Joe Murphy, Yoram Ben-Amram, and Galatex Development, Llc v. the City of Galveston, Texas ( 2015 )

FILED
15-0423
8/6/2015 8:55:19 AM
tex-6396840
SUPREME COURT OF TEXAS
BLAKE A. HAWTHORNE, CLERK
No. 15-0423
JOE MURPHY, YORAM BEN AMRAM and
GALATEX DEVELOPMENT, LLC.
V.
THE CITY OF GALVESTON, TEXAS
On Petition for Review from the Fourteenth Court of Appeals at
Houston, Texas, No. No. 14-14-00222-CV
AMENDED PETITION FOR REVIEW
Mark W. Stevens
TBN 19184300
P.O. Box 8ll8
Galveston, Texas 77553-8118
409.765.6306
Fax 409.765.6469
Email: markwandstev@sbcglobal.net
Counsel for Petitioners Joe Murphy,
Yoram Ben Amram and Galatex Development LLC
1
Identity of the Parties and Counsel
Petitioner Yoram Ben Amram is a citizen of Florida and is represented by trial and
appellate counsel Mark W. Stevens. See below.
Petitioner Galatex Development LLC is a Texas Limited Liability Corporation and
is represented by trial and appellate counsel Mark W. Stevens. See below.
Petitioner Joe Murphy, now deceased, was a citizen of Texas and resident of
Galveston County, Texas . This case is now being prosecuted by his widow and
independent executrix, Mrs. Coral Beach. See TRAP 7.1.
Petitioners’ Counsel is Mark W. Stevens, Trial and Appellate Counsel for
Petitioners, TBN 19184300, PO Box 8118, Galveston, Texas 77553.
Respondent is the City of Galveston, Texas.
Respondent’s trial and appellate counsel are David P. Salyer and Jocelyn Holland
of the firm of McLeod, Alexander, Powell, & Apffel, PO Box 629, Galveston,
Texas 77553.
2
Contents
Identity of Parties and Counsel…………………………………………………….2
Authorities………………………………………………………………………….3
Statement of the Case………………………………………………………………6
Procedural History………………………………………………………………….7
Statement of Jurisdiction………………………………………………………..…8
Issues Presented…………………………………………………………………...10
Statement on Citations…………………………………………………………….11
Summary of the Argument—Why This Case is Important…………………….…11
Facts…………………………………………………………………………….....12
Argument…………………………………………………………………...……..21
Conflict with Obra Homes………………………………..………………..21
Mayhew: Raw Land vs. Developed Properties…………………………….22
Judicial Endorsement of “Whipsaw” Tactics………………………………24
Bobbing for Apples—“Tweaking” the SUP Application…..……………..24
Vox Populi—An Unconstitutional Yardstick………………………………20
Administrative Appeals: Wormier Apples………………………………....26
Fact Finding Under Summary Judgment Standards…………………….….26
Letting the “Leverage” Cat Out of the Bag…………………………...……29
Conclusion………………………………………………………...………………30
Prayer…………………………………………………………………………..….31
Signature…………………………………………………………………………..31
Certificate of Compliance…………………………………………………………31
Certificate of Service…………………………………………………….………..31
Tab A—Judgment of the Court of Appeals
Tab B---Opinion of the Court of Appeals
Tab C—Order of Trial Court Denying Plea To Jurisdiction
3
Index of Authorities
Cases
Casso v. Brand, 776 S.W.2d 551 (Tex. 1989)…………………………………….28
City of Dallas v. Chicory Court Simpson Stuart L.P., 271 S.W.3d 412
(Tex. App.—Dallas 2008, no pet.)……………………………………………….23
City of Dallas v. Stewart, 361 S.W.3d 562 (Tex. 2012)………………...………9, 27
City of El Paso v. Madero Development, 803S.W.2d 396
(Tex. App. El Paso 1991), writ denied), cert. denied,
502 U.S. 1073 (1992)……………………………………………………………28
City of Harlingen v. Obra Homes, Inc., 2005 WL 74121
(Tex. App.—Corpus Christi 2005, no pet.)………………….…………………8, 21
Dallas Area Rapid Transit v. Amalgamated Transit Union Local 1338,
273 S.W.3d 659 (Tex. 2007)…………………………………………………….…9
Hallco Texas, Inc. v. McMullen County,221 S.W.3d 50 (Tex.
2007)……………………………………………………………………….……6 ff.
In Re City of Galveston, 14-14-01005-CV (Tex. App. –
Houston [14th Dist. ] March 3, 2015)(original proceeding)………………………23
Galveston Historical Foundation v. Zoning Board of Adjustment
of the City of Galveston, 17 S.W.3d 414 (Tex. App.—
Houston[1st Dist.] 2000, no pet.)………………………………...……………….27
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex.
1998)…………………………………………..……………………...…8, 16, 22 ff.
Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999)………9, 25
Nollan v. California Coastal Commission, 483 U.S. 825 (1987)………………9, 25
Palazzolo v. Rhode Island, 563 U.S. 606 (2001)……………..…………….…..9, 25
4
Sheffield Development Company, Inc. v. City of Glenn Heights,
140 S.W.3d 660 (Tex. 2004)………………...……………………………8, 26, 29
Stephen F. Austin State University v. Flynn, 228 S.W.3d 6533
(Tex. 2007)…………………………………………………………………………8
Statutes & Rules
Texas Local Government Code Sec. 211.008(a)………………………………….27
Texas Local Government Code Sec. 211.011(a)………………………………….27
Texas Government Code Sec. 22.001(a)(2); (a)(6)……………………………...…8
Texas Government Code Sec. 22.225(3)………………………………………...…8
Texas Government Code Sec. 551.071(2)………………………………………...30
Tex. R. App.P. 47.1………………………………………………….…………....10
Tex. R. App. P. 47.7(b)…………………………………………………………….8
United States Constitution, Amd. V……………………………………………6, 30
Texas Constitution, art. I, Sec. 2………………………………………..…………11
Texas Constitution, art. I, Sec. 19………………………………………...…….....31
5
No. 15-0423
JOE MURPHY, YORAM BEN AMRAM and
GALATEX DEVELOPMENT, LLC.
V.
THE CITY OF GALVESTON, TEXAS
AMENDED PETITION FOR REVIEW
TO THE HONORALBE SUPREME COURT OF TEXAS:
“This case illustrates how the government can
use the ripeness requirement to whipsaw a
landowner.”
Hallco Texas, Inc. v. McMullen County,
221 S.W.3d 50, 63 (Tex. 2007)
(Hecht, J., dissenting)
“An out and out plan of extortion.”
Nollan v. California Coastal Commission,
483 U.S. 825, 837 (1987)(Scallia, J.).
Statement of the Case
This inverse condemnation case demonstrates how “whipsawing” by
claims of non-ripeness has reached a high state of refinement, and is now reliable
tool for implementing “out and out extortion” in violation of the United States
Constitution, Amd. V, and the Texas Constitution, art. I, Sec. 19. A two-building,
14-unit apartment complex in Galveston was forced into foreclosure following
Hurricane Ike after City Council made it clear that repair would be allowed if the
6
owners agreed to destruction 4 of the 14 units to create “green space” which was
not required by any statute or ordinance.
Procedural History
The suit was originally filed in the 10th District Court of Galveston County,
Texas, and was removed to the U.S. District Court for the Southern District of
Texas, Galveston Division, in Case No. G-12-163. On August 15, 2013, the Hon.
John Froeschner, U.S. Magistrate, signed an order staying Petitioners’ federal
claims and remanding the state claims to the 10th District Court.
Back in State Court, the City filed a motion to dismiss citing lack of
“ripeness”. The Motion was heard on February 18, 2014, with testimony and
exhibits being received by The Hon. Kerry Neves of the 10th District Court of
Galveston County, Texas. Judge Neves signed an Order overruling the City’s plea
to the jurisdiction. Tab C [Murphytabctrialcourtorder].
A timely interlocutory appeal was taken by the City. Following oral
arguments, the a panel of the Fourteenth Court of Appeals (Justices Mac Brown as
author, McCally and Wise), handed down its Opinion ( --- S.W.3d---, 2015 WL
167178)(Tab B-MurphytabbCAOpinion] and Judgment (Tab A
[murphytabaCAJudgment]), reversing in part the Order denying the plea to the
jurisdiction and dismissing one of Respondents’ claims—a taking based on denial
of a Special Use Permit or “SUP”-- on grounds of “ripeness”. On March 2, 2015,
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following grants of extension, a Motion for Rehearing and Rehearing En Banc
was filed, and was denied on April 23, 2015.
