### OPIN ION No
. 04 -0 7- 00 03 8- CV CO NT I NE NT AL H O ME S O F T E XA S , L . P. ,

Appellant
v . CI TYOF SAN AN TON IO , Appellee Fr om the 166th J udicial District Court, Be x ar County , Texas

Trial Court No. 2006-CI -10813 Honora ble Martha B . Tanne r, Judge Pre siding Opinion by : Phy lis J . Speedlin, J ustice Sitt ing: Alma L . L ópez, Chief J ustice

Phy lis J . Speedlin, J ustice Steven C. Hilbig, Just ice Deliver ed and F iled: April 16, 2008 REVERSED AND RENDERED, I NJ UNCTI ON DI SSOL VED Continental Homes of Texas, L .P. (“Contine nta l” ) a p p e a ls the trial cour

t’s judgme nt gr anting a per manent injunction enjoining it from removing any tree s from a trac t of land under development (the “Ka llison Ranch Project”) without first obtaining a permit under the City

of San Antonio’s tree prese rvation ordi n an ce, a nd order ing it to re plant specifie d quantities of tree s in mit iga tion of the tr e e s r e mov e d; t

he c ourt de c lin e d Contin e nta l’ s re qu e st fo r a de c larator

y jud g me nt r e c og nizi ngits04

- 07

- 00 03 8- CV

1 ... I n 1997 , t he C i t y of San A nt oni o ena ct ed a t r ee pres er vat i on ordi nan ce f or t he f i r s t t i me, wh i ch i ns t i t ut ed a p e rm it re q u ire m e n t b e fo re c e rta in p ro te c te d tre e s c o u ld b e re m o v e d
. T h e o rd ina n c e w a s a m e n d e d in 2 0 0 3 , w h ic h is the ve rs io n a t i ssu e in this c a se . T h e 2 0 0 3 o rd ina n c e is re fer re d to he re in a s the “T re e P e rm it O rd ina n c e .”

- 2- vested rig hts f

or the projec t. We reve rse the tr ial court’s judg ment and dissolve the injunction, and
re nd e r j ud g me nt r e c og nizi ngContin e nta l’ s v e ste d r ig hts and awa rd ingit atto rn e y ’s fe e s. F A C TUA L & P R OC EDU R A L B ACKG ROUND In August 1991, the Kallison Ranch landowner s enter ed into a written agree ment with Grey For est Utiliti es to provide natural g as ser vice to the de velopment in exchang e for t h e utility ’s
a c qu isi tio n o f a

tr a c t of land fo r p la c e me nt o f a

g a s me te ri ngstatio n. B a se d o n th e Gr e y F or e st util ity service ag ree ment, the City of San Antonio g rante d an application for a veste d rig hts permit for the Ka lli so n Ran c h Pro

je c t on Marc h 1 5, 20 02 (t

he “ Ve ste d Ri g hts Pe rm it” ). Th e Ve ste d Ri g hts Pe rm it states that it is effe ctive “a s of August 29,1991,” and does not state any conditions to it s continuation or any expiration date. In Fe bruar

y 2005, Pape-D awson Eng ineer s, actingon behalf of the th en owner s of the proper ty , submitt ed a Master Deve lopment Plan (“MDP #838”) to the City of San Antonio for the development of the Kallison Ranch Project. Pape-D awson supplemented the MDP with a Ma ster Tree Stand Delineation. In August 2005, the City ap p ro v ed t h e Master Deve lopment Plan, but reje cted the pr oposed Master Tree Stand D el i neation, statingin a sepa rate letter to Pape- Dawson that, “this project will be subje ct t o the . . . 2003 Tre e Prese rvation ordinanc e 1 . . . No Tre e Preser vation plan i s approve d for this MDP.” No admini strative appeal of the City ’s dec ision was taken. In May

2006, Continental Homes, which is a wholly owned subsidiary

of D.R. Horton, acquir ed par

t of the Ka llison R anch pr operty from L ennar Homes and took over development of the04

- 07

- 00 03 8- CV

2 ... T h e K a lli so n R a n c h P ro je c t l ie s w ithin the C ity o f S a n A n to n io ’s ex tra te r r it o r ia l j u risd ic tio n , o r “E T J ,” whi ch i s def

i ned as “ t he un i ncor po r at ed ar ea t hat i s cont i gu ous t o t he corpora t e bo un dari es of t he muni ci pal i t y an d t hat is lo c a te d
. . . with in five m iles o f t h o se b o u n d a rie s, in th e c a se o f a m u n ic ip a lit y w ith 1 0 0 ,0 0 0 o r m o re inh a b itan ts.” T EX . L OC . G OV ’ T C O D E A NN . § 4 2
. 0 2 1 (a)( 5 ) ( V ernon 2 0 0 8 ).

- 3- land. In J uly

20 0 6 , C ontinental hired the Eg g mey er c ompany to clear brush and tre es fr om approximately

30 acr es. B laine L opez, Conti nental’s Vic e P resident of L and De velopment, testified that he wa s fa m i liar with the City ’s Tre e Permit Ordinanc e but believe d it did not apply in the extraterritorial jurisdiction (“ ETJ ”), 2 and ther efor e Continental did not apply for a tree permit prior to removingany

protec ted tree s. On J uly

12, 2006, a tre e inspec tor for the City of San Antonio drove pas t t h e s i te on his way

to another site a

nd noticed bigmulch piles and hea vy equipment used for clea ringlarg e tre es. Afte r v er i fy i n g t h at no tree permit had be en issued for that site, he issued a

“ sto p- wo rk ” or de r t o th e Eg g me y e r s up e ri nte nd e nt at 5: 45 p. m. t hat da y . Th e su pe ri nte nd e nt t old the tree inspector that he beli ev ed t h e C i ty could not enfor ce its tree ordinanc e in the ETJ, and indicated they

planned to continue w ith the job. The Eg g mey er c rewcontinued wor king until 6:00 p.m., their usual stopping time. Two day s later, the Cit y

obtained a te mporary

restra ining or der. The City then filed a

petition seekinga per

manent injunction, c ivil pena lties a nd mitigation based on the number of protec ted tree s
remove d. Approxim ately one we ek af

ter the te mporary restra ining or der w as g rante d, Continental
re vie we d th e Pa

pe -D aws on

fi le on the Ka lli so n Ra

nc h Pr oje c t and

fo un d th e Ve ste d Ri g hts Pe rm it issued in 200 2 , s tati n g th a t t h e p r o je c t w a s v e s te d

b a c k to 1 9 9 1
. A ll o f

th e Co n ti n e ntal repr esentatives who testified agr eed that this was the first time Continental knew about the Ve sted Rights Permit. When Conti nental answ ere d the City ’s suit, it p l ed v es t ed rig hts as an af firmative defe nse, asse rting that it was entitled to develop the proper ty under the ordinanc es in eff ect on the date of vesting , i.e. , August 29, 1991; there wa s no tree prese rvation ordinanc e in e ffe ct on that date,04

