Clear Lake City Water Authority v. Clear Lake Country Club, L.P.
340 S.W.3d 27
Tex. App.2011Background
- Water Authority sought to condemn a 178-acre defunct golf course (Property) to construct storm water detention facilities.
- Deed restrictions on the Property limited use to a golf course or recreational facility until 2021.
- Country Club purchased the Property in 2002 for $2.3 million and operated a golf course there until 2005 when it closed.
- Civic League and Green Space Committee opposed redevelopment and influenced governance discussions; Dunbar became Water Authority’s engineering consultant and recommended detention facilities on the Property.
- Water Authority passed a Board Resolution on November 10, 2005 to acquire the Property (by purchase or condemnation) to establish detention facilities; condemnation petition filed April 18, 2007.
- Special Commissioners valued the Property at $14,132,000; jury later found Water Authority’s detention purpose fraudulent/arbitrary and set FMV at $5.1 million; trial court dismissed condemnation; Water Authority appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JNOV was proper on the fraud/arbitrariness findings | Water Authority argues insufficient evidence for fraud/arbitrariness. | Country Club argues evidence supports fraud/arbitrariness and that Water Authority acted without rational basis. | JNOV should have been granted; findings lack legal sufficiency. |
| Whether Dunbar’s engineering basis was a reasonable basis for condemnation | Water Authority contends Dunbar’s recommendation was a sound basis. | Country Club contends Dunbar’s analysis was inadequate and lacking specifics. | Evidence supports that there was a reasonable basis; no arbitrariness/fraud proven. |
| Whether evidence showed Water Authority's true motive to stop redevelopment demonstrates fraud | Water Authority argues motive does not negate legitimate detention purpose. | Country Club asserts motive to stop redevelopment shows fraud/arbitrariness. | Evidence insufficient to prove fraudulent/arbitrary motive; not dispositive. |
Key Cases Cited
- Malcomson Road Util. Dist. v. Newsom, 171 S.W.3d 257 (Tex.App.-Houston [1st Dist.] 2005) (condemnor's discretion; fraud/arbitrariness require proof of no reasonable basis)
- Wagoner v. City of Arlington, 345 S.W.2d 759 (Tex.Civ.App.-Fort Worth 1961) (differences of opinion do not prove arbitrariness)
- Circle X Land & Cattle Co., Ltd. v. Mumford Indep. Sch. Dist., 325 S.W.3d 859 (Tex.App.-Houston [14th Dist.] 2010) (industry-standard evidence insufficient to establish arbitrariness without case-specific facts)
- Ludewig v. Houston Pipeline Co., 773 S.W.2d 610 (Tex.App.-Corpus Christi 1989) (two opinions allowed; reasonable basis need not be perfect)
- Whittington v. City of Austin (Whittington I), 174 S.W.3d 889 (Tex.App.-Austin 2005) (public use and necessity presumptions; fraud/bad faith challenges)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for no-evidence review and sufficiency in jury verdicts)
- Anderson v. Teco Pipeline Co., 985 S.W.2d 559 (Tex.App.-San Antonio 1998) (condemnation necessity presumptions; review of fact questions)