State v. KNA Partners, a Texas Joint Venture ( 2015 )


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  •                    No. 01-14-00723-CV
    __________________________________
    FILED IN
    1st COURT OF APPEALS
    IN THE COURT OF APPEALS FOR THE HOUSTON, TEXAS
    FIRST DISTRICT OF TEXAS AT HOUSTON    5/14/2015 5:01:50 PM
    __________________________________ CHRISTOPHER
    Clerk
    A. PRINE
    THE STATE OF TEXAS,
    Appellant,
    v.
    KNA PARTNERS, INC., A TEXAS JOINT VENTURE,
    Appellee.
    __________________________________
    SUR-REPLY OF APPELLEE
    __________________________________
    Trial Court Cause No. 1011330
    On Appeal from County Civil Court at Law Number Three
    Harris County, Texas
    The Honorable Linda Storey, Judge Presiding
    __________________________________
    VINSON & ELKINS L.L.P.
    H. Dixon Montague
    State Bar No. 14277700
    e-mail: dmontague@velaw.com
    Billy C. Dyer
    Catherine B. Smith
    David G. Wall
    1001 Fannin Street, Suite 2500
    Houston, Texas 77002-6760
    Telephone: 713.758.2086
    Facsimile: 713.615. 5461
    Attorneys for Appellee KNA Partners, Inc., A Texas Joint Venture
    TABLE OF CONTENTS
    Page
    TABLE OF AUTHORITIES ................................................................................. ii
    I.      At Trial, the State Characterized KNA’s Driveways as Appurtenant
    Easements. ....................................................................................................1
    II.     The Judgment Is Supported by the State’s Agreement, Stipulation, or
    Concession....................................................................................................3
    A.       The State’s Attorney’s Unequivocal Statement to the Trial
    Court Constitutes an Agreement, Stipulation, or Concession. .............3
    B.       Alternatively, No Pleading Is Required Because the State Tried
    the Driveway Issue by Consent. ..........................................................5
    III.    The State Acknowledges that Payment Is Required Prior to Passage of
    Title. .............................................................................................................6
    IV.     The State’s Appeal Is Moot Because It Is Undisputed That the State
    Voluntarily Restored the Driveways. ............................................................7
    CONCLUSION AND PRAYER.............................................................................8
    CERTIFICATE OF COMPLIANCE.....................................................................10
    CERTIFICATE OF SERVICE..............................................................................11
    i
    TABLE OF AUTHORITIES
    Page(s)
    Cases
    Camarena v. Texas Employment Comm’n,
    
    754 S.W.2d 149
    (Tex. 1988) .......................................................................... 8
    City of Houston v. Texan Land and Cattle Co.,
    
    138 S.W.3d 382
    (Tex. App.—Houston [14th Dist.] 2004, no pet.).................. 6
    Employees Finance Co v. Lathram,
    
    369 S.W.2d 927
    (Tex. 1963) .......................................................................... 7
    Gen. Land Office of Tex. v. OXY U.S.A., Inc.,
    
    789 S.W.2d 569
    (Tex. 1990) .......................................................................... 8
    Highland Church of Christ v. Powell,
    
    640 S.W.2d 235
    (Tex. 1982) .......................................................................... 8
    Miga v. Jensen,
    
    96 S.W.3d 207
    (Tex. 2002)............................................................................ 7
    Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Martinez,
    
    800 S.W.2d 331
    (Tex. App.—El Paso 1990, no writ)..................................4, 5
    Shepherd v. Ledford,
    
    926 S.W.2d 405
    (Tex.App.—Fort Worth 1996),
    aff’d, 
    962 S.W.2d 28
    (Tex. 1998)................................................................... 5
    Southwestern Resolution Corp. v. Watson,
    964 S.W2d 262 (Tex. 2003) ........................................................................... 6
    St. Louis, A. & T. Ry. Co. v. Henderson,
    
    86 Tex. 307
    , 
    24 S.W. 381
    (1893) ................................................................... 6
    State v. Meyers,
    