This Petition for Review is timely filed on extension and seeks review of
that portion of the Opinion dismissing Petitioners’ claim as to the denial of the
Special Use Permit (SUP).
Statement of Jurisdiction
This Court has jurisdiction in this interlocutory appeal under Texas
Government Code Secs. 22.001(a)(2); 22.001(a)(6) and 22.225 (e), the latter of
which was amended in 2013 to read that “conflict” would exist to address
inconsistency between decisions which “….should be clarified to remove
unnecessary uncertainty in the law and unfairness to litigants.” Stephen F. Austin
State University v. Flynn, 228 S.W.3d 653, 656 nn. 1-3 (Tex. 2007).
More specifically, the Opinion herein(Tab A) conflicts inter alia with City of
Harlingen v. Obra Homes, Inc., No. 13-02-268-CV, 2005 WL 74121 at *3 (Tex.
App.—Corpus Christi, January 13, 2005, no pet.); see, Tex. R. App. P. 47.7(b)
effective as to opinions handed down after January 1, 2003.
Further, the Opinion herein conflicts with the following decisions of the
Texas Supreme Court:
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998)
8
Sheffield Development Company, Inc. v. City of Glenn Heights,
140 S.W.3d 660 (Tex. 2004)
City of Dallas v. Stewart, 361 S.W.3d 562 (Tex. 2012)
Also, under Dallas Area Rapid Transit v. Amalgamated Transit Union
Local 1338, 273 S.W.3d 659, 665-66 (Tex. 2007), the Opinion conflicts with the
following decisions of the United States Supreme Court:
Nollan v. California Coastal Commission, U.S. 825 (1987)
Palazzolo v. Rhode Island, 563 U.S. 606 (2001)
Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999)
9
Issues Presented
Issue 1
Did the Court of Appeals err in holding as a matter of law that Petitioners’
“takings” claims under Tex. Const. art. I, sec. 19 and U.S. Const. Amd. V by
denial of a Special Use Permit was not “ripe” for adjudication? Opinion at 14.
Issue 2
Did the Court of Appeals err in holding that no fact question existed on the
issue of futility. Opinion at 13
Issue 3
Did the Court of Appeals err in holding that Petitioners’ claim was not
“ripe” and thereby depriving Petitioners of a fair and speedy post-deprivation
means of protecting federal rights? Opinion at14.
Issue 4
Did the Court of Appeals err under TRAP 47.1 in declining to consider or
apply City ordinances which addressed Petitioners’ right to repair buildings
following a natural disaster? Opinion at 8 n. 4, referring to Ordinance Secs. 29-
111(a)(4) and 29-111(c)(permitting repair following natural disasters).
Issue 5
Did the Court of Appeals err in substituting its view of conflicting facts for
that of the trial court? Opinion at 14.
Issue 6
Did the Court of Appeals err in its application of the standard of review for
ripeness and futility? Opinion at 12 nn. 9, 10.
10
Statement on Citations
The City Council Meeting of February 10, 2011 was transcribed and judicial
notice taken at 2 RR 41. It is referred to below as CCM, and is found as an exhibit
to the City’s Plea to the Jurisdiction, beginning at CR 161.
The District Court hearing of February 18, 2014 is recorded in two volumes,
the text being the second volume. Cites to that hearing are given as “RR” followed
by the page number.
Summary of the Argument—Why This Case is Important
The doctrine of “Ripeness” is being applied in ways far beyond its intended
purpose of preventing advisory opinions under Texas Constitution, art. I, Sec. 2.
Much of the case law in this area deals with the developers of raw land, but the
formulas developed and applied in such cases do not address the concerns of the
owners of mortgaged income properties when confronted with “delay” or
“whipsaw” tactics by governmental bodies. This makes the owners of income
properties especially vulnerable, and “ripeness” standards need to be developed—
and applied—in a way which will allow such owners effective access to the
courts. If this is not done in this case, owners of income properties will be
especially susceptible to the predatory scheme demonstrated below.
The full record reveals clandestine intentions of the City to force Petitioners
to spend enormous sums repairing an apartment complex which had already been
11
marked for confiscation by at least one city council member and certain of her
constituents. In order to lay the foundation for a “ripeness” challenge, the City
Council only hinted at what was demanded—a sacrificial destruction of 4 of the
10 residential units for aesthetic purposes—without ever giving a solid proposal for
the landowner to consider. An unguarded admission by the City’s former Mayor
provided clear evidence that the City was seeking to “leverage” Petitioners into
capitulation by delay and attrition.
Such tactics will be employed statewide unless review is granted and the
law clarified to protect property rights under State and Federal law.
Facts
The recital of facts in the Opinion 2-4 is in many ways incomplete , and the
more effective method of demonstrating that is to repeat below essentially what
was in Petitioners’ Brief before the Court of Appeals, and which was entirely
within the record. The pattern confronting Petitioners was one of deliberate
successive delays, in the face of a critical post-Ike housing shortage, intended to
take the Properties past an imaginary 6 month “vacancy” line that would enable the
City—at least in the City’s view—to demand an SUP which would never be
forthcoming unless one of the buildings was entirely destroyed.
12
On March 25, 2009, Code Enforcement Officer Wells reported to Debbie
Stark of City Planning that 1624/1628 Sealy—the properties in question-- were
“Condemned on 1-30-09 and that “all tenants are out.” PX-2 . Contrary to the
City’s later position as to “vacancy”, in the same email Ms. Wells reported that a
different property at 1106 M in Galveston was “…not abandoned because there is
steady work being done.” (PX-2, final paragraph).
On May 18, 2009, Sarah Gandy emailed to Ron Penn (City Inspector) with
copies to numerous persons including K. Wells and Council member Elizabeth
Beeton:
“I implore you to do all that is in your power to enforce the codes
and regulations against this absentee owner. He is an Israeli citizen
living in Miami who has seen this property only once for
approximately 8 minutes. He seems to think that Galveston is an easy
place to make a quick buck at the expense of local taxpayers.”
PX-3.
On May 20, 2009 Mrs. Gandy emailed a complaint to Council Member
Beeton complaining that “historical” doors had not been replaced and apparently
were being resurfaced. That email was copied to Wendy O’Donohoe, City
Manager Steve LeBlanc and Lance Gandy, among others. See PX 4 . Mr. Ben
Amram reinstalled the original (i.e., “historic”) doors, paying a $100 per door fine
to placate the City.
13
On May 21, 2009, Wendy O’Donohoe (Planning Director) emailed to Ms.
Wells and William Plummer (City Inspectors) with copies to Debbie Stark and
David Ewald, both of City Planning, forwarding May 20 email of Mrs. Gandy and
giving directions to “red tag” the property, i.e., halt constructions. (“If it is
necessary to file charges at this point, please move forward as soon as possible.”)
See PX-4..
On May 26,2009, Ms. Wells informed Mrs. Gandy that the property has
been “red tagged” and that City personnel has informed the owner that the
“original [historic] doors would have to be put back up.” She further advised that,
“…as of today the original doors have been returned and put back up” and that the
doors are boarded to prevent vandalism, and that the work could now resume.” PX
– 15 . Undeterred, Mrs. Gandy almost immediately (4:46 p.m. to 4:59 pm)
emailed Ms. Wells, asking about previous supposed complaints (electrical, mold,
construction debris, etc.) PX 15.
On September 29, 2009 Ms. Gandy emailed Ms. Wellsabout “broader
planning issues with the property—parking, green space, life safety, etc.” Id. In
the same email Ms. Gandy then raised the issue of a possible six-month vacancy
tactic:
“If the roof, windows, and other issues do not get repaired quickly and
the age of the permit is past 6 months, what happens? Does it ever
expire?
14
PX-9.
On December 19, 2009 Council Member Beeton noted that “Coral Beach”
(the apartments) is “…advertising that it is ready to receive tenants again.” PX-9
This news was ill received by Council Member Beeton, who then asked:
“It is located in the East End Historical District but it does not meet
the standards for the District. Has it lost its grandfathered status since
it has not been operational for more than six months?”
PX-7[emphasis added].
In a string of emails of December 21, 2009 , Wendy O’Donohoe—
perturbed that the properties might actually be renting-- asked “When was
downstairs released?” Further, “What were details of previous agreement”. She
further asked about “any issues, historical significance, etc.? PX-8, second page.
