the City of Houston v. John O'Fiel and Mary Jane O'Fiel

Opinion issued January 29, 2009

In The

Court of Appeals

For The

First District of Texas

NO. 01-08-00242-CV

THE CITY OF HOUSTON, Appellant

V.

JOHN O’FIEL and MARY JANE O’FIEL, Appellees

On Appeal from County Civil Court of Law Number One

Harris County, Texas

Trial Court Cause No. 901201

MEMORANDUM OPINION

Appellant, the City of Houston (“the City”), appeals the trial court’s denial of

its plea to the jurisdiction. The City argues that the trial court should have granted its

plea to the jurisdiction because the suit filed against it by appellees, John and Mary

Jane O’Fiel (“the O’Fiels”), is not ripe for adjudication. We affirm. Background

John and Mary Jane O’Fiel own property near White Oak Bayou, within the

City of Houston. The property consists of 45,750 square feet of land and one 628-

square-foot house. According to the O’Fiels, prior to 2006, the City’s Code of City

Ordinances (“the Code”), restricted development within the floodway of the City but

allowed the city engineer to issue permits notwithstanding those restrictions. In 2006,

the City amended the Code to further restrict development within the floodway.

Section 19-43(a)(2) prohibits the issuance of a permit for “ development to be

located in any floodway, . . . if that development provides for [n]ew construction,

additions to existing structures, or substantial improvement of any structure within

the floodway.” Section 19-43(d) allows the city engineer to issue a permit, even if

a permit application is denied under section 19-43(a)(2), so long as the general

appeals board determines in writing that the improvement is insubstantial and will not

increase flood levels during occurrence of the base flood nor impede the flow of

floodwaters.

The O’Fiels filed suit against the City in 2007, alleging that, after the Federal

Emergency Management Agency approved new Flood Insurance Rate Maps in June

2007, their property was within a newly delineated floodway. The O’Fiels allege that,

in light of that new designation, the City’s 2006 amendments to Section 19-43(c) of

the Code prohibit the issuance of building permits for “new construction, additions

to existing structures or substantial improvement of any structure” on their property.

In addition, the O’Fiels contend that the amended Code prohibited the City Engineer

from issuing any building permits for such construction, stating that the Code “simply

denies [the O’Fiels] the ability to secure a building permit without a right to be heard

by any administrative body or agency.” The O’Fiels allege that the City’s ordinance

“unlawfully deprived [them] of use, benefit and enjoyment of the Property and has

drastically reduced its value because [they] can neither construct any improvement

in or upon the Property nor sell the Property to anyone who desires to construct any

improvements in or upon the Property.” Finally, the O’Fiels allege that “no

administrative procedures have been established by [the City] for the issuance of

building permits on properties situated in the Floodways within the geographical

boundaries of the City of Houston.”

The City’s answer alleges that the O’Fiels had failed to exhaust the

administrative remedies allowed by the Code. The City also provided an affidavit

from the City Engineer attesting that the O’Fiels had not applied for a development

permit for their property, that no such permit had been yet denied to them, and that

no appeal had been taken from such a denial. The City filed a plea to the jurisdiction

contending that the City Engineer has exclusive authority to approve or disapprove

an application for a permit for proposed development in a floodway, and that the

Code also allows for an appeal to the General Appeals Board if the City Engineer

denied a development permit for an improvement that the Board determined was

“insubstantial.” The City argues that, because the O’Fiels had not filed an application

for a permit, nor had they yet appealed such a denial as allowed by the Code, their

claims were not ripe and the trial court lacked jurisdiction to consider their petition.

The City again attached the affidavit of the City Engineer, stating that the O’Fiels had

not sought, nor had they been denied or appealed, a development permit for their

property.

The O’Fiels responded that, under the plain language of the Code, their

intended use for the property—residential construction—was expressly forbidden and

the Code allowed no discretion or variances. After hearing, the trial court denied the

City’s plea to the jurisdiction, and this interlocutory appeal followed.

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). If the plea challenges the sufficiency of the claimant’s pleadings, the trial

court must construe the pleadings liberally in the claimant’s favor and deny the plea

if the claimant has alleged facts affirmatively demonstrating jurisdiction to hear the

case. If the pleadings are insufficient, the court should afford an opportunity to

replead if the defects are potentially curable but may dismiss if the pleadings

affirmatively negate the existence of jurisdiction. Id. at 226–27.

