Property owners cannot sue on City’s right to amend deed restrictions on lots it owns or create City park; increased traffic and noise cannot be basis for inverse condemnation claim

The City of Friendswood and Kevin Holland v. Paul and Carolyn Horn, et al., 01-15-00436-CV (Tex. App. – Houston [1st Dist.], February 11, 2016).

This is essentially an inverse condemnation case where the First Court of Appeals reversed the denial of a plea to the jurisdiction and dismissed the Plaintiff’s claims involving converting adjoining property to a city park.

After Tropical Storm Allison destroyed the Imperial Estates Section One subdivision, the City of Friendswood acquired most of the subdivision’s 42 lots through a federally-subsidized flooding mitigation program from FEMA.  The program required the City to leave the lots open for flood control, but the lots could be used for specific purposes, including a park.  Four property owners did not sell and rebuilt their homes. Ten years later, the City decided to develop the lots (consistent with federal guidelines) into a park and the home owners sued asserting the park was inconsistent with deed restrictions, was an inverse condemnation, and a nuisance. The trial court denied the City’s plea to the jurisdiction and the City appealed.

The 1958 deed restrictions dictated that lots were dedicated “for residential purposes only.” Since the City owned 38 lots, it had the ability to amend the restrictions under the express terms of the deeds and did so through a properly posted meeting. The City’s actions were in furtherance of flood control and public park development, which are governmental functions as a matter of law, not proprietary. As a result, immunity applies. Under the takings analysis, the court determined the City did not enter onto the Plaintiff’s property, but merely moved forward with developing the lots it already owns. The homeowners’ live pleadings does not allege that any diminution in the value of their lots occurred when the City acquired lots in 2001. Rather, the homeowners allege that the City’s decision to place a park adjacent to their property 10 years later impairs the peaceable use and enjoyment of their property. These allegations cannot support an inverse condemnation claim for compensation. “[I]ncreased traffic and noise to a community do not give rise to a compensable taking.” The homeowners’ nuisance claim is premised on the same allegations as their inverse condemnation claim and is also insupportable. Further, the City is immune from any declaratory judgment claims or contract claims arising out of its right to amend the covenants. To the extent the homeowners seek injunctive relief or specific performance to enforce the deed restrictions, these claims for relief may not be brought against a governmental unit. The City is immune from misrepresentation claims as such are intentional torts. Finally, the undisputed evidence established properly Texas Open Meetings Act postings, so the ultra vires claims against the Mayor are dismissed.

If you would like to read this opinion click here. Panel: Chief Justice Radack, Justice Bland and Justice Huddle. Opinion by Justice Bland. The attorneys listed for the Plaintiffs are Aaron Mark Pool and James T. Sunosky. The attorneys listed for the City are William S. Helfand and Charles T. Jeremiah.