In the same email string, Ron Penn of Planning advises that an earlier
agreement (which he dates as 12/17 instead of November 17) was “verbal” but that
“confirmation is being faxed today” and further that “Conditions state lower floor
only” and that “any occupancy of upper floors without inspection and approval
will result in charges being filed in municipal court and condemnation of entire
property.” PX-8.
On December 21, 2009, PX-9, , Ms. Wells advised the local property
manager by letter that “per our conversation on November 17, 2009, the
15
condemnation has been lifted only on the lower level apartments of both addresses.
Renting of the upper level apartments will result in charges filed with the
Municipal court…and condemnation of the entire complex….” Ben Amram had
made substantial progress on the lower units, flooded by Ike—but the City would
continue to “flyspeck” the project as to the second story units—which had not been
affected by Ike at all.
On December 23, 2009, PX 10 , Ben Amram emailed Ron Penn that he
wanted the project done “100%” and stated that all except the “back stairs” had
been done. He noted that electrical and plumbing permits are “closed” (i.e., work
completed) and that he has an open building permit because his contractor was
waiting for removal of the “condemnation.” He asked for help in closing out the
2009 permits. A similar email was sent on December 31, 2009, advising that “ the
City inspector approved the building.” PX 11 .
The City backpedaled-- in high gear. On January 19, 2010, [Tab 12], Ron
Penn emailed Ben Amram with list of additional items to be repaired, showing as
15 attachments. Ben Amram responded: “…Until only two weeks ago, many of
these items where [sic] never presented to us as violations and were not on any list
of requests. Some of these items had been addressed already….” Id.
On January 25, 2010 PX 14, Ben Amram emailed Mr. Penn advising of
progress and addressing all previous concerns. That would not do. On January
16
28, 2010 Kandelle Wells forwarded Ben Amram’s email of January 25 to Debbie
Stark in Planning. She then PX-13 emailed Ron Penn and Debbie Stark at City
Planning, raising the following “issues” apparently for the first time:
--City wanted an engineer’s letter;
--Questioned whether the heating will be adequate to meet a 68 degree F.
requirement;
--“All bathtubs, sinks and lavatories” will be maintained in a “safe and
sanitary manner, free from “defects” and leaks.
--Questioned whether 60 watt bulbs are being used;
--Requireed “luminaires” in all spaces.
--Requires exterior walls to be free from holes, etc. etc. etc.
On January 25, 2010 PX-14, Ben Amram advised that 1624 Sealy will be
ready for an inspection on Monday.
That wasn’t good enough. On February 4, 2010, PX-15 , Ms. Wells advised
that an inspection on February 2 revealed that 1624 Sealy was “not ready for
human habitation” because:
--a light fixture (pictured) is not up to electrical code;
--Stairs must be repaired or replaced before condemnation can be lifted,
noting that a permit was issued on the previous day, February 3
17
Ms. Wells’ unqualified to make any determination about the
supposed inadequacy of heating or air conditioning.. She was not trained in heating
technology; she could not say (“I don’t remember”) what the source as of her
“belief” that the units were inadequate; and that she wasn’t actually saying that the
heater was inadequate, but only that it “might” be inadequate. See Deposition
extract read into evidence at 2 RR 63. Her requirement of “testing” the units on a
cold day was unlikely to occur for many months, since the requirement was
announced in February. 2 RR 63-64.
March 23, 2010 Ben Amram emailed Wells, advising that the stairway and
electrical code issues will be fixed “in the next few days” so that the city “…can
lift the condemnation per your previous inspection and discussion.” PX-17 ..
Setting The Six Month “Vacancy” Trap
On March 26, 2010 PX-18 Second Page, Council Member Beeton emailed
City Attorney Susie Green and Wendy O’Donohoe:
“If a structure such as this is not in compliance with the standards in
place in the historical district and it is substantially damaged, don’t
they have to come into compliance when they rebuild? In addition,
has been out of operation for over 6 months so its grandfathering
would have lapsed.”
On April 7, 2010 (PX-18 final page) Wendy O’Donohoe emailed numerous
members of “Staff” and called for a meeting on the subject property, mentioning “a
few emails from CM Beeton w/Questions”.
18
On April 11, 2010 Ben Amram emailed Ms. Wells with copies to Ron Penn
and William Plummer, advising that “your requested replacements and work on
1624 is no[w] completely done”, requesting a removal of condemnation and
calling for an inspection. PX 19. That email was forwarded to Wendy
O’Donohoe with importance category “high.” PX 8.
On April 26, 2010 (PX 20) Lori Schwartz (City Historical Director) emailed
Wells with copies to Wendy O’Donohoe and Debbie Stark:
“As a reminder, I need the email regarding the condemnation of the structure
and the cease in land use at these locations as soon as possible. Please send
me a summary of the code enforcement activities first thing on Tuesday
morning.”
On May 3, 2010, Ms. Wells emailed Debbie Stark: “Have we heard
anything yet from legal re: the above addresses and the non-conforming use of
them…Whether or not they’ll be able to operate?” PX-22 .
May 4, 2010 PX-23 at 8:55 am Wendy O’Donohe emailed Penn, Stark,
Wells and Lori Schwartz asking “can everyone be available at 1:30 today to
discuss this property?” About 15 minutes later, at 9:11 am, Wells replied, “Yes,
ma’am! Thanks.”
On May 4, 2010, PX-24 Ms. Wells emailed to Lori Schwarz a draft of an
email proposed to be sent to Mr. Ben Amram. The draft email for the first time
would invoke Zoning Standards Section 29-111(a)(4), the so-called six month
provision. The draft email of May 4 recites that “…the Planning Division has
19
reviewed the land use with the City Attorney’s office and has determined that the
properties ….are now in violation of Section 29-111 of the Zoning Standards.”
According to the City’s “interpretation”, this would require a “Special Use Permit”
before the properties could be operated as an apartment or even occupied by more
than two families.
Springing the Trap
Yoram Ben Amram was not even then told by the City of the supposed “six
month vacancy” issue. On May 10,2010 Joe Murphy visited the City Planning
office and was informed for the first time that the City was invoking the “six
month” provision and require an Special Use Permit, or SUP, for multi-family
operation. Murphy testimony, 2 RR 105.
The Opinion at 8, n. 4, bypassed Sec. 29-111(d), PX-46, which
demonstrates that the city’s “parking” condition was merely camouflage for a
ruinous reduction in “density”—4 units out of 14 of the heavily mortgaged
Property. Sec.29-111(d) states:
The failure of an existing structure, property or business to comply
with the area standards for yards, lot area, open space coverage, height
or vehicle parking shall be interpreted as a non-conformity of
structure, but such non-conformity shall not be a basis for refusal of a
permit to alter, improve or reconstruct such existing structure,
property or business so long as such alteration, improvement or
reconstruction does not increase the degree of non-conformity existing
prior to such action (Ord. 02-018) [emphasis added].
20
It is important to note that Council’s concern for “trash” etc. was entirely
independent of the SUP. See CCM, p. 7:
CM Greenberg: So nothing, even if you did this, an SUP it would be subject
to coming up to code on everything.
O’Donohoe: Correct.
Thus, those issues were “red herrings.” The real issue was the SUP.
Argument
Conflict with Obra Homes
The Opinion at p. 8 frames the case in terms of whether the SUP denial
constituted a “final decision such that we know to a reasonable degree of certainty
the extent of permitted usage of the property”. However,the Opinion at 14 n. 10
acknowledges the contrary approach taken in City of Harlingen v. Obra Homes,
Inc., 2005 WL 74121 at *3 (Tex. App.—Corpus Christi 2005, no pet.)(mem. Op.),
with which it conflicts. Obra Homes recognized that there comes a point when
municipal inaction-- or chicanery-- can make further efforts and expense futile.
A property owner aware of Obra Homes and the Opinion below cannot
determine what his options are. A city or other governmental unit may invoke the
Opinion below, now published, to force an owner into a war of attrition until the
process becomes so expensive that the owner capitulates or suffers serious losses
due to the delay. The Opinion will exert a chilling effect on many owners at the
21
outset of disputes, giving a systemic and unconstitutional advantage to
governmental bodies.
Mayhew: Raw Land vs. Developed Properties
Beginning at p. 6 the Opinion seeks to distinguish Mayhew v. Town of
Sunnyvale, 964 S.W.2d 922 (Tex. 1998). There occurred the first and most
fundamental analytical error. Mayhew, like most other cases in this field, involved
undeveloped land, which almost always has residual, if disappointing, value.
