Becky, Ltd. v. the City of Cedar Park, Matt Powell, Stephen Thomas, Lyle Grimes, Lowell Moore, Jon Lux, and Don Tracy

Opinion

ACCEPTED 03-15-00259-CV 7162333 THIRD COURT OF APPEALS AUSTIN, TEXAS 9/30/2015 11:47:56 AM JEFFREY D. KYLE CLERK

No. 03-15-00259-CV FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS IN THE 9/30/2015 11:47:56 AM THIRD COURT OF APPEALS JEFFREY D. KYLE Clerk AUSTIN, TEXAS

BECKY, LTD., Appellant V.

THE CITY OF CEDAR PARK, STEPHEN THOMAS, MATT POWELL, MITCH FULLER, LYLE GRIMES, LOWELL MOORE, JON LUX, AND DON TRACY, Appellees

ON APPEAL FROM THE 126TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS

REPLY BRIEF OF APPELLANT

ELIZABETH G. BLOCH LEONARD B. SMITH State Bar No. 02495500 State Bar No. 18643100 Heidi.bloch@huschblackwell.com lsmith@leonardsmithlaw.com Husch Blackwell LLP P.O. Box 684633 111 Congress, Suite 1400 Austin, Texas 78768 Austin, Texas 78701 (512) 914-3732 (512) 472-5456 (512) 532-6446 (fax) (512) 479-1101 (fax) Attorneys for Becky, Ltd.

ORAL ARGUMENT REQUESTED TABLE OF CONTENTS REPLY TO APPELLEES’ STATEMENT OF FACTS ............................................1

SUMMARY OF THE REPLY ..................................................................................2

ARGUMENT AND AUTHORITIES ........................................................................3

I. The trial court has subject-matter jurisdiction over Becky’s ultra vires claims against the individual defendants in their official capacities. ..............3

A. Orderly development of subdivisions is a critical municipal function. .................................................................................................4

B. The City Council effectively granted a variance to the City’s subdivision ordinances without the authority to do so. .........................6

C. The City Council had no discretion to effectively grant a variance from its subdivision ordinance requirements. ........................7

D. Declaratory relief against the individual City Council members is appropriate. ......................................................................................10

II. The UDJA waives the City’s immunity under these circumstances. ............12

III. Becky has standing to assert its claims..........................................................14

IV. Becky’s claims are ripe..................................................................................18

V. Becky’s claims are not moot. ........................................................................21

CONCLUSION ........................................................................................................23

CERTIFICATE OF COMPLIANCE .......................................................................24

CERTIFICATE OF SERVICE ................................................................................24

i INDEX OF AUTHORITIES

CASES Alexander Oil Co. v. City of Seguin, 825 S.W.2d 434 (Tex. 1991) ...............................................................................11

Allen v. Wright, 468 U.S. 737 (1984) ............................................................................................16

Brandon v. Holt, 469 U.S. 464, 105 S.Ct. 873, 83 L.Ed.2d 878 (1985) .........................................13

City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) .................................................................... 3, 10, 13

City of El Paso v. Maddox, 276 S.W.3d 66 (Tex. App.—El Paso 2008, pet, denied) ............................. 18, 19

City of Houston v. Little Nell Apts., 424 S.W.3d 640, 647 (Tex. App.—Houston [14th Dist.] 2014, pet. filed) ..........3

City of Houston v. Williams, 353 S.W.3d 128 (Tex. 2011) ...............................................................................22

City of McKinney v. Hank’s Restaurant Group, L.P., 412 S.W.3d 102, 111-112 (Tex. App.—Dallas 2013, no pet.) ...........................12

City of Round Rock v. Smith, 687 S.W.2d 300 (Tex. 1985) .............................................................................4, 5

DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299 (Tex. 2008) ...............................................................................16

Heckman v. Williamson Cnty., 369 S.W.3d 137 (Tex. 2012) ...............................................................................16

Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985) .......................................13

Lake Medina Cons. Soc. v. Tex. Nat. Res. Cons. Comm’n, 980 S.W.2d 511, 513-15 (Tex. App.—Austin 1998, pet, denied) ......................15

ii Lombardo v. City of Dallas, 124 Tex. 1, 73 S.W.2d 475 (1934) .........................................................................4

Satterfield & Pontikes Constr., Inc. v. Tex. S. Univ., 2015 WL 4760209 (Tex. App.—Houston [1st Dist.] August 13, 2015, pet. filed) ..............................................................................................................11

Save Our Springs Alliance, Inc. [SOS] v. City of Austin, 149 S.W.3d 674 (Tex. App.—Austin 2004, no pet.) .....................................21, 22

