Enbridge Pipelines (East Texas) L.P. v. Gilbert Wheeler, Inc.

Ill.h CUPV
THE SUPREME COURT OF TEXAS
Post Office Box 12248
Austin, Texas 78711
(512)463-1312
August 29, 2014
Ms. Julie Wright Ms. Macey Reasoner Stokes
Flowers Davis PLLC Baker Botts LLP
1021 ESE 323 Loop, Suite 200 910 Louisiana Street, One Shell Plaza
Tyler, TX 75701-9607 Houston, TX 77002-4995
Mr. Darrin M. Walker
Law Office of Darrin Walker
6134 Riverchase Glen Drive
Kingwood, TX 77345 FILE iDlNCOURTOFAPPE ALS
1: urt of Appeals Distr let
RE: Case Number: 13-0234
Court of Appeals Number: 12-11-00303-CV - 1 20K
Trial Court Number: 07CV29,883
TYLER TEXAS
Style: GILBERT WHEELER, INC. CATHY S. LUSK, CLERK
v.
ENBRIDGE PIPELINES (EAST TEXAS), L.P.
Dear Counsel:
Today the Supreme Court of Texas issued an opinion and judgment in the above-
referenced cause. You may obtain a copy of the opinion and judgment through Case Search on
our Court's webpage at: http://www.supreme.courts.state.tx.us/. On the Case Search page
simply enter the case number and push the Search button to find the docket page for your case.
Sincerely,
^V. vWjjJ^sk"
Blake A. Hawthorne, Clerk
by Claudia Jenks, Chief Deputy Clerk
cc: Ms. Lori Oliver
Ms. Cathy S. Lusk
IN THE SUPREME COURT OF TEXAS
No. 13-0234
'COURT OF APPEALS
Gilbert Wheeler, Inc., Petitioner,
?ATHY S. Lusl
Enbridge Pipelines (East Texas), L.P., Respondent
On Petition for Review from the
Court of Appeals for the Twelfth District of Texas
Argued February 27, 2014
Justice Lehrmann delivered the opinion of the Court.
This case presents various issues regarding the proper manner of compensating a landowner
for the destruction of trees on his property. As a general rule, when an injury to real property is
temporary, the owner is entitled to damages commensurate with the cost of restoring his property,
but when an injury to the same property is permanent, the owner is entitled to damages
commensurate with the loss in the fair market value to the property as a whole. In today's case, we
consider whether this general rule applies when the wrongful conduct causing the injury stems from
breach of contract rather than tort. Concludingthat it does, we also review a common law exception
to this general rule,whichundercertaincircumstances entitlesthe landowner to damages in keeping
with the intrinsic value of the trees that were destroyed. Becausewe conclude that the exception
properly applies in this case, and hold that any error in the jury charge related to such damages was
harmless, we reverse the judgment of the court of appeals and remand the case to that court to
address the remaining issues.
I. Facts
The Wheeler family, by way of closely held corporation Gilbert Wheeler, Inc. (Wheeler),
owns a 153-acre tract of land in Shelby County called "the Mountain." The property, which the
Wheelers use as a family retreat, is heavily wooded and transected by a natural stream. When
Enbridge Pipelines, L.P. determined that it needed to construct a pipeline across the property, it
engaged INA Field Services to approach Wheeler about obtaining an easement. Wheeler agreed to
grant Enbridgea right of way, but insisted that Enbridge install the pipeline by boring underground
in order to preserve the trees on the property. Wheeler agreed to a contract that reflected this
stipulation in explicit terms. Because this was an unusual provision, Enbridge was required to
specifically approve the contract.
Soon after the parties executed the agreement, Enbridge hired a construction company to
build the pipeline, but failed to inform the contractors about the provision requiring them to use the
boring method to install the pipeline. As a result, in clearing the right of way the construction
company cut down several hundred feet of trees and bulldozed the ground. In the process, the
workers also channelized the stream that once meandered through the woods.
