Fort Worth Court of Appeals holds Plaintiffs properly plead constitutional challenges to City’s short-term rental ordinance

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City of Grapevine v. Ludmilla B. Muns, et al, 02-19-00257-CV (Tex. App. – Fort Worth, Dec. 23, 2021)

This is an opinion on rehearing where the Fort Worth Court of Appeals reversed in part and affirmed in part the trial court’s order regarding the validity of the City’s short-term rental ordinance. [Comment: warning, this is a long opinion – 50 pages.]

The City asserted its zoning ordinance was written in a way that prevented short-term rentals (STRs), but some “bed and breakfasts” were allowed.  However, there was sporadic enforcement. After an increase in complaints about negative effects from STRs, the City conducted a study.  At the end of the study, the City passed an ordinance banning short-term rentals (STRs) in the entire city. The City provided a 45-day grace period before enforcement would begin. Several property owners and commercial real estate services sued to invalidate the ordinance. The City filed a plea to the jurisdiction and motion for summary judgment, which were denied. The City appealed.

The City first contended the Plaintiffs failed to appeal any decisions to the board of adjustment and therefore failed to exhaust their administrative remedies. Generally, a party must exhaust the administrative remedies available under Chapter 211 of the Local Government Code before seeking judicial review of an administrative official’s decision. However, the Plaintiffs did not apply for permits or otherwise receive any enforcement notification to which they must appeal. Statements made about the City’s intent to enforce an ordinance, without more, is not the type of administrative action over which an appeal is triggered. Appealable actions are those actual determinations made in the act or process of compelling a property owner’s compliance with a City ordinance. Information-only statements are not appealable administrative determinations.  Further, the Plaintiffs challenged the constitutionality of the ordinance, which does not always require exhaustion. Generally, administrative bodies do not have the authority to rule on the constitutionality of statutes and ordinances. And while constitutional challenges are not “globally exempted” from the exhaustion requirement, if the administrative body lacked the ability to “render a relief that would moot the claim” then no exhaustion is required.  The board of adjustment lacked the authority to grant the Plaintiffs’ the right to conduct an STR, so no exhaustion is required. Next, the City argued that STRs do not fit within the definition of a “single-family detached dwelling” under its zoning code because STRs are not occupied by a single-family but are occupied by groups of people. However, the City’s code defines the word “family” in such a way that it does not require that the people living as a “single housekeeping unit” be related by blood or marriage. It also has no duration of occupancy limit. As a result, by its own wording, the code does not prohibit STRs as long as the occupancy fall within the common and ordinary meaning of “family.”  The City next argued the Plaintiffs did not directly challenge the validity of the STR ordinance (only an interpretation of whether it applied to them) so no declaratory relief can be granted.  However, the court found their retroactivity, due-course-of-law, and takings claims turn on whether the existing code allowed STRs. To that extent, they have a valid justiciable controversy. Under the takings analysis, the court held that although a property owner generally has no vested right to use his property in a certain way without restriction, they have a vested right in the real property, which includes the ability to lease. From a constitutional standpoint, that is sufficient to trigger a protected property right interest for jurisdictional purposes. This, along with the fact the court found that STRs were not expressly prohibited by the wording of the ordinance,  creates a fact issue as to whether the Plaintiffs suffered a taking. The court also noted that, contrary to the City’s arguments, lost profits are a relevant factor to consider in assessing the property’s value and the severity of the economic impact on a property owner. The Plaintiffs pled and submitted evidence to support that STRs “generate higher average rent than long-term leases, even after expenses” and that the STR Ordinance prevents them from “participating in an active, lucrative market for [STRs].” Next, the court did agree with the City that the regulation of STRs is not preempted by the Tax Code, as alleged by the Plaintiffs. Plaintiffs did not point to any provision in either the Tax Code or the Property Code that implies that the legislature meant to limit or forbid local regulations banning STRs. The court then addressed the retroactive law arguments, holding that a “settled” right is different than a vested right and the Plaintiffs asserted the STR ordinance impaired their settled property rights under the common law and under the City’s code to lease their properties on a short-term basis. The issue is not about the “property owners’ right to use their property in a certain way,” but about the owners’ “retaining their well-settled right to lease their property.” Next, in the substantive-due-process context, a constitutionally protected right must be a vested right that has some definitive, rather than merely potential existence. Property owners do not acquire a constitutionally protected vested right in property uses once commenced or in zoning classifications once made. Thus, although the Homeowners have a vested right in their properties, they do not have a vested right under the Zoning Ordinance to use them as STRs.  However, the court found they do have a fundamental leasing right, which is sufficient to plead, jurisdictionally, a due-course-of-law claim. The court clarified in this rehearing opinion, that its holding on this point is limited to the fact a property owner has a fundamental right to lease, but the durational limits may be valid or may be invalid depending on the extent of the regulatory intrusion into that right. The intrusion goes to the merits of the case, which the court declined to address as part of the interlocutory appeal.  In short, the Plaintiffs properly plead all claims for jurisdictional purposes, except a claim under a preemption theory.

If you would like to read this opinion click here. Panel consisted of Chief Justice Sudderth and Justices Kerr and Gabriel.  Opinion on rehearing by Justice Kerr.

