Usually, when “unity of use” comes up in an eminent domain case, the property owner is the one arguing that everything hangs together, and the condemnor is the one saying the pieces are separate. Unity means a bigger larger parcel, and a bigger larger parcel can mean damages to the remainder.
In this one, the parties swapped jerseys.
In In re State of Texas, No. 03-26-00496-CV (Sep. 11, 2026), the Texas Court of Appeals (Austin) held that the trial court clearly abused its discretion when it severed the condemnation claim against one tenant’s portion of a shopping center into its own lawsuit. The owner and the tenant argued for separation, and the State argued for unity. The State won:
Because the severed claim is so interwoven with the remaining action that the actions involve the same facts and issues, we will conditionally grant the writ.
Op. at 1.
For TxDOT’s I-35 improvement project, the State sought a 1.069-acre strip of the Capital Plaza Shopping Center in Austin. The center sits on a 37.282-acre tract owned by Capital/Highway 35. The State’s appraiser divided the center into five “economic units”: Target, a Chase Bank building, Mattress Firm, McDonald’s, and Walgreens. The strip being taken includes a piece of each. The appraiser put compensation at $9,362,933. The special commissioners awarded $13,729,238 and, in a handwritten interlineation, showed how they apportioned that figure among the five units. Target was the only defendant who objected, and the State objected too. Op. at 1. The court noted that “[b]ecause the state objected, the award is not final as to any parties[.]” Op. at 2 n.2.
The landlord and Target moved to sever the Target unit into its own case (the landlord also withdrew the $10,670,761 apportioned to the four non-Target units). Target’s pitch was that severance “is the only way for Capital Highway and the other tenants to achieve a final resolution of their interests now, without waiting for potentially years of litigation about Target’s compensation.” Op. at 2. The trial court severed, and the State sought mandamus.
The court of appeals started with unity of use:
We do not agree that Capital/Highway 35’s leasing of space to different establishments, some of which are housed in separate buildings, resulted in the shopping center lacking unity of use.
Op. at 2. The proof was in the leases, which included covenants restricting competition within the center. McDonald’s got exclusivity as the drive-in restaurant, Walgreens got the only drug store, and a Taco Bell on the Target unit was protected from other fast-food restaurants “serving primarily and principally Mexican food.” Op. at 3. (Who knew a chalupa clause could decide an eminent domain mandamus?) The court concluded that “[t]he Target agreement itself reflects that Target and Capital/Highway 35 consider the property’s use to be as a unified shopping center.” Id.
The appraiser’s economic units, the court held, were a valuation tool, not separate takings:
Nor do we agree that an appraiser’s method of valuing a property based on separate economic units within a commonly owned tract, without more, obligates the State to separately litigate a condemnation proceeding against each or any particular unit, especially where the appraiser responsible for identifying the economic units used them to opine as to the value of the property as a whole.
Op. at 3. The commissioners’ allocation didn’t change that, because they awarded the whole $13,729,238 “collectively to” all defendants. Id.
What really sank the severance was practical. All of the tenants share interests in the center’s easements and common elements, including lighting and parking, and the taking affects those as a whole:
Thus, the other tenants will not “achieve a final resolution of their interests now” based on the severance. The severed action involves the same parties, facts, and issues as the unsevered proceeding.
Op. at 3. On whether an appeal would be an adequate remedy, the court looked at where the owners’ theory would lead:
But this argument would render any portion of a tract subject to partial condemnation subject to severance based on a single appraiser’s definition of separate economic units, while forcing the State to argue facts and issues relating to the whole tract.
Op. at 3. Piecemeal proceedings against the same parties would waste resources, and “the State has a right to define the property being taken.” Op. at 4 (quoting In re State, 355 S.W.3d 611, 617 (Tex. 2011)).
This seems right to us. It’s one owner, one tract, one taking, and the tenants all share the same parking. Turning an appraiser’s lines on a map into separate lawsuits would let a valuation method decide the shape of the case. We also like seeing the commissioners’ award treated as what it is: a lump sum paid to everyone with an interest.
But there’s almost always a “but.” Owners should keep an eye on what comes next. The State has persuaded a court that this center is a unified whole: common parking, common lighting, and covenants tying the tenants together. Those are the kinds of facts owners use to argue for a larger parcel and damages to the remainder.
The court was careful. It noted that “[p]arties usually dispute unity of use when a defendant in a condemnation proceeding is asserting damages to the remainder of property it owns which is not taken.” It noted that no one had raised remainder damages here, and said it addressed unity of use “only insofar as it relates to the question of interrelatedness of the severed portion of the proceeding and the remaining action.” Op. at 2 n.3. So this is not a larger-parcel holding. Still, if the State later wants to carve the center back into economic units in front of the jury, the owners will have this opinion close at hand. A condemnor that has the right to define what it is taking, and defines it as one thing, may find it hard to argue later that it was really five.
Last, the landlord didn’t have to wait for most of its money. It pulled the $10.67 million allocated to the other units while the fight over Target’s share goes on. The deposit worked, even if the severance didn’t.
In re State of Texas, No. 03-26-00496-CV, 2026 WL 2671727 (Tex. App.—Austin Sep. 11, 2026) (mem. op.) (orig. proceeding)
