BOA holding barred by Res Judicata says 5th Court of Appeals

Board of Adjustment of the City of Dallas v. Billingsley Family Limited Partnership, 05-12-00199-CV (Tex. App. – Dallas, August 27, 2013).

This is an appeal from a trial court order reversing a ruling of the Board of Adjustment of the City of Dallas (“BOA”). The Fifth District Court of Appeals affirmed the reversal in part and reversed in part and the BOA appealed.

Billingsley owns some multifamily dwellings and was cited by the City for running a residential hotel in violation of the City Code. Billingsley filed a separate lawsuit (and City counter-claimed) seeking a declaration he was not running a hotel under the statutory definitions. That matter proceeded to trial which ultimately resulted in the trial court denying relief to all parties.  While Billingsley I was pending, a City building official revoked the certificate of occupancy (“CofO”) because the property was deemed a residential hotel and he applied for it under false pretense. Various different actions occurred in Billingsley I at different times including the trial court changing its orders.  The denial of the CofO was based on rulings at the time but a chronological flow of events muddied the issues for the trial court on the appeal of the CofO denial.

The Fifth Court of Appeals held that it was not error for the trial court to consider the final ruling in Billingsley I for res judicata purposes. Res judicata not only precludes claims which were actually raised, but claims which could have been raised arising out of the same subject matter. Because res judicata precludes re-litigation of the facts (including a valid CofO at the time), such an asserting could not be altered by the building official or the BOA. So the trial court properly affirmed the reversal of the BOA. However, under the statute authorizing an appeal from a BOA, costs can only be assessed if the court determines the board acted with gross negligence, bad faith, or malice. The court noted the BOA did not have certified copies of the Billingsley I orders before it (even though the court earlier noted that since the BOA did not object to the introduction of the pleadings at trial, it waived an appeal on that basis). As such, no negligence, malice or bad faith can be established. The court therefore affirmed the reversal of the BOA but reversed the trial court’s assessment of costs.

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