Court Opinion

ID: 4208151
Source: CourtListenerOpinion
Date Created: 2017-10-02 07:17:00.09588+00
Date Added: 2024-06-11T14:14:46.161243
License: Public Domain

ACCEPTED
                                                                                      04-17-00077-CV
                                                                           FOURTH COURT OF APPEALS
                                                                                SAN ANTONIO, TEXAS
                                                                                    9/25/2017 9:11 PM

                                                                      FILED IN
                                                               4th COURT OF APPEALS
                       In the Fourth Court of Appeals           SAN ANTONIO, TEXAS
                        Sitting at San Antonio, Texas          09/25/2017 9:11:33 PM
                                                                   KEITH E. HOTTLE
                                                                        CLERK

             Electro Sales and Service, Inc. & Salim Merchant,
                                                 Appellants
                                     v.

                           City of Terrell Hills,
                                                    Appellee

          Appeal from the 57th District Court, Bexar County, Texas
        Cause No. 2016-CI-19821; Hon. Michael Mery, Judge Presiding

                   Brief of Appellee City of Terrell Hills

Barbara L. Quirk                               Adolfo Ruiz
State Bar No. 16436750                         State Bar No. 17385600
MCKAMIE KRUEGER, LLP                           MCKAMIE KRUEGER, LLP
941 Proton Road                                941 Proton Road
San Antonio, Texas 78258                       San Antonio, Texas 78258
210.546.2122 Telephone                         210.546.2122 Telephone
210.546.2130 Facsimile                         210.546.2130 Facsimile
barbara@mckamiekrueger.com                     adolfo@mckamiekrueger.com

                           Attorneys for Appellee

                 ORAL ARGUMENTS NOT REQUESTED
              STATEMENT REGARDING ORAL ARGUMENT
      1.     Oral argument is not requested, because Defendant/Appellee asserts

the facts and legal arguments are adequately presented in the briefs and record.

This appeal is made from the trial court’s granting of a summary judgment motion.

The merit of the arguments of the parties may be readily determined from the

briefs of the parties without need for oral argument.

      2.     This    appeal    involves    questions    of   law;   for   each   of

Plaintiffs/Appellants causes of action, inverse condemnation and declaratory

judgment, whether Defendant/Appellee negates at least one element of the cause of

action, or otherwise demonstrates there is no genuine issue of fact and

Defendant/Appellee is entitled to judgment as a matter of law, or alternatively,

pleads and conclusively establishes each element of at least one of its affirmative

defenses, governmental or sovereign immunity, lack of standing, or lack of

ripeness/failure to exhaust administrative remedies; or, alternatively, whether

Plaintiffs have provided summary judgment evidence to create a genuine issue of

material fact regarding each of the elements of Plaintiffs’ causes of action against

Defendant/Appellee, the City of Terrell Hills, for inverse condemnation/regulatory

taking and for declaratory judgment in their response to Defendant’s traditional

and no evidence summary judgment motion; and, alternatively, whether Plaintiffs’

response raised a genuine issue of material fact sufficient to defeat one or more of

                                          ii
the elements of each of the defenses established by Defendant in its summary

judgment motion, governmental/sovereign immunity, lack of standing, lack of

ripeness and exhaustion of administrative remedies. Because this matter was

decided on the basis of the summary judgment evidence, the pleadings of the

parties, Defendant’s Motion for Summary Judgment and the subsequent Response

and Reply, the relevant factual and legal allegations are all contained in the record

on appeal and the briefs of the parties before this Court.

      3.     The movant can move for summary judgment even with no evidence

on the grounds that there is no evidence of one or more essential elements of a

claim or defense on which the non-movant has the burden of proof. The burden

then shifts to the non-movant to present evidence raising an issue of material fact.

Oral argument would not assist the Court further in this matter.

                                          iii
                                          TABLE OF CONTENTS
STATEMENT REGARDING ORAL ARGUMENT .............................................. ii
TABLE OF CONTENTS ......................................................................................... iv
INDEX OF AUTHORITIES.................................................................................... vi
STATEMENT OF FACTS ........................................................................................1
SUMMARY OF ARGUMENT .................................................................................5
  A. Summary Judgment Proper Because Plaintiffs Waived No Evidence Issues ...6
  B. Summary Judgment Proper on Jurisdictional Grounds .....................................7
  C. Appellee’s Objections to Appellant’s Issues 2, 3, and 4 Which Were not
  Argued in Plaintiffs’ Response to Defendant’s Motion for Summary Judgment ..9
  D. Summary Judgment Proper; No Fact Issue on Elements of Plaintiffs’ Claims
  and Defendant Entitled to Judgment as a Matter of Law .....................................11
OBJECTION TO CERTAIN OF APPELLANTS’ FACTUAL ALLEGATIONS .19
ARGUMENT ...........................................................................................................22
  I. The Trial Court’s Summary Judgment for the City should be upheld because
  Plaintiffs/Appellants have not raised any issue on the City’s No-Evidence
  grounds, and, alternatively, the Trial Court’s judgment should be upheld based
  on defensive grounds of immunity, lack of standing, and lack of
  ripeness/exhaustion of remedies. (Responds to Appellants’ Brief at pg. 6; ref.
  Issue 1) ..................................................................................................................22
  I-1. Appellants have failed to raise an issue on appeal regarding the no evidence
  portion of Defendant’s Motion for Summary Judgment and on the declaratory
  judgment grounds and summary judgment should be upheld on these grounds. .24
     A. Standard and scope of review for subject matter jurisdiction (Responds to
     Appellants’ Brief at pg. 6) .................................................................................29
     B. Plaintiffs Failed to Raise Valid Regulatory Takings Claim; City Entitled to
     Sovereign Immunity (Responds to Appellants’ Brief at pg. 7) .........................31
     C. Plaintiffs have not provided evidence to create a fact issue to demonstrate
     they have standing to sue. (Responds to Appellants, Brief at pg. 9). ................36
     D. Plaintiffs’ claims are not ripe because Plaintiffs failed to establish futility
     of other options available (Responds to Appellants’ Brief at pg.10) ................38

                                                             iv
  II. No inverse condemnation/taking can be demonstrated because there is no
  intentional taking and no property right in having one’s zoning changed to
  commercial or in reinstating a non-conforming use abandoned by a predecessor
  in interest (Responds to Appellants’ Brief at pg. 11; ref. issues 2, 3 and 4). .......42
     A. Traditional summary judgment standards of review (Responds to
     Appellants’ Brief at pg. 11) ...............................................................................42
     B. Appellee Objects to Appellants’ “Issue 2” (Balance Between Public and
     Private Interests) Raised for First Time on Appeal and Not a Relevant Issue
     (Responds to Appellants’ Brief at pg. 11 and pg. 21; ref. Issue 2) ...................44
     C. Subject to the foregoing objection, Defendant City not required to prove
     that public interest in its zoning restrictions outweighs the private burden on
     Plaintiffs, property, Plaintiffs failed to present any evidence on this issue or
     raise question of fact (Responds to Appellants’ Brief at pg. 13 ref. Issue 2)....44
     D. Appellee Objects to Appellants’ “Issue 4” (Stripped Economic Viability)
     Raised for the First Time on Appeal. Subject thereto, Plaintiffs failed to
     provide evidence or raise an issue of fact to support their argument that the
     City’s zoning deprived Plaintiffs of the economically viable use of their
     property or unreasonably interfered with their use of the property (Responds to
     Appellants’ Brief at pg. 16; ref. Issue 4) ...........................................................52
  III. Defendant objects to Appellants issue on the character of governmental
  action which was not raised by Plaintiffs in their Response to Defendant’s
  summary judgment motion. Subject thereto, the summary judgment evidence
  shows no zoning intransigence and there is no regulatory taking as a matter of
  law (Responds to Appellants’ Brief at pg. 20; ref. Issue 4) .................................61
  IV. Appellee has objected above to Appellants’ “Issue 2” (Balance Between
  Public and Private Interests) Raised for First Time on Appeal and Not a Relevant
  Issue (Responds to Appellants’ Brief at pg. 21; ref. Issue 2) ...............................62
  V. CONCLUSION ..............................................................................................63
PRAYER ..................................................................................................................64
CERTIFICATE OF SERVICE ................................................................................66
CERTIFICATE OF COMPLIANCE .......................................................................67
APPENDIX ..............................................................................................................68

                                                            v
                                       INDEX OF AUTHORITIES
Cases
Abbott v. City of Princeton, 721 S.W.2d 872, 875 (Tex. App.--Dallas 1986, writ

  ref'd n.r.e.) .............................................................................................................37

Ager v. Wichita Gen. Hosp., 977 S.W.2d 658, 660 (Tex. App.--Fort Worth 1998,

  no pet.) ..................................................................................................................33

Agins v. City of Tiburon, 447 U.S. 255, 260 (1980) ................................................51
Allen v. City of Texas City, 775 S.W.2d 863 (Tex. App.--Houston [1st Dist.] 1989,

  writ denied) ...........................................................................................................26

Azadpour v. City of Grapevine, No. 02-13-00323- CV, 2014 WL 2566024, at *4

  (Tex. App.––Fort Worth June 5, 2014, pet. denied) (mem. op.) ..........................48

Bland ISD v. Blue, 34 S.W.3d 547, 44 Tex. Sup. Ct. J. 125 (Tex. 2000)................30

Browning-Ferris, Inc. v. Brazoria County, 742 S.W.2d 43, 49 (Tex. App.--Austin

  1987, no writ) ........................................................................................................41

Carr v. Brasher, 776 S.W.2d 567 (Tex. 1989) ..........................................................6

City of Abilene v. Burk Royalty Co., 470 S.W.2d 643, 14 Tex. Sup. Ct. J. 489 (Tex.

  1971) .....................................................................................................................26

City of Dallas v. Blanton, 200 S.W.3d 266 (Tex. App.--Dallas 2006, no pet.) 26, 31

                                                             vi
City of Dallas v. VSC, LLC, 347 S.W.3d at 236 .....................................................35

City of Fort Worth, 388 S.W.2d 400, 402 (Tex. 1964 ...................................... 51, 60

City of Hedwig Village Planning & Zoning Comm'n v. Howeth Invs., Inc., 73
S.W.3d 389 (Tex. App.--Houston [1st Dist.] 2002, no pet.) ................................30

City of Houston v. Clear Creek Basin Auth., 589 S.W.2nd 671, 678 (Tex. 1979) ...43

City of Pharr v. Pena, 853 S.W.2d 56, 63 (Tex. App.—Corpus Christi 1993, writ

  denied)...................................................................................................................60

City of Pharr v. Tippitt, 616 S.W.2d 173, 176 (Tex. 1981).............................. 49, 52

City of San Antonio v. El Dorado Amusement Co., Inc., 195 S.W.3d 238 (Tex.

  App.--San Antonio 2006, pet. denied) ..................................................................32

City of University Park v. Benners, 485 S.W.2d 773, 778 (Tex. 1972) ........... 48, 52

City of University Park v. Benners, 485 S.W.2d 773, 779 (Tex. 1972) ..................14

Denman v. Citgo Pipeline Co., 123 S.W.3d 728 (Tex. App. Texarkana 2003) ......37

Dillard v. Austin Indep. Sch. Dist., 806 S.W.2d 589 (Tex. App.--Austin 1991, writ

  denied)...................................................................................................................31

EPGT Tex. Pipeline, L.P. v. Harris County Flood Control Dist., 176 S.W.3d 330

  (Tex. App.—Houston, 2004, pet’n dismissed) ........................................ 30, 33, 43

                                                            vii
Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830

  (Tex. App.--Houston [1st Dist.] 1999, no pet.) ....................................................25

FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) ...............22

Foster v. Denton Indep. Sch. Dist., 73 S.W.3d 454 (Tex. App. – Fort Worth, 2002)

  ...........................................................................................................................6, 25

Gen'l Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591 (Tex. 2001) .....25

Hamilton Bank Williamson County Reg’l Planning Comm’n v. Hamilton Bank, 473
U.S. 172, 186 (1985) .............................................................................................40

Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468, 476 (Tex. 2012) ...........36

Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68 (Tex. App.--Austin 1998, no pet.) ...25

King Ranch Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) ...................................24

Lay v. Aetna Ins. Co., 599 S.W.2d 684, 686 (Tex. Civ. App.--Austin 1980, writ

  ref'd n.r.e.) .............................................................................................................37

Lingle v. Chevron USA, Inc., 544 U.S. 528 (2005) ............ 11, 13, 16, 45, 49, 51, 57

Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998).. 26, 46, 47, 49, 55, 60

McMahon Contracting, L.P. v. City of Carrollton, 277 S.W.3d 458 (Tex. App.-

  Dallas 2009, pet. denied) ......................................................................................31

                                                             viii
Medrano v. City of Pearsall, 989 S.W.2d 141, 144 (Tex. App.--San Antonio 1999,

  no pet.) ..................................................................................................................33

Moore v. K Mart Corp., 981 S.W.2d 266 (Tex. App.--San Antonio 1998, pet.

  denied)...................................................................................................................25

Mr. W. Fireworks, Inc. v. Comal Cty., No. 03-06-00638-CV, 2010 WL 1253931, at

  *8 (Tex. App.––Austin Mar. 31, 2010, no pet.) (mem. op.) ................................48

Public Util. Comm’n v. Houston Lighting & Power Co., 748 S.W.2d 439 (Tex.

  1987) .....................................................................................................................41

Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 40 Tex. Sup. Ct. J. 438 (Tex.

  1997) .............................................................................................................. 30, 43

Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2002)7, 8, 45,

  46, 47

State Bar of Texas v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994) ............................41

State v. Terrell, 588 S.W.2d 784, 22 Tex. Sup. Ct. J. 543 (Tex. 1979)...................31

Taub v. City of Deer Park, 882 S.W.2d 824, 826 (Tex. 1994) ................................46

Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 36 Tex. Sup. Ct. J. 607

  (Tex. 1993)..................................................................................................... 31, 41

                                                             ix
Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 47 Tex. Sup. Ct. J.
386 (Tex. 2004)........................................................................................ 30, 31, 32

Tex. Dep't of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162 (Tex. 2013) 32

Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 1993 Tex.

  LEXIS 22, 36 Tex. Sup. J. 607 (Tex. 1993) .........................................................36

Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) .........22

Statutes
Tex. Civ. Prac. & Rem. Code Ann. §37.001 (West 2017) ........................................4

Tex. Const. Art. I, §17 .............................................................................. 4, 8, 25, 26

TEX. LOC. GOV’T CODE § 211.010(b)................................................................39

Tex. Loc. Gov’t Code Ann §211.009(a) ..................................................................38

Tex. Loc. Gov’t Code Ann §211.010 ......................................................................38

Tex. Loc. Gov’t Code Ann §211.011 ......................................................................38

TEX. R. CIV. P. 166a(i) ................................................................................... 24, 25

Other Authorities
City of Terrell Hills Code of Ordinances Ch14, Sec. XV .......................................39

City of Terrell Hills Ordinance 1347 .........................................................................4

                                                        x
City of Terrell Hills Ordinance 1349 .........................................................................4

City of Terrell Hills Ordinance 1386 .........................................................................4

                                                      xi
                              No. 04-17-00077-CV

                          In the Fourth Court of Appeals
                           Sitting at San Antonio, Texas

               Electro Sales and Service, Inc. & Salim Merchant,
                                                   Appellants
                                       v.

                              City of Terrell Hills,
                                                       Appellee

            Appeal from the 57th District Court, Bexar County, Texas
            Cause No. 2016-CI-19821; Hon. Michael Mery, presiding

                     Brief of Appellee City of Terrell Hills

TO THE HONORABLE FOURTH COURT OF APPEALS:

      NOW COMES Appellee, the CITY OF TERRELL HILLS (sometimes

referred to herein as “the City”), and submits this Brief of Appellee in accordance

with the Texas Rules of Appellate Procedure (“TRAP”).

                           STATEMENT OF FACTS
      4.    This case began with the purchase by Electro Sales and Service

through its President, Plaintiff/Appellant, Salim Merchant (“Merchant”), from

Billy and Gin Wei Eng (“the Engs”) of a property located within the City of Terrell

Hills (“the Property”). See Appellant’s Brief at pg. 1. The Warranty Deed and

                                        1
purchase contract show that the purchaser of the property was a Texas corporation,

Plaintiff/Appellant Electro Sales and Service, Inc. Merchant signed as the

President of the Corporation. CR 564 to CR 580. Merchant has failed to provide

evidence of any alleged individual ownership interest in the Property.

      5.     The Property has been zoned semi-commercial since the mid-1960s.

See CR 613 and 696 (excerpts of the deposition of the previous property owner,

Billy Eng, who states the Property was always semi-commercial; all the way back

in the 60’s). In the mid-1960s the Property had been re-zoned from commercial to

semi-commercial by Defendant, the City of Terrell Hills (“the City”), pursuant to

the City’s plans for the area. See Appellants’ Brief, pg. 1, par. 1.

      6.     At the time of the zoning decision in the 1960’s certain commercial

business uses (such as the laundromat use in the center of the Property) were

allowed to continue as “non-conforming uses” for so long as they did not cease to

operate the use for six months or more.

      7.     Mr. Eng testified that at the time the Property was sold to Electro

Sales and Service the middle space already had lost it grandfathered status for

being able to be operated as a commercial laundromat and that he let Merchant

know. CR 614 - 615. The Engs allowed the previous tenant of the space in question

to vacate the premises because his business as a laundromat or dry cleaners was

failing. CR 696. Eng intentionally allowed the non-conforming commercial

                                           2
laundromat use to lapse because he did not intend to do a laundromat anymore; he

believed he could lease it as office space (following the existing semi-commercial

zoning). CR 615, Excerpts of Billy Eng’s Deposition, pages 94:21 to 95:10. The

non-conforming commercial uses in the outer parcels, including a bar and a

convenience store, had not been abandoned since the time Mr. Eng’s father

acquired the Property in the 1960’s and continued to operate after Merchant’s

purchase of the Property. CR 611, Excerpts of Billy Eng’s Deposition, pages 18:4-

25; 19:1-21; 20:4-8.

      8.    Minutes of the City Council of the City of Terrell Hills of August 8,

2011 show that the City Council discussed a request by Merchant to re-zone the

Property to “Commercial,” but City Council denied the request, discussing the fact

that this area is a transition zone and there are immediate neighbors who would be

directly affected. CR 622.

      9.    The minutes of the City Council of the City of Terrell Hills from

October 8, 2012 show that the matter put before City Council from Merchant was a

request for rezoning of the Property from “Semi-Commercial” to “Commercial”.

CR 628. These were not requests to reinstate the previously abandoned non-

conforming laundromat use. Merchant told City Council he wished to lease to a

tenant who planned to open a barber shop. CR 628. The Planning and Zoning

Commission recommended City Council deny the re-zoning request. CR 628. The

                                        3
re-zoning request was denied, but City Council decided a meeting should be held

by the Planning and Zoning Commission to discuss amending the zoning ordinance

to allow for the issuance of Special Use Permits which would allow uses such as a

barber shop, but not the entire range of commercial uses. CR 628.

          10.    Since that time, the City Council has granted Merchant’s requests for

special use permits for use of the Property under City of Terrell Hills Ordinance

1347, passed on December 10, 2012, providing for a Special Use Permit process;

City of Terrell Hills Ordinance 1349, passed May 13, 2013, allowing a hair and

nail salon use; and City of Terrell Hills Ordinance 1386, passed April 13, 2015,

allowing a hair and nail salon. See CR 632 to 639. 1

          11.    Plaintiffs’ filed causes of action against the City for a regulatory

taking 2 under Section 17 of Article I of the Constitution of the State of Texas and a

declaratory judgment under Chapter 37 of the Texas Civil Practices and Remedies

Code related to interpretation of the City’s Zoning Ordinance. CR 5 – 6; Tex. Civ.

Prac. & Rem. Code Ann. §37.001, et seq. Tex. Const. Art. I, §17.

1
    The City requests that the Court take judicial notice of all of the provisions of the City’s Zoning
     Code relied upon herein.
2
 In the fact section of the Petition on page 4 Plaintiff states the interpretation of the ordinance is
regulatory condemnation, and the enforcement of the ordinance is regulatory taking. However,
the causes of action portion of the pleading only asserts regulatory taking. CR 4 – 5. The Petition
also contains a section d) which has a heading applicable to “all defendants”, but this section
contains no claims against the City. CR 8.

                                                   4
      12.    For further factual averments, Appellee incorporates herein as if set

forth in full the summary judgment evidence attached to Defendant’s Motion for

Summary Judgment and Reply in Support of its Motion for Summary Judgment,

Exhibits 1 through 8 at CR 610 to 651 and CR 696.

                         SUMMARY OF ARGUMENT
      13.    This lawsuit arose from Plaintiffs’ dispute with the Engs, the previous

owners of the Property, over Merchant’s own failure to investigate the long-

standing “Semi-Commercial” zoning classification of the Property before

purchasing the Property. Merchant has admitted his misconception regarding the

previous intentional abandonment and termination by the Engs, of a non-

conforming commercial laundromat use in the center suites of the Property.

Merchant attempted to compensate for his error by trying to force the City to

change the zoning of the Property from its long-standing “Semi-Commercial”

zoning to “Commercial” zoning. Although the City denied Plaintiffs’ re-zoning

request, the City has granted Plaintiffs Special Use Permits for their requested uses

on more than one occasion.

      14.    Appellants’ suit against the City is one for inverse condemnation and

declaratory judgment, claiming an intentional regulatory taking of their property

rights for a public purpose without compensation.

                                         5
      15.    Appellants are appealing the Trial Court’s decision to grant

Defendant, the City of Terrell Hills’ Motion for Summary Judgment. The judgment

appealed from does not specify the reason for the Trial Court’s decision. CR 698.

This Court of Appeals should find for Defendant, the City of Terrell Hills, if any of

the City’s grounds for summary judgment are meritorious. Foster v. Denton Indep.

Sch. Dist., 73 S.W.3d 454, 464-465 (Tex. App. – Fort Worth, 2002); Carr v.

Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

      16.    The City filed its Traditional and No-Evidence Motion for Summary

Judgment on all of Plaintiffs’ claims against the City (including inverse

condemnation/regulatory taking and declaratory judgment) on August 16, 2016.

(CR 581 to 651).

      A. Summary Judgment Proper Because Plaintiffs Waived No Evidence
      Issues
      17.    The grounds alleged by the City include a no-evidence motion that

Plaintiffs have provided no evidence of one or more of the material elements of

their claims. In particular, on the inverse condemnation claim Plaintiffs have

provided no evidence of a property right that was taken by the City, no evidence of

deprivation of all economically viable use of the Property or of unreasonable

interference with use of the property based on investment backed expectations, no

evidence that City action not substantially related to legitimate public purpose (if

                                         6
the Court applies this element), and no evidence any action of the City was the

proximate cause of damages to Plaintiffs.

      18.    Appellants have failed to raise a viable issue on appeal with regard to

Defendant’s no evidence grounds for summary judgment and, for this reason, this

Court of Appeals should uphold the Trial Court’s Summary Judgment for

Defendant/Appellee on this ground with no need for further consideration of

Appellants’ issues.

      B. Summary Judgment Proper on Jurisdictional Grounds

      19.    Defendant’s Motion for Summary Judgment also asserts alternative

grounds that Plaintiffs failed to establish jurisdiction because the jurisdictional

facts negate one or more elements Plaintiffs would need to establish to defeat

Defendant’s claims of immunity, lack of standing, failure to exhaust administrative

remedies, and ripeness.

      20.    Plaintiff has failed to properly invoke waiver of immunity under the

takings clause in the Texas Constitution primarily because Defendant has

demonstrated the taking of a property right is negated in this case. The undisputed

summary judgment evidence establishes the Property Plaintiffs were attempting to

up-zone to commercial zoning had been zoned semi-commercial (a transition area)

since the 1960s. This is not a fact situation like the one in the Sheffield case cited

by Appellants where a city passed regulations which down-zoned the uses allowed

                                          7
on a developer’s property after he purchased it. Sheffield Dev. Co. v. City of Glenn

Heights, 140 S.W.3d 660, 663 (Tex. 2002).         Landowners hold their property

subject to police regulations of the cities in which they are located. There is no

legal right to up-zone a property.

      21.    The Texas Constitution, Article I, Section 17 provides there is no

taking when the landowner consents. In this case, it is undisputed the prior owner

voluntarily abandoned the non-conforming commercial laundry use in the center

suites on the Property. Plaintiffs could not have acquired any rights to a takings

claim from the prior owners related to the termination of the non-conforming use.

It is also undisputed many property uses are allowed on a semi-commercial zoned

Property. Further, Plaintiffs have not been denied the right to use the center suites

for commercial uses because as Plaintiffs admit, the City granted Plaintiffs’

requests for Special Use Permits for the barber shop/hair salon uses requested.