- 07

- 00 03 8- CV

3 ... A t t he c harge co nf erence, C o nt i nent al H o m es s t i p ul at ed t hat i t s agent s had remo ved “ si gni f i cant ” and
“ h er i t ag e” t r ee s t h at w ou l d h av e bee n pr ot ec t ed u n der t h e T r ee Per mi t O r di n an ce , i f i t a ppl i ed.

- 4- and the re fo re Contin e nta l c la ime d it wa s exem pt fr om the Tr e e Pe rm it Or din anc e . Cont ine nta l a lso filed a c ounterc laim for dec lara tory relief as to its vested rights, askingthe cour t to affirm its “rig ht to develop the pr operty

under the ordinanc es i n place as of August 29, 1991,” and see king r ecove ry of its attorney ’s fees; a claim for wrong ful injunction was later dropped. The City

responde d by ple a din g that any

ve ste d r ig hts ha d e xpir e d o r b e c ome do rm ant, and did no t e xemp t com

pli anc e wi th the Tre e Permit Ordinanc e. A tempor ary injunction was g rante d in J uly 2006. In September 2006, a

jury trial was held on the City ’s re quest for a perma nent injunction, civil penalties and mitig ation damag es, and on Continental’s counter claim for de clar atory relief and
a t t o r n e y ’ s f e e s . T h e e v i d e n c e w a s un d i s p u t e d th a t th e K a l l i s o n R an c h P r o j e c ti s l o c a t e d

i nth e E T J, the City issued the Veste d Rights Permit for the pr o j ec t in March 2002, a

nd Continental did not apply for a tree permit under the Tree Permit Ordinance befor e re moving pr otected tr ees f rom the site. 3 Th e City argue d at tr ia l th a t any ve ste d r ig hts ha d b e c ome do rm ant d ue to l a c k o f p ro g re ss toward c ompletion of the projec t, and, alter nativ el y , t h at even if the vested r ights we re va lid, Continental Homes was still required to c omply with the “proc edura l” permitt ing require ments of the Tre e Permit Ordinanc e because it did not impinge on “substantive” vested rights. Continental’s position at trial was that the City could not enfor ce its Tre e Permit Ordinanc e in th e E T J , and,
a lte rn a tiv e ly , that the Ve ste d Rig hts Pe rm it e xemp te d it fr om havin g to a pp ly fo r, or

ob ta in, a pe rm it under the subsequently -ena cted or dinance
. Th e jur y ans we re d th e fo llo wi ngfo ur qu e sti on s o f f

a c t a s f oll ow s:04

- 07

- 00 03 8- CV

- 5- (1) Do you find the Ka llison R anch pr oject bec ame dor mant afte r May

11, 1999? Answer : No (2) State in diamete r i nches the amount of sig nificant or he ritag e tre es re moved from the prope rty

in question by

Contine n t al Hom es, L .P. or its age nts in ex cess of the perc entag es allowed by the City Code of San Antonio a nd the Tre e P re s er v ation ordinanc es of the City

of San Antonio. Answer : Significa

nt trees: 29,947 diamete r inche s Her itag e tre es: 26,126 diameter inches (3 ) Wh a t amou

nt o f a c ivi l pen a lty sh ou ld be a sse sse d a g a ins t Co nti ne nta l H ome s, L .P. ? Answer : $15,743,000 (4 ) Wh a t is a

re a so na ble fe e fo r t

he ne c e ssa

ry se rv ic e s o f C on ti nenta l H ome s’ a t t o r n e ys i nth i s c a s e , an d f

o r e x p e n s e s i n c ur

r e d , s t a t e d i nd o l l ar s an d

c e n t s , i f an y ? Answer : $134,000 for prepa ration and trial; $10,000 for an appea l to the Court of Ap pe a ls; $5 ,0 00 fo r a

n a pp e a l to the Sup re me Court of Te xas. Ea c h s ide mov e d f

or jud g me nt o n th e jur

y ’s ve rd ic t, ea c h ask ing the c ourt to dis re g ard c e rt a in jury finding s. After a hearing , the t rial court enter ed a final j udg ment in favor of t he City , g ranting a per manent injunctio n prohibiting Continental from r emoving any tree s without first comply ing with the Tree Permit Ordinance , and orde ringContinental t o m ake mitig ation by repla nting repla ceme nt trees; the c ourt enter ed a take-nothingjudgme nt on Conti nental’s c ounterc laim for decla ratory relief as to its vested rights. The tr ial court a dopted the jury ’s findingas to the number of pr ote c te d tre e s re mov e d. Th e c ourt dis re g ard e d the jur y ’s fi nd ing that Conti ne nta l’ s v e ste d r ig hts
wer e not dormant as “immaterial,” disreg arde d the jury ’s awa rd of the $15 million civil penalty as unauthorized bec ause the violation occurr ed in the ETJ, and disreg arde d the awa rd of attorney ’s fe es t o C o n t i n en t al as i m m at er i al t o th e j u d gm en tre n d er ed
. Fu rt h er , th e t ri al co urt m ad e i t s o wn fi n d i n gs of fact and conclusions of law in support of its final judgme nt, concludingthat any vested rig hts were04

- 07

- 00 03 8- CV

4 ... T he C i t y rai sed a si ngl e i ss ue o n c ross- ap p eal , a ss ert i ng the t ri al e vi d ence co ncl usi vel y e st ab l i shed t hat t he K al l i s on R anc h P r ojec t had becom e do r mant , and t her ef ore t he j udgment s houl d be mo di f i ed t o re f l ect t hat Co nt i nen t al po s s es s es no v es t ed r i gh t s as a mat t er of l aw. T he C i t y wi t hdr ew i t s cros s - appeal at ora l ar gu ment ; t her ef ore, we nee d n o t d e te rm ine w h e the r th e e v id e n c e “c o n c lus ive ly es ta b lishe d ” d o rm a n c y.

