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Keywords

contractbreach of contracttortdamagesappealtrialwilljury trial
contracttortappealwillcorporation

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Gilbert Wheeler, Inc. v. Enbridge Pipelines (East Texas), L.P., 449 S.W.3d 474, 57 Tex. Sup. Ct. J. 1465

Facts

The Wheeler family owned a 153-acre wooded property in Shelby County, Texas, which they used as a family retreat. When Enbridge Pipelines, L.P. sought to construct a pipeline across the property, they agreed to a contract that required the pipeline to be installed underground to preserve the trees. However, Enbridge failed to inform the construction company of this requirement, resulting in the destruction of several hundred feet of trees and alteration of a natural stream. Wheeler sued Enbridge for breach of contract and trespass, leading to a jury trial that found Enbridge liable and awarded damages for restoration and the intrinsic value of the trees.

The Wheeler family, by way of closely held corporation Gilbert Wheeler, Inc. (Wheeler), owns a 153–acre tract of land in Shelby County called 'the Mountain.'

Issue

The main legal issues were whether the injury to the property was temporary or permanent and whether the landowner could recover damages for the intrinsic value of the trees destroyed.

The court of appeals agreed with Enbridge and held that, because Wheeler had failed to secure a finding as to whether the injury to the property was temporary or permanent, Wheeler had waived its entitlement to a damage award.

Rule

The court established that an injury to real property is considered permanent if it cannot be repaired or if it is substantially certain that the injury will recur. Additionally, a landowner may recover for the intrinsic value of trees if the diminution in the fair market value of the land is nominal.

An injury to real property is considered permanent if it cannot be repaired, fixed, or restored, or if it is substantially certain that the injury will repeatedly, continually, and regularly recur.

Analysis

The court applied the rule by determining that the injury to the Wheeler property was permanent due to the nature of the destruction and the economic feasibility exception. The court clarified that the temporary-versus-permanent distinction applies to both tort and contract claims, and since the injury was deemed permanent, the trial court's instruction to calculate damages based on restoration costs was incorrect. The jury's award for the intrinsic value of the trees was upheld as the fair market value of the property had not significantly diminished.

We hold that application of the temporary-versus-permanent distinction in cases involving injury to real property is not limited to causes of action that sound in tort rather than contract.

Conclusion

The Supreme Court reversed the Court of Appeals' judgment and remanded the case, affirming that the injury to the property was permanent and that the landowner could recover for the intrinsic value of the destroyed trees.

We therefore reject its conclusion.

Who won?

Wheeler prevailed in the case because the Supreme Court found that the injury to the property was permanent and that the landowner was entitled to recover for the intrinsic value of the trees destroyed.

Wheeler may recover for the intrinsic value of the trees on his property so long as the diminution in the fair market value of the land is essentially nominal.

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