There has been no legally recognized taking in this case and Plaintiffs failed to

invoke the waiver of immunity provided for a takings violation.

      22.    Defendant has established Appellants lack of standing to sue for a

regulatory taking for the same reasons discussed above. Additionally, Plaintiffs

failed to exhaust their administrative remedies as required for a takings claim

because they did not appeal the City staff interpretations of the zoning ordinance of

which Plaintiffs complain to the Zoning Board of Adjustment. For this same

                                         8
reason, Plaintiffs’ causes of action are not ripe for adjudication. Plaintiffs have not

raised a question of material fact on any of these defenses established by

Defendant.

      23.    Appellants have addressed the defenses of subject matter jurisdiction,

immunity, standing and ripeness in Article 1 of their Brief which appears to

correspond with their Issue 1. Appellants fail to fully state the burden of proof on

these claims. Once Defendant establishes the elements of these defenses, which

Defendant has accomplished, the burden of proof shifts to Plaintiffs to raise a

genuine issue of material fact on these elements.

      24.    In its Motion for Summary Judgment Defendant established Plaintiffs

have failed to provide any evidence to create a genuine issue of material fact as to

the jurisdictional claims of Defendant and this Court of Appeals should uphold the

Trial Court’s judgment on the grounds of lack of jurisdiction without need to

examine Appellants’ arguments further.

C. Appellee’s Objections to Appellant’s Issues 2, 3, and 4 Which Were not Argued
 in Plaintiffs’ Response to Defendant’s Motion for Summary Judgment

      25.    Defendant objects to three of Appellants’ issues which were not

argued in Plaintiffs’ Response to Defendant’s Motion for Summary Judgment:

1)(Appellants’ “Issue 2”) how the City’s regulation affects the balance between the

public and private interests; 2) (Appellants’ Issue 3”) whether the zoning of the

                                          9
Property (as opposed to the previously argued denial of change in zoning) serves a

substantial public interest; and 3) (from Appellant’s “Issue 4”) whether Plaintiffs

were denied all economically viable use of the Property (although this was

mentioned in the pleading, no argument on this issue was presented in Plaintiffs’

Response to Defendant’s Motion for Summary Judgment). Appellee objects to the

three new issues because they were not raised in Plaintiffs’ Response to

Defendant’s Motion for Summary Judgment and for other reasons discussed

further below.

      26.    In Appellants’ “Issue 2,” discussed in Article II, Section C, and

Article IV of Appellants’ Brief, Appellants assert a fact issue exists regarding how

the City’s regulation of the Property affects the balance between public and private

interests. This is being raised for the first time and is not a valid issue for appeal.

      27.    In Appellants’ “Issue 3,” discussed in Article II, Section D, 2,

Appellants’ claim Defendant’s zoning of the Property does not serve a substantial

public interest. Plaintiffs’ Response to Defendant’s Motion for Summary Judgment

only addressed the substantial public interest test with respect to the City’s

decision to deny Plaintiffs’ request to up-zone the Property to commercial. That is

a different issue than a challenge to the substantial public interest in the City’s

decision in the 1960s to zone the property semi-commercial. If Plaintiffs intended

to argue this point on the 1960s zoning ordinance in Plaintiffs’ Response,

                                           10
Defendant would have argued the statute of limitations argument raised in the

City’s Original Answer. Further, the City would have raised the issue previously

raised in the City’s Plea to the Jurisdiction that the Texas Attorney General’s

Office must be provided notice of the challenge to an existing law (such as the

zoning ordinance) before jurisdiction may attach. Further, the United States

Supreme Court in Lingle has backed away from the use of the substantial public

interest test in inverse condemnation cases, except in certain circumstances which

do not apply here. Lingle v. Chevron USA, Inc., 544 U.S. 528 (2005).

       28.    It would make more sense not to apply the substantial public interest

test in a case such as the present case where Plaintiffs have stated one of the

elements they need to prove for their takings claim is that the taking was for a

public purpose. By not arguing the substantial public interest test with regard to the

semi-commercial zoning of the Property in their Response Appellants have waived

this issue.

D. Summary Judgment Proper; No Fact Issue on Elements of Plaintiffs’ Claims
 and Defendant Entitled to Judgment as a Matter of Law

       29.    In the alternative, if same be needed, and subject to the foregoing

objections, Defendant’s Motion for Summary Judgment asserts grounds that there

is no genuine issue of fact as to the negation of one or more of the elements of each

                                         11
of Plaintiffs’ claims for which Plaintiffs would have the burden of proof at trial and

the City is entitled to judgment as a matter of law.

      30.    Appellants have failed to completely state the burden of proof on

summary judgment. In the event summary judgment is not upheld on the no-

evidence grounds or on the jurisdictional defenses raised by Defendant, it may still

be granted on the grounds that there is no genuine issue of fact as to the negation of

one or more elements of Plaintiffs’ causes of action and Defendant is entitled to

judgment as a matter of law. The burden of proof then shifts to Plaintiffs to provide

evidence sufficient to create a genuine issue of fact as to the elements negated.

      31.    Defendant has established there is no genuine question of material fact

as to one or more of the essential elements of Plaintiffs’ causes of action (inverse

condemnation/regulatory taking and declaratory judgment) and Defendant is

entitled to summary judgment on Plaintiffs’ causes of action as a matter of law. In

particular, the City did not act intentionally with reasonable certainty of the denial

of Plaintiff’s property rights. In fact, the City attempted to accommodate Plaintiffs’

needs by granting Plaintiff’s Special Use Permits for the uses requested.

      32.    Further, there has been no taking of a property right because there has

been no denial of all economically viable use of the Property and no unreasonable

interference with use of the Property based on reasonable investment backed

expectations. Plaintiffs are still free to use the Property for semi-commercial uses

                                          12
and for commercial uses by obtaining Special Use Permits from the City. There is

no property right and no reasonable expectation to change the long-standing zoning

of a property, which in this case has been semi-commercial for over forty years,

which existed long before the purchase of the Property by Electro Sales and

Service. CR 612 to 616. There is no taking under the law when there is consent

which has been shown due to the voluntary abandonment and termination of a non-

conforming commercial use by the prior owners of the Property.

      33.    Plaintiffs have raised an issue based on the substantial advancement of

a public purpose test.

      34.    Subject to the foregoing objections, Appellants argument that the City

has not provided a rationale to show the semi-commercial zoning of Plaintiffs’

property and the refusal to rezone the Property to its prior commercial designation

or reinstate the former non-conforming use exception “effectuates a substantial

public purpose” is a red herring. See Appellants’ Brief at page 4. Plaintiffs Original

Petition does not include the element of substantial advancement of a legitimate

public purpose in Plaintiffs’ cause of action for taking, and instead, only indicates

Plaintiffs are basing their claim on alleged denial of economic viability and

unreasonable interference with use of the Property. See CR 170. In its Motion for

Summary Judgment the City discussed the change in the application of the

substantial advancement issue found in the Lingle case, but also provided argument

                                         13
in the alternative regarding the presumption applied by the Courts in the favor of

finding a zoning ordinance substantially advances a legitimate government

purpose. CR 595 to 598. The City also attached the minutes of the City Council

meeting at which the transitional purpose of protecting abutting properties was

discussed. Because of the presumption in favor of a municipal zoning ordinance on

this issue, it is Plaintiffs’ burden to show conclusive evidence the ordinance is

arbitrary. See City of University Park v. Benners, 485 S.W.2d 773, 779 (Tex.

1972).

      35.   Appellants’ statement on page 4 of Appellants’ Brief that the City

refuses to allow commercial tenants in the center suites is contrary to the

undisputed facts admitted by Plaintiffs that the City has granted Special Use

Permits for the center suites for the commercial uses requested by Plaintiffs. As

seen in the minutes of the City Council attached to Defendant’s Motion for

Summary Judgment, the City Council has a legitimate concern regarding not

having any control over the types of commercial businesses which would be placed

in this transition zone if the zoning of the Property were to be changed to

commercial. The Special Use Permit process remedies this issue while still

allowing the uses requested by the landowner.

      36.   It is undisputed the City’s decision to zone the Property semi-

commercial occurred in the 1960s, long before the acquisition of the Property by

                                       14
Electro Sales and Service. The prior commercial designation has not been in effect

since the 1960s. Any challenge to the decision in the 1960s would be barred by

limitations and waiver.

      37.   Further, the record reflects Plaintiffs have not met the prerequisite to

making a challenge to the zoning ordinance of notifying the Texas Attorney

General. For further argument, the City incorporates its discussion of this issue

from its Motion for Summary Judgment into this Brief as if set forth in full from

CR 595 to 598.

      38.   There is no dispute that in the 1960s when the zoning change occurred

the non-conforming use exception was allowed for particular uses which had

legally existed prior to the zoning change. CR 612 to 616. There is no dispute that

under the City’s ordinances the non-conforming use exception for each particular

use (in this case a laundromat) was to terminate whenever the use was abandoned

for six months. It is also undisputed that the non-conforming use in question was

voluntarily abandoned by the Engs before they sold the Property to Electro Sales

and Service. CR 612 -616.

      39.   The non-conforming use exception would have allowed the

landowners at the time of the zoning change in the 1960s to recoup their

investment backed expectations over time. In this case Plaintiffs have no right to

restart recoupment of the original landowner’s investment backed expectations

                                        15
which would have already run. Plaintiffs can show no evidence of reasonable

investment backed expectations from their own purchase. Nothing has changed in

the zoning of the Property or the non-conforming use status of the center suites in

the Property since the date of the purchase by Electro Sales and Service. They can

still use the Property in the exact same manner as the date on which the purchase

was made. As purchasers of real estate Plaintiffs, not the public, should bear the

risk inherent in their own failure to investigate the zoning of the Property prior to

making their purchase.

      40.    Defendant has shown that the United States Supreme Court has

moved away from the use of a substantial relationship test except in certain cases

which do not apply here. CR 596. Lingle v. Chevron USA, Inc., 544 U.S. 528, 539

(2005).

      41.    If this Court of Appeals does determine the substantial relationship

test should apply here, Defendant has met its burden to show the relationship of the

City’s denial of up-zoning to the public purpose of maintaining the orderly

development of the City and providing transition zones between residential and

commercial areas to protect from the consequences of traffic congestion and

parking issues, and to insure orderly development of the City. The City has

provided evidence in the form of City Council hearing and meeting minutes that

this semi-commercial zone serves the purpose of a transition zone protecting

                                         16
residential areas abutting the Property. CR 621 and 622. The Property has never

been zoned commercial and changing the zoning to commercial would mean that

rather than having a semi-commercial zone next to a residential area, the

residential zone would back up directly to a commercial zone. This would negate

what the City was trying to do in the 1960s when it created the semi-commercial

zone.

        42.   Plaintiffs now bear the burden to establish a question of fact on this

issue and they have not met that burden.

        43.   Page 4 and 5 of Appellants’ Brief contain factual statements which are

not supported by the only summary judgment evidence provided by Plaintiffs, Mr.

Merchant’s affidavit, and to which Appellee has objected elsewhere in this Brief.

Appellants argue the center suite is flanked by commercial businesses on either

side and throughout the entire area surrounding the Property. They conveniently

omit the residential neighbors backing up to the Property. Plaintiffs allege changes

in the area since the original zoning has passed, but provide no evidentiary support

for their arguments.

        44.   Appellants make a blanket statement that the center space has lost any

economic viability, but Plaintiffs have provided no evidence of this. Plaintiffs have

not mentioned, even in Merchant’s affidavit, any efforts to lease the space for any

of the numerous uses allowed in semi-commercial zoning. In fact, Mr. Eng

                                           17
testified that he let the Laundromat out of their lease because they were no longer

making it financially and that he believed he could lease the space for a semi-

commercial office use.

      45.    Although it is not mentioned in Appellants’ list of issues, in Article II,

D and Article III of their Brief, Appellants also discuss their claim of unreasonable

interference with use and enjoyment of the Property. This issue was addressed in

Plaintiffs’ Response to Defendant’s Motion for Summary Judgment. However,

Plaintiffs failed to provide any evidence to support their claims and failed to raise a

genuine issue of fact to defeat Defendant’ summary judgment motion on this issue.

The Courts determine whether or not unreasonable interference has occurred based

primarily on investment backed expectations. Defendant has demonstrated

Plaintiffs could not have had reasonable investment backed expectations that the

center suites of the Property could be used for commercial uses where, as here, the

zoning of the Property had been changed to semi-commercial in the 1960s to serve

as a transition zone and the previous owner, Mr. Eng testified in deposition he told

Merchant the non-conforming use had terminated for the center suites. CR 615.

      46.    The only alleged evidence provided by Plaintiffs was the self-serving

and conclusory Affidavit of Salim Merchant (CR 682 to 895) to which Defendant

filed objections. Subject to this objection, the Affidavit failed to provide any

evidence demonstrating unreasonable interference with property rights or

                                          18
reasonable investment backed expectations. Merchant provided no evidence as to

the relationship of the price of the Property to the semi-commercial zoning of the

Property and the previous termination of the non-conforming use of the laundromat

in the center suites.

       47.    Appellants have failed to address Defendant’s summary judgment

argument regarding Plaintiffs’ declaratory judgment claims and the Trial Court’s

decision to grant summary judgment for the Defendant should be upheld with

respect to these claims.

       48.    The Trial Court’s decision in favor of Defendant should stand.

         OBJECTION TO CERTAIN OF APPELLANTS’ FACTUAL
                         ALLEGATIONS
       49.    Appellee objects to statements in Appellants’ Statement of Facts

(“Appellants’ Facts”) which are being raised for the first time on appeal or

otherwise differ from the facts as presented in Plaintiffs’ Response to Defendant’s

Motion for Summary Judgment (“Plaintiffs’ Summary Judgment Response”). (CR

654 – 656) Defendant further asserts there is no support in the summary judgment

evidence for these factual allegations and they should be stricken. (See Appellant’s

Brief at pg. 1).

       50.    In particular, Appellee objects to Appellants statement on page 1 that

the non-conforming use allowed the Property to be used by commercial enterprises

                                         19
so long as it did not remain vacant for more than six months. Appellants have not

provided a citation to the record for this statement which revises earlier allegations

by Plaintiffs in a manner which fails to acknowledge the individual nature of the

non-conforming use allowance for each of the uses operated in the suites in the

Property.

      51.    Appellee further objects to Appellants’ statement on page 2 of

Appellants’ Brief without citation to any support that they made a request for

reinstatement of non-conforming use (in addition to the re-zoning request) which

came before Council on October 1, 2012, and was denied. This allegation was not

previously raised by Plaintiffs in their Response to Defendant’s Summary

Judgment Motion and should be stricken.

      52.    Appellee further objects to Appellants’ unsupported statement on page

2 in which Appellants state they were informed a barber shop violated the

prohibition against using the space for display or sale of merchandise. This

allegation was not previously raised by Plaintiffs in their Response to Defendant’s

Summary Judgment Motion and should be stricken.

      53.    Appellee further objects to the entire paragraph at the end of page 2

and the top of page 3 of Appellants’ Brief and requests that it be stricken.

Appellants make factual allegations not previously raised that neither permit

request was approved in a timely fashion, that one took six months, and the other

                                         20
took over a year, and that Merchant lost two prospective tenants. Although

Plaintiffs do note pages in the Court Record for certain of these allegations, the

cited pages do not support these new factual allegations. It is impossible from the

cited references to determine the dates on which completed paperwork was

actually received by the City or even to connect the items referenced by Plaintiffs

in time. Further, there is no evidence in the summary judgment record of these two

alleged potential tenants, the timing of their submissions to the City of all required

paperwork, Plaintiffs’ alleged loss of two tenants, or any connection to the reasons

for any actions given. These objectionable facts as well as objectionable issues

raised for the first time on appeal are restated by Appellants in their Summary of

the Argument on pages 4 and 5 of Appellants’ Brief and Defendant requests these

two pages of Appellants’ Brief also be stricken.

      54.    Defendant renews its objection to the conclusory and self-serving

Affidavit of Salim Merchant originally stated in Defendant’s Reply in Support of

its Motion for Summary Judgment and incorporates herein for all purposes the

reasons for the objection set out therein. CR 688. Subject to this objection,

Appellee asserts the Affidavit does not provide any evidence sufficient to support

the statements alleged above by Plaintiffs.

      55.    Plaintiffs/Appellants refer to CR 227 on page 10 of Appellants’ Brief.

This page is a self-serving letter written by Plaintiff which is not supported by an

                                         21
affidavit and is not proper summary judgment evidence. Plaintiffs did not refer to

this document in their Response to Defendant’s Motion for Summary Judgment

and have only referred to it now for the first time on appeal. For these reasons,

Appellee objects to Plaintiffs’ reference to CR 227 and requests any reference to

these documents by Plaintiffs/Appellants be stricken from the record.

                                   ARGUMENT
I. The Trial Court’s Summary Judgment for the City should be upheld because
   Plaintiffs/Appellants have not raised any issue on the City’s No-Evidence
   grounds, and, alternatively, the Trial Court’s judgment should be upheld based
   on defensive grounds of immunity, lack of standing, and lack of
   ripeness/exhaustion of remedies. (Responds to Appellants’ Brief at pg. 6; ref.
   Issue 1)

      56.   "When a trial court's order granting summary judgment does not

specify the grounds relied upon," as here, "the reviewing court must affirm

summary judgment if any of the summary judgment grounds are meritorious."

Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 439 (Tex. 2016);

FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872(Tex. 2000). The

Trial Court’s decision should be upheld if any one of Defendant’s grounds for

summary judgment was meritorious.

      57.   The City’s Traditional and No-Evidence Motion for Summary

Judgment filed August 16, 2016 (CR 581 to 651), alleges the following grounds:

                                        22
a. There is no property right to a change in zoning in this case, and there can
   be no taking when the City allowed the Plaintiffs a special use permit for
   the requested use; as a result, Plaintiffs have failed to plead a claim which
   would waive the City’s immunity. Plaintiffs have also failed to establish
   standing to sue since the semi-commercial zoning classification occurred
   in the 1960s and the previous property owners intentionally allowed the
   non-conforming commercial use of the center suites to terminate;

b. Alternatively, Plaintiffs failed to exhaust administrative remedies
  available because they did not appeal administrative decisions of City
  staff to the Zoning Board of Adjustment;

c. Alternatively, Plaintiffs’ claims are not ripe;

d. Alternatively, Plaintiff has failed to provide evidence to create a genuine
   issue of material fact to defeat summary judgment for the City on the
   grounds that the denial to up-zone the Property does not deny Plaintiff all
   economically viable use of the Property or unreasonably interfere with
   Plaintiff’s right to use and enjoy the Property and is not a regulatory
   taking as a matter of law (there should be no substantial advancement of
   public interest test; however, if the Court looks at whether the City’s
   decisions substantially advanced legitimate city interests, Plaintiffs have
   also failed to produce any evidence to raise a question of fact on this
   issue);

e. Plaintiffs’ declaratory judgment action is filed only to seek attorney’s fees,
   will not resolve ripe justiciable issues between the parties, and should be
   dismissed as a matter of law; and

f. Alternatively, Plaintiffs have provided no evidence of one or more of the
   material elements of their claims; no evidence of property right that was
   taken by the City, no evidence of deprivation of economically viable use
   of the Property or of investment backed expectations, and no evidence any
   action of the City was the proximate cause of damages.

CR 583 to 585.

                                    23
      58.   To the extent Plaintiffs attempt to seek remedy for the zoning decision

of the City made in the 1960s, Defendant has also raised the defense of limitations

in its Original Answer.

    I-1. Appellants have failed to raise an issue on appeal regarding the no
    evidence portion of Defendant’s Motion for Summary Judgment and on the
    declaratory judgment grounds and summary judgment should be upheld on
    these grounds.
      59.   Appellants have not raised an issue on appeal related to Defendant’s

no-evidence grounds for summary judgment and the grounds related to declaratory

judgment. See Appellant’s Brief at page x. For this reason, Appellants have waived

any argument on appeal related to these issues and the judgment of the Trial Court

in favor of Defendant should be upheld on these grounds without the need for

further analysis of Appellants’ Issues. Only in the event this Court of Appeals

considers further argument on this issue Appellee offers the following:

            For a no-evidence summary judgment, as alleged in paragraph 31 of
            Defendant’s Motion for Summary Judgment, the movant can move for
            summary judgment even with no evidence on the grounds that there is
            no evidence of one or more essential elements of a claim or defense
            on which the non-movant has the burden of proof. The burden then
            shifts to the non-movant to present evidence raising an issue of
            material fact. King Ranch Inc. v. Chapman, 118 S.W.3d 742, 751
            (Tex. 2003); EPGT Tex. Pipeline, L.P. 176 S.W.3d at 334-335; see
            TEX. R. CIV. P. 166a(i); Flameout Design & Fabrication, Inc. v.
            Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.--Houston
            [1st Dist.] 1999, no pet.).

                                        24
      60.    A trial court must grant a no-evidence summary judgment motion

unless the non-movant produces summary judgment evidence that raises a genuine

issue of material fact. See TEX. R. CIV. P. 166a(i) cmt.; Moore v. K Mart Corp.,

981 S.W.2d 266, 269 (Tex. App.--San Antonio 1998, pet. denied); Jackson v.

Fiesta Mart, Inc., 979 S.W.2d 68, 71 (Tex. App.--Austin 1998, no pet.); Foster v.

Denton Indep. Sch. Dist., 73 S.W.3d 454, 464-465.

      61.    Article I, Section 17 of the Texas Constitution ("the inverse

condemnation clause") provides, in part: "No person's property shall be taken,

damaged or destroyed for or applied to public use without adequate compensation

being made, unless by the consent of such person." TEX. CONST. art. I, § 17. To

demonstrate a constitutional inverse condemnation, the landowner must show: (1)

the State intentionally performed certain acts in the exercise of its lawful authority

(intent); (2) that resulted in the taking, damaging, or destroying of property

(causation); and (3) for public use (public use). Gen'l Servs. Comm'n v. Little-Tex

Insulation Co., 39 S.W.3d 591, 598 (Tex. 2001); Steele, 603 S.W.2d at 791.

      62.    Inverse condemnation occurs when property is taken, damaged, or

destroyed for public use without process or without proper condemnation

proceedings, and the property owner attempts to recover compensation. City of

Abilene v. Burk Royalty Co., 470 S.W.2d 643, 646, 14 Tex. Sup. Ct. J. 489 (Tex.

1971); Allen v. City of Texas City, 775 S.W.2d 863, 864 (Tex. App.--Houston [1st

                                         25
Dist.] 1989, writ denied); EPGT Tex. Pipeline, L.P. v. Harris County Flood

Control Dist., 176 S.W.3d 330, 341-342.

      63.    Plaintiffs have failed to produce any evidence to support the elements

of a claim for inverse condemnation/regulatory taking. A regulatory taking occurs

when the government imposes restrictions that either deprive the owner of all

economically viable use of the property or unreasonably interfere with his right to

use and enjoy the property (a substantial advancement test may also be applied in

certain circumstances). See, Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 933-

935 (Tex. 1998). Whether particular facts are sufficient to allege a constitutional

taking is a question of law. City of Dallas v. Blanton, 200 S.W.3d 266, 271 (Tex.

App.--Dallas 2006, no pet.).

      64.    A compensable regulatory taking occurs when a governmental agency

imposes restrictions that unreasonably interfere with a landowner's right to use and

enjoy his property, such as denying a permit for development. See Mayhew, 964
S.W.2d at 933. In the present case, the undisputed facts show that the Property was

developed decades ago, the center suites on the Property may still be used as zoned

for semi-commercial use, and the City has granted Plaintiffs Special Use Permits

for commercial uses of the center suites on the Property.

      65.    In its Motion for Summary Judgment, Defendant asserted that

Plaintiffs provided no evidence of one or more of the material elements of their

                                         26
claims, specifically: that a property right was intentionally taken by the City for

public use; that they were deprived of all economically viable use of the Property

or that any action of the City unreasonably deprived them of the use of the

Property based on reasonable investment backed expectations (or, if considered by

the Court, that the City’s regulations were not substantially related to a public

purpose); or that any action of the City was the proximate cause of any damages to

Plaintiffs.

       66.    Plaintiffs have failed to provide any evidence to demonstrate the

existence of a property right which was taken by the City’s regulations. Plaintiff,

Salim Merchant has also provided no evidence of his personal ownership interest

in the Property.

       67.    There is no protected property right to have the zoning of a property

changed in a manner inconsistent with the local governing authority’s long-

established zoning classification of a property. There is no property right to have a

non-conforming use privilege reinstated after the use has been abandoned by the

previous owners. Appellants would be unable to provide any case law

demonstrating such a right.