- 6- waived be cause Continental and its predec essor did not administratively appea l the City ’s
c on dit ion a l a

pp ro va l of

the Ma ste r D e ve lop me nt Plan (MD P #8 38 ) fo r the Ka lli so n Ran c h Pr oje c t, which stated the plan was “ subject t o” the Tree Permit Ordinance . The c ourt furthe r conc luded that the Tre e Permit Ordinanc e wa s enfor cea ble in the ETJ as a matter of law, and thus Continental was
re qu ir e d to , b ut d id n ot, ob ta in a tr e e pe rm it. Contin e nt al ti mel y a pp e a le d, and

the City c ro ssappea led. 4 A N A L Y SIS On a pp e a l, C on tin e nta l H ome s r a ise s f ive iss ue s: ( 1) the tr ia l c ourt erred in ba sin g its judgme nt on its own finding s of fact and conclusions of law holdi ng Continental’s vested rig hts were
wa ive d, in p art

be c a us e the City ne ve r ple d wa ive r; (2 ) ap pli c a tio n of the Tr e e Pe rm it O rd ina nc e is contra ry to state law a

nd brea ches a previous agr eeme nt betwee n the landowne rs and the City ; (3) the trial cour

t erre d in rende rin g judgme nt ag ainst Continental without t akinginto account amendments made to the Tree Permit Ordinance afte r trial but bef ore r endition of judgme nt; ( 4) by requiringContinental to ex pend millions of dollars replantingtree s, the court e ffe ctively assessed a civil pena lty

for a violation occurr ing in the E TJ , fo r wh i ch it has no authority ; and (5) the trial
c o urt e r r e d b e c a u s e th e Ci ty

is n ot enti tl e d

to e n f o r c e it s T r e e Pe r

mi t O r d in an c e in

th e E T J. We be g in o ur ana ly sis by

a dd re ssi ngthe fi rs t is su e c on c e rn ingwa ive r o f C on tin e nta l’ s v e ste d r ig hts
.04

- 07

- 00 03 8- CV

5 ... W i t hi n it s f

i rs t is sue, C o nt i nent al al so ass ert s t hat i t and i t s p rede cess o r Lennar were not requir ed t o pursue a n a d m inistra tive a p p e a l b e c a u se the C ity’ s c o n d iti o n a l a p p ro v a l o f t h e M D P w a s a vo id a ttem p t t o re tro a c tive ly i m p a ir o r d e stro y its v e ste d rig h t to b e fre e fro m su c h re g u la tio n ; the re fo re , its failu re to a p p e a l ca n n o t co n stitute w a ive r o f i ts su b sta n tive rig h ts. See T EX . C O N ST . ar t. 1 , § 1 6 ; C o rp u s C h risti P e o p le ’s B a p ti s t C h u r c h , I

n c . v. Nu e c e s C o u n ty A p p ra isa l D ist. , 90 4 S
. W
. 2 d 62 1 , 62 6 (T ex. 19 9 5 ) ( ret roac t i ve l aw t hat de st roys or i m p ai rs vest ed ri ght s i s i nval i d ). Con t i n e n t a l a l s o c on t e n ds t h e t r i a l c ou r t e r r e d i n di s r e g a r di n g t h e j u r y ’ s a n s w e r de c l i n i n g t o f i n d t h e pr oj e c t h a d b e c om e d o rm a n t. G ive n o u r re so lutio n o f t h e w a ive r issu e , w e ne e d no t re a c h the se a rg u m e n ts.

- 7- Wa iv e r o f t he V este d Ri ght s In its first issue, Cont inental Homes a sserts, in part, tha t the trial cour t erre d in rende ring judgme nt for the City

based on the aff

irmative defe nse of waiver , which was ne ither pled nor tr ied by c on se nt. 5 Specifica lly , the judg ment includes the followi n g fi n d ings of fac t releva

nt to waiver
ma de by the tr ia l c ourt : No. 3 In August 2005, the City of San Antonio a pp ro v ed M DP # 8 3 8 wi t h t he condition that MDP #838 was subject to the C i t y of San Antonio’s Tre e Preser vation Ordinanc e. The City of San Antonio specific ally reje cted the
“ Ma ste r T re e Stand

De lin e a tio n” su

bmi tte d b y

Pa pe -D aws on

En g ine e rs . No . 4 De sp ite the availa bil ity of a dmi nis tr a tiv e a

pp e a ls un de r the a

pp lic a ble City of San Antonio ordinanc es for the owner s of the prope rty to challeng e the imposit ion of the condition that approva l of MDP #838 was conditioned on compliance with the Tree Preser vation Ordinanc e, no appe al was e ver ma de b y th e p r i o r

o w n e r s o f

th e p r o p e rty. N o . 5 Co n t i n e n t a l H o m e s o f T e xa s , L
. P
. a c qu i r e d

t i t l e t o th e p r o p e rty

s u bje c t to MDP #838 in Ma

y 2006. No administrative appe al of the c onditions i mposed a s p art o f th e a p p r o v a l o f

M D P # 8 3 8 w a s e v e r

in it iate d b y Continental Homes of Te x as, L .P. when it took over deve lopment of the Kallison Ranch Pr oje c t. Th e jud g me nt a lso c on ta ins Con c lus ion of L aw N o. 2 a s to wa ive r, wh ic h s tate s: At the time MDP #838 was conditionally approve d by the C ity of San Antonio, Conti nental Homes of Texas, L .P.’s prede cessor had administrative re medies ava ilable to i t to appea l the conditions that wer e imposed, see e .g. U NI F I ED D E VE L OP ME NT C ODE §§ 35.412(d); 35.712(d), a

nd the failure to appea l resulted, as a matter of la

w, in a waiver of any

vested rig hts that were aff ecte d by the conditional approva l of MDP #838. Compare Fi ncher v . Board of Adjustment of04