Fort Worth Court of Appeals holds one city was not entitled to a plea to the jurisdiction in condemnation suit brought by adjoining city

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Town of Westlake, Texas v. City of Southlake, 02-21-00241-CV  (Tex. App. – Fort Worth, Dec. 23, 2021)

This is an interlocutory appeal from the denial of the Town of Westlake’s plea to the jurisdiction in a case where the City of Southlake filed condemnation proceedings against the Town of Westlake.  The Fort Worth court of appeals affirmed the denial. [Comment: warning, this is a long opinion – 49 pages.]

The City of Southlake moved to condemn approximately 1400 feet of land owned by the Town of Westlake. In Southlake, a residential development was principally within Southlake, but abutted the boundary with Westlake. Immediately inside Westlake’s eastern town limit is a right of way owned and maintained by Westlake that abuts the lanes of Farm-to-Market Road 1938, but the actual road is owned by the State of Texas. The construction of the present configuration of FM 1938 was a cooperative effort of Southlake, Westlake, Keller, and Tarrant County.  Westlake opposed for years the developer’s requests for access across Westlake’s ROW as only one access to the development currently exists and the developer needed two. Westlake claims that the present condemnation action brought by Southlake is an attempt by Southlake to use its powers of condemnation to gain access to FM 1938 that the developer has not been able to negotiate. Southlake followed the condemnation procedures outlined in chapter 21 of the Texas Property Code and the commissioners awarded Westlake $22,000 for the condemnation. Westlake filed a motion to dismiss which was denied. Then, just before the award was filed with the district court, Westlake filed a plea to the jurisdiction in the district court. The court noted the plea was not a plea, but should have been a motion opposing the taking and denied the plea.  Westlake filed this interlocutory appeal in response. Southlake filed a motion to dismiss at the court of appeals level.

With regard to Southlake’s motion to dismiss, the trial court’s jurisdiction was triggered once the commissioners’ findings were filed, even if Westlake “jumped the gun” and filed the plea before the commissioners’ filing.  There is no consequence for filing early. As a result, the matter is properly before the appellate court. Next, regarding Westlake’s plea, Westlake first argues no waiver of immunity exists under §251.001 of the Local Government Code, however the court noted the language allows condemnation regardless of whether the property is already public or private, whether it is inside the city or outside, and possesses safeguards to prevent abuses. Because the statute allows condemnation of public property, it must, therefore include a waiver of immunity for the owning entity. Comparing the langue in §251.001 to similar provisions of the Utility Code (which the Texas Supreme Court previously ruled constitute a waiver of immunity), the court held immunity is waived for Westlake.  While case law states that when one governmental entity is condemning property owned by another governmental entity, the condemning entity must establish the “paramount importance” standards (i.e. it has a public need greater and will not destroy the public nature).  However, the paramount importance doctrine is not jurisdictional. With regards to Westlake’s argument that § 311.002 of the Transportation Code (giving cities exclusive control over streets and highways) the record has not been established enough to make the determination of whether the condemnation will interfere with such streets (since Westlake owns only the adjoining ROW). The record was also not sufficiently developed to establish whether Southlake could establish a valid public purpose.  As a result, the plea was within the trial court’s discretion to deny.

If you would like to read this opinion click here.  Panel consists of Justices Birdwell, Bassel, and Womack.  Memorandum opinion by Justice Bassel.

Texarkana holds city properly supported its summary judgment to permanently enjoin mobile home park

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Polecat Hill, LLC, et al. v. City of Longview, Texas, et al. 06-20-00062-CV (Tex. App. – Texarkana, December 2, 2021).

This is a nuisance/permit case brought under Chapter 54 of the Texas Local Government Code where the Texarkana Court of Appeals affirmed the judgment entered on behalf of the City.  [Comment: this is a long, 39-page opinion].

Polecat owned 5 acres of land within the City limits. Polecat received a notice of violation from the City asserting the property violated several health and safety ordinances and needed to be repaired. After receiving the notice, Polecat sued the City. The city counterclaimed against the corporate owners and sued the property in rem. Polecat asserted the property had operated as a location for manufactured dwellings to affix to real property and obtain connections since the 1960s. Polecat argued that the City refused to allow it to proceed with its plans to prepare the Property to be on public sewer service. Polecat argued that, instead, the City was requiring it to apply for a mobile home park license and comply with city ordinances by dedicating property to install fire hydrants, dedicating a turnaround space for fire trucks, and absorbing the cost of water flowing through the fire hydrants. The City asserted Polecat was illegally operating an unlicensed mobile home park and unlicensed travel trailer park in violation of the City’s code of ordinances.  The trial court granted the City’s traditional and no-evidence motions for summary judgment, resulting in a final judgment in favor of the City. The trial court’s order specifically found that the Polecat Defendants’ violations of city ordinances created a substantial danger of injury or adverse health impact and that a permanent injunction was necessary to prohibit the specific conduct that violated the ordinances and to require conduct necessary to comply with them. Polecat appealed.

