Lead Opinion
MAJORITY OPINION
This is an appeal from a summary judgment in a condemnation case. At the center of the controversy is Texas’s longstanding rule that a property owner who is familiar with the market value of his property may testify regarding that market value, even if he is not qualified or designated as an expert witness (hereinafter “Property Owner Rule”). Today we must decide whether this rule, applied countless times to individual property owners, applies to corporate property owners. The Supreme Court of Texas has not directly spoken on the matter, and our sister courts of appeals are divided on this issue.
The trial court granted a no-evidence summary judgment after striking all of the compensation evidence offered by the corporate property owner in the condemnation action. One of the stricken affidavits was made by a representative of the corporate property owner under the Property Owner Rule. If the Property Owner Rule does not apply to corporate entities, then the trial court did not err in striking this affidavit. If the Property Owner Rule does apply, then the trial court erred in striking the affidavit. We conclude that the Property Owner Rule applies to all property owners, including corporate property owners. Because evidence in the stricken affidavit raises a genuine issue of material fact regarding compensation, we reverse and remand.
Factual And Procedural Background
Appellant Speedy Stop Food Stores, Ltd., a Texas limited partnership (“Speedy Stop”) owns a 2.0661 acre tract of land in Harris County, Texas (“Property”). Ap-pellee Reid Road Municipal Utility District No. 2 (the “District”) initiated a condemnation action in the trial court below for the purpose of acquiring a .0592 acre waterline easement over, through, under, and across the Property for the construction, operation, and maintenance of facilities for transportation and delivery of water.
The trial court appointed three special commissioners to assess condemnation
The District then filed a second motion for summary judgment in which it asserted a single no-evidence ground, namely that there is no evidence of the amount of just compensation to be paid to Speedy Stop for the taking of the easement. In its motion, the District sought judgment that Speedy Stop be awarded one dollar in nominal damages for the condemnation of the easement. In response, Speedy Stop offered the affidavit of Carlton LaBeff, the vice president of the general partner of Speedy Stop. LaBeff made the affidavit on behalf of the owner of the property, Speedy Stop. LaBeff testified that, for several years, he has been in charge of all real estate acquisitions for Speedy Stop, which owns and operates more than a hundred convenience stores in Texas. According to his affidavit, LaBeff is the person who has responsibility for dealing with easement issues at all of the Speedy Stop stores, and he was involved with the acquisition of the convenience store on the property that is the subject of this condemnation action. LaBeffs affidavit shows that he is familiar with the market value of the property in question. LaBeff testified that there is a $62,000 difference in the fair market value of the Property immediately before and immediately after the condemnation of the easement. LaBeff does not have a real-estate broker’s license, and he is not a licensed real-estate appraiser. Speedy Stop did not designate LaBeff as an expert witness.
Speedy Stop also attached a transcript of David Ambrose’s appraisal and testimony from the special commissioners’ hearing. In this testimony, Ambrose opined that Speedy Stop’s total damages are $9,342. Speedy Stop stated that it attached this testimony as an admission against interest.
In its summary-judgment reply, the District objected to LaBeffs affidavit and moved to exclude it on the following grounds:
• The time for designating experts has expired, and Speedy Stop did not designate LaBeff as an expert witness.
• LaBeff is not qualified to testify as an expert because he is not a licensed real-estate appraiser.
• LaBeffs methodology does not satisfy the reliability requirement for expert testimony.
The District also objected to the admission of Ambrose’s testimony and appraisal.
The record reflects that the trial court focused on the issue of whether the Property Owner Rule applies to corporate entities. The District argued it does not, and Speedy Stop argued it does. The trial court sustained the District’s objections to LaBeffs affidavit and to Ambrose’s testimony and appraisal. The trial court granted the District’s motion to exclude these items from the summary-judgment evidence. With no evidence before it as to how much compensation the District must pay Speedy Stop, the trial court granted the District’s no-evidence motion for summary judgment. The trial court rendered
Issues Presented
Speedy Stop presents the following issues:
(1) Did the trial court err in granting [the District’s] no evidence motion for summary judgment?
(2) Was [Speedy Stop’s] summary judgment evidence, the affidavit of Carlton LaBeff, as the owner and as a lay witness, some evidence of the value of the property rights being condemned?
(3) Was [the District’s] appraisal testimony by Mr. David Ambrose at the condemnation hearing or Mr. Am-brose’s appraisal some evidence that the property being condemned had value?
Speedy Stop argues in its appellate brief that the Property Owner Rule applies to corporate entities and that LaBeffs affidavit, on behalf of Speedy Stop, raises a fact issue as to the amount of compensation the District must pay Speedy Stop. LaBeffs affidavit shows his familiarity with the market value of the Property and states that the condemnation of the easement would decrease the market value of the Property by $62,000.
