City of Dickinson, Texas and Sean Skipworth, in His Official Capacity as Mayor of the City of Dickinson, Texas v. Crystal Cruise Investments, LLC D/B/A Nautical Navy and Harrison Yat, Individually and as Managing Member of Crystal Cruise Investments, LLC

Texas Court of Appeals, 1st District (Houston)·Decided February 26, 2026·No. 01-24-00684-CV·Published

Opinion

Opinion issued February 26, 2026

In The

Court of Appeals

For The

First District of Texas

Casa Grande Street in Dickinson (the property). Crystal Cruise started renting out the property without first securing the specific use permit required by the City’s zoning ordinance regulating vacation rentals (the “vacation rental ordinance”).

After Dickinson notified Crystal Cruise that its operation of the property violated the vacation rental ordinance, Crystal Cruise filed suit against Dickinson and its Mayor, Sean Skipworth, challenging the constitutionality of the ordinance. The trial court ruled in favor of Crystal Cruise, holding that the vacation rental ordinance violated Crystal Cruise’s rights to due course of law and equal protection guaranteed by the Texas Constitution.

In seven issues, Dickinson contends that the trial court erred in invalidating its vacation rental ordinance and in failing to award Dickinson statutory damages against Crystal Cruise and Harrison Yat, Crystal Cruise’s managing member (collectively, Crystal Cruise) for violation of the ordinance.

We reverse the trial court’s judgment, render judgment for the City on Crystal Cruise’s claims against it, and remand the City’s counterclaim against Crystal Cruise, Yat, and Crystal Cruise’s co-manager, Russell Griffin, for further proceedings consistent with this opinion.

Background

Dickinson enacts its vacation rental ordinance in 2016.

In 2016, Dickinson adopted amendments to its ordinances to regulate bed-

and-breakfast and vacation-rental properties. In the preamble to Ordinance 840-2016, the City Council found “that it is in the best interest of the health, safety, and welfare” of Dickinson’s residents “to require minimum regulations” for bed and breakfast and vacation rental properties and that the regulations contained in Ordinance 840-2016 were “in the best interest of the health, safety, and welfare” of Dickinson’s residents. DICKINSON, TEX., ORDINANCE No. 840-2016 (Mar. 22, 2016) (codified in various provisions of Dickinson, Texas Code of Ordinances Chapter 18). The ordinance defines a vacation rental as “a residential facility that is offered for rental for a period not to exceed thirty (30) days.” DICKINSON, TEX., CODE OF ORDINANCES, ch.18, art V, § 18-11. It allows vacation rentals in Dickinson’s rural residential district1 and its conventional residential district2 if the owner is approved for a specific use permit. Id. § 18-61(c).

1 The “rural residential” district designation applies to areas with “conventional detached single-family dwellings at a density not exceeding one (1) dwelling unit per acre . . . where adequate public facilities are not available to support higher density urban development.” DICKINSON, TEX., CODE OF ORDINANCES, ch.18, art V, § 18-49.

2 The “conventional residential” district designation applies to areas with “conventional detached single-family dwellings . . . where adequate public facilities exist, and residential development is appropriate given the surrounding land uses and neighborhoods.” Id. § 18-50.

The vacation rental ordinance prescribes that a vacation rental property maintain a “residential feel and character” and “not unnecessarily intrude upon the adjacent neighbors.” Id. It also requires the vacation rental owner to install certain safety features, abide by signage regulation, and provide minimum number of parking spaces for each room rented. And the ordinance prohibits on-street parking.

Maximum occupancy for a vacation rental would be “determined in each individual specific use application based on the number of rooms, beds, parking, neighborhood input, and any other factor deemed to be relevant by the . . . Commission or City Council.”

Relevant factors for determining whether to approve a special use permit for a vacation rental include:

a. The proposed occupancy and the size of the property, and whether a smaller occupancy level is appropriate;

b. Setbacks and proximity to other dwellings;

c. Rental regulations (such as no large parties, no extra guests)

imposed by the owner and the degree of owner involvement in property management;

d. Occupant access to waterways and other environmentally sensitive areas;

e. Vehicle access and onsite parking and the number of parking spaces available; and f. Compliance with all state, county, and city ordinances, laws, rules, and regulations including the building codes and fire codes.