The summary judgment evidence showed that the Property was continuously operated as a mobile home and travel trailer park. Polecat testified that the Property was a residential property that was eighty percent occupied, but admitted it housed rental mobile homes since the 1960s, as well as seven travel trailers.  The City’s appraisal district had labeled the Property as a mobile home park, and Polecat had never challenged that designation. Even the TNRCC sent notices of violations to Polecat related to improperly hooked up septic lines. The summary judgment evidence showed that the City was willing to work with the Polecat Defendants to obtain mobile home and travel trailer park licenses and would consider a site plan that complied with city ordinances, however, Polecat did not agree to comply with the ordinances.  During discovery, numerous other violations became apparent, including violations preventing fire trucks from being able to properly access or service the Property.  Polecat’s testimony established it never applied for a license to operate a mobile home park or travel trailer park.  The City’s traditional summary judgment motion established various violations of the City’s ordinances. The City also filed a no-evidence motion for summary judgment asserting that because the City was not requesting the dedication or transfer of any portion of the Property to the public for public use; the City had not deprived the Polecat Defendants of all viable use of the Property. Further, it was Polecat’s failure to apply for a site plan permit and a license that prevented the City from extending sewer services. Polecat also admitted it was not challenging the validity of any ordinances.

The court found Polecat failed to preserve its appellate points objecting to the City’s summary judgment evidence as they complained of only procedural defects and failed to obtain a ruling. Next, the court held the City was not required to prove continuing violations in order to be entitled to injunctive relief under Chapter 54. Polecat’s petition did not contain any challenge to the city ordinances themselves or allege that the ordinances did not apply to them and therefore was not entitled to any declaratory relief. The court also noted that there were multiple defendants, including the property in rem, but only Polecat responded to the summary judgment on behalf of itself alone. As a result, the other defendants could only attack the granting of the summary judgment by asserting the City failed to carry its burden of proof. The City met its burden to establish entitlement to summary judgment and permanent injunctive relief. Further, “[i]n a regulatory taking, it is the passage of the ordinance that injures a property’s value or usefulness.” Polecat does not challenge the passage of any ordinance. Instead, the petition focused on whether the City’s intentional actions resulted in inverse condemnation.  However, since the City did not destroy all economically viable use of the property, there can be no taking. Additionally, Polecat’s summary judgment evidence (which Polecat argued created a fact issue) contained mainly affidavits that were unsigned and unnotarized. As a result, Polecat failed to create a fact issue with proper summary judgment evidence. The trial court properly entered judgment for the City.

If you would like to read this opinion click here. Panel consists of Chief Justice Morris and Justices Burgess and Carter. Opinion by Justice Burgess.

Dallas Court of Appeals holds commercial lease on property separated from airport was a proprietary function

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City of Dallas v. Oxley Leasing North Loop, LLC, 05-21-00241-CV, (Tex. App – Dallas, Nov. 12, 2021)

This is a breach of a lease agreement case where the Dallas Court of Appeals affirmed the denial of the City’s plea to the jurisdiction, holding the City was performing a proprietary function.

The City created a Land Use and Development Plan (“Development Plan”) for the airport. The Development Plan identified several portions of airport property for potential development, designating some as airfield operations, airfield-related development, non-aviation-related development, open space/recreational, and a commercial office park.  The City leased portions of the commercial office park (“the Property”) to First Continental Bank for an initial term of 40 years. The City agreed to construct a barrier and a road to physically separate the Property from the back of the airport. The lease was assigned several times, eventually being held by Oxley. The City and Oxley dispute whether Oxley property initiated an extension under the lease. The City, believing no renewal had occurred, moved to evict Oxley. Oxley filed suit for breach of the lease and the City filed a plea to the jurisdiction. The trial court denied the plea and the City appealed.

Leasing in a commercial park is not listed under the TTCA as a governmental function. As a result, the court must analyze the nature of the transaction under Wasson II standards. The mere fact that the City leased property located at the airport is not determinative of the nature of that activity.  Since the Property is identified by the City as nonaviation related, the court had little difficulty determining it was not related to the operation of the airport. Under Wasson II,  the City had no obligation to lease the Property to First Continental Bank, was discretionary, and the nature of the private lease necessarily excludes the general public from benefiting from the premises. The fact that a city’s proprietary action bears some metaphysical relation to a governmental function is insufficient to render the proprietary action governmental. As a result, the specific lease at issue is proprietary and the City is not entitled to immunity.

Panel consists of Justices Schenck, Smith, and Garcia. Affirmed. Memorandum Opinion by Justice Schenck can be read here. Docket page with attorney information found here.

Amarillo Court of Appeals holds fire marshal’s office employs firefighters who are entitled to civil service protection

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City of Amarillo, Texas, et al. v. Nathan Sloan Nurek and Michael Brandon Stennett, 07-20-00315-CV, (Tex. App – Amarillo, Nov. 18, 2021)

This is a civil service case where the Amarillo Court of Appeals affirmed in part and reversed in part a trial judgment holding the fire marshal’s office was entitled to civil service protection.

Plaintiffs sued the City and various officials trying to hold the Amarillo Fire Marshal’s Office (“FMO”) should be classified as a civil service position.  In the City, firefighters are classified positions, but the FMO is not classified.  As such, employees within the FMO are civilians who are not afforded civil service protections. The FMO performs fire prevention duties such as checking building plans, inspecting businesses, and investigating suspicious fires. FMO employees are certified by the Texas Commission on Fire Protection. Following a bench trial, the trial court entered a final order declaring that positions within the Amarillo FMO are civil service positions, but denied the promotional relief sought. The trial court ruled the firefighter’s association (“Association) was the necessary real party in interest, not the individual Plaintiffs and the claims were therefore precluded.

