Opinion issued April 2, 2015




                                     In The

                               Court of Appeals
                                     For The
                          First District of Texas
                         ————————————
                            NO. 01-13-00953-CV
                          ———————————
                      THE STATE OF TEXAS, Appellant
                                        V.
        JASDEEP SINGH CHANA, MANJIT SINGH CHANA, AND
               AMAR PAL SINGH CHANA, Appellees

               On Appeal from County Civil Court at Law No. 2
                            Harris County, Texas
                       Trial Court Case No. 969941


                                  OPINION
      This eminent-domain case involves a dispute over the fair market value of

2.072 acres of land, acquired by the State from the Chana family for the purpose of

constructing a detention pond associated with the roadway expansion of FM 529.

On appeal, the State challenges the trial court’s judgment, which awarded the

Chanas $922,256.00 as compensation for the condemnation of their property.
      The State identifies four issues in which it complains that the trial court

abused its discretion in making certain evidentiary rulings. In its first two issues,

the State asserts that the trial court abused its discretion when it admitted the

testimony of the Chana’s real estate appraisal expert. The State’s third issue

challenges the admission of certain comparable land sales, and the State’s fourth

issue assails the trial court’s exclusion of records from a tax-protest hearing in

which the Chanas challenged the taxes assessed for the property.

      We affirm.

                                   Background

      Jasdeep Singh Chana, Manjit Singh Chana, and Amar Pal Singh Chana (“the

Chanas”) owned a 7.765-acre tract of vacant land in Harris County, Texas. The

land sat at the intersection of FM 529 and Enchanted Creek Drive in Katy, Texas.

The rectangular-shaped tract was bounded by FM 529 on its northern side and

Enchanted Creek Drive on its western side. The tract’s eastern side was bounded

by Dinner Creek.      Behind the tract’s southern property line was a housing

subdivision.

      In 2010, the State sought to obtain 2.385 acres out of the 7.765-acre tract for

the construction of a detention pond, needed as part of the roadway expansion of

FM 529. The State planned to construct the detention pond on the eastern most

                                         2
part of the Chanas’ property next to Dinner Creek. The Chanas requested the State

to decrease the size of the taking to permit the Chanas’s remaining 5.693 acres of

land to maintain access to Dinner creek for drainage and detention purposes. The

State agreed and shifted the back boundary of the taking 30 feet forward to the

north. This gave the Chanas a strip of land behind the State’s taking, which

connected the remainder of their property to Dinner Creek, allowing for future

drainage and water detention. After this change, the amount of land condemned by

the State for construction of the detention pond was reduced from 2.385 acres to

the 2.072 acres.

      The State petitioned the county court to condemn the 2.072 acres to use in

conjunction with TxDOT’s roadway expansion of FM 529. The county court

appointed three special commissioners to determine the fair market value of the

land. Following a hearing, the commissioners awarded the Chanas $722,176.00.

The State objected to the award and requested a jury trial. On November 29, 2010,

the State deposited the full amount of the commissioner’s award into the court’s

registry, thereby establishing the date of the taking and the date that the State

acquired the 2.072 acres of land.

      The case proceeded to trial before a jury for a determination of the amount

of money due the Chanas for the 2.072 acres of land condemned by the State for its

                                        3
roadway-expansion project. Each side offered the testimony of its own real-estate

appraisal expert to show the fair market value of the property as of November 29,

2010.

        The State filed a pre-trial motion to exclude the testimony of the Chanas’

real-estate appraisal expert, Mark Sikes. The trial court denied the motion and,

over the State’s continued objections at trial, permitted Sikes to testify. Sikes

testified that the highest and best use for the Chanas’ 7.765-acre piece of land was

to divide it into three separate, independent land parcels or “economic units” for

commercial development. He opined that the 2.072 acres taken by the State would

be part of a 2.385-acre self-sufficient economic unit. Located on the eastern most

side of the Chanas’ property, this rectangular-shaped economic unit was fronted on

its northern side by FM 529, a major thoroughfare. The economic unit had Dinner

Creek on its eastern boundary, the Chanas’ remaining property on its western

boundary—which Sikes opined should be divided into two other self-sufficient

economic units—and a housing subdivision behind its southern boundary.

Although he testified that the Chanas’ remaining property could be divided into

two additional economic units, Sikes testified that he did not appraise those

economic units because he had been retained to appraise only the property

condemned by the State, which was part of the eastern economic unit.

                                         4
      Sikes acknowledged that the economic unit, containing the condemned

property, mirrored the dimensions of the parcel of land that the State had originally

planned to condemn before agreeing to permit the Chanas to retain a 30-foot strip

at the back of the property for drainage purposes. Sikes testified that the 2.385-

acre economic unit was independent of, and could be marketed and sold separately

from, the remaining land owned by the Chanas.

      According to Sikes, the highest and best use of the 2.385-acre economic unit

would be commercial development. Sikes testified that, both before and after the

condemnation in this case, the commercial real-estate market was active in the area

where the Chanas’ property is located. He stated that there had been commercial

development of properties to the east and to the west of the land. Sikes pointed out

that the Chanas’ property was located less than a mile from the major intersection

of Fry Road and FM 529. This intersection had been commercially developed with

nationally recognized stores and a bank. Sikes testified that these businesses

generated traffic and that the Chanas’s property was in the “sphere of influence” of

that intersection. Sikes also stated that, in the last decade, there had been a growth

of housing subdivisions in that area, which provided a residential base for

commercial property.      According to Sikes, there had been “quite a bit” of

residential development around the Chanas’ property, and it sat at “one of the

                                          5
primary commercial thoroughfares that provides access to that residential

property.”

      In forming his opinion, Sikes relied on the sale of 10 properties, which he

averred were comparable to the condemned property. He testified that he had

based his conclusion that the condemned property could be sold as part of a

separate 2.385-acre economic unit for commercial development on these property

sales. He stated that these comparable properties were in the area surrounding the

Chanas’ property. Eight of the ten properties were less than one mile from the

Chanas’ property and two were slightly further away. The sales of these 10

properties occurred between June 2006 and November 2011. These properties

ranged in size from .776 acres to 2.939 acres in size. The sales price of these

properties ranged from $7.70 to $20.00 per square foot. Sikes stated that it is

unusual for him as an appraiser to find so many property sales in such close

proximity to the property that is the subject of appraisal. Sikes stated that this

indicated that real estate, sold as smaller economic units for commercial develop,

was in demand in the area of the Chanas’ property.

      A few of the properties relied on by Sikes to appraise the subject property

had been subdivided from larger tracts of land and then sold as separate economic

units for commercial development. With regard to the area where the Chana’s

                                        6
property was located, Sikes testified that “everybody’s selling and developing

smaller tracts out of larger tracts. I think that the highest and best use of the

Chanas’ [property] would be the exact same, what the market is doing.” Sikes

testified that he did not find property along FM 529 being sold as large seven acre

tracts of land. Rather, he stated that landowners in the area were dividing their

property and selling off smaller economic units.