Wheeler sued Enbridge for breach of contract and trespass. The suit proceeded to a jury trial,
and the court charged the jury on both claims. Enbridge objected to the trespass submission, arguing
that Wheeler's claims sounded only in contract. Enbridge also requested a question concerning
whether the damage to the Mountain was temporary or permanent, contending that the question was
a necessary predicate to determine whether the jury should award damages commensurate with the
cost to restore the trees and stream or damages commensurate with the loss in the Mountain's fair
market value. Wheeler contended that the distinction was irrelevant. Ultimately, the trial court
submitted the charge without the question, and the jury found Enbridge liable for the damage to
Wheeler's property on both trespass and breach-of-contract theories. In conjunction with the breach-
of-contract claim, the jury awarded $300,000 to compensate Wheeler for the reasonable cost to
restore the property. In conjunction with the trespass claim, the jury found no loss in the Mountain's
fair market value and awarded Wheeler $288,000 in damages for the intrinsic value of the trees
Enbridge destroyed. Wheeler elected to recover the damages awarded for breach of contract.
Enbridge appealed, arguing that the trial court erred in failing to submit the predicate
question of whether the injury to the Mountain was temporary or permanent. Enbridge also
contended that the injury was permanent as a matter of law, that cost-to-restore damages were
therefore improperly awarded, and that Wheeler could not recover damages for the intrinsic value
of the trees because that measure of damages was unavailable and not properly submitted to the jury
in any event. Wheeler countered that the temporary-versus-permanent distinction did not apply
because its case sounded in contract. Wheeler argued in the alternative that it could recover for the
intrinsic value ofthe trees destroyed without respect to the temporary-versus-permanent distinction.
The court of appeals agreed with Enbridge and held that, because Wheeler had failed to secure a
finding as to whether the injury to the property was temporary or permanent, Wheeler had waived
its entitlement to a damage award. For that reason, the court of appeals rendered a take-nothing
judgment in Enbridge's favor. Wheeler petitioned this Court for review.
II. Analysis
Wheeler's petition raises broad concerns about the boundaries of the temporary-versus-
permanent distinction and its application to the calculation of damages for injury to real property.
In order to resolve the confusion surrounding this distinction, we take this opportunity to clarify its
contours.
A. Temporary-Versus-Permanent Injury to Real Property
Applying the distinction betweentemporaryand permanent injuryto real property has proven
a vexing task for litigants and courts alike. After all, injury to real property often appears permanent
in the sense that the exact real estate in question—ademolishedhouse or destroyedtree—no longer
exists. However, as discussed below, the law recognizes that such items frequently can be replaced
in an adequate manner, rendering the landowner suitably compensated. To further complicate
matters, Texas courts have attempted to categorize various aspects of a legal claim, including a
party's conduct, an event or occurrence, a condition, an injury or harm, and the damages resulting
from an injury or harm, as either temporary or permanent.
Further muddling things are the multiple purposes served by characterizing an injury to real
property as temporary or permanent. The distinction guides courts in determining: "(1) whether
damages are available for future or only past injuries; (2) whether one or a series of suits is required;
and (3) whether claims accrue (and thus limitations begins) with the first or each subsequent injury."
Schneider Nat'I Carriers, Inc. v. Bates, 147 S.W.3d 264, 275 (Tex. 2004). The present case
4
illustrates a fourth application of the distinction: it guides the proper measure of damages for injury
to real property.1 To that end, we have applied the distinction in evaluating real-property damages
across many different theories of liability. See, e.g., Coinmach Corp. v. Aspenwood Apartment
Corp.,417 S.W.3d 909,921 (Tex. 2013) (trespass); Natural Gas Pipeline Co. v. Justiss, 397 S.W.3d
150, 152 (Tex. 2012) (nuisance); State v. Bristol Hotel Asset Co., 293 S.W.3d 170, 172 (Tex. 2009)
(eminentdomain); Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d227,235 (Tex.
2004) (negligence).
In today's case, we focus on the significance of classifying injury to real property as
temporary or permanent in the context of properly compensating the injured landowner. Our
analysis takes into consideration the fact that the property in question was injured due to a breach
of contract, as well as the fact that the injury involves loss of trees.
B. Application of Distinction to the Measure of Damages for Injury to Real Property
As early as 1889, we stated that "[i]f land is temporarily but not permanently injured by the
negligence or wrongful act of another, the owner would be entitled to recover the amount necessary
to repair the injury, and put the land in the condition it was at the time immediately preceding the
injury, with interest thereon to the time of the trial." Trinity & S. Ry. Co. v. Schofield, 10 S.W. 575,
576-77 (Tex. 1889). The companion rule, of equally venerable provenance, states that "the true
measure of damages in case of permanent injury to the soil is the difference between the value of the
We specifically recalled this "different purpose" for the temporary-versus-permanent distinction in Schneider.
