161 Mieth v. Ranchquest, Inc.

Richard F. Brown

 
Mieth v. Ranchquest, Inc., 177 S.W.3d 296, (Tex. App.—Houston [1st Dist.] 2005, no pet.), considers the proper measure of surface damages resulting from re-entry operations on an abandoned oil and gas well.  The surface was damaged by the discharge of saltwater and various drilling fluids and chemicals, and the Railroad Commission found numerous violations of Statewide Rule 8. The jury found that the reasonable and necessary cost to remediate the surface was $200,000, but the diminution in the fair market value was $-0-. The trial court concluded that the injury to the property was permanent and, therefore, that the correct measure of damages was the jury’s verdict of $-0-.
 
The issue on appeal was whether the damages to the property were permanent or temporary, and the proper measure of damages. Permanent damage results from activity that is of such a character and that exists under such circumstances that it will be presumed to continue indefinitely, and it  is constant  and continuous, not intermittent  or recurrent. “The proper measure of damages for permanent injury to the land is the diminution in the value of the land.”
 
On the other hand:
 
Temporary injuries are intermittent, sporadic, or recurrent injuries to land that are contingent upon some irregular force, such as rain . . . . When an injury to land is temporary and can be remediated at reasonable expense, the proper measure of damages is the cost of restoration to its condition immediately preceding the injury . . . . However, the diminution in fair market value is the measure of damages when the cost of restoration exceeds the diminution in fair market value.
 
Because the evidence in this case showed the productivity of the land had been impaired since 1996, the court held that the damage was permanent and that the landowners should take nothing.
 
The significance of the case is that it highlights the definition of the kinds of injuries that will be characterized as “permanent” or “temporary” with the different applicable measurement of damages, and that the cost of remediation will not be imposed when it exceeds the dimunition in the fair market value of the land.