The Texas Supreme Court recently issued an opinion in Texas Department of Transportation v. Self, a case regarding compensation for landowners when the State cut down trees on their property while maintaining an adjacent easement.  [Read Opinion here.]

Photo by Adrobski 

Background

Mark and Birgit Self own a tract of land in rural Montague County.  Their property adjoins Farm-to-Market Road 677 and extends to the centerline of the road.  The State of Texas has a right-of-way easement extending 50′ from the centerline of the road in either direction.  This easement burdens the Selfs’ property.  The Selfs’ predecessor constructed a fence along the edge of the easement.  The Selfs hired a new contractor to remove the prior fence that was decaying and replace it with a new fence.  The Selfs instructed their contractor to place the new fence 2-3′ on the Selfs’ side of the easement to preserve large trees that had grown along the original fence.  Thus, the new fence was not constructed on the easement boundary line, and a 2-3′ strip of the Selfs’ property was outside the new fence, but was not part of the State’s roadway easement.

The Texas Department of Transportation (DOT) began a highway maintenance project.  The State contracted with TFR to remove brush and trees from the State’s right-of-ways.  The contract between DOT and TFR required trees to be removed should be marked with an X painted on the trunk prior to the maintenance work being performed by TFR.  At some point, the DOT revised its instruction to TRF and told them to “clear everything between the fences.”

After DOT expressed concern with TFR being able to complete the project on time, TFR hired a subcontractor, Lyellco Inc. to do tree removal. The Lyellco workers did just that, cutting the trees all the way up to the Selfs’ fence, including those trees in the 2-3′ strip that was not burdened by the State’s easement.

The Selfs sent a letter to DOT to complain.  DOT emails indicated DOT employees acknowledged a DOT inspector ordered the trees be removed, but the trees were on the state highway side of the fence. The Selfs sent a survey to DOT, which showed 28 oaks and elms with trunk diameters between 18-39″ were removed near their fence line.  Of these, 13 were wholly outside the State’s right-of-way and 7 were partly outside it.  The Selfs sought $251,000 in compensation for the 20 trees.  DOT rejected this request, noting the Attorney General’s office investigating the situation concluded DOT was not negligent.

DOT testified they conducted no surveys prior to the project and they were not aware of any communications with the Selfs prior to clearing the trees.

Lawsuit

The Selfs filed suit against DOT, TRF, and Lyellco for removing the trees from their land claiming negligence and inverse condemnation.

DOT asserted sovereign immunity and sought to dismiss both claims.

With regard to the negligence claim, DOT claimed the Selfs had not shown a DOT employee damaged the trees by operating motor-driven equipment, which would serve as an exception to sovereign immunity.  The Selfs argued the Lyellco employees who removed the trees were DOT “employees” within the meaning of the Tort Claims Act and other DOT employees exercised such control over the equipment used to remove trees they “operated or used” the equipment within the meaning of the statute.

As to the inverse condemnation claim, DOT admitted it instructed TFR to remove trees up to the fence line, but argued the Selfs failed to offer evidence that DOT intended to have trees removed from property outside its right-of-way.

The trial court denied DOT’s motion to dismiss on both counts.  The Ft. Worth Court of Appeals affirmed in part and reversed in part. The Court of Appeals held there was a question of fact as to whether the Lyellco employees who used the equipment to remove the trees were DOT “employees” under the Tort Claims Act. The Court of Appeals sided with DOT on the inverse condemnation claim, finding there to be no intent to destroy the Selfs’ trees.

Both the Selfs and the DOT sought review from the Texas Supreme Court.

Texas Supreme Court Opinion

Justice Busby delivered the Opinion of the Court.  [Read Opinion here.]

Negligence Claim 

The Court began with a discussion on sovereign immunity, which protects the State, its agencies, and its subdivisions from lawsuit and liability.  However, immunity can be waived by the Tort Claims Act in certain situations.  Immunity is waived when property damage is proximately caused by the negligence of an employee acting within his scope of employment if the damage arises from the operation or use of motor-driven equipment and the employee would personally be liable under Texas law.

