Village of Tiki Island v. Jerry D. Ronquille and Wife Janelle L. Ronquille, Milton Chang and Wife, Marie, Angelia G. Hill and Richard Samaniego, 463 S.W.3d 562

Background

Six Tiki Island homeowners (Ronquille, Chang, Hill, Samaniego, et al.) sued the Village of Tiki Island after the Village passed Ordinance No. 05-14-02 (May 20, 2014), which prohibits short-term residential rentals but grandfathered 15 properties used for short-term rentals before March 1, 2011.
Plaintiffs allege the ordinance effects a regulatory taking under Article I, §17 of the Texas Constitution, seek declaratory relief, and obtained temporary injunctions in favor of the Ronquilles and Changs (Aug. 26, 2014) and Angelia Hill (Sept. 30, 2014).
The Village appealed only the Sept. 30, 2014 Hill injunction (timely); the appeal as to Ronquille/Chang injunctions was untimely and dismissed for lack of appellate jurisdiction.
At the injunction hearings Hill and other witnesses testified they relied on rental rights when buying, had operated short-term rentals for years, had contractual future bookings and rental income, and asserted imminent irreparable harm (loss of income, breach-of-contract exposure, decreased property value).
The Village argued the plaintiffs failed to plead or prove a regulatory taking (so sovereign immunity bars suit), and that a court of equity cannot enjoin enforcement of a penal ordinance absent unconstitutional application threatening vested property rights.
The court held Hill pleaded and presented evidence sufficient to state a viable regulatory takings claim (waiving sovereign immunity) and to support a temporary injunction as to Hill; the court lacked jurisdiction over Hill’s declaratory-judgment claim and the Ronquille/Chang injunction was not before the court on appeal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs pleaded/demonstrated a regulatory taking waiving sovereign immunity	Hill: ordinance unreasonably interferes with existing short-term rental use; she relied on rentals when purchasing; loss of income and value is imminent	Village: pleadings/evidence insufficient to show total or unreasonable interference; lost future profits not relevant; sovereign immunity bars suit	Held: Hill’s pleadings and evidence (existing rentals, reliance, income loss) suffice to allege a viable takings claim; sovereign immunity waived as to that claim
Whether the trial court had jurisdiction to grant temporary injunctive relief against enforcement of the penal ordinance	Hill: injunction necessary to prevent irreparable harm to vested property/investment-backed expectations; criminal citations issued to Hill	Village: equity cannot enjoin penal ordinance unless unconstitutional and vested property rights threatened; no vested right shown	Held: Trial court had jurisdiction to enjoin enforcement as applied to Hill because she showed a vested, investment-backed interest and imminent irreparable harm; injunction affirmed as to Hill
Whether Hill’s declaratory-judgment claim was justiciable	Hill: seeks early adjudication that ordinance is invalid as applied to her	Village: declaratory claim merely recasts takings claim and is not ripe/justiciable	Held: Court lacks jurisdiction over Hill’s declaratory-judgment request because it merely duplicates the takings claim
Appellate jurisdiction over injunctions entered for other plaintiffs	Plaintiffs: appeal challenges multiple injunction orders	Village: appealed Sept. 30 order	Held: Appellate court limited to timely appeal (Sept. 30 Hill order); appeal of Aug. 26 Ronquille/Chang injunctions dismissed as untimely

Key Cases Cited

Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2004) (factors for regulatory takings analysis and rejection of a rigid formula)
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998) (consideration of economic impact and investment-backed expectations in regulatory takings)
Rusk State Hosp. v. Black, 392 S.W.3d 88 (Tex. 2012) (courts of appeals may consider jurisdictional challenges raised first on interlocutory appeal but must construe pleadings in plaintiff’s favor and apply safeguards)
City of College Station v. Turtle Rock Corp., 680 S.W.2d 802 (Tex. 1984) (takings analysis is fact-sensitive; review for reasonableness)
Cernosek Enters., Inc. v. City of Mont Belvieu, 338 S.W.3d 655 (Tex. App.—Houston [1st Dist.] 2011) (pleadings must allege specific facts showing a taking to overcome governmental immunity)
State v. Morales, 869 S.W.2d 941 (Tex. 1994) (limitations on equity courts enjoining penal statutes—requires unconstitutional application threatening vested property rights or enforcement threatening irreparable injury to property)
Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468 (Tex. 2012) (existing and permitted uses inform investment-backed expectations in takings claims)
City of Anson v. Harper, 216 S.W.3d 384 (Tex. App.—Eastland 2006) (distinguishing takings and declaratory-judgment claims; declaratory relief does not expand jurisdiction)
City of University Park v. Benners, 485 S.W.2d 773 (Tex. 1972) (property owners generally do not have a vested right to a particular use; ordinances may allow recoupment to avoid constitutional problem)