Harris County, Texas v. Clear Channel Outdoor, Inc.

Opinion of April 22, 2008, Withdrawn, Affirmed and Substitute Memorandum Opinion filed April 29, 2008

Opinion of April 22, 2008, Withdrawn, Affirmed and Substitute Memorandum Opinion filed April 29, 2008.

In The

Fourteenth Court of Appeals

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NO. 14-07-00226-CV

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HARRIS COUNTY, TEXAS, Appellant

V.

CLEAR CHANNEL OUTDOOR, INC., Appellee

On Appeal from the County Court at Law No. 2

Harris County, Texas

Trial Court Cause No. 824011

S U B S T I T U T E   M E M O R A N D U M   O P I N I O N

Appellant, Harris County, Texas, appeals a final judgment rendered in favor of appellee, Clear Channel Outdoor, Inc.  We affirm the trial court=s judgment.

Factual and Procedural Background

This is a condemnation case initiated by appellant to take property for a road project at FM 1960 at Kuykendahl Road.  The road project was a joint project between the Texas Department of Transportation (TxDOT) and appellant.  The federal government partially funded the project.  Under the agreement between appellant and TxDOT, appellant was responsible for the acquisition of the right of way for the project.  Because the federal government was providing funding for the project, appellant was required to comply not only with TxDOT policies, but also with all federal laws in handling those acquisitions.

Located within a portion of the property sought by appellant was a billboard owned by appellee.  While the sign was considerably older, appellee had executed a twenty-year lease with the property owners in 2003.  Prior to December 2004, both TxDOT policy and federal law considered billboards removed for transportation projects to be real property and required that the billboard owner be compensated for the loss of the sign or the cost of relocating the sign.  However, in late 2004, for reasons not disclosed in the record, TxDOT initiated changes in the regulations addressing how billboards affected by transportation projects should be handled.  These changes, which took effect in December 2004, dictated that billboards affected by transportation projects would no longer be treated as real property and the sign owners would no longer be offered compensation for the loss of the sign.

The road project, as well as appellee=s billboard, were located within the City of Houston.  City of Houston ordinances generally prohibit the construction of new off-premise billboards such as the one owned by appellee.  However, the City of Houston created an exception for billboards affected by transportation projects.  Under this exception, the City of Houston allows a billboard affected by a transportation project to be relocated to a new location within the City of Houston for a maximum period of ten years.  In addition to the time limit, the new location must comply with other restrictions such as the billboard cannot be within 1,500 feet of another billboard or within a designated scenic or historic district.

Although appellant notified appellee it had to remove the sign for the road project, appellant took the position, in line with TxDOT=s billboard policy, it did not have to pay appellee compensation for the sign structure, only for the loss of the leasehold itself.  The Special Commissioners awarded appellee a total sum of $60,000.00 for appellee=s property interests affected by the project.  Appellee filed objections to the Special Commissioners= award and filed an inverse condemnation counterclaim to seek compensation for the loss of the billboard as well as the leasehold estate.

Appellee eventually filed a motion for partial summary judgment in which it argued appellant=s action in forcing appellee to remove its billboard was a taking under both the federal and Texas constitutions for which the payment of just and adequate compensation is required.  In response, appellant argued appellee=s billboard was personal property and, under Texas law, personal property was not compensable. The trial court agreed with appellee and granted appellee=s motion for partial summary judgment.

Having determined appellant=s action was a taking and appellee was therefore entitled to compensation for the loss of the billboard, the issue on the amount of compensation owed to appellee was tried to the court.  The stipulations included the prerequisites of the right to take, the procedural posture of the case, the parties= opinions of value, and the authenticity of their respective appraisal reports.  Because appellant instructed its appraiser to exclude the value of the billboard structure from his valuation, the only evidence of value for the billboard structure was the valuation prepared by appellee=s appraiser. Appellee=s appraiser determined the value of the billboard structure was $305,500.00 and placed the bonus value of the lease at $20,000.00.  Appellant=s appraiser determined the bonus value of the lease was $17,662.00.  The trial court entered a final judgment that awarded appellee=s property interests, including the billboard, to appellant and $324,331.00 compensation to appellee.  Appellee=s compensation included $305,500.00 for the billboard and $18,831.00 for the lease bonus value.  No findings of fact and conclusions of law were requested or entered.  This appeal followed the denial of appellant=s Motion to Modify the Judgment and Alternatively, Motion for New Trial.

