The Prosecutor, November-December 2010, Volume 40, No. 6

Facing challenges in ­condemnation proceedings

How to prepare for and avoid two types of challenges in these lawsuits

 

Few people outside of the courthouse are familiar with prosecutors’ duties related to condemnation, incorrectly assuming it must have something to do with criminals. Instead, a prosecutor representing a governmental entity has the burden of proving that it needs private property for a public use and that it negotiated in good faith to acquire the property short of instituting condemnation proceedings. Failure to do so can result in the death penalty for the acquisition, or at least a penalty in the form of delay.

    For those who do not practice routinely in the eminent domain arena, all of the procedural requirements for condemning land may seem like a daunting and risky proposition. The starting point is to thoroughly review Chapter 21 of the Texas Property Code. Additionally, other resources provide comprehensive guidance in discussing the entire condemnation procedure.1 What follows is a more focused discussion on how to prepare for and avoid two types of challenges that landowners sometimes raise once a condemnation proceeding becomes a lawsuit.

“Right to take” challenges

Potentially the biggest obstacle to a successful condemnation proceeding is an affected landowner’s meritorious challenge to the government’s “right to take” the property in question. Section 21.012(b) of the Texas Property Code provides that the condemnor must include within the condemnation petition the purpose for which the entity intends to use the property. Simply pleading the purpose is not enough to withstand a landowner’s “right to take” challenge. If the condemnor is unable to prove that the condemned property is needed for a public purpose, the court will dismiss the proceeding for lack of jurisdiction. The landowner may recover “reasonable and necessary fees for attorneys, appraiser, and photographers and for the other expenses incurred by the property owner to the date of the hearing or judgment.”2 And the county will have to start over, regardless of how much time and money the county spent.  

To avoid these consequences, there are two elements that a condemnor must be able to prove: 1) that the condemnation is for a “public use” and 2) that the property being condemned is actually needed for that particular public use.3 The first element is a question of law for the court to decide, whereas the second is a fact issue for the jury to decide.4

    The “public use” requirement has its genesis in Article I, §17 of the Texas Constitution:

No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being 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. …

Local Government Code §261.001(a) provides counties with specific “public uses” for which a county may use its power of eminent domain: for acquisition of land for jails, courthouses, hospitals, or libraries, “or for another public purpose authorized by law.” Likewise, §224.002 of the Transportation Code empowers counties to acquire highway rights-of-way for the state. Additionally, a whole host of other statutes give counties power to condemn land for specific public uses.5 With all of this statutory guidance, county land acquisitions should unquestionably be for public uses. Nevertheless, a commissioners court must specifically state the actual public use in a court order when authorizing acquisition of land by way of condemnation. Failure to do so can be fatal, as demonstrated in the 2005 case of Whittington v. City of Austin.6

    The City of Austin needed land owned by Whittington to construct a chilling plant for Austin Energy and a parking garage, all to serve the Austin Convention Center. The Austin City Council resolution authorizing the condemnation simply stated that “Lots 1-8 inclusive, Block 38 of the Original City of Austin, in the City of Austin, Travis County, Texas should be acquired for a public use,” and the resolution authorized the city attorney to file a condemnation suit “and take other appropriate action to acquire the property.” Even though the Austin Court of Appeals recognized that Texas courts “traditionally afford great weight to legislative declarations that a given use of property is a public use,” the court ultimately held that this resolution was wholly deficient.

    To bolster its position that the taking was for a public use, the city offered the resolution into evidence as well as a whole host of other documents:
•    the Austin city charter, establishing that the city is a municipality with the power of eminent domain;
•    the condemnation petition, which stated that the city had made a determination to acquire by fee the simple title of Whittington’s property for the purpose of building a parking garage for the Austin Convention Center, operated by the Austin Convention Center Department of the City of Austin, as well as for the purpose of operating a cooling plant on the property;
•    proof that the Convention Center Department and Austin Energy were city departments;
•    documentation of a city- approved proposition for the expansion of the city’s Convention Center;
•    papers from the condemnation action, including the special commissioners’ award, the parties’ objections, and a receipt indicating that the city deposited the amount of the special commissioners’ award into the registry of the court; and
•    lastly, Whittington’s responses to requests for admissions.