147 S.W.3d at 270 n.12. We note that these purposes are not exclusive. We have held, for example, that a landowner
may receive injunctive relief to prevent certain future trespasses if the trespass is "continuing." See, e.g., R.R. Comm '«
of Tex. v. Manziel, 361 S.W.2d 560, 567 n.2 (Tex. 1962).
land immediately before the injury and its value immediately after." Fort Worth &D. C Ry. Co. v.
Hogsett, 4 S.W. 365, 366 (Tex. 1887). These rules are premised on the notion that the ordinary
measure of damages is the cost to restore the property. When restoration is not possible, however,
we award damages equal to the loss in fair market value of the property as a whole.
1. Application of Distinction to the Breach-of-Contract Claim
Wheeler argues that, with respect to calculating damages for injury to real property, the
temporary-versus-permanent distinction has no place when those damages stem from breach of
contract rather than tort. Wheeler notes that contract damages serve to give a plaintiff the benefit
of his bargain, i.e., to place the plaintiff in the position he would have occupied if the contract had
been performed. Wheeler contends that restorationcosts will give it the benefit of its bargain under
the right-of-way agreement and thus are the proper measure of damages regardless of whether the
injury to the Mountain is characterized as temporary or permanent.
We have never directly addressed this issue, and the courts of appeals are not in agreement.
Some have held that calculating damages for injury to real property requires application of "general
principles" across causes of action, whether sounding in contract or tort. Hall v. Hubco, Inc., 292
S.W.3d 22, 32 n.4 (Tex. App.—Houston [14th Dist.] 2006, pet. denied); see also Z.A.O., Inc. v.
Yarbrough Drive Ctr. Joint Venture, 50 S.W.3d 531, 545-46 (Tex. App.—El Paso 2001, no pet.)
(holding that cost to restore was the appropriate measure of damages for temporary injury to real
property caused by breach of a lease agreement). Others have been more flexible in evaluating
damage awards. See, e.g., P. G. Lake, Inc. v. Sheffield, 438 S.W.2d 952, 954-55 (Tex. Civ.
App.—Tyler 1969, writ ref d n.r.e.) (declining to apply the temporary-versus-permanent distinction
where an oil and gas lessee breached his contract to repair the leased premises); see also B. A. Mortg.
Co. v. McCullough, 590 S.W.2d 955,956-57 (Tex. Civ. App.—Fort Worth 1979, no writ) (affirming
cost-to-restore damages in a case involving permanent injury to land because "the reasonableness
of applying a given measure of damages in a given case unavoidably hinges on the peculiarities of
the case" (citation and internal quotation marks omitted)).
We hold that application of the temporary-versus-permanent distinction in cases involving
injury to real property is not limited to causes of action that sound in tort rather than contract. Of
course, contracting parties are free to specify in an agreement how damages will be calculated in the
event of a breach, but when they do not, both courts and parties benefit from the application of
general principles with respect to calculating damages for such injury. In this case, we find
persuasive our prior holding that, with respect to right-of-way agreements like the one at issue here,
"the measure of damages for breach of an easement that restricted a right to cut trees would be the
same as the measure for negligently cutting trees." DeWitt Cnty. Electric Coop., Inc. v. Parks, 1
S.W.3d 96,105 (Tex. 1999). This stands to reason because the injury in question under either cause
of action is the same. We see no reason to compensate a party differently because the wrongful
conduct that caused the identical injury stems from breaching a contract rather than committing a
tort. Further, the exceptions to the general rules in this area, discussed below, operate to ensure
landowners are adequately compensated. Accordingly, we hold that the temporary-versus-permanent
distinction underlies the determination of the proper measure of damages for both the trespass and
breach-of-contract claims at issue.
2. Definitions of Temporary and Permanent Injury
Having clarified the significance ofwhether injury to real property is temporary or permanent
with respect to measuring the resulting damages, we turn to how that determination is made. We
have previously defined a permanent action or consequence in accordance with its ordinary
meaning—that is, as a thing which will continue indefinitely, or at least for a very long time.
