Robert Anding and Roberta Anding v. City of Austin, Texas And Ferdinand D. Clervi, Austin Municipal Court Judge ( 2020 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-18-00307-CV
Robert Anding and Roberta Anding, Appellants
v.
City of Austin, Texas; and Ferdinand D. Clervi, Austin Municipal Court Judge, Appellees
FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-17-002142, THE HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING
MEMORANDUM OPINION
This appeal arises from a constitutional challenge to the City of Austin’s
regulations of short-term rental (STR) properties. See Austin, Tex., Code §§ 25-2-788–799
(STR ordinance). Robert and Roberta Anding, who own a house in Austin that they rent for
short time periods, sued the City for declaratory and injunctive relief after the City cited them for
violations of the STR ordinance. In their suit, the Andings claimed that the STR ordinance was
unconstitutionally vague as applied to them. In the same suit, the Andings sought mandamus
relief against Austin Municipal Court Judge Ferdinand D. Clervi related to his review of the
administrative hearing of the STR-ordinance violations. The district court granted summary
judgment in favor of the City on the Andings’ constitutional claim and sustained Clervi’s plea to
the jurisdiction as to the Andings’ mandamus claim. We affirm the summary judgment and
reverse the ruling on the plea to the jurisdiction.
The City of Austin’s STR Ordinance
The City ’s STR ordinance applies to “short-term rental use” that is “rented for
periods of less than 30 consecutive days.” Id. §§ 25-2-788–790; see id. § 25-2-3(10) (defining
“short-term rental use” as, relevant here, “the rental of a residential dwelling . . . on a temporary
or transient basis”). Property owners whose short-term rentals are subject to the STR ordinance
must satisfy eligibility criteria and obtain a license before being allowed to rent their property on
a short-term basis. See id. §§ 25-2-788–794, -796. Short-term rentals are divided into three
categories:
• Type 1—single-family residence that is “owner-occupied or is associated with an
owner-occupied principal residential unit,” id. § 25-2-788(A)(2);
• Type 2—single-family residence that “is not owner-occupied and is not associated
with an owner-occupied principal residential unit,” id. § 25-2-789(A)(3);1 and
• Type 3—residence that is “part of a multi-family residential use,” id. § 25-2-
790(A)(2).
The STR ordinance also imposes several use restrictions on short-term rentals. See id. § 25-2-
794(A)–(C) (noise restrictions), (D) (building requirements), (E)–(G) (advertising restrictions),
25-2-796 (requiring local contact). 2
1
As a practical matter, the difference between type-1 and type-2 status depends on
whether the owner claims the property as a homestead for tax purposes. See Austin, Tex., Code
§ 25-2-788(A)(2), -789(A)(3); see Zaatari v. City of Austin, No. 03-17-00812-CV, 2019 WL
6336186, at *2 n.1 (Tex. App.—Austin Nov. 27, 2019, no pet. h.). Further, the City amended the
STR ordinance in 2016 to eliminate type-2 rentals as of 2022, but this Court recently declared
that amendment unconstitutional. See Zaatari, 2019 WL 6336186 at *7–10 (declaring section
25-2-950 unconstitutional).
2
The STR ordinance also includes certain occupancy restrictions that this Court has
declared unconstitutional. See Austin, Tex. Code § 25-2-795; Zaatari, 2019 WL 6336186 at
*10–18 (declaring section 25-2-795 unconstitutional).
2
Background 3
The Andings, whose principal residence is in Houston, own a 5,000 square foot,
six-bedroom vacation house in Austin that they rent to others when they are not themselves using
the property. In an effort to avoid the City’s STR ordinance, the Andings only enter into lease
agreements that are for periods of 30 days or more. A third-party company manages and leases
the Andings’ house. 4
The Andings’ 30-day leases are often signed by multiple, unrelated tenants. The
leases state that every signatory has “full possessory interest and right of enjoyment” of the
Andings’ house “for the entire [t]erm of the [l]ease.” The leases permit signatories to “enter into
their own separate agreement for the sharing of the” Andings’ house, “including agreed upon
periods of occupancy,” but any such separate agreement does not relieve the signatories of their
obligations under the lease with the Andings.