Save Our Springs [SOS] Alliance, Inc. v. City of Dripping Springs, 304 S.W.3d 871 (Tex. App.—Austin 2010, pet. denied) ....................................14

Schecter v. Wildwood Developers, LLC, 214 S.W.3d 117 (Tex. App.—El Paso, no pet.) ...................................................15

South Tex. Water Auth. v. Lomas, 223 S.W.3d 304 (Tex. 2007) ................................................................................18

Stop the Ordinances Please v. City of New Braunfels, 306 S.W.3d 919 (Tex. App.—Austin 2010, no pet.) ...........................................17

Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835 (Tex. 2007) ................................................................................13

Texas Department of Transp. v. Sefzik, 355 S.W.3d 618 (Tex. 2011) ................................................................................12

Texas Logos, LP v. TxDOT, 241 S.W.3d 105 (Tex. App.—Austin 2007, no pet.) .................................... 10, 11

Texas Lottery Commission v. First State Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010) ..................................................................................3

Texas Nat. Reserve Conservation Commission v. IT-Davy, 74 S.W.3d 849 (Tex. 2002) ..................................................................................10

OTHER AUTHORITIES City of Cedar Park Home Rule Charter § 7.04(a)......................................................4

Code of Ordinances § 12.06.002................................................................................5

Code of Ordinances § 12.12.003................................................................................5

iii Code of Ordinances § 12.15.001(1) ...........................................................................5

Code of Ordinances §§ 12.03.004(a), (b) ..............................................................5, 6

Code of Ordinances §12.15.002(a) ............................................................................5

Ordinance § 16.02.005 ...........................................................................................8, 9

STATUTORY AUTHORITIES TEX. GOV’T CODE Chapter 551. ...............................................................................22

TEX. LOCAL GOV’T CODE § 212.006(a) .............................................................. 4, 22

iv REPLY TO APPELLEES’ STATEMENT OF FACTS Becky agrees that “this case is about a future road to a vacant lot,” although

if the City Council 1 had not engaged in unauthorized conduct, the road to Becky’s

tract would have been built by now. Planning future roads to vacant tracts of land

is a critical part of a city’s subdivision planning process, and the orderly

development of the City’s infrastructure, including roadways that connect one

subdivision to the next, is one of the most important municipal functions. It is not

true, as the city contends, that “Becky wants the City to build a road to the Becky

tract.” 2 To the contrary, the City’s own subdivision ordinances require that

developers such as Milestone either build or pay for the construction of roadways

contained in the City’s master plan that are within their subdivisions. In that sense,

it would be more accurate to say that the City wants Becky to build a road on

Milestone’s tract.

The road at issue here, the Old Mill Road Extension, is in the City’s master

roadway plan as a “residential collector” planned roadway. 3 Consistent with this

roadway plan, Milestone dedicated to the City a right of way for Old Mill Road in

1 The “City Council” refers to the individual defendants, in their official capacity as members of the City of Cedar Park City Council. The “City” will refer collectively to the City of Cedar Park and the City Council, except where a distinction is expressly stated. 2 Appellees’ Br. at 4. 3 CR 213, a more recent and legible copy of which is attached hereto as Appendix A, designates Old Mill Road as road number 32 on the City’s roadway plan. See also http://www.cedarparktexas.gov/modules/showdocument.aspx?documentid=2979.

1 its Development Agreement. 4 The Agreement, however, contrary to the City’s

ordinances, grants Milestone an exemption from completing or paying for

construction of the entirety of the road within one year. Instead, the Agreement

requires Milestone to complete “Phase 1” of Old Mill Road (See map on page 1 of

Becky’s opening brief) without any time deadline, and worse, it does not require

Milestone to complete, timely or otherwise, “Phase 2” of the road, 5 leaving

Becky’s tract indefinitely stranded.

SUMMARY OF THE REPLY Becky’s suit is a challenge to the City’s authority to grant Milestone,

through the Development Agreement, an exemption or variance to the City’s own

subdivision ordinance requirements. The suit alleges ultra vires conduct by the

City Council members, thus invoking the court’s subject matter jurisdiction over

those defendants. Since construction of the City’s ordinances is a necessary

component of Becky’s ultra vires claim, Becky also seeks declaratory relief

regarding the City’s ordinances under the Uniform Declaratory Judgments Act

(UDJA), which requires that the City be made a party to the suit. This court

therefore has subject matter jurisdiction over both the individual defendants and

the City. Alternatively, even if the City is immune, the suit against the individual

City Council members must be allowed to proceed.

4 I CR 198; Development Agreement at ¶ 2. 5 See I CR 199; Development Agreement at ¶ 3.

2 ARGUMENT AND AUTHORITIES

I. The trial court has subject-matter jurisdiction over Becky’s ultra vires claims against the individual defendants in their official capacities. The City does not dispute that ultra vires claims against governmental

officials in their official capacities are an exception to immunity. City of El Paso v.

