Chief Justice JEFFERSON delivered the opinion of the Court.
After the State sought to condemn a tract of land, the owners subdivided the property into eight separate parcels. The trial court then severed the case into eight different proceedings. The State contends that the severance was improper, and it seeks a writ of mandamus requiring the trial court to vacate the order. Because the severance would require eight trials where only one is appropriate, and because it would preclude the State from presenting relevant valuation evidence, we conditionally grant the writ.
The State of Texas filed a petition to condemn a tract of land and a drainage easement from its owners, the Laws family. The State sought to acquire a 39.619 acre fee tract as well as a 0.23 acre drainage easement, which would come out of the Lawses' 185.835 acre property in Travis County. The property was to be used in the construction of State Highway 130. On the same day that it filed its condemnation petition, the State also filed a notice of lis pendens, giving notice of the pendency of a suit affecting the Lawses' land. See TEX. PROP.CODE § 12.007 (authorizing the filing of a notice of lis pendens in eminent domain actions).
A Special Commissioner's hearing was set, but five days before the hearing, nine separate limited liability corporations filed nine separate Pleas in Intervention and Suggestions of Succession.
After the subdivision, the State added the nine intervenors as parties claiming an interest in the Acquisition, but the State nonetheless continued to proceed against the Acquisition as a single plot of land. At the Special Commissioners hearing, the Lawses and the LLCs were represented by the same counsel. The State's appraisal expert testified at the hearing that because of the lack of significant retail and commercial development in the area, the property should be appraised as a single unit and that its best and highest use was to hold the frontage for future commercial use. On this basis, the State appraised the land at $0.65 per square foot and valued the whole property, including the drainage easement, at $1,155,693.
The Lawses' appraiser, rather than value the property as a single economic unit, appraised each of the eight subdivided tracts separately. He determined that the best and highest use of each of the tracts was as highway frontage commercial property. On this basis, he recommended total compensation of $4,145,000. The Special Commissioners issued an award of $2,487,991, which, at the Lawses' request, was apportioned among the eight tracts. The Lawses and the State filed various objections to the award, and the case was transferred to the County Court at Law in Travis County for trial on the appeal of the Commissioners' award. See TEX. PROP. CODE § 21.018. The State filed a Notice of Deposit and tendered the award into the court's registry, and the trial court granted the LLCs' motion to withdraw the funds. The Lawses filed disclaimers of interest in the Acquisition and award.
Before trial in the county court at law, the various intervening LLCs filed eight motions to sever, one for each of the tracts into which the property had been subdivided, arguing that there was no unity of ownership between the tracts. At the hearing on those motions, the LLCs did not introduce any valuation evidence. Over the State's objections, the court signed eight orders severing the single cause of action into eight separate actions. The State unsuccessfully sought mandamus relief from the court of appeals. 2010 Tex.App. LEXIS 2377, *1.
The State asks us to order the trial court to vacate its severance order.
Courts permit severance principally to avoid prejudice, do justice, and increase convenience. F.F.P. Oper. Partners
Assuming the validity of the conveyances,
Because the trial court abused its discretion, we must consider whether the State has an adequate remedy by appeal. If it does not, mandamus is proper. We assess the adequacy of an appellate remedy by "balancing the benefits of mandamus review against the detriments." In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex.2008). In performing this balancing, we look at a number of factors, among
We believe that the circumstances of this case also make the appellate remedy inadequate because of the enormous waste of judicial and public resources that compliance with the trial court's order would entail. Requiring eight separate suits here, when only one is proper, would be a clear waste of the resources of the State, the landowners, and the courts.
The Lawses subdivided their property and sought severance based on a belief that its highest and best use was as multiple parcels. Though they have called the procedural wrangling in this case a waste of time and money, they pursued it out of an "abundance of caution" due to a fear that our opinions in City of Harlingen v. Sharboneau, 48 S.W.3d 177 (Tex.2001), and State of Texas v. Willey, 360 S.W.2d 524 (Tex.1962), would prevent them from seeking a valuation based on the subdivision. Willey and Sharboneau are distinguishable.
