502 S.W.3d 320
Tex. App.2016Background
- Owners (Taub and related entities) owned ~99 acres in Deer Park, divided into a northern ~42-acre tract (condemned) and a southern ~56-acre tract.
- Harris County Flood Control District condemned the 42-acre tract; date of taking established as July 28, 2010; special commissioners awarded $9,000,000; trial de novo followed.
- Taub’s appraisers relied on multiple comparable transactions: the Frantz sales contract (original and later amendment), an option agreement with Kinder Morgan, a March 2010 sale of 56 acres to Deer Park ISD (the School sale), and two hotel-site sales (Candlewood Suites and La Quinta).
- Disputed comparables: District objected to admission of evidence about the Frantz contract amendment, the Kinder Morgan option, the School sale (buyer had eminent-domain power), and the hotel-site sales.
- The jury returned a single-market-value verdict of $11,636,238 (matching Sikes’s $6.25/sf opinion); trial court denied new trial; appeal challenges admissibility of certain comparables and whether erroneous admissions were harmful.
Issues
| Issue | Taub's Argument | District's Argument | Held |
|---|---|---|---|
| Admissibility of Frantz agreement amendment (was it a binding sale or an option?) | Frantz contract was a binding sales contract; amendment valid and admissible | It was effectively an option/liquidated-damages arrangement and therefore inadmissible | Frantz contract was a binding sales contract; admission was not an abuse of discretion |
| Admissibility of Kinder Morgan transaction (option) | Taub argued it supported market evidence; treated like a sale | District: Kinder Morgan agreement was an unexercised option (unaccepted offer), inadmissible | Kinder Morgan agreement was an unexercised option and its admission was an abuse of discretion |
| Admissibility of School sale (buyer with eminent-domain power) | Sale was voluntary and not under threat of condemnation, so admissible | Sale to entity with condemning authority is inadmissible even if claimed voluntary | Sale to school district with eminent-domain power was inadmissible; trial court abused discretion in admitting it |
| Admissibility and weight of Candlewood Suites sale; project-influence rule impact | Candlewood comparable and adjustments accounted for differences; Frantz amendment not project-influenced (Taub) | District argued dissimilarity and project-influence tainted Frantz amendment and comparables | Candlewood sale was admissible (trial court within discretion). Court held District waived challenge to trial court’s failure to fix project-influence trigger date; project-influence complaint not preserved |
Key Cases Cited
- State v. Clevenger, 384 S.W.2d 207 (Tex. Civ. App.—Houston 1964) (unaccepted offers and options are not competent comparable-sales evidence)
- Hanks v. Gulf, Colo. & Santa Fe Ry. Co., 320 S.W.2d 333 (Tex. 1959) (sales to condemning authority are inadmissible as proof of market value)
- City of Austin v. Capitol Livestock Auction Co., 453 S.W.2d 461 (Tex. 1970) (same rule excluding sales to entities with eminent-domain power)
- Carlton Energy Group, LLC v. Phillips, 369 S.W.3d 433 (Tex. App.—Houston [1st Dist.] 2012) (transaction consummation not determinative of admissibility; weight is for jury)
- Caffe Ribs, Inc. v. State, 487 S.W.3d 137 (Tex. 2015) (project-influence rule explained; preferable to admit evidence and instruct jury to account for project influence)
- Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846 (Tex. 2011) (adoptive admissions: party’s adoption of third-party statement removes hearsay bar)