There was nothing “hypothetical” or “theoretical” about Petitioners’ loss. The
actions of the City unquestionably destroyed a valuable property, ultimately
bringing about a foreclosure and later sale at a “dirt” price. Murphy testimony, RR
110/2 (Sale after foreclosure for $55,000).
Historical uses of the property are critically important in assessing the
reasonable investment backed expectations of the owner. Mayhew, 964 S.W.2d at
937. The buildings in this case had stood and been in operation for 50 years in the
case of one structure (4 apartments), and nearly 100 years for the larger building
(10 units). CCM, p. 10.
Speculators in raw land always risk the possibility of delay in approval of
plans, but investors with mortgages on existing income properties do not.
Petitioners did not have the luxury of waiting years to “tweak” with various
22
proposals (suggestion of Mayor Jaworksi, at Opinion 12) until they satisfied the
amorphous demands of various council members. At 12 n. 8, the Opinion
concedes that a “tweak” might include a reduction in density, i.e., a reduction of
units that had been operating –and which were critically needed following
Hurricane “Ike”.
Council Member Beeton knew and effectively conveyed that she was after
a ruinous alternation when she suggested that Ben Amram and his mortgagor to
jointly take a what some call a “haircut”, CCM 78:
….I think this could be a successful property in this neighborhood if it
were properly repaired and managed. I do believe it would be much
more likely to be successful if the new building that was wedged into
what used to be the courtyard there was removed. And that would
leave ten units, there would be some green space…And I would really
like to encourage Mr. Ben Amram and his lien holder Mr. Murphy
to give some thought to an approach like that.
[Emphasis added]. The “new” building had been “wedged” into the property about
50 years before. CCM, p. 10. To Ms. Beeton, “successful” obviously meant
destruction of part of the property to create “green space”, and without any
compensation. The City had no right to demand such an exaction under the State
and Federal Constitutions.
In attempting to distinguish Mayhew, the Opinion at 10 first cited City of
Dallas v. Chicory Court Simpson Stuart L.P., 271 S.W.3d 412, 421-22 (Tex.
App.—Dallas 2008, no pet.). Chicory Court also involved raw land. The owner
23
“…essentially acquiesced in the City’s preference for a completely underground
sewer system” 271 S.W.3d at 421-22 . In the present case, Petitioners’ “plan”
was simply to repair the property like everybody else in the wake of “Ike.”
Judicial Approval of “Whipsaw” Tactics
The Opinion at 11 actually endorsed the “whipsaw” tactics of the City,
stating that the “…this [Landmark] commissioner also noted that Ben Amram
could chose to ‘come back with another application that was less dense ‘” and
suggesting that Ben Amram was “unwilling” to do that. Ben Amram was in fact
unable to do so because such an exaction would ruin him. RR 75-76.
“The ripeness doctrine does not require a property owner…to seek permits
for development that the property owner does not deem economically viable.
Mayhew, supra, at 932. Such language may be problematic in “raw land” cases,
but it is critical when dealing with income properties. In this case, and given the
events since “Ike”, Ben Amram could never be sure-- or even confident-- that his
repairs would fully satisfy the City inspectors, and even then had every reason to
believe that an SUP would be not be granted without unless he destroyed some of
the units—or an entire building-- that he had just “repaired.”
Bobbing for Apples—“Tweaking” the SUP Application
24
The suggestion by Mayor Jaworski, CCM 84, Opinion at 12, that Ben
Amram might reapply later with a “tweaked” SUP application was an invitation
to go bobbing for apples without any chance of getting a real bite. Hallco , supra,
221 S.W.3d at 63-64, 72 (Hecht, J., dissenting).
Such official vacillation was critical—and condemned-- in Monterey v.
Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 698 (1999), where the Court
observed that when that council denied a developer’s plan they “…not only
declin[ed] to specify measures the landowners could take to satisfy the concerns
raised by the counsel but also refus[ed] to extend conditional use permit to allow
time to address those concerns.” Monterey, at 697.
In Palazzolo v. Rhode Island, 563 U.S. 606 (2001), the Supreme Court faced
a situation in which a developer of raw land was being in effect “whipsawed” by a
state regulation scheme:
Government authorities, of course, may not burden property by the
imposition of repetitive or unfair land use procedures in order to avoid a
final decision.
Palazollo, supra, 563 U.S. at 621, citing Monterrey v. Del Monte Dunes at
Monterrey, Ltd., 526 U.S. 687, 698 (1999).
Similarly, in Nollan v. California Coastal Commission, 483 U.S. 825, 837
(1987), the Supreme Court held that a requirement that landowners grant a public
25
easement across their land as a condition of receiving a building permit was
unconstitutional, characterizing it as “an out-and-out plan of extortion.”
Vox Populi—An Unconstitutional Yardstick
The Opinion 11 n. 6 then noted that “several” of Ben Amram’s neighbors
spoke, consistently requesting denial of the application, and further notes that those
neighbors “had been in contact with the City to complaint about the property
during the renovation.”
Indeed they did! In fact, two of them, Mr. and Mrs. Gandy, were trying to
buy the property at a “dirt” price of $55,000. Lance Gandy stated that he wanted
to “reduce the occupancy” and to remove the brick four-plex. RR 107/14. Gandy
said that he “didn’t care” if such actions would bankrupt Mr. Ben Amram. RR
107/19. Gandy made an offer with an earnest money contract to buy the property
and seek a demolition permit. As of the date of Gandy’s contract, Murphy had
already foreclosed on the property. RR 108/25.Gandy backed out of the contract,
however. The price on Gandy’s proposed contract was $55,000. RR 108/1-12, i.e.,
“value of the land only.” RR 108/19.
“…[A] strong public desire….is not enough to warrant achieving the desire
by a shorter cut than the constitutional way of paying for the change.” Sheffield
Development Company, Inc. v. City of Glenn Heights, 140 S.W.3d 660, 670 (Tex.
2004).
26
Administrative Appeals: Wormier Apples
The suggestion at Opinion 13 that Ben Amram should have resorted to the
Zoning Board of Adjustment conflicts with City of Dallas v. Stewart, 361 S.W.3d
562 (Tex. 2012). The Zoning Board of Adjustments (ZBA) is precisely the type of
body referred to in Stewart, i.e., incompetent to adjudicate constitutional matters
of property rights:
The protection of property rights, central to the functioning of our
society, should not—indeed, cannot—be charged to the same people
who seek to take those rights away.
Stewart, supra, at p. 580.
The Zoning Board of Adjustments was created under Texas Local
Government Code Sec. 211.008(a), which provides that the “governing body”—
i.e., City Council—appoints the ZBA members. Even if the ZBA ruled in favor of
Ben Amram, the City itself or any “person aggrieved” could appeal the ZBA to the
District Court, under Texas Local Government Code Sec. 211.011(a). A “person
aggrieved” would include local historical preservation groups. See, e.g.,
Galveston Historical Foundation v. Zoning Board of Adjustment of the City of
Galveston, 17 S.W.3d 414 (Tex. App.—Houston[1st Dist.] 2000, no pet.). At the
City Council Meeting, a letter was read into the record by the “East End Historical
27
District Association”, opposing the grant of an SUP. CCM 56/12. Appealing to
the ZBA would merely invite further delay, amplifying and reinforcing the City’s
contrived “ whipsaw”.
Fact Finding Under Summary Judgment Standards
At 12, n. 8, the Opinion correctly stated the standard of review was
essentially the same as for summary judgment. However, the Opinion then
discounted the comments of various City Council Members cited by Petitioners,
but apparently accepted whole cloth—or at least credited-- their claims of good
faith, e.g. “openness” to multifamily operations in the East End Historical Zone.
At that point, the Opinion was improperly weighing evidence in violation of
the standard of review under summary judgment principles, and in so doing
conflicts with Sheffield :
But the takings provision of the Texas Constitution would suffer a
huge loophole if we were required to presume that a city’s endless
refusal to permit a landowner the reasonable use of his property was
justified by an honest disagreement of council members.
Sheffield, supra, 140 S.W.3d at 680.
While individual council members cannot speak for the entire body, Opinion
at 12, n. 9, citing City of El Paso v. Madero Development, 803S.W.2d 396, 401
(Tex. App. El Paso 1991), writ denied), cert. denied, 502 U.S. 1073 (1992), it does
not follow that such statements can establish any fact, or the ultimate conclusion of
28
a lack of ripeness. A claim of one’s future intent or state of mind ordinarily
presents a fact issue. Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989).
