In Texas, more than your dog. Gilbert Wheeler, Inc. v. Enbridge Pipelines (East Texas), L.P. is good news for landowners. The Texas Supreme recognized the intrinsic-value-of-trees exception to the general rule for damages to real property, so that landowners are compensated for the loss of the ornamental (esthetic) and utilitarian (shade) value that trees bring to the property.

What About Fideaux?

PETA might not approve, but an owner can only recover the objective economic value for the negligent loss of his canine, no matter how much you loved the cuddly little ball of fur. Sentimental value and the owner’s subjective emotions are not to be considered.

The Facts Drive The Law

Whether the law is good or bad depends on your perspective. Wheeler and Enbridge had an easement by which Enbridge would construct a pipeline across Wheeler’s 153 acre tract by boring underground in order to preserve the trees and a natural stream on the property. The FUBAR was created when Enbridge failed to tell the contractor about the plan. The contractor cut down several hundred feet of trees, bulldozed the ground, and channelized the stream that once “meandered through the woods”.

The court set out to “clarify an area of the law that has been muddled for decades”. Read the decision for the muddled history. The law now is this:

A  permanent injury:  It cannot be repaired, fixed or restored or even though the injury can be repaired, fixed or restored it is substantially certain that the injury will repeatedly, continually, and regularly recur such that future injury may be reasonably evaluated. Generally rule: If the injury is permanent, the owner is entitled to the loss of fair market value to the property as a whole.

A temporary injury: It can be repaired, fixed or restored and any anticipated recurrence would be only occasional, irregular, intermittent and not reasonably predictable such that future injury could not be estimated with reasonable certainty.  General rule: If the damage is temporary the owner is entitled to costs of restoration.

The exception to the rules allows compensation for the landowner even if the destruction of trees results in no diminishment of the fair market value or so little diminishment that the loss is essentially nominal. Beware: The court has a history of carefully avoiding what it considers to be overcompensating the landowner.

Inside Baseball

This part is for lawyers. The court held that whether injury to property is temporary or permanent is a question of law for the court, although the jury must decide the facts on which the question of law is decided.

Wheeler actively opposed a jury question whether the injury was temporary or permanent. He believed that it didn’t matter in a breach of contract context, because he was seeking benefit-of-the-bargain damages.  The court agreed, but not quite for the same reason. Because the temporary vs. permanent distinction is a question of law, that jury question was not necessary. Because the court deemed the injury permanent, the trial court improperly instructed the jury to calculate damages based on the cost to restore the property. The jury awarded Wheeler $288,000 in damages for the intrinsic value of the trees that were destroyed. Because of the destruction of the trees had not diminished the value of the property (or at most, according to Enbridge, $3,000) diminution in the fair market value was either zero or negligible. Thus, the intrinsic-value exception was allowed.

A musical interlude the Wheelers might relate to (except for the “my ole man” part).