       68.    Subject to Defendant’s objection to Appellants’ failure to make any

argument as to economic viability in its Response to Defendant’s Motion for

Summary Judgment, Appellee asserts Plaintiffs have provided no evidence despite

                                         27
extensive discovery in the case and could not provide evidence of the denial of all

economically viable use of the Property, or even of any unreasonable interference

with Plaintiffs’ use of the Property.

      69.    It is undisputed the Property has been zoned semi-commercial since

the 1960s and that this zoning allows the use of the center suites for a number of

semi-commercial uses, such as offices. Plaintiffs have failed to provide any

evidence of any failed attempts to operate an office or other semi-commercial use

at the site. It is undisputed the City has granted Plaintiffs Special Use Permits

allowing the uses requested by Plaintiffs. Plaintiffs have failed to provide any

evidence to support their claims.

      70.    Appellants claim the City has failed to establish it acted in accordance

with a substantial public interest. Subject to Defendant’s assertion that the

substantial advancement test should not be applied in this case after Lingle,

Plaintiffs have failed to demonstrate the City’s denial of their zoning change

request did not support the City’s substantial public interest in having transition

zoning such as semi-commercial zoning between commercial areas and residential

areas as reflected in related City Council minutes, and the recognized zoning

benefits of protecting neighbors from traffic congestion and parking issues, and

providing for the orderly development and growth of the City.

                                         28
      71.   Because Appellants did not raise an issue on appeal as to the no-

evidence argument, they have waived any claim that the Trial Court should not

have granted summary judgment on the no-evidence grounds. The Trial Court’s

judgment was correct on these grounds.

      72.   Additionally, Plaintiffs have failed to raise an issue on appeal as to the

declaratory judgment cause of action and the Trial Court’s decision on that claim

should be upheld.

            A.    Standard and scope of review for subject matter
            jurisdiction (Responds to Appellants’ Brief at pg. 6)

      73.   Alternatively, if same be necessary, the Trial Court was correct in

granting summary judgment for Defendant on all of its jurisdictional grounds,

including immunity, lack of standing, ripeness and failure to exhaust

administrative remedies. Appellee’s response to Appellants’ issues related to the

defenses follow. For further argument related to Defendant’s entitlement to

summary judgment on these defenses, Defendant incorporates herein as set forth in

full its related arguments from its Summary Judgment Motion at CR 590 to 594, its

Reply in Support of its Summary Judgment Motion at CR 689 to 692, and Plea to

Jurisdiction, CR 184 to 187.

      74.   Appellants have recognized on page 7 of Appellants’ Brief that they

have a burden to show that there is a disputed material fact regarding the

                                         29
jurisdictional issue. Plaintiffs failed to meet that burden for any of the jurisdictional

issues.

      75.    Summary judgment for a defendant is proper if the defendant negates

at least one element of each of the plaintiff's theories of recovery, or pleads and

conclusively establishes each element of an affirmative defense. EPGT Tex.

Pipeline, L.P. v. Harris County Flood Control Dist., 176 S.W.3d 330, 334-335

(Tex. App.—Houston, 2004, pet’n dismissed); Science Spectrum, Inc. v. Martinez,

941 S.W.2d 910, 911, 40 Tex. Sup. Ct. J. 438 (Tex. 1997).

      76.    A motion for summary judgment may raise a challenge to a trial

court's subject-matter jurisdiction. City of Hedwig Village Planning & Zoning

Comm'n v. Howeth Invs., Inc., 73 S.W.3d 389, 391 (Tex. App.--Houston [1st Dist.]

2002, no pet.). A plaintiff then bears the burden of alleging facts affirmatively

showing the trial court has subject-matter jurisdiction. Tex. Dep't of Parks &

Wildlife v. Miranda, 133 S.W.3d 217, 226, 47 Tex. Sup. Ct. J. 386 (Tex. 2004);

Bland ISD v. Blue, 34 S.W.3d 547, 554, 44 Tex. Sup. Ct. J. 125 (Tex. 2000); Tex.

Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446, 36 Tex. Sup. Ct. J. 607

(Tex. 1993); see also, McMahon Contracting, L.P. v. City of Carrollton, 277
S.W.3d 458, 464 (Tex. App.-Dallas 2009, pet. denied).

      77.    The question of whether a trial court has subject-matter jurisdiction

over a claim is one of law, and is reviewed de novo. Miranda, 133 S.W.3d at 226.

                                           30
             B.    Plaintiffs Failed to Raise Valid Regulatory Takings Claim;
             City Entitled to Sovereign Immunity (Responds to Appellants’
             Brief at pg. 7)

      78.    Under the common-law doctrine of sovereign immunity, a unit of

government cannot be sued without its consent. State v. Terrell, 588 S.W.2d 784,

785, 22 Tex. Sup. Ct. J. 543 (Tex. 1979); Dillard v. Austin Indep. Sch. Dist., 806
S.W.2d 589, 592 (Tex. App.--Austin 1991, writ denied).

      79.    Governmental immunity protects a city from suit when it exercises its

governmental functions unless that immunity is clearly waived. See City of Dallas

v. Blanton, 200 S.W.3d 266, 271 (Tex. App.--Dallas 2006, no pet.). Although the

Texas Constitution waives immunity for a validly pled inverse condemnation

claim, when a plaintiff does not allege a valid inverse condemnation claim,

governmental immunity applies. Id.

      80.    On pages 7 and 8 of Appellants’ Brief Appellants have incorrectly

provided a standard based on a review of a denial of a plea to the jurisdiction based

solely on a plaintiff’s pleadings. In the present case, the jurisdictional issues,

including immunity are raised in a summary judgment motion and the Court may

consider evidence to resolve the jurisdictional issues.

      81.    To defeat a government entity's jurisdictional immunity claim, a

landowner must provide evidence to establish a fact issue with regard to the waiver

of immunity. Therefore, if a plaintiff cannot raise a fact issue with regard to its

                                         31
inverse condemnation cause of action, there is no waiver of immunity, and the trial

court lacks subject-matter jurisdiction. Tex. Dep't of Transp. v. A.P.I. Pipe &

Supply, LLC, 397 S.W.3d 162, 166 (Tex. 2013). To satisfy this burden, the

landowner must raise a fact issue as to one of the elements of inverse

condemnation: intent, causation, or public use. See Miranda, 133 S.W.3d at 226-

228 (holding pleas to the jurisdiction generally follow summary judgment burden

of proof); but see City of San Antonio v. El Dorado Amusement Co., Inc., 195
S.W.3d 238, 244 (Tex. App.--San Antonio 2006, pet. denied) (a public use is not a

necessary component of a regulatory taking).

      82.   In an inverse condemnation case, once the movant has demonstrated it

is a government entity entitled to immunity and presented its defense that the Court

lacks jurisdiction, the burden of proof shifts to the non-movant to show a material

fact issue exists regarding the jurisdictional issue, that is, waiver of movant’s

immunity. See Miranda, 133 S.W.3d at 228; City of San Antonio v. Rogers

Shavano Ranch, Ltd., 383 S.W.3d at 241; see also, EPGT Tex. Pipeline, L.P. 176
S.W.3d at 334-335; Medrano v. City of Pearsall, 989 S.W.2d 141, 144 (Tex. App.-

-San Antonio 1999, no pet.); Ager v. Wichita Gen. Hosp., 977 S.W.2d 658, 660

(Tex. App.--Fort Worth 1998, no pet.); See also, EPGT Tex. Pipeline, L.P. 176
S.W.3d at 334-335.

                                        32
      83.    In the present case the City is a governmental entity and has met its

initial burden to demonstrate it is a governmental entity entitled to immunity unless

Plaintiff can show a valid waiver of immunity. As discussed further below,

Defendant has demonstrated there has been no taking of a valid property right in

this case to support waiver of immunity under an inverse condemnation claim

because the Property has been zoned semi-commercial for over 40 years, the

cessation of the non-conforming commercial use in the center suites was

consensual and prior to Plaintiffs’ ownership of the Property, and the City has

allowed Plaintiffs the uses they requested by Special Use Permits.

      84.    Plaintiffs have failed to meet their burden to show a material fact issue

exists regarding the jurisdictional issue. On pages 8 and 9 of Appellants’ Brief

Plaintiffs rely entirely on their own statements in their pleadings to support their

jurisdictional argument and provide no evidence to create a material fact issue.

      85.    Further, Defendant is entitled to dismissal of Plaintiffs’ claims as a

matter of law because Plaintiff’s own facts as plead show Defendant granted

Plaintiffs the uses they requested in the form of Special Use Permits, a fact which

negates the takings element Plaintiffs would need to demonstrate in order to invoke

waiver of immunity under takings law.

      86.    Additionally, City Council minutes attached to the City’s Summary

Judgment Motion reflect this area is a transition zone abutting up to residential

                                         33
property. CR 622. This type of zoning serves the purpose of protecting residential

areas from increased traffic, parking congestion, and provides for orderly

development of the City. Plaintiffs failed to provide any evidence to demonstrate

facts which would support the elements of a valid inverse condemnation claim by

regulatory taking. As a result, Plaintiffs have failed to meet their burden of

demonstrating facts to establish a genuine issue of fact regarding the City’s

entitlement to immunity.

        87.   In the present case, Plaintiffs can show no valid claim for inverse

condemnation, and therefore, the City’s immunity to suit and liability are not

waived as to Plaintiffs’ claims. Plaintiffs have not demonstrated a legal claim for

taking of a property right and have failed to present any evidence of their claims

despite extensive time for discovery in the case.

        88.   There can be no taking where, as here, there has been no action by the

City to take any property right. There is no legally protected property right to a

change in zoning as requested by Plaintiffs. A landowner’s use of the land is

subject to police power regulations of the relevant city, including zoning

regulations passed in accordance with regulations in the Texas Local Government

Code.

        89.   There also can be no taking where, as here, there is consent. The

previous property owner intentionally abandoned and therefore, consented to the

                                         34
termination of the non-conforming use status of the laundromat in the center suites

because the laundromat was failing and he intended to lease the suites for “Semi-

Commercial” office uses.

      90.    Further, there can be no taking where, as here, Plaintiffs have been

free to use the Property for the use they requested. It is undisputed the City granted

Plaintiffs Special Use Permits on more than one occasion to allow Plaintiffs to

lease the Property for the uses requested. CR 655.

      91.    On pages 8 and 9 of Appellants Brief Appellants appear to be basing

their response to Defendant’s immunity grounds on Plaintiffs’ pleading allegations

and on unsupported factual allegations raised for the first time on appeal to which

Appellee has objected. These allegations and unsupported facts are not sufficient to

raise a question of fact to defeat Defendant’s immunity.

      92.    Plaintiffs list factors related to a “viable allegation” from City of

Dallas v. VSC, LLC, 347 S.W.3d at 236. The facts in the present case do not rise

to the level contemplated in these factors. There can be no credible allegation of

ouster, unreasonable restrictions, or overly burdensome standards when Plaintiffs

are simply subject to the zoning that existed on the Property when they bought the

Property and have by their own admission been given special use permits for the

uses he requested, including a barber shop use. CR 655. If Plaintiff’s claims

constitute a taking, then landowners all over the land could claim a taking simply

                                         35
because they are subject to zoning classifications set by cities. There is no legal

precedent for any such claim to rise to a valid takings case. Plaintiffs do not

provide evidence of factual elements to support these legal conclusions.

      93.    Because Plaintiffs have failed to demonstrate a viable regulatory

takings claim, the City retains its immunity. See Hearts Bluff Game Ranch, Inc. v.

State, 381 S.W.3d 468, 476 (Tex. 2012). The Trial Court’s judgment for Defendant

should be upheld on immunity grounds.

             C.   Plaintiffs have not provided evidence to create a fact issue
             to demonstrate they have standing to sue. (Responds to
             Appellants, Brief at pg. 9).

      94.    Standing is not an affirmative defense but is a legal question regarding

subject-matter jurisdiction. See Texas Ass’n of Business v. Texas Air Control Bd.,

852 S.W.2d 440, 1993 Tex. LEXIS 22, 36 Tex. Sup. J. 607 (Tex. 1993) . Plaintiffs

have no standing to sue for the cessation of the non-conforming use in the middle

suite. Plaintiffs were not personally aggrieved because the non-conforming use was

voluntarily abandoned prior to the purchase of the Property. The right to sue for the

injury is a personal right belonging to the person owning the property at the time of

the injury. Denman v. Citgo Pipeline Co., 123 S.W.3d 728 (Tex. App. Texarkana

2003) relying on Abbott v. City of Princeton, 721 S.W.2d 872, 875 (Tex. App.--

Dallas 1986, writ ref'd n.r.e.); Lay v. Aetna Ins. Co., 599 S.W.2d 684, 686 (Tex.

                                         36
Civ. App.--Austin 1980, writ ref'd n.r.e.). Therefore, without express provision, the

right does not pass to a subsequent purchaser of the property. Denman, supra;

Abbott, 721 S.W.2d at 875; Lay, 599 S.W.2d at 686. “A mere subsequent

purchaser cannot recover for an injury committed before his or her purchase.”

Denman, supra; Lay, 599 S.W.2d at 686.

      95.    Here, it is undisputed that Electro Sales and Service bought the

Property from the Eng Defendants after the non-conforming use expired and that

the regulatory zoning classification of the Property was put in place over 40 years

prior to the purchase. CR 613 to 615 and 696. Therefore, Plaintiffs’ unsupported

assertion that standing was somehow acquired when the Property was purchased

fails to raise a genuine issue of material fact.

      96.    Plaintiffs’ allegations on pages 9 and 10 of Appellants’ Brief are not

supported by summary judgment evidence. Plaintiffs further lack standing because

their claims are not ripe as discussed further below. Merchant also lacks standing

because he has not provided any evidence of individual ownership in the Property.

      97.    For these reasons the Trial Court’s summary judgment should be

upheld on grounds of lack of standing.

                                           37
            D.    Plaintiffs’ claims are not ripe because Plaintiffs failed to
            establish futility of other options available (Responds to
            Appellants’ Brief at pg.10)

      98.   Appellants fail to raise an issue of fact and they are barred as a matter

of law from litigating a regulatory takings claim based on 1) the cessation of the

nonconforming use in the middle suite of the Property and 2) the denial of a barber

shop in a semi-commercial district because they failed to exhaust administrative

remedies to appeal those administrative enforcement decisions to the Board of

Adjustment. See Tex. Loc. Gov’t Code Ann §§211.009(a), 211.010 and 211.011.

Appellants have failed to address the lack of appeal to the Board of Adjustment on

either a ripeness or exhaustion of administrative remedies argument and have

failed to provide any evidence that such an appeal would be futile.

      99.   Plaintiffs base their takings claim and declaratory judgment claim in

large measure on the City staff’s interpretation and enforcement of the zoning

ordinances, specifically that prior to purchase of the Property the nonconforming

use in the middle suite on the Property ceased, and that a barber shop was not an

allowable use in the middle suite after the cessation of the nonconforming use and

its reversion back to semi-commercial zoning. However, there is no evidence that

Plaintiffs timely appealed these administrative decisions to the Board of

Adjustment as required by Section XV of the City’s Zoning Code. City of Terrell

Hills Code of Ordinances Ch14, Sec. XV

                                        38
      100. Under Chapter 14, Section XV of the Zoning Code, appeals to the

Board of Adjustment may be taken by any person aggrieved or by any officer,

department, board or bureau of the municipality affected by any decision of the

administrative officer. See CR 646 to 648 – Zoning Code, Ch. 14 Sec. XV

(2)(b)(1). Chapter 14 of the Zoning Code further defines what a “reasonable time”

is for the purposes of appealing a decision of a City administrative officer to the

Terrell Hills Board of Adjustment. Id. Such appeal shall be taken with ten (10)

days from the date of any such ruling, by filing with the officer from whom the

appeal is taken and with the Board of Adjustment a notice of appeal specifying the

grounds thereof. Id.

      101. Here, Plaintiffs failed to obtain a final ruling from the City through

the appellate process set out in TEX. LOC. GOV’T CODE § 211.010(b) and the

Zoning Code, Ch. 14 Sec. XV (2)(b)(1). Plaintiff’s failure to timely appeal the

decisions of the City staff in compliance with the City’s appellate process bars

Plaintiff from litigating both the decision relating to the cessation of the

nonconforming use for the middle suite of the Property and the decision that the

barber shop was not an allowed semi-commercial use in the middle suite. As a

result, the City is entitled to dismissal of Plaintiff’s claims related to these decision.

      102. Plaintiffs’ statement on pages 10 and 11 of Appellants’ Brief that

“Appealing to some review board for which the City Council is the convening

                                           39
authority would have been futile since the City Council has the final say” defies

the entire due process system which the Board of Adjustment Procedures set out in

the Texas Local Government Code. Appellants did not even try to appeal to the

Board and base their argument on one decision by City Council, which simply is

not enough to demonstrate futility of appeal to the Board of Adjustment

      103. In addition, Plaintiffs’ assertion that they obtained a final decision

denying the request to up-zone the Property to commercial fails to satisfy a

ripeness inquiry on the takings claim. The facts are undisputed that the City

granted Plaintiffs’ applications for a Special Use Permit allowing additional

permitted uses for the Property, including a barber shop/hair salon. There is no

final decision and the City has not closed the door to continued future uses for the

middle suite of the Property. See Hamilton Bank Williamson County Reg’l

Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 186 (1985).

      104. Ripeness is an element of subject matter jurisdiction. State Bar of

Texas v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994). As such, ripeness is a legal

question. Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 444-

45 (Tex. 1993). A takings claim is not ripe for court action until a final decision

about what level of use will be permitted on the property. See Public Util. Comm’n

v. Houston Lighting & Power Co., 748 S.W.2d 439 (Tex. 1987) (“A court has no

jurisdiction to render an advisory opinion on a controversy that is not yet ripe.”).

                                        40
“[T]he ripeness doctrine conserves judicial time and resources for real and current

controversies, rather than abstract, hypothetical, or remote disputes. Browning-

Ferris, Inc. v. Brazoria County, 742 S.W.2d 43, 49 (Tex. App.--Austin 1987, no

writ). In order for a regulatory takings claim to be ripe, there must be a final

decision regarding the application of the regulations to the property at issue.

Hamilton Bank at 186.

      105. Here, the undisputed facts clearly demonstrate that the City granted

Plaintiffs’ applications for a Special Use Permit allowing additional permitted uses

for the Property, including a barber shop/hair salon. Plaintiffs cannot demonstrate

that the City ever shut its door to continued future uses for the middle suite of the

Property. Since the possibility remains that Plaintiffs’ future use requests would be

granted by the City, there can be no taking.

      106. The existing zoning of the middle suite of the Property when Plaintiffs

acquired the Property was semi-commercial, and the City is allowing Plaintiffs

uses greater than the stated semi-commercial zoning for the Property. It would be

premature to request a court or jury to make a determination whether a

compensable taking has occurred under such circumstances when the undisputed

facts demonstrate that the City is likely to continue approving uses for the Property

above the stated semi-commercial zoning for the Property. As such, Plaintiffs’

                                         41
claim is premature, and the Trial Court’s summary judgment in favor of the City

should be upheld on these grounds.

II.    No inverse condemnation/taking can be demonstrated because there is no
  intentional taking and no property right in having one’s zoning changed to
  commercial or in reinstating a non-conforming use abandoned by a predecessor
  in interest (Responds to Appellants’ Brief at pg. 11; ref. issues 2, 3 and 4).

      107. Alternatively, if same be necessary, the Trial Court was correct in

granting summary judgment because Defendant has established there is no genuine

issue of material fact on one or more elements of Plaintiffs’ causes of action and

that Defendant is entitled to judgment as a matter of law. Plaintiffs failed to present

evidence to raise a genuine issue of material fact as to whether or not a taking of a

valid property right occurred or to demonstrate any unreasonable interference with

the property rights of Plaintiffs, and other issues related to declaratory judgment

and attorneys’ fees claims.

      A.   Traditional summary judgment standards of review (Responds to
      Appellants’ Brief at pg. 11)

      108. Summary judgment for a defendant is proper if the defendant negates

at least one element of each of the plaintiff's theories of recovery, or pleads and

conclusively establishes each element of an affirmative defense. EPGT Tex.

Pipeline, L.P. v. Harris County Flood Control Dist., 176 S.W.3d 330, 334-335

                                          42
(Tex. App.—Houston, 2004, pet’n dismissed); Science Spectrum, Inc. v. Martinez,

941 S.W.2d 910, 911, 40 Tex. Sup. Ct. J. 438 (Tex. 1997).

      109. However, Appellants have failed to include the complete standards for

the traditional summary judgment as raised by Defendant. For a traditional motion,

as stated in Paragraph 30 of Defendant’s Motion for Summary Judgment (CR 589),

once the movant establishes the right to judgment as a matter of law, the burden

shifts to the non-movant who must then set forth sufficient evidence to create an

issue of material fact. City of Houston v. Clear Creek Basin Auth., 589 S.W.2nd

671, 678 (Tex. 1979).

      110. Since Defendant has met its burden, Plaintiffs would need to produce

facts to demonstrate a genuine issue of fact on each of the elements of Plaintiffs’

claims in order to defeat summary judgment. In the case of the inverse

condemnation/regulatory taking claim, Appellants would need to demonstrate an

ownership interest in the property, an intentional action by the City (for which the

City knew with reasonable certainty would have the result of taking Plaintiffs’

Property), that the action either denied them of all economically viable use of their

property or unreasonably interfered with their right to use and enjoyment of the

property based on reasonable investment backed expectations (or failed to

substantially advance a legitimate public interest, if the Court applies this test).

                                           43
      B.    Appellee Objects to Appellants’ “Issue 2” (Balance Between
      Public and Private Interests) Raised for First Time on Appeal and Not a
      Relevant Issue (Responds to Appellants’ Brief at pg. 11 and pg. 21; ref.
      Issue 2)

      111. Appellants’ “Issue 2” argues there is a fact issue regarding how the

City’s regulation affects the balance between the public interest and that of the

private landowner. See Appellants’ Brief at pg. x. Defendant objects to this Issue 2

because Plaintiffs are raising this argument for the first time on appeal. Plaintiffs

failed to raise this issue in their response to Defendant’s Motion for Summary

Judgment. See CR 658 to 680. Defendant requests that this Court of Appeals strike

“Issue 2” and related argument at II, C and IV from Appellants’ Brief.

      112. Subject to and without waiving the foregoing objection Defendant

asserts this issue is not material to the summary judgment issues because it is not

one of the elements of Plaintiffs’ cause of action for inverse condemnation or of

the City’s defenses. As stated by the Supreme Court in Lingle, the primary factors

are the economic impact of the regulation on the claimant and, particularly, the

extent to which the regulation has interfered with investment backed expectations.

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538-40 (2005). A question of fact as

to a non-material issue will not defeat a summary judgment motion.

      C.   Subject to the foregoing objection, Defendant City not required to
      prove that public interest in its zoning restrictions outweighs the private
      burden on Plaintiffs, property, Plaintiffs failed to present any evidence

                                         44
      on this issue or raise question of fact (Responds to Appellants’ Brief at
      pg. 13 ref. Issue 2)

            1.     Subject to the foregoing objection, Appellee further objects
                   to Appellants argument because Appellants are challenging
                   the zoning ordinance on these grounds for the first time on
                   appeal. If the Summary judgment burden on City is to
                   establish conditions support passage and/or maintenance of
                   the zoning ordinance or make the issue arguable, which
                   Appellee does not admit, the City has met its burden and
                   Plaintiff has the burden to raise a genuine issue of material
                   fact (Responds to Appellants’ Brief at pg. 13).

      113. Subject to and without waiving the foregoing objection, Appellee

responds to this argument in the following paragraphs in the event the Court

determines it should consider this argument. At page 11 of their Brief, Appellants

cite to the Texas Supreme Court decision in Sheffield for their proposition that the

Court is required to balance the public’s interest against that of the landowners.

The Sheffield case differs from the present case because Sheffield involved an

actual downzoning of undeveloped property by the City of Glenn Heights reducing

the number of residences that the owner/developer could build on the property.

Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660, 663 (Tex. 2002). In

Sheffield the Texas Supreme Court reversed the Appellate Court’s decision and

rendered a take nothing judgment in favor of the City on the developer’s takings

claim, finding that the down-zoning did not go too far and was not a taking.

Sheffield, 140 S.W.3d at 679.