- 07

- 00 03 8- CV

- 8- theCity of Hunters Village , 5 6 S .W .3 d 8 15 (Tex . Ap p. —Ho us to n [1s t Dist.] 2001, no pet.). Waiver is “an intentional r elinquishment of a known r ight or intentional conduct inconsistent with claiming that rig ht.” Sun Exploration & Prod. Co. v. Benton , 728 S.W .2d 35, 37 (Tex. 1987). I t is an aff irmative defense that must be specifica lly pled. T EX . R. C IV . P. 9 4; T.O. Stanley Boot Co.

v . B an k of E l P as o , 847 S.W .2d 218, 223 (Tex. 1992). L ikewise, fa ilure to exhaust administ rative
reme dies is an af

firmative de fense that must be pled. AB T Ga lv esto n Lt d. P’ sh ip v . G alv esto n Ce nt. Appraisal Dist., 13 7 S. W.3 d 1 46 , 151 ( Te x. Ap p. —H ou sto n [1s t D ist .] 20 04 , n o p e t.) . F a ilure to plead a n aff irmative def

ense g ener ally

waives it. Shoemak

e v. F ogel, Ltd. , 8 2 6 S
. W.2d 933, 937 (T e x. 19 92 ); Komet v. Grav es , 40 S.W .3d 596, 602 (Tex. Ap p .—San Antonio 2001, no pet.). Fur ther, the tria l court’s judg ment must confor m to the pl eading s of the pa rties. T EX . R. C IV . P. 301; In re D.G .R. , No. 04-05-00439- CV, 2006 WL 36111 5 6 , at *3 (Te x . App.—San Antonio Dec . 13, 2006, no pet.) (“ a par

ty may not obtain a judg ment on a theor y not pleaded” ). I t is clear from t he record, and the City conce des, that the a ffirmative defe nse of wa iver ba sed on failure to appea l the conditional approva l of MDP #838 was ne ver ple d by the City . In an attempt to uphold the judg ment, the City argues that the issue of waiver was tried by consent, a nd thus “the la c k o f p le a din g wa ive r d oe s n ot o ve rc ome the tr ia l c ourt ’s fi nd ingof wa ive r. ” Th e City

a lso contends that wa iver ba sed on fa ilure to administratively appea l is a “pure question of law,” which could prope rly

be dete rmi n ed b y t h e court ba sed on the undisputed evide nce introduc ed at tria l without objection. I n support, the City cites the testim ony of Roderic k Sanchez, Assistant Direc tor of L an d D e v e lo p me n t f

o r th e Ci ty , th a t h e w r o te th e le tt e r to Pa p e - D aw s o n E n g in e e r s s tati n g that the Kallison Ranch Projec t MDP was approve d “subjec t to” the Tre e Permit Ordinanc e; that no one
came back on be half of the projec t and said they had vested rig hts; there is a process by which they04

- 07

- 00 03 8- CV

- 9- c ou ld ha ve ob je c te d and the n a

pp e a le d if the City

re fu se d to a c kn ow le dg e a c la im o f v e ste d r ig hts , but that was not done. An unpleade d issue may

be de em ed tried by

consent whe n evidenc e is deve loped under circ umstances indicating both par ties u n d er s t o o dthe issue was in the c ase, a nd no complaint was made. T EX . R. C IV . P. 6 7; Fraz ie r v . H av e ns , 10 2 S .W .3 d 4 06 , 4 11 (T e x. Ap p. —H ou sto n [14 th Di st. ] 200 3, no pe t.)
. To de te rm ine wh e the r an iss ue wa s tr ie d b y c on se nt, an a

pp e llate c ourt

mus t examine the rec ord for

evidenc e of the trial

of the issue, not just admissi on of evide nce on the issue. Case Corp. v. Hi-Clas s Bus. Sys. of Am., Inc

. , 18 4 S.W. 3d 76 0, 77 1 (T e x. Ap p. —D a lla s 2 00 5, pe t. de nie d) ; Stephanz v. Laird, 84 6 S. W.2 d 89 5, 90 1 (T e x. Ap p. —H ou sto n [1s t D ist .] 19 93 , w ri t denied)
. I ssues are not “ tried” mere ly by the re ceipt of e vidence on the issue. SageStr e e t A sso cs. v. Northdale Const . Co. , 863 S.W .2d 438, 446 (Tex. 1993). Additionally , the doctrine of trial by implied consent g ener ally does not apply

if the evidenc e related to the issue is also releva nt to other issues raised by

the pleading s. Case Corp., 184 S.W .3d at 771. I f an issue is de emed tried by consent, it is treate d as if it had been ra ised in the pleading s. Ma sti n v . M as tin , 70 S.W .3d 148, 154 (Tex. App.—San Antonio 2001, no pet.). He re , wh ile Sanchez’s testimony was a dmitted without obj ection and did touch on the absenc e of a

n administrative appe al, it also relate d to other re levant issues i n t he ca se such a s do rm anc y of the Ka lli s o n

R a n c h P r o j e c t, C on tin e nta l’ s and

L e nn ar’ s k

no wl e dg e of

the Ve ste d Ri g hts Per mi t, an d Co n ti n e n ta l’ s kn o w le d g e o r la c k o f kn o w le d g e o f th e Ci ty ’ s le tt e r im p o s ing the Tree Permit Ordinance condition on the MDP. Further , even thoug h this evidenc e was rele vant t o waiver , the City ne ve r a rgue d a wa ive r t he or y duri ngits op eni ng and closin g argume nts , n e ve r a sse rt e d it during th e c o ur s e o f

tr ia l, an d n e v e r s o u g h t t o ame n d

it s p le a d in g s to in c lu d e it a f te r th e e v id ence04

- 07

- 00 03 8- CV

- 10- was re ceive d. In fac t, the rec ord is c lear that the City consistently had two trial theories – that the Vested Rig hts Permit had become dor mant, and, alternatively , even if it was valid it did not ex empt the deve loper fr om having to apply for a tree permit. Thus, eve n thou gh evidenc e re levant to the absenc e of a

n administrative appea l was admitted without objection, the re cord c lear ly shows that
wa ive r t hr ou g h f a ilure to a dmi nistrat iv ely app eal wa s n ot tried as an issue in the c ase. Se e Cas e Corp., 18 4 S. W.3 d at 77 1; Ste ph an z, 846 S.W .2d at 901. Th e re c or d r e ve a ls that th e fi rs t ti me a wa ive r the or

