State v. Louis M. Howard, Corrine Howard and Federal Deposit Insurance Corporation, Receiver for Chas. Schreiner Bank ( 1993 )

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN





NO. 3-91-214-CV



THE STATE OF TEXAS,

APPELLANT

vs.





LOUIS M. HOWARD, CORRINE HOWARD AND FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER FOR CHAS. SCHREINER BANK,

APPELLEES

FROM THE PROBATE COURT NO. 1 OF TRAVIS COUNTY

NO. 1804, HONORABLE MICHAEL J. SCHLESS, JUDGE PRESIDING

This appeal arises from a statutory condemnation case, wherein a portion of the landowners' property was taken for the expansion of U.S. Highway 183. The trial court rendered judgment on the jury's verdict awarding the landowners the value of the part taken as well as damages to the remaining property. The condemnor, State of Texas (the "State"), appeals, claiming errors in various evidentiary rulings by the court and in the court's charge. We will affirm the judgment of the trial court.

BACKGROUND

Appellees, Louis M. and Corrine Howard, are the owners ⁽¹⁾ of the North Brooke retail shopping center located on U.S. 183, also known as Research Boulevard, in Austin, Texas. The center sits on approximately 4.34 acres of land and is comprised of three brick buildings (two one-stories and one two-story), totalling 49,385 square feet.

The State initiated condemnation proceedings to acquire a portion of the Howards' property for improvements to U.S. 183. The part taken in condemnation is 624 feet of highway frontage. The condemnation will essentially "strip off" the front of the property, leaving the new highway within twelve feet of the buildings. The taking will encompass approximately one-third of the available parking. The Howards presented expert testimony that the loss of parking in front will result in poor distribution of the remaining parking places relative to the improvements; will require the closing of an existing driveway; and will result in poor traffic circulation around the buildings. The record reveals that, after the taking, the center will suffer from significant functional impairment as well as internal traffic hazards and increased maintenance costs.

Uncontroverted evidence at trial established that the physical impact of the condemnation on the remainder property, i.e., loss of parking, impaired traffic circulation, poor parking distribution, denial of access, and proximity of the roadway to the improvements, as well as the decrease in functional utility that these factors occasion, would have a negative influence on the fair market value of the remainder.

The jury returned a verdict favorable to the Howards, and the State appeals. In six points of error, the State challenges the admissibility of certain evidence, the failure of the Court's charge to include certain requested instructions, and the failure of the trial court to consider the Howards' adjacent property for mitigation of damages.

DISCUSSION

Admissibility of Evidence

In a series of condemnation cases involving the U.S. Highway 183 project, the State has taken the position that the landowner is attempting to recover statutory condemnation damages that are non-compensable. See Morales v. Chrysler Realty Corp., 843 S.W.2d 275 (Tex. App.--Austin 1992, no writ); State v. Munday Enters., 824 S.W.2d 643 (Tex. App.--Austin 1992, writ requested); State v. Schmidt, 805 S.W.2d 25 (Tex. App.--Austin 1991, writ granted).

These non-compensable elements generally involve the loss of access to the landowner's remaining property by the grade elevation necessary for the condemnation project, the loss of visibility resulting to the remainder property as a result of the elevated roadway, and the construction disruption and inconvenience that results to the remainder property. We held in Schmidt, Munday and Chrysler Realty that, while the value of these items is not recoverable as a separate item of damage, evidence of their value is admissible on the question of diminution in the fair market value of the landowner's remainder property. Chrysler Realty, 843 S.W.2d at 277; Munday, 824 S.W.2d at 647; Schmidt, 805 S.W.2d at 35. In the instant cause, the trial court permitted the introduction of this type of evidence. We reaffirm our prior holdings that this evidence is admissible on the question of remainder damages.

In addition, we note from the record that the expert appraisal witnesses for the Howards did not rely on the so-called Schmidt factors as having a significant impact on the damage to the remainder property. Rather, they based their expert opinion on the internal damage to the Howards' property resulting directly from the condemnation project. One of appellees' exhibits, for example, identified fifteen separate impediments to the Howards' use and enjoyment of their remainder property as a direct result of the condemnation project. Accordingly, we overrule the State's fifth point of error challenging the admissibility of this evidence.