                                        45
          114. In making its decision in Sheffield, the Texas Supreme Court noted

that the City's zoning decisions, apart from the faulty way they were reached, were

not materially different from zoning decisions made by cities every day. Id. The

Court also stated the down-zoning in Sheffield differed from the refusal to up-zone

found in the Mayhew decision where the City was maintaining the status quo in

any area which had a particular zoning classification for many years. Id; see also,

Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 936 (Tex. 1998)

          115. The Texas Supreme Court discussed in Sheffield that the takings

clause does not charge the government with guaranteeing the profitability of every

piece of land subject to its authority. Sheffield, 140 S.W.3d at 677. Purchasing and

developing real estate carries with it certain financial risks, and it is not the

government's duty to underwrite this risk as an extension of obligations under the

takings clause. Id. 87

          116. Similarly, in the present case, Merchant was an experienced purchaser

of property for his leasing business and undertook his own risk in not researching

the zoning of the Property before he made his purchase. Applying the Texas

Supreme Court’s analysis in Sheffield, the City of Terrell Hills’ action, not to

down-zone a property as in Sheffield, but to deny an up-zoning of the Property in

87   Taub v. City of Deer Park, 882 S.W.2d 824, 826 (Tex. 1994).

                                                46
order to maintain the long-standing zoning of the Property as in Mayhew, does not

rise to the level of a taking.

       117. With regard to the substantial advancement test, the Texas Supreme

Court stated in Sheffield that the Supreme Court appears to have equivocated

somewhat on its statement in Agins (that a substantial advancement test is

appropriate) outside the context of cases involving required dedications or

exactions. See, Id. at 673. However, the Court in Sheffield went on to apply the test

in this case. Sheffield, 140 S.W.3d at 674. They did not think it must be proved to a

certainty and stated that the actual effects of the City's rezoning are for the future

and can only be projected and estimated. Id. at 676. They supported the court of

appeals conclusion that the City's rezoning substantially advanced its interests in

avoiding the ill effects of urbanization and preserving the rate and character of

community growth. Id.

       118. In the present case, Defendant demonstrated the public interest in not

up-zoning the Property because it is currently transition zoning, which protects

neighboring properties. Defendant’s Summary Judgment Motion asserted such

zoning accomplishes the public purposes of protection from traffic congestion and

to provide for the orderly development of the community. Minutes of the City

Council of the City of Terrell Hills of August 8, 2011 show that the City Council

discussed a request by Merchant to re-zone the Property to “Commercial”, but City

                                         47
Council denied the request, discussing the fact that this area is a transition zone and

there are immediate neighbors who would be directly affected. CR 622.

      119. Because Defendant has met its burden for summary judgment, the

burden shifted to Plaintiffs to provide evidence to establish a genuine issue of

material fact. Plaintiffs failed to provide evidence of the alleged economic impact

and alleged degree of interference with legitimate property interests. These issues

are not strictly within the City’s knowledge and purview as argued by Plaintiffs.

The decision of the Trial Court should be upheld on these grounds.

      120. Generally, a property owner has no vested right to use its property in a

certain way without restriction. See Azadpour v. City of Grapevine, No. 02-13-

00323- CV, 2014 WL 2566024, at *4 (Tex. App.––Fort Worth June 5, 2014, pet.

denied) (mem. op.); Mr. W. Fireworks, Inc. v. Comal Cty., No. 03-06-00638-CV,

2010 WL 1253931, at *8 (Tex. App.––Austin Mar. 31, 2010, no pet.) (mem. op.).

In addition, it is well settled in Texas that “property owners do not acquire a

constitutionally protected vested right . . . in zoning classifications once made.”

City of University Park v. Benners, 485 S.W.2d 773, 778 (Tex. 1972). The City

retains its legislative authority to re-zone at any time as public necessity demands.

City of Pharr v. Tippitt, 616 S.W.2d 173, 176 (Tex. 1981). These principles apply

to an even greater extent in the present case where the City did not rezone the

Property, but only denied Plaintiff’s request to up-zone the Property.

                                          48
      121. The Supreme Court in Lingle concluded that the substantial

advancement test is a due process inquiry and not a takings inquiry. Lingle v.

Chevron U.S.A., Inc., 544 U.S. 528, 539 (2005). For this reason, even if Plaintiffs

were to defeat the City’s immunity, standing, ripeness, and other grounds for

summary judgment, Plaintiffs could not defeat the City’s summary judgment

motion in this case, unless Plaintiffs provide evidence sufficient to create a genuine

fact issue as to whether or not the City’s denial of Plaintiffs’ upzoning request has

denied Plaintiffs all economically viable use of their property or whether the City

unreasonably interfered with their right to use and enjoy the property. A regulatory

taking is a condition of use “so onerous that its effect is tantamount to a direct

appropriation or ouster.” Lingle., 544 U.S. 528 at 537. A court in deciding a zoning

issue cannot assume the role of “super zoning board.” Mayhew at 933.

             2.    Subject to the foregoing objections the City carried its
                   summary judgment burden and Plaintiffs failed to meet
                   their burden to present evidence or raise question of fact
                   (Responds to Appellants’ Brief at pg. 14)

      122. In this case, the zoning of the Property has remained semi-commercial

for fifty years, not commercial. On pages 14 and 15 of Appellants’ Brief,

Appellants attempt to equate a non-conforming use exception with effective zoning

of the Property. These two terms do not have the same meaning or effect. Zoning is

                                         49
the use which is allowed for an area. The very term, “non-conforming use” means

that the use does not comply with the zoning of the area. A non-conforming use

exception only allows a particular use (in this case a laundromat use) to continue

for a period of time until it is abandoned. This gives landowners a chance to recoup

investment backed expectations after a zoning change, but still does not allow

other unrestricted businesses into the area in the manner that an upzoning would

allow.

         123. Plaintiffs propose the City should offer proof related to the

justification of the City’s zoning decision in 1962. Any claim for that time period

would be barred by the statute of limitations.

         124. Here, the undisputed facts are that the City’s 1962 zoning ordinance

established zoning for the Property as semi-commercial with nonconforming uses

of the Property to continue until a nonuse of six months occurred whereupon the

nonconforming use would cease and revert to semi-commercial zoning. Plaintiffs

cannot demonstrate that the City’s denial of the up-zoning request was anything

but a decision to advance the City’s legitimate government concern to protect

residents from the ill effects of increased traffic, parking congestion and to control

the rate and character of community growth. As a result, the City is entitled to

summary judgment on Plaintiff’s taking claim.

                                         50
      125. Without waiving the City’s position that substantial advancement of

legitimate government interest is not applicable to this analysis, the City provides

the following argument in the event the Court finds this element does apply.

      126. The City Council minutes attached to Defendant’s summary judgment

motion discuss the fact that the semi-commercial zoning is a transition zone that

protects neighbors. The Texas Supreme Court has determined that there are a broad

range of governmental purposes that will satisfy the substantially advance

requirement. Id. Legitimate state interests include protecting residents from the ill

effects of traffic congestion, parking congestion, enhancing the quality of life, and

controlling the rate and character of community growth. Id. at 934. Such zoning

benefits the public and serves the City’s interest in assuring careful and orderly

development of business uses. See Agins v. City of Tiburon, 447 U.S. 255, 260

(1980); see also Lingle, 544 U.S. at 539.

      127. A zoning ordinance, duly adopted is presumed to be valid, and the

burden is on the one seeking to prevent its enforcement to prove that the ordinance

is arbitrary or unreasonable. City of Fort Worth, 388 S.W.2d 400, 402 (Tex. 1964).

Further, zoning is a legislative function of municipal government. City of Pharr v.

Tippitt, 616 S.W.2d 173, 175 (Tex. 1981). The courts must give deference to a

city’s action such that, “if reasonable minds may differ as to whether or not a

particular zoning ordinance has a substantial relationship to the public health,

                                            51
safety, morals or general welfare, no clear abuse of discretion is shown and the

ordinance must stand as a valid exercise of the city's police power.” Id. at 176.

“Courts may not interfere unless a challenged ordinance is shown to represent a

clear abuse of municipal discretion or unless there is conclusive evidence that a

zoning ordinance is arbitrary either generally or as to particular property.” Benners

at 779. A plaintiff cannot ask the Court to review the wisdom of the City’s denial

of Plaintiff’s zoning request.

         128. Further, the Texas Supreme Court has stated that “We are in accord

with the principle that municipal zoning ordinances requiring the termination of

nonconforming uses under reasonable conditions are within the scope of municipal

police power; and that property owners do not acquire a constitutionally protected

vested right in property uses once commenced or in zoning classifications once

made. Benners at 778. “A nonconforming use of land or buildings is a use that

existed legally when the zoning restriction became effective and has continued to

exist.” Id

         129. The City has met its burden and Plaintiff has failed to create a fact

issue.

               D.    Appellee Objects to Appellants’ “Issue 4” (Stripped
                     Economic Viability) Raised for the First Time on Appeal.
                     Subject thereto, Plaintiffs failed to provide evidence or raise
                     an issue of fact to support their argument that the City’s
                     zoning deprived Plaintiffs of the economically viable use of
                     their property or unreasonably interfered with their use of

                                         52
                   the property (Responds to Appellants’ Brief at pg. 16; ref.
                   Issue 4)

      130. In “Issue 4”, discussed in Article II, Section D, 1 and 3, and Article III

of Appellants’ Brief, Appellants have included a discussion not previously made in

their Response to Defendant’s Motion for Summary Judgment. They assert for the

first time on appeal that the center strip was stripped of all economically viable

use. Defendant objects to this argument being raised for the first time on appeal.

Although Plaintiffs mentioned in their Response to Defendant’s Motion for

Summary Judgment that this element was plead in the petition, Plaintiffs failed to

make any argument or provide any evidence related to this element in their

Response. See CR 658 to 680. Defendant requests this Court strike Appellants’

“Issue 4” and related argument at II, D, 1 and 3, and III of Appellants’ Brief.

      131. Subject to the foregoing objection, Defendant has demonstrated

Plaintiffs still have economically viable uses in the form of semi-commercial uses

for the center suites in the Property and have been granted Special Use Permits

even for the specific commercial uses requested by Plaintiffs.

      132. Subject to and without waiving the foregoing objection, the City

asserts Plaintiffs failed to provide any evidence in support of this argument. The

City has shown that the prior owner, Eng, allowed the non-conforming laundromat

use to be abandoned because it was not performing financially and that he believed

he could lease the Property for semi-commercial office uses. Plaintiffs have

                                         53
admitted the City granted them Special Use permits for the uses they requested.

Plaintiff has failed to provide any evidence that the Property has been stripped of

economic viability because of any action by the City.

                        1.    Standard for showing regulatory taking requires
                        more than unsupported statements that zoning regulations
                        unreasonably interfere with use of property and affect the
                        economic viability of the property; must be evidence that
                        unreasonable restriction (Responds to Appellants’ Brief at
                        pg. 16)

       133. Defendant has provided evidence that the denial of the upzoning

request was not unreasonable. The denial simply maintained the status quo which

existed at the time Plaintiffs purchased the Property. There can be no reasonable

investment backed expectation to have a property’s zoning changed to commercial

after it is acquired.

       134. It is undisputed the City has granted Plaintiffs Special Use Permits for

the Property. The former owner Billy Eng testified that the laundromat operated in

the middle suite under the nonconforming commercial use and his business failed.

CR 696. Mr. Eng allowed the non-conforming use to be abandoned because he

believed he could lease the suites for office space. CR 696.

       135. Plaintiffs have failed to provide any evidence that they tried to utilize

the space for office space or any other use allowed under the semi-commercial

                                           54
zoning of the Property. All Plaintiffs have offered is their personal opinions that

having the middle suite zoned commercial would somehow be more economically

viable. Plaintiff’s self-serving and unsupported statements are not summary

judgment evidence sufficient to raise an issue of fact regarding the reasonableness

of the City’s actions. There can be no genuine dispute that the City has never

denied Plaintiff full economic use of the Property. Plaintiff’s desire not to need to

apply for a new special use permit for the middle suite when he changes tenants is

not a property right to which he is entitled under the law. It is not unreasonably

restrictive for the City to require a permit to use property in a manner which would

not otherwise have been allowed in that zoning district, particularly, as here, where

the City granted the permit

      136. Defendant provides the following argument subject to its objection

above. “A restriction denies the landowner all economically viable use of the

property or totally destroys the value of the property if the restriction renders the

property valueless.” Mayhew at 935. While the semi-commercial zoning

classification for the middle suite of the Property does not permit Plaintiff to lease

to certain types of businesses, there are numerous economically viable businesses

which are permitted under the existing zoning. Any number of professional offices

for doctors, lawyers, real estate professionals are permitted. The undisputed facts

here clearly demonstrate that Plaintiff acquired several barber shops and nail salons

                                         55
who were interested in the Property and requested Special Use Permits for them.

The City approved Special Use Permits on more than one occasion at Plaintiff’s

request for barber shop/nail salon uses, but Plaintiff, although authorized, never

filled the vacancy in the middle suite of the Property.

      137. It is clear that the City has not “destroyed all value of the property” by

denying the Plaintiff’s zoning request. To the contrary, the City approved the

Plaintiff’s requests for Special Use Permits on more than one occasion. Plaintiff

operates two leased business suites on the property, that of a convenient grocery

store and a bar, that remain in use. Because Plaintiff cannot demonstrate that he

has been denied all economic uses of the Property, the City is entitled to summary

judgment on Plaintiff’s takings claim.

                   2.     The zoning had been in effect for 50 years; allowing a
                   property owner to continue a non-conforming use subject to
                   termination of the use on certain conditions does not
                   constitute a zoning change, but a benefit to the landowner;
                   no evidence was shown of an unreasonable restriction on
                   the property and City not required to show serving a
                   substantial public purpose (Responds to Appellants’ Brief
                   at pg. 18; ref. Issue 3)

 Appellees Object to Appellants’ “Issue 3” on Substantial Public Purpose of
 the City’s “Zoning” (as opposed to denial) Raised for the First Time on
 Appeal and Not a Relevant Issue

                                         56
      138. Appellants’ “Issue 3” and related argument at II, D, 2 of Appellants’

Brief argues there is a regulatory taking because the City’s zoning does not

effectuate a substantial public purpose. Appellant objects to Plaintiffs raising the

issue of whether or not there is a substantial public purpose to the City’s zoning for

the first time on appeal. Plaintiffs’ Response to Defendant’s Motion for Summary

Judgment only raised the issue of whether or not the City had established a

substantial public purpose for its decision not to up-zone the Property from long-

standing “Semi-Commercial” zoning to “Commercial” zoning. CR 668 to 675.

Appellee requests Appellants’ Issue 3 and related argument at II, D, 3 of

Appellants’ Brief be stricken.

      139. Subject to and without waiving the foregoing objection, Appellant

asserts the City is not required to show a substantial public purpose in order to

succeed on its summary judgment motion for an inverse condemnation claim. In its

Motion for Summary Judgment, the City relied on the Supreme Court’s statement

in the Lingle decision that there is no substantial purpose test in a regulatory

takings claim because this is a due process factor. CR 596.

      140. Nonetheless, Defendant did make an argument in its Motion for

Summary Judgment related to Plaintiffs’ failure to demonstrate the denial of

zoning did not advance a substantial state interest. This argument was made subject

                                         57
to and without waiving the City’s position that the substantial advancement test is

not a valid issue in this inverse condemnation case. CR 596 to 598.

      141. On page 18 of Appellants’ Brief, Appellants again attempt to confuse

“zoning” with “non-conforming use.” The Property has been zoned semi-

commercial for over fifty years. There can be no unreasonable burden on Plaintiffs

property where the zoning has remained as it was when Plaintiffs purchased the

Property and the City has granted Special Use permits for the uses requested.

      142. Subject to the foregoing objection, in the event this Court of Appeals

does consider the substantial advancement test, Defendant has demonstrated the

substantial relationship between the City’s denial of the up-zone request and a

legitimate public purpose. The semi-commercial zone is a transition zone which

protects residents of residential areas from increased traffic and parking congestion

in commercial areas and allows the City to control the rate and character of

community growth. CR 596 to 598. The City has provided evidence of a

substantial public purpose in the form of minutes of a City Council meeting at

which the up-zoning request was discussed. The discussion included statements

regarding the fact that this area is a transition zone between “Commercial” and

“Residential” zones, and that there is a residential property backing directly up to

the Property and neighboring properties which would be negatively affected by

unrestricted commercial zoning of the Property. CR 621 and 622.

                                         58
      143. Because the City has met its burden to demonstrate a substantial

public purpose, the burden shifts to Appellants to provide evidence to create a fact

question as to this element. Defendant’s evidence demonstrates a substantial public

purpose and Plaintiffs’ only alleged evidence, the Affidavit of Salim Merchant,

fails to provide any evidence sufficient to create a question of fact on whether or

not the denial of the up-zone request substantially advanced a legitimate

government interest. CR 682 to 685.

      144. Merchant’s reliance on a list of businesses he claims are allowed to

operate within one mile of the Property fails to demonstrate that the City’s zoning

decision regarding the Property does not substantially advance a legitimate City

interest. A bare list of business names without providing their specific location, the

location relative to residential homes, the availability of parking spaces, the impact

on traffic, the signage, the zoning for each, and the impact on the City’s

development fails to carry Plaintiffs’ burden to prove that the 50 year old zoning

ordinance in this case is somehow arbitrary or unreasonable. At a minimum,

Merchant’s affidavit does not even substantiate the list of business names

contained in the Response. Plaintiffs do not, at a minimum, produce evidence that

the businesses listed are even located within the City of Terrell Hills. In addition,

Merchant’s personal opinion that it is arbitrary or irrational for the City’s zoning to

allow for the middle suite not to be zoned commercial when the end suites are

                                          59
zoned commercial is inaccurate and insufficient for the Court to overturn a

presumptively valid zoning ordinance. See City of Fort Worth, 388 S.W.2d 400,

402 (Tex. 1964). There is no dispute that the underlying zoning of all of the spaces

on the Property has been “Semi-Commercial” since the 1960’s although the non-

conforming commercial uses were allowed to continue provided they were not

abandoned.

      145. Determining whether the government has unreasonably interfered

with a landowner's right to use and enjoy property requires consideration of two

factors: 1) the economic impact of the regulation, and 2) the extent to which the

regulation interferes with distinct investment-backed expectations. Mayhew, 964
S.W.2d at 935. The existing zoning of the property at the time the Property is

acquired is to be considered in determining whether the regulation interferes with

investment-backed expectations. Mayhew at 937-38. The party claiming privilege

to continue a nonconforming use, in this case Plaintiff, bears the burden of proving

its preexisting status. See City of Pharr v. Pena, 853 S.W.2d 56, 63 (Tex. App.—

Corpus Christi 1993, writ denied). Here, it is undisputed that Plaintiff acquired the

Property after the nonconforming use made of the middle suite on the Property had

been abandoned by the prior owner. The abandonment of only the non-conforming

use on the center suites and not the two outer suites of the Property was a decision

                                         60
made by the former owner, Eng, not by the City. For this reason, it cannot be

considered an arbitrary action by the City.

      146. For further argument the City incorporates the City’s argument from

CR 596 to 698 herein as if set forth in full for the purpose of demonstrating that

Plaintiffs have not met their burden on this test.

                    3.    Plaintiffs presented no evidence City’s restriction was
                    unreasonable, or that any City restriction or any failure to
                    act timely made the center space un-leasable (Responds to
                    Appellants’ Brief at pg. 19; ref. Issue 4)

      147. Plaintiff’s assertion that the semi-commercial status makes it

impossible to lease is a completely unsupported personal opinion, especially when

Plaintiff has testified that he had several potential barbershop and hair salon

tenants for the middle suite for which the City provided Plaintiff special use

permits. The decision to leave the non-conforming uses on the end suites, not the

center one was made by former owner, Eng, not by the City. It cannot be attributed

to the City.

III. Defendant objects to Appellants issue on the character of governmental
  action which was not raised by Plaintiffs in their Response to Defendant’s
  summary judgment motion. Subject thereto, the summary judgment evidence
  shows no zoning intransigence and there is no regulatory taking as a matter of
  law (Responds to Appellants’ Brief at pg. 20; ref. Issue 4)

                                          61
      148. Defendant objects to Appellants issue on the character of

governmental action which was not raised by Plaintiffs in their Response to

Defendant’s summary judgment motion. Subject thereto, the summary judgment

evidence shows no zoning intransigence and there is no regulatory taking as a

matter of law. The character of the City’s action in this case has been demonstrated

to be a typical zoning action to preserve the status quo of having a transition zone

to protect neighboring properties. Plaintiffs have failed to raise a question of fact to

defeat summary judgment.

IV. Appellee has objected above to Appellants’ “Issue 2” (Balance Between
  Public and Private Interests) Raised for First Time on Appeal and Not a
  Relevant Issue (Responds to Appellants’ Brief at pg. 21; ref. Issue 2)

      149. Already above - Appellants’ “Issue 2” argues there is a fact issue

regarding how the City’s regulation affects the balance between the public interest

and that of the private landowner. See Appellants’ Brief at pg. x. Defendant objects

to Plaintiff raising this argument for the first time on appeal. Plaintiffs failed to

raise this issue in their response to Defendant’s Motion for Summary Judgment.

See CR 658 to 680. Defendant requests that this Court of Appeals strike “Issue 2”

and related argument at II, C and IV from Appellants’ Brief. Subject to and

without waiving the foregoing objection Defendant asserts this issue is not material

                                          62
to the summary judgment issues because it is not one of the elements of Plaintiffs’

cause of action for inverse condemnation or of the City’s defenses.

      150. Subject to the foregoing objection, in the event the Court does look to

the balancing test, Defendant asserts there is nothing to balance because Plaintiffs

have failed to provide evidence of burdens to them which could outweigh the

public interest demonstrated by Defendant of having a transition zone, protecting

neighbors from traffic congestion and parking issues, and providing for orderly

development of the City. A question of fact as to a non-material issue will not

defeat a summary judgment motion. The Trial Court’s Judgment should be upheld.

                               V.     CONCLUSION
      151. As shown above Plaintiffs/Appellants have failed to show any

evidence to support at least one of the elements of their cause of action,

alternatively, have failed to show waiver of immunity and otherwise establish

jurisdiction, and, alternatively, have failed to raise a question of material fact as to

the elements of their causes of action. Plaintiffs simply bought a piece of property

without researching its zoning and tried to make the public pay for their mistake.

The City’s actions in denying an upzoning merely maintained the long-standing

semi-commercial zoning of the Property. Plaintiffs’ self-serving statements that he

has been denied all use of the property simply don’t hold weight given that the City

has granted Special Use Permits for the uses requested by Plaintiffs. For the

                                          63
reasons cited above Defendant/Appellee asserts the judgment of the District Court

granting Defendant’s Summary Judgment should be upheld.

                                     PRAYER
       WHEREFORE, PREMISES CONSIDERED, Defendant/Appellee, City

of Terrell Hills, prays this Court of Appeals finds the final judgment of the District

Court in favor of the City of Terrell Hills’ Motion for Summary Judgment should

stand and enters a decision upholding the decision of the District Court and order

that Plaintiffs take nothing, and for such other and further relief, both general and

special, at law and in equity, to which the Defendant/Appellee may show itself to

be justly entitled.

                                              Respectfully submitted,

                                              /s/ Barbara L. Quirk
                                              Barbara L. Quirk
                                              State Bar No. 16436750
                                              MCKAMIE KRUEGER, LLP
                                              941 Proton Road
                                              San Antonio, Texas 78258
                                              210.546.2122
                                              210.546.2130 (Fax)
                                              barbara@mckamiekrueger.com

                                              Adolfo Ruiz
                                              State Bar No. 17385600

                                         64
     MCKAMIE KRUEGER, LLP
     941 Proton Road
     San Antonio, Texas 78258
     210.546.2122
     210.546.2130 (Fax)
     adolfo@mckamiekrueger.com

     ATTORNEYS FOR APPELLEE,
     CITY OF TERRELL HILLS

65
                        CERTIFICATE OF SERVICE
       As required by Texas Rule of Appellate Procedure 6.3 and 9.5(b), (d), (e),
I certify that I have served the foregoing Appellee’s Brief on all other parties
which are listed below by e-filing on September 25, 2017 as follows:

R. Carlo Garcia
OLIVA, SAKS, GARCIA & CURIEL
14255 Blanco Road
San Antonio, Texas 78216
(210) 308-6600
(210) 308-6939 (fax)
cglaw@osgclaw.com

Jeff Small
LAW OFFICE OF JEFF SMALL
12451 Starcrest Drive, Suite 100
San Antonio, Texas 78216-2988
(210) 496-0611
(210) 579.-399 (fax)
jdslaw@satx.rr.com

Attorneys for Appellants Electro Sales and Service
And Salim Merchant

                                                     /s/ Barbara L. Quirk
                                                     Barbara L. Quirk

                                       66
                      CERTIFICATE OF COMPLIANCE
I certify that this document is in compliance with Tex. R. App. P. 9.4 (e) and (i). It
contains 14,993(LESS THAN 15,000) words excluding the exempted parts of the
document. The body text is in 14 point font, and the footnote text is in 12 point
font.

