Trudy's Texas Star, Inc. v. City of Austin

This case requires us to consider circumstances in which a municipality’s regulatory discretion can be limited by estoppel or contract. Trudy’s Texas Star, Inc. d/b/a South Congress Café (Trudy’s) appeals a final summary judgment granting the City of Austin declaratory and injunctive relief requiring Trudy’s to tear down an outdoor deck and other improvements it had constructed behind an existing restaurant building. There is no dispute that Trudy’s constructed the improvements without obtaining advance approvals and permits from the City, as the City Code requires. However, Trudy’s has presented summary-judgment evidence that the City not infrequently allows landowners who have built improvements without required approvals and permits to obtain them retroactively, that the City afforded Trudy’s that opportunity here, and that the City even memorialized an obligation to provide Trudy’s that opportunity in a Rule 11 agreement. Having done this, the City, Trudy’s complains, then gave Trudy’s representations and assurances for almost eight months that it could bring its improvements into compliance with applicable City parking requirements by providing one handicapped parking space off-site and induced Trudy’s to incur substantial expenses and inconvenience satisfying various City regulatory demands in securing that off-site handicapped parking space. Then, after initially approving Trudy’s site plan (the linchpin in the City’s land-use approval process), the City, Trudy’s complains, reversed its position in response to neighborhood opposition and asserted that Trudy’s could not provide the handicapped parking space off-site after all. In short, Trudy’s complains that the City induced it for months to pursue, at great expense and inconvenience, an objective that the City now maintains was an exercise in futility.

On appeal, Trudy’s challenges the summary judgment in four issues. In its first issue, it argues that the summary-judgment evidence raised a fact issue as to an affirmative defense that estoppel bound the City to act consistently with its prior assurances that Trudy’s could satisfy City parking requirements by providing the handicapped space off-site. In its second and third issues, Trudy’s contends that fact issues remain as to whether the City breached obligations under the Rule 11 agreement with Trudy’s, which go to both affirmative defenses and counterclaims that Trudy’s has asserted. Finally, in its fourth issue, Trudy’s asserts that the district court’s judgment granted relief not raised or requested in the City’s summary-judgment motion.