y wa s ra ise d by

the City wa s at th e po stve rd ic t he ari ngon

the part ies ’s com

pe tin g mot ion s to e nte r j ud g me nt. At tha t he ari ng , th e City argued for the first

time that beca

use Continental and its prede cessor did not assert vested r ights at the time the MDP was appr oved “subje ct to” the Tr ee Per mit Ordinance , it had waived the m. The City arg ued that sec tion 35-412(d) (2) of the Unified D evelopment Code g ave the develope r the rig ht to administratively

appea l the Ci t y ’s condit ional approva l of MDP #838 to the Cit y Planning Commis sio n wi thi n 30 da y s, and that its fa ilure to u

nd e rt ake su c h a

n a pp e a l w a ive d a

ny ve ste d r ig hts with respec t to the Tree Permit Ordinance
. See § 3 5
- 4 1 2 ( d )(2) , U NI F I ED D E VE L OP ME NT C ODE . Continenta l a s s e rte d a t th e h e ar in g th a t th e o n ly d e f e n s iv e is s u e s p le d b y th e Ci ty w e r e that the
ve ste d ri g hts ha d e xpir e d or be c ome do rm ant, and did no t e xemp t c omp lia nc e wi th t he Tr e e Pe rm it Ordinanc e; thus, the City ’s fa ilure to plead w aiver prec luded entry

of judg ment on that g round. Afte r the trial cour

t signe d the final judgme nt c ontaining its finding s and conc lusions of law on waive r, Contin e nta l f

ile d a mot ion fo r ne w tri a l ar g uin g , in par t, t hat th e jud g me nt w a s e rr on e ou s b e c a us e the af firmative de fense of wa iver ha d not been pled by the City . Continental asserts on appe al that it w a s d e pr ive d o f d

ue pr oc e ss b e c a

us e it h a d n o n ot ice th a t w a ive r t hr ou g h f a ilure to e xha

us t04

- 07

- 00 03 8- CV

- 11- administrative re medies wa s an issue in the ca se until we ek s afte r the jury verdic t. We ag ree that the re c or d d oe s n ot s up po rt a fi nd ingthat w a ive r w a s tr ie d b y c on se nt. Finally , at ora l argument, the C ity contende d that the judg ment is not really based on w aiver , but rather on the cour

t’s other c onclusions of

law that the Tr ee Per

mit Ordinance applies in the ETJ
as a matter of law , and that Continental Homes fa iled to obtain a tree permit as r equired by the
or din anc e and

MD P #8 38 . H ow e ve r, the pla in l angua g e of the jud g me nt s ho ws that a s a wh ole it is based on the c ourt’s conc lusion that the failure by Continental, a nd its predec essor, to pursue an
a dmi nis tr a tiv e a

pp e a l of t he Ci ty ’s c on dit ion a l a pp ro va l of

MD P #8 38 wa ive d a

ny ve ste d r ig hts
a ff e c te d b y MD P #8 38 ; th e re fo re , und e r t he Tr e e Pe rm it O rd ina

nc e , Co nti ne nt al was re qu ir e d to obtain a tre e per

mit and its failure to do so violated the MDP. The trial c ourt’s ver bal rulingat the
co n cl u s i o n of the he aringon the motions to enter judg ment confirms that re adingof the wr itten judgme nt. The cour

t stated in part, “I

do think that the Ci t y o f San Antonio ac cepte d the master development plan subje ct to a 2003 Tree Preser vation Ordinanc e, which I think then makes [L ocal Gover nment Code section] 212 operative. And so Ithink y ou had to g et a pe rmit to do thi s. And there was no a

ppeal of the vested r ights a s to the 2003 Tree Ordinanc e, so then, there fore , the master development plan w as violated.” W e there fore reje ct the City ’s contention that the tria l court’s judgme nt is not based on the cour t’s finding that Continental’s vested rig hts were waived. B e c a us e the re c or d c le arl y

sh ow s th a t th e City

ne ve r p le d wa iv er th ro ug h f a ilure to administratively

appea l as an aff

irmative defe nse, and the waiver issue was not tried by consent, the trial court’s judgment, which is based on waiver of Continental’s vested rig hts, cannot stand. See Compass Bank

v. MFP Fin. Servs., Inc

. , 152 S.W .3d 844, 851 (Tex. App.—Dallas 2005, pe t. denied)04

- 07

- 00 03 8- CV

6 ... W e ne e d no t re a c h the b ro a d e r q u e stio n o f wh e the r th e trial c o u rt h a d the a u tho rity to d isre g a rd the ju ry’s f i nd i ngs and m ake i t s o wn su a sp o n te fi n d ing s o f f a c t. See T EX . R. C IV . P . 2 9 6
.

- 12- (if af firmative de fense is not pled or tried by consent, it is waived, a

nd trial court in n o n -jury

trial has no authority

to make a f

act f inding on that issue)
. 6 App lic ab ili

ty of Tre ePe rmit O rd

ina nc ein V

ie w of V este d Ri ght s Having conclude d that the trial court’s f inding that Continental’s ve sted rig hts were waived
c ann ot s tand , w e ne xt ad dr e ss wh e the r, g ive n it s e xistin g ve ste d r ig hts , Co nti ne nta l w a s n e ve rt he le ss
r e qu i r e d t o c o mp l y w i thth e T r e e P e r m i tO r d i n an c e a s c o n t e n d e d b y th e C i ty. Continental a sserts that its Ve sted Rights Permit wholly exempts i t from havingto apply for and obtain a pe rmit unde r

the Tre e Permit Ordinanc e bec ause se ction 245.002 prohibits the Cit y from enfor cingordinanc es that are enacted af ter rig hts have ve sted. T EX . L OC . G OV ’ T C ODE ANN . § 245.002 (Ve rnon 2005). I t further contends the languag e of the Tree Permit Ordinanc e itself shows i t does not apply

to the Kallison Ranch Projec t. Rely ing on FM Props. Ope rating Co. v. Ci ty of Austin, the City

replies that a

landowner

or develope r is not entitled to determine for itself what laws apply , and there fore Continental is require d to c omply with the Tree Permit Ordinance even if it has
v ested rig hts. See FM

