Affirmed and Opinion filed May 2, 2002.
In The
Fourteenth Court of Appeals
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NO. 14-01-00094-CV
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WEINGARTEN REALTY ADVISORS, Appellant
V.
HARRIS COUNTY APPRAISAL DISTRICT, Appellee.
On Appeal from the 55th District Court
Harris County, Texas
Trial Court Cause No. 99-43829
O P I N I O N
This is a property tax appraisal case involving alleged unequal taxation of commercial property. The property owner, Weingarten Realty Investors, appeals the trial court=s judgment in favor of the Harris County Appraisal District (AHCAD@) and an order excluding Weingarten=s expert witness. We affirm the judgment of the trial court.
Factual and Procedural Background
Weingarten purchased Champion=s Village Shopping Center in December 1998, for $36 million. Champion=s Village is located at FM 1960 and Champion Forest Drive in Houston, Harris County, Texas, and contains approximately 400,000 square feet of net rentable area.
HCAD appraised Champion=s Village Shopping Center at $30 million for the 1999 tax year. Weingarten protested HCAD=s appraisal, and after exhausting its administrative remedies, timely appealed to the district court. In its petition, Weingarten made two claims of entitlement to relief for the 1999 tax year under the Texas Tax Code. Weingarten contended the appraised value of Champion=s Village Shopping Center was in excess of its fair market value under the Texas Constitution. Weingarten also contended the appraised value was unequal to the appraised values of several comparable properties for purposes of ad valorem taxation. Weingarten later non-suited the excessive valuation appeal and proceeded to trial solely on its unequal appraisal claim.
Before trial began, HCAD filed a motion to exclude the testimony of Weingarten=s sole appraisal expert witness, David Dominy. The motion, filed pursuant to E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995), raised four main arguments: (1) Dominy did not consider fair market values in conducting his analysis; (2) Dominy did not consider economic characteristics for Champion=s Village Shopping Center or any of his Aassessment comparables@ in making value adjustments; (3) Dominy did not include a reasonable number of comparable properties in his analysis; and (4) Dominy=s value adjustments were not based upon any quantitative analysis. Within its third argument, HCAD raised objections to the selectivity and substantive quality of the comparable properties as well as to the quantity of them. In its fourth argument, HCAD objected to Dominy=s ipse dixit used to make the required, appropriate adjustments to the comparable properties under section 42.29(d) of the Texas Tax Code.
Rather than conduct a pre-trial Robinson hearing, because it was a bench trial, the trial court Acarried the motion@ in the interest of efficiency. At trial, Dominy testified Champion=s Village was unequally appraised and its equal appraised value was $19,149,962, more than $10 million less than HCAD=s 1999 appraisal. At the conclusion of the one-day bench trial, the trial court requested post-trial briefs in lieu of closing arguments. Along with its brief Weingarten submitted additional evidence for purposes of HCAD=s Robinson challenge C the affidavits of Breck Bostwick and Ronald Little. About six weeks after the trial, the court entered an order excluding the testimony of Dominy and simultaneously signed a takeB nothing judgment against Weingarten. Weingarten filed a motion to reconsider and motion for new trial. The motion for new trial was overruled by operation of law, and after a hearing on the motion to reconsider, the trial court entered no further orders.
Issues Presented
Weingarten presents three issues for review:
(1) Did the trial court abuse its discretion in excluding Weingarten=s expert witness by misinterpreting and misapplying section 42.26(d) of the Texas Tax Code?
(2) Does Robinson apply to the trial court=s exclusion of Dominy=s testimony, and if it does, did the trial court abuse its discretion in excluding Dominy=s testimony under Robinson?
(3) Is Weingarten entitled to an award of reasonable attorney=s fees?
Because the second issue is controlling, we will discuss it first.
Standard of Review
We review an order excluding an expert witness under an abuse of discretion standard. Helena Chemical v. Wilkins, 47 S.W.3d 486, 499 (Tex. 2001). The trial court abuses its discretion when its ruling is arbitrary, unreasonable, or made without reference to any guiding rules or legal principles. See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998). We must uphold the trial court=s evidentiary ruling if there is any legitimate basis for it. Owens‑Corning Fiberglas v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
To obtain reversal of a judgment based upon error in the admission or exclusion of evidence, the appellant must show: (1) the trial court did, in fact, commit error; and (2) the error was reasonably calculated to cause, and probably did cause, the rendition of an improper judgment. See Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989). Because the trial court did not specify the grounds on which it excluded Dominy=s testimony, we will affirm the trial court=s ruling if the ruling is correct on any theory supported by the pleadings and evidence. See Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex. 1999).