Heinrich, 284 S.W.3d 366, 373 (Tex. 2009). Instead, the City contends that

Becky’s claims do not fall within that exception because the City Council’s actions

were discretionary. Deciding this issue necessarily requires a construction of the

applicable ordinances, to determine whether Becky’s claims assert conduct by the

City Council that was outside of their discretion. See City of Houston v. Little Nell

Apts., 424 S.W.3d 640, 647 (Tex. App.—Houston [14th Dist.] 2014, pet. filed)

(“this court will need to construe the ordinance … to determine whether the facts

as pleaded demonstrate the ultra vires nature of [plaintiff’s] alleged actions”).

The same rules that govern statutory construction apply to the construction

of municipal ordinances. Id. at 648. This includes examining the City’s words in

context of the ordinances as a whole and not considering words or parts of the

ordinance in isolation. Id. at 649 (citing Tex. Lottery Comm’n v. First State Bank of

DeQueen, 325 S.W.3d 628, 636 (Tex. 2010)). The City’s ordinances as a whole

demonstrate the importance of the orderly development of its subdivisions. They

also demonstrate the clear demarcation of authority between the City Council and

the City’s Planning Commission, as discussed in Becky’s opening brief.

3 A. Orderly development of subdivisions is a critical municipal function.

As the Texas Supreme Court has noted:

The police power [of a city] is a grant of authority from the people to their governmental agents “to promote the public convenience or the general prosperity, as well as regulations designed to promote the public health, the public morals, or the public safety.” Lombardo v. City of Dallas, 124 Tex. 1, 73 S.W.2d 475, 479 (1934). The purpose of plat approval is to ensure that subdivisions are safely constructed and to promote the orderly development of the community. Plat approval protects future purchasers from inadequate police and fire protection, inadequate drainage, and insures sanitary conditions.

City of Round Rock v. Smith, 687 S.W.2d 300, 302 (Tex. 1985) (emphasis added).

To this end, Chapter 212 of the Local Government Code gives cities regulatory

power over the subdivision of land. Section 212.006(a) places authority to approve

plats, under the subchapter dealing with regulation of subdivisions, squarely on the

“municipal planning commission,” with some exceptions not applicable here. TEX.

LOCAL GOV’T CODE § 212.006(a).

Consistent with this statutory directive, the City’s Code of Ordinances vest

exclusive authority over platting and subdividing of land in the Planning

Commission. City of Cedar Park Home Rule Charter § 7.04(a). Also consistent

with this statutory directive, the City’s subdivision ordinances (found in Chapter

12 of the City’s Code of Ordinances), 6 place sole authority to grant variances from

6 See http://z2.franklinlegal.net/franklin/Z2Browser2.html?showset=cedarparkset

4 the terms of its subdivision regulations squarely and exclusively with the

Planning Commission. Code of Ordinances §§ 12.03.004(a), (b).

The City’s Code of Ordinances also mirror the sentiment announced in City

of Round Rock that its subdivision development be orderly:

• The provisions of this chapter … are designed and intended to insure that, for all subdivisions of land within the jurisdiction of the city, all improvements as required herein are installed in a timely manner in order that: … the city can provide for the orderly and economical extension of public facilities and services (Code of Ordinances § 12.15.001(1));

• … the applicant requesting final plat approval shall, within the time period for which the final plan has been conditionally approved by the city: (1) Construct all improvements as required by this chapter, … or (2) Provide a surety instrument guaranteeing construction of all improvements required by this chapter. (Code of Ordinances §12.15.002(a));

• The final plan provides detailed graphic information … indicating property boundaries, easements, streets, utilities … (Code of Ordinances § 12.06.001);

• The final plat shall include the entire tract intended to be developed at one (1) time, and shall contain or have attached thereto: … (2) A location map showing the relation of the subdivision to streets and other prominent features. … (5) The lines and names of all proposed streets…. (Code of Ordinances § 12.06.002);

• All transportation improvements including streets … shall be designed in accordance with the … transportation master plan …. (Code of Ordinances § 12.12.003);

A developer’s final plat, such as Milestone’s here, is essentially an agreement with

the City that it will construct (or provide security for construction of) all of the

improvements shown on the plat in a timely manner or suffer expiration of its final

plat. Milestone’s final plat includes Old Mill Road, and expressly dedicates a right

5 of way for that road to the City from one end to the other of Milestone’s tract,

which abuts Becky’s tract. The City’s Ordinances limit the time for completion of

all improvements designated on a final plat to one year after plat approval. Code of

Ordinances § 12.15.003(c). Failure to timely complete the improvements

automatically results in plat expiration. Code of Ordinances § 12.15.003(d). The

threat of plat expiration encourages the timely and orderly development of the

subdivision and all infrastructure shown on the subdivision plat.