Pr op e rti es O

pe ra tin g Co . v . Ci ty

of A us tin , 2 2 S
. W
. 3 d

8 6 8 , 8 7 9

- 8 0 ( T e x. 2000) (holding l aw au thorizi ng private la ndowner s to ex empt themselves fr om municipal water
re g ulatio ns wa s unc on sti tut ion a l de le g a tio n o f l e g isl a tiv e po we r t hat c ou ld a dv e rs e ly a ff

e c t pu bli c int e re st in wate r qu a lity

). Th e City a lso a sse rt s the pe rm it re qu ir e me nt imp os e d by the or din anc e is “wholly proce dural” and does not impair a substantive veste d rig ht; therefor e, the or dinance can be applied re troac tively
. See Subaru of Am., Inc. v. David Mc David Nissan, Inc. , 84 S.W .3d 212, 219 (T e x. 20 02 ) ( re tr oa c tiv e stat ute is unc on sti tut ion a l on ly if it “ take s awa

y or imp a ir s v e ste d r ig hts04

- 07

- 00 03 8- CV

- 13- acquir ed under

exis ting law ,” and proce dural statutes ty pically do not aff

ect vested rig hts). Fur

ther, the City argue s MD P #8 38 wa s a pp ro ve d “ su

bje c t to” the Tr e e Pe rm it O rd ina nc e , a nd the e xpre ss lan gu age o f t he ordina

nce r equire s a per

mit before a

ny remova l of protec ted tree s – without exception. See§ 35-477, U NI F I ED D E VE L OP ME NT C ODE . Se c tio n 245 .0 02 of the L oc a l G ov e rnme nt C od e re c og nize s v e ste d r ig hts . Sp e c if ic a lly , it require s a re g ulatory

ag ency to consider a

n application for a permit solely based on the regulations and ordina

nces in e ffe ct at the time the or igina l applicat i o n fo r per mit is filed for

revie w for a

ny purpose. T EX . L OC . G OV ’ T C ODE ANN . § 24 5. 00 2 (a ), (b ) (V e rn on 20 05 ). Th is Court ha s r e c e ntl y held that rig hts vest in a parti cu l ar p roj ect, not the land, a nd are not affe cted by

a subseque nt conveyance of the prope rty
. City ofSan Antonio v. En Seguido, Ltd. , 2 2 7 S. W. 3 d 2 3 7 , 2 4 2

- 4 3 ( T e x. Ap p. —Sa n A nto nio 20 07 , n o p e t.) . T hu s, Contin e nta l is e nti tle d to the be ne fi t of the Ve ste d Ri g hts Permit obtained in 2002, prior to its ac q u i s ition of the proper ty . I t is undisput ed that the Ve sted Rig hts Pe rm it w a s o bta ine d p ri or to t he e ff e c tiv e date of

the 20 03 ve rs ion

of the Tr e e P erm it Ordinanc e at issue in this case
. We next turn to the applica b i l ity languag e of the provisions of the Tre e Permit Ordinanc e its e lf . Se c tio n 35- 47 7 of the Un if ie d De ve lop me nt Cod e , en tit le d “T re e Pe rm its ,” state s a s f oll ow s: (a ) A pp lic a bil ity T h e p r o v i s i o n s o f

th i s s e c t i o na

p p l y t o an y a c t i v i ty su bjec t to the tree pr e se rv a tio n s tand ard s. (b) Initiation (1 ) Ap pli c a tio n to City Ar bo ri st A valid application for per mit mus t be filed a

nd approve d with the city arbor ist before :04

- 07

- 00 03 8- CV

- 14- A. Mitigating , removing , or destroy ing any s ignif

icant or heritag e tre es that ar e re quired t o be counte d for c alculating minimum tr e e p r e s e rvation per centa g es as pr ovided in the tree prese rvation standar ds; or B
. An y p e r s o n c o n d u c t s a r e g u l a t e d a c t i v i ty , a s d e f i n e d in S u b s e c t i o n( a ) o f

§ 3 5
- 5 2 3 , o np r o p e rty subject to thi s section that may result in the remova l or destruction of any such tree
. § 35-477(a ), (b) (1), U NI F I ED D E VE L OP ME NT C ODE (empha sis added). The “tre e pre servation standards” are outlined in section 35-523 of the Unified Development Code. Subsection (a) (1) of
se c tio n 3 5- 52 3, e nti tle d “ Ap pli c a bil ity ,” pr ov ide s in

re le va nt p art : (a ) Ap pli c a

bil ity (1 ) Ge ne ra lly A. The re g ulations contain ed i n this divi sion shall apply to any pr ivate pro pert y . . . th a t is not thesu bje c t of

a p e rm it as of the ef fec tive date of

this provision . . . . C. Th e re g ulati ons c on ta ine d in thi s d ivi sio n s ha ll r e g ulate a ll activities that result or may result in the re moval of sig nificant or her itag e tre es as def

ined her ein. Said activities include a ny of the fo llo wi ngc on du c te d o n p ro pe rt y to which the division applies
. . . . § 35-523(a )(1) , U

NI F I ED D E VE L OP ME NT C ODE (empha sis added). The City ’s Unified D evelopment Code also specific ally adopts Chapter 245 of the L ocal Gove rnment Code, which r ecognizes vested rig hts. See§ 35-712(g ), (k) , U NI F I ED D E VE L OP ME NT C ODE . B a se d o n th e lang ua g e and str uc tur e of thi s p art ic ula

r T re e Pe rm it O rd ina

nc e , r e a d in conjunction with section 245.002 of the L ocal Gove rnment Code, we a g ree with Conti nental Homes that the permit provisions of sec tion 35-477 do not apply to the Kallison Ranch Projec t beca use, by virtue of the V ested Rig hts Permit which contains n o condit ions or expiration, the project is not

“ su bje c t to ” the Or din anc e ’s tr e e pr e se rv a tio n s tand ard s. Th e re fo re , b e cause the Tr e e Pe rm it04

- 07

- 00 03 8- CV

7 ... T he j ur y an s wer ed “ N o” whe n a s ked i n Q ues t i on N o. 1 w het her i t f ound t hat t he K al l i s on Ranch P r ojec t ha d becom e dormant
. I n r ender i ng i t s j udgment bas ed on wai ver of Co nt i nen t al ’ s ve s t ed r i gh t s , t he t r i al cour t di s r ega r ded the ju ry’s a n sw e r o n d o rm a n c y a s im m a te ria l.