Both parties agree that the determination of whether a particular position is a “fire fighter” position depends on whether the position meets the definition identified in Texas Local Government Code section 143.003(4).  The City’s argument appeared to turn on whether the position was one of “fire suppression” and not other duties. The express language of section 419.032 distinguishes “fire protection personnel” from “fire suppression.”  The testimony established  FMO positions require substantial knowledge of firefighting. The trial court heard evidence that the FMO was moved within the Amarillo Fire Department in 1989, the FMO is part of the Fire Department for budgeting purposes, and the FMO is listed as part of the Fire Department within the City’s Organizational Structure. As a result, the trial court properly determined the position should be classified as a firefighter. Next, the City actively argued that the association lacked standing to participate in the case and Plaintiff’s agreed. The court did not see any basis for the trial court holding the association’s inaction established the defenses of laches, estoppel, or limitations. The trial court also made findings that the City proved that using non-classified employees in FMO positions was motivated by good faith, was more satisfactory to the public, and was based on more than monetary savings.  However, the standard requires that the City provide a good-faith reason to justify the use of non-classified personnel over civil servants, rather than assessing the qualifications of particular individuals to serve in those positions. Therefore, the City is not entitled to a good-faith defense for the use of non-classified personnel.   And while the court of appeals found the Plaintiff’s general relief was not precluded, the trial court did not consider the entitlement on the merits. As a result, certain relief matters were remanded.

Panel consists of Chief Justice Quinn, and Justices Parker and Doss. Affirmed, reversed, and remanded to trial court. Opinion by Justice Parker can be read here. Docket page with attorney information found here.

Fourth Court of Appeals upholds injunction preventing Governor from prohibiting ordinances regulating face masks – Governor’s authority does not extent to local health and safety regulations with separate grants of authority

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Greg Abbott, in his Official Capacity as Governor of Texas, and State of Texas v. City of San Antonio and County of Bexar, 04-21-00342-CV (Tex. App. – San Antonino, November 10, 2021).

This is a COVID-19 declaratory judgment (ultra vires) action brought against Texas Governor Gregg Abbott where the Fourth Court of Appeals held the Governor does not have the power to prevent certain local regulations during a disaster.

Bexar County and the City of San Antonio sued Governor Abbott after the Governor signed Executive Order GA-38, which provides, with some exceptions, that: “No governmental entity, including a county, city, school district, and public health authority, and no governmental official may require any person to wear a face-covering or to mandate that another person wear a face covering . . . .”  The local entities sued asserting the order exceeded the Governor’s authority. The trial court issued a temporary injunction order enjoining the enforcement of certain provisions of Executive Order GA-38 disallowing local governmental entities from requiring individuals to wear face coverings. The Governor filed an interlocutory appeal.

The City and County’s ultra vires claim requires construction of the Texas Disaster Act.  The entities have different powers, but both have the ability to adopt reasonable rules and regulations to protect public health. These powers are granted to the entities at all times and are especially relevant during times of disaster. The Governor invoked § 418.016(a) of the Texas Government Code as support for his authority. Under the section, the Governor may “suspend the provisions of any regulatory statute prescribing the procedures for conduct of state business or the orders or rules of a state agency if strict compliance with the provisions, orders, or rules would in any way prevent, hinder, or delay necessary action in coping with a disaster.”  After analyzing the language the Fourth Court held the statutes the Governor purports to suspend are not “regulatory statutes,” subject to suspension under the Act.  Regulatory statutes “prescribe the procedures” for the conduct of state business, such as procedures for the proper return of mail-in ballots.  The statutes do not address state-level procedure or business; instead, they are “grant-of-authority statute[s] giving local authorities the leeway to act in their best independent judgment within the confines of their own jurisdictions.”  Further, the Governor may only suspend regulatory statutes proscribing procedures for state business. The health and safety laws at issue are not procedural but  grant authority to local governments to act on matters of local public health and do not pertain to “state business.” It would “strain credulity to suppose the Legislature intended to abdicate its legislative prerogative, beyond the narrow regulatory and procedural matters specified, and permit the Governor to suspend all legislated grants of local authority on matters of public health without stating so directly.”  The court then examined the injury elements in the interim, the status quo elements of an injunction, and standing of the local entities. In the end, the court held the local entities were entitled to legally seek a temporary injunction and such injunction was proper under the standards indicated in the rules.

If you would like to read this opinion click here. Panel consists of Chief Justice Martinez, Justice Chapa and Justice Rios. Opinion by Chief Justice Martinez. The docket page can be found here.

 

First Court of Appeals holds 380 development agreement was an agreement for goods and services (waiving immunity) but dismissed all other claims brought against the City by the developer

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Town Park Center, LLC v. City of Sealy, Texas, Janice Whitehead, Mayor, Lloyd Merrell, City Manager and Warren Escovy, Assistant City Manager, 01-19-00768-CV, (Tex. App – Hou [1st], Oct. 28, 2021)

In this contract dispute, the First Court of Appeals in Houston affirmed in part and reversed in part the City’s plea to the jurisdiction. This is the third lawsuit involving the parties and underlying dispute.

Town Park Center and the City executed a “380” Economic Development Agreement (“the EDA”) to develop a commercial shopping center on Town Park’s property. Town Park Center agreed to develop and construct the shopping center according to a development plan that the City had approved. The City agreed to pay annual economic development grant payments (based on sales tax collections) to Town Park Center “as an incentive to comply with this Agreement.” Town Park Center first filed suit against the City and officials, asserting breach of contract and other claims. The basis was an assertion the EDA required the City to sell stormwater detention capacity to Town Park and failed. The City filed a plea to the jurisdiction, which was granted as to the city but not the individual officials. The officials appealed but Town Park non-suited. Town Park then filed a second suit against other officials, but which was otherwise identical.  Town Park later non-suited, only to file a third suit seeking mandamus, declaratory, injunctive relief, takings, ultra vires claims and claims under the “vested rights provision” of Local Government Code chapter 245. The factual allegations were nearly identical to the first and second suit. The City filed a plea to the jurisdiction and argued immunity as well as res judicata “ish” arguments. The trial court granted the plea and Town Park Center appealed.