In related points of error three and four, the State complains of the action of the trial court in overruling its motion for judgment n.o.v. and motion for new trial because the evidence does not support the jury's verdict.

At trial, appellees presented three expert appraisal witnesses, each of whom testified that the condemnation project resulted in a substantial diminution in the value of the Howards' remainder property. The State's appraisal witness, Craft, also testified to remainder depreciation but differed as to the amount of damage. The jury resolved this dispute within the range of the expert testimony. The jury is the sole judge of the witnesses' credibility and the weight to be accorded their testimony. Benoit v. Wilson, 239 S.W.2d 792, 796 (Tex. 1951). The State's points of error three and four are overruled.

Limiting Instruction on Community Damages  

In point of error one, the State contends that the trial court should have included in the charge an instruction that the jury should not award remainder damages which are shared by the community in general, and in its second point of error, the State contends that the jury should have been affirmatively instructed not to consider the so-called Schmidt elements of damage, e.g., loss of access, visibility and construction inconvenience, for any purpose.

As we observed in Munday, the State takes the position in these condemnation cases that remainder damages shared in common by all the landowner/condemnees of the project are "community damages" and, hence, non-recoverable. We reject this argument. We reiterate our holding in Munday that the term "general community damages" refers to the community at large and is not limited to other landowner/condemnees of the condemnation project in issue. Munday, 824 S.W.2d at 649. A limiting instruction on the general proscription regarding community damages would have served only to confuse the jury in this case. The trial court properly refused to grant the requested instructions. Accordingly, the State's points of error one and two are overruled.

Mitigation of Damages

In its sixth and last point of error, the State complains of the failure of the trial court to consider the Howards' adjacent property on the issue of mitigation of damages. Under this point, the State contends that the Howards could have used this adjoining property to supply the parking lost through this condemnation proceeding and, thus, mitigate their remainder damages.

At trial, the State attempted to introduce evidence of appellees' ownership of another parcel of land located in the vicinity of the tract that was the subject of this suit. The substance of this testimony was that appellee, Louis Howard, owned a three-acre tract (subject to a separate condemnation proceeding) to the south of the subject property with the two tracts being separated at the narrowest point by some fifteen feet. The evidence was tendered to show that property owned by Mr. Howard was in close proximity and could provide suitable parking for the subject property. The record contains no evidence that: 1) appellees had an easement or any other legal right of passage between the two tracts; 2) the two tracts were utilized together in any way; 3) utilizing the three-acre tract for parking could be done without significant expense to appellees; or 4) utilizing the three-acre tract for parking would not diminish its value.

There were no pleadings by either party putting in issue the use or ownership of the three-acre tract in the subject suit. The two tracts are not contiguous. They are neither utilized as a unit nor in conjunction with one another. In fact, the two tracts lack all the legal prerequisites for consideration as a "unified" tract relative to damages. See State v. Lock, 468 S.W.2d 560 (Tex. Civ. App.--Beaumont 1971, writ ref'd n.r.e.).

Article I, section 17 of the Texas Constitution imposes on the State the duty to make adequate compensation for private property taken or damaged for public use. It imposes no corresponding duty on the property owner to minimize his or her loss. At common law, there exists no duty to minimize or prevent damages to real property if to do so would result in expense to the owner or injury to adjacent land. Austin & N.W.R. Co. v. Anderson, 19 S.W. 1025 (Tex. 1892); Shellhammer v. Carruthers, 99 S.W.2d 1054 (Tex. Civ. App.--Beaumont 1936, writ dism'd w.o.j.).

The trial court excluded the testimony as irrelevant to the issue of appellees' damages. The proper test for admission or exclusion of evidence by the trial court is abuse of discretion. Syndex Corp. v. Dean, 820 S.W.2d 869, 873 (Tex. App.--Austin 1991, writ denied). Based upon our review of the record, we do not find any abuse of discretion. The State's sixth point of error is overruled.

The judgment is affirmed.

Mack Kidd, Justice

[Before Chief Justice Carroll, Justices Jones and Kidd]

Affirmed

Filed: March 17, 1993

[Do Not Publish]

1.   Federal Deposit Insurance Corporation is the successor-in-interest to two promissory notes made payable to Chas. Schreiner Bank and secured by two deeds of trust for the Howards' tract of land at issue in this case.