- 15- Ordinanc e, as draf

t ed , simply

does not apply

to this project, we ne ed not deter mine whether

the ordinanc e’s pe rmit proce ss is purely proce dural, as the C ity contends, or aff ects subst antive veste d ri g hts , a s Co nti ne nta l c on te nd s. Cont inental ’s Request for Dec laratory Judgm ent and A ttorn ey’ s Fees Finally , we a ddress whe ther the trial court err ed in de nying Continental’s c ounterc laim for de c larator y re lie f a s to its ve ste d r ig hts to de ve lop the Ka lli so n Ran c h Pro je c t and fo r re c ov e ry

of its at t o rn ey ’s fees. The tria l court denie d Continental’s claim for a decla ratory judgme nt, and disreg arde d the jury ’s aw ard of attorney ’s fe es as immater ial. On appe al, Continental asserts that it is entit led to decla

ratory re l i ef as t o i t s vested rig hts, and to rec overy of attorne y ’s fe es in the amounts found by

the jury , i.e. , $134,000 for tria l plus $15,000 in conditi onal appe llate fe es. At trial and on a

ppeal, the City has stressed that it doe s not c oncede that Continental Homes has valid, existi ng vested rig hts to develop the Kallison Ranch P rojec t. The trial e vidence , howeve r, was undisputed that the C ity issued a Vested Rights P ermit on Marc h 15, 2002, providing that the projec t has vested r ights a s of August 29, 1991; the permit itself was int roduce d into evidenc e. The City atte mpt e d to de fe a t the Ve ste d Rig hts Pe rm it at tr ia l by arguin g it ha d eithe r e xpir e d o r b e c ome do rm ant. As no te d, the Ve ste d Rig hts Pe rm it c on ta ins no e xpir a tio n date , and the jur y de c lin e d to fi nd the pr oject had becom e do rm ant. 7 On appe al, the City argues that the de clar atory judgme nt action is not ripe bec ause the re is no ac tual controve rsy , is not proper be cause vested rig hts were
a sse rt e d a s a

de fe ns e no t a

n a ff ir mativ e c la im, and is me re ly be ing us e d b y Contin e nta l a s a

ve hic le to rec over its attorne y ’s fe es. We addre ss eac h argument in turn.04

- 07

- 00 03 8- CV

- 16- Th e City fi rs t a sse rt s th a t Co nti ne nta l’ s r e qu e st f or de c lara tor y re lie f a s to its ve ste d r ig hts is premature , or “not ripe ,” b ec au s e “the City has neve r bee n asked to e valuate a permit in which
su c h r ig hts we re a sse rt e d a nd the re fo re ha s n e ith e r a

pp ro ve d n or

de nie d a pe rm it i n w hic h s uc h r ig hts
we re c la ime d. ” Es se nti a lly , the City argue s that be c a us e Contin e nta l ne ve r a

pp lie d f or a tr e e pe rm it under the Tree Permit O rdinanc e, and conseque ntly never asser ted its ve sted rig ht s i n co nnection with such a permit application, there i s no actua l, justiciable controve rsy . See Bonham State Bank

v . B e ad le , 9 07 S.W. 2d

46 5, 46 7 ( Te x. 19 95 ) ( de c lara tor y jud g me nt i s a

pp ro pr iate on ly

if the re is a justiciable controve rsy about the rig hts and status of the par ties and the de clar ation will resolve the
c on tr ov e rs y

); see a l s o C i t y of Helotes v. M

iller , 2 43 S.W. 3d

70 4, 70 8 ( Te x. Ap p. —Sa n A nto nio 2007, no pet.) (“ ripene ss emphasizes the need f or a c oncre te injury

for a j u s t i ci able claim to be prese nted,” a

nd a cla im is “not ripe if its resolution depends on conting ent or hy pothetical fa cts, or upon events not y et come to pa ss”). Given our c onclusion that the Tre e Permit Ordinanc e, as dr af t ed , does not apply

to the Kallison Ranch P rojec t, the fa ct that there has bee n no permit application, and thus no ruling by the City , is ina

pp os ite . T he re c or d is c le ar t hat th e City

its e lf a pp ro ve d a nd iss ue d th e Ve ste d Ri g hts Permit in March 2002; it is equall y cl ea r t h at , in the context of the development of the Kallison Ranch P rojec t, the C ity ref uses t o rec og nize the validi ty of t he Vested Rights Permit. Continental Ho me s is a tte mpt ingto d e ve lop the Ka lli so n Ra nc h Pr oje c t, a

nd ha s ma de it c le ar t

hat it int e nd s to pr oc e e d w ithits de ve lop men t pl ans upon re so lut ion

of thi s la ws uit . T hu s, an a c tua l c on tr ov e rs y
e xists be tw e e n th e City

and Contin e nta l Ho me s c on c e rn ing wh e the r C on tin e nta l ha s v e ste d r ig hts to d e ve lop the Ka lli so n Ra nc h Pr oje c t un de r t

he ordi nan c e s in

e ff e c t a s o f Augus t 29 , 1 99 1 – thi s dis pute e xten ds be y on d the re mov a l of pr ote c te d tr e e s w ith out a pe rm it. Contin e nta l’ s c ounte rc la im04

- 07

- 00 03 8- CV

- 17- seeks r ecognitio n o f i t s vested rig hts and an a cknowledg ment that all future de velopment of the Kallison Ranch Projec t is gove rned by t he ordina

nces in e ffe ct on August 29, 1991. See BHP Pe tro le um Co. v . M

illar d , 800 S.W .2d 838, 84 2 (Tex. 1990) (def ensive de clar atory

judgme nt counter claim th at has gre ater ramifications than origina l suit i s proper ). We reje cted a simil ar ripene ss argument by the C ity in City of Helotes v. Miller , and we likewise reje ct the argument here
. See City of He lotes , 243 S.W .3d at 708-09 (r ejec ting city ’s arg ument that landowner ’s claim wa s not ri pe be c a us e no pe rm it h a d b e e n is su e d o r d e nie d) ; c .f. , Sa v e Ou r S pr ing s A lli an c e v . Ci ty

of A us tin , 14 9 S. W.3 d 6 74 , 6 83 -8 4 ( Te x. Ap p. —Aus tin 20 04 , n o p e t.) (ho ld in g c on tr ov e rs y wa s n ot r ipe in absenc e of f