    403 S.W.2d 366
    (Tex. 1966) .......................................................................... 1
    ii
    Constitutions, Rules, and Statutes
    Texas Constitution,
    art. I, § 17 ...................................................................................................... 6
    art. II, § 1 ....................................................................................................... 8
    Texas Property Code § 21.042(d)........................................................................2, 5
    Texas Rules of Civil Procedure,
    Rule 11 .......................................................................................................... 5
    Rule 67 .......................................................................................................... 6
    Other Authorities
    73 Am. Jur. 2d Stipulations § 1 (1974)................................................................... 5
    http://www.merriam-webster.com/dictionary/restore ............................................. 4
    iii
    TO THE HONORABLE JUSTICES OF THE FIRST COURT OF APPEALS:
    Appellee files this Sur-reply to respond to the State’s Reply Brief. This case
    is set for submission without oral argument on May 19, 2015.
    I.    AT TRIAL, THE STATE CHARACTERIZED KNA’S DRIVEWAYS                          AS
    APPURTENANT EASEMENTS.
    The State agrees in its Reply brief that KNA “has an easement of access” to
    the abutting roadway, but asserts that KNA’s “nine driveways or curb cuts do not
    constitute easements appurtenant.” Reply 2. The State contends that none of
    KNA’s cases “support the proposition that curb cuts constitute easements
    appurtenant,” when that in act is exactly what they are. See Reply 4. State v.
    Meyers, a Texas Supreme Court case cited by KNA, recognizes that “abutting
    property owners have certain private rights in existing streets and highways . . .
    [and] the most important of these private rights is the right of access to and from
    the highway.” State v. Meyers, 
    403 S.W.2d 366
    , 370-71 (Tex. 1966). The Texas
    Supreme Court expressly referred to this right of access as “an easement
    appurtenant to the abutting land.” 
    Id. Emphasis added.
    Not only does the Texas Supreme Court authority refer to a driveway access
    as an easement appurtenant, but the State’s counsel also agreed with that legal
    description when it referred to the driveways during the trial. As the State’s
    counsel explained to the trial court:
    1
    The owner has the right of egress and ingress, access,
    onto and off of their property. . . . The analysis the courts
    have employed is, it’s total access from the subject
    property to the right-of-way and it has the right of access
    to the – they have an easement appurtenant to the
    right-of-way.
    3 RR 81 (emphasis added); see also 6 RR 127-28; 8 RR 189.
    The State asserts in a footnote that testimony by Peter Boecher and John
    Hudson at trial that KNA held appurtenant easements in the driveways is
    “conclusory, unreliable, and misstatements of the law… and no evidence.” Reply
    7 n.1.     But, the State never made any such objection at trial to that elicited
    testimony, and in fact acknowledged the characterization by also referring to the
    right of access through the driveways as an easement appurtenant in its cross-
    examination of Boecher and Mark Sikes, KNA’s appraisal expert. See, e.g. 6 RR
    128; 8 RR 189.
    The only manner by which an abutting property owner gains access to a
    public street is by a curb cut, nine of which were needed in the case of KNA’s
    property to support its highest and best use. If the access is altered (i.e., by loss of
    curb cuts), the property owner has the right to pursue a claim for that loss as
    provided by the Legislature in 2011 in § 21.042(d) of the Texas Property Code.
    TEX. PROP. CODE § 21.042(d).
    2
    II.   THE JUDGMENT IS SUPPORTED                BY    THE   STATE’S     AGREEMENT,
    STIPULATION, OR CONCESSION.
    A.     The State’s Attorney’s Unequivocal Statement to the Trial Court
    Constitutes an Agreement, Stipulation, or Concession.
    It is undisputed that the State agreed to restore all nine of the driveways.
    But, the State claims that it had no “agreement” or “stipulation” with KNA
    regarding restoration of the nine driveway access connections. Reply 7. The State
    does acknowledge that it “represented both before and during trial that its project
    included reconstruction of the nine driveway access connections.” 
    Id. The State
    made this representation with the intent that KNA rely on it, which it did.
    In connection with pretrial stipulations, the trial court expressly asked about
    the curb cuts:
    THE COURT:         All the curb cuts were included in that [the
    taking]?
    MR. MONTAGUE: Yes. The curb cuts were included in the taking.
    THE COURT: We are all talking about curb cuts.
    MR. MONTAGUE: If the curb cuts were included in the taking. The
    State, if you go out there today, has reestablished some of the curb
    cuts. It’s a consequence of how close the taking is now to the
    building. Those curb cuts really offer no viable access in and out of
    the property for the types of traffic that the office/warehouse facility
    serves.
    THE COURT: Is it an agreed or a disputed fact that these buildings
    are usable or not usable anymore?
    MR. MONTAGUE: We have agreed to a stipulation as I think, Your
    Honor, that as a consequence of the taking, the improvements on the
    3
    property, correct me if I’m wrong, Mr. Brocato, the improvements on
    the property after the taking no longer are viable and must be raised.
    THE COURT: Okay. And is that an agreed fact?
    MR. BROCATO: That’s an agreed fact, Your Honor.
    THE COURT: Why did ya’ll go put curb cuts back then for, I guess,
    whatever somebody might tear down the buildings and rebuild?
    MR. BROCATO: They can redevelop the site.
    THE COURT: That’s what I’m saying. Okay. So, it can be
    redeveloped with buildings in a different location, configuration or
    whatever?
    MR. BROCATO: Right. And we’ll put all the curb cuts back.
    3 RR 7-8 (emphasis added).
    The State thus represented on the record to the trial court that all of the curb
    cuts would be restored. 1 3 RR 8. While it is true that the parties did not make a
    formal stipulation about the curb cuts/driveways to the trial court, the trial court
    could properly consider the material representations made by the State’s attorney
    on the record, in open court.
    A “stipulation” is an agreement, admission, or concession made in a judicial
    proceeding by the parties or their attorneys, respecting some matter incident
    thereto. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Martinez, 
    800 S.W.2d 331
    ,
    1
    The State’s engineer witness, Robert Scott Davis, testified in that same pre-trial hearing
    that TxDot made the decision to “leave [the nine driveways] restored.” 3 RR 71-72. The verb
    “restore” means (1) to give back (someone or something that was lost or taken); (2) to return
    (someone or something); (3) to put or bring (something) back into existence or use; (4) to return
    (something) to an earlier or original condition by repairing it, cleaning it, etc. See
    http://www.merriam-webster.com/dictionary/restore.
    4
    334 (Tex. App.—El Paso 1990, no writ) (citing 73 Am. Jur. 2d Stipulations § 1, at
    536 (1974)).   In the National Union case, the court held that the appellant’s
    attorney’s statements to the court regarding wage rate in a workers’ compensation
    case should be construed as an “agreement or stipulation” within the contemplation
    of Rule 11 of the Texas Rules of Civil Procedure. Rule 11 and its mandate
    encompass concessions made by counsel in trial court. See Shepherd v. Ledford,
    