1. “Employee”

The Selfs claim the Lyellco employees who cut down the trees were “employees” as defined by the Tort Claims Act, making their use of motor-driven equipment to destroy the trees waive immunity. An employee is defined by the statute as “(1) a person, including an officer or agent, who is in the paid service of a governmental unit by competent authority, but (2) does not include an independent contractor, an agent or employee of an independent contractor, or a person who performs tasks the details of which the governmental unit does not have the legal right to control.”

The Court explained this two-part test as initially requiring the person be “in the paid service of a governmental unit.”  If a person is not in the paid service of a governmental unit, the second part of the test is unnecessary. The Court rejected DOT’s “strict paycheck test” which would answer the question based solely on who the person’s paycheck came from.  This, the Court found, and DOT conceded at oral argument, is too narrow of a test.

While the Court noted the difficulty of determining the proper test to use in this situation, doing so was unnecessary here, because “the relationship between DOT and Lyellco’s employees is far removed from the kinds of payment relationships courts have concluded amounts to paid service.” TXDOT did not have a direct relationship with Lyellco, a subcontractor brought in by TFR.  The TFR-Lyellco contract specifically stated the payment provisions between DOT and TFR were not part of the subcontract. In fact, DOT paid TFR on a per-tree basis, while TFR paid Lyellco on a per-day basis. There was no evidence DOT’s payments flowed through to Lyellco, that DOT had any role in determining payment to Lyellco, or that DOT had any reimbursement requirement for subcontracted labor.

Thus, the Lyellco employees were not in DOT’s paid service as required to waive immunity under the Tort Claims Act.

2. “Operation or use”

The Selfs argued the DOT employees’ direction and mandatory control over the equipment constituted “operation” or “use” sufficient to waive immunity.  This argument was set up by a circuit split among Texas appellate courts, with some holding a state employee must physically operate the machinery, and others holding actual physical use was not necessary and, instead, exercising control over the machine’s operation was enough.   The Court, however, found it unnecessary to resolve this circuit split in this case.  Instead, the Court held the facts here “did not rise to the level of control” cases have determined to create a fact question related to operation or use.  There was no precise direction by a governmental employee in close physical proximity to the equipment being operated.

Thus, the Tort Claims Act did not waive immunity for the negligence claim, and the Court ordered it to be dismissed.

Inverse Condemnation Claim

Next, the Court turned to the inverse condemnation claim. Under Texas law, an inverse condemnation claim requires proof that (1) an entity with eminent domain authority intentionally performed certain acts; (2) that resulted in the taking, damaging, or destroying of property for or applying it to (3) public use.  For an act to be “intentionally performed” the entity must have either intended to damage the property, knew its conduct would cause identifiable harm, or specific property damage was substantially certain to result from the conduct.

The Selfs offered the following evidence that DOT acted intentionally in damaging their trees:  (1) DOT employee instructed Lyellco agents to cut the trees at issue; (2) The Selfs owned the land on which the trees stood and, thus, the trees themselves; (3) at least 20 damaged trees were partially or wholly outside the State’s easement; and (4) cutting the trees destroyed the Selfs’ property. These facts, the Court held, were sufficient to raise a question of fact with regard to the DOT’s intentionality.

DOT argued where the government’s action initiates a chain of events that ultimately results in the taking of private property, the government is not liable.  The Court held this case did not involve such a chain of events as it was simply a directive given by DOT to the Lyellco employees.

DOT also argued because it assumed the trees were in the right-of-way, it had no intent to damage the Selfs’ property. The Court rejected this as well.  “The government must pay compensation when it intentionally takes private property for public use even if the government mistakenly believes that it has a legal right to do so apart from its power of eminent domain.”  Adopting DOT’s argument to the contrary would allow the government to avoid liability by merely claiming it thought at the time of the taking it had the right to do so. Several courts have rejected this view, holding instead the government must pay compensation when it intentionally destroys private property for public use even with the mistake belief it had the right to do so.  “We conclude that the government may not avoid paying compensation for intentionally taking, damaging, destroying, or appropriating private property for public use by showing that it acted under the incorrect impression that it had the right to do so.”

Thus, the Court reversed the court of appeals’ dismissal of the inverse condemnation claim and remanded for further proceedings.