The court noted that res judicata is an affirmative defense and could not be raised in a plea to the jurisdiction. It declined to consider the arguments through the lens of a summary judgment noting the trial court consideration lacked the hallmarks of a true summary judgment proceeding, including the required 21 days’ notice of a hearing date. However, the City also raised immunity defenses. The court held the EDA constituted a contract for goods or services which can trigger a waiver of immunity. The EDA included a provision for Town Park Central to build and dedicate a road to the City as part of the development, which therefore constitutes a service.  The trial court therefore erred in granting the plea as to the breach of contract claim. However, as to the Chapter 245 vested rights claim, Town Park Center did not identify any City order, regulation, ordinance, rule, or other requirement in effect when its rights in the project vested that mandates the sale of the capacity at issue. With no change in order or rule, Chapter 245 is inapplicable. As to Town Park’s takings claim, it failed to establish the City’s refusal to allow the purchase of detention capacity deprived them of the beneficial use of the property. Specifically, the court noted Town Park Center finished the development and sold it to host a grocery store. The City, therefore, did not deprive it of all economic use of the property. As to the ultra vires claims, the court first chastised the parties for failing to follow proper pleadings rules, making the determination more difficult on the court, specifically by labeling various amended pleadings as supplemental pleadings. Considering the pleadings as filed, the court held the City officials ended up joining the City’s plea as part of a supplement (without objection from the other side). Merely failing to comply with a contract does not give rise to an ultra vires claim.  While Town Park Central points to a city resolution allowing for detention capacity purchases, it does not mandate the sale of detention capacity. It instead only provides that the City may sell detention capacity, which is discretionary. As a result, the ultra vires claims were properly dismissed.

In short, the court reversed the dismissal of the breach of contract claim, ultimately affirmed the dismissal of all other claims, and remanded for trial.

Panel consists of Justices Kelly, Guerra, and Farris. Opinion by Justice Farris can be read here. Docket page with attorney information found here.

The plaintiff failed to show that damages were insufficient in a condemnation case where there was sufficient evidence supporting the judgment of the trial court.  

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

Castellanos v. Harris County, Texas and City of Baytown, Texas., No. 01-20-00414-CV (Tex. App.—Houston [1st Dist.] Oct 7, 2021) (mem. op.).

In this appeal from a trial court’s judgment in a condemnation case, the First Court of Appeals in Houston affirmed the trial court’s judgment because there was sufficient evidence to support the amount in their judgment as it related to the condemned property.

The plaintiffs’ property was the subject of a condemnation case including a road easement, water line easement, a temporary construction easement, and damages for the remainder of the project. After the trial court issued its judgment, the plaintiffs appealed arguing that the amount of compensation in the judgment should have been higher and that their suggested jury instruction regarding compensation to make changes to the home post-condemnation should have been given.

The Texas Constitution requires adequate compensation to any property owner whose property is taken by a governmental entity.  Tex. Const. art. I, § 17(a).  This value is determined by fair market value on the date of the taking which can take into account both the current use and the highest and best use.  See Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d 580, 611 (Tex. 2016).  When only a portion of the property is taken both the value of what is taken and the damages to the remainder are both used to determine compensation.  Morello v. Seaway Crude Pipeline Co., LLC, 585 S.W.3d 1, 29–31 (Tex. App.—Houston [1st Dist.] 2018, pet. denied).  In addition, to complain about a jury instruction on appeal, the plaintiff needs to make such objection at the trial.  Tex. R. Civ. P. 274; Tex. R. App. P. 33.1.  To properly bring a claim that a ground of recovery or defense was not considered, the avenue would have been a motion for judgment notwithstanding the verdict or a motion to disregard a jury finding. Those motions were not filed.  The Court of Appeals affirmed the trial jury’s compensation amount because the plaintiffs did not prove that the evidence presented at trial required a different fair market value for the property and did not properly object to the lack of award for changes to the house post-condemnation.

The court of appeals affirmed the trial court’s judgment because the plaintiffs failed to conclusively establish that the amount of compensation was insufficient.

If you would like to read this opinion click here.   Panel consists of Justices Kelly, Guerra, and Farris.  Opinion by Justice Kelly.

 

A charter election proposition that receives more votes than a second charter proposition on the same ballot can invalidate a second charter proposition if proper notice is given. 

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

Hotze v. Sylvestor Turner, Mayor  and City of Houston, Texas., No. 14-19-00959-CV (Tex. App.—Houston [14th Dist.] Oct 12, 2021).

In this appeal from a trial court’s summary judgment in favor of the city and mayor, the Fourteenth Court of Appeals in Houston affirmed the trial court’s judgment because the election ordinance correctly affirmed that only one ballot proposition of two could be passed.