    926 S.W.2d 405
    , 410 (Tex.App.—Fort Worth 1996), aff’d, 
    962 S.W.2d 28
    (Tex.
    1998) (applying Rule 11 to stipulations which included a “concession” by
    counsel). Certainly, the State’s attorney’s unequivocal statement to the trial court
    on the record constitutes an agreement, stipulation, or concession. And KNA
    relied on it; otherwise, it would have pursued a claim for a material impairment of
    access. TEX. PROP. CODE § 21.042(d).
    B.    Alternatively, No Pleading Is Required Because the State Tried
    the Driveway Issue by Consent.
    KNA’s land planner, Peter Boecher, prepared a drawing showing that all
    nine driveways would be restored “After the Taking,” and that Exhibit 10 was pre-
    admitted for the trial of this case without any objection from the State. 4 RR 96;
    see 16 RR DX10. As outlined in KNA’s Brief of Appellees, numerous witnesses
    testified about KNA’s nine curb cuts/driveways and the value that those driveways
    added to the property. Br. App’ee 16-18. When issues not raised by the pleadings
    are tried by express or implied consent of the parties, they shall be treated in all
    5
    respects as if they had been raised in the pleadings. TEX. R. CIV. P. 67; see also
    Southwestern Resolution Corp. v. Watson, 964 S.W2d 262, 264 (Tex. 2003)
    (holding unpleaded affirmative defense of payment on a note was tried by consent
    when the opposing party did not object to testimony about whether payment was
    made).
    III.   THE STATE ACKNOWLEDGES         THAT   PAYMENT IS REQUIRED PRIOR         TO
    PASSAGE OF TITLE.
    The Texas Constitution provides that “No person’s property shall be taken,
    damaged, or destroyed for or applied to public use, without adequate compensation
    being first made, unless by consent of such person; and when taken, except for the
    use of the state, such compensation shall be first made or secured by a deposit of
    money.”     TEX. CONST. art. I, § 17 (emphasis added).          The payment of
    compensation is a condition precedent to the right to take and use, and title does
    not vest until payment is made. St. Louis, A. & T. Ry. Co. v. Henderson, 
    86 Tex. 307
    , 312, 
    24 S.W. 381
    , 384 (1893); see also City of Houston v. Texan Land and
    Cattle Co., 
    138 S.W.3d 382
    , 392 (Tex. App.—Houston [14th Dist.] 2004, no pet.).
    The State agrees that in condemnation that title “does not pass until payment is
    made.” Reply 5. The State argues, however, that payment does not include
    reconstruction of access connections because such reconstruction “was not part of
    the compensation.” 
    Id. at 6.
    The State argues that compensation in condemnation
    must only be money damages based on fair market value. See 
    id. But, the
    State
    6
    can point to no authority that excludes compensation “in kind” compensation (i.e.,
    the restoration of the curb cuts), particularly where that compensation has been
    agreed to by the property owner.        Moreover, to so hold would foreclose a
    condemning authority’s opportunity to make physical modifications to one’s
    property to lessen the damages caused by the condemnation as part of the
    consideration which is to no one’s benefit.
    IV.      THE STATE’S APPEAL IS MOOT BECAUSE IT IS UNDISPUTED THAT               THE
    STATE VOLUNTARILY RESTORED THE DRIVEWAYS.
    It is undisputed that all nine driveways have been reconstructed. But, the
    State still claims that there is still an existing controversy because the judgment
    makes passage of title subject to the return of the driveways. However, the State
    restored all nine driveways voluntarily and without explicitly reserving the right to
