination of its market value and, particularly, the diminution in market value to the remaining property once a taking has occurred. The Heals argue that the general principles set forth in State v. Carpenter, 126 Tex. 604, 89 S.W.2d 194 (1936), guide the disposition of this case.

2. Applicable Law

Article I, section 17 of the Texas Constitution provides in pertinent part: “No person’s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made....” When part of a person’s property is taken, this provision requires adequate compensation both for the part taken and any severance damages to the remainder. Schmidt, 867 S.W.2d at 772 (citing Buffalo B., B. & Colo. R.R. v. Ferris, 26 Tex. 588, 603 (1863) (applying identical language from Texas Constitution of 1861, article I, section 14)). Likewise, the Texas Property Code provides:

If a portion of a tract or parcel of real property is condemned, the special commissioners shall determine the damage to the property owner after estimating the extent of the injury and benefit to the property owner, including the effect of the condemnation on the value of the property owner’s remaining property.

Tex.PROP.Code Ann. § 21.042(c) (Vernon 1984).

It is the damage to the remainder which is at issue in this case. The supreme court set forth the measure for determining severance damages in its landmark Carpenter decision. Where a part of a tract of land has been taken for a public use, damages- to the remainder tract are to be determined by ascertaining the difference between its market value immediately before and after the appropriation, taking into consideration the nature of the improvements and the use to which the land taken is to be put. Carpenter, 89 S.W.2d at 197.

The court defined market value in terms of a willing-seller/willing-buyer test: the price which the property would bring when it is offered for sale by one who desires, but is not obliged, to sell and is bought by one who is under no necessity of buying. Carpenter, 89 S.W.2d at 202. As to the matters of proof touching on value, the court stated:

Generally it may be said that it is proper as touching the matter of the value and depreciation in value to admit evidence upon all such matters as stdtability and adaptability, surroundings, conditions before and after, and all circumstances which tend to increase or diminish the present market value. Evidence should be excluded relating to remote, speculative, and conjectural uses, as well as injuries, which are not reflected in the present market value of the property.

Carpenter, 89 S.W.2d at 200 (emphasis added). Thus, evidence based on possibilities rather than reasonable probabilities is incompetent. City of Pearland v. Alexander, 483 S.W.2d 244, 247 (Tex.1972). Accordingly, the question of the competency of the evidence bearing on the issue of market value at the time of the taking rests on those factors of reasonable weight in the factual determination of what a willing seller would sell for and what a willing buyer would pay. City of Pearland, 483 S.W.2d at 247. The rule established in Carpenter is as well settled as any in our jurisprudence. Schmidt, 867 S.W.2d at 773.

We disagree with the State’s argument that Schmidt and its progeny control the disposition of this case. Schmidt involved the taking of commercial property to convert a roadway into a controlled access highway in Austin. The court disallowed evidence of four specific factors: diversion of traffic, increased circuity of travel to the property, lessened visibility to passersby, and the inconvenience of construction activities. The court noted that it had in the past refused to allow recovery for loss of value due to diversion of traffic and circuity of travel. Schmidt, 867 S.W.2d at 777. The court saw no reason to treat the remaining two factors differently.

In this case, none of those factors was considered. In fact, the complaint here is not that a landowner will have some loss to his business based on the foür factors cited above. Rather, the complaint concerns an increase in travel on a road fronting a residential lot. Thus, we do not believe that Schmidt is dispositive of the issues presented in this appeal. Accordingly, we will analyze this issue pursuant to long-standing rules regarding compensation for the diminution in value to the remaining property first set out in Carpenter.

3. Application of Law to Facts

The nature of the improvement is the widening of Southwestern as part of the Central expansion project. Although the State argues the tract taken will be used as a grassy parkway, we believe that characterization relies too heavily on the literal use without considering the purpose of the take. The land taken is needed to widen Southwestern to the service road to allow the intersection to be aligned with a new bridge. Therefore, in determining diminished value, we consider the impact this project has on the remainder. See Schmidt, 867 S.W.2d at 772; Carpenter, 89 S.W.2d at 197. All damages, present and prospective, that are the natural, necessary or reasonable incident of the improvement constitute the compensation which our constitution requires to be made. See City of Pearland, 483 S.W.2d at 246.

