Gilchrist Community Association v. County of Galveston, Texas ( 2018 )

Motion denied; Reversed in Part and Remanded, and Memorandum Opinion
filed December 21, 2018.
In the
Fourteenth Court of Appeals
NO. 14-17-00681-CV
GILCHRIST COMMUNITY ASSOCIATION, Appellant
v.
COUNTY OF GALVESTON, TEXAS, Appellee
On Appeal from the County Court at Law No 2
Galveston County, Texas
Trial Court Cause No. CV-0076026
MEMORANDUM OPINION
This appeal involves a condemnation suit brought by Galveston County
against the Gulf Coast Rod, Reel and Gun Club (the Club) and Gilchrist
Community Association (GCA). GCA challenges the trial court’s judgment in two
issues. First, GCA contends the trial court erred by concluding it lacked standing.
Second, GCA contends the trial court erred in granting summary judgment in favor
of Galveston County because Galveston County lacked statutory authority to
condemn the property. The Club does not itself appeal the trial court’s judgment
but has submitted a brief challenging GCA’s appeal. Galveston County moves to
dismiss GCA’s appeal for lack of standing. We deny the motion, reverse in part,
and remand.
I. BACKGROUND
Rollover Pass is a piece of property on Bolivar Peninsula. In March 2016,
Galveston County filed a petition in condemnation seeking to condemn the
property. At the time Galveston County filed suit and for many years prior, the
Club owned the property while GCA managed and maintained it. In its petition,
Galveston County named the Club as the owner of the property. GCA filed a
notice of appearance in the suit, claiming to be a tenant of the property.
The trial court appointed special commissioners, and GCA appeared at the
special commissioners’ hearing on the condemnation. At the conclusion of the
proceeding, the special commissioners awarded the Club $1,600,000 for the
property. The special commissioners made no award to GCA. GCA objected.
After GCA’s objection, on August 16, 2016, Galveston County amended its
petition to include GCA as a defendant. The petition described GCA as “an entity
which either owns, possesses, or claims some interest in title to the land
described[.]”
On August 24, 2016, Galveston County deposited the amount awarded by
the special commissioners into the court’s registry.
On March 21, 2017, Galveston County filed a motion for summary judgment
regarding its right to take. In a footnote, Galveston County noted that it disputed
GCA’s claim to any ownership interest in the property. Both the Club and GCA
responded to the motion for summary judgment. On April 19, 2017, the trial court
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granted partial summary judgment on Galveston County’s right to take and granted
possession to Galveston County.1 The value of the property had yet to be
determined.
Subsequently, Galveston County filed a Motion to Require Proof of
Standing or, Alternatively, to Preclude the Offer of Evidence (“Motion to Require
Proof of Standing”). In the motion, Galveston County argued that GCA lacked
standing to seek affirmative relief, or alternatively, should be precluded from
offering evidence at trial. Galveston County asserted that GCA lacked standing
because GCA had “no personal stake in the litigation at the time the condemnation
was filed.” In its reply in support of its motion, Galveston County prayed for the
trial court to “dismiss the GCA as a party” after “find[ing] the GCA lacks
standing.” On July 21, 2017, the trial court signed an order granting the motion “in
all respects,” ordering that GCA “lacks standing in this cause, and in the event of
trial, shall be precluded from offering evidence of any kind.”
On July 26, 2017, Galveston County and the Club entered into an agreed
final judgment in which the court found Galveston County was entitled to
condemn the property and the Club should be awarded $1,750,000 as
compensation. In addition to awarding condemnation to the County and the
settlement payment to the Club, the amended agreed final judgment stated that
GCA was not entitled to any compensation for the taking of Rollover Pass because
of the trial court’s finding that GCA lacked standing:
IT IS FURTHER ORDERED that, in light of this Court’s ruling on
July ___, 2017 (sic), granting Petitioner’s Motion and Supplemental
1
GCA filed a notice of appeal on April 25, 2017, seeking to appeal the trial court’s
partial summary judgment. This court docketed the appeal as cause number 14-17-00348-CV,
but later dismissed the appeal because the partial summary judgment was unappealable as an
interlocutory order.
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Motion to Require Proof of Standing or, Alternatively, to Preclude the
Offer of Evidence, and finding Defendant, Gilchrist Community
Association, to lack standing in this proceeding, any claim by
Defendant, Gilchrist Community Association, for adequate
compensation for the taking in this proceeding; reasonable and
necessary fees for attorneys, appraisers, experts, or other expenses; or
any other request for affirmative or monetary relief of any kind is
DENIED.