Letting the “Leverage” Cat Out of the Bag
At the outset of this Petition, it was suggested that “whipsawing” has been
elevated to something of an Art Form since Justice Hecht’s Hallco dissent in 2007.
What follows illustrates just how skillfully that technique has been crafted.
Petitioners suggest that the statements of council members relied upon by
the Court below were choreographed in the “executive” session as deliberate
means of salting the record with self serving claims of “good faith” to defend an
anticipated claim on grounds of lack of ripeness.
There was in the record unmistakable evidence that this happened. The
Council meeting was preceded by an “executive” session. At the Council Meeting,
CCM 88, Mayor Jaworski made this remarkably unguarded comment:
…We were talking about leverage to affect change in certain
things in our executive session. I don’t think I’m giving away
anything there.
But the Mayor was giving away something that was critical in this case, and
disturbing more generally. The City was clearly seeking the “leverage” of
delay—a tactic denounced in Sheffield Development Company, Inc. v. City of
29
Glenn Heights, 140 S.W.3d 660, 680, 688 (Tex. 2004)(“… but the use of delay for
extortion is hardly a legitimate governmental function.”).
Texas courts should be reminded that “ripeness” claims in land use cases
involve public bodies and thus will inevitably involve potential violation of the
Texas Open Meetings Act. Legitimate reasons for calling an executive session do
not include woodshedding council members on how to posture in open session on
the law of “takings”. This is not a theoretical concern, in Galveston or elsewhere.
See, In Re City of Galveston, 14-14-01005-CV (Tex. App. –Houston [14th Dist. ]
March 3, 2015)(original proceeding), where a panel of the same court of appeals
below very recently directed a District Judge in Galveston County to consider in
more detail which topics were discussed in executive session under Texas
Government Code Sec. 551.071(2)(legal consultation), noting that proper use of
that provision required direct discussions of specific questions for counsel.
Conclusion
Mayor Jaworski at least got one thing right: “Money can make any property
nicer.” Opinion at 12. The issue is whether that money must be the City’s or the
owners’. Where cities seek to conduct “urban renewal” by coercing landowners
into foreclosure or distress sales, it must be the City’s money. Tex. Const. art. I,
Sec. 19; U.S. Const., Amd. V.
30
Prayer
Petitioners pray that review be granted and that upon full hearing the
Judgment of the Court of Appeals be reversed insofar as it rendered any judgment,
and that this case remanded for trial on the merits.
Respectfully submitted,
/s/Mark W. Stevens
Mark W. Stevens
TBN 19184300
PO Box 8118
Galveston, Texas 77553
409.765.6306
Fax 409.765.6469
Email: markwandstev@sbcglobal.net
Counsel for Appellees
Certificate of Compliance
The applicable portions of the forgoing Petitioner contain 4,393
words in Times New Roman 14 point, double spaced.
/s/Mark W. Stevens
Mark W. Stevens
Certificate of Service
A true and correct copy of the foregoing instrument has been served
upon Mr. David P. Salyer and Ms. Jocylen Holland, McLeod, Alexander,
Powel & Apffel via electronic means on August 7, 2015, Amending the
Petition for Review filed on August 6, 2015.
31
/s/Mark W. Stevens
Mark W. Stevens
32
January 13, 2015
JUDGMENT
The Fourteenth Court of Appeals
THE CITY OF GALVESTON, TEXAS, Appellant
NO. 14-14-00222-CV V.
JOE MURPHY, YORAM BEN-AMRAM, AND GALTEX DEVELOPMENT,
LLC, Appellees
________________________________
This cause, an interlocutory appeal from the order denying appellant City of
Galveston’s motion to dismiss for lack of subject-matter jurisdiction, in favor of
appellees, Joe Murphy, Yoram Ben-Amram, and Galtex Development, LLC,
signed February 28, 2014, was heard on the transcript of the record. We have
inspected the record and find the trial court erred in failing to grant the motion in
part. We therefore order that the order that denied the City’s motion to dismiss
with regard to appellees’ takings claims based on the City’s denial of appellees’
Special Use Permit is REVERSED in part and RENDER judgment dismissing
such claims.
Further, we order that the order is AFFIRMED in part with regard to
appellees’ takings claims based on the City’s revocation of the property at issue’s
grandfathered non-conforming status.
We order that each party shall pay its costs by reason of this appeal.
We further order this decision certified below for observance.
Affirmed in Part, Reversed and Rendered in Part, and Opinion filed January
13, 2015.
In the
Fourteenth Court of Appeals
NO. 14-14-00222-CV
THE CITY OF GALVESTON, TEXAS, Appellant
V.
JOE MURPHY, YORAM BEN-AMRAM, AND GALTEX DEVELOPMENT,
LLC, Appellees
On Appeal from the 10th District Court
Galveston County, Texas
Trial Court Cause No. 12-CV-0907
OPINION
Appellees Joe Murphy, Yoram Ben-Amram, and Galtex Development, LLC 1
sued the City of Galveston, claiming that the City unconstitutionally took their
property without just compensation through inverse condemnation. The City filed
a plea to the jurisdiction, which the trial court denied. The City timely filed this
1
We refer to the appellees collectively as the “Property Owners.”
interlocutory appeal, asserting that the trial court lacked subject-matter jurisdiction
because the Property Owners’ claims are not ripe for review. We affirm in part,
and reverse and render in part a judgment of dismissal.
I. FACTUAL AND PROCEDURAL BACKGROUND
At the time of the claims, Ben-Amram d/b/a Galtex owned the property at
issue, subject to a mortgage held by Murphy. The property—consisting of two
buildings built in 1910 and approximately 1955-1965, respectively—is located in
Galveston, Texas, on Sealy Street, in the East End Historical District. Although
the Historical District is zoned for single-family dwellings, the property was
categorized and operated as “multiple-family dwellings,” comprising a total of 14
rental units.
On September 13, 2008, Hurricane Ike struck Galveston Island and flooded
the first floors of the property. Repairs began in January 2009. On January 30,
2009, the City advised Galtex that the property was “unfit” for human habitation
and had been “condemned.” The tenants evacuated. Ben-Amram and Galtex
pulled permits and began renovations. In May 2009, the City “red tagged” one of
the buildings for lack of compliance with the Historical Code and requested mold
remediation and moisture reports. Renovations continued. The condemnation as
to the lower floors was lifted in November 2009 but was reinstated in December
2009 after an inspection. In January 2010, City inspectors indicated that the
condemnation would be lifted if various code items were completed and a letter
from a certified engineer attesting to the property’s safety was provided.
Over the next few months, Ben-Amram met and communicated with City
inspectors regarding these and additional requested items. In May 2010, City
officials for the first time informed the Property Owners that, because the property
had been unoccupied for over six months, it had lost its “grandfathered” non-
2
conforming status and would require a Specific Use Permit (SUP) 2 to be occupied
as multi-family dwellings.
In December 2010, Ben-Amram submitted the SUP application to the City.
He also submitted copies of the application to the Landmark and Planning
Commissions for review and recommendation. In January 2011, Ben-Amram’s
and Galtex’s engineer recommended certain brick work. The additional brick
work commenced. Later in January 2011, both the Landmark and Planning
Commissions recommended denial of the SUP application. City staff
recommended approval, subject to meeting specified conditions, including meeting
all compliance requirements necessary to lift the condemnation, and providing
more parking spaces or requesting a variance.
City Council heard the Property Owners’ request for a SUP on February 10,
2011, and denied the request. Murphy foreclosed on the property in October 2011.
In April 2012, the Property Owners filed suit against the City, alleging that the
SUP denial, as well as the City’s “purported” invocation of the six-month vacancy
used to then require the SUP, constituted a regulatory taking under both the Texas
and federal constitutions.
The City filed a motion to dismiss for lack of subject-matter jurisdiction.
The City argued that the Property Owners’ claims were not ripe because there was
no final or definitive decision regarding use of the property as multi-family
dwellings. The City attached evidence consisting of Ben-Amram’s deposition
transcript and exhibits, and the relevant excerpt from the February 2011 City
Council public hearing. The Property Owners filed a response.
2
The parties also refer to the SUP as a “special use permit.”
3
On February 18, 2014, the trial court held an evidentiary hearing. The
Property Owners presented three live witnesses: City Councilmember Beeton,
Ben-Amram, and Murphy. The Property Owners also read excerpts from the
depositions of two City officials and offered exhibits. On February 28, 2014, the
trial court signed an order denying the City’s motion to dismiss. The City timely
filed this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8)
(West 2011).