If the plea to the jurisdiction challenges the existence of jurisdictional facts, the

trial court must consider 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 fact-finder.

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 227–28. In reviewing the evidence presented in support of the plea to the

jurisdiction, we take as true all evidence favorable to the nonmovant. Id. at 228 . We

indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.

Id. “[T]his standard generally mirrors that of a summary judgment under Texas Rule

of Civil Procedure 166a(c). . . . By requiring the [political subdivision] 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

quotations and citation omitted); accord Dallas County v. Wadley , 168 S.W.3d 373,

377 (Tex. App.—Dallas 2005, pet. denied) (“[On a plea to the jurisdiction,] the

burden is on the government to meet the summary judgment standard of proof.”).

We remain mindful of the Texas Supreme Court’s admonishment that, although

the plaintiff’s claims may form the context against which the jurisdictional plea is

determined, the plea generally “should be decided without delving into the merits of

the case.” Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000). In

general, “the proper function of a dilatory plea does not authorize an inquiry so far

into the substance of the claims presented that plaintiffs are required to put on their

case simply to establish jurisdiction.” Id. at 554 .

Analysis

The Texas Constitution provides that no “person’s property shall be taken,

damaged or destroyed for or applied to public use without adequate compensation

being made.” Tex. Const. art. I, § 17; Sheffield Dev. Co., Inc. v. City of Glenn

Heights , 140 S.W.3d 660, 669 (Tex. 2004). 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. The Just Compensation

Clause applies to the states by operation of the Fourteenth Amendment. Mayhew v.

Town of Sunnyvale , 964 S.W.2d 922, 933 (Tex. 1998).

Inverse condemnation occurs when property is taken for public use without

proper condemnation proceedings and the property owner attempts to recover

compensation for that taking. City of Dallas v. Blanton , 200 S.W.3d 266, 271 (Tex.

App.—Dallas 2006, no pet.). To state a cause of action for inverse condemnation, a

plaintiff must allege: (1) an intentional governmental act; (2) that resulted in his

property being taken, damaged, or destroyed; (3) for public use. Id. Although the

Texas Constitution’s adequate compensation provision is worded differently than the

just compensation clause of the Fifth Amendment to the United States Constitution,

the Texas Supreme Court has described them as comparable and generally looks to

federal cases for guidance in takings cases. See Hallco Tex., Inc. v. McMullen

County , 221 S.W.3d 50, 56 (Tex. 2006) ; Sheffield , 140 S.W.3d at 669 .

Is the O’Fiels’ claim ripe?

A regulatory-takings claim may challenge a land-use restriction on its face or

as applied to particular property. Keystone Bituminous Coal Ass’n v. DeBenedictis ,

480 U.S. 470, 494 , 107 S. Ct. 1232, 1247 (1987) (recognizing “an important

distinction between a claim that the mere enactment of a statute constitutes a taking

and a claim that the particular impact of government action on a specific piece of

property requires the payment of just compensation”); City of Corpus Christi v. Pub.

Util. Comm’n , 51 S.W.3d 231, 247 (Tex. 2001). A facial challenge is ripe when the

restriction is imposed, but an as-applied claim is not ripe until the regulatory authority

has made a final decision regarding the application of the regulation to the property.

Compare Yee v. City of Escondido , 503 U.S. 519 , 533–534, 112 S. Ct. 1522 , 1531–

32 ( 1992) with Williamson County Reg’l Planning Comm’n v. Hamilton Bank , 473

U.S. 172, 186 , 105 S. Ct. 3108, 3116 (1985). Because the O’Fiels do not allege that

the sections of the Code at issue do not “substantially advance a legitimate state

interest” no matter how they are applied, we construe the O’Fiels’ claim as

complaining that the Code, as applied to their property, amount to an unconstitutional

regulatory taking of their property. Yee, 503 at 533-534, 112 S. Ct. at 1531–32.

Ripeness is an element of subject matter jurisdiction and, as such, is subject

to de novo review. Mayhew v. Town of Sunnyvale , 964 S.W.2d 922 , 928–29 (Tex.