Discussion

I.        The Standard Of Review

On appeal, appellant does not challenge the amount of compensation the trial court awarded appellee for either the loss of the lease or the actual billboard.  Instead, appellant, arguing the billboard was non-compensable personal property, contends the trial court erred when it initially determined the forced removal of appellee=s billboard was a taking which entitled appellee to just and fair compensation.  This issue was resolved when the trial court granted appellee=s motion for partial summary judgment.  A partial summary judgment becomes appealable after a final judgment is rendered disposing of all issues in a case.  Newco Drilling Co. v. Weyand, 960 S.W.2d 654, 656 (Tex. 1998).  The movant for summary judgment has the burden to show there is no genuine issue of material fact and it is entitled to judgment as a matter of law.  Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985).  In determining whether there is a genuine fact issue precluding summary judgment, evidence favorable to the non-movant is taken as true and the reviewing court makes all reasonable inferences and resolves all doubts in the non-movant=s favor.  Id. at 548B49.  We review a trial court=s summary judgment de novo.  Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).  When a trial court=s order granting summary judgment does not specify the ground or grounds relied on for the ruling, the summary judgment will be affirmed on appeal if any theory advanced is meritorious.  Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

II.       Waiver

In a single issue on appeal, appellant contends the Atrial court erred when it awarded [appellee] non-compensable property damages in addition to the properly awarded damages for the leasehold interest in the real property acquired in this condemnation case.@  However, within that single issue, appellant makes five independent arguments as to why the trial court erred: (1) state and federal law do not entitle appellee to compensation beyond its leasehold interest and relocation costs; (2) appellee=s billboard was not affixed to the real property such that it became a part of the real property and thus was not compensable beyond the value of the leasehold; (3) the billboard was appellee=s personal property as determined by appellee=s intent and appellant is not required to pay compensation for personal property ; (4) appellee=s billboard was a trade fixture and, therefore, was not compensable; and (5) there was no inverse condemnation as appellant sought only to condemn appellee=s leasehold interest and not appellee=s billboard.  In response, appellee asserts appellant, with the exception of the third argument above, has waived the remaining arguments as appellant did not include these contentions in its summary judgment response.  We agree.

In the context of a summary judgment, a non-movant is required to expressly present to the trial court, by written answer or response, any issues defeating the movant=s entitlement to summary judgment.  Tello v. Bank One, 218 S.W.3d 109, 118 (Tex. App.CHouston [14th Dist.] 2007, no pet.) (citing Tex. R. Civ. P. 166a(c)).  To Aexpressly@ present issues as required by Rule 166a(c), the written answer or response to the motion for summary judgment must fairly apprise the movant and the trial court of the issues the non-movant contends should defeat the motion for summary judgment.  Id. at 119.  In determining what issues were expressly presented to the trial court, a reviewing court may not rely on the appellate briefs or the summary judgment evidence.  Dubose v. Worker=s Med., P.A., 117 S.W.3d 916, 920 (Tex. App.CHouston [14th Dist.] 2003, no pet.).  Any issues not expressly presented to the trial court in a written response shall not be considered as grounds for reversal.  Id.  Thus, the failure to present issues to defeat summary judgment in the trial court waives those issues on appeal.  Here, appellant presented a single argument in its summary judgment response: (1) compensation is not required for personal property, and (2) application of the Logan test indicates appellee intended the billboard to remain personal property.^[1] Appellant did not raise any of the remaining arguments in its response to appellee=s motion for partial summary judgment.  Therefore, appellant has waived those arguments on appeal.

III.      The United States Constitution Requires Appellant To Compensate Appellee For The Taking Of Appellee=s Billboard For Public Use

In its motion for partial summary judgment, appellee argued it was entitled to compensation for the loss of the billboard under both the Fifth Amendment to the United States Constitution and Article I, section 17 of the Texas Constitution.  We agree with appellee that the Fifth Amendment to the United States Constitution requires appellant to compensate appellee for the loss of the billboard.^[2] Because we hold the Fifth Amendment mandates appellee receive compensation for the loss of the billboard, we need not address appellee=s contention the Texas Constitution also requires compensation.  Tex. R. App. P. 47.1; Carr, 776 S.W.2d at 569.

Eminent domain has been described as one of the inalienable rights of sovereignty.  State v. Ware, 86 S.W.3d 817, 821B22 (Tex. App.CAustin 2002, no pet.).  It is the power to take private property for public use.  Id. at 822.  However, the government cannot take private property without payment of the market value for that property.  Id.  The Fifth Amendment provides private property may not be taken for public use without just compensation.  Id. (citing U.S. Const. amend. V). Under the Fifth Amendment, the term Ataken@ is construed broadly to mean the deprivation of the former owner rather than the accretion of a right or interest to the sovereign.  United States v. Gen. Motors Corp., 323 U.S. 373, 378, 65 S. Ct. 357, 359, 89 L. Ed. 311 (1945).  Under the Fifth Amendment Ajust compensation@ means the full monetary equivalent of the property taken.  Almota Farmers Elevator and Warehouse Co. v. United States, 409 U.S. 470, 473, 93 S. Ct. 791, 794, 35 L. Ed. 1 (1973).  The owner is to be put in the same position as he would have occupied if his property had not been taken.  Id. at 473B74, 93 S. Ct. at 794. Under this concept, the owner is entitled to the fair market value of the property at the time of the taking.  Id. at 474, 93 S. Ct. at 794.  This fair market value is normally to be ascertained from what a willing buyer would pay in cash to a willing seller.  Id.