                                                    /s/ Barbara L. Quirk
                                                    Barbara L. Quirk

                                                    September 25, 2017
                                                    Date

                                         67
__________________________________________________________________

                                  APPENDIX
__________________________________________________________________

TO THE HONORABLE JUDGE OF SAID COURT:

The following exhibits are incorporated by reference into the Appellee City of
Terrell Hills’ Brief:

A.   City of Terrell Hill’s Motion for Summary Judgment filed August 16, 2016

B.    City of Terrell Hill’s Reply to Plaintiff’s Response to Defendant’s Motion
      for Summary Judgment filed September 28, 2016

C.    Clerk’s Record Excerpt pp. 621 – 622 City Council Minutes

C-2. Clerk’s Record Excerpt p. 628 City Council Minutes

D.    Clerk’s Record Excerpt pp. 636 – 639 Ordinances 1349 and 1386 granting
      Special Use Permits to Plaintiff

D-2. Clerk’s Record Excerpt pp. 646 – 648 Section XV of the City of Terrell
     Hills Zoning Ordinance, Board of Adjustment Procedures

E.    Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660

E-2. Tex. Loc. Gov’t Code Section 211.010 Appeal to Board of Adjustment

                                       68
EXHIBIT A
FILED
8/16/2016 12:25:00 PM
Donna Kay McKinney
Bexar County District Clerk
Accepted By: Marissa Ugarte

                                                       CAUSE NO. 2013-CI-00447

              SALIM MERCHANT & ELECTRO                                   §             IN THE DISTRICT COURT
              SALES AND SERVICES, INC.,                                  §
                   Plaintiff,                                            §
                                                                         §
              v.                                                         §             57th JUDICIAL DISTRICT
                                                                         §
              THE CITY OF TERRELL HILLS AND                              §
              BILLY W. ENG AND GIN WEI ENG,                              §
                   Defendants.                                           §             BEXAR COUNTY, TEXAS

                          CITY OF TERRELL HILLS’ MOTION FOR SUMMARY JUDGMENT

              TO THE HONORABLE JUDGE OF SAID COURT:

                       COMES NOW the City of Terrell Hills, Texas (hereinafter the “City”), Defendant in the

              above-entitled and numbered cause, and files this Motion for Summary Judgment and in support

              thereof, would respectfully show the Court as follows:

                                                            I. BACKGROUND

              1.       This case began with the purchase by Plaintiff 1 on June 7, 2011, of 2111 to 2117 Harry

              Wurzbach (“the Property”), located in the City of Terrell Hills from Billy W. Eng and Gin Wei

              Eng (“the Eng Defendants”). The lawsuit arose from Plaintiff’s own failure to investigate the semi-

              commercial zoning status of the property prior to purchasing the property, his misconception

              regarding the abandonment by the previous owner of one of the commercial uses which had existed

              previously on the property, and his subsequent efforts to force the City to change the zoning of the

              property from semi-commercial to commercial in a manner not consistent with the City’s plans for

              the area.

              1
               Plaintiff’s Original Petition names two plaintiff entities, Salim Merchant and Electro Sales and Services Inc., but
              defines them as one “Plaintiff.” The City will likewise refer to both named plaintiff entities as a singular Plaintiff.

                                                                        1
              581
                                                                                                                        EXHIBIT A
2.      Plaintiff’s misconceptions about the City’s ordinances are not relevant against the City. A

landowner has no right to a change in zoning in cases such as this and the City is entitled to

judgment as a matter of law dismissing all claims against the City in this lawsuit.

3.      On January 10, 2013, Plaintiff filed this case against the Eng Defendants and the City.

Plaintiff’s primary case against the Eng Defendants can be summarized as alleged

misrepresentations in the sales transaction. As Plaintiff states on page 3 of Plaintiff’s Original

Petition (the “Petition”), Plaintiff alleges he was unaware of the semi-commercial (rather than

commercial) zoning of the Property prior to the purchase. Plaintiff states he was also unaware the

Engs had abandoned one of the non-conforming commercial uses previously operated at the

middle suite on the Property. 2 Plaintiff’s lack of knowledge does not create any duty on the City’s

part to give him the zoning he wants for the Property.

4.      Plaintiff’s case against the City asserts a regulatory taking 3 without adequate compensation

having been made in violation of Section 17 of Article I of the Constitution of the State of Texas.

In the Petition Plaintiff disagrees with the City’s interpretation of its non-conforming use ordinance

prior to his purchase of the Property related to the cessation of one of the commercial

nonconforming uses which had been abandoned by the previous owner. The discontinuance of this

non-conforming use occurred before Plaintiff’s purchase of the Property and Plaintiff has no

standing for claims against the City related to this matter. Plaintiff further challenges the City’s

denial in October of 2012 of his request to up-zone the Property from semi-commercial to

commercial. Further, despite the fact that the City created a special use permit for the purpose of

2
  The City’s Zoning Ordinance provides that a non-conforming use will be lost if the use is discontinued for six
months. In this case, the other non-conforming commercial uses on the Property purchased by Plaintiff which had not
been abandoned by the previous owner continue to this day.
3
  In the fact section of the Petition on page 4 Plaintiff states the interpretation of the ordinance is regulatory
condemnation, and the enforcement of the ordinance is regulatory taking. However, the causes of action portion of
the pleading only asserts regulatory taking.

                                                        2
582
                                                                                                      EXHIBIT A
allowing Plaintiff to use the middle suite location for the use he requested, Plaintiff complains of

the City’s interpretation of its zoning ordinance as not permitting a barber shop use in a semi-

commercial zoning district (without the special use permit) and asserts he should not be required

to make a new request for a special use permit whenever his tenant changes. See the Petition at

pages 3 and 4.

5.     Plaintiff also seeks a judicial declaration as to the City’s interpretation of specific ordinance

provisions relating to permitted uses of the Property. It is difficult to interpret Plaintiff’s meaning

in the declarations language, but the overall intent of the declarations sought appears to be: 1)

whether Section VIII of the City’s comprehensive zoning ordinance (“Zoning Code”) forbids the

placement of a barbershop in the suite in question; 2) whether Section X of the City’s Zoning Code

allows one non-conforming use at a particular address in a larger tract to cease while other non-

conforming uses at different addresses in the same building continue; and 3) whether the City’s

Zoning Code prevents Plaintiff from placing a service-oriented business in the suite in question.

6.     Pursuant to Texas Rules of Civil Procedure 166a(c) and 166a(i) the City requests summary

judgment in favor of the City on all of Plaintiff’s claims against the City.

                             II. SUMMARY OF THE ARGUMENT

7.     The City is entitled to summary judgment on the following grounds:

       a.        Plaintiff cannot overcome the City’s assertion of immunity from this suit where

Plaintiff has not plead a viable regulatory takings claim. Plaintiff’s allegations do not set forth the

taking of any property right and no waiver of immunity is triggered. There was no taking, in part

because there is no property right in a zoning change for property from semi-commercial to

commercial. There also can be no taking where the City granted Plaintiff’s request for a special

use permit for the suite in question. Plaintiff also cannot establish standing to sue.

                                                  3
583
                                                                                            EXHIBIT A
       b.      Plaintiff is barred as a matter of law from litigating a regulatory takings claim based

on 1) the cessation of the nonconforming use in the middle suite of the Property and 2) the denial

of a barber shop in a semi-commercial district because he failed to exhaust his administrative

remedies to appeal those administrative enforcement decisions to the Board of Adjustment.

       c.      Plaintiff is barred as a matter of law from pursuing his claims because of lack of

ripeness.

       d.      Plaintiff cannot demonstrate that the City’s denial to up-zone the Property

constitutes a regulatory taking because 1) it substantially advances legitimate City interests; 2) it

does not deny Plaintiff all economically viable uses of the Property; 3) it does not unreasonably

interfere with Plaintiff’s right to use and enjoy the Property. There is no genuine issue of material

fact to defeat summary judgment for the City on these issues.

       e.      Plaintiff’s declaratory judgment action is an impermissibly duplication of his

takings claims for purposes of obtaining attorney’s fees.

       f.      Alternatively, Plaintiff has provided no evidence of the material elements of his

claims; that a property right was taken by the City; that he was deprived of any economically viable

use of the Property or of any investment backed expectations; or that any action of the City was

the proximate cause of any damages to him.

8.     In addition, the City is entitled to summary judgment on Plaintiff’s claim for declaratory

judgment where the claim impermissibly duplicates the issues already before the trial court. In

addition, because Plaintiff’s claim for declaratory judgment is based on administrative decisions

relating to the cessation of the nonconforming use of the middle suite of the Property and the denial

of a barber shop use in a semi-commercial district, Plaintiff is barred from litigating those decisions

because he failed to exhaust his administrative remedies to the Board of Adjustment. Because there

                                                  4
584
                                                                                            EXHIBIT A
is no viable basis for the declaratory judgment action, Plaintiff’s claim is an improper request for

judicial opinion and is nothing more than a veiled request for attorney’s fees. Furthermore, because

Plaintiff cannot overcome the City’s assertion of immunity to the regulatory takings claim, the

request for declaratory relief will not resolve a live controversy as to the rights of the parties. The

City is entitled to judgment as a matter of law on all of Plaintiff’s claims against the City.

9.     Alternatively, the City is entitled to judgment as a matter of law because Plaintiff has

provided no evidence to support his claims against the City. An adequate time for discovery has

passed since this suit was filed. Written discovery and depositions of Plaintiff and Co-Defendant

Mr. Eng have occurred. Plaintiff has produced no evidence of a taking of a property right, whether

it be because he allegedly has been denied all economically viable uses of the suite in question, or

that any action of the City unreasonably interfered with Plaintiff’s right to use and enjoy the

Property. In fact, Plaintiff admits on page 5 of the Petition that the City passed a special use permit

provision which would allow him to rent the middle suite as a barber shop. Plaintiff could not

claim he has been denied any reasonable investment backed expectations because the zoning status

of which he complains existed prior to his purchase of the Property. It would not be reasonable for

a purchaser of property to have expectations of uses in a zoning classification which do not apply

to the property at the time of the purchase. Further, Plaintiff has produced no evidence of any

damages he sustained which were proximately caused by any action on the City’s part.

10.    Plaintiff has provided no evidence to support his takings claim against the City and has

provided no genuine issue of material fact to defeat summary judgment. The City is entitled to

judgment on all of Plaintiff’s claims against the City as a matter of law.

                                                  5
585
                                                                                            EXHIBIT A
                             III. SUMMARY JUDGMENT FACTS

11.    All averments in the paragraphs above are incorporated herein as if set forth in full.

12.    Defendant, City of Terrell Hills is a Home Rule municipality, organized, operating and

existing under Art. 11, Sec. 5, Constitution of the State of Texas.

13.    Since the mid-1960s the zoning for the property located at 2111-2117 Harry Wurzbach

within the City of Terrell Hills (hereinafter “Property”) was semi-commercial. See Exhibit 1 –

Excerpts of Billy Eng’s Deposition, page 28:9-11; 33:12-17.

14.    From 1962 to 2011, the previous owners of the Property continuously maintained three

separately leased suites of business on the Property. See Exhibit 1 – Excerpts of Billy Eng’s

Deposition, page 18:4-25; 19:1-21; 20:4-8.

15.    Prior to Plaintiff buying the Property, the middle suite of the Property became vacant for

over six months and lost its grandfathered non-conforming commercial use status. See Exhibit 1

– Excerpts of Billy Eng’s Deposition, page 65:14-18.

16.    The previous owner of the Property, the Eng Defendants, prior to selling the Property,

intended to let the grandfathered non-conforming use status lapse and follow the zoning rules

regarding the use of the middle suite as an office space. See Exhibit 1 – Excerpts of Billy Eng’s

Deposition, page 94:18-25; 95:1-18. He felt confident there were sufficient uses available to him

to lease the suite. See Exhibit 1 – Excerpts of Billy Eng’s Deposition, page 94:21; 95:10.

17.    On June 7, 2011, Plaintiff purchased the Property. See Plaintiff’s Original Petition, page 3.

18.    On June 13, 2011, Plaintiff applied to the City of Terrell Hills Planning and Zoning

Commission (“Zoning Commission”) to rezone the Property from semi-commercial to

commercial. See Exhibit 2 – Plaintiff’s June 13, 2011 Plaintiff’s Application for Rezoning.

                                                 6
586
                                                                                         EXHIBIT A
19.      On August 8, 2011, the Terrell Hills City Council (“City Council”) held a public hearing

on Plaintiff’s application for rezoning. Following the conclusion of the public hearing, the City

Council denied the application for rezoning. See Exhibit 3 – City Records, August 8, 2011 City

Council Minutes Denying Rezoning.

20.      On July 10, 2012, Plaintiff through his attorney, applied to the Zoning Commission to re-

zone the middle suite of the Property for a Cricket Communication store. See Exhibit 4 – July 10,

2012 Plaintiff’s Application for Rezoning Middle Space for Cricket.

21.      On or about October 1, 2012, the City Council, following public hearing, denied the

application to rezone the middle suite of the Property. See Exhibit 3 – City Records, October 1,

2012 City Council Denial of Rezoning.

22.     On December 10, 2012, the City Council adopted Ordinance 1347, amending the Zoning

Code adding Section VIII, Section D by providing for a Special Use Permit in the Semi-

Commercial Zoning District that will allow certain uses in more restrictive districts under special

conditions of design with the approval of the Planning and Zoning Commission and the City

Council. See Exhibit 3 – City Records, December 10, 2012 Ordinance 1347 Creating Special Use

Permit. 4

23.     On December 12, 2012, Plaintiff applied to the Zoning Commission for a Special Use

Permit for the middle suite of the Property to be used as a Barber Shop and Beauty Parlor. See

Exhibit 5 – December 12, 2012 Plaintiff’s Application for Special Use Permit Hair Salon.

24.     On or about January 10, 2013, Plaintiff filed a lawsuit against the Eng Defendants and the

City in Cause No. 2013-CI-00447, in the 57th Judicial District Court of Bexar County, Texas. The

Petition stated causes of action against the City for a Regulatory Taking and Declaratory Judgment.

4
 The City requests that the Court take judicial notice of all of the provisions of the City’s Zoning Code relied upon
herein.

                                                         7
587
                                                                                                        EXHIBIT A
25.    On May 13, 2013, the City Council accepted and approved the site plan for the Property

located at 2115 Harry Wurzbach, Terrell Hills and passed Ordinance 1349 approving a Special

Use Permit for 2115 Harry Wurzbach, the suite at issue in this lawsuit, for use as a hair and nail

salon. See Exhibit 3 – May 13, 2013 Ordinance 1349 Approving Special Use Permit Hair Salon.

Under Section 2 (f) of Ordinance 1349, the Special Use Permit zoning classification will expire

six (6) months after the Property is no longer used for at least one (1) of the Permitted Uses. Id.

26.    Plaintiff failed to open the hair and nail salon before the May 2013 Special Use Permit had

expired. As a result, Plaintiff again requested that the Zoning Commission grant a Special Use

Permit for a barber shop as soon as possible. See Exhibit 6 – February 5, 2014, Plaintiff’s

Application for Special Use Permit Hair Salon.

27.    On April 13, 2015, the City Council again approved a site plan for the Property located at

2115 Harry Wurzbach, Terrell Hills, and adopted Ordinance 1386 approving a Special Use Permit

for 2115 Harry Wurzbach, the suite at issue in this lawsuit, for use as a hair and nail salon. See

Exhibit 3 – City Records, April 13, 2015, Ordinance 1386 Approving Special Use Permit Hair

Salon. Under Section 2 (f) of Ordinance 1386, the Special Use Permit zoning classification will

expire six (6) months after the Property is no longer used for at least one (1) of the Permitted Uses.

Id.

28.    Even though authorized to do so, Plaintiff never used the middle suite located at 2115 Harry

Wurzbach on the Property for a permitted use allowed under the Specific Use Permits within six

months of being granted by the Zoning Commission and the City.

                          IV. SUMMARY JUDGMENT EVIDENCE

29.    The City relies upon the following undisputed summary judgment evidence either on file

with the Court or appended to this motion:

                                                  8
588
                                                                                           EXHIBIT A
       Exhibit 1 – Excerpts of Billy Eng’s Deposition

       Exhibit 2 – Plaintiff’s June 13, 2011 Plaintiff’s Application for Rezoning Property

       Exhibit 3 – City of Terrell Hills’ Records, including: August 8, 2011 City Council Minutes;
       October 1, 2012 City Council Minutes; December 10, 2012 Ordinance 1347; May 13, 2013
       Ordinance 1349; April 13, 2015 Ordinance 1386

       Exhibit 4 – July 10, 2012 Plaintiff’s Application for Rezoning Middle Space for Cricket

       Exhibit 5 – December 12, 2012 Plaintiff’s Application for Special Use Permit Hair Salon

       Exhibit 6 – February 5, 2014 Plaintiff’s Application for Special Use Permit Hair Salon

       Exhibit 7 – City of Terrell Hills Comprehensive Zoning Ordinance, Chapter 14

                         V. SUMMARY JUDGMENT STANDARDS

30.    Tex. R. Civ. P. 166a(c) sets forth the standard for traditional summary judgment. The

movant for summary judgment has the burden of showing there is no genuine issue of material

fact and is entitled to summary judgment as a matter of law. Nixon v. Mr. Property Management,

690 S.W.2d 546, 548-49 (Tex. 1985). In deciding whether there is an issue of material fact,

evidence favorable to the non-movant will be taken as true and every reasonable inference indulged

in its favor. Id. Once the movant establishes the right to judgment as a matter of law, the burden

shifts to the non-movant who must then set forth sufficient evidence to create an issue of material

fact in order to avoid summary judgment. See City of Houston v. Clear Creek Basin Auth., 589
S.W.2d 671, 678 (Tex. 1979).

31.    Tex. R. Civ. P. 166a(i) sets forth the standard for a no-evidence summary judgment. After

adequate time for discovery, a movant may move for summary judgment without evidence on the

ground that there is no evidence of one or more essential elements of a claim or defense on which

the non-movant has the burden at trial. The burden shifts to the non-movant to present evidence

raising an issue of material fact. The no-evidence motion for summary judgment should be granted

                                                9
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                                                                                        EXHIBIT A
when there is a complete absence of evidence of a vital fact. King Ranch Inc. v. Chapman, 118
S.W.3d 742, 751 (Tex. 2003).

                                         VI. ARGUMENT

32.     All assertions in the foregoing paragraphs are incorporated into this Article as if set forth

in full herein.

33.     The City is entitled to summary judgment because no genuine issue of material fact exists

as to any element of Plaintiff’s claims against the City and the City is entitled to judgment as a

matter of law.

A.      Immunity and Lack of Standing

34.     All relevant assertions stated elsewhere in this Motion are incorporated into this section as

if set forth in full herein.

35.     The City, as a municipal government, is entitled to governmental immunity from a suit for

money damages unless its immunity has been waived. City of Houston v. Carlson, 451 S.W.3d
828, 830 (Tex. 2014). Without this waiver, courts have no jurisdiction to adjudicate any claim

against the City. See id. It is Plaintiff’s burden to establish the City’s consent to be sued through a

waiver of immunity. Id. Because Plaintiff cannot demonstrate a viable regulatory takings claim as

discussed further below, the City retains its immunity. See Hearts Bluff Game Ranch, Inc. v. State,

381 S.W.3d 468, 476 (Tex. 2012). As a result, the City is entitled to dismissal of Plaintiff’s claims

against the City.

36.     Further, Plaintiff has no standing to raise a takings claim against the City. The regulatory

zoning classification of which Plaintiff complains was put in place many years prior to Plaintiff’s

purchase of the Property. The discontinuance of the non-conforming use in question occurred prior

to Plaintiff’s purchase of the Property. Since Plaintiff purchased the Property, the City has not

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                                                                                            EXHIBIT A
taken any action to restrict Plaintiff’s ability to use the Property. Instead the City has increased

Plaintiff’s ability to use the Property by allowing for a special use permit for the use Plaintiff

requested.

B.      Failure to Exhaust Administrative Remedies

37.     All relevant assertions stated elsewhere in this Motion are incorporated in this section as if

set forth in full.

38.     Plaintiff bases his takings claim and declaratory judgment claim in large measure on the

City staff’s interpretation and enforcement of the zoning ordinances, specifically that prior to

Plaintiff’s ownership of the Property the nonconforming use in the middle suite on the Property

ceased, and that a barber shop was not an allowable use in the middle suite after the cessation of

the nonconforming use and its reversion back to semi-commercial zoning. However, there is no

evidence that Plaintiff timely appealed these administrative decisions to the Board of Adjustment

as required by Section XV of the City’s Zoning Code.

39.     Federal case law provides that a takings claim is not ripe until (1) the relevant governmental

unit has reached a final decision as to what will be done with the property and (2) the plaintiff has

sought compensation through whatever adequate procedures the state provides. See Sandy Creek

Investors, Ltd. v. City of Jonestown, 325 F.3d 623, 626 (5th Cir. 2003); Williamson County Reg’l

Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 194-95 (1985); Hidden Oaks Ltd. v. The City

of Austin, 138 F.3d 1036, 1041 (5th Cir. 1998); Samaad v. City of Dallas, 940 F.2d 925, 933-34

(5th Cir. 1991). This law is applicable to the present case with respect to the first element, that the

relevant governmental unit must have reached a final decision as to what will be done with the

property before a plaintiff may pursue a takings claim. In the present case, Plaintiff failed to appeal

the decisions of staff for a decision by the Board of Adjustment. As a result of Plaintiff’s failure

                                                  11
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                                                                                            EXHIBIT A
to exhaust his administrative remedies, the Plaintiff is barred from litigating these administrative

decisions, and the City is entitled to summary judgment on his takings claim and request for

declaratory judgment based on those decisions.

40.    In the present case, challenges to a zoning decision of an administrative official or staff

personnel should first have been brought to the Board of Adjustment. See TEX. LOC. GOV’T

CODE § 211.009(a). A Board of Adjustment may hear and decide an appeal that alleges error in

an order, requirement, decision, or determination made by an administrative official in the

enforcement of this subchapter. TEX. LOC. GOV’T CODE § 211.009(a)(1). A person aggrieved

by the decision of an administrative official or any officer, department, board or bureau of the

municipality may appeal. TX. LOC. GOV’T CODE § 211.010(b). The appellant must file with the

Board of Adjustment and the official from whom the appeal is taken a notice of appeal specifying

the grounds for the appeal within a reasonable time as determined by the rules of the board. TEX.

LOC. GOV’T CODE § 211.010(b). The City has created a Board of Adjustment pursuant to this

statutory authority.

41.    Under Chapter 14, Section XV of the Zoning Code, appeals to the Board of Adjustment

may be taken by any person aggrieved or by any officer, department, board or bureau of the

municipality affected by any decision of the administrative officer. See Exhibit 7 – Zoning Code,

Ch. 14 Sec. XV (2)(b)(1). Chapter 14 of the Zoning Code further defines what a “reasonable time”

is for the purposes of appealing a decision of a City administrative officer to the Terrell Hills Board

of Adjustment. Id. Such appeal shall be taken with ten (10) days from the date of any such ruling,

by filing with the officer from whom the appeal is taken and with the Board of Adjustment a notice

of appeal specifying the grounds thereof. Id.

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                                                                                            EXHIBIT A
42.     Here, Plaintiff failed to obtain a final ruling from the City through the appellate process set

out in TEX. LOC. GOV’T CODE § 211.010(b) and the Zoning Code, Ch. 14 Sec. XV (2)(b)(1).

Plaintiff’s failure to timely appeal the decisions of the City staff in compliance with the City’s

appellate process bars Plaintiff from litigating both the decision relating to the cessation of the

nonconforming use for the middle suite of the Property and the decision that the barber shop was

not an allowed semi-commercial use in the middle suite. As a result, the City is entitled to dismissal

of Plaintiff’s claims related to these decisions.

C.      Ripeness

43.     All relevant assertions made elsewhere in this Motion are incorporated in this section as if

set forth in full.

44.     Ripeness is an element of subject matter jurisdiction. State Bar of Texas v. Gomez, 891
S.W.2d 243, 245 (Tex. 1994). As such, ripeness is a legal question. Texas Ass'n of Business v.

Texas Air Control Bd., 852 S.W.2d 440, 444-45 (Tex. 1993). A takings claim is not ripe for court

action until a final decision about what level of use will be permitted on the property. See

Williamson Planning Comm’n at 173; see also Public Util. Comm’n v. Houston Lighting & Power

Co., 748 S.W.2d 439 (Tex. 1987)(“A court has no jurisdiction to render an advisory opinion on a

controversy that is not yet ripe.”). “[T]he ripeness doctrine conserves judicial time and resources

for real and current controversies, rather than abstract, hypothetical, or remote disputes. Browning-

Ferris, Inc. v. Brazoria County, 742 S.W.2d 43, 49 (Tex. App.--Austin 1987, no writ). In order for

a regulatory takings claim to be ripe, there must be a final decision regarding the application of the

regulations to the property at issue. Hamilton Bank at 186. A “final decision” usually requires both

a rejected development plan and the denial of any variances from the controlling regulations. Id.

at 187-88.