    challenge the recitations in the judgment regarding the passage of title – as it
    represented to KNA (and the trial court) that it would do both before and during
    trial.
    How is the State’s conduct any different than a judgment debtor who
    voluntarily pays the judgment against him without explicitly reserving the right to
    appeal? It is a settled rule of law that when a judgment debtor voluntarily pays and
    satisfies a judgment rendered against him, the cause becomes moot. Employees
    Finance Co v. Lathram, 
    369 S.W.2d 927
    , 930 (Tex. 1963). The judgment debtor
    thereby waives his right to appeal and the case must be dismissed. See Miga v.
    7
    Jensen, 
    96 S.W.3d 207
    , 211 (Tex. 2002) (requiring judgment debtor who pays
    judgment to express an intent to pursue his appeal); Highland Church of Christ v.
    Powell, 
    640 S.W.2d 235
    , 236 (Tex. 1982) (noting that expressly reserving the right
    to appeal when the judgment is paid is the safest course of action).
    The State restored all nine driveways without expressly reserving its right to
    appeal the recitations in the judgment relating to the restoration of those driveways.
    It is a fundamental tenet that this Court cannot decide moot controversies. Gen.
    Land Office of Tex. v. OXY U.S.A., Inc., 
    789 S.W.2d 569
    , 570-72 (Tex. 1990);
    Camarena v. Texas Employment Comm’n, 
    754 S.W.2d 149
    , 151 (Tex. 1988). This
    prohibition is rooted in the Texas Constitution’s separation of powers doctrine,
    which prohibits courts from rendering advisory opinions. See TEX. CONST. art. II,
    § 1. Because the State voluntarily restored the driveways without reserving any
    appellate rights, this appeal should be alternatively dismissed for want of
    jurisdiction.
    CONCLUSION AND PRAYER
    For all the reasons stated above and in KNA’s Brief of Appellee, the Court
    should affirm the judgment of the trial court or alternatively dismiss the appeal as
    moot.
    8
    Respectfully submitted,
    VINSON & ELKINS L.L.P.
    /s/ H. Dixon Montague
    H. Dixon Montague
    State Bar No. 14277700
    dmontague@velaw.com
    Billy C. Dyer
    State Bar No. 06312580
    bdyer@velaw.com
    Catherine B. Smith
    State Bar No. 03319970
    csmith@velaw.com
    David G. Wall
    State Bar No. 25060788
    dwall@velaw.com
    1001 Fannin Street, Suite 2500
    Houston, Texas 77002-6760
    Telephone: 713.758.2086
    Facsimile: 713.615. 5461
    Attorneys for Appellee, KNA Partners,
    A Texas Joint Venture
    9
    CERTIFICATE OF COMPLIANCE
    Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that
    this Sur-reply contains 1,969 words, excluding the words not included in the word
    count pursuant to Texas Rule of Appellate Procedure 9.4(i)(1). This is a computer-
    generated document created in Microsoft Word, using 14-point typeface for all
    text, except for footnotes which are in 12-point typeface. In making this certificate
    of compliance, I am relying on the word count provided by the software used to
    prepare the document as well as a hand count of words contained in the charts
    included in the brief.
    /s/ Catherine B. Smith
    Catherine B. Smith
    10
    CERTIFICATE OF SERVICE
    The undersigned certifies that on May 14, 2015, the foregoing Sur-Reply of
    Appellee was served electronically on the following parties in accordance with the
    requirements of the Texas Rules of Appellate Procedure:
    Susan Desmarais Bonnen
    susan.bonnen@texasattorneygeneral.gov
    Philip Arnold
    Ken Paxton
    Charles E. Roy
    James E. Davis
    Randall K. Hill
    P.O. Box 12548
    Austin, Texas 78711-2548
    Attorneys for Appellant
    Via Electronic Service
    /s/ Catherine B. Smith
    Catherine B. Smith
    US 3451667v.1
    11