John Hatchett, Sandra Hatchett, and JPH Capital LLP v. West Travis County Public Utility Agency

CourtCourt of Appeals of Texas
DecidedMarch 11, 2020
Docket03-18-00668-CV
StatusPublished

This text of John Hatchett, Sandra Hatchett, and JPH Capital LLP v. West Travis County Public Utility Agency (John Hatchett, Sandra Hatchett, and JPH Capital LLP v. West Travis County Public Utility Agency) 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
John Hatchett, Sandra Hatchett, and JPH Capital LLP v. West Travis County Public Utility Agency, (Tex. Ct. App. 2020).

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-18-00668-CV

John Hatchett, Sandra Hatchett, and JPH Capital LLP, Appellants

v.

West Travis County Public Utility Agency, Appellee

FROM THE 201ST DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-18-001654, THE HONORABLE DUSTIN M. HOWELL, JUDGE PRESIDING

OPINION

John and Sandra Hatchett and JPH Capital LLP (collectively, the Hatchetts)

appeal the trial court’s order granting the plea to the jurisdiction filed by the West Travis County

Public Utility Agency (the PUA) and dismissing the Hatchetts’ petition. In its plea, the PUA

contended that the Hatchetts do not have standing and that it is immune from suit. The

Hatchetts’ petition sought declarations invalidating the PUA’s “policies, rules, and regulations”

limiting density and impervious coverage on their property and granting them vested-rights

protection under Chapter 245 of the Local Government Code (LGC) due to a prior permit

application for water service. See Tex. Loc. Gov’t Code § 245.002(a) (requiring regulatory

agencies to consider approval of permit application solely on basis of regulations in effect when

original application for permit is filed). For the following reasons, we will affirm the trial court’s

order in part and reverse and remand the order in part. BACKGROUND1

The Hatchetts filed this lawsuit in April 2018. In their live (third amended)

petition, they alleged that they owned approximately 910 acres of land in Travis County (the

Property) for several years and in 2013 entered into an agreement with Masonwood Development,

Inc. that “set forth a takedown schedule with Masonwood purchasing and developing the

Property in phases.” When the petition was filed, “Masonwood ha[d] obtained title to a portion

of the Property” but the “Remainder Property” was “still owned by [the] Hatchett[s].”

In May 2013, Masonwood submitted to the PUA2 a “service extension request”

(SER), seeking water service for the Property. At the time, the PUA’s tariff “did not impose

lot impervious coverage [] restrictions as a condition of receiving service.” In November 2013,

the PUA issued Masonwood a “service availability letter” with proposed conditions for the

provision of water service for up to 1837 LUEs,3 to be memorialized in a future “non-standard

service agreement” (NSSA). Masonwood and the PUA executed the NSSA in March 2015.

The agreement provided for the PUA’s provision of retail water service to the development

equivalent to 700 LUEs.

In August 2016, the Hatchetts submitted to the PUA a second SER to obtain

service for the Remainder Property for the additional 1137 LUEs originally contemplated to

develop the Property. In March 2017, the PUA’s Board met, considered, and denied the second

SER “in its entirety.” In January 2018, the PUA’s Board amended its tariff, which amendments

1 We have derived the facts in this section from allegations in the Hatchetts’ live petition. 2 The PUA is a public utility agency and political subdivision created and operating under Chapter 572 of the LGC. See Tex. Loc. Gov’t Code §§ 572.051, .052(c). 3 LUE stands for “living unit equivalent.” 2 “require” the Hatchetts “to comply with impervious coverage requirements of governmental

entities other than the []PUA” to obtain service to the Remainder Property.

The Hatchetts sought the following declaratory judgments: (1) the PUA’s

“policies, rules, and regulations limiting density and impervious coverage on the Property” are

“null and void” because they (a) “are unauthorized and violate the powers given to public utility

agencies” in Chapter 572 of the LGC, see id. § 572.058, and (b) “violate Article XVI, Section 59

of the Texas Constitution because these powers are reserved to conservation and reclamation

districts which are created in accordance with the Constitution and statute,” see Tex. Const.

art. XVI, § 59; and (2) the PUA’s “policies, rules, and regulations enacted after the first permit

[Masonwood’s SER] for the project on the Property was submitted to the []PUA cannot be

applied to the Property” under the vested-rights protections provided in Chapter 245 of the LGC,

see Tex. Loc. Gov’t Code § 245.002.

STANDARD OF REVIEW

A plea to the jurisdiction seeks to dismiss a cause of action regardless of whether

the claim has merit. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). A plea to

the jurisdiction is a dilatory plea that challenges the trial court’s power to adjudicate the subject

matter of the controversy. Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Whether a

party has alleged facts that affirmatively demonstrate a trial court’s subject-matter jurisdiction

and whether undisputed evidence of jurisdictional facts establishes a trial court’s jurisdiction

are questions of law that we review de novo. Texas Dep’t of Parks & Wildlife v. Miranda,

133 S.W.3d 217, 226 (Tex. 2004). A court deciding a plea to the jurisdiction is not required to

look solely to the pleadings but may consider evidence and must do so when necessary to resolve

3 the jurisdictional issues. Bland, 34 S.W.3d at 555. If the evidence raises a fact issue regarding

jurisdiction, the plea to the jurisdiction cannot be granted, and a factfinder must resolve the issue.

Miranda, 133 S.W.3d at 227–28.

DISCUSSION

Vested rights in Chapter 245

Under Chapter 245 of the LGC, once an application for the first permit required to

complete a property-development project is filed with the agency that regulates such use of the

property, the agency’s regulations applicable to the project are effectively “frozen” in their then-

current state and the agency is prohibited from subsequent regulatory changes to further restrict

the property’s use. Harper Park Two, LP v. City of Austin, 359 S.W.3d 247, 248–49 (Tex.

App.—Austin 2011, pet. denied); see Tex. Loc. Gov’t Code § 245.002(b) (“Each regulatory

agency shall consider the approval, disapproval, or conditional approval of an application for a

permit solely on the basis of any orders, regulations, ordinances, rules, expiration dates, or other

properly adopted requirements in effect at the time . . . the original application for the permit is

filed for review for any purpose . . . .”). Chapter 245 defines a “permit” as

a license, certificate, approval, registration, consent, permit, contract or other agreement for construction related to, or provision of, service from a water or wastewater utility owned, operated, or controlled by a regulatory agency, or other form of authorization required by law, rule, regulation, order, or ordinance that a person must obtain to perform an action or initiate, continue, or complete a project for which the permit is sought.

Tex. Loc. Gov’t Code § 245.001(1). Upon filing of the first permit application, the project is

considered to have “vested rights” and “is not subject to intervening regulations or changes after

4 the vesting date.” City of San Antonio v. Rogers Shavano Ranch, Ltd., 383 S.W.3d 234, 245

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John Hatchett, Sandra Hatchett, and JPH Capital LLP v. West Travis County Public Utility Agency, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-hatchett-sandra-hatchett-and-jph-capital-llp-v-west-travis-county-texapp-2020.