      On cross-examination, Sikes acknowledged that the 10 properties he utilized

as comparable properties were either located on a corner or had access to two

major thoroughfares. In comparison, the 2.385-acre economic unit defined by

Sikes on the Chanas’ property had frontage on one major thoroughfare, FM 529,

and was located “mid-block” with the nearest intersection being FM 529 and

Enchanted Forest, a street accessing a housing subdivision.               Sikes also

acknowledged that some of the comparable properties had more infrastructure and

utilities in place than the economic unit he had defined.

      Sikes explained, however, that appraising real estate is an art, not a science,

entailing a subjective, qualitative analysis. He stated that an appraiser looks at the

marketplace to find comparable properties.           He indicated that, the more

comparable properties an appraiser had to analyze, the better his analysis would be.

Sikes explained that, when a comparable property differs in terms of location, size,

                                          7
utility availability, access, and frontage from the subject property being appraised,

an appraiser makes adjustments to the valuation of the subject property.

      Sikes testified that, if he were to value the property taken by the State as a

part of the Chanas’ whole 7.765-acre tract, then he would not be valuing the

property at its highest and best use. Sikes explained that property sells for more

money per square foot when it is sold as a smaller tract of land. Sikes stated that,

as a certified real estate appraiser, it was his job to determine the highest and best

use of the Chana’s property.

      Based on his analysis, Sikes testified that the 2.385-acre economic unit,

containing the condemned land, was worth $9.50 per square foot. Thus, the total

value for the whole 2.385-acre economic unit would be $986,927.                 After

discounting the portion of the economic unit that was not part of the condemnation,

Sikes testified that his “compensation estimate,” that is, the amount owed the

Chanas for the fair market value of the 2.072 acres acquired by the State, was

$922,256.

      At trial, the State offered the testimony of David Dominy, a certified real

estate appraiser. He testified that, in his opinion, the Chanas’ property should be

valued as one whole 7.765-acre piece of property and that the subject property

taken by the State should be valued as a part of that whole. According to Dominy,

                                          8
the market, in 2010, did not support dividing the Chanas’ property into separate

economic units.

      According to Dominy, the highest and best use of the Chanas’ property was

“future commercial development” after “some of the other vacant land in the

market’s been absorbed and developed.” He stated, “[T]hen, at that point in time I

believe commercial development would be viable.”

      Dominy acknowledged that, in the area of the subject property, it had been a

common practice to carve out and sell smaller economic units from larger tracts of

land. But Dominy did not believe that, in 2010, this had been a viable option for

the Chana’s property. Dominy pointed out that there were large tracts of land

around the Chanas’ property, which were vacant. Dominy emphasized that the

subject property also did not have much infrastructure in place. Because of the

lack of infrastructure, Dominy indicated that the subject property was not

comparable to certain properties in the area that had been carved out of larger tracts

of land and sold as separate economic units for as much as $20.00 a square foot.

When asked, Dominy opined that some of the comparable properties utilized by

Sikes in his appraisal were not comparable to the subject property.          Dominy

indicated that these other properties had more infrastructures in place than the

subject property and were more marketable as independent economic units.

                                          9
      To formulate his appraisal of the condemned property, Dominy relied on

information from the sale of five properties, which he opined were comparable to

the Chanas’ property. Dominy utilized two of the same property sales as Sikes had

used. The five properties relied on by Dominy ranged in size from .786 acres to

4.813 acres in size. The sales price of these properties ranged from $3.67 to

$12.95 per square foot.

      Based on his analysis, utilizing the five comparable land sales, Dominy

opined that the Chanas’ 7.76-acre tract was worth $5.00 per square foot. Using

that figure, Dominy explained the additional calculations he performed to arrive at

the amount owed the Chanas’ to compensate them for the State’s condemnation of

the 2.072 acres of their property. Dominy testified that, in his opinion, the total

compensation owed the Chanas’ was $484,735.00.

      The jury was presented the following question: “What do you determine to

be the just compensation owed to the Chanas for the value of the part taken and

damages to the remainder as of November 29, 2010?” The jury responded by

awarding the Chanas $922,256.000, which is the same amount as Sikes had

testified was owed to the Chanas.

      The trial court rendered judgment on the jury’s verdict.        This appeal

followed.

                                        10
      On appeal, the State identifies four issues. In its first two issues, the State

asserts that the trial court abused its discretion by admitting Sikes’ expert

testimony regarding the value of the condemned property. Relatedly, in its third

issue, the State complains that the trial court erred by admitting documentary

evidence of five of the comparable property sales relied on by Sikes in forming his

appraisal of the condemned property. Lastly, in its fourth issue, the State asserts

that the trial court abused its discretion by refusing to admit a statement from a tax-

protest hearing in 2010 at which the Chanas had sought to lower the tax assessed

value on the 7.765-acre tract.

                   Admissibility of Sikes’s Opinion Testimony

      In issues one and two, the State claims that the trial court abused its

discretion by admitting Sikes’s opinion testimony regarding the compensation

owed to the Chanas as a result of the State’s taking.

A. Standards Applicable to Expert Opinion Evidence

      If scientific, technical, or other specialized knowledge would assist the jury,

a witness who is qualified as an expert by “knowledge, skill, experience, training,

or education” may testify as an expert. TEX. R. EVID. 702. Such expert witness

“may testify . . . in the form of an opinion or otherwise.” Id.




                                          11
      The proponent of the expert’s testimony bears the burden of showing that

the expert’s testimony is relevant and rests on a “reliable foundation.” E.I. du Pont

de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995) (adopting

analysis of Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589–90, 113 S.

Ct. 2786, 2795, (1993)). The trial court must make the threshold determination of

whether the testimony meets both the relevancy and reliability standards for

admissibility under Rule 702. Robinson, 923 S.W.2d at 557. We review the trial

court’s decision to admit the testimony for an abuse of discretion. Whirlpool Corp.

v. Camacho, 298 S.W.3d 631, 638 (Tex. 2009).               Serving as an evidentiary

gatekeeper by screening out irrelevant and unreliable expert evidence, the trial

court has broad discretion to determine the admissibility of that evidence.

Robinson, 923 S.W.2d 549 at 558. A court abuses its discretion when it acts

without reference to any guiding rules or principles. Id

      Appraisal expertise—as involved in this case—is a form of “‘specialized

knowledge [used to] assist the trier of fact to determine a fact in issue.’”

Guadalupe–Blanco River Auth. v. Kraft, 77 S.W.3d 805, 807 (Tex. 2002) (quoting

TEX. R. EVID. 702). Thus, to be admissible, an appraisal expert’s opinion must be

relevant and reliable. See id.




                                         12
      The relevance requirement, which incorporates traditional relevancy analysis

under Rules of Evidence 401 and 402, is met if the expert testimony is “sufficiently

tied to the facts of the case that it will aid the jury in resolving a factual dispute.”