This appeal followed.
II. ANALYSIS
GCA argues that the trial court erred in holding that GCA lacked standing.
GCA also argues that the trial court erred by granting summary judgment on
Galveston County’s right to take because Galveston County’s “declared purpose of
building a park was a subterfuge for assisting the [General Land Office of Texas]
in closing Rollover Pass.” Galveston County moves to dismiss the appeal
contending this court lacks jurisdiction because GCA lacks standing to bring the
appeal.
A. Standing to appeal
As a threshold issue, we must determine the matter of this court’s
jurisdiction. Galveston County’s motion to dismiss GCA’s appeal asserts that
GCA has no standing to appeal because GCA does not have an ownership interest
in the property at issue. This argument is without merit.
Generally, a named party to the suit can bring an appeal. See City of San
Benito v. Rio Grande Valley Gas Co., 109 S.W.3d 750, 754 (Tex. 2003). To
appeal an alleged error, a party must show that the error injuriously affects it.
Torrington Co. v. Stutzman, 46 S.W.3d 829, 843 (Tex. 2000). Contrary to
Galveston County’s assertion, ownership of property is not required to make this
showing in a case involving property. Id. at 844 (“We held that Bi-Ed could
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appeal despite the fact that it asserted no ownership interest in the property,
reasoning that it had a ‘justicable interest’ in pursuing the case. . . . This is in
accord with our well-established rule that, to appeal an alleged error, a party must
show that the error injuriously affects it.”); Bi-Ed Ltd. v. Ramsey, 935 S.W.2d 122,
123 (Tex. 1996) (plaintiff had standing to appeal judgment against it in action
against city and owner of adjacent property for alleged wrongful obstruction of
access to road on adjacent property, since trial court’s judgment refused to grant
any of relief sought by plaintiff).
Galveston County’s contention that GCA has no standing to appeal because
GCA does not have an interest in the property is one of the very issues that GCA
appeals. To support its argument that the trial court erred by granting Galveston
County’s Motion to Require Proof of Standing, GCA argues that it has a justiciable
interest in the property. This court has jurisdiction to review questions of standing
and jurisdiction. State v. Naylor, 466 S.W.3d 783, 787 (Tex. 2015) (“We always
have jurisdiction to resolve questions of standing and jurisdiction.”). Because
GCA is a named defendant in the underlying suit and because GCA appeals the
trial court’s standing determination against it, we reject Galveston County’s
argument that GCA has no standing to appeal.2 We deny Galveston County’s
motion to dismiss and proceed to address the merits of GCA’s appeal.
B. Standing before the trial court
2
We are likewise unpersuaded by the arguments of the Club and Galveston County that
GCA lacks standing because the Club withdrew the condemnation award from the registry of the
trial court. Tejas Gas Corp. v. Herrin, as well as other cases the Club and Galveston County
cited in support of this proposition, states the principle that after the landowner has withdrawn an
award from the registry of the court or advocated for its withdrawal, he cannot thereafter contest
the taking. See, e.g., 716 S.W.2d 45, 45–46 (Tex. 1986). Courts have reasoned that the
withdrawal or advocacy for withdrawal effectively constitutes consent to the taking. See, e.g., id.
GCA neither withdrew any money from the registry nor advocated for the Club to withdraw the
money. Therefore, Tejas and its progeny are inapposite.
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GCA makes several arguments in support of its contention that the trial court
erred by granting Galveston County’s Motion to Require Proof of Standing.3
Because of the unique posture of this case, we need not reach most of the
arguments raised by GCA.
Standing is implicit in the concept of subject-matter jurisdiction, and
subject-matter jurisdiction is essential to the authority of a court to decide a case.
Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993).
We review standing under the same standard by which we review subject-
matter jurisdiction generally. Id. at 446. Whether the trial court has subject-matter
jurisdiction is a question of law that we review de novo. Tex. Dep’t of Transp. v.
A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 166 (Tex. 2013); Tex. Dep’t of Parks
& Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).
The question of standing applies to a plaintiff or a party seeking affirmative
relief. The standing inquiry “focuses on the question of who may bring an action.”
