Bar didn’t overcome City’s immunity but given chance to replead

City of McKinney v. Hank’s Restaurant Group, 05-12-01359-CV (Tex. App. – Dallas, September 18, 2013).

This is an interlocutory appeal from the denial of a plea to the jurisdiction in cross-suits involving a local bar.

Hank’s sued first alleging the City engaged in ten years of harassment and intimidation against the company and its customers including falsely claiming certain events exceeded occupancy capacity.  The next day the City filed suit against Hank’s for numerous violations of fire, building and food-service codes. The cases were consolidated. The City filed a plea to the jurisdiction after the trial court granted a restraining order and set an injunction hearing. The trial court denied in part the plea, but held the City retained immunity from monetary claims in excess of the offset its own claims. Both sides appealed.

The First Court of Appeals revisited prior holdings in light of the Supreme Court’s Heinrich opinion and held that a City retains immunity for all declaratory judgment claims except the limited situation where a Plaintiffs seeks to invalidate an ordinance (not merely interpret it). It then dismissed 4 of Hank’s claims. For the rest of the claims, the court felt he properly raised the issue of an unenforceable ordinance, but should have been given the opportunity to amend to state why the ordinance was unenforceable (which was not present in the pleadings). The court rejected Hank’s waiver-by-conduct argument. It also rejected a claim that Hank’s pleadings demonstrate jurisdiction under Chapter 245 of the Local Government Code (vested rights due to issuance of permit), but jurisdiction was not negated either so it gave Hank’s another opportunity to replead and save those claims. The court held the analysis holds the same for all injunctive relief. It then held Hank’s did not properly plead a waiver entitling him to damages outright, but because the City filed suit and sought attorney’s fees, it waived such immunity to the level of an offset. In the end, the court dismissed entirely 4 of Hank’s claims and remanded the rest to allow him to replead.

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