Robinson, 923 S.W.2d at 556. Evidence that has no relationship to any issue in the

case does not satisfy Rule 702; it is thus inadmissible under Rule 702, as well as

under Rules 401 and 402. Id.

      Rule 702’s reliability requirement centers on the principles, research, and

methodology underlying an expert’s conclusions. Exxon Pipeline Co. v. Zwahr, 88

S.W.3d 623, 629 (Tex. 2002).         “Under this requirement, expert testimony is

unreliable if it is not grounded ‘in the methods and procedures of science’ and is no

more than ‘subjective belief or unsupported speculation.’” Id. (quoting Robinson,

923 S.W.2d at 557). If an expert relies on unreliable foundational data, any

opinion drawn from that data likewise is unreliable. Helena Chem. Co. v. Wilkins,

47 S.W.3d 486, 499 (Tex. 2001) (citing Merrell Dow Pharm ., Inc. v. Havner, 953

S.W.2d 706, 714 (Tex. 1997)). Expert testimony also is unreliable if “there is too

great an analytical gap between the data the expert relies upon and the opinion

offered.” Zwahr, 88 S.W.3d at 629.




                                          13
B. Project-Enhancement Rule

      The State asserts, “Sikes’s opinion impermissibly relies on project

enhancement because his economic unit is defined by the State’s parameters of its

acquisition area; therefore, his opinion is unreliable and inadmissible under Texas

Rule of Evidence 702.” In support of this assertion, the State relies on Exxon

Pipeline Company v. Zwahr, 88 S.W.3d 623 (Tex. 2002).

      In Zwahr, the supreme court determined whether the trial court had abused

its discretion in admitting the opinion testimony of Brad Kangieser, a real estate

appraisal expert.   See id. at 626. Kangieser testified regarding the fair market

value of a pipeline easement taken by condemnation by Exxon. See id. The

supreme court restated the well-established legal standards applicable to valuing

real property in a condemnation proceeding:

      Compensation for land taken by eminent domain is measured by the
      fair-market value of the land at the time of the taking. The general
      rule for determining fair-market value is the before-and-after rule,
      which requires measuring the difference in the value of the land
      immediately before and immediately after the taking. When, as here,
      only part of the land is taken for an easement, a partial taking occurs.
      In this situation, the before-and-after rule still applies, but
      compensation is measured by the market value of the part taken plus
      any diminution in value to the remainder of the land.

            In determining market value, the project-enhancement rule
      provides that the factfinder may not consider any enhancement to the
      value of the land-owner’s property that results from the taking itself.
      This is because the objective of the judicial process in the
                                        14
      condemnation context is to make the landowner whole.                 To
      compensate a landowner for value attributable to the condemnation
      project itself, however, would place the landowner in a better position
      than he would have enjoyed had there been no condemnation. . . .

             On the other hand, the factfinder may consider the highest and
      best use to which the land taken can be adapted. The existing use of
      the land, . . . is its presumed highest and best use, but the landowner
      can rebut this presumption by showing a reasonable probability that
      when the taking occurred, the property was adaptable and needed or
      would likely be needed in the near future for another use.

              Finally, Texas law permits landowners to introduce testimony
      that the condemned land is a self-sufficient separate economic unit,
      independent from the remainder of the parent tract with a different
      highest and best use and different value from the remaining land. In
      this situation, the market value of the severed land can be determined
      without reference to the remaining land. But when the portion of the
      land taken by eminent domain cannot be considered as a separate
      economic unit, the before-and-after method requires determining
      market value by evaluating the taken land as a proportionate part of
      the remaining land.

Id. at 627–28 (internal citations omitted).

      Applying these legal principles, the Zwahr court concluded that Kangieser’s

testimony was irrelevant, and therefore inadmissible, to determining the value of

the land taken from the Zwahrs; thus, the trial court had abused its discretion in

admitting Kangieser’s testimony. Id. at 631. The Zwahr court provided two rea-

sons for its holding: (1) Kangieser had impermissibly premised his valuation of the

easement on the fact of Exxon’s taking, in violation of the project-enhancement



                                          15
rule, and (2) Kangieser had failed to utilize the before-and-after method in valuing

the easement. Id. at 630–31.

       The supreme court concluded that “Kangieser’s testimony as a whole

reveal[ed] that he premised his valuation on the fact of Exxon’s condemnation,

thus improperly including project enhancement in that valuation.” Id. at 629. Of

particular relevance to the Zwahr court was Kangieser’s testimony that Exxon’s

condemnation defined the parameters of the economic unit.           Id. at 629–30.

Kangieser testified that the 1.01 acre easement acquired by Exxon was a separate

economic unit, which had a “highest and best use” as a pipeline easement. Id. at

626, 629. Kangieser stated that Exxon’s taking “created the economic unit.” Id. at

630.

       The court also emphasized that “[n]ot only did Kangieser rely on the Exxon

project to establish a separate economic unit, he relied on Exxon’s condemnation

to assign a value to the condemned land.” Id. The Exxon easement overlapped an

existing easement owned by Koch by 82%, or approximately .82 acres.              Id.

Kangieser testified that before Exxon’s project, the Zwahrs’ interest in the .82

acres burdened by the Koch easement was of “negligible” or “nominal” value

because it was an exclusive easement owned by Koch. Id. He then testified that

once Exxon received Koch’s consent to lay another pipeline within the easement,

                                        16
the value of the .82–acres increased to $35,720 per acre, making the 1.01–acre

Exxon easement worth $36,077. Id. “In other words, had the Exxon project never

come along, the .82 acres would have continued to have no value to the Zwahrs.”

Id. In addition, Kangieser “admitted twice that the value he placed on the land did

not exist before Exxon’s condemnation.” Id.

      Because Kangieser relied on Exxon’s condemnation in establishing a
      separate economic unit and in assigning a value to that unit, his final
      opinion reflected enhancement in the land’s value that occurred only
      because of the Exxon project itself. As explained earlier, value that
      exists because of the condemnation project is not, under the project-
      enhancement rule, value for which a landowner may recover. . . . In
      addition, after Kangieser identified the 1.01–acre tract as a separate
      economic unit, he evaluated it without reference to the Zwahrs’ entire
      49–acre tract. Thus at best, Kangieser determined the value of the
      easement to Exxon, not the value of the loss to the Zwahrs for the
      taking of the easement. . . . Kangieser failed to apply the before-and-
      after valuation method, which would have required him to evaluate
      the 1.01–acre as a proportionate part of the entire forty-nine acres.

Id. at 630–31 (citations omitted). The Zwahr court concluded that “Kangieser’s

testimony was irrelevant to determining the value of the land taken from the

Zwahrs and therefore inadmissible under Texas Rule of Evidence 702.” Id at 631.

