State v. Schmidt
867 S.W.2d 769, 1993 WL 433069 (1994)
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Rule of Law:
When only a portion of a landowner's property is taken for a public project, severance damages for the diminution in value of the remaining property are not compensable if they are caused by non-compensable factors such as diversion of traffic, increased circuity of travel, impaired visibility, or construction inconvenience, as these are considered community damages and do not arise from the condemnor's specific use of the part taken.
Facts:
- The Leon A. Schmidt Children’s Trust No. 1 (Schmidt) and Austex, Ltd. (Austex) owned adjoining commercial properties fronting U.S. Highway 183 in Austin, Texas.
- The properties housed several retail businesses that benefited from direct access to, and high visibility from, the at-grade, six-lane highway.
- The State of Texas and the City of Austin (the State) initiated a project to convert Highway 183 into a controlled-access highway.
- The project involved elevating the main traffic lanes approximately 37 feet above the existing roadway.
- This conversion would divert the majority of traffic to the elevated lanes, significantly reducing the visibility of the Schmidt and Austex properties from the main thoroughfare.
- Access to the properties would become more circuitous, requiring motorists to exit the elevated highway onto the original at-grade lanes, which would remain as service roads.
- To widen the right-of-way for the project, the State condemned a small strip of land along the highway frontage of both properties: 503 square feet from Schmidt and 1,275 square feet from Austex.
- The project was scheduled to involve disruptive construction activities over a five-year period.
Procedural Posture:
- The State of Texas instituted condemnation proceedings against the Schmidt and Austex tracts in a trial court.
- Special commissioners awarded Schmidt $7,559 and Austex $105,000 for the taking.
- The landowners, Schmidt and Austex, appealed the awards to the trial court, claiming additional severance damages for the injury to their remaining property.
- Following separate jury trials, the trial court rendered judgments on the verdicts, awarding severance damages of $74,880 to Schmidt and $200,000 to Austex.
- The State, as appellant, appealed only the severance damages awards to the Texas Court of Appeals, with Schmidt and Austex as appellees.
- The Court of Appeals affirmed the trial courts' judgments in favor of the landowners.
- The State then appealed to the Supreme Court of Texas.
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Issue:
In a partial condemnation for a highway conversion project, are landowners entitled to severance damages for the diminution in market value of their remaining property caused by diversion of traffic, increased circuity of travel, lessened visibility, and construction inconvenience?
Opinions:
Majority - Hecht, Justice
No. A landowner in a partial takings case is not entitled to severance damages for a diminution in the value of the remainder property caused by diversion of traffic, increased circuity of travel, lessened visibility, or construction inconvenience. The court reasoned that these types of injuries are not compensable for several reasons. First, Texas law has consistently held in inverse condemnation cases that a landowner has no vested property right in the volume of traffic or visibility of their property to passersby, and that damages for circuity of travel are non-compensable. Creating a different rule for condemnation cases would create an anomaly where a landowner whose property is slightly taken could recover for such injuries, while an adjacent neighbor suffering identical harm without a physical taking could not. Second, the damages claimed did not result from the State's use of the small strips of land taken, but rather from the overall public works project constructed on the State's existing right-of-way and on land taken from others. Citing the rule from Campbell v. United States, the court held that compensation does not include diminution in value caused by the use of adjoining lands of others for the same undertaking. Finally, these injuries are considered non-compensable 'community damages,' as they are shared by all properties along the project, differing only in degree, not in kind. The nature of the injury is what defines it as community, not merely its geographic location.
Analysis:
This case significantly clarifies and limits the scope of recoverable severance damages in Texas partial takings jurisprudence. By harmonizing the rules for condemnation and inverse condemnation cases regarding traffic-related impacts, the court prevents landowners from receiving a windfall for non-compensable injuries simply because a small portion of their land was physically taken. The decision reinforces the principle that severance damages must be causally linked to the use of the specific property taken from the landowner, not the public project as a whole. This holding has a major impact on eminent domain cases involving highway expansions, making it more difficult for abutting property owners to claim damages for economic impacts that are considered a shared burden of community progress.
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