When the Andings enter into a multi-tenant lease, their third-party manager
provides the signatories with a “Co-Tenant Agreement” or “Tenant Agreement” form that
specifies how the tenants will share the Anding lease costs and occupancy. Under the co-tenant
agreement, each co-tenant agrees to “only access the [p]roperty during the dates allocated to
such” co-tenant and to share proportionately the rent due under the Anding lease. The co-tenant
agreement specifies that the Andings and the third-party management company are not parties to
the co-tenant agreement.
3
The facts underlying this case are, unless otherwise indicated, undisputed and are taken
from the record and briefs before us.
4
Because their house in Austin is not their principal residence, the Andings, if subject to
the ordinance, would be required to obtain a type-2 license. See Austin, Tex. Code § 25-2-
789(A).
3
In sum, the Andings rent their Austin house for periods of 30 consecutive days,
but they do not directly limit how the signatories to a multi-tenant lease share the lease term and
rent due. For example, using the rental documents that are in the record before us, the Andings
rented their house to three separate tenants for the period May 27 to June 26, 2016, at a total cost
of $21,396. The three signatories to the May 27 lease agreed in a “Co-Tenant Agreement”
provided by the third-party manager that one tenant would pay $5,296.24 for the right to occupy
the property from May 27 through 30; the second tenant would pay $8,462.58 for June 12
through 19; and the third would pay $7,637.53 for June 20 through 27.5 In the second lease that
is in the record before us, the Andings rented their house for the period July 1 through July 31,
2016, at a total cost of $8,710.02. The “Tenant Agreement” specified that Robert Anding was
entitled to stay at the house from July 1 through July 5 for $0; the second tenant was entitled to
stay from July 7 through July 10 for $4,959.38; and the third tenant was entitled to stay from July
12 through 15 for $3,750.64. The final lease included in the record has only one signatory and is
for the period September 10 through October 10, 2017 at a cost of $3,056.15.
In April 2016, a nearby homeowner complained to the City about the Andings’
house. In response, the City sent out code-enforcement officers to investigate. Based on their
interviews with occupants of the Andings’ house, the officers issued four administrative citations
(dated May 14, 20, 27, and July 8, 2016) to the Andings for operating without an STR license—
specifically, for violating ordinance section 25-2-789 (type-2 rental). The officers later testified
that they had asked the tenants how long they were staying, not the term of their leases, and, if
5
The lease states that the lease term ended June 26, but the co-tenant agreement stated
that occupancy was through June 27.
4
the tenant answered by saying less than 30 days—e.g., “the weekend”—the officers issued a
citation.
The Andings paid the fines due under the May/July 2016 citations, but challenged
their validity in an administrative-hearing process. See Austin, Tex. Code §§ 2-13-1–25-13-32
(administrative adjudication of violations). The Andings argued that their rentals were not
subject to the City’s STR ordinance because the leases were for 30 days or more. After an
evidentiary administrative hearing, the City’s hearing officer fined them $600 after concluding
that the Andings had violated the STR ordinances because, based on the underlying facts, they
were renting the property to individuals and groups for less than 30 days.
The Andings appealed the hearing officer’s decision regarding the May/July 2016
citations to the Austin municipal court. See Tex. Loc. Gov’t Code § 54.044 (alternative
procedure for administrative hearing); Austin, Tex. Code § 2-13-31 (providing for appeal of
administrative hearing to municipal court). Ultimately, the municipal court judge, Clervi,
affirmed the hearing officer’s decision and denied the Andings’ motion for new trial.
In April 2017, the City cited the Andings twice more for violation of the STR
ordinance (on April 1 and 7) after a code-enforcement officer determined that the renters were
staying at the house for periods of only a few days. The April violations were adjudicated in a
second administrative hearing before a hearing officer, who determined that the Andings were in
violation of the STR ordinance and assessed a fine of $4,445. The hearing officer based his
determination on his conclusion that the co-tenant agreement “functionally nullifies the 30-day
nature of a [third-party manager] customer’s lease” of the property because the co-tenant is
agreeing to not stay for the full 30 days. The Andings acknowledged in this hearing, according
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to the hearing officer’s decision, that their leases in this case were no different than the leases in
the first administrative hearing.
