FALL 2010 NEWSLETTER TAKINGS AND ZONING CASE LAW UPDATE

by John Husted

Supreme Court of Texas

Kirby Lake Development Ltd. V. Clear Lake City Water Authority, 2010 Tex. LEXIS 613 (Tex. August 27, 2010)

An inverse condemnation suit is barred when the State withholds property or money from an entity while acting within a color of right under a contract, as opposed to exercising its eminent domain powers.

Residential Developers entered into a contract with the Water Authority stipulating that the Developers would build water and sewer facilities according to the Authority’s specifications, and that the Developers would lease the facilities to the Authority free of charge until the Authority purchased them. The Authority agreed to reimburse the Developers for part of their construction costs once it received voter-approved bond funds, but the Authority was not obligated to pay the Developers until the bond sale was approved by election. When the voters rejected the bond election to pay the developers as stipulated by the contract, the developers brought suit alleging, in addition to breach-based claims, that the Authority’s continued possession of the facilities constituted a taking.

The Developer’s inverse condemnation suit was barred, because the Developers consented to any alleged taking when they agreed to allow the Authority to lease and use the Facilities free of charge until the Authority purchased the facilities. The Authority was acting within a color of right under the contract and not under its eminent domain powers.

State of Texas v. Brownlow, 2010 Tex. LEXIS 615 (Tex. August 27, 2010)

The State’s easement to build and maintain a mitigation pond on a landowner’s property does not, alone, grant the State a right to remove and use the excavated dirt from the landowner’s property for other purposes, and doing so provides a basis for a constitutional takings claim.

The State obtained an easement to construct a mitigation pond on the Brownlow’s property to collect water that would result from a highway expansion project. The State built the pond, and used most of the excavated dirt for highway construction purposes in another location. The Brownlows sued the State for inverse condemnation as to the dirt that was removed.

Because the easement did not grant the State the right to use the excavated dirt for highway construction or any other purposes, and because the Brownlow’s suit stated a constitutional takings claim, the State does not have sovereign immunity from the suit.

Texas District Courts

Rio Bravo Subdivision Property Owners Association v. City of Brownsville, 2010 Tex. LEXIS 8130
(Tex. App. – Corpus Christi – Edinburg, October 7, 2010)

In the context of a recently annexed area’s petition for disannexation, a municipality is not required to provide any new or additional services to the annexed area beyond those required by the Texas Local Government Code, even though the area already received the statutorily required services prior to the annexation.

The property owners association of a recently annexed subdivision submitted a petition for disannexation pursuant to the procedures provided by the Texas Local Government Code. The petition was based on an alleged failure by the City to provide services to the annexed area. Though the petitioners stipulated that the City provided certain municipal services after the annexation and that the City provided every type of municipal service that it was legally allowed to provide, the property owners alleged that the City acted in bad faith by failing to provide any additional or new services that the subdivision did not already receive prior to the annexation.

Because nothing in the plain language of the applicable disannexation statute indicates that a municipality must provide new or additional services to an annexed area, the petitioner’s argument was meritless.