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                                                                                            EXHIBIT A
45.     Here, to the extent that Plaintiff’s regulatory taking claim is based on the use of the middle

suite of the Property, the undisputed facts clearly demonstrate that the City granted Plaintiff’s

applications for a Special Use Permit allowing additional permitted uses for the Property, including

a barber shop/hair salon. Plaintiff cannot demonstrate that the City ever shut its door to continued

future uses for the middle suite of the Property. Plaintiff specifically requested to put a barber shop

in the middle suite on the Property, and the City granted a Special Use Permit for that use. Since

the possibility remains open that Plaintiff’s requested uses would be permitted on the Property by

the City, a jury could not reach a decision on whether the Property had been “taken.” The

application history makes it clear that the City is allowing the uses of the Property as requested by

Plaintiff. The existing zoning of the middle suite of the Property when Plaintiff acquired the

Property was semi-commercial, and the City is allowing Plaintiff uses greater than the stated semi-

commercial zoning for the Property. It would be premature to request a court or jury to make a

determination whether a compensable taking has occurred under such circumstances when the

undisputed facts demonstrate that the City is likely to continue approving uses for the Property

above the stated semi-commercial zoning for the Property. As such, Plaintiff’s claim is premature,

and the City is entitled to summary judgment on the claims against them.

D.      City Entitled to Judgment as Matter of Law on Regulatory Takings Claim

46.     All relevant assertions made elsewhere in this Motion are incorporated in this section D

and its subparts as if set forth herein.

47.     Plaintiff’s petition alleges that the City’s decisions related to his Property constitute a

regulatory taking without adequate compensation having been made, in violation of Section 17 of

Article I of the Constitution of the State of Texas. The decisions discussed in the factual summary

in the Petition include: the cessation of the previous nonconforming use on the middle suite of the

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                                                                                            EXHIBIT A
Property prior to Plaintiff’s purchase of the property; a denial to up-zone the Property from semi-

commercial to commercial; staff’s interpretation that a barber shop/salon was not an allowable use

in a semi-commercial zone; and the City’s requirement for Special Use Permits for uses

determined not to be allowed in the zone.

48.    The Texas Constitution provides, in pertinent part, that no “person’s property shall be

taken, damaged or destroyed for or applied to public use without adequate compensation being

made....” Tex. Const. art. I, § 17.

49.    Generally, a property owner has no vested right to use its property in a certain way without

restriction. See Azadpour v. City of Grapevine, No. 02-13-00323- CV, 2014 WL 2566024, at *4

(Tex. App.––Fort Worth June 5, 2014, pet. denied) (mem. op.); Mr. W. Fireworks, Inc. v. Comal

Cty., No. 03-06-00638-CV, 2010 WL 1253931, at *8 (Tex. App.––Austin Mar. 31, 2010, no pet.)

(mem. op.). In addition, it is well settled in Texas that “property owners do not acquire a

constitutionally protected vested right . . . in zoning classifications once made.” City of University

Park v. Benners, 485 S.W.2d 773, 778 (Tex. 1972). The City retains its legislative authority to re-

zone at any time as public necessity demands. City of Pharr v. Tippitt, 616 S.W.2d 173, 176 (Tex.

1981). These principles apply to an even greater extent in the present case where the City did not

rezone the Property, but only denied Plaintiff’s request to up-zone the Property.

50.    In order to succeed on a compensatory regulatory takings claim, Plaintiff must demonstrate

that a zoning regulation (1) does not substantially advance a legitimate state interest, (2) denies the

landowner of all economically viable use of their property, or (3) unreasonably interferes with a

landowners’ rights to use and enjoy their property. Mayhew v. Town of Sunnyvale, 964 S.W.2d
922, 932-33, 935 (Tex. 1998)(citing Lucas v. South Carolina Coastal Council, 505 U.S. 1003,

1015-19 & n.8 (1992)); see also Agins v. City of Tiburon, 447 U.S. 255, 260 (1980) and Lingle v.

                                                  15
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                                                                                            EXHIBIT A
Chevron U.S.A., Inc., 544 U.S. 528, 539 (2005). Because the Supreme Court in Lingle concluded

that the substantial advancement test is a due process inquiry and not a takings inquiry, the City

asserts in this case Plaintiff would need to demonstrate either that he has been denied all

economically viable use of his property or that the City unreasonably interfered with his right to

use and enjoy the property. A regulatory taking is a condition of use “so onerous that its effect is

tantamount to a direct appropriation or ouster.” Id. at 537. (citation omitted). A court in deciding

a zoning issue cannot assume the role of “super zoning board.” Mayhew at 933. Whether a zoning

ordinance constitutes a compensable taking is a question of law, not fact. Id.

       1.      City Entitled to Judgment as Matter of Law because Plaintiff Cannot
               Demonstrate City’s Zoning Decisions Do Not Substantially Advance
               Legitimate Government Interests.

51.    Without waiving the City’s position that substantial advancement of legitimate government

interest is not applicable to this analysis, the City provides the following argument in the event the

Court finds this element does apply.

52.    Plaintiff cannot demonstrate that the City’s zoning decisions regarding the Property do not

substantially advance a legitimate City interest.

53.    The substantial advancement requirement to demonstrate a regulatory takings claim looks

at the nexus between the effect of the ordinance and the legitimate state interest it is supposed to

advance. Mayhew at 934. “The standard requires that the ordinance ‘substantially advance’ the

legitimate state interest sought to be achieved rather than merely analyzing whether the

government could rationally have decided that the measure achieved a legitimate objective. Id.

Moreover, the “wisdom of the [City’s] decision” is not under review. Id. The Court must only be

concerned with whether the decision satisfies constitutional standards. The Texas Supreme Court

has determined that there are a broad range of governmental purposes that will satisfy the

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                                                                                           EXHIBIT A
substantially advance requirement. Id. Legitimate state interests include protecting residents from

the ill effects of traffic congestion, parking congestion, enhancing the quality of life, and

controlling the rate and character of community growth. Id. at 934. Such zoning benefits the public

and serves the City’s interest in assuring careful and orderly development of business uses. See

Agins v. City of Tiburon, 447 U.S. 255, 260 (1980); see also Lingle, 544 U.S. at 539.

54.    A zoning ordinance, duly adopted is presumed to be valid, and the burden is on the one

seeking to prevent its enforcement to prove that the ordinance is arbitrary or unreasonable. City of

Fort Worth, 388 S.W.2d 400, 402 (Tex. 1964). Further, zoning is a legislative function of

municipal government. City of Pharr v. Tippitt, 616 S.W.2d 173, 175 (Tex. 1981). The courts must

give deference to a city’s action such that, “if reasonable minds may differ as to whether or not a

particular zoning ordinance has a substantial relationship to the public health, safety, morals or

general welfare, no clear abuse of discretion is shown and the ordinance must stand as a valid

exercise of the city's police power.”   Id. at 176. “Courts may not interfere unless a challenged

ordinance is shown to represent a clear abuse of municipal discretion or unless there is conclusive

evidence that a zoning ordinance is arbitrary either generally or as to particular property.” Benners

at 779. A plaintiff cannot ask the Court to review the wisdom of the City’s denial of Plaintiff’s

zoning request.

55.    Further, the Texas Supreme Court has stated that “We are in accord with the principle that

municipal zoning ordinances requiring the termination of nonconforming uses under reasonable

conditions are within the scope of municipal police power; and that property owners do not acquire

a constitutionally protected vested right in property uses once commenced or in zoning

classifications once made. Benners at 778. “A nonconforming use of land or buildings is a use that

existed legally when the zoning restriction became effective and has continued to exist.” Id.

                                                 17
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                                                                                          EXHIBIT A
56.      Here, the undisputed facts are that the City’s 1962 zoning ordinance established zoning for

the Property as semi-commercial with nonconforming uses of the Property to continue until a

nonuse of six months occurred whereupon the nonconforming use would cease and revert to semi-

commercial zoning. See Exhibit 1 – Excerpts of Billy Eng’s Deposition, page 28:9-11; 33:12-17.

In addition, at the time that Plaintiff acquired this Property, the nonconforming use of the Property

had ceased on the middle suite and reverted to a semi-commercial use. See the Petition at pages 3

and 4. Almost 40 years after the semi-commercial zoning was assigned, Plaintiff requested an up-

zoning of the Property to commercial. See Exhibit 2 – June 13, 2011 Plaintiff’s Application for

Rezoning. Plaintiff cannot demonstrate that the City’s denial of the up-zoning request was

anything but a decision to advance the City’s legitimate government concern to protect residents

from the ill effects of increased traffic, parking congestion and to control the rate and character of

community growth. As a result, the City is entitled to summary judgment on Plaintiff’s taking

claim.

         2.     The City is Entitled to Summary Judgment because Plaintiff has Not Been
                Denied All Economic Uses of the Property.

57.      Plaintiff alleges the City’s zoning decisions constitute a “taking.” However, the undisputed

evidence clearly demonstrates Plaintiff has not been denied all economically viable uses of the

middle address suite or of the Property as a whole. Plaintiff has been allowed to continue non-

conforming uses in all suites on the Property except the middle suite for which the non-conforming

use had previously been discontinued. Plaintiff was provided a special use permit for the middle

suite on the Property so that Plaintiff could rent that suite for the use Plaintiff requested. Thus,

there can be no genuine dispute that the City has never denied Plaintiff full economic use of the

Property. Plaintiff’s desire not to need to apply for a new special use permit for the middle suite

when he changes tenants is not a property right to which he is entitled under the law. It is not

                                                 18
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                                                                                           EXHIBIT A
unreasonably restrictive for the City to require a permit to use property in a manner which would

not otherwise have been allowed in that zoning district, particularly, as here, where the City granted

the permit.

58.    “A restriction denies the landowner all economically viable use of the property or totally

destroys the value of the property if the restriction renders the property valueless.” Mayhew at

935. While the semi-commercial zoning classification for the middle suite of the Property does not

permit Plaintiff to lease to certain types of businesses, there are numerous economically viable

businesses which are permitted under the existing zoning. Any number of professional offices for

doctors, lawyers, real estate professionals are permitted. The undisputed facts here clearly

demonstrate that Plaintiff acquired several barber shops and nail salons who were interested in the

Property and requested Special Use Permits for them. The City approved Special Use Permits on

more than one occasion at Plaintiff’s request for barber shop/nail salon uses, but Plaintiff, although

authorized, never filled the vacancy in the middle suite of the Property. See, Exhibit 3 – City

Records, December 10, 2012 Ordinance 1347 Creating Special Use Permit and May 13, 2013

Ordinance 1349 Approving Special Use Permit Hair Salon.

59.    It would appear from Plaintiff’s allegations and actions that Plaintiff is only interested in

having the Property rezoned from semi-commercial to commercial. He is essentially asserting that

commercial uses are the only economically viable uses of the Property and anything less than the

City changing the zoning classification would deny the only economically viable uses of his

Property and constitute a constitutional taking. Such an argument fails to satisfy the standard for

demonstrating a constitutional taking. The former owner, Defendant Billy Eng, testified that he

was intending, after the nonconforming use ceased, to put a business office in the middle suite in

conformity with the semi-commercial zoning. See Exhibit 1 – Excerpts of Billy Eng’s Deposition,

                                                 19
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                                                                                           EXHIBIT A
page 94:18-25; 95:1-18. He felt confident there were sufficient uses available to him to lease the

suite. See Exhibit 1 – Excerpts of Billy Eng’s Deposition, page 94:21-25; 95:1-10.

60.    It is clear that the City has not “destroyed all value of the property” by denying the

Plaintiff’s zoning request. To the contrary, the City approved the Plaintiff’s requests for Special

Use Permits on more than one occasion. Plaintiff operates two leased business suites on the

property, that of a convenient grocery store and a bar, that remain in use. Because Plaintiff cannot

demonstrate that he has been denied all economic uses of the Property, the City is entitled to

summary judgment on Plaintiff’s takings claim.

       3.      The City Did Not Unreasonably Interfere with Plaintiff’s Right to Use and
               Enjoy Property.

61.    Determining whether the government has unreasonably interfered with a landowner's right

to use and enjoy property requires consideration of two factors: 1) the economic impact of the

regulation, and 2) the extent to which the regulation interferes with distinct investment-backed

expectations. Hearts Bluff Game Ranch, 381 S.W.3d at 476; Mayhew, 964 S.W.2d at 935 (citing

Lucas, 505 U.S. at 1019, n. 8, 112 S. Ct. 2886; Penn Cent. Transp. Co., 438 U.S. at 124, 98 S. Ct.
2646). In the present case Plaintiff will be unable to demonstrate that the City’s zoning decisions

have interfered with Plaintiff’s right to use and enjoy his property when the zoning on the Property

has remained semi-commercial for many years prior to Plaintiff’s ownership of the Property and

the previous nonconforming use of the middle suite of the Property had been discontinued before

Plaintiff ever acquired the Property.

62.    The existing zoning of the property at the time the Property is acquired is to be considered

in determining whether the regulation interferes with investment-backed expectations. Mayhew at

937-38. The party claiming privilege to continue a nonconforming use, in this case Plaintiff, bears

the burden of proving its preexisting status. See City of Pharr v. Pena, 853 S.W.2d 56, 63 (Tex.

                                                20
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                                                                                         EXHIBIT A
App.—Corpus Christi 1993, writ denied). Here, it is undisputed that Plaintiff acquired the Property

after the nonconforming use made of the middle suite on the Property had ceased and the use of

that suite had reverted back to semi-commercial use. The facts are undisputed that the Eng

Defendants allowed the middle suite to remain vacant for longer than six months. Pursuant to the

City’s zoning ordinance, when a use is discontinued, it loses its special use status and reverts back

to the established zoning of the Property, in this case, semi-commercial. The previous owner, Mr.

Eng, understood that the non-conforming use ceased prior to Plaintiff purchasing the Property due

to the vacancy of the middle suite for over six months. See Exhibit 1 – Excerpts of Billy Eng’s

Deposition, page 65:14-18. As a result, at the time of the sale to Plaintiff in 2011, the lawful use

of the middle suite was limited to semi-commercial uses based on the 1962 zoning ordinance

classifications. Once the non-conforming use had been abandoned, Plaintiff’s request after he

purchased the property to expand the use of the middle suite beyond semi-commercial purposes

was not consistent with the semi-commercial zoning of the Property. Because the nonconforming

use had ceased prior to Plaintiff acquiring the Property, Plaintiff cannot demonstrate that he had a

reasonable investment-backed expectation to a discontinued nonconforming use in the middle suite

of the Property and cannot demonstrate that the City unreasonably interfered with Plaintiff’s right

to use and enjoy the Property by denying his zoning request.

63.    To the extent Plaintiff is complaining that the procedural requirement for a Special Use

Permit is “so onerous that its effect is tantamount to a direct appropriation or ouster,” Plaintiff

cannot demonstrate that such a procedural requirement somehow constitutes a regulatory taking

in Texas. Essentially, Plaintiff does not wish to follow the City’s process for application for a

Special Use Permit if there is a change in tenant for the middle suite of the Property. Plaintiff

cannot demonstrate that requiring a Special Use Permit somehow interferes with his right to enjoy

                                                 21
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                                                                                          EXHIBIT A
the Property, especially, where the City has granted his several requests for Special Use Permits.

As a result, the City is entitled to summary judgment on Plaintiff’s takings claim against them.

E.     Declaratory Judgment

64.    Plaintiff seeks declaratory judgment and to recover attorney’s fees under the Uniform

Declaratory Judgments Act (the “Act”). See Tex. Civ. Prac. & Rem. Code § 37.003. Plaintiff

requests declarations as to: 1) whether Section VIII of the City’s Zoning Code allows the use of a

barbershop in a semi-commercial zoning district; 2) whether Section X of the City’s Zoning Code

allows the non-conforming use at one suite in a larger tract to be discontinued when other non-

conforming uses at other suites in the same building on the Property continue to operate; and 3)

whether the City’s Zoning Code prevents Plaintiff from placing a service-oriented business in the

middle suite of the Property.

65.    A party cannot use the Act to obtain an otherwise impermissible attorney’s fee. MBM Fin.

Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009). The Act provides that a

person whose rights, status, or other legal relations are affected by a statute or ordinance “may

have determined any question of construction or validity arising under” the statute or ordinance

and obtain a declaration of his rights, status, or other legal relations thereunder. Tex. Civ. Prac. &

Rem. Code § 37.004(a). The Act waives governmental immunity against claims that a statute or

ordinance is invalid. City of El Paso v. Heinrich, 284 S.W.3d 366, 373 n.6 (Tex. 2009). However,

it does not waive immunity against claims seeking a declaration of the claimant’s statutory rights.

Tex. Dep't of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex. 2011)(per curiam). When declaratory

relief would resolve a controversy as to the rights and status of the parties, a trial court may award

relief under the Act when deciding cases “already within [its] jurisdiction.” Chenault v. Phillips,

914 S.W.2d 140, 141 (Tex. 1996). However, relief should not be awarded where the declaratory

                                                 22
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                                                                                           EXHIBIT A
action has no greater ramifications than a plaintiff’s cause of action for a compensable taking and

is merely duplicating the issues already before the trial court. See City of Carrollton v. RIHR Inc.,

308 S.W.3d 444, 2010 (Tex. App. Dallas 2010).

66.     Here, other than attorney’s fees, Plaintiff is seeking no relief under the declaratory

judgment pleading not associated with its cause of action alleging a compensable taking. The

Plaintiff’s declaratory action claims are subsumed within its cause of action for the regulatory

taking, i.e., the legitimate right of the City to regulate the uses on the Property, the legitimate right

of the City to allow nonconforming uses to cease on the Property, and the legitimate right of the

City to disallow a use that does not meet the zoning ordinance requirements and the City’s plans.

In addition, as stated above, Plaintiff is barred from litigating the staff decisions on nonconforming

use and the barber shop use because he did not timely appeal those decisions to the Board of

Adjustment as required by the Zoning Code. Moreover, the City has permitted the special use of a

barber shop to Plaintiff in the middle suite of the Property on more than one occasion. As such,

Plaintiff’s use of the Act is really an improper vehicle for obtaining attorney’s fees.

67.     Furthermore, as stated in the regulatory takings section above, the City is entitled to

summary judgment on immunity grounds on Plaintiff’s taking claim. Because Plaintiff has failed

to overcome the City’s assertion of immunity, the request for declaratory relief would not resolve

a controversy as to the rights of the parties. As a result, the City is entitled to summary judgment

and all of Plaintiff’s requests for declaratory relief should be dismissed.

F.      No Evidence

68.     Alternatively, Plaintiff has provided no evidence of the material elements of his claims

despite the fact that ample time for discovery has passed. As discussed above, to establish a takings

claim Plaintiff must demonstrate that a property right was taken by the City. He has provided no

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                                                                                             EXHIBIT A
evidence of the taking of any zoning use from him since the time of his purchase of the Property.

Further, Plaintiff has failed to provide any evidence of either of the two elements discussed above

from Mayhew and Lindle: that the City regulation either (1) denies the landowner of all

economically viable use of their property, or (2) unreasonably interferes with a landowners’ rights

to use and enjoy their property. The latter can be shown by denial of reasonable investment backed

expectations. However, Plaintiff cannot show that he was deprived of all economically viable use

of the Property because he was granted a special use permit by the City. Further, Plaintiff has failed

to provide any evidence of any legitimate investment backed expectations which were taken.

Plaintiff would be unable to produce such evidence because there could be reasonable expectation

of use of the Property for zoning which did not exist at the time of his purchase.

69.    Proximate cause is an essential element of a takings case. “[W]ithout causation, there is no

‘taking.’” Tarrant Reg'l Water Dist. v. Gragg, 43 S.W.3d 609, 615 (Tex.App.—Waco 2001),

aff'd,151 S.W.3d 546 (Tex.2004). Plaintiff has failed to produce any evidence that any action of

the City proximately caused damages to Plaintiff.

                   G.      Texas Business and Commerce Code, Chapter 27

70.    Plaintiff generally alleges a violation of Chapter 27 of the Texas Business and Commerce

Code against all defendants. However, the original petition does not allege any factual references

against the City under the Texas Business and Commerce Code. The only factual references relate

to the real estate transaction and contract, none of which include any actions by the City. To the

extent Plaintiff is alleging some claim against the City under the Texas Business and Commerce

Code, the City is entitled for summary judgment on immunity grounds.

                                       VII. CONCLUSION

       The summary judgment evidence shows there is no genuine issue of material fact on

Plaintiff’s claims against the City and the City is entitled to judgment as a matter of law on all of

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                                                                                           EXHIBIT A
Plaintiff’s claims against the City. Alternatively, Plaintiff has provided no evidence to support the

main elements of his cause of action against the City, that there was a taking of a property right.

Plaintiff has failed to provide any evidence that he has no economically viable use of the Property

in question in this lawsuit or even that any action of the City unreasonably interfered with his use

of the Property. In fact, the City granted Plaintiff’s request for a special use permit so that he could

rent out the suite in question for the use he requested. Further, Plaintiff’s request for declaratory

judgment is an impermissibly duplicitous claim designed only for the purpose of seeking attorney’s

fees. Plaintiff has failed to establish any grounds for proceeding against the City and the City is

entitled to summary judgment on all of Plaintiff’s claims against the City.

        WHEREFORE, PREMISES CONSIDERED, Defendant City of Terrell Hills prays this

Court grant its Motion for Summary Judgment and dismiss all claims against it, that Plaintiffs,

Salim Merchant and Electro Sales and Services, Inc. take nothing by their suit against the City,

and that the City have and recover such other relief, both general and specific, at law or in equity,

to which the City may be justly entitled.

                                                        Respectfully submitted,

                                                        MCKAMIE KRUEGER, LLP
                                                        941 Proton Road
                                                        San Antonio, Texas 78258
                                                        (210) 546-2122
                                                        (210) 546-2130 Fax

                                                        /s/: Barbara L. Quirk
                                                        WILLIAM M. McKAMIE
                                                        State Bar No. 13686800
                                                        mick@mckamiekrueger.com

                                                        BARBARA L. QUIRK
                                                        State Bar No. 16436750
                                                        barbara@mckamiekrueger.com

                                                  25
605
                                                                                             EXHIBIT A
           ADOLFO RUIZ
           State Bar No. 17385600
           adolfo@mckamiekrueger.com

           SUE ANN GREGORY
           State Bar No. 00795392
           sue@mckamiekrueger.com

           ATTORNEYS FOR DEFENDANT CITY
           OF TERRELL HILLS

      26
606
                                       EXHIBIT A
STATE 0 F TEXAS               §

COUNTY OF BEXAR               §

                                           VERIFICATION

       Before me, the undersigned authority, on this day, personally appeared Sue Ann Gregory,
known to me, who upon being duly sworn by me, affirmed, "I certify that each of the exhibits
attached to this Motion are true copies of the originals or of documents provided by Plaintiff or
the Eng Defendants in this proceeding."

                                                                      La~
                                                                    Sue Ann Grego~~                       _

                                                                             . __,...   {..(._
            SUBSCRIBED AND SWORN BEFORE ME on                   _Aug·       /':::J ---           ,2016.

                                                              v!ft.e.-k ~~C~-n,J
                              BRENDA HEIMANN
                            My Notary ID# 130419536
                            Expires January 29, 2020        Notary Public of the State of Texas

                                                       27
  607
                                                                                                    EXHIBIT A
                               CAUSE NO. 2013-CI-00447

SALIM MERCHANT & ELECTRO                     §           IN THE DISTRICT COURT
SALES AND SERVICES, INC.,                    §
     Plaintiff,                              §
                                             §
v.                                           §           57th JUDICIAL DISTRICT
                                             §
THE CITY OF TERRELL HILLS AND                §
BILLY W. ENG AND GIN WEI ENG,                §
     Defendants.                             §           BEXAR COUNTY, TEXAS

                                          FIAT

       Hearing on the above Defendant City of Terrell Hills’ Motion for Summary Judgment is

 hereby set for hearing on the 6TH      y offSEPTEMBER
                               ______ day                                8:30 A_.m. in the
                                              ______________,, 2016, at _________

                   Presiding District Court                     m1
                                        urt of Bexar County, Room1.09
                                                                   09
                                                                  _____.