It is undisputed that the trial evidence established that traffic volume negatively affects the value of residential property. The question is whether, in this case, traffic volume in the year 2010 and increased traffic due to barricaded streets are factors a jury can consider in determining fair market value after the taking.

Traffic volume in 2010. In the first point of error, the State advances two arguments: (i) the traffic counts were not relevant because there was ho showing that the numbers measured traffic increases caused by the project, and (ii) the numbers were too remote, speculative, and conjectural because they look twenty-one years into the future from the date of the taking. The Heals counter that the numbers were the most current available to the State on traffic projections on Central, its service road, Southwestern, and Lovers Lane. Additionally, the Heals contend they were entitled to fully cross-examine the State’s expert on the projections because the projections were used as a basis for her opinions and conclusions.

Terry Marlene Sams, coordinator for the middle portion of the Central reconstruction project, testified extensively about the State’s expansion plans for the freeway and, particularly, Southwestern. Sams, a registered professional civil engineer, stated that the project’s design was based on the 2010 traffic projections, which were contained in a 1987 cross-street operational analysis report. Sams acknowledged that the report was used to formulate the basis of opinions and conclusions concerning the project.

The study reflected traffic patterns in 1987 and in 2010, the year the entire project is slated for completion. Sams testified that prior to the taking, about 900 vehicles per hour passed the Heals’ property. That number is forecasted to increase to 1500 vehicles per hour in 2010. Sams testified that these numbers were the most current available to the State because there were no projections closer to the date of the taking than those contained in the report.

We conclude the traffic projections were admissible for the jury’s consideration as a factor bearing on the question of the fair market value of the property after the taking. The Heals did not introduce the traffic projections on the theory that these damages were recoverable as separate damage elements, but as justification for their opinion that the value of the remainder tract had been damaged and its market value reduced. This project will route a significant increase in traffic onto Southwestern directly in front of the Heals’ property. These were the traffic projections relied on by the State in redesigning Southwestern and creating a bottleneck in front of the Heals’ driveway. There is nothing speculative or conjectural about the fact that the Heals’ property will front a five-lane major thoroughfare at the turn of the century as opposed to a two-lane collector road before the taking. There is nothing speculative or conjectural about the fact that the road will carry sixty-percent more vehicles at that time.

The knowledge that the remaining property will be so burdened certainly bears on what a willing buyer would pay a willing seller in today’s market. As the date approaches and the project becomes a reality, certainly the property’s value -will be even more affected. But it is the impact of that project, at its completion, on the property’s fair market value after the taking that a jury can consider. We overrule the State’s first point of error.

Barricading of city streets. In the second point of error, the State argues that its decision to close five interior streets between Southwestern and Lovers Lane was not admissible to show damages to the remaining property. Specifically, the State contends (i) the damages did not result from the taking but from the State’s new use of its existing right-of-way, and (ii) alternatively, any injury was a non-compensable “community damage.” The Heals contend the jury was entitled to assess the benefits and/or injuries created by constructing the sound wall.

Sams testified that, after being approached by a neighborhood group, the State agreed to construct a sound wall along the service road as a barrier to noise. The wall will be constructed fifty feet south of the intersection of Southwestern and the service road and will extend south to Lovers Lane. To erect that wall, however, the State must close the five interior streets and reroute the traffic. Although the wall will provide noise protection for the five interior streets, Sams acknowledged that persons living on Southwestern will derive no benefit. The increased traffic will be forced into a “bottleneck,” specifically created by this project, directly in front of the Heals’ property.

We conclude the increased traffic due to the barricading of the streets was admissible as a factor for the jury to consider in assessing damages resulting from the taking. The taken property will be used to expand Southwestern. The State closed the roads to buffer noise due to increased traffic along the service road and Central. However, the State had to be able to reroute that traffic onto roads which could sustain the flow. Without the taking of the Heals’, land, Southwestern would not have been an option.