    After reviewing all of this material, the Austin Court of Appeals concluded that none of it proved any legislative determination to condemn Whittington’s property for a parking garage or chilling plant. Instead, the summary judgment proof at most established an abstract proposition that a parking garage and chilling plant could be considered a public use under Texas law. Therefore, the appellate court concluded that the city had failed to meet its burden of conclusively establishing that it condemned Whittington’s property for a public use.

    The lesson for those representing counties in condemnation proceedings is to confirm that the commissioners court order authorizing the condemnation specifically states what the public use is, rather than simply stating that the property is needed for a public use.

    Even if a county establishes that there has been a valid legislative determination that the use is a valid public use, there is still the second element that the county must prove: that the condemnation of the land is necessary to advance or achieve the public use. A condemnor’s determination that there is a public necessity for taking private property is presumed, unless a statute requires affirmative pleading and proof of that element.7 To gain this presumption, however, the condemnor “must first establish that its governing board actually made a determination that the particular taking was necessary to advance the ostensible public use”8 by introducing the commissioners court order denoting the specific use of the property into evidence.9 Is any magic language required? The Whittington court reviewed a whole host of cases that examined various scenarios involving public uses and necessities and concluded that legal precedent does not “categorically require the use of magic words such as ‘necessary’ or ‘needed’ within a resolution or other instrument manifesting the governing body’s actions, though prudence would perhaps make such language advisable. To the contrary, it would appear sufficient to prove that the condemnor’s governing body made a determination (manifested in some form) that, in substance, condemning a particular property would be necessary to advance a specific, identified public use.”10

    If the condemnor establishes that its governing authority made such a determination, the court will presume that the determination of necessity was correct unless the landowner can show that the condemnor acted fraudulently, in bad faith, or arbitrarily.11 As already mentioned, the character of the condemnor’s actions is a fact question that may properly be decided by a jury.

    With respect to whether the City of Austin demonstrated a public necessity for acquiring the Whittington property, the court found the city’s resolution wholly deficient, explaining that it contained “no determination by the Austin City Council that condemning the Whittingtons’ property was necessary to advance a public use, or even what its intended public use is. Nor did the city establish through other means that the Austin City Council made an express determination of necessity. There was no evidence of orders, resolutions, or minutes that might have elaborated on the proceedings underlying [the resolution].”12

    Additionally, the court rejected the city’s efforts to establish a public necessity for taking the property by way of other “affirmative acts,” such as offering the condemnation petition and other instruments filed in the proceedings. The appellate court pointed out that pleadings are not competent summary judgment evidence.13

    A helpful point to remember in defending counties in a “right to take” challenge is that certain conduct by a landowner results in waiver of the challenge. The Texas Supreme Court held in the 1965 case of State v. Jackson14 that “[a]fter an award has been made, and the money deposited in the registry of the court and the landowner has withdrawn the same, he cannot thereafter contend that the taking was unlawful. In legal contemplation, he has consented to such taking and will not be permitted to retain his compensation and at the same time assert that the condemning authority had no right to take his property under the eminent domain power.”15

    In light of this holding, if a landowner challenges the right to take the land in an objection to the special commissioners award or in some other pleading, prosecutors should verify whether he has withdrawn any of the proceeds from the registry of the court. If he has, the “right to take” challenge cannot stand.

Good faith negotiation challenges

A second challenge sometimes raised by landowners is that the condemnor failed to negotiate in good faith for the land’s acquisition. The §21.012(b) pleading provisions require a statement that the condemning authority and the property owner were unable to agree on the damages. This pleading provision is a reference to what is commonly known as “good faith negotiations.”