The City’s charter amendment election ballot contained two propositions on expenditures that were contradictory.  Both passed.  The plaintiff sued the mayor and the city arguing that: (1) the clause invalidating the second proposition was not properly in the first ballot proposition; and (2) that the clause invalidating the second ballot proposition conflicts with state law and the Texas Constitution.  The trial court granted the city’s motion for summary judgment that the first ballot proposition was the only valid amendment   The plaintiff appealed.

The primary issue is the validity of two charter amendment propositions related to financial limitations of the city that were on the same ballot. The first ballot proposition included a clause outside of quotes stating that:

“If another proposition for a Charter amendment relating to limitations on increases in City revenues is approved at the same election at which this proposition is also approved, and if this proposition receives the higher number of favorable votes, then this proposition shall prevail and the other shall not become effective.”

Both ballot propositions passed, but due to the language in the first ballot proposition, and the first ballot proposition passing with more votes, only the first ballot proposition was deemed valid.  Even though this clause was not within the quoted portion of the ballot proposition it is still valid because voters are “presumed to be familiar with every measure on the ballot.”  Dacus v. Parker, 466 S.W.3d 820, 825 (Tex. 2015).  Not only was the language in the ballot indicating that only one proposition may be valid, newspaper articles stated that this was a possibility at the time of the election.  Section 9.005 of the Texas Local Government Code states that a ballot proposition is adopted if a majority of qualified voters vote for the proposition.  Both propositions were approved and adopted, but the invalidating clause in the first proposition was still effective to invalidate the second proposition without violating Section 9.005 and by extension the Texas Constitution.  The Court of Appeals affirmed the trial court’s summary judgment in favor of the City.

The dissent stated that the invalidating clause was an unconstitutional and illegal poison pill provision and should be held void, especially considering that the second ballot proposition was voter driven while the first ballot proposition was city driven.

If you would like to read this opinion click here.   The Dissent can be read here. Panel consists of Justices Jewell, Zimmerer, and Hassan.  Majority Opinion by Justice Hassan.  Dissenting Opinion by Justice Jewell.

 

U.S. Fifth Circuit holds standing for First Amendment violation can be shown through chilled speech without the need for actual arrest or citation.

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

Anthony Barilla v. City of Houston, Tex., No. 20-20535 (5th Cir. Sept. 10, 2021).

In this appeal for dismissal for lack of standing by the district court, the U.S. Fifth Circuit reversed and remanded the district court’s order, holding that the intention to engage in busking (playing music for tips) plus the ordinance regulating the activity was sufficient to show standing on his First Amendment claim.

The plaintiff sued the city after his busking permit to play music for tips expired. He desired to busk in other parts of the city but was kept from doing so based on the need to get a permit and the ordinance that prohibits busking in most areas of the city.  He chose not to busk but instead to file suit against the city.  The city argued that the plaintiff had not proved an actual injury or standing because he had not been arrested, denied a permit, or cited for busking.  The district court granted the city’s motion to dismiss based on the plaintiff’s lack of standing.

To prove standing, a plaintiff must demonstrate an injury in fact by showing that the plaintiff: (1) has the serious intention of engaging in conduct that affects a constitutional interest; (2) that the conduct is regulated or prohibited; and (3) the threat of enforcement against the conduct is substantial.  Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289, 298 (1979).  Both music and solicitation for times are constitutionally protected.   See Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989).  Standing existed in this case because the plaintiff had shown a serious intention to busk as he had engaged in the activity previously, and the activity of busking is constitutionally protected.  The U.S. Court of Appeals for the Fifth Circuit reversed the district court’s dismissal and remanded for further review on the standing issue.

The court of appeals reversed and remanded the district court’s dismissal on the basis of standing because the plaintiff provided sufficient evidence of a serious interest in engaging in constitutionally protected activity that is being regulated/prohibited by the city.

If you would like to read this opinion, click here.   Panel consists of Chief Judge Owen and Judges Clement and Higginson.  Opinion by Judge Stephen A. Higginson.

Tyler Court of Appeals holds a motion for new trial did not extend the time to perfect an accelerated appeal

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SignAd, Ltd. V. The City of Hudson, 12-21-00056-CV, (Tex. App – Tyler, Sept. 15, 2021)

This case is mainly procedural, and the Tyler Court of Appeals held SignAd failed to timely file its notice of appeal, either as an interlocutory appeal or of a final judgment.

This is a billboard construction case where the City sought injunctive relief and civil penalties asserting SignAd violated its local ordinances. SignAd asserted counterclaims for declaratory judgment, compensation for loss of the billboard if ordered to remove it, inverse condemnation, unenforceability of the ordinance against SignAd, and 42 U.S.C. § 1983. The trial court issued various orders but the order of contention is a January 19, 2021 order granting the City’s first amended motion to dismiss for lack of subject matter jurisdiction. The parties disagree as to whether the January 19th order was a final order or is interlocutory. The order contained various findings including that SignAd lacks standing to bring its counterclaim for declaratory judgment, SignAd’s billboards exceed the size limitations for commercial signs, and that SignAd cannot maintain its billboards under the ordinance even if it achieved a total victory in this case.

The court of appeals held if the order is an appealable interlocutory order, the notice of appeal was due to be filed within twenty days after the judgment or order was signed, i.e., February 8.  SignAd filed its notice of appeal on April 13th.  SignAd’s motion for a new trial did not extend the time to perfect an accelerated appeal. But even if not interlocutory a notice of appeal must be filed within thirty days after the judgment is signed or within ninety days after the judgment is signed if any party timely files a motion for new trial. However, any motion for new trial was due to be filed by February 18. SignAd filed its motion for new trial on February 22. The certificate of service attached to the motion for new trial reflects that it was served on February 16; however, the motion is file marked February 22. Thus, the motion was late and did not extend the time for filing the notice of appeal.  And an “order overruling an untimely new trial motion cannot be the basis of appellate review, even if the trial court acts within its plenary power period.”  As a result, the court of appeals dismissed the appeal for want of jurisdiction.