                                                 ___________________________________
                                                 ______
                                                     _______________________
                                                                          _______________________________
                                                              PRESIDING JUDGE

                                            28
608
                                                                                            EXHIBIT A
                               CERTIFICATE OF SERVICE

       I certify that a true and correct copy of City of Terrell Hills’ Motion for Summary
Judgment was served according to the Texas Rules of Civil Procedure on all counsel of record in
the manner specified below on August 16, 2016 as follows:

Carlo Garcia                                       Via E-Serve
OLIVA, SAKS, GARCIA AND CURIEL, LLP
14255 Blanco Road
San Antonio, Texas 78216
Fax: 210.308.6939
cglaw@osglaw.com

Jay Moritz                                         Via E-Serve
THE LAW OFFICES OF JAY MORITZ
2600 SW Military Drive, Suite 118
San Antonio, Texas 78224
Fax: 210.928.9118
JayLaw5@aol.com

                                                   /s/: Barbara L. Quirk
                                                   Barbara L. Quirk

                                              29
609
                                                                                    EXHIBIT A
                                                                          Page 1
                            CAUSE NO. 2013-CI-00447

SALIM MERCHANT AND ELECTRO            *     IN THE DISTRICT COURT
SALES & SERVICE, INC .                *
                                      *
vs.                                   *     BEXAR COUNTY , TEXAS
                                      *
THE CITY OF TERRELL HILLS ,           *
BILLY W. ENG AND GIN WEI ENG          *     57TH JUDICIAL DISTRICT

                     ORAL DEPOSITION OF BILLY W. ENG

                                 JUNE 22,    2016

              ORAL DEPOSITION of BILLY W. ENG, produced as a witness

at the instance of the Plaintiffs,           and duly sworn , was taken in

the above - styled and numbered cause on June 22, 2016,            from

9 : 49   a .m. to 12:00 p . m., before Darlene Zueh l, Certified
Shorthand Reporter in and for the State of Texas,            reported by

method of machine shorthand, at the Law Off i ces of Oliva Saks

Garcia & Curiel,     LLP,    14255 Blanco Road, San Antonio, Bexar

County, Texas, pursuant to the Texas Rules of Civil Procedure and

the provisions stated on the record or attached hereto.

                                  * * * * * *

            SAN ANTONIO COURT REPORTING, FIRM NO. 175
                  555 E. BASSE ROAD, SUITE 205
610                                                                 EXHIBIT 1
                                                                     EXHIBIT A
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               617                                                                                                  EXHIBIT 2
                                                                                                                     EXHIBIT A
                                        CUSTODIAN OF RECORDS AFFIDAVIT
                                            CITY OF TERRELL HILLS

STATEOFTEXAS                                   §
                                               §
COUNTY OF BEXAR                                §

Records pertaining to: CITY OF TERRELL HILLS

        Before me, the undersigned, personally appeared COLUMBUS STUTES, who is by me
duly, deposed as follows:

       I, the undersigned, am over 18 years of age, competent to make this affidavit, and am
personally acquainted with the facts herein stated.

                 I am the CUSTODIAN OF RECORDS for:

                 THE CITY OF TERRELL HILLS

        Attached hereto are 21 pages of records. These said records are kept by the CITY OF
TERRELL HILLS in the regular course of business. It is the regular course of business for
employees to make these records, with the knowledge of the act or event, and the records are
made at or near the time or reasonably soon thereafter. The records are true and correct copies of
the original documents on file with the CITY OF TERRELL HILLS.

                                                      COLUMBUS STUTES, Secretary-Manager
                                                      CITY OF TERRELL HILLS

SUBSCRIBED AND SWORN to before me by the said COLUMBUS STUTES on the 15th day
of August, 2016 to certify which witness my d and seal of office.

      ,~,uuu ,
             11
 /~,~~·'·~~..; \       AMY M 8UCKERT                         Y PUBLIC IN AND FOR THE
 ~: ::...,1~·:': ~ Norory Pub11c. State or Texas      STAT    FTEXAS
 ~~   · l~       ' •"$"Com m E~p 1res l 1-04 · 201Y

                                                                      Expires:~ ~. 2t::l\Cj'
 -..,.;
   ,, ~...
         .,. ..
             ,t:·+  ,...
    ,,,,,,,,,,,,•'       No ta ry JD 1304 3 J 98-7
                                                      My Commission

618                                                                                    EXHIBIT 3
                                                                                        EXHIBIT A
                                CITY OF TERRELL HILLS
                    MINUTES OF TllE REGULAR CITY COUNCIL MEETING
                                   AUGUST 8. 2011

                                         AGENDA

      !. Call lo Order and RecordingofQuonnn

      2. Rcvlcw/aclion of Minutes oJ'1heJu1y 11. 2011 regular Council Meeting..

      J. Employee of' the Quaner

      4. Public Ilea.ring on the requesl from Mr. Salim Merchan1 for the rezoning of the property
         located at 2115 J ISJTy Wurzbach Road from semi-commercial to commercial 1.1.ming.

      5. Discussion/Action on the request from Mr. Salim Mercl1am for 1he rezoning of 1he
         property located at 2 11 5 Harry Wurzbach Road from semi-commercial Lo commercial
         1.oning

      6. Discussion/ Action approving the spcc ifi c~tions for the 20 I I Bond Road projects and
         authorizing lb!.! bid process.

      7 Discussion/Action authorizing the disrmsal of surplus equipmenl

      8. Discussion I Action on requesl for Special Activity Pern1il for the Texas Campaign for the
         Env[rcmmenl to conduct a door-to-door canvass ofTerl'ell Hills on September 7. 2011 .

      9. Oniinance~ and Resolutioni;

         a. Resolution fl 1324 A Resolution approving the relocation of an easemenl
         granted to San Antonjo Water System (SAWS) by the City of Terrell Hills alld
         setting an effective dale.

      iO. Reports

         u. Chy Manager Report: General Fund. Debt Service and Capital Funds reports. Update
         on the Ad Valorem Tax Rolls.

         h Deputy Fire Chiefs' Report: Recent Fire Department Activity

         c. Police Chief Report: Reccnl Activity

      11 . Comments hy citizens

619
                                                                                    EXHIBIT 3
                                                                                                   EXHIBIT A
          11   Adjoummcnl

      CALL TO ORDER ANO RECORDING OF QUORUM

               Mayor Camp declared a quorum present and called lhc regular Council meeting to order
      at 5'.00 p.m. at City Hall. 5100 North New Braunfels Avenue. on August 8. 201 I

      fherc were present.

      Ma}or .I Bradford Camp
      Mayor Pro lem Michelle Brady
      Ct.tuncilmember Wilham Ochse. IJl
      Councilmcmhcr Anne Rallantyne
      Cmmcilmember Charles Parish.. Jr

      Also present were:

      Interim City Manager. Columhus Stutes
      Police Chief, Greg Whitlock
      Deputy Fire Chief. William Knupp
      Deputy Fire Chief. Justin Seibr.::rt
      Fxecutive S1;:crctary, Kristine Sanchell'
      City t\ttomcy, hank Garza
      Buddy & Kay Rosene. 348 Ulac Lane
      Salim Merchant. 2111 I-tarry Wurzhach
      John Colquhoun. Preese & Nichols
      Richard Kelley, Freese & Nichols
      Mr & Mrs. James Flagg, 1433 Wiltshire
      David Balmer. 347 Garra1y
      Mr. & Mrs. George Ryan. 1437 Wiltshire
      Halma Siemek. 139 Brykcr
      Ross l'a:ylor 140 Bryker

      IU:VIEW/ACTIO~        OF MTNl'TES OF THE JUI,\ 11. 201J REGULAR COUNCIL
      \1FF-TING

             Upon motiun hy Couocilmembcr Ballantynl!. and second hy Mayor Pro tern Brady. the
      minutes of the July I I. 201 t regular Council Meeung were unanimously approved.

      EMPLOYEE OF THE QUARTER

              Mayor Camp rccogmLed Alan Swanson a> Lmployce of the Quarter. for the second
      qunrter of 2011. Deputy Chief Seiher1 spoke orFirdightcr Swanson's accomplishments over the
      Inst quar1cr stating lhal he had completed bis paramedic classes with an t\ average. played a

                                                   2

620
                                                                                           EXHIBIT 3
                                                                                                       EXHIBIT A
      significant role in the oew computer generated Pre-Pluns for the department. and continued hi'>
      duties with his shift.

      PUBLIC HEARING ON THE REQUEST FROM MR. SALIM MERCHANT FOR THE
      REZONING OF TllE PROPERTY LOCATED AT 211 5 llARRY WURZBACH ROAD
      FROM SEMI-COMMERCIAL TO COMMERCIAL ZONrNG

              Mayor Camp opened the public hearing al 5:05 pm on Mr. Merchant's requesl. The City
      Manager explained that this request had been submitted lo the Planning and Zoning Cnmmission
      and rhe recommendation of the commission was against the request for re-zotU.ng. The property
      in question is localed between the Fort Sam Grocery W1d Ebbt1de Lounge.
              Mr Merchant addressed Council explaining that when he purchased the properly he
      though1 the entire su·ip was commercial and U1at without the re-2oning he cannot lease !lie
      property as he had intended and in addiuon this will decrease the property value. Mr. Merchant
      said that he has a similar property on Eisenhauer which is all commercial. There is a spnns har,
      convi:aience store as well as his office localed there and he ht1s encountered ao problems with
      the neighbors during U1e past ten years.
              Mr. Flagg spoke to Council saying that Lherc was a reason the pr•operties had heen re-
      zorn:d. I he Laundroma1 that was located there previously hlls been closed for more than six
      momhs and 1herefore is zoned semi-commercial and it should be kepi 1111s way. l le said he
      agreed with the recommeudatiou of the P&Z Commjss100.
              Mrs. Ryan said that her concern is tha1 once the property is zoned commercial there will
      be no way of controlling what type of business opens there. She said she believed Mr.
      Merchant's intentions were good but tltal does not mean iI he sells the property the new owner,s
      would be. She explained 1ha1 their property backs directly up 10 that one and they have had
      problems over the years with disturbances from the " drunks and derelicts" tha1 hang out in 1he
      parking lot. Mr. Ryan agreed slating that at one time it was such a problem lhcy requested and
      received a variance to put in a higher fence.
              Couucilmembe1 Ocl1se verified with I.he City Manager that all of those p1-operties rue
      zoned semi-commercial; the store and bar are grandfathered in because they were in existence
      prior to the re-zoning The City Manager confirmed this saying they are not z.oned commercial
      Councilmember Ochse asked what types of businesses WL"f'C allowe BY THE CITY OF
      TERRELL RILLS AND SETTING AN EFFECTIVE DATE

             'J be City Manager said this easement is required as part of the City I tall Renovalio11.
      Mayor Pro tem Brady rnade the motion. whic11 was seconded by Councilmember Ballantyne lo
      approve Resolution# 1324. All vored in favor and the motion passed.

      CITY MANAGER REPORTS

             The City Maniiger reponed that the budget is right where it should be for this Lime of
      year. He said that expenses are 85% of budget and mcome il> 100% of budget. The combined
      cash on hand is$ I 1-357,468 and all departments are operating within iheir bi1dgets. The Capital
      outlays al this point are minimal, but will begin to increa-;e as the projects progress.
               The ad valorem tax rate shows a 1.8% reduction in valuations. This means that in order to
      set tl1e effective la~ rel.le to bnng in the same collections we would have to incrt:ase taxes by .02;
      however staff bas found savings iu ol.ber areas uflhe budget to avoid a 1ax increase.

      DEPUTY FIRE CHIEFS' REPORTS

              Deput) ChiefSeiben reported that the department responded 10 51 calls in July. most of
      which were emergency medical calls. There were no fire calls and response Lime is gooublic Ai.:cess Educational Governmental
      Programming. Many smaller cities have opted 10 reject this paymen1 becnuse t11e cost of
      '> UCh programming 1s greater than the PEG Fee received Time Warner Cable has said
      1hat cities thnt pass the resolution before the end ol 1he year will not be required to return
      the 1% and 111 addi1ion this will reduce the rcs1dcnt"s hill b, 1his 1%. Upon motion bv

                                                    5

630
                                                                                             EXHIBIT 3
                                                                                                         EXHIBIT A
      Councilmernber Ballantyne and second by Councilmcmbcr Ochsc, Council unanimously
      voted to pass Resolution# 1343.

      CITY MANAGER REPORTS

               Mr. Stutes reported that the fund balance has shown a significant decrease
      because of large paymenL'l on lhe City Hall and Street projects. The budget is perfomung
      as 11 should. TI1e Capital PmjecLc; Fund shows both the City Hall and Street Projects have
      paid $1 IM in expenses Lo date.
              The Street projec1 is progressing. all of the signs have been collected that were
      lefi on Newbury by the cont.rc1ctor. The work on Geneseo will move to the other sjde of
      lhe esplanade within the nex1 v.edc Mayor Camp menuoncd that he has seen some
      failure ut the comer of Fldon and I errcll arid 1J1c City Manager said Slaff is aware and is
      in the process or revie\\.ing the engineers resting log.

      POLICE CHIEF REPORTS

                 Chief Whitlock said tbat during National Night Out their were two
      neighborhood gatherings: one in the 1200 block of Wiltshire and one in the 800 block of
      1 errcll. Police and Fire personnel attended and spent some time mingling with Lhe
      residents. fhe Fall Festival at St. David. s will take place on the 19111 of October and Lhe
      PD will attend this as well.
                 Chief said lhat property crimes are very low; I 1. Foley 1s 1n Quantico and Sgt.
      Baham is workmg C1D

      FIRE CHIEF REPORTS

                 Chief Knupp reported 47 incidcnls for lhc rnonlh of September and response
      tune was 1 min and 6 seconds. He said rha1 at National Night Out the FD had a Fire
      fatinguisht.'T Demo and it was a hit with the residents. The Alamo Area Chiefs
      Association has formed a comnuuee to dt.>vl!lop a "'best prJctaces·· which is similar k'
      what the PO JUSt did, and Chief Knupp said he will be serving. on that committee. Shift
      Officers allcndcd a symposium on October .i1h put on by the LA rirc County Department.
      Tbe officer!. said it went Vt!T) .... cu and was very cJucalional.

      ADJOURNMENT

             TI11o:rc being no funber businc.-ss, Mayor Camp adjourned the meeting at 4:59 p.m.

      AIJGLL~*-
       SEC'RFTARY-MANAGER

631                                                6                                    EXHIBIT 3
                                                                                                     EXHIBIT A
                                          ORDINANCE NO. 1347

                                              AN ORDINANCE

                    AMENDING THE CITY CODE O F ORDINANCES CHAPTER
                    14, AOOfNG SECTION Viti, SECTION (D) BY PROVIDING
                    FOR A SPECIAL USE PERMIT tN THE SEMI-COMMERCIAL
                    DIST RICT THAT WILL ALLOW CERTAlN USES IN MORE
                    RESTRJCTIVE DISTRICTS UNDER SPECIAL CONDITIONS
                    O F DESIGN, OPERATION AND APPE ARANCE AFTER
                    RECOMMENDATION BY THE PLANNING AND ZONING
                    COMMISSION AND AJ'PROVAL HY THE CITY COUNCIL;
                    PROVIDlNG FOR SEVERABILITY; PROVIDING       AN
                    E FFECTIVE DATE; AND REPEALING ANY 0RD1NANCE IN
                    CONFLICT.

      WllEREAS, the City of Terrell I !ills has u Laning Ordinance to comply with its comprehensive
      plan which his designed to promote heaJtb and the general welfare. provide adequate light and
      air. and prevent overcrowding~ and; and

      WHEREAS, the City ofTerrell Hills Planning und Loning Commission held a public hcaring on
      December 3, 2012 to gather public inp ut on providing for Special Use Permits in the Semi-
      Commercial Zoning uode( special conditions of design, operation and appearance and may be
      pe1111itted when specifically authorized by this section afrcr recommendation by the Planning and
      Loning commission and approval by the City Council.

      NOW, Tl:IEllEFOIU.:, BE IT ORDAINED {lY TRE CITY COUNCTL O F THF. CITY OF
      TERRELL HILLS, T EXAS:

      Section l.     The City of Terrell Hills Code of Ordinances. Chapter 14 Zoning, Section Vil I.
      Zone Distric1 B. Semi-Commercial District is amended to includt! Section D a'> follows:

      D. Special Use Permit (SUP): Certain uses are considered appropriate in Distm;l B, Scmi-
      Commercia1 District under special conditions of design. opera1ion and appearance and may be
      permitted \Vh.en specifically authorized by this section after recommendation by the Planning and
      Zoning Commission and approval by the City Council. Such special use pennits may be granted
      in order tha~ lhe City muy develop in accordance with the intent and purpose or this chapter. that
      land may be fully utilized for a lawful purpose and that substantial justice may be done.

               In reaching a decision   011   any application for a special use pcnnil, I.he City shall
              determine:

              (a) That lhe requested special use permit will establish only thal further 1hc intent and
                           or
                  purpose this chapter.

              (b) Thal the loi;ation of proposed activities and improvements are clearly defined on a
                  site plan filed by 1he applicant.

              (c) That tbt: special use pennit will be wholly compatible with the use cmd permrtted
                  development of adjacent properties either as tiled or subject to such requirements a!>
                  Lhe city council may find necessary lo protect and maintain the st:Jbilily of adjacent
                  properties. The city council may also detennine co11dilions 10 be met (o meet the
                  intent of this chapter. They may include hours of operation.

              (d) Granting of the special use permit will not adversely atTec1 the character and
                  appropriate use of the area or neighborhood in which it is proposed to locate; will
                  not substantially depreciate the value of adjacent and nearby properties for use in
                  accordanee with the regulations of the Semi-Commercial district in which they are
                  located~ will be io keeping with the spirit and intent of this chapter; will not
                  adversely affect the impJementaLion of the tomprehensiw plan~ and will not
                  adversely affect traffic. public utilities, public health, public safety, am.l the general

632
                                                                                             EXHIBIT 3
                                                                                                          EXHIBIT A
             welfare.
         (e) No special use permh for the \!Se of buildings or lands shall bt: approvt:tl unLil a site
             plan has been submitted and recommended by the planning and zoning commission
             and approved by the city council. The site plan may be submitlcd concurrently with
             the special use pcnnit applic:'ltion or separately following the initial recommendation
             and approval

         2. Special Use Permit Application. SUP Application sball be submitted 10 the City
            with the proposed site plan and th.: same fees required for zoning changes. A site
            pl~ with detail as required below must he submitted upon application for a
            rezoning for an SUP. The site plnu shall be prepared to scale. Such rcquirnd site
            plans shall show, al a rnimmum. lhe following:

             (a) The location of the building or buildings to be constructed or altL"Tcd;

             (b) All parking, loading, and driveways to be constnacted or altered:

             (c) The location and dimensious of all screening devices. lighting equipment,
             exterior located equipmc!nl such as cooling systems, trash containers, s igns. fire
             hydrants, and sidewalks,

             (d) The location 81ld details or all landscaping and planl malerials t<' be installed;

             (e) Elevaticms and floor plans of Lhe buildings showing materials, treatments ol'
             exteriors, location of balconies, overhangs, and paLio>; aml

              (f) Such other details of Lbe development as the Commission and/or may deem
             necessary to evaluate the impact of the development on adjoining and surrounding
             properlii:s.

      3. Procedures. Granting of an SUP as considered zoning and as such, all the procedures for
         changing a zoning dist.rict apply to an appticalion for W1 SUP and shall be processed in
         the same manner.

         (a) Approval or an SUP by Lhe City Council shall be evidenced by an ortli.nancc which
             shall include all special requirements lo be included in the SUI?, and all agreements
             or other docurnenlS between the City and the applicant shall be incorporated in the
             orctinance by reforence.

          (b) If aJJ apµltcation is approved and an SUP is granted, all condilions which may have
              been attached to 1.he approval are biadi.ng on tbe property and shall be complied wi.th
             before a Certificate l)f Occupancy may be issued. All subsequent development and
             use, as shown and described i11 Lhe approved SUP. or the property, shall be in
             1:Lccordancc with the appruvcd plan and conditions.

          (c) Any proposed amendment shall be approved in the same manner and under the same
              procedures as are applicable to the issuance of the original pernut.

      4. Rcvocatfoo of rcrmil. The SUP may be considered for revocation for, bu1 not limited
          to, the following re-asons:

          (a) A use other than the use approved in the SUP or in tbe underlying t.on.ing district is
              developed.

          (b) Construction fa nor begun wilhin one year of the date of approval of the permir.

          (c) Failure to satisfy the condi1ions of tht! SUP or follow the site plan made part or tht:
              SUP. The City Manager or dcsignee shall have the right to periodically examine the
              operation of the special use to detennine compliance with the requirements and any
              conditions. If the City Manager or dcsignee dctennmes I.hat the requirements have
              not been met, or the conditions are being violated, a written notice shall be issued to
              the owner of the property outlining the nature of the violation and giving the owner

633
                                                                                            EXHIBIT 3
                                                                                                        EXHIBIT A
                    or the property a maximum or thirty (JO) days to come into compliance. ff after
                    lhirly (30) days the violations continue to exist, then lhe City Manager or dcsigncc
                    shall forward a report lo the City Council through the Planning aod toning
                    Commission which may recommend that action be taken to: (a) revoke the SUP
                    !Tom lhe property, (b) refuse issuance of a Certificate of Occupancy. or (c) revoke
                    lhe Certificate of Occupancy.

              (d) Regardless of the notice requil'ements in Section 4(c), if a health and safety v1olauon
                  is cited, and there exists an imminent health and safety risk to the public as
                  detc.mnined by the City Manager or designee, lhe Cenifica1e of Occupancy will be
                    temporarily revoked. The revocation of the Certificate of Occupancy wiU last um11
                    the health and safety violation is cured, Failure lo cure violation within thirty (30)
                    days. then lbe City Manager or desjgnce shaU forward a repon to the City Council
                    through the Planning and Zoning Commission which may recommt:nd Lhat action be
                    taken lo revokt.: the Certificate of Occupancy.

              (e) If property owner is in arrears on any taxes owed to the Ciry, th111 are not being
                    con~ested, City Manager shall provide a written notice LO lhe property owner of the
                    taxes owed and give the owner of the propeny a maximum of lhirty (30) days lo
                    make all necessary payments. If after thirty (30) days the taJccs are still owed to the
                    City or no arrangements have been made for rcpaymcut, City Manager shall forward
                    a repol1 to the City Council through the Planning and Zoni11g Commission which
                    will recommend Tevocauon of the SUP from the property.

              (f) The revocation process shall be the same as for a zoning district change, with notice
                  to property owners within 200 feel. public bearing and recommendation by the
                  Planning and Zoning Commission, and public hearing and ordinance consideration
                  by the City Council.

              (g)   Th~  City Council may deny the SUP revoeation. approve the revocation, deny the
                    revocation and add additional restrictions 1o lhe SUP, suspend the SUP for a period
                    lhe Couocil determines, or amend the SUP wilh probationary n:quirements and terms
                    the Council determines.

              (h) Upon revocation of an SUP the property subject lo Lhe SUP may be used for any
                  permiued ust' within the Semi-Cbmmt!rc1al districl.

          5. Subliequeot Applications. An application for an SUP may be withdrawn nt any time.
             No application for an SUP pertaining to any lot, parcel or ponion thereof which re4uests
              the same use and same oooditions shall be considei:ed within one (I) year of a final
              decision denying the application

      Section 2.    The SUP amendment identified in Section I of the Ordinance is th<.: only
      iimendruent and all other provisions of Chapter 14, Section VIII shall remain ..is unchanged.

      ScctionJ.      This ordinance shall take effect immediately upon its passage, approval and
      publication according. lo law.

      Section 4.     If any section or part of any section or paragraph of this ordinance is declared
      invalid or w1constitutional for any reason, it shall not be held 10 invalidace or impair the validity ,
      force, or effect of any olhcr section or sections or pan or a section or paragraph of lhis
      Ordinance.

      Section S.     /\II ordinances or parts of ordinances, in conflict herewith are to the extent of such
      contlicl hereby repealed The balance of such ordinance is herehy saved !Tom repeal.

634
                                                                                              EXHIBIT 3
                                                                                                           EXHIBIT A
      PASSED AND APPROVED THIS 10'1' DAY OF DECEMBER2012.

      ATTEST:

        SECRETARY-MANAGER

635
                                                            EXHIBIT 3
                                                                        EXHIBIT A
                                          OR.DlNANCE NO. 1349

             AN ORDINANCE AMENDlNG ORDINANCE NO. O rd. 929, 1-15-96, THE
             COMPREHENSIVE ZONING ORDTNANCE OF THE ClTY OF
             TERRELL llILLS FOR THE PURPOSE OF ESTABLISHING A SPEClAL
             USE PERMIT FOR TRE PORTION OF CB 5848A BLK 11 LOT E IRRG
             122.10FTOF11, BEXAR COUNTY, TEXAS WHICH rs ZONED B SEMl-
             COMMERCIAL. COMMONLY REFERRED T O AS 2 115 HARRY
             WURZBACH, TERRELL HILLS, TEXAS 78209; AND SETTING AN
             EFFECTTVE DATE.

