City of Lorena, Texas v. Bmtp Holdings, L.P.
409 S.W.3d 634
| Tex. | 2013Background
- City of Lorena engineers warned in 2006 its sewer system was over capacity; City enacted a series of temporary moratoria on sewer taps/connections beginning June 2006 and extending multiple times into 2008–2009.
- Developer BMTP had final plat approval for South Meadows Estates phases 4 and 5 (including seven unsold lots) in Jan 2006 and completed infrastructure work for phase 5 in May 2006, before the moratoria.
- City applied the moratoria to BMTP’s seven remaining lots (exempting some lots sold prior to the moratorium), and extended moratoria while seeking WMARSS membership and additional capacity.
- BMTP sued for declaratory judgment that the moratoria could not apply to property already approved for development and later added an inverse-condemnation (regulatory taking) claim for damages.
- Trial court granted summary judgment for City on declaratory and takings claims and awarded attorney’s fees; court of appeals reversed as to declaratory judgment and remanded takings and fees. The Texas Supreme Court affirmed the court of appeals in part and remanded for further factfinding on the takings and fee issues.
Issues
| Issue | Plaintiff's Argument (BMTP) | Defendant's Argument (City) | Held |
|---|---|---|---|
| Whether Chapter 212 moratoria may be enforced against property already "approved for development" | "Development" includes subdivision or construction, so moratoria cannot apply to property for which the plat was approved (BMTP’s seven lots) | City: definition permits moratoria to restrict later-stage approvals (construction) even if subdivision was approved; moratorium valid here | Held: Chapter 212 defines development to include subdivision or construction; moratoria aimed at shortages of essential facilities cannot validly apply to property approved for development (BMTP prevails on declaratory judgment) |
| Ripeness: whether BMTP was required to exhaust moratorium procedures (application, appeal, waiver) before suing | Procedures would be futile or inapplicable; BMTP not required to follow them | City: BMTP failed to use moratorium’s processes and waivers so claims are unripe | Held: Moratorium’s application process was futile; no exclusive administrative remedy required; waiver provisions did not apply to BMTP — ripeness defense rejected |
| Existence of a regulatory taking (inverse condemnation) as a matter of law on summary judgment | Moratoria and enforcement caused severe economic loss and frustrated investment-backed expectations — factual disputes exist on economic impact, expectations, and character of govt action | City: moratorium served valid public purpose, some economic value remained, and interference was reasonable — summary judgment proper | Held: Disputed material facts remain under Penn Central factors (economic impact, investment-backed expectations, character of action); summary judgment for City on takings claim was erroneous; remand for factfinding |
| Award of attorney’s fees under the Declaratory Judgment Act | BMTP argued moratorium invalid; fees awarded below based on trial court’s ruling for City | City obtained attorney’s fees after trial court found moratorium valid | Held: Because court rules moratorium invalid as to BMTP’s lots, trial court must reevaluate whether awarding fees remains equitable and just; remanded |
Key Cases Cited
- City of Rockwall v. Hughes, 246 S.W.3d 621 (Tex. 2008) (statutory‑interpretation principles)
- State v. Gonzalez, 82 S.W.3d 822 (Tex. 2002) (use plain statutory meaning and context)
- Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998) (futile administrative remedies need not be exhausted for takings claims)
- Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468 (Tex. 2012) (regulatory‑takings analysis and Penn Central framework)
- Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (U.S. 1978) (three‑factor takings test: economic impact, investment‑backed expectations, character of government action)
- Sheffield Dev. Co., Inc. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2004) (applying Penn Central in Texas takings claims)
- Bolton v. Sparks, 362 S.W.2d 946 (Tex. 1962) (municipal ordinances must conform to controlling statutes)