Panel consists of Chief Justice Worthen, and Justices Hoyle and Neeley. Dismissed for Want of Jurisdiction. Memorandum Opinion per curiam can be read here. Docket page with attorney information found here.

13th Court of Appeals holds City sufficiently complied with TOMA and Tax Code in 2019 when it adopted its annual tax rate

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Leftwich v City of Harlingen, 13-20-00110-CV (Tex. App. – Corpus Christi, Sep. 9, 2021).

This is a declaratory judgment suit to declare the city violated procedural requirements when it adopted its tax rate in 2019. The Thirteenth Court of Appeals held no alleged violation constituted a waiver of the City’s immunity.

Leftwich alleges the City violated several statutory requirements in 2019 when it adopted its tax rate, including (1) the published notice failed to conform to the “date, time[,] and location” requirements of Texas Local Government Code § 140.010(c),  (2) the City failed to meet the deadline to adopt the tax rate (requiring a vote on proposed tax rate “not be earlier than the third day or later than the [fourteenth] day after the date of the second public hearing”); (3) the City violated TOMA by not allowing public comment “before or during” the consideration of the of the tax ordinances and various other procedural deficiencies. The City filed a plea to the jurisdiction, which the trial court granted. Leftwich appealed.

The court first noted that TOMA’s waiver of sovereign immunity only extends to mandamus or injunctive relief for actual or threatened violations of TOMA, not to suits for declaratory relief.  Further, under TOMA, substantial compliance is sufficient. The location of a meeting may be sufficient without including the full street address, name of the city, or meeting room, so long as the notice sufficiently apprises the public of the location.  Here, the term “town hall” sufficiently put the public on notice of the location of the meeting. No general waiver of immunity exists under the UDJA.  Plaintiff sought a judgment “declaring that the[o]rdinances are invalid and void ab initio” due to appellees’ alleged TOMA and tax code violations. The alleged TOMA violation during the meeting focused on the City Council not taking public comments before voting on the first reading of the tax ordinance. However, the mayor was clearly heard on camera, prior to the final vote on the first reading of each ordinance, asking for discussion, to which no one responded. Assuming, arguendo, that the mayor’s call for discussion was not clearly directed to the public, Leftwich would remain unsuccessful as that was only the first reading. The ordinance was not adopted until the second reading. Only an action taken in violation of TOMA is voidable.  Under the tax code, no requirement exists that two publications exist for public hearings, only that two public hearings are held and that notice is published. Under § 26.06(e) of the Texas Tax Code, the City was required to hold a meeting to vote on the tax ordinances not “earlier than the third day or later than the [fourteenth] day after the date of the second public hearing.” However § 26.06(e) provides no authority for a court to enjoin the collection of taxes for failure to comply with § 26.06(e), which is what Plaintiff seeks.  Plaintiff further asserts the councilmember making the motion failed to follow the specific quoted language for the motion contained within the statute. However, after reviewing the record, the court concluded the motion followed the important parts of the statutory language, verbatim.  Leftwich next asserted the City failed to properly post the necessary tax information on the City’s website.  However, Leftwich failed to present evidence that would raise a fact issue as to whether the City previously posted the notice to the website. The court concluded the undisputed language which was present meets the requirements of Texas Tax Code § 26.05(b)(2), which requires the notice be published after the ordinance is adopted. Leftwich failed to allege jurisdiction under TOMA or the Tax Code for any alleged violation.  Finally, while Plaintiff attempts to bring a First Amendment claim, he failed to brief the claim and therefore waived it.

If you would like to read this opinion click here.  Panel consists of Justices Benavides, Hinojosa and Silva. Memorandum opinion by Justice Silva.

Fourth Court of Appeals holds plaintiff suing for BOA decision must be given opportunity to replead to show timing of when the BOA decision was filed in board’s offices

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Alpha Securities, LLC, v City of Fredericksburg, 04-20-00447-CV (Tex. App. – San Antonio, Aug. 10, 2021, no pet h.).

This is a board of adjustment appeal and declaratory judgment action where the San Antonio Court of Appeals agreed no jurisdiction existed, but remanded to provide the Plaintiff the opportunity to replead.

Alpha Securities purchased real property in Fredericksburg’s historical district. It sought a variance to expand its doors so the building could be used for commercial uses. The historic district’s review board approved the expansion of one door, but not the other on Milam St.  As a result, Alpha Securities was unable to obtain a Certificate of Occupancy, water and electrical services. Alpha Securities appealed the determination to the City’s Board of Adjustment (BOA), and the BOA denied relief. Alpha sued the City, which filed a plea to the jurisdiction. The trial court granted the plea and Alpha appealed.

