1707 New York Ave., LLC v. City of Arlington ( 2015 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00259-CV
1707 NEW YORK AVE., LLC APPELLANT
V.
CITY OF ARLINGTON APPELLEE
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FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 352-271175-14
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MEMORANDUM OPINION1
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I. Introduction
Appellant 1707 New York Ave., LLC appeals from the trial court’s order
granting Appellee the City of Arlington’s plea to the jurisdiction. Appellant raises
two issues. In its first issue, Appellant claims that its claims are brought “directly
under the Texas Constitution” so that the City is not immune from Appellant’s
1
See Tex. R. App. P. 47.4.
claims. In its second issue, Appellant asserts that its claims are not subject to
the exhaustion requirement recognized by the Texas Supreme Court in City of
Dallas v. Stewart, 361 S.W.3d 562 (Tex. 2012). Because we hold that
Appellant’s constitutional claims are subject to the exhaustion requirement and
because this holding is also dispositive of Appellant’s first issue, we will affirm the
trial court’s judgment.
II. Factual and Procedural Background
After notice and a dangerous-and-substandard-structure hearing, the City’s
municipal court signed an order declaring the La Joya Arlington Apartments (the
apartments) to be “dangerous, substandard structures” and, thus, a public
nuisance. The municipal court ordered the owner to repair, remove, or demolish
the apartments by a certain date and to abate asbestos in accordance with
applicable law prior to undertaking repairs or demolition. Six months later, the
municipal court held a progress hearing and determined that the apartments
were not in compliance with the requirements of its prior order. Consequently,
the municipal court signed an August 13, 2013 order authorizing the City to
demolish the apartments at its discretion. The owner did not appeal the order,
and it became final. The City began the demolition process, mailed a notice of
demolition to the owner and interested parties, and filed the notice of demolition
in the Tarrant County deed records.
Subsequently, with full notice of the filed notice of demolition, Appellant’s
parent company purchased from Fannie Mae a promissory note secured by the
2
apartments. Appellant’s parent company then foreclosed on the note and
purchased the apartments at foreclosure. Later, after engaging in negotiations
with the City concerning possibly rehabilitating the apartments, Appellant’s parent
company transferred the property to Appellant.2 Appellant filed this suit,
asserting constitutional claims under Texas Constitution article I, sections 17 and
19 and alleging a taking of its property and due-process violations.
III. The Law Concerning Constitutional Taking Claims
and Nuisance Determinations
The Texas Constitution provides that no “person’s property shall be taken,
damaged, or destroyed for or applied to public use without adequate
compensation being made . . . .” Tex. Const. art. I, § 17. Those seeking
recovery for a taking under this provision of the constitution must prove the
government “intentionally took or damaged their property for public use, or was
substantially certain that would be the result.” Harris Cty. Flood Control Dist. v.
Kerr, No. 13–0303, 2015 WL 3641517, at *2 (Tex. June 12, 2015) (quoting City
of Keller v. Wilson, 168 S.W.3d 802, 808 (Tex. 2005)); City of Dallas v. Jennings,
142 S.W.3d 310, 314 (Tex. 2004). Governmental immunity does not shield the
government from liability for compensation under the takings clause.3 Kerr, 2015
2
Appellant’s brief contains a thorough recitation of additional procedural
facts, but we omit them because they are not relevant to the trial court’s ruling on
the City’s plea to the jurisdiction.
3
The supreme court has explained that governmental immunity is distinct
from sovereign immunity; governmental immunity refers to the protection
afforded to political subdivisions such as counties, cities, school districts, and
3
WL 3641517, at *2 (citing Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39
S.W.3d 591, 598 (Tex. 2001)). When a plaintiff fails to allege a valid
inverse-condemnation claim, however, governmental immunity continues to
apply, and a trial court is without jurisdiction. Bell v. City of Dallas, 146 S.W.3d
819, 825 (Tex. App.—Dallas 2004, no pet.); Dahl ex rel. Dahl v. State, 92 S.W.3d
856, 862 (Tex. App.—Houston [14th Dist.] 2002, no pet.); see also Little-Tex, 39
S.W.3d at 599 (affirming grant of plea to the jurisdiction where plaintiff did not
allege proper takings claim).
The Texas Supreme Court has “long held that the government commits no
taking when it abates what is, in fact, a public nuisance.” City of Dallas v.
Stewart, 361 S.W.3d 562, 569 (Tex. 2012); see City of Texarkana v. Reagan,
247 S.W. 816, 817 (Tex. 1923). A party asserting a taking based on an allegedly
improper administrative nuisance determination must appeal that determination
and assert any takings claim in that proceeding. City of Beaumont v. Como, 381
S.W.3d 538, 540 (Tex. 2012); Patel v. City of Everman, 361 S.W.3d 600, 601
(Tex. 2012); Stewart, 361 S.W.3d at 579. A party must also avail itself of
statutory remedies that may moot its takings claim, rather than directly instituting
a separate proceeding asserting such a claim. Como, 381 S.W.3d at 540;
Stewart, 361 S.W.3d at 579; City of Dallas v. VSC, LLC, 347 S.W.3d 231, 234–
37 (Tex. 2011).
others. See Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex.
2003). Governmental immunity is at issue here.
