Court of Appeals of Texas, Fifth District, Dallas
Appeal from the County Court at Law No. 5 Dallas County,
Texas Trial Court Cause No. CC-14-03073-E
Justices Whitehill, Molberg, and Reichek
own motion, we withdraw our July 18, 2019 opinion. This is
now the opinion of the court.
condemnation case concerns a more than forty-year old hotel
along Highway 183 in Irving, Texas. The State condemned a
portion of the hotel's front parking spaces for a highway
expansion but none of the hotel's three buildings. The
jury awarded the property owner, Mian Development
Corporation, a total of $1, 186, 350 for both the land taken
and damages to the remaining property.
dispute focused primarily on the second calculation, and that
debate was heavily influenced by conflicting opinions
regarding whether the hotel would be viable post-taking.
Mian's owner, its two appraisal experts, and even the
State's hotel data expert testified that the taking
rendered the remaining hotel unviable; whereas, the
State's appraisal experts testified that the hotel had a
remaining useful life of at least five years. The jury's
verdict in this contest between battling experts more closely
aligned with the State's experts' opinions.
Accordingly, this appeal concerns the admissibility of the
State's experts' opinions.
issues, Mian argues that (i) the trial court erroneously
admitted testimony from three of the State's expert
witnesses, two of whom Mian called as adverse witnesses in
its own case in chief; (ii) the erroneous admission of the
experts' testimony violated its constitutional rights to
a jury trial, just compensation, and due process; (iii) the
trial court erred by denying its motion for new trial; and
(iv) cumulative errors require reversal. Because Mian does
not contend that the State's experts were unqualified,
the admissibility issue turns on whether their opinions were
relevant and based on reliable valuation methods and
underlying data. Both side's experts used one or more of
the same valuation methods and much of the same supporting
on the issues and arguments Mian asserts and the record
before us, we conclude that Mian has not shown that the
rulings were an abuse of discretion. Therefore, Mian's
constitutional rights to a jury trial, due process, and just
compensation were not violated. Likewise, the trial court did
not err by denying the motion for new trial because: (i) the
evidence is sufficient to support the judgment; (ii) there
was no abuse of discretion in allowing the State's
experts to testify; and (iii) Mian was not deprived of the
opportunity to cross-examine the State's experts. Because
there was no error, there was no cumulative error. We thus
affirm the trial court's judgment.
the taking, Mian owned a 4.3576 acre property on which the
Sterling Hotel and garage are located (the Property). The
Sterling has three buildings: a twelve-story full-service
hotel tower with 360 rooms; an adjoining building in which
the hotel lobby, restaurant, and common areas are located;
and a five-story parking garage.
2014, the State filed a petition for condemnation seeking to
take a 24, 290 square foot parcel of the Property for its
plan to widen State Highway 183, including some of the
Sterling's parking spaces and landscaping. The taking
also entails moving the new right-of-way line within three
feet of the Sterling parking garage.
commissioners awarded Mian $3, 499, 999. Both parties
objected to the award and both disagreed about the
Property's market value before the State's
acquisition. The parties agreed to set aside the
Commissioners' conditional order granting a writ of
possession and the case was set for a jury trial.
trial, Mian argued it should be compensated for the Property
and the values of the improvements because the taken portion
rendered the remaining property unviable. That is, Mian
argued that its damages were the hotel's value before the
taking minus zero dollars for a total loss. To this end, Mian
offered two appraisal witnesses, Josh Korman and Peter Malin,
who testified that the total compensation due to Mian was
$13, 600, 101 and $19, 100, 000, respectively.
other hand, the State's appraisal witnesses, Matthew
Browne and Alan Pursley, testified that the compensation owed
to Mian was $1, 027, 927 and $764, 970, respectively. Both
experts opined that the Sterling had some continued
viability. Thus, their damages models measured the
hotel's pre-taking value less its post-taking value. Mian
called Brown and Pursley as its second and third witnesses in
its case in chief.
Walker, a hotel expert, also testified for the State and
opined that the Sterling was unsustainable.
jury was asked to determine the value of the land taken and
the damages to the remainder due to the taking and found, (i)
the fair market value of the taking was $286, 350 and (ii)
the damages to the remaining property were $900, 000. The
trial court entered judgment on this verdict. Mian then moved
for a new trial, which the trial court denied.
following chart summarizes the evidence regarding the (i)
pre-taking values of, and damages to, the remainder property
and (ii) jury's related damages finding:
$13, 315, 033
$19, 255, 000
$3, 883, 609
$13, 274, 573
$19, 425, 000
$3, 769, 524
$13, 014, 275
18, 075, 000
$3, 489, 535
$4, 911, 985 
Agreed Tax Valuation
$2, 550, 000
Damages to Remainder
First and Second Issues: Did the trial court abuse its
discretion by admitting the expert testimony, thereby
infringing Mian's constitutional rights?
argues that Walker's, Browne's, and Pursley's
expert testimony should not have been admitted. According to
Mian, these allegedly erroneous evidentiary rulings infringed
on its constitutional rights to a jury trial, due process,
and just compensation.  We reject these arguments because the
record contains evidence from which the trial court could
have reasonably found that the experts' opinions related
to disputed issues, used accepted methods, and were based on
reliable data. And the record does not establish that the
experts' analysis contained analytical gaps.