The City cited the Andings again on September 29, 2017. The City issued this
violation based on the tenant’s statement to the code-enforcement officer that she was only
staying a few days, but that she was not part of a shared lease agreement. In response to a
September 29, 2017 email from the City’s code-enforcement officer, the Andings’ third-party
manager provided the City with a copy of the September 2017 lease, which has only one
signatory and is for the period September 10 through October 10, 2017 at a cost of $3,056.15.
The September 2017 citation has not been adjudicated in an administrative-hearing process.
After the municipal-court judge affirmed the first administrative-hearing decision
regarding the May/July 2016 citations, the Andings filed the underlying suit against the City,
seeking declaratory and injunctive relief related to the City’s citations. The Andings asserted
that the City’s STR ordinance is unconstitutionally vague as applied to the Andings because it
does not give fair notice that leases violate the ordinance if some, any, or all of the tenants do not
actually stay at the home for a continuous 30 days or if the tenants share the rent and periods of
possession. As relief, the Andings asked the district court to enjoin the City from enforcing the
STR ordinance as to leases of 30 days or more where (1) any tenant does not physically reside at
the property for the full possessory term of the lease, or (2) where multiple tenants agree among
themselves to share periods of physical occupancy and costs.
In the same suit, the Andings sought mandamus relief to compel “the ministerial
act that Judge Clervi apply the law correctly where the facts and circumstances demonstrate that
there is only one rational decision.” The correct law to be applied by Clervi, according to the
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Andings, is that their leases are exempt from the STR ordinance because their leases are for 30
days or more.
The parties filed cross-motions for summary judgment on the Andings’
constitutional claim. The City’s motion for summary judgment included an assertion that the
district court lacked jurisdiction over the Andings’ claims. Clervi filed a plea to the jurisdiction
challenging the Andings’ request for mandamus relief. The district court denied the Andings’
motion for summary judgment, granted the City’s motion for summary judgment, and sustained
Clervi’s plea to the jurisdiction. This appeal ensued.
Discussion
The Andings raise three issues on appeal: (1) whether the district court erred in
its summary-judgment decision because the STR ordinance is unconstitutionally vague as
applied to the Andings; (2) whether the district court had jurisdiction over the Andings’ claims;
and (3) whether the district court erred in granting Clervi’s plea to the jurisdiction on the
Andings’ request for mandamus relief. We begin by addressing the district court’s jurisdiction
over the Andings’ constitutional claims against the City.
Jurisdiction
In its plea to the jurisdiction and motion for summary judgment, the City
challenged the district court’s jurisdiction over the Andings’ claim, arguing that the Uniform
Declaratory Judgments Act (UDJA) does not waive immunity for a declaration of rights under an
ordinance. See generally Tex. Civ. Prac. & Rem. Code §§ 37.001–.011. The district court did
not rule on the plea to the jurisdiction, but it did grant the City’s motion for summary judgment
without relying on any specific grounds. On appeal, the Andings contend that, to the extent that
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it concluded otherwise in granting the summary judgment, the district court had jurisdiction over
its constitutional claim. We agree.
As the City explains, the UDJA does not waive immunity where the plaintiff
seeks a declaration of rights under a statute or ordinance. See Texas Dep’t of Transp. v. Sefzik,
355 S.W.3d 618, 621 (Tex. 2011). However, our review of the record indicates that the Andings
nonsuited their declaration-of-rights claim by omitting it from their live pleading, leaving (as to
the City) only their claim that the ordinance is unconstitutionally vague. The UDJA does waive
immunity for claims alleging that a statute or ordinance is unconstitutional. See City of El Paso
Heinrich, 284 S.W.3d 366, 373 n.6 (Tex. 2009) (noting that UDJA waives sovereign immunity
for claims challenging the validity or a statute or ordinance because it requires service on the
attorney general in suits where a statute or ordinance is alleged to be unconstitutional).
Accordingly, the district court had jurisdiction over the Andings’ constitutional claims.