The trial court did not enter findings of fact or conclusions of law. Therefore, we view the trial court=s judgment as impliedly finding all the facts necessary to support its judgment. See Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); Shapolsky v. Brewton, 56 S.W.3d 120 (Tex. App.CHouston [14th Dist.] 2001, pet. denied). Weingarten also challenges the court=s implied findings underlying the judgment and exclusion order by contesting the legal and factual sufficiency of the evidence to support them. See Worford, 801 S.W.2d at 109. Under an abuse of discretion standard, legal and factual sufficiency challenges are not independent reversible grounds of error, but are relevant factors in assessing whether the trial court abused its discretion. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991); In re: D.S., ___ S.W.3d ___, 2002 WL 287738, *2 (Tex. App.CHouston [14th Dist.] 2002, no pet. h.).
Analysis
We begin by addressing HCAD=s contention that Weingarten waived a portion of the argument it now brings on appeal. In its motion to exclude expert testimony, HCAD attacked the reliability of Dominy=s foundational data. On appeal, HCAD argues Weingarten waived one facet of the multi-pronged argument made below, specifically, the reliability issue of using only portions of comparable retail centers in Dominy=s calculations. HCAD claims Weingarten did not specifically address this aspect of a reliable foundation for the expert=s testimony in its original brief. We disagree. As Weingarten points out in its reply brief, under the now Anot-so-new@ appellate rules, a party can make a simple statement of the issue or point for review. See Tex. R. App. P. 38.1(e). Appellate courts treat an issue or point as covering every subsidiary question that is fairly included in the issue or point. Id.; see also Stephenson v. LeBouef, 16 S.W.3d 829, 843B44 (Tex. App.CHouston [14th Dist.] 2000, pet. denied).
Weingarten brief presented the following issue: AWhether the trial court abused its discretion in excluding Dominy=s testimony under Robinson?@ In Robinson, the Texas Supreme Court set forth a two‑part test governing the admissibility of expert testimony. For expert testimony to be admissible (1) the expert must be qualified and (2) the testimony must be relevant and be based on a reliable foundation. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995). An issue presented for review that invokes Robinson also invokes the reliability of an expert witness=s foundational data, in this case the quality of the comparable properties. Moreover, in response, Weingarten addressed reliability of the comparable properties as portions of larger retail centers in its reply brief. Because Weingarten properly presented its complaint on appeal, we now turn to address the merits of its second issue.
Is an expert witness insulated from a Robinson reliability challenge when a statute
mandates the methodology?
In its second issue, Weingarten argues that an expert witness is insulated from a Robinson reliability challenge when a statute mandates a methodology, citing to Rushing v. Kansas City S. Ry. Co., 185 F.3d 496, 506B07 (5th Cir. 1999), cert. denied, 528 U.S. 1160 (2000). Weingarten claims this court is required to hold Dominy=s testimony reliable as a matter of law because Dominy employed a statutorily mandated methodology, specifically, section 42.49(d) of the Texas Tax Code. In Rushing, the Fifth Circuit was concerned with the admissibility of an expert=s affidavit in an appeal of a partial summary judgment. The opponent argued against admissibility based on the expert=s qualifications and the reliability of his testing methods. The proponent responded that the expert precisely followed techniques mandated by Noise Control Act regulations. Unlike this case, there was no direct challenge to the reliability of the underlying facts or data employed by the expert in conducting the sound-level testing. Id. We do not find Rushing persuasive or controlling in this case; its reliability challenge focused on qualifications and methodology, not underlying data. Reliability of methodology is only one facet of the reliable foundation required to admit expert testimony under Texas Rule of Evidence 702. See Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 713B14 (Tex. 1997). Thus, we consider whether Dominy=s testimony satisfied Robinson.
Did the trial court abuse its discretion in excluding Dominy=s testimony under
Robinson?
Unreliable expert testimony is of no evidentiary value. See Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 712 (Tex. 1997). Texas Rule of Evidence 702 requires that all expert testimony, not just scientific evidence, must be relevant and reliable before it is admitted. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 727 (Tex. 1998). As noted above, a two‑part test governs whether expert testimony is admissible: (1) the expert must be qualified; and (2) the testimony must be relevant and be based on a reliable foundation. E.I. du Pont de Nemours & Co., 923 S.W.2d at 556. The trial court makes the initial determination about whether the expert and the proffered testimony meet these requirements. Robinson, 923 S.W.2d at 556. The trial court may exclude the expert testimony if there is too great an analytical gap between the data and the opinion proffered. Gammill, 972 S.W.2d at 727.