Vernco Constr., Inc. v. Nelson, 460 S.W.3d 145, 149 (Tex. 2015) (quotation
omitted); see Lazarides v. Farris, 367 S.W.3d 788, 796–97 (Tex. App.—Houston
[14th Dist.] 2012, no pet.) (same); see also Lewis v. Aurora Loan Servs., No. 01-
15-00362-CV, 2016 WL 887176, *3 (Tex. App.—Houston [1st Dist.] Mar. 8,
2016, no pet.) (mem. op.) (“The defendants are not the plaintiffs in this case.
3
First, GCA argues that it had a justiciable interest in the condemnation of Rollover Pass
because before the condemnation suit commenced, it had “provided supervision over the
property.” Second, GCA states that many of its members “had property or livelihoods which
depended, in some degree, on the continuing success of Rollover Pass as a public attraction.”
Third, GCA suggests that it may have associational standing as a “public interest group.”
Fourth, GCA argues that Galveston County’s standing argument is precluded by estoppel. GCA
complains that Galveston County raised its standing argument “after the GCA had participated in
the litigation for about a year, with the tacit approval of the County.” GCA points out that in
Galveston County’s First Amended Petition, the County identified the GCA as a defendant.
Finally, GCA asserts standing as a leaseholder of a Rollover Pass.
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Lewis is. Thus, the issue is not whether defendants have standing to maintain this
action.”).
Condemnation of private property involves a two-part process prescribed in
sections 21.012 through 21.016 of the Texas Property Code. Tex. Prop. Code Ann.
§ 21.011 (West 2018). During the first phase, the party seeking condemnation
initiates an administrative proceeding by filing a petition for condemnation in the
trial court. Tex. Prop. Code Ann. § 21.012 (West 2018); Hubenak v. San Jacinto
Gas Transmission Co., 141 S.W.3d 172, 179 (Tex. 2004); Amason v. Nat. Gas
Pipeline Co., 682 S.W.2d 240, 241 (Tex. 1984). Once a petition is filed, the trial
court appoints three disinterested individuals as special commissioners to assess
the damages. Tex. Prop. Code Ann. § 21.014 (West 2018). The special
commissioners conduct a hearing to determine the amount of damages. Tex. Prop.
Code Ann. § 21.015 (West 2018). If either party files objections to the special
commissioners’ award,4 “the . . . award is vacated and the administrative
proceeding converts into a normal pending cause in the court with the condemnor
as plaintiff and the condemnee as defendant.” Amason, 682 S.W.2d at 242. In the
judicial proceeding, the burden of proof regarding the right to take is generally on
4
Only “owners” are entitled to share in condemnation award. See Tex. Prop. Code Ann.
§ 21.042 (West 2018) (referring to property owners as those entitled to compensation).
However, the term “owner” is broadly defined in the eminent domain context. The term
“owner,” as used in the statutes governing eminent domain, embraces not only the owner but
also a tenant for life, a lessee for years, and any other person who has an interest in the property
that will be affected by the condemnation. Houston North Shore Ry. Co. v. Tyrrell, 98 S.W.2d
786, 793 (Tex. 1936) (“The term ‘owner’ as used in condemnation statutes, embraces not only
the owner of the fee but a tenant for life, a lessee for years, and any other person who has an
interest in the property that will be affected by the condemnation.”); see Elliott v. Joseph, 351
S.W.2d 879, 884 (Tex. 1961) (“The term ‘owner’ in this sense includes a lessee for years as well
as any other person who has an interest in the property.”); State v. Fiesta Mart, Inc., 233 S.W.3d
50, 55 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (“Unless a contrary provision exists
in the lease agreement, a lessee is entitled, as a matter of law, to share in a condemnation award
when part of its leasehold interest is lost by condemnation.”)
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the condemnor, while the burden to prove the value of condemned property is on
the condemnee. Religious of Sacred Heart of Tex. v. City of Houston, 836 S.W.2d
606, 613 (Tex. 1992).
We conclude that because GCA is the defendant in this condemnation cause
of action, GCA is not required to establish standing. As the plaintiff, condemnor
Galveston County, not the defendant condemnee GCA, sought affirmative relief in
the court below. Galveston County amended its petition to add GCA as a
defendant, and Galveston County asserts that GCA is bound by the trial court’s
resulting judgment that GCA has no leasehold interest in the property and is not
entitled to compensation. Thus, there was a real controversy between Galveston
County and GCA regarding whether GCA had a compensable interest in the
property, and that controversy was actually determined by the relief Galveston
County sought and obtained from the trial court. See Austin Nursing Ctr., Inc. v.