The court held that the trial court had abused its discretion in admitting

Kangieser’s testimony. Id.

      In both WestTex 66 Pipeline Co. v. Bulanek, 213 S.W.3d 353 (Tex.—App.

Houston [1st Dist.] 2003), aff’d as modified 209 S.W.3d 98 (Tex. 2006) and

                                        17
WesTTex 66 Pipeline Co. v. Baltzell, No. 01-01-00826-CV, 2003 WL 21665312

(Tex. App.—Houston [1st Dist.] 2003, pet. denied) we were presented with the

issue of whether the trial court had abused its discretion by admitting the testimony

of a real estate appraisal expert who had testified regarding the value of a pipeline

easement taken by condemnation. In each case, the pipeline company, WesTTex,

objected to the testimony, asserting that the experts had impermissibly included

project enhancement in their appraisals by relying on WesTTex’s condemnation to

define the economic unit and to compute the easement’s fair-market value.

Baltzell, 2003 WL 21665312 at *2; Bulanek, 213 S.W.3d at 357. We agreed.

      As in Zwahr, the experts in Baltzell and in Bulanek testified that the pipeline

easements being acquired were separate economic units, thereby demonstrating

that the condemnation involved in each case defined the parameters of the

economic unit. See Zwahr, 88 S.W.3d at 629; Baltzell, 2003 WL 21665312 at *5;

Bulanek, 213 S.W.3d at 357. From the experts’ testimony, it was clear that the

separate economic unit derived from the condemnation itself and would not have

existed independent of the condemnation. Baltzell, 2003 WL 21665312 at *5;

Bulanek, 213 S.W.3d at 357.

      In addition, as in Zwahr, the experts’ testimony in Baltzell and in Bulanek

indicated that, not only had they relied on the condemnation to define the

                                         18
economic unit, they had also relied on the condemnation in each case to assign

value. Baltzell, 2003 WL 21665312 at *6–7; Bulanek, 213 S.W.3d at 358. In other

words, the experts had improperly assessed the value of the easements to

WesTTex, not the loss suffered by the landowners. Baltzell, 2003 WL 21665312

at *7; Bulanek, 213 S.W.3d at 358. We also concluded that the experts failed to

employ the before-and-after valuation method, which, as stated in Zwahr, is the

appropriate method to apply in pipeline condemnation proceedings in which the

subject land is not a separate economic unit. Baltzell, 2003 WL 21665312 at *7;

Bulanek, 213 S.W.3d at 358.

      Applying the standards enunciated in Zwahr, we concluded in both Baltzell

and Bulanek that the experts’ opinions were irrelevant to determining the value of

the property taken by WesTTex and, therefore, the testimony was inadmissible

under Rule of Evidence 702. Baltzell, 2003 WL 21665312 at *7; Bulanek, 213

S.W.3d at 358.    We held that the trial courts had abused their discretion in

admitting the expert appraisal testimony. See Baltzell, 2003 WL 21665312 at *8;

Bulanek, 213 S.W.3d at 358–59.

      Here, citing Zwahr, Baltzell, and Bulanek, the State asserts that “Sikes’

appraisal methodology defines an economic unit created from the State’s

condemnation itself, which violates the project enhancement rule.” The State

                                       19
points out that the boundaries of the 2.385-acre economic unit appraised by Sikes

has the same parameters as the original acquisition the State had planned to take

for the detention pond. At the Chanas’ request, the State did not take a 30-foot

strip at the back of the originally-defined acquisition to provide drainage access to

Dinner Creek for the reminder of the Chanas’ property. This reduced the size of

the State’s acquisition from the 2.385 acres originally planned to the 2.072 acres

that was ultimately condemned.

      The State points to Sikes’s testimony on direct examination in which he

stated that the reason he valued the eastern portion of the Chanas’ 7.765-acre tract

was because “that’s what’s actually being taken here.” Also, near the end of his

direct examination, when asked whether he was “valuing that eastern [part of the

property] because that’s where the state . . . took the property?” He answered,

“Correct.”

      The State further points to Sikes’s testimony on cross-examination in which

he acknowledged that the economic unit, appraised by him, appeared to be nearly

identical to the State’s originally-planned acquisition. He also acknowledged that,

had the State not agreed to move the southern boundary, the economic unit

appraised by him would have had the same parameters as the State’s acquisition.




                                         20
      It is, however, useful to place the testimony cited by the State in context. In

this respect, Sikes testified as follows on cross-examination:

      Q. [I]t’s your testimony that when you determine the size and shape of
      this separate economic unit that would sell in the open place, you did
      that based upon market data that you identified and not on the
      acquisition?

      A. I based it upon market data, you know, that the property would be
      subdivided into three economic units.

      Q. And you further said it’s going to be 2.3-acre—three point—2.385-
      acre tract?

      A. Yeah, that’s my opinion.

      Q. Almost identical boundaries as the State’s acquisition?

      A. That’s my opinion.

      Q. And you did that based on market data, not the acquisition itself?

      A. I looked at the market and how the property would be developed to
      its highest and best use.

      Q. And the State’s acquisition had absolutely no influence on your
      articulation of the boundaries of your separate economic unit?

      A. It’s—it is the economic unit.

      Q. But that’s not what I asked. I asked you whether the State’s
      acquisition had any influence on your articulation of the parameters of
      your separate economic unit?

      A. No, it didn’t.

      Q. So, it’s just a coincidence that they’re virtually identical?
                                          21
      A. Well, yeah. It’s not a coincidence.         It’s based upon what’s
      happening in the market.

      Q. That’s right. It’s not based on the survey order here?

      A. No. It’s not based upon the survey; but, you know, as we started
      the process, the role is to estimate just compensation to the Chanas.

      Sikes’s testimony on cross-examination was consistent with his testimony

given on direct examination. During direct examination, testified as follows:

      Q. Did you do that analysis with regard to your appraisal of the Chana
      property?

      A. I did.

      Q. And what did you determine was the highest and best use for the
      Chana property?

      A. A commercial development. The vacant land would be developed
      commercially.

      Q. Is this also—well, let me ask you this, first of all: Are you, in fact,
      required to value the Chana property as though it’s put to its highest
      and best use in this proceeding?

      A. That’s all appraisals, by the definition of market value.

      Q. Okay. So, you determine a commercial use. Does that—is this
      also—the highest and best use analysis also where you evaluate the
      economic unit concept?

      A. Exactly. They have over a 7-acre tract, but if you look in the
      marketplace how the market was developed—you can look right
      down the road and see these economic units cut out of this larger
      parcel. That’s how this property would be developed. That would be
                                         22
the highest and best use of the property. So, in my opinion, the
economic use is the highest and best use.

Q. The economic unit—

A. Yes.

Q. —is the highest and best use?

A. Economic unit.

Q. Okay. And during the—there’s been some suggestion, maybe in
opening statement or whatnot, that you—your economic unit has
some problems because it’s all the way on the eastern side of the
property. Can you explain to the jury your overall analysis and why
you valued the part on the eastern portion of the property?

