Jose Gerardo Padilla, Giovanna Padilla and Houston Best Foods & Services, LLC D/B/A Doneraki Fulton v. Metropolitan Transit Authority of Harris County

Reversed and Remanded and Opinion filed May 24, 2016.

In The

Fourteenth Court of Appeals

NO. 14-14-00938-CV

JOSE GERARDO PADILLA, GIOVANNA PADILLA, AND HOUSTON

BEST FOODS & SERVICES, LLC D/B/A DONERAKI FULTON, Appellants

V.

METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY,

Appellee

On Appeal from the County Civil Court at Law No. 4

Harris County, Texas

Trial Court Cause No. 1010704

OPINION

Appellants Jose Gerardo Padilla, Giovanna Padilla, and Houston Best Foods

& Services, LLC d/b/a Doneraki Fulton appeal from the trial court’s order

dismissing their inverse condemnation lawsuit against appellee Metropolitan

Transit Authority of Harris County (Metro) for lack of subject-matter jurisdiction.

Appellants owned and operated a Doneraki restaurant on Fulton Street in Houston,

Texas. Appellants alleged that Metro’s construction of a light rail line along

Fulton blocked access to the restaurant for significant periods of time, forcing the

closure of the restaurant. Appellants sued Metro, alleging, among other claims,

that they were entitled to compensation for the total, temporary blockage of access

under Article 1, section 17 of the Texas Constitution.

In multiple issues on appeal, appellants argue that the trial court erred when

it dismissed their inverse condemnation lawsuit. Because the jurisdictional

evidence raised a genuine issue of material fact on both Metro’s intent and on

whether Metro’s construction of the light rail line temporarily blocked all access to

the Doneraki restaurant and thereby damaged appellants’ property, we hold that the

trial court erred when it granted Metro’s motion to dismiss. We therefore reverse

the trial court’s order of dismissal and remand the case to the trial court.

BACKGROUND

A. Access to appellants’ restaurant before Metro’s North Line

project began

Appellants’ restaurant was located on the southeast corner of the intersection

of Fulton Street and Halpern Street. Fulton runs along the west side of the

restaurant property and Halpern borders the north side of the restaurant property.

The property had a restaurant building as well as a paved parking area accessible

from Halpern Street. To supplement the on-site parking area, appellants leased a

separate surface parking lot a short distance south of the restaurant on Fulton

Street. The public entrance into the restaurant building fronted on Fulton Street.

Prior to the construction, Fulton Street adjacent to the restaurant consisted of

one northbound lane with an additional six-foot wide bike lane, one southbound

lane with an additional six-foot wide bike lane, and a curbed median. The

intersection of Fulton and Halpern was controlled by a traffic light. The following

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traffic movements were permitted at that intersection prior to the construction

project: (1) vehicles traveling southbound on Fulton could continue through the

intersection, make a right turn into an apartment complex, make a left turn onto

Halpern and travel east, or make a u-turn and travel north on Fulton; (2) vehicles

traveling northbound on Fulton could continue straight through the intersection,

make a right turn onto Halpern and travel east, make a left turn into the apartment

complex, or make a u-turn and travel south on Fulton; and (3) vehicles traveling

westbound on Halpern could continue through the intersection into the apartment

complex, make a right turn onto Fulton and travel north, or make a left turn onto

Fulton and travel south.

B. The North Line construction plans

Metro began construction of a five-mile extension of an existing light rail

line, referred to as the North Line, in the spring of 2009. As part of the rail-line

extension, Metro had to relocate public and private utilities, widen and reconstruct

portions of North Main, Boundary, and Fulton streets, install new traffic signals

and associated wires and cables, and construct the light rail guideway and transit

stations. Although Metro did none of the actual work on the project, the work was

performed by private companies operating under contract with Metro. Metro’s

agreement with its chosen builder, which eventually became Houston Rapid

Transit Joint Venture (HRT), is set forth in six documents that we refer to

collectively as the Contract. The Contract admonished HRT not to use private

property in the construction of the North Line or to engage in acts of negligence

that would harm property owners along the route. The Contract also urged HRT to

minimize impacts to adjoining property owners:

Design-Builder [HRT] shall ensure that all of its activities and the

activities of Subcontractors are undertaken in a manner that will

minimize the effect on surrounding property and the public to the

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maximum extent practicable. Without limiting the foregoing, Design-

Builder shall fully and timely implement the provisions on

minimizing impacts of noise, dust, vibration, construction lighting,

traffic and pedestrian diversion, and other construction-related

activities to properties, businesses, and residents adjacent to the Work

and to the general public set forth in the Contract Documents.