Tarrant Reg 7 WaterDist. v. Gragg, 151 S.W.3d 546, 558 (Tex. 2004). But we have also recognized
that the same action or consequence "need not be eternal" or "perpetual" to qualify as permanent.
Schneider, 147 S.W.3d at 277. On the contrary, an action or consequence may qualify as permanent
if it is ongoing, continually happening, or occurring repeatedly and predictably. Gragg, 151 S.W.3d
at 558; Schneider, 147 S.WJd at 272; Atlas Chem. Indus., Inc. v. Anderson, 524 S.W.2d 681,
684-85 (Tex. 1975); Brazos River Auth. v. City of Graham, 354 S.W.2d 99, 106 (Tex. 1961).
Identifying the opposites of the same themes, we have defined as temporary those actions and
consequences that do not last for long periods of time, are not ongoing, are not likely to occur again,
occur only sporadically, or occur unpredictably. Schneider, \A1 S.W.3d at 272; Atlas, 524 S.W.2d
at 685; Brazos River Auth., 354 S.W.2d at 108.
For the sake of clarity, we reformulate these definitions in the following way. An injury to
real property is considered permanent if (a) it cannot be repaired, fixed, or restored, or (b) even
though the injury can be repaired, fixed, or restored, it is substantially certain that the injury will
repeatedly, continually, and regularly recur, such that future injury can be reasonably evaluated.
Conversely, an injury to real property is considered temporary if (a) it can be repaired, fixed, or
restored, and (b) any anticipated recurrence would be only occasional, irregular, intermittent, and
8
not reasonably predictable, such that future injury could not be estimated with reasonable certainty.
These definitions apply to cases in which entry onto real property is physical (as in a trespass) and
to cases in which entry onto real property is not physical (as with a nuisance). With these definitions
in hand, we turn to whether the jury or the court is the proper entity to determine whether an injury
to real property is temporary or permanent.
3. Whether Injury to Real Property Is Temporary or Permanent Is a Question of Law
We held long ago that "[w]hether the injury [to real property] amounts to total or only partial
destruction of value, or whether it be permanent or temporary, as well as the extent of the injury and
the resulting amount of damages, are all questions for the determination of the jury under proper
instructions." Trinity & S. Ry. Co. v. Schofield, 10 S.W. 575, 577 (Tex. 1889). However, we have
more recently clarified, in the context of a nuisance suit, that "[jjurors must still decide the
frequency, extent, and duration of noxious conditions .. . [b]ut jurors cannot decide questions such
as whether damages can be estimated with reasonable certainty, whether principles of res judicata
allow one or a series of suits, or when limitations ought to accrue." Schneider, 147 S.W.3dat281.
Accordingly, we instructed that jurors should determine whether a nuisance works temporary or
permanent injury only "to the extent there is a dispute regarding what interference has occurred or
whether it is likely to continue." Id.
Because this instruction should apply with equal force in cases considering the appropriate
measure of damages for injury to real property, we hold that whether an injury is temporary or
permanent is a question of law for the court to decide. At the same time, we recognize that questions
regarding the facts that underlie the temporary-versus-permanent distinction must be resolved by the
jury upon proper request. Said another way, when the facts are disputed and must be resolved to
correctly evaluate the nature of the injury, the court, upon properrequest, must present the issue to
the jury, relying on the definitions we have provided in this opinion.
4. Exceptions to the General Rule as to Damages
As noted above, the general rule in cases involving injury to real property is that the proper
measure of damages is the costto restore or replace, plus loss of use for temporary injury, and loss
in fair market value for permanent injury. However, we apply this rule with some flexibility,
considering the circumstances of each case to ensure that an award of damages neither over- nor
under-compensates a landowner for damage tohis property. We maintain thatthepurpose of the law
"in every case, is to compensate the owner for the injury received, and the measure of damages
which will accomplish this in a given case ought to be adopted." Pac. Express Co. v. Lasker
Real-Estate Ass 'n, 16 S.W. 792, 793 (Tex. 1891). For that reason, Texas courts have appealed to
a number of exceptions to the general rule when it would compensate a landowner unjustly. Two
of those exceptions are at issue in this case.
a. The Economic Feasibility Exception
In cases involving temporary injury, Texas courts have recognized the so-called economic
feasibility exception to the general rule that the cost to restore is the proper measure of damages.