A. Well, very commonsensical. That’s what’s actually being taken
here. The corner in Enchanted Oak is not being taken. We’re here to
estimate the value of that acquisition. If you look at the property,
where it’s located, the size of the parent tract, it could be cut up into
three different tracts. So, I’m looking at the economic unit based
upon, okay, I've got a 7-acre parent tract; but if I look at the properties
in the marketplace, everybody’s selling and developing smaller tracts
out of the larger tract. I think the highest and best use of the Chanas’
[property] would be the exact same, what the market is doing.

Q. And so, when you say you determined an economic unit, you
actually are—did you speak in terms of the whole property being
divided into multiple economic units?

A. Yes.

Q. Okay. So, there would be one—an economic unit at the hard
corner of Enchanted Creek?




                                    23
A. I think you’re—you’re—if you look at the Chana property and
look at how the property was developed across the street, you can see
how it’s cut up.

Q. But we’re talking in this lawsuit about the eastern and that—and
you valued the eastern economic unit.

A. Correct. I didn’t value anything to the west of the . . . [line] there. I
just valued that component, that economic unit.

Q. Okay. And why did you value the eastern economic unit?

A. Well, it’s my opinion that that property can stand on its own. It
doesn’t need the entire 7 acres. And if you look at other development
that’s. You know, just down the street from us, that’s how those
properties were developed.

Q. Okay. But I’m kind of thinking even more basic than that. You
say two or three—three or four economic units on the Chana property.
That would be the highest and best use.

A. You know multiple economic units.

Q. Okay. But why are we talking about the ones to the east?

A. Because they’re not taking the ones to the west.

Q. Okay. So, in order to assist the jury when determining value, you
valued what the State is taking?

A. Right, because it can stand alone.

Q. If the State were taking the hard corner at enchanted Creek, would
you have valued an economic unit there?

A. That would be a different analysis.



                                    24
      Q. Okay. But it would be—would it be correct to say that you only
      carved out one economic unit from this property, and it’s all the way
      to the eastern boundary of the property?

      A. Correct.

      Q. Would that be correct to say?

      A. That would be correct.

      Q. Okay. But—make sure—I don’t think we’re communicating.

      A. Okay.

      Q. Overall, you would carve up the Chana property into multiple
      economic units?

      A. Yeah. I think of the 7 acres, you’d have three economic units—
      three different pad sites.

      Q. Okay. And all my question is: If there’s a suggestion that you’re
      only creating one economic unit on the property and it’s all the way to
      the eastern boundary, that wouldn’t be correct, would it?

      A. No.

      Q. But you valued that one because that’s where they’re taking it?

      A. Exact—exactly. And they’re not taking the—the other economic
      units.

      Sikes’s testimony stands in contrast to the testimony of the appraisal expert

in Zwahr and in Baltzell. In Zwahr, the landowners’ expert testified that “Exxon’s

condemnation ‘created the economic unit,’” and that the 1.01 acre “did not exist

until after the condemnation.” See Zwahr, 88 S.W.3d at 630.
                                         25
      Similarly, in Baltzell, the landowners’ experts determined the economic unit

to be the same 5.47 acres of land that had been condemned for a pipeline easement.

2003 WL 21665312 at *7. One of landowners’ appraisal experts testified that

“WesTTex created the economic unit that I valued.” Id. at *5. Their other expert

testified that he adopted the pipeline easement as his economic unit and stated that

pipeline’s placement on the 5.47–acre strip of land was what made it a separate

economic unit. Id.

      Here, unlike the experts in Zwahr and Baltzell, Sikes expressly denied using

the State’s original condemnation survey as the basis for his opinion regarding the

boundaries of the economic unit. In addition, Sikes explained why he appraised

the eastern section of the Chanas’ property, taken by the State, as a separate

economic unit; that is, he explained the basis for his opinion.

      Sikes testified that the highest and best use for the Chanas’ 7.765 acre tract

was to subdivide it into three separate, independent tracts to be sold individually

for commercial use. Sikes testified that this is how other comparable properties in

the area were selling at the relevant time. Larger properties like the Chanas were

not selling as a whole but were being divided and sold as smaller properties for

commercial use. Sikes stated that he appraised only the eastern most of the three




                                         26
economic units because that economic unit contains the property condemned by

the State.

      We conclude that the trial court had ample evidence to reject the State’s

assertion that Sikes’s testimony violated the project-enhancement rule because the

economic unit appraised by Sikes had the same dimensions as the original

condemnation planned by the State. We hold that the trial court did not abuse its

discretion by refusing to exclude Sikes’s testimony on the ground that his appraisal

violated the project enhancement rule as set forth in Zwahr.

C.    Separate Economic Unit

      The State further assails Sikes’s valuation methodology by asserting that

Sikes should not have evaluated the condemned 2.072 acres as part of a separate

2.385-acre economic unit; rather, the State asserts that Sikes should have evaluated

the condemned property as a proportionate part of the entire 7.765 acres owned by

the Chanas. To support this assertion, the State relies on the following language

from Zwahr:

      Texas law permits landowners to introduce testimony that the
      condemned land is a self-sufficient separate economic unit,
      independent from the remainder of the parent tract with a different
      highest and best use and different value from the remaining land. In
      this situation, the market value of the severed land can be determined
      without reference to the remaining land. But when the portion of the
      land taken by eminent domain cannot be considered as a separate
      economic unit, the before-and-after method requires determining
                                        27
      market value by evaluating the taken land as a proportionate part of
      the remaining land.

Zwahr, 88 S.W.3d at 628 (citations omitted). The State first asserts that, pursuant

to the foregoing language in Zwahr, Sikes’s testimony did not establish that the

2.385-acre tract he appraised was a separate economic unit because it did not have

a different highest and best use from the remainder of the Chanas’ property.

      As shown above, Sikes testified that the highest and best use of the Chanas’

7.765 acres was dividing it into three separate, self-sufficient tracts. The highest

and best use for each of these individual parcels, including the one appraised by

Sikes, is commercial development.         Under this methodology, there is no

“remaining property”; rather, the whole property is comprised of three separate,

self-sufficient units. Nonetheless, Sikes’s testimony indicated that the highest and

best use of the 7.765-acre parent tract (division into three parcels) is not the same

as the highest and best use for the economic unit appraised by Sikes (commercial

development).

      The State further asserts that Sikes’s testimony failed to show that the

appraised economic unit was self-sufficient or independent from the remaining

acreage. The State points to Sikes’s testimony in which he explained how access

to the appraised economic unit could be gained. Sikes stated that there would be a

driveway on FM 529 for direct access. He also stated that access could be gained
                                         28
from Enchanted Creek Drive by cross-access over the two economic units to be

developed on the Chanas’ property. Sikes testified: “[Y]ou’re going to have a

portion of access off 529; but since the Chanas own all that other property, you’re

going to have cross access over to Enchanted [Creek], just like many of these tracts

in the marketplace have cross access.”

