Texas Bay Cherry Hill, L.P. v. the City of Fort Worth, Texas, and Becky L. Haskin

Court of Appeals of Texas·Decided May 29, 2008·No. 02-06-00325-CV·Published

Opinion

COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 2-06-325-CV

TEXAS BAY CHERRY HILL, L.P. APPELLANT V.

THE CITY OF FORT WORTH, TEXAS, APPELLEES AND BECKY L. HASKIN

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FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY ------------

OPINION

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I. Introduction Texas Bay Cherry Hill, L.P. (“Cherry Hill”) appeals from a trial court order granting the City of Fort Worth’s plea to the jurisdiction and dismissing Cherry Hill’s claims against former Fort Worth City council member Becky L. Haskin. This appeal presents four key questions: (1) whether the City was engaged in a governmental function—and therefore immune from suit—or a proprietary

function—and therefore subject to suit—when it allegedly committed the acts made the basis of Cherry Hill’s claims for business disparagement, tortious interference, and civil conspiracy; (2) whether Cherry Hill’s claims for a declaratory judgment and injunctive relief were ripe for determination; (3) whether Cherry Hill stated a claim for inverse condemnation; and (4) whether Haskin was entitled to dismissal of Cherry Hill’s claims against her under section 101.106 of the civil practice and remedies code. We affirm. II. Background Cherry Hill owns the Cherry Hill apartment complex in the Woodhaven neighborhood on the east side of Fort Worth. Woodhaven primarily comprises relatively low-income multifamily apartment complexes, but it also contains a smaller enclave of higher-income single-family homes.

A. The Woodhaven redevelopment plan In 2003, a consulting group prepared a report for the City council recommending the “dispersion of low-income housing units throughout the city.” After endorsing the recommendation, the City’s Housing and Workforce Development Committee asked City staff to bring forward a project to demonstrate the dispersal and deconcentration of low-income housing. The City selected Woodhaven for the demonstration based on the high concentration of assisted housing and Section 8 units in the neighborhood.

The City council hired a consultant, Gideon Toal, to create a Woodhaven master development plan (“the Plan”). The City council also created a steering committee of Woodhaven community volunteers and City officials, including council member Becky Haskin, whose district included Woodhaven. Haskin is also a Woodhaven resident.

The Plan sought to abate high crime rates, reverse declining property values, and achieve a balance of incomes and housing types in Woodhaven. To that end, it recommended the redevelopment of a key Woodhaven intersection—Boca Raton Boulevard and Oakland Hills Drive—as a “neighborhood center” to spur redevelopment in the area. The recommended redevelopment called for the acquisition of two commercial properties and five apartment complexes.

Cherry Hill is one of the apartment complexes. Cherry Hill and the other four apartment complexes in question had unusually high police calls and reported crimes—33% of all police calls to Woodhaven and 30% of all Part I and II crimes.1 In 2004, providing police and emergency services to the apartment complexes cost the City $4.4 million, while tax revenue from all of Woodhaven was only $0.6 million.

1 … Part I and II crimes include homicide, rape, aggravated assault, burglary, and vehicle theft.

The Plan identified a $13-$15 million “investment gap” as an obstacle to redevelopment; in other words, the cost of acquisition and redevelopment of the property in question was higher than the redevelopment’s expected revenue or sales price, making it extremely unlikely that a private developer would undertake the project. The Plan suggested a public-private partnership to bridge the investment gap and identified several possible financing tools, including implementing tax increment financing, capturing incremental sales and property taxes from site-specific development, borrowing funds from community development block grants, and creating a local development corporation.

Gideon Toal presented a draft of the Plan to the City council on June 28, 2005. On February 14, 2006, after several public hearings and a report from the City manager, the City council passed a resolution endorsing the plan. The Plan, the City manager’s report to the City council regarding the Plan, and the resolution adopting the plan all explicitly state that the City will not use its powers of eminent domain to acquire property under the Plan. The City manager recommended that the City encourage the project through economic development incentives, and the City council authorized City staff to “negotiate a public-private partnership for implementation of the goals outlined in the Plan by means of the City’s available economic community development incentive

tools, as City staff deems appropriate and feasible, including but not limited to, tax abatement and increment financing.”

B. The City’s suit against Cherry Hill Meanwhile, in September and October 2004, the City sued Cherry Hill to abate common and public nuisances under chapter 125 of the civil practice and remedies code,2 alleging that Cherry Hill’s apartment complex was a common nuisance under section 125.0015.3 In January 2005, Cherry Hill and the City signed a rule 11 settlement agreement in which they agreed to abate the lawsuit and cooperate with one another to reduce criminal activity at the Cherry Hill apartments. The City also agreed to dismiss its lawsuit after a year if Cherry Hill fulfilled its end of the bargain, and the City eventually dismissed the lawsuit.

C. Cherry Hill’s suit against the City

… 2 See T EX. C IV. P RAC. & R EM. C ODE A NN. § 125.001-.002, .004, .044-.045, .061 (Vernon Supp. 2007); .003, .042-.043, .046-.047, .062-.069 (Vernon 2005).

… 3 See id. § 125.0015(b) (“A person maintains a common nuisance if the person maintains a multiunit residential property to which persons habitually go to commit [various criminal acts listed in subsection (a)] and knowingly tolerates the acts and furthermore fails to make reasonable attempts to abate the acts.”).

In September 2005, Cherry Hill filed this suit against the City, Haskin, and Woodhaven Community Development, Inc., alleging they conspired to diminish the apartment complex’s value by disparaging it and tortiously interfered with its business relationships with existing and prospective tenants. Cherry Hill alleged that the City’s chapter 125 suit was a sham intended to justify the defendants’ statements that the apartments would soon close and be demolished and that the defendants affirmatively steered prospective residents away from the apartments, including Hurricane Katrina refugees. Cherry Hill also sought a declaratory judgment and injunctive relief to stop the City from using its eminent domain powers for economic development.

The City filed an original answer, a plea to the jurisdiction, and a motion to dismiss Cherry Hill’s claims against Haskin. Cherry Hill amended its pleading by adding an inverse condemnation claim, a request for a declaration that the Plan is unlawful urban renewal under local government code sections 374.001- .910, and a request to enjoin the City from continuing to fund and participate in the Plan.

After a hearing, the trial court granted the City’s plea to the jurisdiction and motion to dismiss Haskin. Cherry Hill nonsuited its claims against Woodhaven Community Development, Inc. and filed this appeal. III. The City’s Plea to the Jurisdiction

The City’s plea to the jurisdiction asserted two key reasons why the trial court lacked jurisdiction over Cherry Hill’s claims: (1) the City is immune from suit for the alleged actions made the basis of Cherry Hill’s business defamation, tortious interference, and conspiracy claims and (2) Cherry Hill’s declaratory judgment action and request for injunctive relief are not ripe for determination.

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Texas Bay Cherry Hill, L.P. v. the City of Fort Worth, Texas, and Becky L. Haskin, (Tex. Ct. App. 2008).

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