    Many Texas appellate courts have held that a showing of compliance with the “unable to agree” provision was jurisdictional and that failure to engage in good faith negotiations prior to condemnation rendered the proceedings void.16 But the Texas Supreme Court’s 2004 holding in Hubenak v. San Jacinto Gas Transmission Co.17 rejected this position. Acknowledging that the §21.012 pleading requirements are mandatory, the court nevertheless held that “the trial courts in these consolidated cases had jurisdiction over the condemnation proceedings regardless of whether the condemnors satisfied the requirement that the parties ‘are unable to agree on the damages.’ We therefore disapprove of those court of appeals decisions that have held or suggested that these statutory requirements are jurisdictional.”18

    If it is mandatory, then what is the remedy when the condemnor fails to meet this statutory requirement? According to the Texas Supreme Court, the remedy is abatement. The court explained, “If a landowner objects in a pleading that there has been no offer, and a trial court finds that the requirement that the parties are ‘unable to agree on the damages’ has not been met, the trial court should abate the proceedings for a reasonable period of time to allow the condemnor to satisfy the ‘unable to agree’ requirement. If at the end of a reasonable period of time, the condemnor has not made an offer, the condemnation proceeding should be dismissed.”19

    What actually constitutes a good faith offer? The Hubenak court followed precedent and held that only minimal evidence is needed to satisfy the “unable to agree” requirement.20Additionally, the court noted that the dollar amount of the offer generally should not be scrutinized. After all, determining market value of the condemned property is the primary purpose of a condemnation proceeding. Therefore, the court reasoned that “[i]t is not necessary to have two trials to reach the ultimate and only determination contemplated by the statute, which is a determination of the value of the property condemned.”21

    Importantly, if a landowner participates in the hearing before the special commissioners, then he waives the right to complain that the condemnor did not make an effort to agree.22 Likewise, if a landowner does not participate in the special commissioners’ hearing but nevertheless withdraws the award from the registry of the court, the landowner waives the right to complain about good faith negotiations.23

    In addition to the “unable to agree” pleading requirement, a condemnor must also plead that it provided the property owner with the “landowner’s bill of rights statement in accordance with §21.0112.”24 The bill of rights statement is prepared by the Texas Attorney General, the substance of which is found at §402.031 of the Texas Government Code. An important requirement for counties is that §21.0112 (b)(2) requires that the statement be included on each county’s Internet website if technologically feasible. The statute specifically provides:

Not later than the seventh day before the date a governmental or private entity with eminent domain authority makes a final offer to a property owner to acquire real property, the entity must send by first-class mail or otherwise provide a landowner’s bill of rights statement ... to the last known address of the person whose name the property is listed on the most recent tax roll of any appropriate taxing unit authorized by law to levy property taxes against the property. In addition to the other requirements of this subsection, an entity with eminent domain authority shall provide a copy of the landowner’s bill of rights statement to a landowner before or at the same time as the entity first represents in any manner to the landowner that the entity possesses eminent domain authority.25

Currently there are no attorney general opinions or caselaw interpreting the application of §21.0112. A question that may arise in future litigation is what happens if a landowner alleges that the bill of rights statement was not delivered before or at the same time as the entity first represented in any manner that the entity possessed eminent domain authority. It is unclear whether providing the statement is a jurisdictional requirement or whether a court would consider it mandatory but not jurisdictional. Arguably, providing the statement relates to the negotiation phase of acquiring property. Therefore, the Hubenak court’s decision related to good faith negotiations should apply: Failure to provide the bill of rights statement results in an abatement of the proceedings.

    But the statement itself provides landowners with a full disclosure of what will happen if an offer is not accepted. Perhaps a landowner may argue that the government’s failure to timely provide the statement somehow prejudiced the landowner’s rights in a condemnation proceeding, resulting in dismissal of the proceedings on jurisdictional grounds.