The trial court=s gate-keeping function does not supplant cross‑examination as the Atraditional and appropriate means of attacking shaky but admissible evidence.@ Id. at 728. The availability of cross-examination, however, does not relieve the trial court of its threshold responsibility under Rule 702 of ensuring that an expert=s testimony both rests on a reliable foundation and is relevant to the task at hand. Id. In ruling on reliability, the trial court is not to determine the truth or falsity of the expert=s opinion, but is to determine whether the expert=s opinion is relevant, whether the analysis is correct, and whether methods and research underlying the opinion are reliable. Robinson, 923 S.W.2d at 557; Gammill, 972 S.W.2d at 718, 727B28. Rather than focus on the expert=s conclusions, the trial court focuses on the reliability of the principles, research, and methods underlying them, as well as on the expert=s reasoning and methodology. Robinson, 923 S.W.2d at 557. If the foundational data underlying opinion testimony is unreliable, an opinion drawn from that data is likewise unreliable. Merrell Dow Pharm. Inc., 953 S.W.2d at 714. Unreliable expert testimony is legally no evidence. Id.
In Robinson, the Texas Supreme Court identified six nonexclusive factors to determine whether an expert=s testimony is reliable and thus admissible. Robinson, 923 S.W.2d at 557. But in Gammill, our high court recognized that the Robinson factors may not apply to certain testimony. Gammill, 972 S.W.2d at 726. In non-scientific cases, it is impossible to set out specific criteria for evaluating the reliability of expert testimony, and, ultimately, the trial court is accorded broad discretion to determine how to assess reliability. The Kroger Co. v. Betancourt, 996 S.W.2d 353, 362 (Tex. App.CHouston [14th Dist.] 1999, pet. denied). As a result, reliability is an admissibility issue for the trial court, not a weightBofBtheBevidence issue for the fact finder. General Motors Corp. v. Sanchez, 997 S.W.2d 584, 590 (Tex. 1999).
Because the present case was tried to the court and the trial court carried HCAD=s Robinson motion to the conclusion of trial, the court heard extensive testimony concerning Dominy=s qualifications as well as the reliability and relevance of his testimony. As both gatekeeper and fact‑finder, the trial court was in a unique position to assess the reliability of Dominy=s technical and specialized knowledge and to determine whether this testimony would assist the trier of fact to understand the evidence and to determine the facts in issue, as contemplated by Rule 702. The trial court was in the best position to evaluate whether the opinions Dominy proffered were based on a sound foundation of facts.
Because the trial court carried HCAD=s motion to exclude, Dominy testified as if his opinions were admitted evidence. The main avenue for HCAD to challenge the reliability of Dominy=s testimony was on cross-examination; on appeal, this does not mean that Dominy=s testimony can only be challenged by sufficiency or weight of the evidence as opposed to admissibility. In fact, in its cross-examination, HCAD extensively challenged the foundational data Dominy used in making his unequal appraisal calculations. It demonstrated the Acomparable properties@ used to perform his equal and uniform valuation analysis were questionably Acomparable@ and questionably Aappropriately adjusted@ for several reasons such that any opinion drawn from them would be unreliable. Points HCAD made on Dominy=s cross-examination include:
C His Acomparable properties@ were significantly smaller retail centers with 105, 897 to 258,513 of square feet of improvements compared to Champion Village=s 407,013 square feet of improvements;
C Nine of the ten Acomparable properties@ used had per-square-foot appraised values significantly lower than Champion=s Village;
C He used only ten Acomparable properties@ even though there were 191 retail centers existing in the northwest quadrant of Harris County;
C He carved out portions of the comparable retail centers due to disparate ownership and, in fact, used only portions of the Acomparable properties@ selected in his equal-and-uniform analysis;
C The adjustments he made to the Acomparable properties@ considered only physical characteristics of condition, age, size and location; and,
C The amount of the percentage adjustment for each characteristic of the Acomparable properties@ that differed from Champion=s Village was subjective.