In Willey, the State condemned a 3-acre portion of Willey's 104-acre property. At the condemnation trial, Willey sought to admit evidence that the best and highest use of the 3-acre tract was "subdivision into residential homesites, with some commercial sites." State v. Willey, 351 S.W.2d 904, 905 (Tex.Civ.App.-Waco 1961), rev'd, 360 S.W.2d 524 (Tex.1962). We held that Willey could not admit such evidence because "at the time of the taking ... there had been no subdivision or development of the 104-acre tract in question." Willey, 360 S.W.2d at 524. We further held that "one seeking to prove the value of such a tract of land may not show what the price of the lots would be if subdivided, or show the price for which already subdivided lots were selling." Id. at 525. In Willey, we relied on City of Austin v. Cannizzo, 153 Tex. 324, 267 S.W.2d 808, 816 (1954), which held that, because a lot was undeveloped and unimproved, "[o]pinion testimony as to the front-foot value of nonexistent lots in a
Unlike Willey and Cannizzo, however, the Lawses are not seeking valuation on the basis of the residential subdivision of their undeveloped property. They seek something much simpler. The property that the State took from the Lawses is primarily highway frontage, and their appraiser testified that the highest and best use was as several individual tracts that could be sold as highway frontage commercial property. This was based on their belief that similar property in the area was sold not in bulk but, rather, in somewhat smaller, commercial-sized parcels.
In City of Harlingen v. Sharboneau, 48 S.W.3d 177 (Tex.2001), we held that a property owner could not value his property according to the so-called "subdivision development method" because such a valuation included substantial speculation. The method used by the landowner in Sharboneau was complex: it started with the condemnee's undeveloped, 10-acre parcel; assumed that it could be divided into 44 lots; estimated the sales prices of those lots; subtracted sale and development expenses, the developer's profit, and the costs to make the lots suitable for residential construction; applied a "discount rate to the annual net sales proceeds to reflect the interest rate necessary to attract debt and equity capital for the development"; and arrived at value for the tract. Id. at 180-81. A method such as this requires numerous speculative inferences because the value of a small residential parcel is based on a number of factors which, in an undeveloped property, do not exist. These include such things as the costs of planning, platting, development, and marketing. In a 10-acre tract like that considered in Sharboneau, it is unlikely that a 1/44th-tract lot would be bought for residential purposes unless the entirety of the residential subdivision had been planned and created, and substantial funds had been invested. Inferences like these are unnecessary to support the sale of parcels such as those into which the Lawses divided their property. The costs of dividing raw land are insubstantial. If the Lawses were to offer evidence that the typical size of highway-frontage commercial parcels was similar to their subdivided parcels, and that those parcels were similarly appropriate for that use, it would not be speculative to permit them to admit valuation evidence on that basis. Of course, the State would be permitted to offer its own evidence that the land was best valued as a single unit. See Windham, 837 S.W.2d at 76.
Our precedents support this sort of valuation testimony. In State v. Meyer, 403 S.W.2d 366 (Tex.1966), we considered how to value a 14-acre strip of property that the State condemned out of Meyer's 103-acre tract. Though Meyer stipulated that there had been no remainder damage, the State attempted to value the 14-acre strip based on the value of the entire 103-acre plot. It therefore arrived at a per-acre value for the whole property and multiplied it by the 14 acres to be taken. Meyer argued, however, that the remainder could not be considered and that the 14-acre plot had to be considered as its own economic unit. Moreover, because it was highway frontage, unlike most of the 103-acre plot, it was more valuable than the averaged per-acre value of the whole property. We agreed with Meyer, writing that "it is beyond dispute that the land being condemned had, at the time of the taking,
We expanded upon our Meyer analysis in Windham. There, the state condemned a 110-foot-deep, 2-acre plot out of Windham's 19-acre property. Windham argued that the 2 acres that the State condemned was not itself a self-sufficient economic unit and therefore sought valuation of a 200 foot deep strip consisting of 3.84 acres, which he argued would, unlike the condemned strip, be valuable as a single unit suitable for commercial development. We permitted Windham's valuation theory but held that he alone could not define the suitable economic unit. Windham, 837 S.W.2d at 77. Accordingly, we allowed the State to present its own expert testimony that the proper economic unit was different and that there was no demand for such subdivision. Id. We wrote:
Id. at 76-77 (citations omitted).
Similar reasoning is applicable here. The State believes that the ideal economic unit is the entire condemned tract, the highest and best use of which is to hold as investment for future development. The State is permitted under Windham to offer this testimony. The Lawses, like Windham, believe that the condemned tract is an inferior economic unit. Where Windham thought the proper unit was larger than the condemned tract, however, the Lawses believe that the tract to be condemned contains several self-sufficient economic units. If they have non-speculative evidence to support this contention, they should be permitted to offer it at trial. Though the State has a right to define the property being taken, it does not have the power to constrain the owners' evidence of competing conceptions of the best economic unit by which the taken property should be valued.
The trial court's severance order prejudices the State's right to offer its valuation