The Andings’ Vagueness Challenge
In their first issue, the Andings argue that the district court erred in denying their
motion for summary judgment and granting the City’s motion on their claim that the City’s STR
ordinance is unconstitutionally vague as applied to them. Specifically, they argue that the
ordinance’s phrase “rented for periods of less than 30 consecutive days” is vague as applied to
them because the City has cited them for violations even though their leases satisfy the
ordinance’s facial requirements. They also argue that the ordinance is vague as applied to them
because the City construes the ordinance as requiring mandatory, physical occupancy by any
tenant for the full term of a 30-day lease, even where there is only one tenant under a 30-day
lease.
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Ordinances are subject to the same constitutional requirements and construction
canons as statutes. Mills v. Brown, 316 S.W.2d 720, 723 (Tex. 1958) (“The same rules apply to
the construction of municipal ordinances as to the construction of statutes.”). To determine
whether a statute is unconstitutionally vague, we begin by presuming that the statute is
constitutional. Walker v. Gutierrez, 111 S.W.3d 56, 66 (Tex. 2003). The party challenging the
statute’s constitutionality has the burden of showing that the statute fails to meet constitutional
requirements. Id. A statute or ordinance is unconstitutionally vague if the persons regulated by
it are exposed to risk or detriment without fair warning or if it invites arbitrary and
discriminatory enforcement by its lack of guidance for those charged with its enforcement. See
Commission for Lawyer Discipline v. Benton, 980 S.W.2d 425, 437 (Tex. 1998); Texas Liquor
Control Bd. v. Attic Club, Inc., 457 S.W.2d 41, 45 (Tex. 1970); City of Webster v. Signad, Inc.,
682 S.W.2d 644, 646 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.). Implicit in this
constitutional safeguard is the idea that laws must have an understandable meaning and must set
legal standards that are capable of application. Lindig v. City of Johnson City, No. 03-11-00660-
CV, 2012 WL 5834855 at *3 (Tex. App.—Austin Nov. 4, 2012, no. pet) (mem. op.) (citing City
of Mesquite v. Aladdin’s Castle, Inc., 559 S.W.2d 92, 94 (Tex. App.—Dallas 1977, writ ref’d
n.r.e.)). “It is established that a law fails to meet the standards of due process if it is so vague
and standardless as to leave a governing body free to decide, without any legally fixed
guidelines, what is prohibited in each particular case.” Id. Due process is violated and a law is
invalid if persons of common intelligence are compelled to guess at a law’s meaning and
applicability. Pennington v. Singleton, 606 S.W.2d 682, 689 (Tex. 1980); Attic Club, 457
S.W.2d at 45; Signad, 682 S.W.2d at 646.
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Regulatory statutes governing business activity are allowed greater leeway than is
allowed criminal statutes in applying the “fair notice” test. Pennington, 606 S.W.2d at 689
(citing Papachristou v. City of Jacksonville, 405 U.S. 156, 162 (1972) (“In the field of regulatory
statutes governing business activities, where the acts limited are in a narrow category, greater
leeway is allowed.”)). “A law is not unconstitutionally vague merely because it does not define
words or phrases.” Vista Healthcare, Inc. v. Texas Mut. Ins., 324 S.W.3d 264, 273 (Tex. App.—
Austin 2010, pet. denied). Only a reasonable degree of certainty is required, id. (citing
Pennington, 606 S.W.2d at 689), and the reasonable-certainty requirement “‘does not preclude
the use of ordinary terms to express ideas which find adequate interpretation in common usage
and understanding.’” Signad, 682 S.W.2d at 646–47 (quoting Sproles v. Binford, 286 U.S. 374,
393 (1932)). Moreover, “the mere fact that the parties disagree as to [an ordinance’s] meaning
does not mean we must necessarily guess at its meaning.” Mills v. Fletcher, 229 S.W.3d 765,
770 (Tex. App.—San Antonio 2007, no pet.); see Vista Healthcare, 324 S.W.3d at 273.