The Contract also admonished HRT to maintain reasonable access to the

properties adjoining the North Line, providing as follows: “The Facility Provider

[HRT] shall provide and maintain vehicle and pedestrian access to all public and

private properties during the construction, except for limited short periods of time

when full and complete access is not possible.” HRT retained the discretion,

however, to construct the North Line in the manner it deemed most appropriate.

C. Construction adjacent to the restaurant

Beginning in January 2011 and continuing through approximately June

2011, HRT reconstructed the northbound lane of Fulton adjacent to the restaurant

and nearby separate parking lot. Metro did not acquire any portion of the

restaurant property as part of the North Line project.

According to Jose Padilla, however, the construction prevented customers

from accessing the restaurant property, blocking all of the entrances and exits for

months at a time. Additionally, access to the property during construction was all

but impossible for reasonably competent drivers of ordinary passenger cars.

Although appellants continued, for a time, to operate the restaurant for those

customers able to access the property, appellants asserted that Metro’s construction

activity prevented appellants’ trash company from removing trash between the

beginning of February and the latter part of March 2011. The resulting foul-

smelling pile of trash adjacent to the restaurant further reduced business.

Appellants also contended that construction workers broke a gas line in

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approximately January 2011 and ruptured a water line in May 2011, causing a total

temporary loss of the use of the property in both instances.

D. Access to the restaurant following construction

The construction of the North Line and City of Houston traffic safety

requirements resulted in permanent restrictions on traffic movements in the area.

The intersection of Fulton and Halpern has been closed to east-west through traffic.

The following traffic movements are now permitted at that intersection: (1)

vehicles traveling southbound on Fulton may continue through the intersection or

make a right turn into the apartment complex; (2) vehicles traveling northbound on

Fulton may continue through the intersection or make a right turn onto Halpern and

travel east; and (3) vehicles traveling westbound on Halpern must make a right turn

onto Fulton and travel north. Although the Fulton/Halpern intersection is closed to

east-west through traffic, some intersections in the area remained open to east-west

through traffic. The open intersections include the Fulton/Hays intersection,

located approximately 700 feet north of the restaurant, and the Fulton/Boundary

intersection, located approximately 1,150 feet south of the restaurant.

According to appellants, once construction was completed, access to the

restaurant was possible but difficult. Although some access remained, appellants

alleged that the business could not survive the more than $500,000 in losses

suffered during construction, and the restaurant was closed in November 2011.

E. The litigation

Appellants filed an inverse condemnation lawsuit against Metro pursuant to

Article 1, Section 17 of the Texas Constitution. Appellants sought to recover lost

profits allegedly caused by the temporary, total denial of access to the restaurant

during the construction of the North Line. Appellants also sought to recover for

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the permanent diminution in the value of the property caused by the alleged

material and substantial impairment of access once the North Line construction

was completed.

Metro responded by filing a motion to dismiss for lack of jurisdiction.

Metro argued that the trial court did not have jurisdiction over appellants’ inverse

condemnation suit because: (1) any impairment appellants suffered was not

material and substantial; (2) appellants’ losses were “community damages” and

therefore not compensable under Texas law; (3) Metro did not have the required

intent to effect a taking; and (4) Metro enjoys sovereign immunity in all

circumstances unless its immunity has been waived by a specific act of the

Legislature.

Appellants filed a response in opposition to Metro’s motion to dismiss.

Appellants attached an affidavit to their response stating that access to the

restaurant was: (1) totally blocked during the construction adjacent to its location;

and (2) permanently impaired after construction. The trial court granted Metro’s

motion to dismiss, and this appeal followed.

ANALYSIS

Appellants raise three issues on appeal challenging the trial court’s dismissal

of their suit against Metro. We address these issues together.

I. Standard of review and applicable law

A governmental unit’s plea to the jurisdiction may challenge either the

plaintiff’s pleadings or the existence of jurisdictional facts. Texas Dep’t of Parks

& Wildlife v. Miranda, 133 S.W.3d 217, 226–27 (Tex. 2004). When, as here, the

governmental unit challenges the existence of jurisdictional facts, and the parties

submit evidence relevant to the jurisdictional challenge, we must consider that

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evidence as necessary to resolve the jurisdictional issues raised. Id. at 227–28;

Olivares v. Brown & Gay Eng’g, Inc., 401 S.W.3d 363, 369 (Tex. App.—Houston

[14th Dist.] 2013), aff’d, 461 S.W.3d 117 (Tex. 2015); see Perez v. City of Dallas,

180 S.W.3d 906, 913 (Tex. App.—Dallas 2005, no pet.) (examining the

jurisdictional evidence submitted by both parties in the litigation to resolve

governmental unit’s plea to the jurisdiction). This evidence includes the

nonmovant’s discovery responses. See State v. Fiesta Mart, Inc., 233 S.W.3d 50,

56 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (“The trial court properly

considered Fiesta’s [discovery] responses in determining whether it had

jurisdiction.”).