      The State argues that the appraised economic unit was not self-sufficient

because cross-access to the unit would need to be through the other portions of the

Chanas’ property. We disagree that such evidence showed that the appraised

economic unit was not independent and self-sufficient. Sikes testified that the

economic unit would have its own direct access from FM 529, a major

thoroughfare. In addition, Sikes indicated that, not only is cross-access common in

the market between economic units, it is beneficial to the economic unit and adds

to its value: He testified:

      You’d have what would be cross access around the front so you could
      drive from the east to the west. Economic units, they like synergy.
      They share customers. If you look at the properties right up here
      (indicating), there is an access drive you can see there. And there’s
      also an access drive back here (indicating). That’s how that property
      was developed. You might have rear access, as well; but you’re going
      to try to—you know, properties with more access are worth more than
      properties with less access, all other things being equal.

      The State further assails Sikes’s opinion that the appraised economic unit

was self-sufficient on the ground that “basic infrastructure,” such as sewer and
                                         29
water, had not been developed on the unit. However, a review of the record

reveals that the State’s claim of the lack of basic infrastructure is not entirely

accurate.

      The State points out that, although a sanitary sewer line existed on the

western boundary of the Chanas’ 7.765-acre tract, the line would need to be

extended 550 feet to reach the appraised economic unit. However, Sikes testified,

“That’s [i.e., 550 feet] fairly close for this type of development.”

      The evidence also showed that a water line ran along the northern boundary

of the appraised economic unit and a storm sewer existed on the property’s

southern border. The evidence further showed that the property was within a

municipal utility district (MUD).       Sikes testified that much of the costs of

developing the infrastructure were reimbursable from the MUD, although he

acknowledged that reimbursement was not guaranteed.

      In addition, the State assails Sikes’s appraisal of the property as a separate

economic unit on the ground that the Chanas’ property had not been previously

partitioned or marketed as a separate 2.385-acre tract. The State also asserts that

this rendered Sikes’s opinion “too speculative to be admitted as direct evidence of




                                          30
market value.”1 In support of this assertion, the State relies on State v. Willey, 360

S.W.2d 524 (Tex. 1962) and City of Harlingen v. Sharboneau, 48 S.W.3d 177, 182

(Tex. 2001). We agree with the Chanas that these cases are distinguishable.

      In Willey, the landowner sought to offer evidence that the best and highest

use of a 3-acre tract, which had been condemned out of a 104-acre tract, was

“subdivision into residential homesites, with some commercial sites.” State v.

Willey, 351 S.W.2d 904, 905 (Tex. Civ. App.—Waco 1961), rev’d, 360 S.W.2d

524 (Tex. 1962). The Supreme Court of Texas held that this evidence was not

admissible because “at the time of the taking . . . there had been no subdivision or

development of the 104–acre tract in question.” Willey, 360 S.W.2d at 524. The

court also held that “one seeking to prove the value of such a tract of land may not

show what the price of the lots would be if subdivided, or show the price for which

already subdivided lots were selling.” Id. at 525.

      Here, unlike in Willey, Sikes’s valuation methodology is not based on selling

the property as a residential subdivision; rather, it is based on “something much

simpler.” In re State, 355 S.W.3d 611, 616 (Tex. 2011) (holding that Willey did

not bar admittance of landowner’s evidence that highest and best use of property



1
      This argument was made under the State’s third issue, but because it is related to
      argument made under the State’s second issue, we discuss it here.
                                          31
was partitioning it into separate parcels to be sold as highway frontage commercial

property). Sikes testified that the highest and best use of the Chanas’ entire

property was partitioning it into three separate tracts, which could each be sold for

commercial development. Sikes explained that his opinion was supported by what

he found was happening in the market in the area surrounding the property. He

stated that larger parcels, such as the Chanas’ 7.765-acre tract, were not being sold

as whole properties for future development. Rather, the sales in the area showed

that smaller tracts were being sold from larger tracts to be used for development of

a single commercial enterprise. Because it is distinguishable, the holding in Willey

does not negate Sikes’s designation of the 2.385-acre tract as a separate economic

unit or render his opinion speculative.

      Sharboneau involved the condemnation of a 10-acre tract of land to be used

for a city park. See 48 S.W.3d at 180. Before trial, the parties stipulated that the

highest and best use for the land was a residential subdivision. Id. At trial, the

landowners’ expert used the subdivision development method to appraise the

condemned land. Id. “This method values an undeveloped tract by calculating

what a developer could expect to realize from sales of individual lots, taking into

account the costs of development and discounting future revenues to present

value.” Id. The analysis employed by the landowner’s expert under the

                                          32
subdivision development method was complicated and complex. See id. at 180–

81.

      In contrast, the city’s expert in Sharboneau used the comparable-sales

method of appraisal to determine the land’s value. Id. The city’s expert offered

evidence of three comparable land sales that were suitable for residential

development.    Id.    The city’s expert determined the value of the condemned

property after making adjustments to the three comparable properties to

compensate for their varying characteristics. Id.

      The Sharboneau court explained that the subdivision development method is

distinct from the comparable sales approach.         Id. at 183–84.      “Although

subdivision development analysis requires the appraiser to examine the market for

ready-to-build lots, such properties are not comparable to the larger, unsubdivided

property actually being appraised.

      The court also recognized that “[c]ourts have long favored the comparable

sales approach when determining the market value of real property.” Id. at 182.

The court continued,

      If the goal of an appraisal is to ascertain market value, then logically
      there can be no better guide than the prices that willing buyers and
      sellers actually negotiate in the relevant market. Under a comparable
      sales analysis, the appraiser finds data for sales of similar property,
      then makes upward or downward adjustments to these sales prices
      based on differences in the subject property.
                                         33
Id.

      Ultimately, the Sharboneau court recognized that the subdivision

development method may be a valid appraisal methodology for undeveloped land.

Id. at 186. However, the court held the subdivision development method could not

serve as a basis for the judgment in that case because the expert’s opinion “did not

demonstrate what a willing buyer would pay to a willing seller in the relevant

market”; thus it was not reliable or relevant. Id.

      Unlike the landowner’s expert in Sharboneau, Sikes did not appraise the

condemned property in this case utilizing the subdivision development method.

Rather, as the city’s expert did in Sharboneau, Sikes appraised the property using

the comparable-sales method.

