Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:In February 1991, Austin passed an interim ordinance to the Comprehensive Watershed Ordinance (CWO), to reduce the permissible amount of impervious cover (the total horizontal area of covered spaces, paved areas, walkways, and driveways) a commercial developer could lay from up to 70 percent to 18 percent. By its terms, the interim ordinance was set to expire in October 1991. In March 1991, developer Eli Garza filed an application to develop a subdivision plat on what was once known as the Garza Ranch in the Barton Creek Watershed. The plat, approved in May 1991 by the Planning Commission, and recorded in September 1991, stated that the subdivision would be developed in accordance with ordinances in place in 1988, which presumably referred to the CWO. Another plat note said that some of the land would be deeded to the city as part of the Williamson Creek Greenbelt. The plat notes also stated that impervious cover credits on some tracks would be donated (“received”) to other tracts within the subdivision. In 1997, Garza sought to sell some of the receiving tracts, contingent on approval by the city. The city rejected the application because of the interim ordinance. Garza and the potential buyer sued for a declaratory judgment that the CWO applied to the subdivision development, not the interim ordinance. The city argued the plat note referring to the 1988 regulatory scheme was a mistake at best, and a deliberate attempt to circumvent the interim ordinance at worst. Garza argued the Planning Commission approved the plat with the date reflected in the note. The parties raised additional arguments, too. The trial court ruled for Garza. The court found: 1. the city was estopped from repudiating the plat note; 2. the commission had the authority to approve all plat notes and Garza was entitled to rely on that approval; 3. Government Code �245.002(d) allowed Garza, as a permit holder, to enforce the plat note against the city; 4. the interim ordinance could not be applied to Garza’s property after the ordinance expired in October 1991; and 5. any defects that occurred in the process were validated. The trial court also awarded Garza attorneys’ fees. HOLDING:Affirmed. Section 245.002(d) states that “a permit holder may take advantage of recorded subdivision Plat Notes, recorded restrictive covenants required by a regulatory agency, or a change to the laws, rules, regulations, or ordinances of a regulatory agency that enhance or protect the protect, including changes that lengthen the effective life of the permit after the date the application for the permit was made, without forfeiting any rights under this chapter.” The city says that because the statute delegates governmental authority to private actors to set their own rules, it is unconstitutional. The court first considers whether there has in fact been a delegation of legislative powers. The court notes that another subdivision under �245.002 requires that property owners are to elect between developing pursuant to the plat notes or pursuant to the regulatory scheme in effect at the time the owner originally filed for a permit. The court cites FM Props. Operating v. City of Austin, 22 S.W.3d 868 (Tex. 2000), in which the Supreme Court upheld delegations when they allow private parties “to choose between two distinct regulatory schemes” versus delegations that allow private parties “to create part of the regulatory scheme that they choose.” Though under �245.002(d) the developer is allowed to “ascertain conditional upon which existing laws may operate,” the choice is limited to one of two regulatory schemes. “Because section 245.002(d) allows the developer to choose between two distinct regulatory schemes but does not allow the developer to create the scheme, it is not a delegation of legislative power.” Independent of its ruling on the constitutionality of �245.002(d), the court also rules that the city is estopped from denying the validity of the plat note upon acceptance of Garza’s dedication of the property for the greenbelt. Though the city is correct in arguing that generally a city cannot be estopped from exercising its governmental functions, the court points out that an exception to that rule is when the city has received a substantial benefit as a result of its own mistake. “While we acknowledge that the applicability of estoppel against municipalities is rare, we conclude that it would be manifestly unjust for the City to retain the benefits of its mistake yet avoid its obligations.” Finally, the court approves the award of attorneys’ fees since it is affirming all of the trial court’s findings in Garza’s favor. OPINION:Puryear, J.; Kidd, Smith and Puryear, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.