Thus, we believe the damage results from the taking of the Heals’ property. Any other conclusion would require the Heals to sustain a burden on their property, created by the State to relieve others of increased highway noise, without any benefit and without assessing that burden on the diminished value of the remaining property. The law requires just compensation for the damages occasioned to the remainder by reason of the taking and the construction of the improvement for which the land was appropriated. See Carpenter, 89 S.W.2d at 197.

We next consider the State’s assertion that the injury is a “community damage.” The property code precludes recovery for community damages. Section 21.042(d) provides:

In estimating injury or benefit under Subsection (c), the special commissioners shall consider an injury or benefit that is peculiar to the property owner and that relates to the property owner’s ownership, use, or enjoyment of the particular parcel of real property, but they may not consider an injury or benefit that the property owner experiences in common with the general community.

Tex.PROP.Code Ann. § 21.041(d) (Vernon 1984). The mere fact that injury is common to everyone on a street does not bar recovery. Texarkana & N.W.R.R. v. Goldberg, 68 Tex. 685, 5 S.W. 824 (1887) (homeowner had not suffered only community .damages by construction of railroad tracks in street abutting his property such that there was room for only one car to pass at a time and sparks from trains posed danger to his buildings). It is also not special injury simply because others farther away do not suffer at all. Schmidt, 867 S.W.2d at 781. As the court explained in Schmidt:

Whether an injury is community cannot be decided simply by setting the size of the relevant area. “Community” in this context means not only where, but, more importantly, what kind. It is the nature of the injury rather than its location that is critical in determining whether it is community.

Schmidt, 867 S.W.2d at 781.

We conclude the Heals’ property does suffer a peculiar injury: their driveway will sit at the top of a bottleneck specifically created by this project. The increased traffic will be forced into this bottleneck. The Heals testified it will be more difficult to enter and exit the driveway because of that configuration. Although property owners to the east of the Heals will also suffer the impact of the increased traffic, the Heals will suffer an injury that is not common with the general community. We overrule the second point of error.

ADMISSION OF NOTICE OF APPRAISED VALUE

In the third point of error, the State contends the trial court erred by admitting a notice of appraised value of the Heals’ property prepared by the Dallas Central Appraisal District (the District). The State asserts the notice was hearsay. The Heals argue the document is a statement against interest, pursuant to rule 803(24) of the rules of civil evidence, and was thus admissible as an exception to the hearsay rules.

Defense exhibit number four is the District’s notice to the Heals of the appraised value of their property: $140,040. The single-page exhibit has the name and address of the Dallas Central Appraisal District. It lists, presumably, five taxing entities and the taxable value of their residence, excluding the homestead exemption. One entity listed is the City of Dallas.

To be admissible under rule 803(24), the document must be a statement against the pecuniary interests of the City of Dallas.¹ At trial, the Heals argued the District was an agent of the City of Dallas; thus, the notice was an admission by the City as to the property’s value. On appeal, the Heals argue the appraisal notice was offered for the limited purpose of showing a decrease in the value of their property, not to establish a specific dollar amount after the taking. The Heals contend the notice is relevant and had no prejudicial effect on the State. We conclude that while, the notice may be relevant, it is inadmissible hearsay.

The Dallas Central Appraisal District was created pursuant to section 6.01 of the property tax code. The district is a political subdivision of the State. Tex.Tax Code Ann. § 6.01(c) (Vernon 1992). As such, it is separate and distinct from the City of Dallas. Cf Plano Indep. Sch. Dist. v. Oake, 682 S.W.2d 359, 361 (Tex.App.—Dallas 1984) (holding that Collin County Central Appraisal District was not Collin County and was therefore required to file an appeal bond), rev’d on other grounds, 692 S.W.2d 454 (1985).

