Property Owner Rule entitled representative to testify as to value of damage to remainder of property after road expansion

The State of Texas v. Speedway Grapevine I, LLC, A Texas Limited Liability Company, and First Commercial Bank, N. A 02-16-00144-CV (Tex.App—Fort Worth, October 19, 2017)

This is a condemnation case where the Fort Worth Court of Appeals affirmed the jury verdict condemnation award, including the admission of valuation evidence by the owner’s representative.

Speedway owned real property which included a car wash and an express lube on a specific lot. In connection with a road-widening improvement project the State condemned a portion of the frontage. However, Speedway asserted the condemnation affected the ability to operate the two businesses.  The State appealed the commissioner’s award but the jury awarded more than the commissioner’s award. The State’s expert opined Speedway’s remainder property had sustained damages in the amount of $0, excluding a total cost to cure of $105,826.00.  Adding the value of the part condemned ($159,789.00), it opined Speedway was entitled to total compensation in the amount of $265,615.00. Speedway’s experts opined the remainder property suffered a total damage of $2,609,420.00. Adding the value of the part condemned to that figure, Speedway asserted it was entitled to compensation in the total amount of $2,748,822.00.  After a jury trial, the jury found the part condemned had a market value of $92,190.00 and that Speedway’s remainder property was damaged in the amount of $4,401,028.00. The State appealed.

The State first objected to Speedway’s appraisal expert, McRoberts. The State argued he speculated on post-condemnation nonconforming treatment, that Texas law did not recognize his income approach, and that he had improperly relied upon noncompensable impairment of access.  The trial court excluded McRoberts’s income approach but not his cost approach. It also permitted him to testify regarding internal traffic circulation difficulties, unsafe access, and nonconformance with zoning regulations.  Mr. High, Speedway’s representative as the owner, testified about his experience in the car wash industry, the reasons why Speedway located the car wash where it did, the market value of the whole property, problems with a cure plan devised for the State, and the viability of the car wash after the condemnation. The State acknowledges that a property owner may testify to the value of his property, as High did here, but it argued the owner’s valuation testimony must still meet the same requirements as any other opinion evidence.  The court rejected this argument in part. The Property Owner Rule “is an exception to the requirement that a witness must otherwise establish his qualifications to express an opinion on land values.” Based on the presumptions that an owner is familiar with his property and will know its value, the Rule accepts that a property owner is qualified to testify.  However, qualification is not the same as the basis of the opinion. The property owner “must [still] provide the factual basis on which his opinion rests.” But the burden is not difficult or complex. “Evidence of price paid, nearby sales, tax valuations, appraisals, online resources, and any other relevant factors may be offered to support the claim.” High’s testimony covered a range of topics that, taken together, provided some probative evidence to factually support his valuation opinion.  Such included his great level of experience in, and knowledge about, the car wash industry and the effects of such property reductions. The testimony was properly admitted. McRoberts testified that the condemnation had affected the property’s functionality so greatly that the property had experienced a change in its highest and best use to something like a small veterinary clinic or an office. McRoberts did not base his opinions on only his word, or on mere conjecture; he based it on the issues that began affecting Speedway’s property only after the condemnation—unsafe access, internal circulation, and zoning nonconformities.  McRoberts thus provided a reasoned basis to support his damage opinions, reinforced by well-established case law, logic, and mathematics.  The court held “[b]oiled down, the State’s argument is nothing more than an evidentiary sufficiency challenge improperly masquerading as an expert opinion admissibility issue. When the highest and best use of property is disputed, the jury is responsible for deciding which use is appropriate when it determines market value.”  Sufficient evidence exists in the record to support the jury’s verdict. As a result, the verdict is affirmed.

If you want to read this opinion click here. The panel consists of Justice Puryear Justices, Field, and Bourland. Justice Bill Meier delivered the opinion of the court. To see the docket page with the list of attorneys click here.

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