If the evidence raises a fact issue as to jurisdiction, the governmental unit’s

plea must be denied because the issue must be resolved by the trier of fact.

Miranda, 133 S.W.3d at 227–28. If the relevant evidence is undisputed or fails to

present a jurisdictional fact issue, however, the court should rule on the plea as a

matter of law. Id. The standard of review for a plea to the jurisdiction based on

evidence generally mirrors that of a motion for summary judgment. Quested v.

City of Houston, 440 S.W.3d 275, 279–80 (Tex. App.—Houston [14th Dist.] 2014,

no pet.). We therefore must credit evidence favoring the nonmovant and draw all

reasonable inferences in the nonmovant’s favor. Id.

The Texas Constitution provides that no person’s property “shall be taken,

damaged or destroyed for or applied to public use without adequate compensation

being made . . . .” Tex. Const. art. I, § 17. Thus, the Texas Constitution waives

governmental immunity from suit for the taking, damaging, or destruction of

property for public use and requires compensation for such destruction. State v.

Bhalesha, 273 S.W.3d 694, 697 (Tex. App.—Houston [14th Dist.] 2008, no pet.).

To prove an inverse condemnation claim, a claimant must show that a

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governmental actor intentionally performed acts that resulted in the taking,

damaging, or destruction of its property. Smith v. City of League City, 338 S.W.3d

114, 122 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (citing State v. Holland,

221 S.W.3d 639, 643 (Tex. 2007)). For purposes of article I, section 17, a

governmental entity acts intentionally if it knows either that a specific act was

causing identifiable harm or that specific property damage was substantially

certain to result from the entity’s action. City of San Antonio v. Pollock, 284

S.W.3d 809, 821 (Tex. 2009). A governmental entity is substantially certain that

its actions will damage property when the damage is necessarily an incident to or

necessarily a consequential result of the governmental entity’s action. Id. An

awareness that damage is a mere possibility is not evidence of the governmental

entity’s intent. Id. The government’s knowledge must be determined as of the

time it acted, not with the benefit of hindsight. Id.

Not all damage caused by government construction projects is compensable.

Property owners may not recover for injuries sustained in common with the

community where the property is situated, such as damage from noise, dust,

increased traffic, diversion of traffic, circuity of travel, and other inconveniences

incident to road or highway construction. See Felts v. Harris County, 915 S.W.2d

482, 485 (Tex. 1996); State v. Whataburger, Inc., 60 S.W.3d 256, 260 (Tex.

App.—Houston [14th Dist.] 2001, pet. denied) (“Increased access to property often

enhances its value; the inconvenience and temporary impairment which a property

owner suffers when street improvements are made is simply an incident of city life

and must be endured.”).

Damages peculiar to a property owner, such as impaired access, are not

barred by the concept of community injury. State v. Heal, 917 S.W.2d 6, 9 (Tex.

1996). To obtain compensation for impairment of access, a plaintiff must establish

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that the governmental entity materially and substantially impaired access rights to

his property. Whataburger, Inc., 60 S.W.3d at 261. More specifically, the 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. Id. If the plaintiff does so, the property owner is entitled to be

compensated for the lost profits arising from the denial of access. Id. Whether

there has been a material and substantial impairment of access is a question of law

for the court. Heal, 917 S.W.2d at 9.

II. The jurisdictional evidence raises a fact issue on appellants’ inverse

condemnation claim against Metro.

In its motion to dismiss, Metro argued that “the jurisdictional facts do not

support a cause of action for which Metro’s immunity has been waived.” Many of

Metro’s arguments attacked appellants’ now-abandoned claim that the North Line

construction caused a permanent, partial impairment of access to their restaurant.1

With respect to appellants’ remaining claim that the North Line construction

caused a temporary, total denial of access to the restaurant, Metro made two

arguments. First, Metro asserted that appellants’ complaints alleged problems

arising out of the construction that are non-compensable community damages.