Standard of Review and Applicable Law
trial court is the "evidentiary gatekeeper"
responsible for excluding irrelevant and unreliable expert
evidence. Exxon Pipeline Co v. Zwahr, 88 S.W.3d 623,
629 (Tex. 2002). It has broad discretion to determine the
admissibility of evidence, and we will reverse only for an
abuse of that discretion. Id
expert's testimony is admissible if the expert is
qualified to testify about "scientific, technical, or
other specialized knowledge" and the testimony is
relevant and based upon a reliable foundation. Tex. R. Evid.
702; TXI Transp. Co. v. Hughes, 306 S.W.3d 230, 234
testimony is unreliable if it is based on unreliable data or
if the expert draws conclusions from his underlying data
based on a flawed methodology. Ford Motor Co. v.
Ledesma, 242 S.W.3d 32, 39 (Tex. 2007) (quoting
Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706,
714 (Tex. 1997)).
Testimony may also be unreliable if there is "too great
an analytical gap between the data the expert relies on and
the opinion offered." Zwahr, 88 S.W.3d at 629.
In applying this reliability standard, the trial court does
not decide whether the expert's conclusions are correct;
rather, it determines whether the analysis used to reach
those conclusions is reliable. Gammill v. Jack Williams
Chevrolet, 972 S.W.2d 713, 727 (Tex. 1998).
expert testimony is legally no evidence, Seger v.
Yorkshire Ins. Co., 503 S.W.3d 388, 410 n.23 (Tex.
2016), and it is an abuse of discretion to admit such
testimony, see Gharda USA, Inc. v. Control Sols.,
Inc., 464 S.W.3d 338, 347-48 (Tex. 2015).
is not a real estate appraiser; he is instead an expert on
hotel valuation. Rather than giving a valuation opinion as
such, Walker provided background testimony that educated the
jury or related to the value calculations. His testimony was
significant to this case because, contrary to Mian's
experts, it tended to lower the hotel's pre-taking value
and to increase the hotel's post taking value. As to the
hotel's continued viability pre-taking, Walker walked a
fine, line falling just short of unequivocally stating that
hotel was not viable pre-taking.
argues that the trial court erred by denying its expert
challenge to Walker because: (i) Walker relied on the
Sterling's actual financials and valued the existing
operation; (ii) even if using the existing financials was a
correct methodology, Walker ignored the existing financials
and formulated his own financial projections; (iii) Walker
offered no evidence of income for the years he rejected; (iv)
Walker incorrectly identified the two zip codes around the
Sterling as the market; and (v) Walker's data did not
assist the jury with understanding the evidence or
determining an issue.
Significantly, however, the court excluded the evidence Mian
challenged in its first three arguments. And while Mian
generally complains that the court excluded the objected-to
data but allowed unreliable opinions about the data, the
record reflects that the data was excluded and Walker did not
opine about the excluded data. Therefore, we consider only
whether Walker's methodology was unreliable and whether
his testimony was relevant to determining the damages that
the taking caused to the remainder portion.
Walker's Testimony Generally
testified generally about the Sterling's location, size,
age, and branding (or lack thereof). He defined and explained
certain terminology for the jury, including average daily
rate or ADR (the average price the hotel charged the customer
for the relevant time period), occupancy rate (the number of
rooms sold divided by the number of rooms available), and
RevPAR (total revenue for selling rooms divided by the number
of rooms available.)
examined data for the Dallas County hotel market for 2014,
and found an occupancy rate ranging from 66-72%, an ADR of
$79-$83, and RevPAR from $52.99-$59.84. This market showed
"pretty strong growth" percentages ranging from
also analyzed the lodging market for two zip codes, 75247 and
75062, around the Sterling. His analysis covered the years
2011-2014, and excluded the Sterling itself. Walker referred
to this as the "local market."
this market to the Dallas County market showed
"significantly lower production," with
approximately $55 RevPAR in the Dallas market and $47 RevPAR
in the local market (a 14.5% difference). Walker thus
concluded that the local market "doesn't appear to
be a very good market."
contends that Walker provided no information about why he
chose the two zip codes to define the local market or whether
they were comparable to the Sterling's market. But Walker
specifically testified that the local market was
representative of the Sterling's market area and that
this is the market that competes with the Sterling.