This exception applies when the cost of required repairs or restoration exceeds the diminution in the
property's market value to such a disproportionately high degree that the repairs are no longer
economically feasible. In those circumstances a temporary injury is deemed permanent, and
damages are awarded for loss in fair market value. See N Ridge Corp. v. Walraven, 957 S.W.2d
10
116, 119 (Tex. App.—Eastland 1997, pet. denied); see also Hubco, 292 S.W.3d at 32; Jim Walter
Homes, Inc. v. Gonzalez, 686 S.W.2d 715, 717 (Tex. App.—San Antonio 1985, writ dism'd). In
North Ridge, a landowner sued for injury to his property caused by unrelated spills of saltwater and
oil. 957 S.W.2d at 117. Although these injuries were capable of being remediated, and therefore
temporary, the combined cost to complete the restoration would have "exceeded the maximum value
of the entire 100-acre tract by more than six times." Id. at 119. As a result, the court of appeals
concluded that the repairs were not economically feasible as a matter of law, and awarded damages
in keeping with the loss in the property's fair market value. Id. at 119-20.
Although this Court has not expressly recognized the economic feasibility exception, we have
applied it, or something very similar to it, when necessary to prevent a landowner from being
overcompensated. Two cases with similar facts illustrate the application of this exception. In
Pacific Express, a landowner sued to recover damages for the negligent destruction of his house,
which by most accounts would be considered a temporary injury because the house could be rebuilt.
16 S.W. at 793. We held, however, that the house should be treated "as a part of the land," and the
measure of damages should be "the difference between the value ofthe land immediately before and
after a house on it is injured or destroyed." Id. at 794. We reached that result because declining
local land values led us to conclude that to award the landowner the cost of restoring the home
"would be to give to him more than would be just compensation." Id. at 793. By contrast, we
reached the opposite result in Coastal Transport Co. v. Crown CentralPetroleum, 136 S.W.3d 227,
235 (Tex. 2004). In that case, fire destroyed a landowner's facility. Mat229. The injury was found
to be temporary, and the trial court awarded an amount commensurate with the cost of replacing the
11
facility, rather than the much larger sum the jury found constituted the property's lost market value.
Id. at 230, 235. The landowner argued that the injury was permanent, as the facility had been totally
destroyed, but we held that the landowner was "entitled to recover only the amount of money
necessary to rebuild its facility and to compensate for its loss of use during the interim." Id. at 235.
This, we explained, was a measure sufficient to place the landowner "in the same position [it]
occupied prior to the injury." Id. (citations and internal quotation marks omitted).
Though we reached divergent results in these cases, in each instance we explained that our
holding was necessary to ensure that the landowner was adequately, but not excessively,
compensated. Consistent with these decisions, we confirm today our recognition of the economic
feasibility exception to the general rule governing the measure of damages for temporary injury to
real property.
b. The Intrinsic Value of Trees Exception
In cases involving real property injured by the destruction of trees, even when the proper
measure of damages is the loss in the fair market value of the property to which the trees were
attached, and the value of the land has not declined, we have held that the injured party may
nevertheless recover for the trees' intrinsic value. This exception was created to compensate
landowners for the loss of the aesthetic and utilitarian value that trees confer on real property. In
Porras v. Craig, a landowner sued his neighbor for cutting down trees on his property, some as large
as four feet in diameter. 675 S.W.2d 503, 504 (Tex. 1984). The parties agreed that the damage to
the land was permanent, and we noted that the usual measure ofdamages for permanent injury to real
property is "the difference in the market value ofthe land immediately before and immediately after"
12
the injury occurs. Id. However, we observed that Texas courts of appeals had begun to apply "a
conditional measure of damages, . . . contingent on a showing of no reduction in market value,"
which compensated landowners for the intrinsic value of the trees that were destroyed. Id. at 506.
We recognized the exception and remanded the case for a new trial in the interest ofjustice. Id.
We recently revisited this exception in Strickland v. Medlen. 397 S.W.3d 184 (Tex. 2013).