Appellant argues it is not required to compensate appellee for the loss of the billboard because, in appellant=s view, the billboard was not sufficiently attached to the real property and therefore remained personal property, which is not compensable in an eminent domain proceeding.  We disagree.  In Almota, the Supreme Court stated the government cannot refuse to provide fair compensation for business improvements that are taken and dismiss the improvements as worth no more than scrap value simply because it did not intend to use them.  Almota, 409 U.S. at 475 n.2, 93 S. Ct. at 795 n.2.  The Supreme Court also determined a condemning authority cannot take advantage of an agreement between a lessor and lessee designating an improvement made by the lessee as personal property.^[3] Id. at 477 n.5, 93 S. Ct. at 796 n.5.  The Supreme Court then went on to state Athis rule . . . exists entirely for the protection of the tenant, and cannot be invoked by the condemnor.  If the buildings or fixtures are attached to the real estate, they must be treated as real estate in determining the total award.@  Id.

Here, it is undisputed appellee held a twenty-year lease on part of the real property condemned by appellant for a publicly financed road project.  It is also undisputed appellee owned a billboard on the leased property.  Further, it is also undisputed that the base of the billboard was buried in asphalt twenty feet deep in the ground.  It is also undisputed appellant ordered appellee to remove the billboard from its location to make way for the road project.  Finally, it is undisputed appellee had to essentially destroy the billboard in order to remove it from the property acquired by appellant for the road project.  Accordingly, we hold appellant, by forcing appellee to remove its billboard as part of the road project, took appellee=s private property thus entitling appellee to just compensation for the loss of that private property.  Accordingly, we overrule appellant=s single issue on appeal and affirm the judgment of the trial court.

Conclusion

Having overruled appellant=s single issue on appeal, we affirm the trial court=s final judgment.

/s/      John S. Anderson

Justice

Judgment rendered and Substitute Memorandum Opinion filed April 29, 2008.

Panel consists of Justices Anderson, Boyce and Senior Chief Justice Murphy.^*

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^[1]  The Logan test is used to determine whether personalty has become a fixture.  Logan v. Mullis, 686 S.W.2d 605, 607 (Tex. 1985).  It examines three factors: (1) the mode and sufficiency of annexation, either real or constructive; (2) the adaptation of the article to the use or purpose of the realty; and (3) the intention of the party that annexed the chattel to the realty.  Id.  We address the applicability of this test to a condemnation proceeding below.

^[2]  This provision of the Fifth Amendment is made applicable to the states by the Fourteenth Amendment which provides that no state may deprive any person of property without due process of law.  State v. Ware, 86 S.W.3d 817, 822 (Tex. App.CAustin 2002, no pet.) (citing U.S. Const. amend. XIV).

^[3]  Appellant=s citation of the Logan Test in support of its contention appellee=s billboard is non-compensable personal property is inapposite.  While routinely used to determine ownership of a fixture or liability for an injury, the test does not apply to condemnation proceedings. This limitation on the test is further confirmed by the cases cited by appellant as none involve a condemnation proceeding.  See Logan, 686 S.W.2d at 607 (dispute between neighboring landowners over use of a bridge);  Tex. & N.O. R.R. Co. v. Schoenfeld, 136 Tex. 173, 146 S.W.2d 724, 725 (1941) (dispute over ownership of railroad track materials); Trenolone v. Cook Exploration Co., 166 S.W.3d 495, 497 (Tex. App.CTexarkana  2005, rule 53.7(f) granted) (dispute over right to use subsurface gas pipeline);   Lingleville I.S.D. v. Valero Transmission Co., 763 S.W.2d 616, 617 (Tex. App.CEastland 1989, writ denied) (tax dispute involving the classification of a pipeline as either real or personal property); Trans-Nebraska Corp. v. Cummings, Inc., 595 S.W.2d 922, 922B23 (Tex. App.CHouston [14th Dist.] 1980, no writ) (conversion case involving an advertising sign);  Vermillion v. Fidel, 256 S.W.2d 969, 969 (Tex. App.CAmarillo 1952, no writ) (dispute over ownership of oil field production equipment); Rogers v. Fort Worth Poultry & Egg Co., 185 S.W.2d 165, 167 (Tex. App.CFort Worth 1944, no writ) (venue case involving a bus crashing into a building); Maro Co. v. State, 168 S.W.2d 510, 511 (Tex. App.CAmarillo 1943, writ ref=d) (tax dispute over an oil and gas leasehold).

^*  Senior Chief Justice Paul Murphy sitting by assignment.