As noted above, Old Mill Road was designated on the City’s roadway plan

as a “collector street.” The City’s Ordinances define the purpose of such streets:

“The purpose of collector streets is to convey traffic from intersecting local streets

and to expedite the movement of traffic to an arterial street or other collector

street.” Code of Ordinances § 12.12.003(6)(B). Here, the City Council’s

unauthorized grant of what amounted to a variance to Milestone completely

defeated the purpose of the City’s own stated purposes and goals.

B. The City Council effectively granted a variance to the City’s subdivision ordinances without the authority to do so. The City points out that the term “variance” is a term of art, and argues that

“Becky has not alleged any facts in its pleading that would demonstrate that the

City Council approved a ‘variance’ as that term is generally understood.” 7 But

that’s exactly Becky’s point: The City never approved an actual “variance”

7 Appellees’ Br. at 8.

6 because Milestone never applied for a variance, did not even attempt to meet the

requirements for granting a variance, and was not granted a variance from the only

entity within the City’s government authorized to grant one—the Planning

Commission.

Milestone could only have been exempted from its requirement to timely

complete or pay for the subdivision infrastructure shown on its plat, including Old

Mill Road, by going through the administrative process of obtaining an actual

variance from the Planning Commission. It did not do so. Instead, the City

Council—an entity without authority to grant a variance—purported to do just that

by contract. The Development Agreement between the City and Milestone

effectively granted Milestone a variance from an entity unauthorized to grant one,

and without the required showing that would support a variance or exemption from

the subdivision ordinance requirements. That portion of the Development

Agreement is therefore void as an ultra vires act of the City Council, purporting to

act on behalf of the City, but without the requisite authority.

C. The City Council had no discretion to effectively grant a variance from its subdivision ordinance requirements. The City has no response at all to the keystone of Becky’s appeal—that

under the City’s Charter and ordinances, only the Planning Commission, through

an administrative process, can do what the City Council purported to do by

contract with a private entity. Instead, the City points to a previously undiscussed

7 and irrelevant ordinance relating to dedication of rights of way, suggesting that the

City had discretion whether to require completion of Old Mill Road. This argument

fails for two reasons. First, the right of way provision relied upon by the City does

not allow the City discretion to forgive both completion of the road and payment

for its construction. Second, to the extent the City has discretion to waive the

build-or-pay option, it could only do so through action by the Planning

Commission.

The City argues that Ordinance § 16.02.005 gives the City discretion to

require construction of a roadway improvement or not. Ordinance § 16.02.005 is

entitled “Dedication of Right of Way,” and it addresses when rights of way may be

required by the City for streets and roads. The dedication of a right of way for Old

Mill Road, however, is not at issue because the City did not waive dedication of

that right of way. Section 16.02.005(a) addresses when a right of way must be

dedicated, once the director of planning determines that all or a portion of the right

of way is needed. Here, there is no question but that this has already occurred

since, as noted above, the City’s roadway plan lists Old Mill Road as a “residential

collector” planned roadway and Milestone agreed to dedicate to the City the right

of way for the entire extension of Old Mill Road at issue. 8

8 I CR 198, Development Agreement, ¶ 2; I CR 210, Exhibit C.

8 The City next relies on § 16.002.005(d) of the right of way dedication

ordinance, which states that in addition to the dedication of right of way, “the City

may require the construction of a roadway improvement or may assess a fee

instead of requiring construction of a roadway improvement ….” Consistent with

the subdivision ordinance provisions noted above, this simply gives the City the

option to require either construction of the roadway improvement or a fee in lieu

of construction. It does not provide the City with any discretion to dispense with

both the construction and a fee to cover the cost of construction. In other words, to

accomplish the orderly development of the City through its subdivisions, roadway

improvements must either be constructed or paid for to ensure that the roadways

connect the dots, as it were, from one subdivision to the next. Orderly development

cannot occur if a city allows a favored developer like Milestone to decide where

and when to build main connecting roadways or to dispense with such roads

altogether.

In addition, if Ordinance § 16.002.005(d) can somehow be construed to

allow the City discretion to waive both the build and the pay requirements for

subdivision improvements, that action could only be carried out by the Planning

Commission, to whom the City delegated sole and exclusive authority to grant

variances. If the City Council purported to do that, it would exceed its authority,

rendering that action void, as discussed below.