In that case, we considered whether pet owners could recover noneconomic damages for the
negligent loss of their dog. Id. at 185. We concluded that they could not, as more than a century of
case law has classified pets as personal property. Id. (citing Heiligmann v. Rose, 16 S.W. 931, 932
(Tex. 1891)). Ultimately, we held that the plaintiffs could recover only the objective, economic
value oftheir pet. Mat 198. In arriving at this conclusion, we distinguished Porras. We explained
that Porras presented no obstacle to the result in Strickland because a tree's intrinsic value is not
"rooted in an owner's subjective emotions," nor does it encompass the tree's "sentimental value"
to its owner. Id. at 190. Rather, the intrinsic value of a tree lies in "its ornamental (aesthetic) value
and its utility (shade) value." Id. (citing Porras, 675 S.W.2d at 506). We also do not rule out other
elements of objective value to the extent an expert lays a proper predicate.
Applying Strickland, we confirm and clarify this exception to the general rule governing
damages for permanent injury to real property. Specifically, we affirm that when a landowner can
show that the destruction of trees on real property resulted in no diminishment of the property's fair
market value, or in so little diminishment of that value that the loss is essentially nominal, the
landowner may recover the intrinsic value of the trees lost; that is, the ornamental and utilitarian
value of the trees. We recognize that in Porras we stated that the exception applies when there is
13
"no" diminution in market value, Porras, 675 S.W.2d at 506, but we decline to limit the exception
so strictly. See Moran Corp. v. Murray, 381 S.W.2d 324, 328 (Tex. Civ. App.—Texarkana 1964,
no writ) (holding that intrinsic value measure of damages is proper when the plaintiff shows "that
destruction of the trees did not have a significant effect upon the market value of the land"). If we
were to permit application of the exception when the property suffered no loss in fair market value
but not permit application of the same exception when the property suffered what amounts to a
nominal loss in value, we would controvert the purpose of a damage award, which is to adequately
compensate the injured party. See Pac. Express, 16 S.W. at 793.
III. Application
Having considered our case law concerning the temporary-versus-permanent distinction, we
turn to the matter at hand. First, we consider whether Wheeler was required to submit a question
asking the jury to characterize the injury to the Mountain as temporary or permanent. Second, we
consider the propriety of the jury's award of cost-to-restore damages. Finally, we consider whether
the jury question concerning the intrinsic value of the trees was properly submitted.
A. Absence of a Temporary-Versus-Permanent Jury Question
The court of appeals ultimately held that Wheeler's claims failed because it had neglected
to request, and in fact actively opposed, a jury question concerning whether the injury to the
Mountain was temporary or permanent. The court of appeals stated that "whether injury to real
property is permanent or temporary is a question of fact." 393 S.W.3d at 925. As a result, it
reasoned that "before damages for injury to real property may be awarded, the plaintiff must first
obtain a finding on whether the injury to the land was permanent or temporary." Id. The court relied
14
on Texas Rule of Civil Procedure 279 to hold that, because Wheeler had declined to include a
necessary predicate question, and Enbridge had objected to that omission, Enbridge was entitled to
rendition of judgment in its favor. See State Dep't of Highways & Pub. Transp. v. Payne, 838
S.W.2d 235, 241 (Tex. 1992).2 As explained above, the court of appeals' analysis is predicated on
an erroneous premise—that the temporary-versus-permanent distinction is a question of fact. We
therefore reject its conclusion.
Any dispute about the underlying facts of the case at bar has no bearing on the classification
of the injury to the Mountain as temporary or permanent. Wheeler presented evidence that the cost
to restore the Mountain to the condition it was in before Enbridge cleared the right of way was
somewhere between $585,745 and $857,589. The jury ultimately found that the reasonable cost to
restore the Mountain was $300,000. Although Enbridge contested the opinions of Wheeler's
experts, at the very least they show that restoration was possible, rendering the injury temporary
under the definitions supplied above. There was also competing expert testimony that the loss in the
Mountain's fair market value was either $0 (according to Wheeler's expert) or $3,000 (according
to Enbridge's expert). Under these circumstances, when restoration of the land is technically
possible but exceeds the diminution in market value to such a disproportionately high degree that
In Payne, we applied Rule 279 to hold that when an element of a party's claim is omitted from the jury charge,
and the opposing party objects to the omission, a finding on the element may not be deemed in the prevailing party's
favor. 838 S.W.2dat241.