1998). We look to the experience of the federal courts in determining the ripeness of

constitutional challenges to land-use regulations. Id.

“[W]hile property may be regulated to a certain extent, if regulation goes too

far it will be recognized as a taking.” Pa. Coal Co. v. Mahon , 260 U.S. 393, 415 , 43

S. Ct. 158 , 160 ( 1922). In an as-applied takings claim, “[a] court cannot determine

whether a regulation has gone ‘too far’ unless it knows how far the regulation goes.”

Mayhew , at 929 . To that end, a “final decision” in this context usually requires both

a rejected development plan and the denial of a variance from the controlling

regulation. Id. ; see also Williamson County Reg’l Planning Comm’n , 473 U.S. at

186–88, 105 S. Ct. 3108 , 3116 (holding takings claim not ripe where the property

owner never sought variances from the zoning ordinance).

The term “variance” is “not definitive or talismanic”; it encompasses “other

types of permits or actions [that] are available and could provide similar relief.”

Mayhew , 964 S.W.2d at 930 . The variance requirement is therefore applied flexibly

in order to serve its purpose of giving the governmental unit an opportunity to “grant

different forms of relief or make policy decisions which might abate the alleged

taking.” Id. However, futile variance requests or re-applications are not required.

Id. at 929 . For instance, property owners are not required to seek permits for

developments that the “property owner does not deem economically viable.” Id. at

932 ; see also Palazzolo v. Rhode Island , 533 U.S. 606, 622 , 121 S. Ct. 2448, 2460

(2001) (“Ripeness doctrine does not require a landowner to submit applications for

their own sake.”). “ While a landowner must give a land-use authority an opportunity

to exercise its discretion, once it becomes clear that the agency lacks the discretion

to permit any development, or the permissible uses of the property are known to a

reasonable degree of certainty, a takings claim is likely to have ripened.” Palazzolo ,

533 U.S. at 620 , 121 S. Ct. at 2459 . Where an ordinance “prohibit[s] precisely the

use” the property owner “intended to make of th[e] property, and nothing in the

ordinance suggest[s] any exceptions would be made,” the owner’s “taking claim [i]s

ripe upon enactment” of the ordinance “because at that moment the ‘permissible uses

of the property [are] known to a reasonable degree of certainty.’” Hallco Tex., Inc.,

221 S.W.3d at 60 (quoting Palazzolo , 533 U.S. at 620 , 121 S. Ct. at 2459 ). We review

the ripeness evidence before the trial court in the light most favorable to the O’Fiels.

Miranda , 133 S.W.3d at 227–28.

The City argues that, because the O’Fiels have not applied for a permit to

develop their property, their claim for inverse condemnation cannot be ripe and the

trial court should have granted the City’s plea to the jurisdiction. The City relies

upon the Texas Supreme Court’s decision in Mayhew to argue that there must be a

“final decision” before the O’Fiels’ claim can be ripe. Without such an application,

and a denial of that application, the City argues it cannot be known for certain

whether the O’Fiels’ property has been taken or impaired in any way . The City

essentially argues that, despite the seemingly mandatory language of the ordinance,

the City or some agent thereof might grant the O’Fiels a variance or development

permit for their property to allow construction.

The City’s reliance on Mayhew misplaced. In Mayhew , the Mayhews sought

permission for a development with a density exceeding the one-unit-per acre zoning

requirement, and they told the town officials that a planned development would not

be feasible under the one-unit-per-acre zoning. Id. at 925–26. After the Mayhews

engaged in a series of discussions with officials lasting over a year, and submitted

several studies and evaluative reports, the planned development request was denied.

Id. The Mayhews subsequently filed suit alleging, among other things, that the

town’s refusal to approve the planned development was a taking of their property.

Id. The town argued that the Mayhews’ claims were not ripe because they submitted

only one planned development application and did not thereafter reapply for

development or submit a variance. Id. at 931 . The Supreme Court found that, under

the unique facts of the case, the Mayhews’ efforts to gain permission for the

development were sufficient to make their claim ripe, and any further applications

would have been futile. Id. Unlike Mayhew , this case does not present the issue of

whether the O’Fiels’ efforts thus far to gain a variance or permit are sufficient, but

whether the Code’s plain language removes the need for any such efforts.