Second, Metro argued that the jurisdictional evidence established that it did not

have the necessary intent to take or damage appellants’ property. In response,

appellants argued that the jurisdictional evidence raised a genuine issue of material

fact on whether the construction caused a temporary, total denial of access to their

1

Appellants initially alleged claims for both a permanent, partial restriction of access and

a temporary, total denial of access. During oral argument, appellants conceded that we no longer

need to consider the permanent, partial restriction of access claim in this appeal. Therefore, the

only claim still at issue here is appellants’ claim that Metro’s construction of the North Line

project created a temporary, total denial of access.

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restaurant as well as on Metro’s intent. We examine each argument in turn.

A. There is a fact issue on whether the construction of the North Line

caused a temporary, total denial of access to appellants’

restaurant.

In its motion to dismiss, Metro argued that it established as a matter of law

that the North Line construction did not cause a temporary, total denial of access to

appellants’ restaurant. Metro attached to its motion the affidavit of Michael Bruce

Krantz, the “Senior Project Director of METRORail Expansion Capital Programs.”

In that role, Krantz was “responsible for monitoring and reporting on the status of

the Metro light rail projects and interfacing with [HRT], its subcontractors, and the

City of Houston . . . regarding those projects.” Krantz also stated that as a result of

his work, he was “familiar with the planning, design, and construction of the

extension of Metro’s Red Line light rail line 5.3 miles north, from the University

of Houston–Downtown to the Northline Transit Center.” According to Krantz,

although the construction caused occasional disruptions along the route, HRT

always made alternative arrangements so customers could access appellants’

restaurant and its parking.2 Because HRT always made arrangements for access to

the restaurant and parking areas for the use of the restaurant’s patrons, Metro

argued that appellants’ allegations regarding access were nothing more than the

type of non-compensable inconveniences associated with all government

transportation projects, and therefore its immunity was preserved.

Appellants attached an affidavit of appellant Jose Gerardo Padilla to their

response to Metro’s motion to dismiss. According to Padilla, he was in charge of

the Fulton Doneraki restaurant and was present at the restaurant “virtually every

2

These disruptions included a six-day closure of the Fulton Street access to the

restaurant’s separate Fulton Street parking area. While admitting the closure, Krantz stated that

HRT arranged an alternative access point to that parking lot as well as the use of another parking

lot in the area during the entrance closure.

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day during Metro’s construction of a light rail route in the vicinity of our

restaurant.” Among other things, Padilla stated that “for months[] at a time all the

entrances and exits were blocked.” Padilla continued that “there were many times

when the restaurant access was blocked for long periods because road work and

utility work around the restaurant was left unfinished with no crews working at

all.” In appellants’ view, the trial court erred when it granted Metro’s motion to

dismiss because Padilla’s affidavit generated a fact issue on the question whether

access to the Doneraki restaurant was totally blocked for temporary periods during

the light rail construction project. Metro responds, as it did in the trial court, that

Padilla’s affidavit is not competent evidence because his statements are

conclusory.

A conclusory statement is one that expresses a factual inference without

providing underlying facts to support that conclusion. See, e.g., Arkoma Basin

Expl. Co. v. FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380, 389 n.32 (Tex. 2008);

Dolcefino v. Randolph, 19 S.W.3d 906, 930 & n.21 (Tex. App.—Houston [14th

Dist.] 2000, pet. denied) (holding statement in affidavit that “this was false and

defamatory and has injured me in my profession” was conclusory). Affidavits

containing conclusory statements that fail to provide the underlying facts

supporting those conclusions are not proper summary judgment evidence. Nguyen

v. Citibank, N.A., 403 S.W.3d 927, 931 (Tex. App.—Houston [14th Dist.] 2013,

pet. denied). To avoid being conclusory, an affidavit must contain specific factual

bases, admissible in evidence, from which any conclusions are drawn. Southtex 66

Pipeline Co. v. Spoor, 238 S.W.3d 538, 542 (Tex. App.—Houston [14th Dist.]

2007, pet. denied). In Metro’s view, Padilla’s statements are conclusory because

his affidavit does not include necessary additional facts—such as describing

exactly what was blocking access to the restaurant—supporting his statement that

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access was blocked.