Applying these principles, we conclude that the STR ordinance’s applicability
provision gives fair warning of what conduct will render a residential rental subject to the
ordinance. The ordinance states that it applies to “short-term rental use” that “is rented for
periods of less than 30 consecutive days.” Austin, Tex. Code §§25-2-788 (type 1), -789 (type 2),
-790 (type 3). Using the common and ordinary meaning of “rent” and “rental” and incorporating
the City Code’s definition of “short-term rental use,” this means that the City’s STR ordinance
applies to the paid-for grant of occupancy or use of a residential dwelling for less than 30
consecutive days. See id. § 25-2-3(B)(10) (defining “short-term rental use” as “the rental of a
residential dwelling . . . on a temporary or transient basis”); American Heritage Dictionary of the
English Language 1488 (5th ed. 2011) (defining verb “rent” as “to grant temporary occupancy or
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use (of one’s own property or a service) in return for regular payments”; and “rental” as “the act
of renting”); Rent, Black’s Law Dictionary (10th ed. 2014) (“To pay for the use of another’s
property.”).
Standing alone, an Anding 30-day lease would fall outside the plain language of
the ordinance because the lease grants the right to use or occupy the house for 30 consecutive
days in return for payment—i.e., under such a lease, the Andings’ house is rented to the lessee
(or lessees) for a period of 30 consecutive days for a certain dollar amount. But the 30-day lease
cannot be the end of our inquiry where, as here, there is more to the transaction. This is because
the applicability provision focuses on “the rental,” not on the owner’s conduct or the first
transaction: “the rental of a” residence, id. § 2-2-3(B)(1) (defining “short-term rental use”)
(emphasis added), “that is rented for periods of less than 30 consecutive days,” id. § 25-2-
789(A)(1) (type-2 applicability provision) (emphasis added). Here, the adjudicated citations
were issued in situations where the lessee signatories to a 30-day lease had entered into co-tenant
agreements among themselves to divide the period of possession and the total rent due. In other
words, each signatory granted to the other signatories, in return for consideration (i.e., a
reduction in the total lease cost), the right to exclusively occupy or use the house for portions of
the 30-day term they each had a right to. As such, the Andings’ house was “rented for periods of
less than 30 consecutive days” and, consequently, the transactions fall under the plain language
of the STR ordinance’s applicability provision. See id. § 25-2-789(A)(1); see also Amco Trust,
Inc. v. Naylor, 317 S.W.2d 47, 50 (Tex. 1958) (explaining that if a lessee who transfers all or
part of his interest under a lease to another retains any reversionary interest, the transaction is
considered a sublease). To ignore the underlying co-tenant agreement would require us to
effectively rewrite the ordinance to require that it apply only to a rental by the owner of the
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house or to the first “rental” in a series of transactions covering the 30-day period. See, e.g., Iliff
v. Iliff, 339 S.W.3d 74, 81–82 (Tex. 2011) (“‘We have no right to engraft upon the statute any
conditions or provisions not placed there by the legislature.’” (quoting Duncan, Wyatt & Co. v.
Taylor, 63 Tex. 645, 649 (1885)).
The Andings also contend that the STR ordinance is unconstitutionally vague as
applied because the City has issued a citation—unadjudicated for now—in a situation where the
Andings had entered into a 30-day lease with only one signatory. This means, the Andings
contend, that the City is improperly construing the STR ordinance to require mandatory, physical
occupancy by a tenant for the full term of a 30-day lease, even where there is only one tenant
under a 30-day lease. We agree that under a plain-meaning review, the applicability provision
does not impose a physical-occupancy or -use requirement. The “30 consecutive days”
requirement refers to the duration of the rental, not the duration of the use or occupancy. See
Austin, Tex. Code § 25-2-789(A)(1) (applying the ordinance to short-term rental that “is rented
for periods of less than 30 consecutive days”) (emphasis added). But the City’s potentially
improper construction does not render the ordinance unconstitutionally vague absent something
in the ordinance that “invites arbitrary and discriminatory enforcement.” See Benton, 980
S.W.2d at 437. As we explained above, the applicability provision gives fair notice of the types
of conduct that are subject to regulation. The fact that the provision does not expressly list every
fact pattern that would not be subject to the STR ordinance does not make the ordinance vague
and, importantly, it does not invite the City to expand the scope of the ordinance beyond its plain
language. See Pennington, 606 S.W.2d at 689 (“‘Most statutes must deal with untold and
unforeseen variations in factual situations, and the practical necessities of discharging the
business of government inevitably limit the specificity with which legislators can spell out
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prohibitions. Consequently, no more than a reasonable degree of certainty can be demanded.’
