A.H.D. Houston, Inc. v. City of Houston

316 S.W.3d 212, 2010 Tex. App. LEXIS 4740, 2010 WL 2542523
CourtCourt of Appeals of Texas
DecidedJune 24, 2010
Docket14-08-00758-CV
StatusPublished
Cited by17 cases

This text of 316 S.W.3d 212 (A.H.D. Houston, Inc. v. City of Houston) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A.H.D. Houston, Inc. v. City of Houston, 316 S.W.3d 212, 2010 Tex. App. LEXIS 4740, 2010 WL 2542523 (Tex. Ct. App. 2010).

Opinion

OPINION

LESLIE B. YATES, Justice.

This appeal concerns an ordinance enacted in 1997 by appellee the City of Houston that strengthened existing regulations for issuing permits to operate sexually-oriented businesses (“SOBs”). Appellants are ten SOB owners who were denied, in whole or in part, their requests for additional time to recoup their investments before being subject to the ordinance. They sought judicial review of these decisions, and the trial court upheld the decisions. Appellants argue that the trial court applied an incorrect standard of review and erred in refusing to require the hearing officers who denied their requests to make fact findings. They also contend that the conduct of the hearing officers violated their rights to due process and due course of law and the proceedings were violative of the separation of powers clause in the Texas Constitution. We affirm.

BACKGROUND

In 1997, the City of Houston enacted Ordinance 97-75. This ordinance amended existing ordinances regulating SOBs, including those regulating where SOBs could be located. Appellants held valid permits to operate SOBs, but under the new ordinance, appellants could no longer operate in their current locations. To give business owners affected by the new ordinance time to recoup their investments and adjust to the new regulations, the ordinance did not go into effect for 180 days. Furthermore, the ordinance contains a procedure known as amortization whereby an affected business owner could apply for additional time to operate under the existing regulations by proving it needed that time to recoup his investment. Each appellant applied for additional time and, at a hearing, provided evidence to a hearing officer to justify its request. The hearing officers denied appellants’ requests, either in whole or in part. The ordinance provides that anyone aggrieved by such a decision can seek judicial review immediately following the decision.

Meanwhile, many SOB owners, including all appellants, brought a federal lawsuit challenging the constitutionality of the ordinance under many different theories. See N.W. Enters., Inc. v. City of Houston, 27 F.Supp.2d 754 (S.D.Tex.1998), rev’d in part, 352 F.3d 162 (5th Cir.2003). After a decade of litigation, including two trips to the Fifth Circuit, the constitutionality of nearly every part of the ordinance was *216 upheld. 1 The federal district court entered judgment on January 31, 2007. The business owners filed several post-judgment motions, including a motion to amend or make additional findings and to alter or amend the judgment. The federal district court denied these motions on March 29, 2007.

The City and the SOB owners agreed that amortization hearings would continue during the pendency of the federal constitutional litigation but that any judicial review of those decisions would be stayed until entry of a final judgment. After the federal district judge denied the post-judgment motions, appellants filed the present judicial review suit in Texas district court. 2 The trial court affirmed the hearing officers’ decisions regarding appellants’ requests for additional time to recoup their investments, and this appeal followed.

ANALYSIS

A. Timeliness

Before we analyze appellants’ issues, we begin with the City’s cross-issue. The City argues that appellants’ judicial review suit is untimely. The parties reached an agreement, which was entered as an agreed order in federal district court, that judicial review of the amortization decisions would be stayed until there was a final judgment in the federal case. The order provided that upon “entry of a final judgment,” the judicial review process would begin according to the procedures set forth in the ordinance. The ordinance provides that any judicial review is to begin “immediately” following an adverse decision and states that any decision is not enforceable for twenty days in order to give the aggrieved party an opportunity to seek judicial review. 3 Therefore, according to the City, the time frame for judicial review began on January 31, 2007, when the federal court entered the judgment. Because appellants did not seek judicial review within twenty days of this date but rather waited until twenty days after the federal court denied its post-judgment motions, the City argues that the judicial review suit is untimely. We disagree with the City’s analysis.

In their agreement, the parties included a provision that the period of time for stay of judicial review ends with entry of a final judgment. Because the agreement was made in federal court, we will look to federal law regarding finality of judgments. Though the judgment entered on January 31, 2007 may have been a final judgment at the time of entry, that changed when the owners filed several post-judgment motions, including a motion to amend or make additional findings under Federal Rule of Civil Procedure 52(b) and a motion to alter or amend the judgment under Federal Rule of Civil Proce *217 dure 59(e). Such motions destroyed the finality of the judgment because the court’s ruling on the motions could obviate the need for an appeal. See Leishman v. Associated Wholesale Elec. Co., 318 U.S. 203, 205-06, 63 S.Ct. 543, 87 L.Ed. 714 (1943); Whitaker v. City of Houston, 963 F.2d 831, 836 (5th Cir.1992); Brown v. United Ins. Co. of Am., 807 F.2d 1239, 1242 (5th Cir.1987) (per curiam); see also In re X-Cel, Inc., 823 F.2d 192, 193 (7th Cir.1987). However, the federal district court’s denial of the post-judgment motions re-established the finality of the judgment. See Whitaker, 963 F.2d at 836; Brown, 807 F.2d at 1242; see also Simmons v. Reliance Standard Life Ins. Co. of Tex., 310 F.3d 865, 867 (5th Cir.2002). Accordingly, we conclude that the end of the judicial review stay began when the district court denied the post-judgment motions and therefore, appellants’ judicial review suit was timely. We overrule the City’s cross-issue.

B. Standard of Review

Appellants complain that the trial court applied an improper standard in its judicial review of the hearing officers’ decisions. The trial court reviewed the hearing officers’ decisions for substantial evidence, which is a limited, deferential standard requiring only more than a mere scintilla of evidence to uphold the decisions. See Montgomery Indep. Sch. Dist. v.

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Bluebook (online)
316 S.W.3d 212, 2010 Tex. App. LEXIS 4740, 2010 WL 2542523, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ahd-houston-inc-v-city-of-houston-texapp-2010.