March 24, 2014

Landowners awarded $2.1 million in pipeline easement case

Johnson County jury sides with owners of land near Texas 360 and U.S. 287 who claimed that the pipeline diminished the development value of nearby acreage.

A Johnson County jury has found that a pipeline company must pay more than $1.6 million for an easement to cross a Mansfield property, 20 times more than the value set in 2007 during an eminent domain proceeding.

State Judge Robert Dohoney, in an order issued March 20, also assessed interest and expenses against Peregrine, bringing the total judgment to $2.1 million.

Attorneys for Eagle Ford Land Partners, based in Dallas, argued that the landowner should be compensated for the reduced development value of surrounding land, not just the acreage taken by the easement, according to court records. The case entails about 400 acres at the intersection of Texas 360 and U.S. 287, said Luke Ellis, an Austin attorney for Eagle Ford Land Partners.

While there are natural gas wells on the property, Peregrine’s pipeline does not serve them, Ellis said.

An attorney representing Peregrine could not be reached for comment, but the company has indicated it will appeal, d Ellis said.

According to court records, Peregrine sought a 6,400-foot-long easement across a parcel owned by Eagle Ford Land, which Ellis said is a partnership of the heirs of the original landowner. When the two sides could not agree on an easement value, Peregrine condemned the 20-foot-wide strip of land under eminent domain.

The right of Peregrine Pipeline to condemn the property for the 16-inch natural gas pipeline was at issue in the court case.

In October 2007, a special commissioners hearing set a value of $79,979 for the easement. That award included a permanent easement on the 20-foot-wide strip, which altogether covered nearly 3 acres, and a temporary easement on a 55-foot-wide strip used during construction.

But after a five-day trial in February, a six-person jury valued those two easements at $282,590. The jury then found that the market value of the rest of the property was diminished by an additional $1,350,410.

That brought the easement award to $1.633 million. With interest accruing at 5 percent annually, Dohoney’s order called for Peregrine to pay a total of $2.1 million.

Ellis said, “This verdict sends a strong message that pipeline easements often cause significant damages to property beyond the easement area.” He said two other recent Texas cases have upheld similar claims.

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