Dallas Court of Appeals hold “library” qualifies as “recreational facility” under deed reverter clause

City of McKinney v. El Dorado Land Company, LP 05-15-00067-CV (Tex. App.- Dallas, May 3, 2016).

This is a takings case regarding a dedication of property with a possibility of reverter where the Dallas Court of Appeals reversed the granting of the grantor’s summary judgment and ruled in favor of the City.

Eldorado conveyed the Property to the City with a reverter stating the property had to be used as a community park. In the event the property was not used as a community park, Eldorado had the first option to buy back the property at a set price. Eldorado asserted that instead of developing the property as a park the City built a library on part of it. Eldorado filed suit asserting a taking of the reversionary interest when the City refused to sell the property back at the listed price. Interlocutory opinions exist in this case ultimately holding that a reversionary interest can be the basis of a taking claim, so jurisdiction exists to try the case as pled. Both parties submitted summary judgment motions where the primary arguments and evidence centered on whether the activities and operation at the library also qualify as a community park. The trial court granted a motion for partial summary judgment as to liability in favor of Eldorado. The trial court then held a jury trial on damages.

The court first held the deed defines “community park” in its four corners to mean “a park and recreational facility.” Based on the uncontested set of facts, “[u]nlike a research library, this library truly offers recreation, including story time and music classes for preschoolers, evening computer classes for adults, a glassed-in play area for children, and a large community meeting room for adults.” Further, the deed restriction does not require that every portion of the Property must be both a “park” and a “recreational facility,” but rather, “part of it can be park and part can be recreational facility.” Eldorado does not challenge that the rest of the property is used as a park and only challenges the section holding the library. After using various statutory construction canons and references to the record, the court determined the library meets the definition of “recreational facility” under the deed restriction.  Therefore, the trial court erred when it granted Eldorado’s summary judgment.  It should have granted the City’s motion.

If you want to read this opinion click here. Panel: Justices Lang, Brown and Whitehill. Memorandum Opinion issued by Justice Lang. Attorneys listed for City of McKinney are Jeffrey S. Levinger, Kent S. Hofmeister and Mark E. Goldstucker. Attorneys listed for Appellee are William V. Dorsaneo III, Robert B. Gilbreath, and Ernest W. Leonard.