A Quick Overview Of Inverse Condemnation In Texas

Article 1, Section 17 of the Texas Constitution:

“[n]o person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made…”

This blog will provide a brief overview of inverse condemnation, what is needed to bring an inverse condemnation claim, applicable statute of limitations, and what remedies are available in Texas.

Before we jump in and discuss inverse condemnation, it is important to understand the foundation of eminent domain and the difference between Statutory and Inverse Condemnation.

What is Eminent Domain?

Simply stated, eminent domain is the power of the government to take private property for a public use (i.e. utilities, roads, and parks). However, the property owner must be paid “adequate” compensation under Article 1, §17 of the Texas Constitution and “just” compensation under the Fifth Amendment of the United States Constitution (“Takings Clause”) for the private property taken, damaged or destroyed by the government entity.

So, if the government has the power of eminent domain to take private property for a public use what rights do property owners have? Chapter 21 of the Texas Property Code sets out the procedural requirements and condemnation procedures associated with a statutory condemnation suit which requires that the property owner be provided with a “Landowner’s Bill of Rights”. The filing of an eminent domain action by the government entity pursuant to these procedures is generally known as statutory condemnation and is different from an inverse condemnation claim where no such action has been filed.

What happens when a government entity takes or damages your property for a public use without paying adequate compensation or using its’ power of eminent domain to file a condemnation suit to acquire your property? You talk with an experienced eminent domain attorney to see if you have an inverse condemnation case.

What is Inverse Condemnation?

Inverse condemnation is a cause of action that allows property owners to bring suit against a government entity that takes or damages private property for public use without paying adequate or just compensation or filing a condemnation suit against the property owner(s) using its power of eminent domain to acquire the property.

In Texas, an inverse condemnation claim is brought by a property owner, under Article 1, § 17 of the Texas Constitution, against a government entity to recover the value of property taken or damaged by the government entity for a public use without exercising its power of eminent domain in a condemnation proceeding to acquire the private property.

An inverse condemnation suit, unlike a statutory condemnation suit, is initiated by the property owner rather than the government and is based on a claim of governmental taking or damages to property without paying adequate compensation or following the formal condemnation procedures contained in Chapter 21 of the Texas Property Code.

Relationship Between Statutory and Inverse Condemnation

• A statutory remedy may bar inverse condemnation claims if it provides an adequate means of recovery.
• Property owners must exhaust administrative remedies and cannot claim inverse condemnation for interests already subject to a formal condemnation proceeding.

Sovereign & Governmental Immunity and Its Waiver

Sovereign immunity and governmental immunity differ in the level of government they protect. Sovereign immunity protects Federal and State government. Governmental immunity protects political subdivisions of the State such as cities and counties.

Government entities are protected by sovereign and governmental immunity unless it is waived by law or constitution. Article 1, §17 of the Texas Constitution waives sovereign and governmental immunity for a proper inverse condemnation claim because this constitutional provision requires adequate compensation be paid when private property is taken, damaged or destroyed for a public use.

Statute of Limitations

Ten-year Statute of Limitations for a Physical Taking. There is no statutory provision in Texas that specifically provides a limitations period for inverse condemnation actions. Trail Enterprises, Inc. v. City of Houston., 957 S.W.2d 625, 631 (Tex. App.—Houston [14th Dist.] 1997, pet. denied). However, courts have held that a claim for inverse condemnation based on an actual physical taking is barred after the expiration of the ten-year period of limitations to acquire land by adverse possession. See Texas Civil Practice and Remedies Code § 16.026; Hudson v. Arkansas Louisiana Gas Co., 626 S.W.2d 561, 563 (Tex.App.— Texarkana 1981, writ ref'd n.r.e.) (reversing a summary judgment where the trial court failed to apply ten-year limitations period to inverse condemnation claim); Hubler v. City of Corpus Christi, 564 S.W.2d 816, 823 (Tex.Civ.App.—Corpus Christi 1978, writ ref'd n.r.e.) (distinguishing ten-year limitations period for “taking” from two-year period for “damaging” of property).

For a physical taking, an inverse condemnation claim begins to accrue when the government intentionally performs an act that results in the taking of the private property for public use. Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 598 (Tex. 2001); City of Justin, v. Rimrock Enterprises Inc., 466 S.W.3d 269, 279.

Two-year Statute of Limitations for Damages

When an inverse condemnation claim involves property that has been damaged, the claim is subject to a two-year statute of limitations (i.e. trespass or property damage) under Texas Civil Practice and Remedies Code §16.003.

