A Texas Court Recently Overturned a Verdict for Stigma Damages

Stigma damages have no place in an appraisal, at least not in Texas. Recently in an 8-0 decision, the Texas Supreme Court refused to accept testimony of an appraiser regarding stigma damages saying the conjecture, speculation and guessing was not sufficient proof of such damages.


Stigma damages have no place in an appraisal, at least not in Texas.  Recently in an 8-0 decision, the Texas Supreme Court refused to accept testimony of an appraiser regarding stigma damages saying the conjecture, speculation and guessing was not sufficient proof of such damages.

 

Texas court voids award in ranch contamination case

 

 

By Chuck Lindell

American-Statesman Staff

The Texas Supreme Court on Friday tossed out a $350,000 jury award to the owners of a Brenham-area ranch who claimed their land values had been harmed because a nearby metal-processing business had improperly dumped hazardous waste for 25 years.

The dumping was discovered in 2007 after one cow and 16 calves unexpectedly died. State environmental inspectors later cited the company, Houston Unlimited, for dumping waste that had contaminated the ranch’s stock pond, court records show.

The owners of Mel Acres Ranch sued the company, arguing that even after the problem was fixed, the lingering stigma of pollution significantly lowered property values. A Washington County jury agreed and ordered Houston Unlimited to pay $350,000 in lost market value.

But in an 8-0 ruling Friday, the Supreme Court determined that the ranch owner’s expert witness presented insufficient and unreliable evidence of lost land values.

Because the opinion was decided on narrow grounds, the Supreme Court did not address the question at the heart of the case — whether Texas landowners have a legal right to recover damages due to lingering stigma.

However, the opinion did note that even if the court ultimately concludes that stigma damages are possible, “it is often legally impossible to prove them.”

“Evidence based on conjecture, guess or speculation is inadequate to prove stigma damages, not only as to the amount of the lost value but also as to the portion of that amount caused by the defendant’s conduct,” said the opinion, written by Justice Jeffrey Boyd.

Lawyers for Houston Unlimited argued that stigma damages are appropriate only for properties that are permanently harmed. The pollution was a temporary condition that was corrected when a new dam stopped the flow of water from the facility to the ranch, they said.

The ranch owners argued that the damage done to the property was permanent because the history of contamination will always have to be disclosed to potential buyers.

Justice Jeff Brown, who had a role in the case when it was before the 14th Court of Appeals, did not participate in Houston Unlimited v. Mel Acres Ranch, 13-0084.


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