Cumulatively or separately, any one of these points could form a satisfactory basis for the trial court to reject testimony based upon the quality of the comparable properties as unreliable. Though not unbridled, the trial court had great latitude in ruling on the admissibility of an expert appraiser=s testimony based upon inadmissible underlying facts or data. See, e.g., Pape v. Guadalupe-Blanco River Authority, 48 S.W.3d 908, 916 (Tex. App.CAustin 2001, pet. denied) (upholding exclusion of comparable sales in condemnation proceeding); Boswell v. Brazos Elec. Power Co-op., Inc., 910 S.W.2d 593, 602B3 (Tex. App.CFort Worth 1995, writ denied) (upholding exclusion of appraisal report); Southwestern Bell v. Ramsey, 542 S.W.2d 466, 476 (Tex. App.CTyler 1976, writ ref=d n.r.e.) (upholding admission of comparable sales in eminent domain proceeding).
In conclusion, we find ample support in the record for the trial court=s conclusion as Agatekeeper@ that Dominy=s testimony was inadmissible because Dominy lacked a reliable foundation for his opinions. As a result, the trial court=s ruling to exclude Dominy=s testimony was not arbitrary or without reference to any guiding rules or legal principles. Thus, we find the trial court did not abuse its discretion.
In any event, any error in excluding Dominy=s testimony would not provide grounds for reversal because Weingarten has not shown that the exclusion of this evidence probably caused the rendition of an improper judgment. See Tex. R. App. P. 44.1 (a)(1); McCraw v. Maris, 828 S.W.2d 756, 757 (Tex. 1992). Reversible error does not result unless the appellant can demonstrate that the whole case turns on the particular evidence excluded. See City of Brownsville v. Alvarado, 897 S.W.2d 750, 753B4 (Tex. 1995). In making this determination, we must review the entire record. See McCraw, 828 S.W.2d at 757.
To demonstrate that the missing evidence probably caused the rendition of an improper judgment, Weingarten reminds us that Dominy was the only valuation witness. However, even if Dominy=s testimony was reliable and had been admitted into evidence, the trial judge, as the fact-finder, could have disbelieved his testimony. Opinion testimony does not establish any material fact as a matter of law and is never binding on the trier of fact. McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986). When acting as the trier of fact, the trial court judges the credibility of the witnesses, and assigns the weight to be given to their testimony. See Leyva v. Pacheco, 163 Tex. 638, 641, 358 S.W.2d 547, 549 (1962); Shintech Inc. v. Group Constructors, Inc., 688 S.W.2d 144, 152 (Tex. App.CHouston [14th Dist.] 1985, no writ). It is not within our power to second-guess the fact‑finder unless only one inference can be drawn from the evidence. See Havner v. E‑Z Mart Stores, Inc., 825 S.W.2d 456, 461 (Tex. 1992). That is not the case here.
Based on the entire record, the trial court could have concluded Dominy=s testimony was shaky, weak, and not credible. A number of points HCAD made on cross-examination go to the weight of this evidence. HCAD made a showing of Dominy=s bias suggesting he selectively chose his ten Acomparable properties@ to skew the numbers, thereby rendering his equal-and-uniform opinion not believable. Simply stated, the trial court, as fact-finder, could have concluded the Champion=s Village Shopping Center was not unequally appraised because it disbelieved the equalBandBuniformBappraisal value Dominy placed on the Champion=s Village Shopping Center. Thus, even when Dominy=s testimony is considered as part of the evidence, the trial court could have entered a take-nothing judgment against Weingarten.
In conclusion, the trial court is the gatekeeper of expert evidence, and we may not usurp that responsibility. We recognize there is a tension between a trial court=s roles as a gatekeeper and fact-finder, made all the more prominent in a bench trial when the trial court carries a Robinson motion as opposed to considering it pre-trial. Nonetheless, we hold that the trial court did not abuse its discretion in excluding Dominy=s testimony. Moreover, if the trial court had erred in excluding this testimony, Weingarten has not demonstrated that the exclusion probably resulted in the rendition of an improper judgment. Therefore, we overrule Weingarten=s second issue.
Exclusion of the Expert Testimony Based on Interpretation and Application of
Section 42.26(d) of Texas Tax Code
In its first issue, Weingarten argues the trial court abused its discretion in interpreting and applying section 42.26(d) of the Texas Tax Code to exclude Weingarten=s expert witness. Essentially, it claims the trial court rejected the methodology of the statute if it excluded Dominy. We begin with a review of the statute and this court=s opinion in Harris County Appraisal Dist. v. United Investors Realty Trust, 47 S.W.3d 648, 653 (Tex. App.BHouston [14th Dist.] 2001, pet. denied).