II. ANALYSIS
A. Standard of review
We review the trial court’s ruling on a plea to the jurisdiction under a de
novo standard. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228
(Tex. 2004).3 Where, as here, the plea to the jurisdiction challenges the existence
of jurisdictional facts, the trial court considers relevant evidence submitted by the
parties. Id. at 227. If the evidence creates a fact question regarding jurisdiction,
then the trial court cannot grant the plea to the jurisdiction, and the fact issue will
be resolved by the factfinder. Id. at 227–28. But if the relevant evidence is
undisputed or fails to raise a fact question on the jurisdictional issue, the trial court
rules on the plea to the jurisdiction as a matter of law. Id. at 228.
“[T]his standard generally mirrors that of a summary judgment under Texas
Rule of Civil Procedure 166a(c). . . . By requiring the [governmental entity] to
meet the summary judgment standard of proof in cases like this one, we protect the
plaintiffs from having to put on their case simply to establish jurisdiction.” Id.
(internal quotation marks and citation omitted); accord Dallas Cnty. v. Wadley,
3
While the usual procedural vehicle to challenge the sufficiency of the pleader’s
jurisdictional allegations or the existence of jurisdictional facts is a plea to the jurisdiction, the
City’s motion to dismiss here functioned as a plea to the jurisdiction. See Drexel Corp. v.
Edgewood Dev., Ltd., 417 S.W.3d 672, 674 (Tex. App.—Houston [14th Dist.] 2013, no pet.).
4
168 S.W.3d 373, 377 (Tex. App.—Dallas 2005, pet. denied).
Under this standard, we credit as true all evidence favoring the nonmovant
and draw all reasonable inferences and resolve any doubts in the nonmovant’s
favor. Miranda, 133 S.W.3d at 228. The movant must assert the absence of
subject-matter jurisdiction and present conclusive proof that the trial court lacks
subject-matter jurisdiction. Id. Evidence is conclusive only if reasonable people
could not differ in their conclusions. City of Keller v. Wilson, 168 S.W.3d 802,
816 (Tex. 2005). If the movant discharges this burden, the nonmovant then must
present evidence sufficient to raise a material issue of fact regarding jurisdiction, or
the plea will be sustained. See Miranda, 133 S.W.3d at 228.
B. Inverse condemnation
Article I, section 17, of the Texas Constitution, the “takings clause,”
mandates that “[n]o person’s property shall be taken, damaged, or destroyed for or
applied to public use without adequate compensation being made, unless by the
consent of such person.” Tex. Const. art. I, § 17. Similarly, the Just Compensation
Clause of the Fifth Amendment provides that “private property [shall not] be taken
for public use, without just compensation.” U.S. Const. amend. V; Town of Flower
Mound v. Stafford Estates Ltd. P’ship, 135 S.W.3d 620, 645–46 (Tex. 2004)
(violation of Just Compensation Clause may be brought under 42 U.S.C. § 1983).
When a governmental entity intentionally takes private property for public
use without adequately compensating the landowner, “the owner may recover
damages for inverse condemnation.” Tarrant Reg’l Water Dist. v. Gragg, 151
S.W.3d 546, 554 (Tex. 2004). To assert inverse condemnation, a claimant must
plead: (1) the governmental unit intentionally performed an act (2) that resulted in
the taking, damaging, or destruction of the claimant’s property (3) for public use.
See Gen. Servs. Comm’n v. Little–Tex Insulation Co., 39 S.W.3d 591, 598 (Tex.
5
2001); Kirby Lake Dev. v. Clear Lake City Water, 321 S.W.3d 1, 5 (Tex. App.—
Houston [14th Dist.] 2008), aff’d, 320 S.W.3d 829 (Tex. 2010). Takings can be
classified as either physical or regulatory. Mayhew v. Town of Sunnyvale, 964
S.W.2d 922, 933 (Tex. 1998). While all property is held subject to the valid
exercise of the police power, a regulatory action may, under some circumstances,
constitute a taking requiring compensation. See Hallco Tex., Inc. v. McMullen
Cnty., 221 S.W.3d 50, 56 (Tex. 2006).
Here, the Property Owners allege a regulatory taking that denied all
economically beneficial or productive use of the property or, in the alternative,
unreasonably interfered with the use and enjoyment of the property. See id.
C. Ripeness
Ripeness is an element of subject-matter jurisdiction and, as such, is subject
to de novo review. Mayhew, 964 S.W.2d at 928–29. “A controversy is ‘ripe’ for
the courts when it has ‘legally matured.’” City of Paris v. Abbott, 360 S.W.3d 567,
578 (Tex. App.—Texarkana 2011, pet. denied). A regulatory takings claim
ordinarily is not ripe until there has been a “final and authoritative determination”
by the governmental entity applying the regulations at issue to the property.
Mayhew, 964 S.W.2d at 929; see Williamson Cnty. Reg’l Planning Comm’n v.
Hamilton Bank of Johnson City, 473 U.S. 172, 186 (1985). This is because “a
court cannot determine whether a taking or other constitutional violation has
occurred until the court can compare the uses prohibited by the regulation to any
permissible uses that may be made of the affected property.” Mayhew, 964 S.W.2d
at 929; see Hallco, 221 S.W.3d at 70 (“A court cannot determine whether a
regulation has gone ‘too far’ unless it knows how far the regulation goes.’”
(quoting MacDonald, Sommer & Frates v. Cnty. of Yolo, 477 U.S. 340, 348
(1986)).
6
A final decision usually requires both a rejected development plan and the
denial of a variance from the controlling regulations. Mayhew, 964 S.W.2d at 929.
Failure to reapply or seek a variance ordinarily is fatal to the ripeness of claims.
Id. at 931. When a general zoning or land-use restriction is subject to discretionary
application or variance, “the impact on a particular property may not be ripe until a
variance is finally denied.” Hallco, 221 S.W.3d at 60. Such variance requirement
is applied flexibly to serve its purpose of giving the governmental entity an
opportunity to grant alternate forms of relief or make policy decisions that might
abate the alleged taking. Mayhew, 964 S.W.2d at 930. However, futile
reapplications or variance requests are not required. Id. at 929. Property owners
are not required to seek permits for developments that the “property owner does
not deem economically viable.” Id. at 932.
The City contends that the Property Owners’ claims are not ripe because
they never obtained a final decision regarding their use of the property as an
apartment complex. According to the City, its denial of the SUP primarily was
based on code safety and structural concerns with the property, including the lack
of the engineer’s letter. In other words, the decision was not final as City Council
encouraged Ben-Amram to bring the property within compliance, submit the
engineer’s letter, and reapply; however, he did not reapply. The City also asserts
that with regard to the parking concern, Ben-Amram had the option of seeking a
variance on the parking requirement from the Zoning Board of Adjustment and did
not.
The Property Owners respond that their case is ripe. In particular, the
Property Owners contend the record contradicts the City’s position that the SUP
application was denied due to safety concerns. The Property Owners also argue
that the City Council hearing was a “sham” designed to wear them down into
7
acquiescing to demands for density reduction, and that “[a]ny efforts by Ben[-]
Amram to make further applications of any kind would be futile.” 4
1. Evidence pertaining to ripeness of denial of SUP application
While a landowner must give the land-use authority an opportunity to
exercise its discretion, a takings claim likely will have ripened once it becomes
clear that the governmental entity lacks the discretion to permit the requested
usage, or the permissible uses of the property are known to a “reasonable degree of
certainty.” See Palazzolo v. Rhode Island, 533 U.S. 606, 620 (2001). Here, City
Council had the discretion to grant the Property Owners’ SUP application, despite
the commissions’ recommendations. Therefore, the key question is whether the
City’s denial of the SUP constituted a final decision such that we know to a
reasonable degree of certainty the extent of permitted usage of the property. See
MacDonald, 477 U.S. at 348–49, 351. We conclude that it does not.
We begin our discussion with Mayhew, with which the Property Owners
align and which the City attempts to distinguish. The Mayhews complained that
the town’s refusal to approve their planned development constituted a taking. 964
S.W.2d. at 926. After reiterating that the concept of ripeness requiring final
decisions is usually signified by rejected development plans and variance denials,
the Mayhew court highlighted the exception that “futile variance requests or re-
applications are not required,” and ruled that any further actions would have been
4
In addition, the Property Owners essentially argue that the City conjured up the illegal
SUP requirement in order to force them to reduce the number of rental units. They contend that
the City improperly relied on the zoning standards—Ordinance Section 29-111(a)(4)—to revoke
the property’s non-conforming status and require the SUP. Instead, according to the Property
Owners, a different section of the code—Ordinance Section 29-111(c)—governs, which permits
reconstruction on non-conforming structures after a natural disaster. The Property Owners also
argue that any additional parking requirement conflicted with Ordinance Section 29-111(d). We
need not reach the construction of these ordinances in order to review the trial court’s ruling on
the plea. See Tex. R. App. P. 47.1.