The property tax code expressly provides that the appraisal district is responsible for appraising properties for ad valorem taxes for the taxing units that impose such a tax on property in the district. Tex.Tax Code Ann. § 6.01(b). Thus, the district appraises the property, and the City of Dallas then assesses a tax rate based on the total appraisal. The fact that the City of Dallas is statutorily compelled to accept the district’s appraised value of the Heals’ property does not make the appraisal the act of the City of Dallas.²

The Heals contend that State v. Stiefer, 443 S.W.2d 275 (Tex.Civ.App.—Tyler 1969, writ ref'd n.r.e.), is controlling. We disagree. Stiefer involved the question of the fair market value of Stiefer’s remaining property. To show the property’s value immediately before the taking, Stiefer offered a letter from the city tax assessor-collector assessing the property’s reasonable cash market value. The letter stated that the tax assessor-collector had been instructed by the city to appraise the property. The court noted that there was no dispute that the city instituted the re-evaluation program which resulted in the setting of the value on the property. The court then concluded that fixing the market value of the property in question was an act of the governing body of the City of Tyler, not the city tax assessor-collector, and was thus admissible as a statement against interest. See Stiefer, 443 S.W.2d at 278. Our case is distinguishable from Stiefer because no affirmative act of the City was required to institute the District’s appraisal. We therefore agree that the trial court erred in admitting this document as a statement against interest.

Having found trial court error, we must review the entire record to determine whether the State was harmed by its admission. In doing so, we look to see whether the admission of the document amounted to such a denial of the State’s rights that it was reasonably calculated to cause and probably did cause the rendition of an improper judgment. See Tex.R.App.P. 81(b)(1).

There was an abundance of testimony regarding diminution in the fair market value of the remaining property immediately before and after the taking. Mrs. Heal testified she is a real estate broker and has sold residential properties in her neighborhood. She stated her property’s fair market value immediately before the taking was $198,000. She estimated its value after the taking had been reduced by $75,000 to $80,000. In support of this opinion, Mrs. Heal said a real estate broker indicated, after the taking, that she would list the residence for sale at $125,-000 to $135,000. Mrs. Heal also testified that the house next door, which was of similar age and construction, sold after the taking for $142,500.

The Heals’ expert, real estate appraiser Leon Hurse, testified that the remaining property’s market value before the taking was $223,896 and was $130,000 after the taking. He valued the part taken at $6,104. Hurse arrived at those figures by comparing the Heals’ property with similar properties that had sold in the market, including the house next door' to the Heals.

The State produced one expert on value. Real estate appraiser Marlin Blake testified the remaining property’s fair market value before the taking was $192,600 and fell to $187,100 after the take, based on comparable sales. Blake valued the part taken at $5,400.

We conclude, based on this evidence, that the admission of the appraisal notice was harmless. Cf. State v. Schaefer, 530 S.W.2d 813, 815 (Tex.1975) (evidence harmful because it put before jury erroneous theory and it was only possible basis for award). Mrs. Heal and Blake both testified that the fair market value of the entire property prior to the taking was $198,000. Testimony also established that the house next door to the Heals, which was similar in age and construction, sold after the taking for $142,500. The difference between these two numbers nearly equals the amount of damages assessed by the jury. Thus, we cannot conclude that the jury’s award was more likely than not based on the appraisal notice. In fact, it is just as likely that the award was based on the amount of the sale of the house next door. Because we cannot conclude that the admission of the evidence resulted in an improper judgment, we hold the error was harmless. Accordingly, we overrule the third point of error.³

AMENDED MOTION FOR NEW TRIAL

In the fourth point of error, the State complains the trial court committed reversible error by refusing to grant its amended motion for new trial. The motion was based on the various complaints we have considered regarding the admissibility of evidence of traffic increases. Our conclusion that that evidence was admissible necessarily disposes of this point of error.

We affirm the trial court’s judgment.

CHAPMAN, J., dissents.

1 . Rule 803(24) provides:

(24) Statement against interest. A statement which was at the time of its making so far contrary to the declarant’s pecuniary or proprietary interest, or so far tended to subject him to civil or criminal liability, or to render invalid a claim by him against another, or to make him an object of hatred, ridicule, or disgrace, that a reasonable man in his position would not have made the statement unless he believed it to be trae.

Tex.R.Civ.Evid. 803(24).

2 . A taxing unit is entitled to challenge before the appraisal review board the level of appraisals of any category of property, but not the appraised value of a single taxpayer’s property. See Tex.Tax Code Ann. § 41.03(1) (Vernon 1992).

3 . The Heals did not argue on appeal that the statement was an admission against the State’s interest. In light of our disposition of this point of error, we decline to address the issue.