In 1997, the Legislature passed section 42.26(d) of the Texas Tax Code which states:
The District Court shall grant relief on the ground that a property is appraised unequally if the appraised value of the property exceeds the median appraised value of a reasonable number of comparable properties appropriately adjusted.
Tex. Tax Code Ann. ' 42.26(d) (Vernon Supp. 2001). In order to perform the calculation under this statute, the appraisal expert determines a reasonable number of comparable properties. Then, the expert takes the appraised value of those properties from the public record, and appropriately adjusts them to the subject property. Thereafter, the appropriately adjusted comparable properties are arrayed and a median is determined. United Investors Realty Trust, 47 S.W.3d at 653.
In United Investors, this court noted that section 42.29(d) became law on January 1, 1998, enacted as part of the Taxpayer=s Bill of Rights. Id. at 652. It was intended to facilitate tax remedies for property owners. Id. In using the methodology mandated by this new avenue for ad valorem tax relief, this court rejected any requirement of independent market-value appraisals of comparable properties, appraisal ratios or a statistical sample of comparable properties. Id. at 653. The proper application of section 42.26(d) does not mandate consideration of market value. Id. at 654. Weingarten and HCAD made several arguments to the trial court, similar to issues presented in United Investors. These arguments question the proper interpretation of the Texas Tax Code and what factors an expert appraisal witness should consider in forming an unequal appraisal opinion. HCAD=s foremost argument is that section 42.26(d) requires consideration of independent market-value of comparable properties. This court rejected that argument in United Investors. Id. at 653. By statute, appraised value is market value. Tex. Tax Code Ann. ' 23.01(a). Furthermore, if a conflict exists between taxation at market value and equal and uniform taxation, equal and uniform taxation must prevail. United Investors, 47 S.W.3d at 654.
Dominy>s methodology complied with section 42.26(d). Counsel for Weingarten systematically led Dominy through the statute as Dominy made his calculations to form opinions of unequal appraisal and a value for an equal appraisal. There was nothing about his methodology that contravened section 42.29(d) as interpreted in United Investors. See id. at 654. As a result, we reject the bulk of HCAD=s arguments in its motion to exclude before the trial court as proper grounds for exclusion of Dominy. If the trial court excluded Dominy=s testimony because of unreliable methodology, that exclusion would have been error.
However, we have no indication the trial court excluded Dominy=s testimony based on an improper interpretation or application of section 42.26(d). Nothing in the record states the trial court rejected the methodology of the statute. There are no findings of fact or conclusions of law. Weingarten directs us to no record citation that would suggest the trial court=s exclusion order was based on a rejection of Dominy=s methodology or a conclusion that the statute=s methodology was unconstitutional. As a result, this court is constrained and must affirm the judgment if it can be upheld on any legal theory that finds support in the evidence. See Curtiss v. Commission for Lawyer Discipline, 20 S.W.3d 227, 231 (Tex. App.CHouston [14th Dist.] 2000, no pet.); Vickery v. Commission for Lawyer Discipline, 5 S.W.3d 241, 258 (Tex. App.CHouston [14th Dist.] 1999, pet. denied). Weingarten tries to isolate the trial court=s discretion in excluding evidence to an erroneous interpretation of section 42.29, essentially characterizing HCAD=s arguments as an attack on this court=s opinion in United Investors. We disagree. Although HCAD does argue statutory factors contributing to an unreliable methodology, as it did in the United Investors, those are not its only arguments in this case. HCAD also moved to exclude Dominy=s testimony on the basis of his foundational data and the quality of the comparable properties he selected for the calculations underlying his opinions. Therefore, we overrule Weingarten=s first issue.
Attorney=s Fees
Finally, in its third issue, Weingarten argues it is entitled to an award of attorneys= fees or remand for consideration of its entitlement to attorneys= fees. Because Weingarten was not a prevailing property owner in the trial court or on appeal, it is not entitled to attorneys= fees under the statute. See Tex. Tax Code Ann. ' 42.29 (Vernon Supp. 2000); Tex-Air Helicopters, Inc. v. HCAD, 15 S.W.3d 173 (Tex. App.CTexarkana 2000, pet. denied). Accordingly, we overrule Weingarten=s third issue.
We affirm the trial court=s judgment.
/s/ Kem Thompson Frost
Justice
Judgment rendered and Opinion filed May 2, 2002.
Panel consists of Chief Justice Brister and Justices Anderson and Frost.
PublishC Tex. R. App. P. 47.3(b).