Lovato, 171 S.W.3d 845, 849 (Tex. 2005) (explaining these two requirements for
standing). GCA did not intervene in the suit or file any counterclaim. Other than a
motion for new trial, GCA did not file any motion for affirmative relief.
Galveston County argues, “when a condemnation case reaches the
compensation stage, a party nominally called a Defendant becomes more like a
Plaintiff.” We disagree that this observation affects the standing analysis. As a
condemnee, GCA filed objections to the special commissioners’ award and GCA
had the burden to prove the amount of adequate compensation for the taking.
Religious of Sacred Heart of Tex., 836 S.W.2d at 613. However, neither its
objections nor the shifted burden converted GCA into a plaintiff. See Collin Cty. v.
Hixon Family P’ship, Ltd., 365 S.W.3d 860, 866–68 (Tex. App.—Dallas 2012, pet.
denied) (holding neither objections nor shifting of burden to prove adequate
compensation causes condemnee to become plaintiff in trial court) (citing Denton
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Cty. v. Brammer, 361 S.W.2d 198, 200 (Tex. 1962)); see also Duncan v. Calhoun
Cty. Navigation Dist., 28 S.W.3d 707, 709 (Tex. App.—Corpus Christi 2000, pet.
denied) (holding that issues of “right to take” and “just compensation” are
components of single, indivisible condemnation cause of action). If GCA failed to
carry its burden to prove it had a compensable leasehold interest, the consequence
would be a binding judgment that GCA is not entitled to compensation from
Galveston County, not a dismissal of Galveston County’s suit against GCA for
lack of subject-matter jurisdiction. Galveston County cannot have it both ways.
Moreover, even if GCA could be analogized to a plaintiff, its failure to prove
entitlement to compensation would not deprive the court of subject-matter
jurisdiction. See Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76–77 (Tex. 2000)
(“‘The right of a plaintiff to maintain a suit, while frequently treated as going to the
question of jurisdiction, has been said to go in reality to the right of the plaintiff to
relief rather than to the jurisdiction of the court to afford it.’” (quoting 21 C.J.S.
Courts § 16, at 23 (1990))); Mitchell v. Turbine Res. Unlimited, Inc., 523 S.W.3d
189, 197 (Tex. App.—Houston [14th Dist.] 2017, pet. denied) (holding that
whether property belongs to party is question going to merits of court’s order, not
court’s jurisdiction). For these reasons, the trial court erred by determining that
GCA lacked standing.
Galveston County points to the decision of this court in Mayberry v. Kinder
Morgan Crude & Condensate, LLC, No. 14-16-00523-CV, 2018 WL 456709 (Tex.
App.—Houston [14th Dist.] Jan. 18, 2018, pet. denied) (mem. op.), as a case where
this court determined that a condemnee lacked standing. In Mayberry, Mayberry
himself (the condemnee) asserted in trial court filings that he had no interest in the
property being condemned. Id. at *2–3. Mayberry also asserted in various trial
court filings that the court lacked jurisdiction to hear the case because he was the
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“wrong defendant.” Id. at *3. As such, Mayberry judicially admitted he was not a
proper party to the case. Nonetheless, the case was called to trial and Mayberry
was permitted to testify regarding his ownership interest in the property at issue
before a determination was made with respect to his “standing.” Id. The trial court
signed a final judgment only after hearing evidence at trial. The judgment stated
that Mayberry failed to meet his burden to prove that he had an ownership interest
in the property. Id. Although this court ultimately held that Mayberry lacked
“standing” because he had no compensable interest in the property at issue, the
holding was based on Mayberry’s judicial admissions and his failure at trial to
establish any ownership interest in the property. Id. at *4–5; see also id. at *1
(“Because we conclude that Mayberry lacks an ownership interest in the
condemned property, we affirm the trial court’s judgment.”). As such, Mayberry
does not properly support Galveston County’s assertion that a condemnee has the
burden to establish standing, much less that its failure to do so deprives the court of
subject-matter jurisdiction yet does not prevent the court from issuing a judgment
binding the condemnee. We decline to extend Mayberry to support such holdings,
which would be contrary to the decisions cited above.