Statutes are not automatically invalidated as vague simply because difficulty is found in
determining whether certain marginal offenses fall within their language.” (quoting United States
v. National Dairy Prods. Corp., 372 U.S. 29, 32 (1963))).
We hold that the applicability provision of the STR ordinance is not
unconstitutionally vague as it was applied to the Andings. A reasonable person of ordinary
intelligence has fair notice of the type of conduct that renders a rental subject to the STR
ordinance. See Benton, 980 S.W.2d at 437. Likewise, the applicability provision is not so vague
and standardless as to leave the City free to decide, without any legally fixed guidelines, what
conduct and transactions are covered by the STR ordinance, such that it invites arbitrary and
discriminatory enforcement. See Pennington, 606 S.W.2d at 689.
The Andings’ Request for Mandamus Relief
The Andings asked the district court to compel “the ministerial act that Judge
Clervi apply the law correctly where the facts and circumstances demonstrate that there is only
one rational decision.” The correct law to be applied, according to the Andings’ petition, is that
their leases are exempt from the STR ordinance because their leases are for 30 days or more.
Clervi asserted a plea to the jurisdiction, arguing that the district court lacked jurisdiction over
the Andings’ petition for writ of mandamus because the Andings have an adequate remedy at
law and they do not seek to compel a ministerial act. See, e.g., Walker v. Packer, 827 S.W.2d
833, 839–41 (discussing grounds for mandamus relief). The district court sustained Clervi’s plea
and dismissed the Andings’ petition. On appeal, the Andings assert that the district court erred in
13
sustaining Clervi’s plea because the district court has jurisdiction over their request for
mandamus relief. We agree.
The district court has exclusive original jurisdiction over mandamus proceedings
except when the Texas Constitution or a statute confers original jurisdiction in another tribunal.
In re Nolo Press/Folk Law, Inc., 991 S.W.2d 768, 775 (Tex. 1999) (orig. proceeding). The
Texas Constitution empowers trial courts to issue writs of mandamus to compel public officials
to perform ministerial acts. Tex. Const. art. V, § 8. An original proceeding for a writ of
mandamus initiated in the trial court is a civil action subject to trial and appeal on substantive
issues and rules of procedure as any other civil suit. See Anderson v. City of Seven Points, 806
S.W.2d 791, 792 n.1 (Tex. 1991). Thus, the trial court had jurisdiction to consider the Andings’
action seeking mandamus relief against Clervi, in his capacity as a municipal court judge. See
Thompson v. Velasquez, 155 S.W.3d 551, 553–54 (Tex. App.—San Antonio 2004, no pet.)
(holding district courts have general mandamus jurisdiction over municipal courts).
Clervi argued, and the district court apparently agreed, that mandamus was not
available because the Andings had an adequate remedy by appeal and because the relief sought
was not the performance of a ministerial act. Such a ruling would not, however, operate to
deprive the district court of subject-matter jurisdiction over the Andings’ claim. Instead, such a
conclusion would dictate the denial of the requested mandamus relief, a decision that could then
be appealed as in any other civil suit. We express no opinion on the merits of the relief the
Andings seek. However, because the district court had subject-matter jurisdiction over the
Andings’ request for a writ of mandamus against Clervi, we hold that it erred in granting the plea
to the jurisdiction. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000) (“A plea
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to the jurisdiction is a dilatory plea, the purpose of which is to defeat a cause of action without
regard to whether the claims asserted have merit.”).
Conclusion
For the reasons stated, we conclude that the district court did not err in denying
the Andings’ motion for summary judgment and in granting the City’s motion for summary
judgment. Accordingly, we affirm the district court’s summary judgment in favor of the City.
For the reasons stated, we also conclude that the district court did err in sustaining Clervi’s plea
to the jurisdiction. We therefore reverse the district court’s order sustaining the plea and remand
the Andings’ mandamus claim against Clervi to the district court for further proceedings.
__________________________________________
Jeff Rose, Chief Justice
Before Chief Justice Rose, Justices Triana and Kelly
Affirmed in Part; Reversed and Remanded in Part
Filed: April 29, 2020
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