15
the repairs are no longer economically feasible,3 the injury is deemed permanent. SeePac. Express,
16 S.W. at 793-94. Moreover, the parties now agree that the injury is a permanent one.
We hold that whether the injury to the Mountain was temporary or permanent is a question
of law and that Wheeler therefore was not required to submit a jury question on that issue. Indeed,
it would have been error for the trial court to include such a question in the charge. Grohman v.
Kahlig, 318 S.W.3d 882, 887 (Tex. 2010). Instead,applying the definitionssupplied in this opinion,
we hold that the injury to the Mountain is deemed permanent as a matter of law due to the parties'
agreement and the application of the economic feasibility exception.
Because the injury is deemed permanent, however, the trial court improperly instructed the
jury to calculate damages based on the cost to restore the property. In turn, the trial court's judgment
may not be upheld based on the jury's calculation of such damages. Accordingly, we turn to the
jury's award of intrinsic value damages.
B. The Intrinsic Value of Trees Jury Question
The jury independently awarded Wheeler $288,000 in damages for the intrinsic value of the
trees that were destroyed. Enbridge contends that Wheeler is barred from recovering such damages
because (1) the loss oftrees caused some diminution in the Mountain's fair market value, and (2) the
3 We note that even the lower range of cost-to-restore damages presented by Wheeler's experts significantly
exceeded the fair market value of the entire 153-acre property. The amount of cost-to-restore damages awarded by the
jury was approximately 78% of the value of the entire property.
16
intrinsic value jury question was submitted in conjunction with the trespass cause of action, which
was itself improperly submitted.4
In its first argument, Enbridge contends that Wheeler may not recover the intrinsic value of
the trees that were destroyed because Wheeler did not adduce legally sufficient evidence that the
value of the Mountain was not at all diminished by the destruction. In support of this argument,
Enbridge cites the opinions of several courts of appeals. See, e.g.,Lamar Cnty. Electric Coop. Ass 'n
v. Biyant, 770 S.W.2d 921, 923 (Tex. App.—Texarkana 1989, no writ); Garey Constr. Co. v.
Thompson, 697 S.W.2d 865, 867 (Tex. App.—Austin 1985, no writ). But, as we have already
explained, a landowner may recover for the intrinsic value ofthe trees on his property so long as the
diminution in the fair market value of the land is essentially nominal. To the extent these opinions
hold otherwise, we expressly overrule them.
In this case, the record indicates that the fair market value of the Mountain as of the date of
the injury was $383,000. As noted above, Wheeler's expert testified that the destruction of the trees
had not diminished the value of the Mountain at all, while Enbridge's expert testified that the
Mountain had been reduced in value by $3,000. Assuming that the latter figure is the correct one,5
the fair market value of the Mountain was reduced by less than one percent. This negligible
Enbridge also argues that Wheeler failed to show that the destroyed trees had no market value as timber
separate and apart from the real property to which they were attached, rendering intrinsic value damages improper. E.g.,
Lucas v. Morrison, 286 S.W.2d 190, 191 (Tex. Civ. App.— San Antonio 1956, no writ). When we recognized intrinsic
value damages in Porras, we did not require the plaintiff to make such a showing, which makes sense because that
measure applies to trees that serve ornamental or shade purposes. 675 S.W.2d at 506.
The jury agreed with Wheeler that there was no loss in fair market value, but Enbridge challenges the
sufficiency of the evidence to support that finding. We need not decide that issue because the result is the same even
if we assume there was a $3,000 loss in fair market value.
17
reduction in fair market value is essentially nominal and does not preclude application ofthe intrinsic
value exception.
Enbridge also suggests an independent ground on which the jury's damage award must be
invalidated. In the jury charge, the question that asked the jury to consider the intrinsic value of the
trees was posed in connection with a liability question on Wheeler's trespass cause of action.
Relyingon DeWitt County Electric Cooperative, Inc. v. Parks, 1 S.W.3d 96 (Tex. 1999), Enbridge
argues that Wheeler cannot recover on its trespass claim as a matter of law and that, as a result, the
jury question related to the intrinsic value of the trees is infirm.