9 D. Declaratory relief against the individual City Council members is appropriate.

In its pleading, Becky seeks a declaration under the Uniform Declaratory

Judgment Act (“UDJA”) that the Development Agreement between the City and

Milestone is void as an ultra vires act of the City Council. 9 “Private parties may

Seek declaratory relief against state officials who allegedly act without legal or

statutory authority.” Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d

849, 855 (Tex. 2002). With respect to the individual City Council members,

declaratory relief that their actions were ultra vires and therefore void is an

appropriate use of the UDJA because it complements and provides a remedy for a

claim—ultra vires conduct—for which immunity is already waived. Id.; City of El

Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009).

This is not a case where a plaintiff is attempting to improperly use the UDJA

to obtain monetary relief against a governmental entity or to otherwise control state

action that is within the actor’s discretion. See, e.g., Heinrich, 284 S.W.3d at 372.

This is also not a case where a plaintiff is merely complaining that the action of

governmental officials was contrary to a statute or ordinance, thus rendering that

action voidable. In this respect, the case is distinguishable from Texas Logos, LP v.

TxDOT, 241 S.W.3d 105 (Tex. App.—Austin 2007, no pet.), a case cited by the

City.

9 I CR 192.

10 In Texas Logos, this court held that the plaintiff’s complaint that a state

agency had not followed its proper bidding procedures was an improper suit to

control state action. Aside from the fact that the plaintiff’s claims against the

individual state official were not dismissed, 10 the critical distinction between this

case and Texas Logos is that here, Becky’s claims, if proven on the merits, would

render the City Council’s actions void ab initio since they were undertaken without

authority to act. See Alexander Oil Co. v. City of Seguin, 825 S.W.2d 434, 438

(Tex. 1991) (action by a municipality that exceeds its legislatively delegated

authority is void). In contrast, the claims in Texas Logos, if true, would merely

render the action voidable:

We disagree with Texas Logos that the statutory violations it alleges would, if proven, render the logo sign contract void; i.e., a nullity. … This statutory scheme contemplates that while contracts executed in violation of the Act’s requirements might be subject to invalidation by the agency or other statutory remedies, they would not be rendered a legal nullity on that basis.

Texas Logos, 241 S.W.3d at 120-21.

A recent decision pinpoints this distinction. In Satterfield & Pontikes

Constr., Inc. v. Tex. S. Univ., 2015 WL 4760209 (Tex. App.—Houston [1st Dist.]

August 13, 2015, pet. filed), the court followed Texas Logos because the plaintiff

in that case, as in Texas Logos, was not seeking “to declare an agency order void as

unauthorized by law,” but rather was seeking to nullify a “once-binding contractual

10 Texas Logos, 241 S.W.3d at 109.

11 obligation.” Id. at *5. Here the Development Agreement, to the extent it granted

Milestone a special privilege, exemption, or variance from the City’s subdivision

ordinance requirements, was void as unauthorized by law, and therefore a legal

nullity that was never a “once-binding” contract. Becky does not seek to void a

merely voidable contract, but rather to have the courts recognize that portions of

the contract are void by law because the City Council had no legal authority to

enter into those terms, having delegated the sole authority to grant exemptions or

variances to the Planning Commission. The fact that the City Council

memorialized this unauthorized action in a contract does not defeat Becky’s ability

to challenge its authority to take that action.

II. The UDJA waives the City’s immunity under these circumstances. Becky acknowledges recent cases holding that the Uniform Declaratory

Judgment Act (“UDJA”) waives immunity only for a claim that a statute or

ordinance is invalid, and does not waive immunity for claims seeking a declaration

of the claimant’s rights or an interpretation of an ordinance. See, e.g., City of

McKinney v. Hank’s Restaurant Group, L.P., 412 S.W.3d 102, 111-112 (Tex.

App.—Dallas 2013, no pet.) (citing Texas Dep’t of Transp. v. Sefzik, 355 S.W.3d

618 (Tex. 2011), and discussing the evolving law on the issue). This case,

however, is distinguishable since it couples a proper ultra vires claim against

individual City Council members, who purported to act on behalf of the City, with

12 a suit for a declaration of Becky’s rights under the applicable statutes and

ordinances. As noted above, the courts will need to construe the ordinances at issue

in order to analyze Becky’s ultra vires claim. Little Nell Apts., 424 S.W.3d at 647.

In any event, even if the City is immune, the City Council members are not.

Given that declaratory relief is available against the individual defendants, that

construction and interpretation of the City’s ordinances is a necessary part of the

suit, and that the ultimate relief sought would void a portion of a contract entered

into by the City, it is somewhat surprising that the City seeks to abandon the

individual defendants by hiding behind its own immunity. In holding that ultra

vires actions can only be brought against individual government officials, the court

in Heinrich noted:

…the suit is, for all practical purposes, against the state. See Brandon v. Holt, 469 U.S. 464, 471-72, 105 S.Ct. 873, 83 L.Ed.2d 878 (1985) (“[A] judgment against a public servant ‘in his official capacity’ imposes liability on the entity that he represents provided, of course, the public entity received notice and an opportunity to respond.”); Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 844 (Tex. 2007) (“It is fundamental that a suit against a state official is merely ‘another way of pleading an action against the entity of which [the official] is an agent’.”) (quoting Kentucky v. Graham, 473 U.S. 159, 165, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985)).