    Until there is some clarity on the implications of this provision, the wisest course is for those negotiating the purchase of land on counties’ behalf to have a landowner’s bill of rights statement handy to deliver at the first contact with an affected landowner.

Conclusion

Successfully representing a county in a condemnation proceeding involves carefully following the procedural requirements in Chapter 21 of the Texas Property Code. The commissioners court order authorizing condemnation should specifically state the public use requiring the acquisition of land and the necessity of acquiring specific land for that use. Doing so will enable a county to withstand jurisdictional attacks under a “right to take” challenge. Likewise, to avoid delays in acquisition of property, county negotiators should make certain to document offers made for the acquisition of land to establish that good faith negotiations took place. To avoid uncertainties about jurisdiction or delays in acquiring property, county negotiators should also make certain to provide the landowner’s bill of rights statement to an affected landowner in compliance with §21.0112 of the Property Code.

Endnotes


1 See generally, Madison Rayburn, Texas Law of Condemnation (Texas Law Press 1960); Brooks, 35 Tex. Prac. series §9.30, Eminent Domain/Con-demnation.
2 Tex. Prop. Code §21.0195(c).
3 Whittington v. City of Austin, 174 S.W.3d 889, 896 (Tex. App. — Austin 2005, pet. denied).
4 1d.    
5 See the list of statutes and specific public uses outlined in Brooks, 35 Tex. Prac. Series §9.30, Eminent Domain/Condemnation. Regarding limitations on the use of eminent domain, Chapter 2206 of the Government Code limits the government’s ability to condemn land for private parties or economic development. See Tex. Gov’t Code §2206.001.
6 174 S.W.3d 889 (Tex. App. — Austin 2005, pet. denied).
7 City of Dallas v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 88 (1940).
8 Whittington, 174 S.W.3d at 897.
9 Id at 900. With regard to a city, the Whittington court noted that a “municipal governing body officially expresses itself through its official proceedings, as manifested in orders, resolutions, and minutes.” Id. By analogy, counties express themselves in a similar fashion.
10 Id. at 905 (emphasis added).
11 Id. at 898. See also Coastal Indus. Water Auth. v. Celanese Corp. of America, 592 S.W.2d 597, 600 (Tex. 1979); Higginbotham, 143 S.W.2d at 88; Anderson v. Teco Pipeline Co., 985 S.W.2d 559, 565-66 (Tex. App.—San Antonio 1998, pet. denied); Bevley v. Tenngasco Gas Gathering Co., 638 S.W.2d 118, 121 (Tex. App.—Corpus Christi 1982, writ ref d n.r.e.).
12 Whittington, 174 S.W.3d at 904.
13 Id. at 905.
14 State v. Jackson, 388 S.W.2d 924, 925 (Tex. 1965).
15 Id. at 925.
16 See e.g. City of Houston v. Derby, 215 S.W.2d 690, 692 (Tex. Civ. App.—Galveston 1948, writ ref’d). See also cases cited in footnote 43 in Hubenak v. San Jacinto Gas Transmission Co., 141 S.W.3d 172, 181 (Tex. 2004).
17 141 S.W.3d 172 (Tex. 2004).
18 Id. at 183.
19 Id. at 184.
20 Id. at 185.
21 Id. at 187.
22 See, e.g., Jones v. City of Mineola, 203 S.W.2d 1020, 1023 (Tex. Civ. App. —Texarkana 1947, writ ref’d); Brown v. Lower Colo. River Auth., 485 S.W.2d 369, 371 (Tex. Civ. App. — Austin 1972, no writ).
23 McConnico v. Texas Power & Light Co., 335 S.W.2d 397, 400 (Tex. Civ. App.—Beaumont 1960, writ ref’d n.r.e.).
24 Tex. Prop. Code §21.012(b)(5). See also Id at § 1.0112 (Provision of the Landowner’s Bill of Rights).
25 Tex. Prop. Code §21.0112(a).