In Parks, certain landowners entered into a contract with an electrical services cooperative
for an easement across the landowners' property. Id. at 99. The right-of-way agreement that created
the easement gave the cooperative certain rights with regard to the trees that were located on or near
the easement. Id. When the cooperative cut down several trees, the landowners sued, alleging
breach of contract and negligence among other claims. Id. We considered whether the plaintiffs
could maintain their negligence claim independently of their contract claim. Id. at 105. Ultimately,
we held that when a contract between two parties "spells out the parties' respective rights about
whether trees may be cut, the contract and not common-law negligence governs any dispute about
whether trees could be cut or how trees were cut." Id. That is, we held that the landowners' claims
sounded only in contract, not in negligence, and we affirmed the trial court's grant ofdirected verdict
to the cooperative on the landowners' negligence claims. Id. However, in Formosa Plastics Corp.
USA v. Presidio Engineers and Contractors, Inc., we held that the existence of a contract did not
prevent a plaintiff from bringing an additional claim for fraudulent inducement. 960 S.W.2d 41,43
(Tex. 1998). Because in the instant suit Wheeler brought a claim for trespass—distinct from both
the negligence claim in Parks and the fraudulent inducement claim in Formosa Plastics—it is not
immediately clear whether the trial court erred in submitting Wheeler's claim to the jury.
However, we need not resolve that question to conclude that, even if the submission of the
trespass cause ofaction was error, it was harmless. We have held that the submission of an improper
jury question may be harmless when an appellate court determines that the verdict was based on a
valid theory of liability. Thota v. Young, 366 S.W.3d 678, 693-94 (Tex. 2012). And, as we have
already stated, the temporary-versus-permanent dichotomy and its concomitant rules and
exceptions—including the intrinsic value exception—govern the proper measure of damages on
Wheeler's breach-of-contract claim. See Parks, 1 S.W.3d at 105. Because breach of contract was
a valid theory of liability on which Wheeler prevailed, it is of no moment that the intrinsic value of
trees jury question was submitted in conjunction with a trespass cause of action.
IV. Remaining Issues
Enbridge raised several issues in the court of appeals that were not reached because of that
court's disposition of the case. Some of those issues were argued in the parties' briefing to this
Court and have been discussed in this opinion. However, several were not, including various
challenges to the trial court's admission of Wheeler's experts' testimony, exclusion of Enbridge's
experts' testimony, and failure to submit a jury question on one of Enbridge's breach-of-contract
defenses. As these issues were not briefed in this Court, we hereby remand the case to the court of
appeals to address them.
19
V. Conclusion
The court of appeals erred in rendering judgment for Enbridge based on the trial court's
failure to submit ajuryquestion onwhether the injury to the Mountain wastemporary or permanent.
For the reasons discussed above, we reverse the court of appeals' judgment and remand the case to
that court to address the remaining issues in a manner consistent with this opinion.
Debra H. Lehrmann
Justice
OPINION DELIVERED: August 29, 2014
20
IN THE SUPREME COURT OF TEXAS
nL >->J ilv
RT OF APPEALS
No. 13-0234 1^hJ^3" Appeals restrict |
Gilbert Wheeler, Inc., Petitioner,
. TYLER TEXA
CATHY S. LUSK. CLERK
Enbridge Pipelines (East Texas), L.P., Respondent
On Petition for Review from the
Court of Appeals for the Twelfth District of Texas
judgment
THE SUPREME COURT OF TEXAS, having heard this cause on petition for review from
the Court ofAppeals for the Twelfth District, and having considered the appellate record, briefs, and
counsel's argument, concludes that the court of appeals' judgment should be reversed.
IT IS THEREFORE ORDERED, in accordance with the Court's opinion, that:
1) The court of appeals' judgment is reversed;
2) The cause is remanded to that court for further
proceedings consistent with this Court's opinion; and
3) Gilbert Wheeler, Inc. shall recover, and Enbridge
Pipelines (East Texas), L.P. shall pay, the costs
incurred in this Court.
Copies of this Court's judgment and opinion are certified to the Court of Appeals for the
Twelfth District and to the District Court of Shelby County, Texas, for observance.
Opinion of the Court delivered by Justice Lehrmann
August 29, 2014