Therefore, a declaratory judgment against the City Council members will, as a

practical matter, essentially be a declaratory judgment against the City in any

event.

13 III. Becky has standing to assert its claims. The City makes the same standing argument, at least in its heading, as

Milestone’s failed argument below—that Becky has no standing because it was not

a party to the Development Agreement. 11 Milestone challenged Becky’s standing

on that precise ground, and the trial court denied Milestone’s challenge. 12 Becky,

however, has never asserted that it has standing by virtue of any third party

beneficiary status regarding the Agreement. Instead, Becky has suffered and will

continue to suffer particularized injury because of the City’s unauthorized action.

The City cites Save Our Springs [SOS] Alliance, Inc. v. City of Dripping

Springs, 304 S.W.3d 871 (Tex. App.—Austin 2010, pet. denied), and states that

this court “held that because neither SOS nor its member had an interest in the

properties that were the subject of the development agreements, SOS lacked

standing.” 13 This court did not so hold. Instead, the court held that SOS lacked

standing because neither it nor its members had a “property interest in Barton

Springs (the land alleged to be polluted [i.e. affected]…) [or] property rights

otherwise affected by Barton Springs’ alleged pollution.” SOS, 304 S.W.3d at 880

(emphasis added).

11 The City’s Br. at 20. 12 I CR 72-73; Supp. CR 6. Becky again points out that the trial court refused to state its grounds for granting the City’s plea to the jurisdiction, but implicit in its ruling—because it also denied Milestone’s jurisdictional challenges—is that it did not base it on lack of standing, mootness, or lack of ripeness. 13 The City’s Br. at 21 (emphasis added).

14 Contrary to the City’s suggestion, a plaintiff is not required to hold an

interest in the property that is the subject of the challenged action or agreement.

The plaintiff need only hold an interest in property that is affected by the

challenged action or agreement. This court in SOS also noted that the plaintiff

asserted only harm to its “environmental, scientific, and recreational interests

generally,” which are interests the law does not protect to the same extent as

economic interests. See SOS, 304 S.W.3d at 879-80 (and cases cited therein). But

even with only environmental harm, the court recognized that such harm might

give a plaintiff standing if the plaintiff “own[s] property affected by the

defendant’s actions.” Id. at 879 (citing Lake Medina Cons. Soc. v. Tex. Nat. Res.

Cons. Comm’n, 980 S.W.2d 511, 513-15 (Tex. App.—Austin 1998, pet, denied)).

Here, Becky has asserted economic harm to real property that is directly affected

by the challenged action, and it therefore has standing.

Similarly, the other case cited by the City, Schecter v. Wildwood Developers,

LLC, 214 S.W.3d 117 (Tex. App.—El Paso, no pet.), does not support its claim of

no standing. In Schecter, the plaintiff asserted a claim that the city planning

commission’s approval of a subdivision plat violated an ordinance, but that claim

was dismissed because the development had progressed during the pendency of the

case so as to render that claim moot. Schecter, 214 S.W.3d at 120. The court did

not hold that the plaintiff had no standing to assert the claim based on violation of

15 an ordinance. The plaintiff’s remaining challenges to the approval of the

subdivision plat were based on allegations that the approval violated the City’s

design criteria (a matter of discretion) and that the approval was based on the

developer’s fraudulent and false statements. There was no allegation that would

render the approval void as an unauthorized act. The court correctly held that

neither of these claims was based on the plaintiff’s legal relations under a contract

or ordinance, and that declaratory relief was unavailable. Schecter, 214 S.W.3d at

122.

Here, Becky has standing because it is “personally aggrieved,” and its

alleged injury is “concrete and particularized, actual or imminent, not

hypothetical.” DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304-05 (Tex.

2008). “A plaintiff must allege personal injury fairly traceable to the defendant’s

allegedly unlawful conduct and likely to be redressed by the requested relief.”

Heckman v. Williamson Cnty., 369 S.W.3d 137, 154 (Tex. 2012) (quoting Allen v.

Wright, 468 U.S. 737, 751 (1984)).