Mian's appraisers both focused on properties in these two
zip codes. Korman looked at seven comparable properties and
Malin at fourteen properties, and for each, five of the
comparable properties were in the zip codes Walker used.
Matthew Browne, one of the State's appraisers, also
relied on comparable properties from this market area.
also complains that Walker only averaged the market data
presented to the jury. The record reflects, however, that
Walker provided hotel-by-hotel underlying data in addition to
the market averages of ADR, occupancy rate, and RevPAR.
Contrary to Mian's suggestion, Walker did not testify
that the Sterling's value was the average of the market
data. Moreover, Mian's expert also considered the average
performance of hotels in the market area.
Hotel Size and Age
opined that the Sterling is too large for its market, and
said that "larger hotels have closed very significantly
if they're not in the downtown area." Thus,
according to Walker, the Sterling "is in jeopardy"
because of its size and location. Walker further noted that
the Sterling is forty years old and "the odds of it
surviving five years are extremely low."
explained the significance of a hotel's brand. He looked
at the hotels in the local market and compared the 2014
RevPAR for independent hotels with chain hotels with a
branded hotels had $49.41 RevPAR and the independents had
$27.57. Walker explained that this result is consistent with
the hotel market in Texas generally. Independent hotels are
only 14 percent of the hotel revenues in the state, and those
that have brands are doing "extremely well." On the
other hand, the low priced independents "are on their
last legs." He explained that he calls those independent
hotels "notel motels - - - and they can't get a
brand." Walker therefore opined that the Sterling cannot
survive without being branded.
insists that Walker's opinions consisted of "bare
conclusions lacking any supporting basis." According to
Mian, the jury was told that "the Sterling was
unsustainable simply because Bruce Walker says it is."
But the record reflects otherwise. Walker's conclusion
was that, viewing all of the characteristics that he
described-location, size, age, and lack of branding-the
Sterling is "not sustainable." We therefore reject
Mian's argument that the testimony was conclusory.
also argues that Walker's testimony is similar to
testimony offered in Morale v. State, 557 S.W.3d
569, 575-76 (Tex. 2018). We disagree.
Morale, the State planned to condemn a portion of a
33, 000 square-foot property for improving FM 720. The
property was improved with an 8, 831 square-foot building
used for a vehicle and collision repair business. The State
planned to take a 3, 200 square-foot strip of land, which
included a metal canopy that would have to be demolished.
State's appraiser concluded that the business could still
be used as an auto repair shop after the taking, but not as a
collision repair shop. Because the property's use would
change, the State classified the property owners as
"displaced," which would mean that they would be
unable to conduct business in the same or similar manner as
prior to the acquisition. Id. at 572. But the
State's land planner subsequently developed a second plan
for the property's continued use as a collision repair
shop. Thus, the State revoked the property owners'
displacement status. The difference meant whether the
subtrahend in the value before and post-taking calculation
was zero dollars or had a positive value.
trial, two State's experts suggested that the property
owners might be given a zoning variance to allow the property
owners to continue the collision repair business in a
nonconforming way. Both experts conceded, however, that they
could not testify about whether such a variance would
actually be granted. The trial court excluded this testimony
as irrelevant. But the court admitted testimony from two
other experts discussing displacement. The court of appeals
reversed and remanded, holding that the displacement evidence
was irrelevant and harmful. Id. at 573.
whether the displacement evidence was admissible, the supreme
court held that, "expert testimony in condemnation cases
is inadmissible if it relates to 'remote, speculative,
and conjectural uses' of the property that 'are not
reflected in the present market value of the
property."' Id. at 575-76 (citing State
v. Schmidt, 867 S.W.2d 769, 773 (Tex. 1993)). The court
qualified, however, that "an expert's opinion may
assume facts established by legally sufficient
evidence." Id. at 575. Finally, the court held
that the testimony was admissible because the expert's
assumption that the property owners could not continue the
property's existing use was grounded in evidence and
"did not improperly assume facts with an insufficient
evidentiary basis." Id. at 575-76. To that end,
the court said, ". . . the State was free to
cross-examine [the expert] on his assumptions, but they did
not render his testimony wholly speculative and therefore
inadmissible." Id. at 576. On the other hand,
the court concluded that the expert testimony concerning
zoning variances was sufficiently speculative that it was
within the trial court's discretion to exclude it.
the record reflects that Walker's opinions were grounded
in legally sufficient evidence (that was not excluded).
Walker opined that the Sterling was not sustainable based on
examination and comparison of Texas-wide data, Dallas County
data, and local market data. Significantly, he did not
conclusively state that the Sterling would definitely go out
of business. Instead, he offered an opinion concerning the
likelihood of its continued viability apparently both before
and after the taking. See e.g., State v. Little Elm
Plaza, Ltd., No. 02-11-00037, 2012 WL 5258695, at *12-14
(Tex. App.-Fort Worth Oct. 25, 2012, pet. dism'd) ...