In its appellate brief, Speedy Stop does not explicitly challenge the trial court’s evidentiary ruling striking LaBeffs affidavit. Nonetheless, the Texas Supreme Court has emphasized that we must construe issues presented liberally to obtain a just, fair, and equitable adjudication of the rights of the litigants. Perry v. Cohen,
Standards Of Review
We review a trial courts’s evidentiary rulings for an abuse of discretion. In re J.P.B.,
In reviewing a no-evidence summary judgment, we ascertain whether the non-movant pointed out summary-judgment evidence of probative force to raise a genuine issue of fact as to the essential elements attacked in the no-evidence grounds. Johnson v. Brewer & Pritchard, P.C.,
ANALYSIS
The Supreme Court of Texas has held that property owners who are familiar with the market value of their property, including real property, may testify as to their opinions regarding this value, even though they do not qualify as expert witnesses and even though they would not be allowed to testify regarding the market value of property they do not own. See Redman Homes, Inc. v. Ivy,
Courts in Arizona, Colorado, Kansas, Tennessee, and Washington have held that the Property Owner Rule applies to corporate owners, while courts in Hawaii and Nebraska have held that it does not. Compare Atkinson v. Marquart,
The Property Owner Rule is based on the premise that property owners ordinarily know the market value of their property
We hold that the Property Owner Rule applies to corporate entities owning property and that a representative of the corporate owner who is familiar with the market value of the property in question may testify under this rule as to the market value of the property, without being designated as an expert witness. See Libhart,
SEYMORE, J., dissenting.
Notes
. The District suggests that LaBeff’s affidavit reasonably can be construed to state that the condemnation of the easement will increase the market value of the Property by $62,000. We disagree.
. Our dissenting colleague reasons as follows: (1) the Porras court stated that a witness, who is otherwise unqualified to give expert testimony, may testify regarding the market value of his own property but not the property of others; (2) corporations cannot be witnesses but rather must designate an agent or representative to testify on their behalf; (3) because a corporate owner cannot testify as a witness as to the market value of its own property, the Porras court implicitly decided that the Property Owner Rule does not apply to corporate owners. See post at p. 659, n. 1. The Poiras court did not speak of a witness; rather it stated that "the owner of the property can testify to its market value, even if he could not qualify to testify about the value of like property belonging to someone else." Porras,
. Our dissenting colleague asserts that the Taiwan Shrimp court did not hold that the Property Owner Rule applies to corporate property owners. See post at p. 659-60. How
. For example, owners of real property must pay property taxes each year based on the market value of their property, unless that property is completely exempt from taxation. See Tex. Tax Code Ann. § 11.01, 23.01 (Vernon 2008). Owners can, and many do, challenge the valuation of their property as not reflect
. Based on this disposition, we need not and do not address whether the trial court erred in striking Ambrose's testimony and appraisal.
Dissenting Opinion
dissenting.
Rulings on admission or exclusion of evidence rest within the sound discretion of the trial court. Horizon/CMS Healthcare Corp. v. Auld,
First, in its brief, Speedy Stop did not directly address the consequences of its failure to timely designate experts. The failure to designate experts as required by the rules is sanctionable by exclusion of the expert’s report. Tex.R. Civ. P. 193.6; see also Duerr v. Brown,
Second, I disagree with the majority’s suggestion that we are presented with a case of first impression relative to whether an unqualified corporate representative or agent should be allowed to give expert testimony regarding the market value of property. The Texas Supreme Court has held that a landowner may testify regarding the market value of his real property despite his lack of competence to testify regarding the value of property belonging to another. Porras v. Craig,
Third, I disagree with the majority’s suggestion that in Taiwan Shrimp Farm Village Ass’n, Inc. v. U.S.A. Shrimp Farm Development, Inc.
Speedy Stop cites a number of cases in which Texas courts allowed an agent of a business entity to testify regarding value of property. However, none of those cases involved an agent of a business entity who was allowed to testify under the landowner exception to the general rule that the difference in value of land immediately before and after the taking must be proved by the testimony of a properly qualified expert. See Maxey v. Tex. Commerce Bank of Lubbock,
Giving due regard for vertical and lateral stare decisis, it is my considered opinion that the holding in Mobil Oil Corp. v. City of Wichita Falls controls our disposition of this appeal.
Speedy Stop further contends the summary judgment should be reversed because the appraisal and testimony of Reid Road’s witness, David Ambrose, amounts to some evidence that the condemned property had value. Speedy Stop argues that the trial court abused its discretion by excluding David Ambrose’s report and testimony before the special commissioners. The record is silent relative to the trial court’s rationale for excluding Ambrose’s report and testimony. As previously noted, Speedy Stop ignores the possibility that the trial court did not consider Ambrose’s report simply because Speedy Stop did not timely designate experts.
Speedy Stop supports its contention that the David Ambrose report and earlier testimony are not hearsay, arguing that such statements are an admission against interest. Speedy Stop cites Yarbrough’s Dirt
To be an admission under rule 801(2), a statement must be made by a party’s agent or servant. Tex.R. Evid. 801(2). A person is not an agent or servant unless he is subject to another party’s control. See Coleman v. Klockner & Co. AG,
Although testimony of an expert may be admissible as an admission by a party opponent if the expert is the agent or servant of the party opponent, see Tex.R. Evid 801(2), Speedy Stop has presented no evidence that Ambrose was acting as an agent or servant of Reid Road for any purpose other than to provide expert testimony. Because there is no evidence in the record supporting the contention that the report constitutes an admission by Reid Road, I would hold that the trial court did not abuse its discretion by excluding Am-brose’s report and earlier testimony.
For all the reasons outlined above, I would affirm the judgment of the trial court. Accordingly, I respectfully dissent.
. The majority opines: "Corporate owners are property owners just as natural persons are, and the Porras court did not give any indication that the Property Owner Rule is limited to owners who are natural persons.” Supra at p. 656. My colleagues miss the Por-ras court’s point about ownership. The majority in Porras cited State v. Berger,