      In addition, we note that the Supreme Court of Texas distinguished

Sharboneau in a case in which the landowner asserted that the highest and best use

of a 39-acre tract, condemned out of a 185-acre tract, was to partition the 39-acres

into several individual tracts that could be sold as highway frontage commercial

property. In re State, 355 S.W.3d at 615–16. Distinguishing Sharboneau, the

State court wrote:

      In a 10–acre tract like that considered in Sharboneau, it is unlikely
      that a 1/44th-tract lot would be bought for residential purposes unless
      the entirety of the residential subdivision had been planned and
                                          34
      created, and substantial funds had been invested. Inferences like these
      are unnecessary to support the sale of parcels such as those into which
      the [landowners] divided their property. The costs of dividing raw
      land are insubstantial. If the [landowners] were to offer evidence that
      the typical size of highway-frontage commercial parcels was similar
      to their subdivided parcels, and that those parcels were similarly
      appropriate for that use, it would not be speculative to permit them to
      admit valuation evidence on that basis. Of course, the State would be
      permitted to offer its own evidence that the land was best valued as a
      single unit.

Id. at 616.

      This reasoning also applies in this case. Valuing the separate economic unit

appraised by Sikes does not involve the same inferences that would be required to

value a residential tract in an undeveloped residential subdivision. See id. Here,

through Sikes, the Chanas offered evidence showing that similarly sized and

situated parcels of land, comparable to the economic unit appraised by Sikes, were

being purchased in the vicinity for commercial development. 2 Thus, it was not

speculative for the Chanas to offer valuation evidence based on the premise that

the appraised economic unit was a separate, self-sufficient unit. See id. In short,

the holding in Sharboneau does not serve to render the basis for Sikes’s opinion

speculative. We hold that the State has not shown that the trial court abused its

discretion by refusing to grant its motion to exclude the opinion testimony of Sikes


2
      As discussed infra, the State objects to the admission of only five out of the ten
      comparable land sales relied on by Sikes.
                                          35
on the basis that the 2.385-acre tract, containing the condemned property, could not

be valued as a separate economic unit.

      We overrule the State’s first and second issues.

                Admissibility of Five Comparable Property Sales

      In its third issue, the State asserts that the trial court abused its discretion by

admitting into evidence certain property sales. Through Sikes, the Chanas offered

into evidence ten property sales, which they asserted were comparable to the

economic unit appraised by Sikes. The State objected to the admission of five of

these sales: Chana Sale Numbers 4, 5, 6, 8, and 9. The State asserted that these

five sales were not comparable to the condemned property because each sale had

involved land that was part of an existing commercial subdivision, located at a

busy intersection, with developed ready-to-build “pad sites,” and infrastructure

already in place. See Sharboneau, 48 S.W.3d at 182 (“Comparable sales must . . .

take place near in time to the condemnation, occur in the vicinity of the condemned

property, and involve land with similar characteristics.”). The State averred that,

in contrast, the Chanas’ property was “raw,” “undeveloped,” and not subdivided.

The State has also asserted that it would be unlikely that the appraised economic

unit would be the first parcel to sell out of the Chanas’ land because it is an interior

tract, not the corner tract of the property.

                                           36
      We review the trial court’s decision to admit or exclude evidence for an

abuse of discretion. Tex. Dep’t of Transp. v. Able, 35 S.W.3d 608, 617 (Tex.

2000); City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). A trial

court abuses its discretion when it acts without regard to any guiding rules or

principles. Alvarado, 897 S.W.2d at 754.

      A trial court’s error in admitting evidence is reversible only if the error

probably (though not necessarily) resulted in an improper judgment. Kia Motors

Corp. v. Ruiz, 432 S.W.3d 865, 883 (Tex. 2014); see also TEX. R. APP. P.

44.1(a)(1) (providing that error does not result in reversal unless it “(1) probably

caused the rendition of an improper judgment; or (2) probably prevented the

appellant from properly presenting the case to the court of appeals”). To determine

whether the trial court’s error was harmful, we review the entire record and require

the complaining party to demonstrate that the judgment turns on the particular

evidence admitted. Kia Motors Corp., 432 S.W.3d at 883. Error in admitting

evidence is generally harmless if the objecting party later permits the same or

similar evidence to be introduced without objection or the contested evidence is

merely cumulative of properly admitted evidence and is not controlling on a

material issue dispositive of the case.      Bay Area Healthcare Group, Ltd. v.

McShane, 239 S.W.3d 231, 234 (Tex. 2007); Interstate Northborough P’ship v.

                                        37
State, 66 S.W.3d 213, 220 (Tex. 2001); Richardson v. Green, 677 S.W.2d 497, 501

(Tex. 1984).

      For purposes of analysis, we will presume, without deciding, that the trial

court abused its discretion by admitting Chana Sale Numbers 4, 5, 6, 8, and 9.

Although it has alleged that the trial court erred by admitting the five comparable

land sales, the State has not explained how this alleged error caused harm. See

Cortez v. HCCI–San Antonio, Inc., 131 S.W.3d 113, 119 (Tex. App.—San Antonio

2004), aff’d, 159 S.W .3d 87 (Tex. 2005) (explaining that on appeal appellant has

burden of showing how he or she was harmed by the exclusion of evidence).

Nonetheless, we turn to the record to determine whether harm resulted from the

admittance of the complained-of evidence.

      The State does mention that Sikes relied on these land sales as examples

supporting his statement that the trend in the market was to carve out and sell

smaller tracts of land from bigger tracts for commercial development. This in turn

supported Sikes’ opinion that the appraised tract was a separate economic unit.

However, there were other sales admitted into evidence involving a sale of a

smaller tract sold out of a larger tract. Chana Sale Number 1, of which the State

does not complain, also involved the sale of a parcel of land, 2.167 acres, that was

sold from a larger tract. This tract was less than one mile from the Chanas’ land,

                                        38
was equivalent in size to the appraised economic unit, and sold for $19.07 per

square foot.

      In addition, through its expert, Dominy, the State also offered into evidence

a sale in which a smaller tract of land had been sold out a larger tract. The State’s

Sale Number 1 involved the sale of a 1.19-acre tract that sat at an intersection.

That tract had been sold off from a larger tract of land. In addition, on cross-

examination, Dominy acknowledged that the 1.19-acre tract had not been the first

smaller tract to sell from that larger tract. He admitted that the first smaller tract to

sell had been a tract “away from the intersection.” As the Chanas point out, a tract

“away from the intersection” would be similarly situated to the economic unit

appraised by Sikes in this case.

      In addition, Chana Sale Numbers 1, 2, 3, 7, and 10, of which the State does

not complain, also provided support for the jury’s monetary award. These land

sales involved property that sold from $7.70 to $19.07 per square foot. Sikes

testified that he valued the condemned property to be worth $9.50 per square foot

with the total compensation due the Chanas to be $922,256.00. Thus, Chana Sale

Numbers 1, 2, 3, 7, and 10 support the monetary award.




                                           39
      We hold that the trial court’s error, if any, in admitting Chana Sale Numbers

4, 5, 6, 8, and 9 was harmless error. See TEX. R. APP. P. 44.1(a)(1). We overrule

the State’s third issue.