8
futile, even though the Mayhews did not file another application and failed to
apply for a variance. Id. at 929, 931. The ruling, however, was limited to the
“unique circumstances” of that case. Id. at 932.
In that case, the Mayhews owned several hundred acres of land which they
hoped to develop, but were confronted by an ordinance prohibiting planned
developments with densities in excess of one dwelling unit per acre. Id. at 925.
The Mayhews met with the town, which amended the ordinance to allow
development in excess of the limit, with council approval. Id. at 926. After
spending half a million dollars for studies and the preparation of evaluative reports,
the Mayhews submitted their planned development proposal to the town. Id. If
approved, the Mayhews planned to sell the property to a third party for
development. Id. However, the third party would only develop the property if it
could build a minimum of 3,600 housing units. Id. Thus, the Mayhews sought
approval to build 3,650 to 5,025 units. Id. After four months of consideration, the
town’s planning and zoning commission recommended denial of the application.
Id. The town council next appointed a negotiating committee, which met with the
Mayhews and agreed to a compromise development of 3,600 units, the minimum
number of units needed for the third party to purchase the property for
development purposes. Id. At a subsequent meeting of the town council, the
council was informed that approval for less than 3,600 units would be considered
an outright denial. Id. Despite the prior compromise with the negotiating
committee, the town council voted to deny the development. Id. A meeting to
reconsider the vote was later cancelled by the town. Id. Instead of reapplying or
applying for a variance, the Mayhews filed suit. Id. at 931.
The Mayhew Court observed that “[n]ormally, their failure to reapply or
seek a variance would be fatal to the ripeness of their claims.” Id. (citing
9
MacDonald, 477 U.S. at 351; Hamilton Bank, 473 U.S. at 188–91). However,
because the “evidence in this case establishe[d] the extent to which the Mayhews
worked with the [t]own in attempting to have their development approved”—
spending $500,000, engaging in negotiations with the town for over a year,
compromising with a negotiating committee after an initial negative response from
the town’s planning and zoning committee, suffering a rejection of their amended
development plan application, and cancellation of reconsideration of the town
council’s vote—the Texas Supreme Court held that any further applications would
have been futile and that the Mayhews’ claims were ripe. Id.
In Mayhew, despite the Mayhews’ submission of only one application and
not applying for any variances, there was a reasonable degree of certainty that the
town council would not grant any further reapplication or variance involving any
development plan of 3,600 units or more. In contrast, the evidence here establishes
that the Property Owners did not obtain a final decision as defined by Mayhew on
their SUP application for a 14-unit dwelling. 5 See City of Dallas v. Chicory Court
Simpson Stuart, L.P., 271 S.W.3d 412, 421–22, 424 (Tex. App.—Dallas 2008, pet.
denied) (distinguishing Mayhew and reversing denial of plea to jurisdiction where
landowner obtained rejection of single drainage plan and never submitted
additional alternative plan, despite city’s indication it would consider one if
landowner chose to submit one).
5
The Property Owners also cite City of Sherman v. Wayne, 266 S.W.3d 34 (Tex. App.—
Dallas 2008, no pet.). However, Wayne is distinguishable where Wayne negotiated with the
planning and zoning board and agreed to concessions regarding his zoning change and SUP
applications, including a more restrictive zoning level and methods to address traffic and noise
concerns, but the city council rejected his applications. Id. at 41–42. The Wayne court cited
Mayhew in highlighting how Wayne had modified his initial re-zoning application and made
concessions during negotiations with the board. Id. at 42.
10
Here, flooding damage and various code issues resulted in condemnation of
the property after Hurricane Ike. Ben-Amram worked with City inspectors over a
period of almost two years, spending between $200,000 to $300,000, in an attempt
to resolve the code issues and obtain a certificate of occupancy. Beginning in
January 2010, the City required the Property Owners to submit an engineer’s letter
certifying the property’s safety. After the City informed the Property Owners in
May 2010 about the loss of their “grandfathered” non-conforming status on the
property, they submitted a SUP application. They were informed of and were
encouraged to, but did not, attend the meetings where the Landmark and Planning
Commissions considered their application. Ben-Amram attended and spoke at the
February 2011 City Council meeting. Ben-Amram acknowledged that he had not
completed the repairs as to several apartments and he needed to do “some more
work.” The City field supervisor assigned to the property confirmed that, to date,
it was not code-compliant and the City had not received the engineer’s letter. One
of the Landmark and Planning commissioners suggested City Council deny the
SUP as “an opportunity to say go forward and meet all these [building] codes and
come back with a different application.” This commissioner also noted that Ben-
Amram could choose to “come back with another application that is less dense.” 6
Multiple councilmembers expressed particular reservations with granting the
SUP. 7 Councilmember Gonzales cited public safety and the property not meeting
code requirements. Councilmember Colbert also cited public safety, the code
violations, and the lack of the engineer’s letter. Councilmember Greenberg
6
Several of Ben-Amram’s neighbors also spoke, consistently requesting denial of the
application. The record reflects that several of these neighbors had been in contact with City
officials to complain about the property during the renovations.
7
Aside from asking questions about an electrical panel, Councilmember Legg expressed
no particular reservations and indicated being “very open to multi-family dwelling.”
Councilmember Puccetti also expressed no particular reservations.
11
indicated there were “too many things wrong” for him to support the SUP,
including infrastructure and engineering concerns. Beeton noted the “significant
attention from code enforcement,” and lack of code compliance and the engineer’s
letter. Beeton also mentioned possible removal of four apartments to increase
green space and alleviate parking problems. Mayor Jaworski appeared to be
concerned with the property’s “state” and “condition,” acknowledging that “money
can make any property nicer,” but indicated that nothing prevented Ben-Amram
from submitting another application with “even a slight tweak.” 8 Jaworski also
suggested that Ben-Amram speak to another apartment owner operating a multi-
family complex in a single-family area to “find out what his business plan was.”
Councilmembers Gonzales and Greenberg both discussed reconsideration of the
SUP application when all or substantially all of the repairs were completed.
Councilmember Greenberg especially noted that this was “the first time” City
Council was considering the application. City Council denied the SUP. 9
At the hearing, it became clear that Ben-Amram was unwilling to consider
any alternative plan involving removal of any units because it would not be
“realistic” and he would “go bankrupt.” But he further expressed his willingness
“to keep working with the [C]ity and . . . to finish the buildings up to the code.”
Ben-Amram acknowledged that City Council told him “that [he] can bring it up to
8
Viewing the summary judgment record in the light favoring the nonmovants, see
Miranda, 133 S.W.3d at 228, one possible “tweak” in a subsequent application could involve
reducing the density of the property.
9
Viewed in the light most favorable to the Property Owners, see Miranda, 133 S.W.3d at
228, although we agree that certain individual actions and statements by Jaworski and Beeton
tend to reflect a preference for density reduction, for purposes of ripeness, we may not isolate
individual councilmembers when determining the City’s mind-set. See City of El Paso v.
Madero Dev., 803 S.W.2d 396, 401 (Tex. App.—El Paso 1991, writ denied), cert. denied, 502
U.S. 1073 (1992) (reversing trial court’s judgment and dismissing based on lack of ripeness
despite two city alderman stating “words to the effect that they wished to impede the
development of the property by zoning the property” for more restrictive use (citing Mayhew)).
12
code and reapply.” However, after the application was denied, Ben-Amram did
not resubmit a SUP application that would have reflected completion of the repairs
and/or an engineer’s letter certifying the safety of the property. To the extent that
City Council expressed any reservations as to parking, Ben-Amram also had
indicated that he would make a “request for the parking variance” with the Zoning
Board, but he did not.
Moreover, although the Property Owners insist the hearing was merely
“scripted,” we cannot agree that a fact issue exists on futility. There is evidence
the City was open to reapplication for specific use of the property as multi-family
dwellings, either: (1) with the same number of units, but after the property’s repairs
met all code requirements and/or the Property Owners produced an engineer’s
letter, or (2) with some reduction in density, namely, the four units in the newer
building, ostensibly allowing for more parking or green space. According to the
Property Owners, it is the second scenario that constitutes a taking.