The O’Fiels point out that the plain language of section 19-43(a)(2) forbids

exactly the type of development they wish to pursue on their property—“[n]ew

construction, additions to existing structures, or substantial improvement of any

structure within the floodway,” and permits the city engineer to issue permits only for

those permits which are initially denied but are later determined to be “insubstantial.”

In addition, the O’Fiels point to section 19-20 of the Code which, while generally

allowing applications for variances from the Code’s requirements on the grounds of

a “substantial hardship, ” specifically forbids variances for development within any

floodway “if the development cannot meet the requirements of section 19-43(b) of

this Code.” Thus, the O’Fiels contend, applying for a permit or a variance would

have been an exercise in futility and a waste of resources.

In light of the plain language of the ordinance, and specifically section 19-20's

specific language prohibiting variances for the type of development sought by the

O’Fiels, we believe the outcome in this case is controlled by the United States

Supreme Court’s decision in Suitum v. Tahoe Regional Planning Agency , 520 U.S.

725 , 117 S. Ct. 1659 (1997) and the Supreme Court of Texas’ opinion in Hallco Tex.,

Inc., 221 S.W.3d 50 (Tex. 2006).

In Suitum , a landowner filed suit claiming an unconstitutional regulatory taking

of her land after the regional planning agency adopted a plan restricting development

on parcels of land carrying runoff into area watersheds, a designation which included

her land. The agency rules at issue did not permit any “additional land coverage or

other permanent land disturbances” on such land. 520 U.S. at 730 , 117 S. Ct. at 1663 .

Further, the rules did not provide for variances or exceptions, although they did

provide for certain credits that landowners of land ineligible for construction could

sell to owners of eligible parcels . Id. The agency argued that Suitum’s claim could

not be ripe, in part because she had not yet applied for a permit to develop her land.

The Supreme Court disagreed, finding that, in light of the agency’s complete lack of

discretion under its rules to actually allow Suitum to build on her land, “no occasion

exists for applying [the] requirement that a landowner take steps to obtain a final

decision about the use that will be permitted on a particular parcel.” Id. at 739 , 117

S. Ct. at 1667 .

In Hallco , the plaintiff purchased land in McMullen County near the Choke

County Reservoir, which supplies water to Corpus Christi and surrounding areas.

Hallco intended to operate an industrial waste landfill on the site. 221 S.W.3d at 60 .

After Hallco purchased the land, the McMullen County Commissioners Court passed

an ordinance prohibiting the disposal of solid waste within three miles of the

Reservoir, an area that included Hallco’s property. Id. at 52–53. The ordinance did

not establish any procedures for obtaining a variance. Id. at 53 . Hallco filed suit

against the County alleging that the ordinance amounted to an unconstitutional

regulatory taking of its property. Id. In addressing when Hallco’s takings claim had

ripened, the Court noted that, “unlike Williamson County , this is not a case in which

a general zoning or land-use restriction was subject to discretionary application.” Id.

at 60 . Instead, “the ordinance here prohibited precisely the use that Hallco intended

to make of this property, and nothing in the ordinance suggested any exceptions

would be made.” Id. Accordingly, the Court concluded that “Hallco’s claim was

ripe upon enactment because at that moment the permissible uses of the property were

known to a reasonable degree of certainty.” Id. (citing Palazzolo , 533 U.S. at 620 ,

121 S. Ct. at 2459 ).

Like the plaintiff in Suitum , the O’Fiels allege that the Code does not provide

the City or any other agency discretion in allowing the O’Fiels to develop or build

upon their property as they desire. Similarly, as in Hallco , the Code prohibits

precisely the use the O’Fiels claim that they intend to make of their property, and

nothing in the ordinance suggests any exceptions or variances would be granted to

them for this use. The City did not present any evidence to raise a question of fact

as to these assertions. Accordingly, we overrule the City’s issue and find that, based

upon the pleadings and the evidence that the record reflects were before the trial court

at the time of the hearing, the issue of whether the Code constitutes an

unconstitutional regulatory taking of the O’Fiels’ property was ripe for adjudication.

Conclusion

We affirm the trial court’s denial of the City’s plea to the jurisdiction.

George C. Hanks, Jr.

Justice

Panel consists of Justices Jennings, Hanks, and Bland.