                           Exclusion of Tax Protest Records

      In its fourth issue, the State asserts that the trial court abused its discretion

when it excluded testimony from a tax-protest hearing in which the Chanas

challenged the taxes assessed on the property.

      Four months before the date of the taking in this case, Brandon Fisher, a tax

consultant, appeared on behalf of the Chanas before the Harris County Appraisal

Review Board to protest the taxes assessed on the Chanas’ property. Fisher stated

under oath at the hearing that the market value of the Chanas’ 7.765-acre tract was

$3.24 per square foot.

      The State sought to admit the record of the tax-protest hearing, asserting that

Fisher’s statement, as to the market value of the property, was admissible as an

admission or a statement against interest. See TEX. R. EVID. 801(e). The Chanas

filed a motion to exclude the tax-protest hearing record.        They asserted that,

pursuant to Rule of Evidence 403, the probative value of the evidence was

outweighed by the danger of unfair prejudice and would confuse the issues for the

jury. See TEX. R. EVID. 403.

                                         40
      Following a pretrial hearing, the trial court granted the Chanas’ motion to

exclude tax protest hearing record. The trial court stated that “using . . . Rule 403,

I do believe the probative value of this tax protest record is substantially

outweighed by the risk of unduly prejudice[ing] and confusing the jury.”

      During trial, the State requested the trial court to reconsider its ruling on the

Chanas’ motion to exclude the tax protest evidence. The trial court denied the

motion to reconsider. The State made an offer of proof for the appellate record

with respect to the transcript of the tax-protest hearing.

      On appeal, the State asserts that the trial court erred by excluding the

evidence because “[i]t is clearly established under Texas law that a property

owner’s prior statements regarding fair market value of the owner’s property are

admissible as substantive evidence in an eminent domain proceeding when the

property owner participates in or adopts the declared value.” The State further

avers, “This rule applies even where the prior statements of value were generated

for tax purposes.”

      In their brief, the Chanas do not dispute “that evidence of a tax rendition

valuation can be admissible as an admission, or a statement against interest . . . .”

The Chanas assert, however, that the State sought to admit more than just Fisher’s

statement of the property’s value. Rather, at the hearing in the trial court, the State

                                          41
made clear that it sought to admit the entire transcript of the tax protest hearing

into evidence. 3

      At the tax-protest hearing, Fisher sought to lower the tax assessed value on

the Chana’s entire 7.785-acre property to $3.24 per square foot. To support this

valuation, Fisher relied on three property sales and six property listings in the area

of the Chanas’ property. Before the appraisal review board, Fisher testified as

follows:

      I’m looking at some comparable properties in the area and I found
      three sales, six listings. I think the listings definitely overpower the
      sales. In fact, there was only a couple of indicated sales in the area,
      especially because it’s hard to find sales in this size. Subject’s almost
      eight acres. Most of the properties in the area that are selling are
      much smaller tracts. Based on the listings of these properties and
      three sales, the median indicated value per square foot is $3.24 a
      square [foot], divide that by the subject property, gives me a value of
      [$] 1,095,975.

             The next couple pages are just a break down of their sales, their
      size, and also the listings, as well. . . .


3
      At the pretrial hearing on the motion to exclude, the trial court asked, “The records
      we are talking about here are not only their Exhibit D, right, the hearing affidavit,
      but you’re also talking about [the] testimony on the records?” The State
      responded that it had brought the file from the proceeding, including an audio
      recording of the tax protest hearing. The trial court then asked, “[P]lease tell me
      what kind of records we’re talking about. So in addition to the audio-recording,
      what else are we talking about?” The State responded that there was “[a] sworn
      affidavit from Mr. Fisher testifying as to market value of the property . . . [a]nd
      then the hearing evidence that they submitted in support of his opinion where he
      opines that the property is valued at $3.24 per square foot . . . .” Later, during its
      offer of proof, the State offered the entire transcript from the tax protest hearing.
                                            42
Fisher then proceeded to discuss a number of the comparable sales and listings on

which he based his valuation.

      As shown in the foregoing excerpt, Fisher testified that he formulated his

opinion regarding the value of the property based—not only on what he regarded

as comparable sales—but also on property listings, which he stated “overpowered”

the comparable sales information.      The Chanas correctly point out that, in a

condemnation suit, evidence of the price for which a similar property is being

offered for sale is not admissible evidence to establish the fair market value of the

condemned property. We have previously recognized, “The law is well settled that

unaccepted offers to buy or sell are incompetent evidence of land value in

condemnation suits.” State v. Clevenger, 384 S.W.2d 207, 209 (Tex. Civ. App.—

Houston 1964, writ ref’d n.r.e.) (citing Hanks v. Gulf, Colo. & S. F. Ry. Co., 320

S.W.2d 333, 336 (Tex. 1959); Taub v. Hous. Indep. School Dist., 339 S.W.2d 227,

229 (Tex. Civ. App.—Eastland 1960, writ ref’d n.r.e.); Loumparoff v. Housing

Auth. of City of Dall., 261 S.W.2d 224, 228 (Tex. Civ. App.—Dallas 1953, no

writ); State v. Layton, 147 S.W.2d 515, 517 229 (Tex. Civ. App.—Eastland 1941,

no writ)); accord Sullivan v. Missouri, K. & T. Ry. Co. of Tex., 68 S.W. 745 (Tex.

Civ. App. 1902) (stating in condemnation case, “It is not competent as evidence of


                                         43
value to prove offers for adjacent and similar property, or the price at which the

owners of such property have offered it for sale”).

      We agree with the Chanas that the evidence of the listing prices, contained

within the tax-hearing transcript, was inadmissible. See Clevenger, 384 S.W.2d at

209. The State made no attempt to segregate this inadmissible evidence from the

admissible evidence from the tax hearing. “It is well settled that where evidence is

offered as a whole, only a part of which is admissible, the court does not commit

error in sustaining an objection to such testimony, and in such case it is not the

duty of the court or the party objecting thereto to separate the admissible from the

inadmissible.” Perry v. Tex. Mun. Power Agency, 667 S.W.2d 259, 265 (Tex.

App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.). Thus, we hold that the trial

court did not abuse its discretion by excluding the record from tax-protest hearing. 4

      We overrule the State’s fourth issue.




4
      Although the trial court stated that it excluded the tax hearing evidence based on
      Rule of Evidence 403, we must uphold the trial court’s evidentiary ruling if there
      is any legitimate basis for the ruling. See Owens–Corning Fiberglas Corp. v.
      Malone, 972 S.W.2d 35, 43 (Tex. 1998); Oyster Creek Fin. Corp. v. Richwood
      Invs. II, Inc., 176 S.W.3d 307, 317 (Tex. App.—Houston [1st Dist.] 2004, pet.
      denied).
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                                    Conclusion

We affirm the judgment of the trial court.




                                             Laura Carter Higley
                                             Justice

Panel consists of Justices Jennings, Higley, and Huddle.




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