We hold that Padilla’s affidavit is not conclusory. Padilla’s statement that

“for months[] at a time all the entrances and exits were blocked” by Metro’s

construction is a statement of fact, not an inference from unstated facts. See

Arkoma Basin Expl. Co., 249 S.W.3d at 389 n.32. Moreover, Padilla provided

background facts that explain the basis of his factual statement that access was

blocked. Padilla stated that he was in charge of the restaurant and was present at

the restaurant “virtually every day” during the construction project. See Southtex

66 Pipeline Co., 238 S.W.3d at 543 (“A person’s position or job responsibilities

can peculiarly qualify him to have personal knowledge of facts and establish how

he learned of the facts.”). Padilla also explained that road work and utility work

around the restaurant was left unfinished for long periods, with no crews working

at all. The cases Metro cites do not support its contention that minute detail is

necessary to render testimony regarding blocked access non-conclusory.3 Because

Padilla’s affidavit is competent evidence, we hold that it raises a genuine issue of

material fact on whether Metro’s North Line construction activities caused a

temporary, total denial of access to appellants’ restaurant. See Whataburger, Inc.,

60 S.W.3d at 261.

B. There is a fact issue on Metro’s intent.

To establish an inverse condemnation claim, a claimant must show that a

governmental actor acted intentionally when it took or damaged property for a

3

See Brookshire Katy Drainage Dist. v. Lily Gardens, LLC, 333 S.W.3d 301, 308–09

(Tex. App.—Houston [1st Dist.] 2010, pet. denied) (holding affidavit statement of District’s

president interpreting District’s legislative authority was legal conclusion and thus not competent

summary judgment evidence); Stryker v. Broemer, No. 01-09-00317-CV, 2010 WL 4484176, at

*5 (Tex. App.—Houston [1st Dist.] Nov. 10, 2010, pet. denied) (holding plaintiff’s statement

that she suffered mental anguish as a result of attorney’s failure to settle case was conclusory);

Southtex 66 Pipeline Co., 238 S.W.3d at 543–45 (holding attorney/witness did not provide facts

explaining how he had expertise to interpret Texas Railroad Commission documents).

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public use. Smith, 338 S.W.3d at 122. Intent may be shown by circumstantial

evidence. Harris County Flood Control Dist. v. Kerr, No. 13-0303, 2015 WL

3641517, at *3 (Tex. June 12, 2015). Metro argued in its motion to dismiss that

the trial court did not have jurisdiction because the jurisdictional evidence

established conclusively that it did not have the requisite intent. To defeat intent,

Metro relied on its contract with HRT and the argument that it was HRT and

HRT’s subcontractors, not Metro, that actually performed the work causing any

denial of access. Because the contract instructed HRT to minimize the effects of

construction on private property owners, Metro asserted that it did not know

damage beyond the typical disruptions associated with construction was

substantially certain to result.

In City of Dallas v. Jennings, the Supreme Court of Texas held that a

governmental entity may be held liable for compensation under article 1, section

17 of the Texas Constitution if it (1) knows that a specific act is causing

identifiable harm; or (2) knows that the specific property damage is substantially

certain to result from an authorized governmental action—that is, that the damage

is necessarily an incident to, or necessarily a consequential result of, the

government’s action. 142 S.W.3d 310, 314 (Tex. 2004). Under this standard, a

governmental entity responsible for a construction project cannot avoid its

constitutional obligation to compensate private property owners for resulting

damage simply by proving that the project was carried out by contractors rather

than the entity itself. See City of Dallas v. Zetterlund, 261 S.W.3d 824, 831–32

(Tex. App.—Dallas 2008, no pet.) (rejecting plea to the jurisdiction because city

failed to prove as a matter of law that it did not know about or authorize actions of

contractors).

Here, it is undisputed that construction of the North Line was an authorized

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Metro project. Metro’s contractual instruction to minimize the impact of

construction on surrounding property owners indicates that it anticipated such

impact. In addition, Krantz—Metro’s Senior Project Director responsible for

monitoring and reporting on the status of the project—stated in his affidavit that he

monitored the project regularly, and he professed detailed personal knowledge of

facts regarding access to appellants’ property. On this record, Metro’s argument to

the trial court regarding use of contractors does not prove as a matter of law that

Metro lacked knowledge that construction (1) was causing identifiable harm to

appellants, or (2) was substantially certain to result in specific property damage to

appellants. See Jennings, 142 S.W.3d at 314.

Because the jurisdictional evidence shows there are genuine issues of

material fact regarding both of Metro’s arguments challenging the trial court’s

subject-matter jurisdiction, we sustain appellants’ issues on appeal.

CONCLUSION

Having sustained appellants’ issues on appeal, we reverse the trial court’s

order dismissing appellants’ inverse condemnation claim against Metro based on a

temporary, total denial of access to their restaurant, and we remand this case to the

trial court for further proceedings.

/s/ J. Brett Busby

Justice

Panel consists of Justices Boyce, Busby, and Brown.

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