This court faced a similar situation in Riner v. City of Hunter’s Creek, 403
S.W.3d 919 (Tex. App.—Houston [14th Dist.] 2013, no pet.). There, the city’s
planning and zoning commission denied the Riners’ application to replat their
property to subdivide it into three lots. Id. at 921. Pursuant to the Riners’ request,
the commission certified 14 reasons for the denial of the replat. Id. Although the
“gravamen” of the Riners’ complaint was that the city misconstrued a lot-size
ordinance when calculating the size of the proposed subdivided lots, they did not
remedy the remaining bases for the commission’s decision and then reapply, did
not file an administrative appeal, and did not request any variances, so we
concluded their requests for declaratory judgment were not ripe. Id. at 922–23,
924–26. We rejected their reliance on Mayhew, explaining that they “could have
isolated the ‘essential question’ of lot size by remedying the remaining deficiencies
13
and reapplying to the commission, but they did not do so.” Id. at 925. 10
Here, the gravamen of the Property Owners’ complaint was that the City
denied their SUP application as a means of impermissibly requiring a reduction in
density. However, even presuming that one basis for denial of the SUP permit was
a preference for a reduced number of units, City Council expressly advanced
distinct safety concerns related to the outstanding code violations on the property,
as well as the still-outstanding engineer’s letter. And although the Property
Owners insist the parking requirement was “only a subterfuge to achieve a
reduction in ‘density,’” Ben-Amram testified that he never applied for a variance
with the Zoning Board. The record therefore reflects that the Property Owners
never isolated the essential question of density for the City’s reconsideration. In
other words, there was no reasonable “degree” of certainty that the City only
would grant a SUP if the Property Owners agreed to remove four or more
apartments. See City of El Paso v. Madero Dev., 803 S.W.2d 396, 400–01 (Tex.
App.—El Paso 1991, writ denied) (“After this degree is attained, the degree of
taking can be arrived at.”).
In these circumstances, we conclude that the Property Owners’ regulatory
takings claims with regard to the City’s denial of the SUP application are not ripe.
Therefore, the trial court erred in denying the City’s plea to the jurisdiction with
regard to, and we render judgment dismissing, the Property Owners’ taking claims
based on the denial of the SUP application. See Chicory Court, 271 S.W.3d at
422, 424; Madero Dev., 803 S.W.2d at 400–01; cf. Riner, 403 S.W.3d at 925–26
10
Contra City of Harlingen v. Obra Homes, Inc., No. 13-02-268-CV, 2005 WL 74121, at
*3 (Tex. App.—Corpus Christi Jan. 13, 2005, no pet.) (mem. op.) (claims ripe where planning
and zoning commission informed landowner he was at “end of the line” as to other types of re-
zoning applications and only could file application that would permit single-family homes on lot
size landowner considered too large to be profitable, effectively issuing final denial of re-zoning
application).
14
(trial court correctly concluded it lacked jurisdiction).
We sustain the City’s issue.
2. Revocation of the property’s non-conforming status as alleged taking
However, this does not end our inquiry. Within a supplemental brief, 11 the
City contends that the Property Owners waived their right to raise any independent
takings claim as to the May 2010 revocation of the property’s grandfathered non-
conforming status by filing the SUP application and failing to pursue an appeal
with the Zoning Board of Adjustment in accordance with the zoning standards. To
its supplemental brief, the City attached Ordinance Section 29-112 as the section
governing appeals to the Zoning Board allegedly in effect at the time and the
ordinance allegedly revising section 29-112. The Property Owners respond, taking
issue with the City’s attempt to supplement the record on appeal with city
ordinances and arguing that it is the City which has waived this argument.
We first consider whether the Property Owners set forth a takings claim
based on the City’s revocation decision, apart from a takings claim based on the
City’s decision to deny the SUP. 12 When we review a trial court’s decision on a
plea to the jurisdiction, we liberally construe the pleadings in the nonmovant’s
favor and look to the pleader’s intent. Miranda, 133 S.W.3d at 226; Cnty. of
Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). After reviewing the Property
Owners’ original petition in this favorable light, 13 we conclude that they
11
The City’s plea to the jurisdiction below did not address the City’s revocation decision.
Nor did the City’s initial appellate brief. The panel directed questions specific to the revocation
decision to counsel during oral argument.
12
We can discern, and the City points to, no reason aside from “waiver” why the
Property Owners would not be able to allege takings theories based on two regulatory actions by
the City.
13
We further note that the City’s plea did not challenge the Property Owners’ pleadings,
nor did the City file special exceptions.
15
sufficiently alleged a regulatory taking with regard to the City’s earlier decision to
revoke the property’s grandfathered non-conforming status pursuant to section 29-
111(a)(4). In particular, under their “cause of action–inverse condemnation and
regulatory taking” section, the Property Owners specifically allege and take issue
with the City’s intentional actions in ostensibly or purportedly invoking its zoning
regulations, specifically, “the six[-]month vacancy,” to require a SUP.
Moreover, although the City couches its argument in terms of waiver, in this
review of the trial court’s ruling on the City’s plea, we construe the City’s
argument in a jurisdictional light. That is, because the Property Owners did not
request reconsideration or a variance from the Zoning Board as to the property’s
revoked non-conforming status, such claim is not ripe. We do not agree with the
Property Owners that the City can waive ripeness as a component of subject-matter
jurisdiction because a defect in subject-matter jurisdiction can be raised at any
time. See Mayhew, 964 S.W.2d at 928; Tex. Ass’n of Bus. v. Tex. Air Control Bd.,
852 S.W.2d 440, 445 (Tex. 1993); Madero Dev., 803 S.W.2d at 400.
The record reflects the City informed the Property Owners in May 2010 that
due to the over-six-months lack of occupancy of the property, it had lost its non-
conforming status as multiple-family dwellings under section 29-111(a)(4) of the
zoning standards. The City did not inform the Property Owners regarding any
potential for appeal of this revocation, and instead indicated that a SUP application
must be reviewed by the Landmark and Planning Commissions and approved by
City Council prior to reoccupancy. Ben-Amram testified that the City did not
inform him of any right to appeal.
16
Although there have been instances where appellate courts have taken
judicial notice of municipal ordinances,14 the City did not request that this court
take judicial notice of the ordinance under Texas Rule of Evidence 204, the trial
court did not take judicial notice of or indicate familiarity with the contents of
section 29-112, only one of the City’s submissions was certified, and the Property
Owners here object to supplementation of the record. Further, even if we were to
take judicial notice of the contents of section 29-112, i.e., that the Property Owners
had the ability to appeal to the Zoning Board within a reasonable time, the City did
not elicit testimony from Ben-Amram or anyone else such as from the Zoning
Board that the Property Owners did not in fact do so. 15 The evidence in the record
as to ripeness is focused on Ben-Amram’s lack of SUP reapplication or application
for a parking variance with regard to the City’s denial of the SUP, not any alleged
failure to obtain a final decision as to the City’s removal of the property’s
grandfathered non-conforming status.
We conclude the City has not met its burden to establish that its revocation
decision was not final and authoritative. See Miranda, 133 S.W.3d at 228;
Mayhew, 964 S.W.2d at 929. Therefore, the trial court did not commit any error
by denying the City’s plea with regard to an alleged taking based on the City’s
revocation of the property’s non-conforming status.
We overrule such issue as presented in the City’s supplemental brief.
14
E.g., City Of Houston v. O’Fiel, No. 01-08-00242-CV, 2009 WL 214350, at *1 n.1
(Tex. App.—Houston [1st Dist.] Jan. 29, 2009, pet. denied) (mem. op.); City of Farmers Branch
v. Ramos, 235 S.W.3d 462, 469 (Tex. App.—Dallas 2007, no pet.); Leonard v. Burge, 74 S.W.3d
135, 137 (Tex. App.—Beaumont 2002, pet. denied).
15
Testimony from Ben-Amram that he was not told of any right to appeal is not the same
as evidence that he did not do so.
17
III. CONCLUSION
In light of the foregoing, we affirm in part the trial court’s denial of the
City’s plea to the jurisdiction with regard to the Property Owners’ takings claims
based on the City’s revocation of the property’s grandfathered non-conforming
status, and reverse in part the trial court’s denial of the City’s plea and render
judgment dismissing the Property Owners’ takings claims with regard to the City’s
denial of the SUP application.
/s/ Marc W. Brown
Justice
Panel consists of Justices McCally, Brown, and Wise.
18
12-CV-0907
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