State v. Windham
837 S.W.2d 73, 1992 WL 125002 (1992)
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Rule of Law:
In a partial condemnation proceeding, where the parties dispute the highest and best use of the property, the condemning authority has the right to present competing evidence regarding the appropriate economic unit for valuation if the landowner introduces evidence based on their own designated economic unit.
Facts:
- Jerry Windham and Frank Thurmond (collectively 'Windham') owned a 19-acre tract of land.
- The State of Texas initiated condemnation proceedings to acquire a 2.12-acre strip of Windham's land adjacent to State Highway 6 for a highway-widening project.
- Windham contended that the highest and best use of the property was for commercial development.
- Windham argued that the 2.12-acre strip taken by the State was not a self-sufficient economic unit for commercial purposes.
- To establish value, Windham designated a larger, 3.84-acre tract (a 200-foot deep strip) as the proper 'economic unit' for valuation.
- The State contended that the highest and best use of the entire 19-acre tract was to hold it for investment purposes.
- Based on its theory, the State argued the entire 19-acre tract was the appropriate economic unit and that each acre was of equal value, regardless of its proximity to the highway.
Procedural Posture:
- A panel of special commissioners awarded Windham $60,250.00 for the taking.
- Windham objected to the award and appealed to the county court (the trial court).
- Prior to trial, Windham filed a motion in limine to exclude the State's evidence regarding its valuation theory, which the trial court granted.
- The jury, hearing only evidence based on Windham's designated economic unit, returned a verdict valuing the property at $138,520.50, and the trial court entered judgment.
- The State of Texas, as appellant, appealed to the court of appeals.
- The court of appeals affirmed the trial court's judgment, finding no error.
- The State of Texas, as petitioner, then sought review from the Supreme Court of Texas.
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Issue:
In a partial takings case where the landowner designates a specific 'economic unit' for valuation purposes based on their theory of highest and best use, does a trial court err by excluding the condemnor's competing evidence regarding a different economic unit based on a conflicting theory of highest and best use?
Opinions:
Majority - Cornyn, J.
Yes. A trial court reversibly errs by excluding the condemnor's competing evidence regarding the appropriate economic unit for valuation. When the highest and best use of a property is disputed, the determination of the appropriate economic unit for valuation is a question of fact for the jury. If the landowner is permitted to present evidence of market value based on their theory of the property's highest and best use, the condemning authority must be allowed to present evidence based on its competing theory. The jury's role is to weigh this conflicting evidence to determine the ultimate issue of market value, as it is permitted to consider all uses to which the property is reasonably adaptable.
Dissenting - Mauzy, J.
No. The trial court did not err by excluding the State's evidence. The Texas Constitution guarantees landowners 'adequate compensation,' which has been interpreted to allow the landowner to choose the method of valuation. Precedent like Meyer and Ramsey protects the landowner's right to focus the jury's attention on the value of the part taken, without reference to the remainder, to prevent the condemnor from unfairly averaging down the value of more desirable frontage property. The majority's holding compromises this constitutional protection and effectively forces the landowner to accept a valuation method that may not provide full and adequate compensation.
Concurring - Doggett, J.
Yes. The trial court erred by excluding the State's evidence. The jury should be trusted to evaluate all competing evidence. Unlike in State v. Meyer, where it was undisputed that the condemned land had a higher value, here the State seeks to offer evidence that all the property shares an equal value. Whether that evidence is persuasive and supports a finding of a shared value is a factual determination properly made by a jury after hearing both sides of the argument.
Analysis:
This decision establishes that the determination of the appropriate 'economic unit' for valuation in a partial takings case is a fact question for the jury when the property's 'highest and best use' is disputed. It prevents a landowner from unilaterally defining the valuation framework and ensures a level playing field where both parties can present competing theories to the fact-finder. This ruling empowers the jury to resolve conflicts in expert testimony regarding land use and value, rather than allowing one party to control the narrative through pretrial motions. It clarifies that while a landowner can propose a valuation method, the condemnor has an equal right to controvert it with its own evidence.
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