Alpha’s first argument, that the City did not timely seek a ruling on the plea, was overruled. Subject matter jurisdiction cannot be waived, and courts cannot acquire subject matter jurisdiction by estoppel.  Alpha attempted to bring ultra vires claims but did not include any specific officials. Such claims were properly denied. To the extent Alpha Securities intended to establish that the review board and BOA violated the law, including its constitutional rights, the UDJA does not waive the City’s governmental immunity.  Next, the court analyzed the timeliness of the appeal. The appeal clock does not start to run at the time of the BOA decision- rather when the BOA’s decision “is filed in the board’s office.” The pleadings do not establish the date when the BOA’s decision was filed in the board’s office. Because Alpha Securities’ pleadings are insufficient to establish jurisdiction but do not affirmatively demonstrate an incurable defect, the trial court should have given Alpha the opportunity to replead. [Comment: this appears to require pleadings to affirmatively list the specific dates for deadline compliance in order to establish jurisdiction].  The City asserts Alpha repled three times and should not be allowed to do so again. However, the Fourth Court determined that was inconsequential in this case. If the trial court determines the plea is meritorious and the pleadings are deficient, the plaintiff must then be given a reasonable opportunity to amend the pleadings to cure the jurisdictional defects. As a result, the case was remanded.

If you would like to read this opinion click here. Panel consists of Justices Chapa, Rios, and Rodriguez. Memorandum opinion by Justice Rodriguez.

Property owners around lake drained by GBRA had no standing to sue as they possessed no particularized injury

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Jimmy and Cheryl Williams, et al. v. Guadalupe-Blanco River Authority and its Officers and Directors, 04-20-00445-CV, (Tex. App. – San Antonio, July 7, 2021)

This is a takings case where the San Antonio Court of Appeals partially reversed and affirmed the trial court’s judgment on Guadalupe-Blanco River Authority’s (“GBRA”) plea to the jurisdiction in takings suit. The trial court granted GBRA’s plea to all claims except the property owners’ takings claims after GBRA drained lakes around their properties.

Six hydroelectric dams (“Hydro Dams”) were privately constructed between 1928 and 1932 and put in service in the Guadalupe River Valley in Comal, Guadalupe, and Gonzales Counties. Construction of the hydro dams resulted in the formation of six lakes: Meadow, Placid, McQueeney, Dunlap, Wood, and Gonzales. In 1963, GBRA acquired the six hydro dams. Spill gates at two of the hydro dams failed draining both Lake Wood and Lake Dunlap. As a result of the deterioration of the hydro dams and respective spill gates, GBRA announced its intent to perform a “systematic drawdown” of the remaining four lakes, beginning at Lake Gonzales and then moving upstream to Meadow Lake, Lake Placid, and Lake McQueeney. Appellants—owners of properties adjacent to the lakes—sued GBRA (and its officers in their official capacities) for injunctive relief to prevent the announced drawdown, declaratory relief, and damages based on diminished property values.

GBRA asserted that the property owners lacked standing because they could not demonstrate a particularized injury.  Standing requires a plaintiff to establish: (1) the plaintiff’s claimed injury is “both concrete and particularized and actual and imminent, not conjectural or hypothetical”; (2) the injury is “fairly traceable to the defendant’s challenged action”; and (3) “it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.”

The Court of Appeals reversed the trial court’s denial of the plea as to the taking claims, finding that the property owners could not demonstrate a particularized injury apart from the community at large absent ownership of a property right in the hydro dams, the lands underneath the lakes, or the water itself. As a result, the Court of Appeals dismissed the sole remaining claim against GBRA.

Panel consists of Justices Alvarez, Chapa, and Valenzuela. Memorandum Opinion by Justice Valenzuela can be read here. Docket page with attorney information found here.

Trespass to try title claims failed to waive immunity, but court remanded to allow further pleading attempts

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City of San Antonio v. Albert Davila, Individually; Madeline Davila, Individually; and Albert Davila as Trustee of the Albert Pena Davila and Madeline Davila Living Trust, 04-20-00478-CV, (Tex. App – San Antonio, August 4, 2021)

This is a trespass to try title case where the Fourth Court of Appeals reversed the denial of the City’s plea to the jurisdiction but remanded to allow Plaintiff the ability to replead.

The Davilas sued the City in a trespass to try title action. The Davilas alleged that, as part of closing and abandoning 12th Street and conveying parcels to adjoining landowners in 1987, the City deeded the subject property to the Davilas’ parents. Alternatively, they allege they adversely possessed the property. The City filed a plea to the jurisdiction asserting the City issued a quick claim deed to Davila’s parents and the deed recites the City passed an ordinance authorizing the sale of the property to the Davilas’ parents. The quitclaim deed also contains a metes-and-bounds description of the subject property and reserves a utility easement. The trial court denied the plea and the City appealed.

When a city is sued in a trespass to try title action based on adverse possession, governmental immunity is not waived, and the trial court lacks subject matter jurisdiction. As a result, the claims, as alleged, do not waive immunity. The Davilas argue section 16.005 of the Texas Civil Practice & Remedies Code waives the City’s governmental immunity, which relates to road closure ordinances. The Davilas did not request relief from the City’s ordinance under Chapter 16, which authorized the sale or abandonment of property, but from the quitclaim deed itself. It does not waive immunity. However, the plea attacks the pleadings only. The City’s brief does not argue or explain why the pleading defect—suing the City instead of government officials for ultra vires acts—is incurable. As a result, the Davilas must be given the opportunity to amend their pleadings.

Panel consists of Chief Justice Martinez, and Justices Chapa and Valenzuela. Reversed and remanded. Memorandum Opinion by Justice Chapa can be read here. Docket page with attorney information found here.