Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:During a February 2003 rainstorm, Mitch Humphrey noticed water entering his home near the back door. According to Humphrey, this was the first time his home had flooded. Humphrey testified that water from Royce Homes LP’s construction site flowed across his back yard and into his home. Humphrey and one of his neighbors testified that the fill dirt being used at Royce’s construction site was red and that the water flooding Humphrey’s home also was red. As a result of the incident, approximately 1 inch of water flooded all of Humphrey’s home except for one bedroom. Humphrey sued Royce Homes for damages to Humphrey’s residence. Humphrey alleged that Royce Homes wrongfully diverted the natural flow of surface waters during the construction of a new house on adjacent property and thus caused Humphrey’s home to flood. The matter went to trial. Following the presentation of evidence, the jury answered two charge questions. Question No. 1 asked the jury if Royce “diverted the natural flow of surface water in a manner that proximately caused damage” to Humphrey’s property. The jury answered “yes” to Question No. 1. In its entirety, Question No. 2 asked: “What sum of money, if any, if paid now in cash, would fairly and reasonably compensate [Mitch] Humphrey, for the damages, if any, caused by Royce Homes, L.P.’s conduct? “In arriving at an amount, if any, consider only the acts of Royce Homes, L.P. and do not include damages caused by any other source. “Consider the elements listed below and none other. Consider each element separately. Do not include damages for one element in any other element. Do not include interest on any amount of damages you find. “a. the reasonable cost of the repairs necessary to restore the property to its condition immediately prior to the incident: “Answer in dollars and cents for damages, if any.” The jury answered $5,314.27. The charge continued: “b. the difference, if any, in the market value in Montgomery County, Texas, of Mitch Humphrey’s Property, located at 11898 LaSalle Spring Court, Conroe, Texas, also known as Lot 39 of LaSalle Crossing, immediately before and immediately after the occurrence in question: “Answer in dollars and cents for damages, if any.” The jury answered $20,000. HOLDING:Reversed and remanded. In issue one, Royce Homes claimed that the trial court erred by submitting the diminution-in-value question to the jury (Question No. 2(b)). Royce claimed that Humphrey is not entitled to damages for diminution in the market value of his home, because the underlying injury was temporary rather than permanent, since Humphrey’s home flooded only once. Humphrey, however, contended that his home suffered permanent damage because of a stigma that attaches to flooded homes. Humphrey produced a real estate appraiser, Ray Steinmann, who testified that flooded homes, even when the flood occurs only once, generally suffer a diminished market value. Texas law, the court noted, explains how to determine whether a plaintiff’s injury is permanent. In Schneider National Carriers Inc. v. Bates in 2004, the Texas Supreme Court conducted a comprehensive analysis of the distinctions between temporary and permanent nuisances. In Bates, the Texas Supreme Court held that “a permanent nuisance may be established by showing that either the plaintiff’s injuries or the defendant’s operations are permanent.” Thus, based on the record, the court concluded that Steinmann’s testimony was more than a scintilla of evidence that would allow reasonable and fair-minded persons to find that Humphrey’s home suffered a diminished market value as a result of the flood and that damages to the house were permanent. In issue two, Royce Homes attacked the legal sufficiency of the evidence supporting the jury’s finding that $5,314.27 was a reasonable and necessary cost for repairs to Humphrey’s home. Humphrey’s testimony and his exhibits, the court stated, constituted legally sufficient evidence to support the jury’s cost-of-repairs finding. Royce Homes, the court stated, presented its arguments on issues three and four together. In issue three, Royce Homes complained that legally insufficient evidence supported the jury’s finding that Humphrey’s home lost $20,000 in market value as a result of the flood. In issue four, Royce Homes complained that the trial court erred in admitting the testimony of Humphrey’s real estate appraiser. Humphrey, the court noted, testified about the reduced value of his property. He stated that the value of his property was $100,000 before the flood. When asked what the value of the property was “after the flood, [the] same day,” Humphrey responded that the property was worth $70,000. Under cross-examination, however, Humphrey undercut his own testimony by conceding that he calculated the post-flood value of his home by “pulling [it] out of the air[.]“ When the owner is familiar with his property’s value, the court stated, “the owner of the property can testify to its market value, even if he could not qualify to testify about the value of like property belonging to someone else.” The court, however, declared Humphrey’s estimate of his damages to be purely speculative. There can be no recovery for damages that are speculative or conjectural, the court stated. Thus, the court found Humphrey’s evidence supporting an award of $20,000 in diminished value to be legally insufficient and sustained Royce Homes’ issue three on that basis. The court further found that the trial court abused its discretion in admitting Steinmann’s testimony that the home suffered a 20 percent reduction in its market value and therefore sustained issue four. Steinmann, the court explained, did not base his opinion of the value of Humphrey’s home on properties that had suffered similar flood damage. Instead, the comparables in Steinmann’s report were nonflooded properties. As a result, the court found “too great an analytical gap” between the data Steinmann may have used and his conclusion as to the percentage of the home’s lost market value. In issue five, Royce contended that the trial court erroneously awarded a double recovery to Humphrey by allowing him to recover damages under both Nos. 2(a) and 2(b). When the question submitted to the jury, the court stated, allows the jury to consider the cost of repairs in determining the difference in market value, entering a judgment awarding both the difference in market value after the occurrence and for costs of repairs would allow a double recovery. Because a double recovery is not permissible, the court sustained issue five. Finally, in issue six, Royce Homes contended, in part, that legally insufficient evidence supported the jury’s finding in Question No. 1 that Royce diverted water in a manner that proximately caused damage to Humphrey’s home. With respect to causation, the court stated, Humphrey testified that he saw water flowing from Royce’s lot into his home. In addition, Dan Wilds, a civil engineer employed by Montgomery County, testified that the Royce slab caused an obstruction affecting the water flow and the incident could have been avoided if Royce had provided proper drainage before it began construction. The court found such evidence legally sufficient to support the jury’s finding that Royce diverted the natural flow of surface water in a manner that proximately caused damage to Humphrey’s property. OPINION:Horton, J.; Gaultney, Kreger and Horton, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.