State of Texas v. Clear Channel Outdoor (Tex.App.- Houston [1st Dist.] Sep. 11, 2008)
(Bland)
(
inverse condemnation, state's plea to the jurisdiction overruled)

The trial court properly denied the State’s plea to the jurisdiction.  We therefore
affirm the judgment of the trial court.  All pending motions are dismissed as moot.

AFFIRM TC JUDGMENT: Opinion by Justice Bland  
Before Justices Taft, Jennings and Bland
01-07-00353-CV        The State of Texas v. Clear Channel Outdoor, Inc.
Appeal from County Civil Court at Law No 1 of Harris County
Trial Court
Judge:  Hon. Jack Cagle

O P I N I O N

The State of Texas appeals the denial of its plea to the jurisdiction in Clear Channel Outdoor,
Inc.’s claims for inverse condemnation and condemnation damages, contending that the facts
alleged by Clear Channel fail to demonstrate that the State has waived sovereign immunity for
those claims and, therefore, the trial court lacks subject matter jurisdiction over them.   We
affirm.

Background

In 2001, Clear Channel obtained a leasehold interest in a parcel of land, identified as parcel
709, located in Harris County within view of the Katy Freeway. Pursuant to the lease, Clear
Channel erected and maintained a billboard on the parcel.  In connection with a planned
freeway expansion, the State petitioned to condemn parcel 709, and named the landowner
and Clear Channel as defendants.

In the hearing on the State’s petition, a panel of special commissioners appointed by the
county civil court at law took evidence from the parties concerning the fair market value of the
property.  At that hearing, the State’s appraiser informed the panel that he did not include the
billboard structure in his opinion of value because the Texas Department of Transportation
(TxDOT) told him that its policies dictated that billboard structures be treated as personal
property.  In accordance with the State’s position, the special commissioners did not account
for the fair market value of the billboard structure in their award.  Clear Channel returned to the
trial court to file its objections to the special commissioner’s award and its counterclaim
against the State for inverse condemnation.  Then, Clear Channel moved for partial summary
judgment on its counterclaim, contending that both the United States and Texas constitutions
require payment of just compensation to Clear Channel for the billboard structure.

The State countered with a plea to the jurisdiction and response to the motion for partial
summary judgment subject to its plea.  The trial court denied the State’s plea to the
jurisdiction, an interlocutory decision which the State appeals.  Tex. Civ. Prac. & Rem. Code §
51.014(a)(5) (Vernon 2008).

    After the State filed this appeal, the trial court signed an agreed interlocutory judgment
settling any dispute among the parties concerning the status of taxes due on the property, the
amount of compensation the State owes to the landowner for the condemned real property,
and the amount of compensation the State owes to Clear Channel for its leasehold interest in
that property.  In addition, Clear Channel agreed to waive its right to seek compensation for
billboard relocation expenses.  The judgment specifies that the parties continue to dispute the
issues raised in this appeal.

Discussion

Standard of Review for Pleas to the Jurisdiction

A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject
matter jurisdiction.  Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004); Villarreal v.
Harris County, 226 S.W.3d 537, 541 (Tex. App.—Houston [1st Dist.] 2006, no pet.).  The
question of whether a court has subject matter jurisdiction is a matter of law; accordingly, we
review de novo the trial court’s ruling on a plea to the jurisdiction.  Hoff v. Nueces County, 153
S.W.3d 45, 48 (Tex. 2004); Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
(Tex. 2004).  Governmental immunity from suit precludes the exercise of subject matter
jurisdiction and thus is properly asserted in a plea to the jurisdiction.  Miranda, 133 S.W.3d at
225–26; Villarreal, 226 S.W.3d at 541.   

