The San Antonio Court of Appeals has reversed a trial court’s order denying TxDOT’s motion for summary judgment on sovereign immunity in a property owner’s claim for inverse condemnation.
Texas Department of Transportation v. C-5 Holdings, LLC and Stone Oak Storage Partners, Ltd. (No. 04-21-00292-CV) stemmed from highway construction on US 281 in Bexar County. Plaintiffs owned undeveloped property on the highway north of Stone Oak Parkway and built a storage facility on the property. The constructions plans included three driveways connecting the property to the highway, one of which would connect directly to the storage facility. After construction had begun, a TxDOT contractor placed a dirt pile 50 feet high and 1400 feet long in front of the driveway to the storage facility. The dirt pile blocked drivers’ view of the facility from the highway and required patrons to drive a mile further south on 281, west on Stone Oak Parkway, and then north along a restaurant parking lot to a private roadway leading to the facility. Importantly, plaintiff C-5 owned the property contiguous to the facility, as well as the private road patrons had to use to access it. Plaintiffs sued TxDOT and the contractor for inverse condemnation, nuisance, negligence, and promissory estoppel. TxDOT moved for summary judgment based on sovereign immunity. The trial court denied the motion. TxDOT filed an interlocutory appeal.
In an opinion by Justice Rios, the court of appeals reversed and remanded. As a threshold matter, the court ruled that TxDOT’s appeal of the summary judgment order was a properly interlocutory because the court of appeals “had jurisdiction over the denial of the combined plea to the jurisdiction and motion for summary judgment, regardless of how the trial-court pleading was styled, because the substance of the pleading was to raise sovereign immunity, which implicates subject-matter jurisdiction” (citations omitted).
Taking up the inverse condemnation claim, the court observed that to recover on such a claim, “a property owner must establish that (1) the State intentionally performed an act, (2) that resulted in the taking, damaging, or destruction of the property, (3) for public use” (citation omitted). The property owner must further show that “there was a ‘material and substantial impairment’ of access to the property” in order to recover compensation for diminution in value. To accomplish that, plaintiff must “show that there has been (1) a total but temporary restriction of access; (2) a partial but permanent restriction of access; or (3) a temporary limited restriction of access brought about by an illegal activity or one that is negligently performed or unduly delayed” (citations omitted). Plaintiffs sought recovery under the third category, but the court ruled that they failed to establish that patrons did not have “suitable access” to the facility despite the dirt pile. Though the alternative access route was a bit circuitous and traveled part of the way on a private road (which plaintiffs argued nullified TxDOT’s suitable access argument, which requires access by public road), the court held that because plaintiffs owned the private road themselves, they could not plausibly argue that they might be denied access by a disinterested third party owner. And, according to SCOTX precedent, “[a]ccess to property is not materially and substantially impaired merely because the remaining access points are significantly less convenient” (citation omitted). Moreover, just as landowners have “no vested right in the volume or route of a passerby, [they have] no right to insist that [their] premises be visible to them” (citation omitted). Finally, that court of appeals noted that, in general, a “‘disruption of use due to construction activities’ by the condemning authority during a roadway expansion project [is] not compensable” (citation omitted).
Plaintiffs nuisance claim likewise failed because it failed to establish a waiver of sovereign immunity by pleading a compensable inverse condemnation claim. As to the promissory estoppel claim, the court of appeals declined to apply a narrow exception to the general rule that “a governmental unit exercising its governmental powers is not subject to estoppel” (citation omitted). That exception, created by SCOTX in City of Hutchins v. Prasifka, 450 S.W.2d 829 (Tex. 1970), applies only to municipalities and only if “justice requires its application, and there is no interference with the exercise of … governmental functions.” Noting that no Texas authority since then has expanded the exception, that it has never been applied to TxDOT, and that plaintiffs presented no evidence of “manifest injustice” (i.e., TxDOT “acted deliberately to induce plaintiffs to act in a way that benefitted the government,” the court rejected plaintiffs attempt to expand the estoppel exception.
