City immune from delay in zoning approval due to City Attorney’s mistaken understanding of municipal boundary line

City of Floresville, et al.  v. Starnes Investment Group, LLC, 04-16-00038 (Tex.App— San Antonio, September 28,2016)

This is an interlocutory appeal from the denial of a plea to the jurisdiction in a case where a city employee mistakenly informed a property developer they were outside city limits.  The San Antonio Court of Appeals reversed the denial and dismissed the claims.

Starnes Investment Group, LLC (“Starnes”) began looking at property to develop as a commercial recreational vehicle park. Starnes filed a rezoning application to allow for the RV park. The City Attorney advised the property was outside of the City limits and not subject to zoning restrictions. However, after Starnes purchased the property and the City completed a map digitization initiative, it discovered the property was partially inside and partially outside of the City limits. The City ultimately approved a zoning change application to allow the RV park. However, Starnes still sued. The premise of Starnes’s lawsuit is that it was harmed by the City’s delay in approving its zoning application and delay in providing water and sewage due to the misunderstanding. The City filed a plea to the jurisdiction which the trial court denied. The City appealed.

The first issue the court resolved was procedurally, the trial court granted the City’s special exceptions and denied the plea in the same order. While Starnes filed an amended petition, it did so after the denial of the plea.  However, since the plea is jurisdictional, the court considers all of the matters during the appeal, including those which were not before the trial court at the time of the original order.  Next, a governmental entity does not have immunity from a valid takings claim. In a takings case, “the requisite intent is present when a governmental entity knows that a specific act is causing identifiable harm or knows that the harm is substantially certain to result.” A taking cannot rest on the mere negligence of the government. Moreover, “[w]hen damage is merely the accidental result of the government’s intentional act, there is no public benefit and the property cannot be said to have been taken or damaged for public use.” Starnes’s amended petition alleges no facts that the information was the result of anything more than either a mistake or negligence on the City Attorney’s part. As a result, there is no takings claim. Next, to state a valid due process or due course of law claim, a plaintiff must first allege the existence of a protected right. Starnes’s zoning application merely sought a governmental benefit to which it was not already entitled. As such, Starnes only had an expectation of the governmental benefit which is not a protected property right. To assert an equal protection claim, the deprived party must establish two elements: (1) that it was treated differently than other similarly-situated parties; and (2) it was treated differently without a reasonable basis. Other than a conclusory statement that it was treated differently from others similarly situated, Starnes failed to allege any facts describing similarly situated parties. As a result, there is no equal protection violation. Chapter 245 of the Texas Local Government Code (often referred to as a vested rights/grandfather statute) creates a narrow exception enforcing changing regulations stating, after receiving a development application or plan, a regulatory agency changes its land-use regulations, the agency cannot enforce such a change. Starnes does not point to any change in the City’s existing “orders, regulations, ordinances, rules, expiration dates, or other properly adopted requirements” that occurred after Starnes filed its zoning application.  The property was always partially in and partially outside of the City limits. An employee’s mistaken belief of the location of the boundary line is not a change in adopted regulation. Additionally, Chapter 245 is enforceable only through mandamus, injunctive or declaratory relief, none of which Starnes sought. Finally, Starnes had the opportunity to, and did in fact, amend its pleadings in the trial court after the City filed its special exceptions.  The court need not provide any further opportunity to amend. The court reversed and rendered in favor of the City.

If you would like to read this opinion click here. The Panel includes Chief Justice Marion, Justice Barnard and Justice Pulliam. Chief Justice Marion delivered the opinion of the court. Attorneys representing the parties can be found on the docket page  here.