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IV. Standard of Review
To defeat a plea to the jurisdiction based on governmental immunity
asserted in a takings claim, a plaintiff must raise a fact issue as to each element
of her claim. Kerr, 2015 WL 3641517, at *2 (citing Tex. Dep’t of Parks & Wildlife
v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004)); Archibeque v. N. Tex. State
Hosp.–Wichita Falls Campus, 115 S.W.3d 154, 157 (Tex. App.—Fort Worth
2003, no pet.). That is, the plaintiff must raise a fact issue as to intent, causation,
and public use. Kerr, 2015 WL 3641517, at *2 (citing Little-Tex Insulation Co., 39
S.W.3d at 598). Whether the specific facts alleged demonstrate a trial court’s
subject-matter jurisdiction is a legal question that is reviewed under a de novo
standard of review. Miranda, 133 S.W.3d at 226. This determination is made
accepting the factual allegations as true and construing them in the plaintiff’s
favor. Id. at 228; Archibeque, 115 S.W.3d at 157.
V. Application of the Law to the Facts
Here, the prior owner of the apartments did not appeal the municipal
court’s order authorizing demolition;4 indeed, Appellant’s parent company
purchased the apartments with full notice that the City intended to demolish the
apartments and that a notice of demolition had been filed in the Tarrant County
deed records. Appellant does not dispute these facts. Instead, Appellant argued
4
Appellant agrees that no appeal was taken––“[u]nder the statute, the
owner had thirty days to appeal that order by filing suit. However, no suit was
filed.”
5
during oral argument that it was not required to satisfy the exhaustion
requirement articulated by the Texas Supreme Court in Como, 381 S.W.3d at
540; Patel, 361 S.W.3d at 601; Stewart, 361 S.W.3d at 579; and VSC, 347
S.W.3d at 234–37, in order to assert its taking claims because, according to
Appellant, the City obtained the order authorizing demolition under a “hybrid”
procedure using the City’s ordinance and Texas Local Government Code
chapters 54 and 214. See Tex. Loc. Gov’t Code Ann. §§ 54.032–.041 (West
2008 & Supp. 2014); see also id. §§ 214.001–.012 (West 2008 & Supp. 2014);
Arlington, Tex., Code of Ordinances ch. Nuisance, art. IV, §§ 4.03–.04 (2015).
But this argument by Appellant constitutes the assertion of a taking based on an
allegedly improper administrative nuisance determination and consequently falls
squarely within the parameters of the supreme court’s holdings in Como, 381
S.W.3d at 540; Patel, 361 S.W.3d at 601; Stewart, 361 S.W.3d at 579; and VSC,
347 S.W.3d at 234–37. Appellant was required to make this argument and to
assert its takings claim and other constitutional claims in an appeal of the
nuisance determination. See Como, 381 S.W.3d at 538; Patel, 361 S.W.3d at
601; Stewart, 361 S.W.3d at 579; VSC, 347 S.W.3d at 234–37. Because neither
Appellant nor any prior owner of the apartments appealed the nuisance
determination, Appellant cannot attack collaterally what was not challenged
directly, and its taking claim and other “direct” constitutional claims are barred.
See Como, 381 S.W.3d at 539; Stewart, 361 S.W.3d at 580.
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Appellant nonetheless argues that although its pleaded constitutional
claims against the City are all premised on the City’s “acts” in proceeding with the
demolition of the apartments pursuant to the municipal court’s August 13, 2013
order5––it is asserting on appeal four different factual grounds for its
constitutional claims “based on actions that were taken [by the City] after the
Order Authorizing Demolition, and which were not covered by that order.” But
this distinction is illusory. The City’s actions after entry of the order authorizing
demolition were taken pursuant to that order in preparation for demolition—these
acts were “covered by” the order authorizing demolition. Appellant has pointed to
no authority, and we have located none, for the proposition that the City was
required to obtain multiple, sequential, and separate orders to engage in acts
preparing for an authorized demolition.
Thus, because the City’s acts forming the basis of Appellant’s
constitutional claims were performed pursuant to the order authorizing demolition
and because neither Appellant nor any prior owner of the apartments appealed
the order authorizing demolition, Appellant’s pleading does not present a valid
takings claim. See Dahl, 92 S.W.3d at 862. Appellant cannot create jurisdiction
by stating a takings claim unless that claim is facially valid. Bell, 146 S.W.3d at
825; Dahl, 92 S.W.3d at 862. Appellant’s claims are not facially valid because
5
For example, Appellant pleads that “the City is intent on destroying
[Appellant’s] property,” “the City’s actions amount to a taking and damaging of
[Appellant’s] property,” and “the City plans to move forward with the complete
destruction of [Appellant’s] property.”
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the nuisance determination is unchallenged and “the government commits no
taking when it abates what is, in fact, a public nuisance.” Stewart, 361 S.W.3d at
569; see Reagan, 247 S.W. at 817.
We overrule both of Appellant’s issues.
VI. Conclusion
Having overruled both of Appellant’s issues, we affirm the trial court’s
judgment.
/s/ Sue Walker
SUE WALKER
JUSTICE
PANEL: WALKER, MEIER, and GABRIEL, JJ.
MEIER, J., filed a concurring opinion.
DELIVERED: October 22, 2015
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