For damages to a property, an inverse condemnation claim begins to accrue when the property is actually damaged. Allen v. City of Tex. City, 775 S.W.2d 863, 866 (Tex. App.—Houston [1st Dist.] 1989, writ denied); Hubler v. City of Corpus Christi, 564 S.W.2d 816, 823–24 (Tex. Civ. App.—Corpus Christi 1978, writ ref’d n.r.e.). If the damage is permanent, the statute of limitations begins to run upon discovery of the first actionable injury and not when the full extent of the damage is realizable. City of Odessa v. Bell, 787 S.W.2d 525, 530 (Tex. App.—El Paso 1990, no writ), disapproved of on other grounds by Schneider Nat. Carriers, Inc. v. Bates, 147 S.W.3d 264 (Tex. 2004). If the damage is temporary, only the injuries occurring more than two years prior to the filing of suit are barred. Id.

Elements needed to establish an Inverse Condemnation Claim:

A property owner must establish their ownership of property that the government intentionally performed certain acts which resulted in a taking, damaging or destroying of private property for public use without the property owner’s consent. Tex. Parks & Wildlife Dep’t v. Sawyer Tr., 354 S.W.3d 384, 390–91 (Tex. 2011).

To establish a proper Inverse Condemnation claim, a property owner must prove:

1. Ownership of the property that is taken, damaged or destroyed.
2. Intent; Intent is present if the government knows harm is substantially certain to occur. Negligence alone is insufficient.
3. Causation; Proximate cause is an essential element of an inverse condemnation claim. Hearts Bluff Game Ranch Inc. v. State, 381 S.W.3d 468, 483 (Tex. 2012).
4. Public use
5. Lack of Consent

Examples of Inverse Condemnation:

Impairment of Access Claims

• A material and substantial impairment of access to property can constitute a taking. State v. Delany,197 S.W.3d 297, 299 (Tex. 2006).

Flooding-Related Claims

• Claims based on flooding require proof that government actions caused tangible damage. Courts have held that recurring flooding resulting from government-approved projects can support inverse condemnation if intent is established.

Regulatory Takings and Use Restrictions

• A regulatory taking occurs when the government over-regulates or restricts a property’s permissible use or causes a diminution in its value. However, not every governmental regulation is a compensable taking. Sheffield Dev. Co., Inc. v. City of Glenn Heights, 140 S.W.3d 660, 670 (Tex. 2004).

Two types of Regulatory Takings:

1. Where a regulation has a direct physical effect on property; and
   • Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 838-39 (Tex. 2012)
2. Where an owner is deprived of all economically viable use.
   • Sheffield Dev. Co., Inc. v. City of Glenn Heights, 140 S.W.3d 660, 670 (Tex. 2004)

Remedies for Inverse Condemnation

Monetary Compensation is the Only Remedy for Inverse Condemnation.

The only remedy available for an inverse condemnation claim is monetary compensation. Tex. Parks & Wildlife Dep’t v. Sawyer Tr., 354 S.W.3d 384, 390–92 (Tex. 2011). A prevailing property owner does not regain use of property lost to inverse condemnation or win possession of it. Id. at 391.

A successful takings claim entitles a claimant to compensation, not to possession of the property. See Tex. Const. art. I, § 17 (“No person's property shall be taken ... without adequate compensation being made ....”) (emphasis added); City of Beaumont v. Bouillion, 896 S.W.2d 143, 149 (Tex.1995) (stating that section 17 of the Texas Constitution waives immunity only when a claimant is seeking compensation).

Attorneys’ Fees are Not available in an Inverse Condemnation Proceeding.

Attorneys’ fees are only recoverable against the government if provided for by statute or contract. See Univ. of Tex. Sys. v. Courtney, 946 S.W.2d 464, 469 (Tex. App. —Fort Worth 1997, writ denied). Although Article 1, §17 of the Texas Constitution waives immunity for an inverse condemnation, it does not authorize an award of attorneys’ fees. City of San Antonio v. El Dorado Amusement Co., Inc., 195 S.W.3d 238, 249 (Tex. App.—San Antonio 2006, pet. denied).

Community Damages

To be entitled to compensation in an inverse condemnation action, an injury must be peculiar to a given property. Gulf, Colo. & Santa Fe Ry. Co. v. Fuller, 63 Tex. 467, 470 (1885).

In distinguishing between community and special damages, the question is whether the injury is peculiar to the property in question or only one suffered in common with other property owners in the community. Tex. Dept. of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 647 (Tex. 2004).

Inverse condemnation claims must overcome some challenging legal obstacles to be successful so knowing the applicable statute of limitations, what elements are needed to establish a proper inverse condemnation claim, and the remedies that are available are an important foundation to building a successful inverse condemnation case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.