The purpose of a plea to the jurisdiction is to “defeat a cause of action without regard to
whether the claims asserted have merit.”  Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554
(Tex. 2000).  It does not involve delving into the substance of the plaintiff’s claims, but rather,
examination of whether the merits of those claims should be reached.  Id.  Accordingly, in
reviewing the trial court’s ruling on plea to the jurisdiction, we construe the pleadings liberally in
favor of the plaintiff and determine if the pleader has alleged facts that affirmatively
demonstrate the court’s jurisdiction to hear the cause.  Villarreal, 226 S.W.3d at 541.  If the
pleadings lack sufficient facts to affirmatively demonstrate the trial court’s jurisdiction, but do
not reveal incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the trial
court may either afford the plaintiff an opportunity to amend or await further development of the
case on the merits.  Miranda, 133 S.W.3d at 226–27.  Conversely, if the pleadings
affirmatively negate the existence of jurisdiction, then the trial court may grant a plea to the
jurisdiction without providing the plaintiff an opportunity to amend.  Id. at 227.

Inverse Condemnation

    Eminent domain empowers the State to take private property for public use without the
consent of the property owner.  Villarreal, 226 S.W.3d at 542, 544.  Both the United States
and Texas constitutions, however, prohibit the State from taking private property for public use
without adequately compensating the property owner for its loss.  U.S. Const. amends. 5, 14;
Tex. Const. art. 1, § 17 (providing that “[n]o person’s property shall be taken, damaged or
destroyed for or applied to public use without adequate compensation being made, unless by
the consent of such person . . .”); see Almota Farmers Elevator & Warehouse Co. v. United
States, 409 U.S. 470, 473, 93 S. Ct. 71, 794 (1973); Villarreal, 226 S.W.3d at 542; City of
Houston v. Boyle, 148 S.W.3d 171, 178 (Tex. App.—Houston [1st Dist.] 2004, no pet.).

When the State takes private property for public use without just compensation, the property
owner may seek just compensation through a cause of action for inverse condemnation.
Villarreal, 226 S.W.3d at 542. “Inverse condemnation occurs when (1) a property owner seeks
(2) compensation for (3) property taken for public use (4) without process or a proper
condemnation proceeding.”  Id. (quoting Boyle, 148 S.W.3d at 178) (internal quotation
omitted).

At the heart of the State’s jurisdictional challenge lies the premise that the Clear Channel
billboard structure is removable personal property, not a fixture.  It contends that personalty is
not compensable in a condemnation proceeding if it can be relocated, even if the personalty is
affixed to the property at the time of the taking.  The State points to Clear Channel’s lease
agreement, which provides that it owns the billboard structure, and must remove it upon
cancellation of the lease.  Thus, the State further contends, no intentional taking has occurred.

The State relies on Logan v. Mullis, 686 S.W.2d 605 (Tex. 1985), to support its contention that
the billboard structure is removable personal property.  Logan sets forth a three-factor test for
determining whether personalty has become a fixture: (1) the mode and sufficiency of
annexation, either real or constructive; (2) the adaptation of the article to the use or purpose of
the realty; and (3) the intention of the party that annexed the chattel to the realty.  See id. at 607
(applying test to determine whether culvert was personalty or fixture, and thus whether
appellant was liable for damages resulting from his removal of culvert when he abandoned
easement).  The State’s reliance on Logan in the condemnation context, however, is
misplaced.  The Logan test, which is routinely used to determine ownership of a fixture or
liability for an injury, conflicts with well-settled principles concerning whether a property owner
has the right to compensation in the condemnation context.  In contrast to the Logan test’s
focus on the property owner’s intent as the pre-eminent factor, in the context of a
condemnation claim, the owner’s characterization of its property rights for other purposes is
not determinative of whether it constitutes a compensable property interest for which the State
must pay just compensation.  See Almota, 409 U.S. 470, 478 n.5, 93 S. Ct. at 797 n.5
(condemning authority cannot take advantage of agreement between lessor and lessee
designating improvement by lessee as personal property); accord Brazos River Conservation
& Reclamation Dist. v. Adkisson, 173 S.W.2d 294, 300 (Tex. Civ. App.—Eastland 1943, writ
ref’d).   Rather, the improvements to the land are considered part of the realty in takings
cases.  State v. Carpenter, 89 S.W.2d 979, 980 (Tex. 1936).  Consequently, we conclude that
the Logan test does not apply to Clear Channel’s condemnation claims.  See Harris County v.
Clear Channel Outdoor, Inc., No. 14-07-00226-CV, 2008 WL 1892744, at *4 n.3 (Tex. App.—
Houston [14th Dist.] Apr. 29, 2008, no pet.).