Becky has alleged improper and unauthorized action by the City and

Milestone that directly and adversely affects Becky’s real property. Becky’s tract

of land abuts Milestone’s tract of land that is the subject of the Development

Agreement. The Agreement purports to waive or exempt Milestone from certain

otherwise binding requirements of the City’s Subdivision Ordinances, including

16 the obligation to construct subdivision infrastructure and improvements such as

roadways and utilities within a year from plat approval. The City’s planned but

unbuilt extension of Old Mill Road runs through Milestone’s tract to Becky’s tract,

and would provide the only access to Becky’s tract from South Lakeline

Boulevard. Becky has alleged both a concrete injury—immediate devaluation of its

property—and a continuing and increasing harm as the Agreement remains in

place, tying up the property without requiring timely construction of the proper

infrastructure and leaving Becky’s property landlocked. Indeed, since suit was

filed, the one-year deadline under the Subdivision Ordinances has long since come

and gone. Without the unauthorized Agreement, Milestone would have been

required to have completed construction of the subdivision improvements by

September 17, 2014, or its plat approval would have expired. The existence of the

Agreement prevented this from happening, harming Becky.

Finally, the City relies on Stop the Ordinances Please v. City of New

Braunfels, 306 S.W.3d 919 (Tex. App.—Austin 2010, no pet.), but this reliance is

misplaced. As pointed out in Becky’s initial brief, the ordinance in that case caused

plaintiffs actual and present injury by rendering valueless ice chests that plaintiff

had purchased for renting out to customers, and by causing them to incur

additional expense to comply with the ordinance. Id. A similar harm to Becky’s

property has occurred in this case since the waiver or variance granted by the City

17 to Milestone has denied and delayed Becky’s ability to effectively use and develop

its property. Becky has alleged such a particularized injury in fact, which is all that

is required. South Tex. Water Auth. v. Lomas, 223 S.W.3d 304, 307 (Tex. 2007).

Becky does not assert standing as a mere taxpayer or a disgruntled citizen. Instead,

Becky asserts standing because its real property is directly and adversely affected

by the City Council’s unauthorized action. Becky, therefore, has standing.

IV. Becky’s claims are ripe. For its ripeness argument, the City relies on two things: the case of City of El

Paso v. Maddox, 276 S.W.3d 66 (Tex. App.—El Paso 2008, pet, denied), and the

suggestion that Becky has not submitted a completed plat application for the City

to review. The case is distinguishable and the suggestion is not true. On October

24, 2014, while this case was pending below, Becky submitted its application for a

preliminary plan and final plat. Although Becky was not required to have filed

such an application in order for its claims to be ripe (since there was a justiciable

controversy even without the application), the application puts that issue to rest.

As for City of El Paso v. Maddox, the plaintiff in that case asserted a claim

for monetary relief against the city for an unconstitutional taking; there was no

allegation that the city’s actions were unauthorized or ultra vires. Another

distinguishing factor is that the city in Maddox had amended its applicable

subdivision ordinance “to eliminate the requirement which would have required

18 that [the developer] provide access to the [plaintiff’s] Property.” Maddox, 276

S.W.3d at 70. There is no such amendment to the City’s ordinances here.

In analyzing the plaintiff’s takings claim, the court in Maddox noted that for

“a regulatory takings claim to be ripe, there must be a final decision regarding the

application of the regulation to the property at issue,” and that a “final decision

usually requires both a rejected development plan and the denial of a variance from

the controlling regulation.” Id. at 71-72. The lack of a “final decision” as it relates

to the ripeness of a regulatory takings claim has no relevance to Becky’s claims

here, which seek declaratory relief—a remedy particularly well-suited for

determining the rights and obligations of the parties when there is an existing

controversy over those rights and obligations.

The City next argues that Becky’s claims are not ripe because Becky filed an

application for a plat on its property and the City has not yet taken final action on

that application. The City’s focus on Becky’s application for a plat, however, is

misplaced. At issue in this case is Milestone’s application for a plat in 2013 and the

City Council’s unauthorized grant of waivers or variances of its subdivision

ordinance requirements, without which either the road would be built by now or

Milestone’s plat would be vacated. Becky has already been and continues to be

harmed by this ultra vires conduct even if it had never filed an application for its

own plat.

19 Becky’s own application simply brings into sharper focus the question of

who may ultimately be responsible for paying for the road, but the issues raised by

Becky’s application, including whether Becky may be required to pay for the road,

will be addressed in an administrative action before the City, not the courts. It may

become part of this case at a later date, when the administrative remedies are

exhausted. That is why Becky deleted its initial request, contained in its original

petition, for a declaration that Becky should not have to pay for the road. That

remedy is premature, and it is not currently an issue in this case.

What is ripe, however, is the immediate effect the Agreement has had and

continues to have on Becky’s property. The existence of the Agreement, with its

ultra vires waivers of the City’s subdivision ordinance requirements, has

landlocked and continues to landlock Becky’s real property and to hold it in limbo.