Even if a condemnor could properly assert a condemnee lacks standing to
participate in a condemnation suit initiated by the condemnor, a condemnor’s right
to dismiss a condemnation proceeding is generally limited after the condemnor has
taken possession of the property. Hooks v. Fourth Court of Appeals, 808 S.W.2d
56, 60 (Tex. 1991). After a condemnor takes constructive or actual possession of a
property, the condemnor may dismiss the condemnation proceeding only if the
owner is not prejudiced or harmed as a result. Id. at 60–61; see Fort Worth
Concrete Co. v. State, 400 S.W.2d 314, 315–17 (Tex. 1966) (rejecting request for
dismissal of party based argument that party had no interest in land sought to be
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condemned where condemnor had already taken possession); see also Mount
Vernon United Methodist Church v. Harris Cty., No. 14-16-00590-CV, 2017 WL
1512251, *2 (Tex. App.—Houston [14th Dist.] Apr. 25, 2017) (mem. op.) (quoting
Fort Worth Concrete, 400 S.W.2d at 317, and applying its principles to a
lienholder).
Here, it is undisputed that Galveston County deposited the commissioner’s
award into the court registry and thereby gained constructive possession of the
property. See Hooks, 808 S.W.2d at 61. Whether GCA was prejudiced by
Galveston County’s constructive taking is a factual matter the trial court did not
address. See id. For this reason and because GCA is not the plaintiff in this action
and seeks no affirmative relief other than the “just compensation” that is part and
parcel of Galveston County’s condemnation cause of action, the trial court erred by
granting Galveston County’s Motion to Require Proof of Standing. We sustain
GCA’s first issue.
C. Summary judgment on right to take
GCA’s second issue challenges the trial court’s ruling on Galveston
County’s motion for partial summary judgment on the “right to take.” Analysis of
this issue is premature. Galveston County argues GCA waived the issue “because
it was never raised in response to the County’s summary judgment motion on the
right to take.” However, the motion for partial summary judgment was not clearly
asserted against GCA.
At oral argument, counsel for Galveston County took the position that the
motion was asserted against both defendants. In its partial motion for summary
judgment on the “right to take,” however, Galveston County took the position that
GCA had no ownership interest in the property. In a few instances in the motion,
Galveston County referred to “Defendants,” plural, but the motion was based on
11
the landowner’s inability to show fraud, bad faith, or arbitrary and capricious acts,
and Galveston County did not acknowledge, or even argue in the alternative, that
GCA was a landowner. Instead, Galveston County relied upon its Motion to
Require Proof of Standing to eliminate GCA from the case. Although GCA joined
the Club’s response to the partial motion and other related briefing, it is not clear
that the trial court ruled on Galveston County’s right to take the property from
GCA.
We conclude that in this circumstance, the appropriate course is to remand
the case to the trial court for further proceedings. See Associated Air Ctr. v. Tary
Network Ltd., No. 05-13-00685-CV, 2015 WL 970664, at *7 (Tex. App.—Dallas
Mar. 4, 2015, no pet.) (mem. op.) (“As long as there is a probability a case has for
any reason not been fully developed, an appellate court has the discretion to
remand rather than render a decision.”); see also United States Fire Ins. Co. v.
Carter, 473 S.W.2d 2, 3 (Tex. 1971) (holding remand is appropriate when a case,
for any reason, has not been fully developed); Scott Bader, Inc. v. Sandstone
Prods., Inc., 248 S.W.3d 802, 822 (Tex. App.—Houston [1st Dist.] 2008, no pet.)
(same); De Monet v. PERA, 877 S.W.2d 352, 361 (Tex. App.—Dallas 1994, no
writ) (“Addressing . . . independent grounds not considered by the trial court
usurps the trial court’s authority to evaluate and rule on issues before it and denies
the appellate court the benefit of the trial court’s decision.”).
On remand, Galveston County will have a full and fair opportunity to assert
its claims regarding GCA’s ownership interests, or lack thereof, on summary
judgment and, if necessary, its right to take with respect to GCA. We think this
result best comports with the interest of justice. See Tex. R. App. P. 43.3(b).
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III. CONCLUSION
We reverse the trial court’s order granting Galveston County’s Motion to
Require Proof of Standing and reverse its judgment as to GCA. We remand the
case to the trial court for further proceedings.
/s/ Marc W. Brown
Justice
Panel consists of Justices Jamison, Busby, and Brown.
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