Id. § 18-61(c).

Dickinson’s Planning and Zoning Commission (the Commission) and City Council must hold public hearings on applications for specific use permits. Id. § 18-59. “Each specific use permit request shall be considered on its merits and with regard to its specific location, the adjacent land uses, and such other factors as may be relevant to a particular application . . . .” Id. In addition to requiring specific use permits for vacation rentals, city ordinance requires specific use permits to operate bed-and-breakfasts, golf courses, group day care homes, nonprofit recreational facilities, schools, and special event centers in rural residential and conventional residential districts. Id. § 18-58.

Crystal Cruise buys the property in 2022 and operates it as a vacation rental.

Casa Grande Street is in Dickinson’s conventional residential district. The narrow, dead-end street is lined on both sides with single-family homes. The property is on the cul-de-sac at the end of the street, where the homes have backyard access to Dickinson Bayou.

In April 2022, Crystal Cruise bought the property and offered it for short-term rental on various online property management platforms, including Beachbox and AirBnB. Crystal Cruise did not apply for a specific use permit before it began renting the property to short-term lessees. Neighborhood residents called Dickinson officials to complain about noise and other disturbances at the property, which alerted Dickinson to Crystal Cruise’s unauthorized use of the property.

Dickinson notifies Crystal Cruise that it must obtain a specific use permit.

In August 2022, Dickinson notified Crystal Cruise that its operation of the property without a specific use permit violated the City’s vacation rental ordinance. Dickinson warned Crystal Cruise that it was required to obtain the permit before it could rent the property to other lessees.

Crystal Cruise brings this suit.

Yat filled out part of an application for a specific use permit. Before completing the application, though, Crystal Cruise sued Dickinson and its mayor. Crystal Cruise asserted that Dickinson’s vacation rental ordinance violated various rights guaranteed by the Texas Constitution, including Crystal Cruise’s substantive rights under the due course of law provision and to the use and enjoyment of its private property.3 Crystal Cruise also maintained that the vacation rental ordinance violated its constitutional right to equal protection, noting that while the vacation rental ordinance placed multiple restrictions on licensees who rent their properties for less than 30 days, no comparable regulations applied to “adjacent properties that are rented for a term longer than 30 days.” According to Crystal Cruise, this “disparate treatment of short-term rental licensees [wa]s not rationally related to any legitimate

3 Crystal Cruise’s pleading also claimed that the ordinance violated its right to freedom of assembly, but Crystal Cruise abandoned this claims. Thus, we do not address the City’s sixth issue.

state interest,” and was “more burdensome than necessary” to address any potential harm.

As to Mayor Skipworth, Crystal Cruise asserted that the Mayor’s “execution”

of the vacation rental ordinance “constitute[d] an ultra vires act that exceeds the City’s lawful zoning authority and must be struck down.” Crystal Cruise asked the trial court to declare the vacation rental ordinance unconstitutional and enjoin the ordinance’s enforcement.

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City of Dickinson, Texas and Sean Skipworth, in His Official Capacity as Mayor of the City of Dickinson, Texas v. Crystal Cruise Investments, LLC D/B/A Nautical Navy and Harrison Yat, Individually and as Managing Member of Crystal Cruise Investments, LLC, (Tex. Ct. App. 2026).

City of Dickinson, Texas and Sean Skipworth, in His Official Capacity as Mayor of the City of Dickinson, Texas v. Crystal Cruise Investments, LLC D/B/A Nautical Navy and Harrison Yat, Individually and as Managing Member of Crystal Cruise Investments, LLC (City of Dickinson, Texas and Sean Skipworth, in His Official Capacity as Mayor of the City of Dickinson, Texas v. Crystal Cruise Investments, LLC D/B/A Nautical Navy and Harrison Yat, Individually and as Managing Member of Crystal Cruise Investments, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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