Without the ultra vires Agreement, the road would have been built by now or

Milestone’s plat would have expired. There is good reason why the City’s own

ordinances contain strict time limitations for development after plat approval—

subdivision development and the construction of improvements within those

subdivisions must be completed in an orderly and timely fashion. It is the limbo

resulting from the ultra vires Agreement that has harmed and devalued Becky’s

property and continues to do so. No administrative action can remedy this harm;

certainly no city department can issue the declaratory relief Becky requests.

20 V. Becky’s claims are not moot. The City’s mootness argument is without substance. The City bluntly states

that “because the City Council validly approved the Agreement, any claim by

Becky that the City Council acted without authority is moot.” The City, however,

does not explain how the City can “validly” approve an agreement that it had no

authority to make, nor does it explain how this would render Becky’s claim moot.

A hint to the substance of its argument comes from the City’s reliance on Save Our

Springs Alliance, Inc. [SOS] v. City of Austin, 149 S.W.3d 674 (Tex. App.—Austin

2004, no pet.), where the city’s subsequent action rendered the plaintiff’s claim

moot. But that case involves very different facts.

In SOS v. City of Austin, the plaintiff challenged a development agreement

as being contrary to an ordinance. While the case was pending, the city “amended

the Ordinance according to the terms of the development agreement. This

amendment was a legislative act by the City.” SOS v. City of Austin, 149 S.W.3d at

681. In other words, the city legislatively amended its ordinance, which the city

had the right and authority to do, so that the development agreement no longer

conflicted with the ordinance. This mooted the plaintiff’s argument that there was a

conflict since the conflict no longer existed.

No such facts are present here. The City has not amended its Subdivision

Ordinances, and certainly not in a manner that would resolve the conflict between

21 the Agreement and the requirements of the Ordinances. Doing so, of course, would

require public notice and public debate at open meetings. See TEX. LOCAL GOV’T

CODE § 212.002 (“After a public hearing on the matter, the governing body of a

municipality may adopt rules governing plats and subdivisions;” emphasis

added) 14; City of Cedar Park Charter § 3.13 (“No ordinances except emergency

ordinances shall be finally passed until they have been read on two (2) separate

days not less than 72 hours apart.”). 15

In its plea to the jurisdiction below, the City’s suggested that the Agreement

“has the effect of amending the city’s subdivision regulations,” 16 but that cannot be

the case. As this court recognized in SOS v. City of Austin, cities may certainly

amend their own ordinances. SOS v. City of Austin, 149 S.W.3d at 681. But that

case does not support the leap that a city may avoid its public notice and open

meeting requirements by “effectively” amending its ordinances through private

contracts. The Supreme Court has recognized that a city may effectively contract

with private parties by properly enacting or amending an ordinance. See City of

Houston v. Williams, 353 S.W.3d 128, 136 (Tex. 2011). But no court has held that

a city may effectively “amend” its existing ordinances by entering into a contract.

14 Failure to comply with this provision would also be in violation of the Open Meetings Act, TEX. GOV’T CODE Chapter 551. 15 http://www.ci.cedar-park.tx.us/modules/showdocument.aspx?documentid=3818 at p. 7. 16 I Cr 44 (emphasis added).

22 CONCLUSION Becky requests that this Court reverse the judgment below and remand the

case to the trial court. Becky requests such other relief to which it may be entitled.

Respectfully submitted,

HUSCH BLACKWELL, L.L.P

BY: /s/ Elizabeth G. Bloch ELIZABETH G. BLOCH Texas Bar No. 02495500 Heidi.bloch@huschblackwell.com 111 Congress Avenue, Suite 1400 Austin, Texas 78701 (512) 472-5456 (512) 479-1101 (facsimile)

Leonard B. Smith Texas Bar No. 18643100 lsmith@leonardsmithlaw.com P.O. Box 684633 Austin, Texas 78768 (512) 914-3732 (512) 532-6446 (facsimile)

ATTORNEYS FOR BECKY, LTD.

23 CERTIFICATE OF COMPLIANCE I hereby certify that the foregoing document contains 5,577 words, according to the word count of the computer program used to prepare it, in compliance with Rule 9.4(i)(2).

/s/ Elizabeth G. Bloch Elizabeth G. Bloch

CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing instrument has been served upon the following counsel of record via electronic filing and/or facsimile on the 30th day of September, 2015:

Cobby Caputo ccaputo@bickerstaff.com Bradley B. Young byoung@bickerstaff.com Bickerstaff Heath Delgado Acosta LLP 3711 South MoPac Expressway Building One, Suite 300 Austin, Texas 78746

/S/ ELIZABETH G. BLOCH Elizabeth G. Bloch