     Even so, application of Logan to the jurisdictional facts in the record under the standard of
review applicable to this appeal supports affirmance of the trial court’s decision.  The record is
undisputed that billboard structure permit applications require the builder to plant the support
pole and affix the structure to the land by embedding the central pole in concrete.  Clear
Channel held a renewable, ten-year lease for parcel 709, and could not remove the billboard
structure without destroying it.  See Logan, 686 S.W.2d at 608 (holding that Logan's culvert
was permanently attached to realty as matter of law based on evidence that tank was
embedded under gravel road in clay or gravel, then packed with dirt, cement and wood pilings,
and was difficult to remove once embedded, facts which revealed Logan’s intent at time he
built culvert); Texas Pig Stands, Inc. v. Krueger, 441 S.W.2d 940, 945 (Tex. App.—San
Antonio 1969, writ ref’d n.r.e.) (holding that lessee was entitled to compensation for
improvements made on land under ten-year lease agreement where record showed
improvements could not economically be removed); see also Harris County Flood Control
Dist. v. Roberts, 252 S.W.3d 667, 672–73 (Tex. App.—Houston [14th Dist.] 2008, no pet.)
(holding that evidence was legally sufficient to support trial court’s determination that billboard
sign structure was fixture at time of taking).  This evidence meets Clear Channel’s burden to
raise a fact issue concerning the jurisdictional inquiry whether the billboard structure is a
fixture.  See Miranda, 133 S.W.3d at 228.

In the condemnation proceeding for parcel 709, the State conceded that it did not include the
billboard structure in reaching a compensable value.  In its counterclaim, Clear Channel
alleges that the State intentionally exercised its right to take parcel 709 for public use, which
resulted in a taking of Clear Channel’s property interests in the billboard structure as well, and
Clear Channel seeks compensation under Article I, section 17 of the Texas Constitution and
the Fifth Amendment to the federal Constitution for the State’s taking of those property
interests.[1]  We hold that the trial court properly denied the State’s plea to the jurisdiction.[2]

Conclusion

The trial court properly denied the State’s plea to the jurisdiction.  We therefore affirm the
judgment of the trial court.  All pending motions are dismissed as moot.

Jane Bland
                                                    
Justice

Panel consists of Justices Taft, Jennings and Bland.  


[1] We lack the jurisdiction in this interlocutory appeal to reach the State’s contentions
concerning the proper fair market value of Clear Channel’s billboard structure or other issues
presented in connection with the partial summary judgment proceedings.  See Tex. Civ. Prac.
& Rem. Code Ann. § 51.014(a)(5) (Vernon 2008).  Our review at this juncture does not extend
to whether the type or quantum of damages sought by Clear Channel constitutes the
appropriate measure and amount of just compensation.  See Roberson v. City of Austin, 157
S.W.3d 130, 138–39 (Tex. App.—Austin 2005, pet. denied) (reviewing propriety of damages
question submitted to jury); Tarrant Reg’l Water Dist. v. Gragg, 43 S.W.3d 609, 625 (Tex. App.
—Waco 2001) (reviewing legal sufficiency of damages award and observing that amount of
damages is question of fact for jury), aff’d, 151 S.W.3d 546 (Tex. 2004).

[2] We decline the State’s suggestion that we construe certain state statutes and municipal
code provisions as narrowing a property owner’s rights to just compensation in contravention
of the federal and state constitutions.