KMS Retail Rowlett, LP F/K/A KMS Retail Huntsville, LP v. the City of Rowlett, Texas
559 S.W.3d 192
| Tex. App. | 2017Background
- KMS owned a recorded private drainage/access/utility easement (private road easement) along the southern boundary of its 9‑acre Luke’s Landing tract; KMS built a private road only partway across the easement.
- Adjacent to the east, Briarwood planned retail development (including Sprouts) and sought cross‑access to Kenwood Drive; negotiations with KMS failed.
- The City of Rowlett condemned the portion of KMS’s private road easement (a ~15‑ft strip ~691 ft long plus a 30‑ft drainage swale) to convert it into a public street; special commissioners awarded KMS $31,662.
- KMS challenged the taking as not necessary for a public use, as a pretext to confer a private benefit tied to an economic incentive agreement, and as fraudulent, in bad faith, or arbitrary and capricious; both parties moved for summary judgment.
- The trial court granted the City’s summary judgment (dismissing KMS’s illegality/fraud/bad‑faith/arbitrary‑and‑capricious claims) and confirmed the damages award; KMS appealed solely the legal rulings (not the damages amount).
Issues
| Issue | Plaintiff's Argument (KMS) | Defendant's Argument (City) | Held |
|---|---|---|---|
| Whether the taking was necessary for a public use | Taking was for the private economic benefit of Briarwood/Sprouts (access to Wal‑Mart traffic), not a public necessity | City resolution, staff report, and testimony showed public street would provide cross‑access, traffic circulation, and emergency access | Affirmed: taking was necessary for a public use (cross‑access, circulation, emergency access) |
| Whether the taking violated Gov't Code §2206.001(b) (prohibiting takings that chiefly confer private benefit or are for economic development) | The condemnation was actually for economic development/private benefit and thus prohibited | Taking was for a public road—an express statutory exception to §2206.001(b) | Affirmed: §2206.001(c)(1) exception for public roads applies; §2206.001(b) claims fail |
| Whether the City’s necessity/public‑use determination was fraudulent, in bad faith, or arbitrary and capricious | Evidence (timing, funding, engineering by Briarwood, rent/lease incentives) shows pretext, abdication to Briarwood, and improper motive | City retained discretion; record supports reasoned determination; private participation/cost‑sharing does not render action arbitrary | Affirmed: KMS failed to raise fact issue or show fraud/abuse of discretion |
| Evidentiary rulings re: City affidavit (Grabenhorst) | Trial court erred in overruling objections; affidavit was sole support for traffic/emergency claims | Other unobjected evidence (City resolution, staff report) corroborated affidavit statements | Affirmed: any error was harmless because unobjected evidence supported the same conclusions |
Key Cases Cited
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (summary judgment review standard)
- City of Garland v. The Dallas Morning News, 22 S.W.3d 351 (Tex. 2000) (summary judgment burdens when parties cross‑move)
- FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (appellate review when both parties move for summary judgment)
- City of Austin v. Whittington, 384 S.W.3d 766 (Tex. 2012) (presumption in favor of condemnor’s public‑use/necessity determination; landowner’s burden to show fraud/bad faith/arbitrary action)
- FKM P’ship, Ltd. v. Bd. of Regents of Univ. of Houston Sys., 255 S.W.3d 619 (Tex. 2008) (deference to governmental determinations of necessity)
- Malcomson Road Util. Dist. v. Newsom, 171 S.W.3d 257 (Tex. App.—Houston [1st Dist.] 2005) (condemnation may be arbitrary when private parties control acquisition/construction and remove government discretion)
- Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828 (Tex. 1958) (public‑use concept requires a public right or use)
- Hous. Auth. of City of Dallas v. Higginbotham, 143 S.W.2d 79 (Tex. 1940) (public character not defeated by limited or local benefit)
- Phillips v. Naumann, 275 S.W.2d 464 (Tex. 1955) (condemnation invalid where sole private benefit shown)
- Maher v. Lasater, 354 S.W.2d 923 (Tex. 1962) (takings for purely private access unconstitutional)