acts showingcity

had applied its land-use regulations in the particular case ). Contin e nta l’ s c ounte rc la im f or de c larator

y re lie f a s to its ves te d r ig hts is n ot p re matur e be c a us e in the cur rent suit the City

is applying th e T re e P ermit Ordinanc e to the proje ct – application of the
or din anc e is not me re ly hy po the tic a l; mor e ov e r, the va lid ity of Contin e nta l’ s c la im o f v e ste d r ig hts extends bey ond the cur

rent dispute over

application of the Tree Permit Ordinance
. Ne xt, th e City

c on te nd s th a t Co nti ne nta l’ s c ounte rc la im f or a de c larator

y jud g me nt a s to its
ve ste d r ig hts is n ot a

n a pp ro pr iate c la im f

or a ff ir mati ve rel ief

, b ut m e re ly

a de fe ns e to l ia

bil ity in response to the City ’s suit. Conti nental pled ve sted rig hts as a def ense to the City ’s s u i t, but then separ ately asser ted vested r ights whe n it later filed its counter claim for declar atory relief that it was
en t i t led “to deve lop the Kallison Ranch Projec t under the or dinance s in place a s of August 29, 1991.” “T o qualify

as a c l aim for a ffirmative relief , a def ensive plea ding must alleg e that the defe ndant has a

cause of ac tion, independent of the plaintiff’s cla im, on which he could r ecove r be ne fi ts, c omp e ns a tio n o r r e lie f, e ve n th ou g h th e pla int if f m ay a ba nd on his c a

us e of a c tio n o r f

a il to establish it.” BHP Pe troleum , 8 00 S.W. 2d a t 84 1. In it s c ounte rc la im, Contin e nta l is no t me re ly04

- 07

- 00 03 8- CV

- 18- seekinga ruli n g o f n on-liability , or re stating its vested r ights de fense in the form of a decla ratory judgme nt action. See id. Rathe r, the re qu e ste d de c lara tor y re lie f re a c he s b e y on d th e pe nd ingsu it to future e vents arisingout of t he ongoing and continuingrelationship between the pa rties due to the continued deve lopment of the projec t. See id. at 841-42 (r ecognizi ng that a def ensive de clar atory jud g me nt may pr e se nt i ssu e s b e y on d th os e ra ise d b y the pla int if

f) ; see also W

inslow v. Acke r , 871 S.W .2d 322, 3 2 8 (T ex . App.—San Antonio 1989, writ denied) (“when a de clar atory judgme nt counter claim has g reater ra mifications than the orig inal suit, the court may allow the counte rcla im”). Continental’s decla

ratory judgme nt c ounterc laim is an independe nt cause of ac tion for af firmative relief that has g reater ra

mifications than the City ’s suit to pro h ibit further tre e re moval; the de c larator y jud g me nt w ou ld h ave the e ff e c t of “ se ttl inga ll f

utu re di spute s” a s to the ve ste d r ig hts to develop the Ka llison R anch Proje ct. See B HP Petroleum , 800 S.W .2d at 842. F ina lly , th e City

a sse rt s th a t Co nti ne nta l c ann ot us e a de c lara tor y jud g me nt a c tio n to ob ta in attorney ’s fe es “mer ely

for r esisting the pla intiff’s rig ht to recove r.” See B exar County Appraisal Rev iew Bd. v. First Baptist C hurch , 8 46 S.W. 2d

55 4, 56 1 ( Tex
. Ap p. —Sa n A nto nio 19 93 , w ri t denied) (litiga

nt may not seek declar atory judgme nt in exis ting suit simply to rec over attorney ’s fe es that are oth e rw ise no t a

uth or ize d by statut e ). We have de te rm ine d that Co nti ne nta l’ s c ounte rc la im is a permissible claim for decla ratory relief ; thus, it is entitled to recove r i ts attorney ’s fe es as pled and prove d at trial. T EX . C IV . P R AC . & R EM . C ODE ANN . § 37.0 09 (V e rn on 19 97 ); City of Dallas v. GTE Southwest, Inc. , 980 S.W .2d 928, 939 (Tex. App.—For t Worth 1998, pet. denied). Havingfound that Continental’s dec laratory judgme nt action is proper and ripe , we c onclude that, based on the undisputed evidenc e that the City issued a Ve sted Rights Permit for the K allison Ranch P rojec t providing that the rig ht to develop the proje ct is vested as of August 29, 1991,04

- 07

- 00 03 8- CV

8 ... G i v en ou r r es ol u t i on of t h e a bov e i s s u es , we n ee d not a ddr es s Con t i n en t al ’ s r ema i n i n g i s s u es r ai s ed on a p p e a l – w h e th e r t h e C it y m a y e n fo rc e the T re e P e rm it O rd ina n c e in the E T J ; wh e the r th e trial c o u rt w a s re q u ire d to c o n s id e r t h e re c e n t am e n d m e n ts to the T re e P e rm it O rd ina n c e ’s m iti g a tio n sta n d a rd s; a n d w h e the r m iti g a tio n is equi val ent t o a prohi bi t ed ci vi l pena l t y f or a vi ol at i on i n t he E T J.

- 19- Contin e nta l Ho me s is e nti tle d to re c ov e r on its c ounte rc la im fo r de c lara tor y re lie f a nd to r e c ov e r i ts
a t t o r n e y’ s f e e s i nth e am o un t s aw ar d e d b y th e j ur

y. 8 C ONCL US I ON Ba sed on the for eg oing analy sis, we reve rse the trial cour t’s judgme nt gr anting a per manent injunction aga i n s t Continental Homes and orde ringmitigation of the r emoved tre es, and r ender a take -n oth ingjud g me nt a g a ins t the City of San A nto nio . In a dd iti on , w e g ra nt C on tin e nta l’ s r e qu e st for decla ratory relief and rende r a decla ratory judgme nt that Continental Homes has the vested rig ht to develop the Ka llison R anch Proje ct under the ordina n ce s i n eff

ect a s of August 29, 1991, and
aw ar d C o n t i n e n t a l i t s a t t o r

n e y’ s f e e s i nth e am o un t s f

o un d b y th e j ur

y.
Phy lis J . Speedlin, J ustice