      WHEREAS, notice of pubJic hearings before the Planning and Zoning Commission and City
      Council were published in a newspaper of general circulation; and

      WHEREAS, notice of public hearings before lhe Planning and 7..oning Commission and City
      Council was sent to property owners within 200 feet of the proposed special us~ permit via
      Uniteducts, or as otherwise permmed and approved by the City Council,

                  d. No parking shall be pennittcd bclund the building located on the Prope11y:

                  e. No operation of any bus1.I1ess at lhe Property may occur between midnight and 6
                       a.m.;

638
                                                                                            EXHIBIT 3
                                                                                                           EXHIBIT A
                 f.   The Special Use Pennit zoning classification will expire six (6) months afl\!r the
                      Property is no longer used for at least one (I) of the Permitted Uses~ and

                 g. Tbe City Council must consider an           ~   I
           -0
      Q
      ...- r-
      m
             0
             -i
                                             .,
                                           _ F---r- _ v....1t-.\L_t;u·m_   __ _   _
      ~
      w      -0
      "'11   };:
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                                     EVENTIDE DRIVE

641                                                                                   EXHIBIT 5
                                                                                       EXHIBIT A
642

      the___T.\T_
                IB
                 ____Tirur            ____ ni·-·· SJ@H©ail-aiiif
                             IL-/:TI)CID                   hf. 19)~
                                                                  .--:· ~~~5).---
            JL\I W              ~     · .fro. Barb~r !fhop &LJl&2Jcr LI 11 "2/2'
      ..                                                     -   ·--   --

                                                                                    EXHIBIT 5
                                                                                     EXHIBIT A
 ELECTRO SALES & SERVICE INC
 3941 EISENHAUER ROAD
 SAN ANTONIO, TX 78218
 TEL (210) 497 8969
 FAX (21 0) 655 9505
 EMAI L: SALIMMERCH ANT 04@AOL .COM

 December 12, 2012

 The Planning and Zoning Commission
 City of Terrel Hills
 5100 N. New Braunfels Ave
 San Antonio, TX 78209

 RE:   SUP APPLICATION FOR 2115 HARRY WURZBACH ROAD

I like to apply SUP APPLICATION for 2115 Harry Wurzbach Road, San
Antonio, TX 78209.

 (a)   The location of the building not to constructed and altered. Its an
       existing location and part of 2111/2117 Harry Wurzbach Road.

 (b)   The parking, loading and driveways not to be constructed.

(c)    The location and dimensions of the building is an existence
       building, no need to make sidewalks, signs, trash containers etc.

(d)    No landscaping and plant materials to be installed.

(e)    Its an existing building, no need to change in the strip center.

(f)    No need to change the existing building including the
       development on adjoining and surrounding properties.

643                                                                 EXHIBIT 5
                                                                     EXHIBIT A
 I have a tenant who wants to open Barber Shop and Beauty Parlor.

 I would appreciate it if you kindly approve the above mention SUP
 APPLICATION as soon as possible so I do not loose my tenant.

 Thank you for your co-operation.

 -~~OM~
S~~CHANT

cc:
Law Offices of
Kenneth E. Grubbs
4241 Woodcock Drive
San Antonio, TX 78228

      I certify that this is a complete and true copy of Mr. Salim Merchant's SUP
      Application submitted to the City of Terrell Hills for the property located at 2115
      Harry Wurzbach.

          CU$is
      Columbus Stutes, City Secretary

644                                                                                  EXHIBIT 5
                                                                                      EXHIBIT A
SALIM MERCHANT
P.O. BOX 790810
SAN ANTONIO, TX 78279
TEL (210) 497 8969
TEL (210) 771 7860
FAX (210) 591 1626
EMAIL: SALIMMERCHANT04@AOL.COM

February 5, 2014

The Planning & Zoning Commission
City of Terrell Hills
5100 N. New Braunfels Ave.
San Antonio, TX 78209
Tel (210) 824 7401
Fax (210) 822 2267

RE:    2113 HARRY WURZBACH ROAD. TERRELL HILLS, TX 78209

Dear Sir,

I. like to open Barber Shop dba STEEL CUTS at 2113 Harry Wurz.bach Road, Terrell
Hills, TX 78209.

I got SUP in May 2013 and failed to open hair and nail saloon because my tenant didn't
want to wait so long, and it was e~pircd. I, therefore, request you to kindly issue SUP for
barber shop as soon as possibJe.

Also, can you authorize to CPS so I can get the light.

Thank You.

SALIM MERCHANT

cc:
1.     Mayor Anne Ballantyne                      aballantyne@terreU-hiUs.com
2.     Pro Tem William Ochse                      wochse@terrell-hills.com
3.     Council Person - Charles Parish -          cpa ris h@terrel l·h ills.com
                                                                                    •   DEPOSITION

                                                                                   I      ex;r
 645                                                                               EXHIBIT 6
                                                                                    EXHIBIT A
City of Terrell Hills Code                                                            Chapter I 4--Zoning

    B. AH such applications for building permits shall further be accompanied by a complete set of
written plans and specifications covering the proposed construction. Such plans and specifications
shall be deemed insufficient unless they bear the seal of either a registered professional engineer or
an architect licensed under the laws of the State of Texas. All foundation plans shall be deemed
insufficient unless they bear the seal of a registered professional engineer licensed under the Jaws of
the State of Texas. Such set of plans shall be retained by the Building Inspector until a Certificate of
Occupancy and Compliance has been issued.

SECTION XIV: CERTIFICATE OF OCCUPANCY AND COMPLIANCE

    A. No building hereafter erected or structurally altered shall be used, occupied or changed in use
until a certificate of occupancy and compliance shall have been issued by the Building Inspector,
stating that the building or proposed use of a building or premises complies with the building laws
and the provisions of these regulations.

    B. Certificates of occupancy and compliance shall be applied for coincident with the application
for a building permit and shall be issued within ten days after the erection or structural alteration of
such buildings shall have been completed in conformity with the building laws and these regulations.
 A record of all certificates shall be kept on file in the office of the Building Inspector.

SECTION XV:                  BOARD OF ADJUSTMENT AND PLANNING AND ZONING
COMMISSION

A. Board of Adjustment

      1. Organization and Operation of the Board.

         a. The Board shall consist of five members and three alternates appointed as required by
      Section 10 of Article VITI of the City Charter. At the first meeting of the Board following
      publication of an ordinance appointing members, the Board shall select a Chair and Deputy Chair
      from its members.

         b. A quorum shall consist of four members/alternates. No more than five members/alternates
      may vote on any issue before the board; the voting altemate(s), if any, shall be designated by the
      Chair at the start of the meeting.

          c. Meetings of the Board shall be held at the call of the Chair. Such Chair, or in his absence
      the Deputy Chair, may administer oaths and compel the attendance of witnesses. All meetings of
      the Board shall be open to the public.

          d. The Board shall keep minutes of its proceedings, showing the vote of each member upon

                                                   32                           ZONJNG-3.DOC.WPD 12·10-12

646                                                                                         EXHIBIT 7
                                                                                             EXHIBIT A
City o(Terre/l Hills Code                                                              Chapter 14--Zoning

      each question, or, if absent or failing to vote, indicating such fact, and shall keep records of its
      examinations and other official actions, all of which shall be immediately filed in the of fice of
      the City Secretary and shall be a public record.

          e. A member/alternate shall not vote or participate as a member in any matter before the
      Board if the member has any interest in this matter, whether such interest is direct or indirect,
      financial or otherwise. In any case, where the question of a member's interest is raised, the Chair
      shalJ rule on whether the member should be disqualified.

          f. Notice - Public notice of hearing before the Board of Adjustment shall be given for each
      separate appeal thereto by publication two times in a newspaper of general circulation in the City
      of Terrell Hills, stating the time and place of such hearing, which shall not be earlier than ten
      (10) days fi:om the first date of such publication, and in addition thereto the Board of Adjustment
      shall mail notices of such hearings to the petitioner and to the owners of property lying within
      two hundred feet (200') of any point of the lot or portion thereof on which such variation is
      desired, and to all other persons deemed by the Board of Adjustment to be affected thereby.
      Such owners and persons shall be determined according to the current tax rolls of the City. The
      published notice and the mailed notice may contain notice of a hearing on more than one matter.
       Substantial compliance with the provisions of this section shall be deemed sufficient, and the
      depositing of such written notice in the mail by the Board of Adjustment shall be deemed in
      compliance with the provisions for mailed notices.

           g. A fee of one-hundred dollars ($100.00) to cover the administrative costs of such hearing
      wiJl be filed with the request for hearing.

      2. The Board of Adjustment shall have the following powers:

          a To authorize upon appeals in specific cases such variance from the terms ofthis ordinance
      as will not be contrary to the public interest, where, owing to special conditions, a literal
      enforcement of the provisions of this ordinance will result in unnecessary hardships, and so that
      the spirit of this ordinance shall be observed and substantial justice done.

          b. To hear and decide appeals where it is alleged there is an error in any order, requirement,
      decision, or determination made by an administrative official in the enforcement of this
      ordinance. In exercising this authority, the Board may reverse or affinn, in whole or in part, or
      modify the administrative official's order, requirement, decision or determination from which an
      appeal is taken and make the correct order, requirement, decision, or determination, and for this
      purpose the board has the same authority as the administrative official.

             (1). Appeals to the Board of Adjustment may be taken by any person aggrieved or by any
         officer, department, board or bureau of the municipality affected by any decision of the
         administrative officer. Such appeal shall be taken with ten (10) days from the date of any

                                                    33                           7.0NING-3.DOC.WPD 12- 10-12

647                                                                                           EXHIBIT 7
                                                                                               EXHIBIT A
City o(Terrell Hills Code                                                               Chapter 14--Zoning

          such ruling, by filing with the officer from whom the appeal is taken and with the Board of
          Adjustment a notice of appeal specifying the grounds thereof. The officer from whom the
          appeal is taken shall forthwith transmit to the Board all papers constituting the record upon
          which the action appealed from was taken.

              (2). An appeal stays all proceedings in furtherance of the action appealed from unless the
          officer from whom the appeal is taken certifies to the Board after notice of appeal shall have
          been filed that by reason of facts stated in the certificate a stay would, in his opinion, cause
          eminent peril to life or property. In such case proceedings shall not be stayed otherwise than
          by a restraining order which may be granted by the Board of Adjustment or by a court of
          record on application on notice to the officer from whom the appeal is taken and on due
          cause shown.

              (3). The Board of Adjustment shall fix a reasonable time for the hearing of the appeal and
          give notice thereof, as hereinafter set forth, and upon the hearing any party may appear in
          person or by agent or by attorney.

      3. The concurring vote of four members/alternates of the board is necessary to:

          a. Authorize a variation from the terms of this ordinance; or

          b. Reverse an order, requirement, decision, or determination of an administrative official.

B. Planning and Zoning Commission

      1. Organization and Operation of the Commission.

          a. The Commission shall consist of seven members and three alternates appointed as
      required by Section 9 ofArticle VIII ofthe City Charter. At the first meeting of the Commission
      following publication of an ordinance appointing members, the Board shall select a Chair and
      Deputy Chair from its members.

          b. A quorum shall consist of four members/alternates of the commission. No final action
      shall be taken on any matter except pursuant to a majority vote of the members present; however,
      in no case shall less than four votes constitute a majority, and this requirement shall govern
      requests for rehearings in zoning cases.

          c. Meetings shall be called by the Chair, provided that written notice thereof is mailed or
      given to each member at least forty-eight (48) hours prior to the time thereof. No approval or
      disapproval of any zoning application shall be given except at a regular meeting. All meetings of
      the Commission shall be held at the City Hall.

                                                    34                            ZONING-3.DOC.WPD 12-10-12

648                                                                                          EXHIBIT 7
                                                                                              EXHIBIT A
City of Terrell Hills Code                                                              Chapter 14--Zoning

           d. The Commission shall keep minutes of its proceedings, showing the vote of each member
      upon each question, or if absent or failing to vote, indicating such fact, and shall keep records of
      its examinations and other official actions, all of which shall be immediately filed in the office of
      the City Secretary and shall be a public record.

          e. A member/alternate shall not vote or participate as a member in any matter before the
      Commission if the member has any interest in this matter, whether such interest is direct or
      indirect, financial or otherwise. In any case, where the question of a member/altemate's interest is
      raised, the Chair shall rule on whether the member/alternate should be disqualified.

         f. Notice - At least fifteen (15) days notice of any public hearing before the Planning and
      Zoning Commission of the time and place of such hearing, shall be published in an official
      paper, or a paper of general circulation in the city. Notice shall be mailed to owners of real
      property lying within two hundred feet (200') of any lot to be replatted or any property upon
      which a change in zoning classification is proposed. Such notice shall be given, not less than 15
      days before the date set for hearing, to all such owners as indicated on the most recently
      approved municipal tax roll.

          g. A fee of one-hundred dollars ($100.00) to cover the administrative costs of each hearing
      will be filed with the request for hearing.

      2. Platting, Replatting and Recording Subdivisions

          a. The provisions of Chapter 212 of the Texas Local Government Code will govern the
      Commission's consideration of such matters. Ifthe commission disapproves a request no hearing
      will be held involving the same tract of land for a six months period unless new, relevant and
      substantial evidence, which could not have been secured at the time set for the original hearing is
      produced by the applicant under sworn affidavit to that effect.

          b. Final Approval Authority. The City Council will be the approval authority for all plats
      and rep lats after such requests are considered by the Planning and Zoning Commission in accord
      with this ordinance, if there are two dissenting votes on the Planning and Zoning Commission
      action.

         c. PROCEDURE: Annex A

          d. SHORT FORM PROCEDURE: A short form procedure, omitting the filing of the
      preliminary plat may be followed when:

             ( 1) All lots in the proposed subdivision front on a previously dedicated street and are so
         situated that no new streets, alleys, easements or public property are required; and

                                                    35                            ZONING-3.DOC.WPD 12-10-12

649                                                                                           EXHIBIT 7
                                                                                               EXHIBIT A
City of Terrell Hills Code                                                             Chapter 14--Zoning

            (2) The utilities and drainage facilities are in place to serve each lot in the proposed
         subdivision and require no alterations; and

             (3) Staff review by the city confirms that all engineering data remains accurate.

         e. The Planning and Zoning Commission may approve and issue an amending plat as
      provided in paragraph 212. 016 of the Texas Local Government Code without notice, a hearing,
      and the approval of other lot owners.

      3. Changes and Amendments to the Comprehensive Zoning Ordinance

         a. The City Council may, from time to time, amend, supplement, or change by ordinance the
      boundaries of the districts or the regulations herein established.

          b. Before taking action on any proposed amendment, supplement or change, the City Council
      shall submit the same to the Planning and Zoning Commission for its recommendation and
      report.

          c. Procedures for amendments of the zoning regulations.

             ( 1) All petitions, applications, recommendations or proposals for changes in the zoning
         district classification of property or for changes in the textual provision of the zoning
         ordinance shall be filed with the Planning and Zoning Commission.

              (2) It is further provided that no application for the rezoning of any lot, lots or block of
         land situated in the city, shall be received or filed with the Planning and Zoning Commission
         of the city and no hearing had thereon, if within one year prior thereto the City Council, after
         consideration and hearing, has denied an application for rezoning of the same property.

            (3) Recommendations. The Planning and Zoning Commission shall make a preliminary
         report on all proposed changes and hold a public hearing thereon before submitting its final
         report to the City Council.

             (4) After the final report is submitted by the Planning and Zoning Commission as
         provided above, the City Council shall act upon said report after a public hearing in relation
         thereto, at which parties in interest and citizens shall have an opportunity to be heard.

             (5) Passage when protested. If the Planning and Zoning Commission has disapproved a
         change in zoning or if there is a protest against any change in the reclassification of the
         zoning district of any property, signed by the owners oftwenty percent (20%) or more either
         of the area of the lots included in such proposed change, or of those immediately adjacent in

                                                   36                            ZONING-3.DOC.WPD 12-10-12

650                                                                                          EXHIBIT 7
                                                                                              EXHIBIT A
City of Terrell Hi/Is Code                                                           Chapter 14-Zoning

         the rear thereof extending two hWldred feet (200') therefrom, or of those directly opposite
         thereto extending two hundred feet (200') from the street frontage of such opposite lots, such
         amendment shall not become effective except by favorable vote of three-fourths of all the
         members of the City Council.

      I certify that this is a complete and true copy of Section XV of the Terrell HiJls Code

         cu
      of Ordinances. ~
                             ~
      Columbus Stutes, City Secretary

                                                  37                           ZONJNG-3.DOC.WPD 12-10-12

651                                                                                        EXHIBIT 7
                                                                                            EXHIBIT A
EXHIBIT B
FILED
9/28/2016 5:26:57 PM
Donna Kay McKinney
Bexar County District Clerk
Accepted By: Edgar Garcia

                                                  CAUSE NO. 2013-CI-00447

               SALIM MERCHANT & ELECTRO                           §          IN THE DISTRICT COURT
               SALES AND SERVICES, INC.,                          §
                    Plaintiff,                                    §
                                                                  §
               v.                                                 §          57th JUDICIAL DISTRICT
                                                                  §
               THE CITY OF TERRELL HILLS AND                      §
               BILLY W. ENG AND GIN WEI ENG,                      §
                    Defendants.                                   §          BEXAR COUNTY, TEXAS

                                   &,7<2)7(55(//+,//6¶REPLY IN SUPPORT OF
                                        MOTION FOR SUMMARY JUDGMENT

               TO THE HONORABLE JUDGE OF SAID COURT:

                        COMES NOW the City of Terrell Hills, Texas (hereinafter the ³City´Defendant in the

               above-entitled and numbered cause, and files this Reply in Support of Motion for Summary

               Judgment and in support thereof, would respectfully show the Court as follows:

                                                      I. INTRODUCTION

               1.       PlaintiffV¶6DOLP0HUFKDQWDQG(OHFWUR6DOHVDQG6HUYLFHV//&UHIHUUHGWRcollectively

               KHUHLQDV³3ODLQWLII´ suit arose because a non-conforming commercial use which had existed on

               SDUWRIWKHSURSHUW\LQTXHVWLRQLQWKLVODZVXLW³WKH3URSHUW\´ZDVDEDQGRQHGE\WKHSULRUSURSHUW\

               owner and prior WR3ODLQWLII¶V purchase of the Property. This part of the Property may still be used

               in accordance with the long-VWDQGLQJ]RQLQJFODVVLILFDWLRQRIWKH3URSHUW\³VHPL-FRPPHUFLDO´

               Plaintiff later asked the City to up-zone the Property to commercial use, but was denied. Instead,

               the City granted his requests for special use permits for the uses requested.

               2.       Plaintiff did not make available appeals to the Board of Adjustment, and, instead filed suit

               against the City and the sellers of the Property, the Eng defendants. The causes of action against

               the City are for a taking and for declaratory judgment.

                                                                 1
               686
                                                                                                       EXHIBIT B
3.       The City filed its Traditional and No-Evidence Motion for Summary Judgment on August

16, 2016, that there is no valid takings claim and the City is entitled to judgment as a matter of law

because:

      a. There is no property right to a change in zoning in this case, and there can be no taking
         when the City allowed the Plaintiff a special use permit for the use; as a result, Plaintiff has
         failed to plead a claim which would waLYHWKH&LW\¶Vimmunity and has failed to establish
         standing to sue;

      b. Alternatively, Plaintiff failed to exhaust administrative remedies available;

      c. $OWHUQDWLYHO\3ODLQWLII¶VFODLPVDUHQRWULSH

      d. Alternatively, Plaintiff has failed to provide evidence to create a genuine issue of material
         fact to defeat summary judgment for the City on the grounds that the denial to up-zone the
         Property GRHVQRWXQUHDVRQDEO\LQWHUIHUHZLWK3ODLQWLII¶VULJKWWRXVHDQGHQMR\WKH3URSHUW\
         and is not a regulatory taking as a matter of law;

      e. 3ODLQWLII¶VGHFODUDWRU\MXGJPHQWDFWLRQLVILOHGRQO\WRVHHNDWWRUQH\¶VIHHV, will not resolve
         ripe justiciable issues between the parties, and should be dismissed as a matter of law;

      f. Alternatively, Plaintiff has provided no evidence of one or more of the material elements
         of his claims; no evidence of property right that was taken by the City, no evidence of
         deprivation of economically viable use of the Property or of investment backed
         expectations, and no evidence any action of the City was the proximate cause of damages.

4.       3ODLQWLII ILOHG KLV 5HVSRQVH WR 'HIHQGDQW &LW\ RI 7HUUHOO +LOOV¶ 7UDGLWLRQDO DQG 1R-

Evidence Motion for Final Summary Judgment ³3ODLQWLII¶V5HVSRQVH´RQRUDERXW6HSWHPEHU

+RZHYHU3ODLQWLII¶V5HVSRQVH fails to create a genuine issue of material fact to defeat

'HIHQGDQW¶V0RWLRQIRU6XPPDU\-XGJPHQWDQGIDLOVWRSURYLGHDQ\OHJDOUHDVRQZK\'HIHQGDQW

is not entitled to judgment as a matter of law.

                            II.    REPLY ARGUMENT AND AUTHORITIES

Standard

5.       Plaintiff has failed to include the complete standards for both the traditional and no-

evidence summary judgment as raised by Defendant. For a traditional motion, as stated in

                                                    2
687
                                                                                            EXHIBIT B
Paragraph 30 of 'HIHQGDQW¶s Motion, once the movant establishes the right to judgment as a matter

of law, the burden shifts to the non-movant who must then set forth sufficient evidence to create

an issue of material fact. (Citing to Houston v. Clear Creek Basin Auth.).

6.      For a no-evidence summary judgment, as alleged in paragraph 3RI'HIHQGDQW¶V0RWLRQ

the movant can move for summary judgment even with no evidence on the grounds that there is

no evidence of one or more essential elements of a claim or defense on which the non-movant has

the burden of proof. The burden then shifts to the non-movant to present evidence raising an issue

of material fact.

Objection to Salim Merchant Affidavit

7.      Defendant objects WRWKHDIILGDYLWZKLFKLVDWWDFKHGWR3ODLQWLIIV¶5HVSRQVHEHFDXVHLWKDV

no legal weight, is self-serving, contains hearsay, is conclusory, not credible and his accusations

are not supported by evidence. In particular, on page 30 of 32, Plaintiff makes statements

regarding the thought processes of potential tenants which are not within his knowledge, which

are not supported by the evidence, and which, are hearsay. Plaintiff further makes self-serving

statements which are not credible and unsupported by the evidence related to his activity on the

premises. His statements are not plausible given that as he admits, the City has granted him special

use permits to use the space for requested uses. 6HH3ODLQWLII¶V5HVSRQVHSDJHRI, par. 4).

Defendant requests these statements in the second paragraph of the affidavit be stricken.

8.      The entire page 31 of 32 is made up of improper legal conclusions by Plaintiff with no

evidentiary support. Defendant requests page 31 of 32 of the affidavit be stricken and that

3ODLQWLII¶VHQWLUHDIILGDYLWEHVWULFNHQIURPWKHVXPPDU\MXGJPHQWHYLGHQFH

                                                 3
688
                                                                                       EXHIBIT B
Immunity

9.      All previous paragraphs are incorporated herein as if set forth in full.

10.     Plaintiff has misstated the burden of proof for immunity. The plaintiff bears the burden to

plead facts that affirmatively demonstrate that governmental immunity has been waived and that

the court has subject-matter jurisdiction. McMahon Contracting, L.P. v. City of Carrollton, 277
S.W.3d 458, 464 (Tex. App.-Dallas 2009, pet. denied). In the present case, although Plaintiff

purports to sue Defendant under takings law, which does contain a waiver of immunity, Plaintiff

has failed to plead a valid claim under this law and therefore, has not properly invoked the Takings

Clause waiver of immunity.

11.     As discussed further herein DQGLQ'HIHQGDQW¶V0RWLRQ, such discussion being included in

WKLVVHFWLRQDVLIVHWIRUWKLQIXOODVDPDWWHURIODZ3ODLQWLII¶VSOHDGLQJGRHVQRWDVVHUWIDFWVZKLFK

establish the necessary elements of a takings claim. Plaintiff must first demonstrate a property

ULJKWZKLFKKDVEHHQWDNHQ7KHUHFRXOGEHQRFUHGLEOHWDNLQJVFODLPLQ3ODLQWLII¶VFODLP$VD

matter of law, there is no property right to a zoning classification LQRQH¶VSURSHUW\7KHUHLVno

property right to reinstatement of a non-conforming use status after abandonment by a previous

RZQHU3ODLQWLII¶V5HVSRQVHKDVQRWSURYLGHGWKLV&RXUWZLWKDQ\FDVHODZWRVXSSRUWWKHH[LVWHQFH

any such property rights and could not do so. Further, by 3ODLQWLII¶VRZQDGPLVVLRQDWSDJHRI

 LQ 3ODLQWLII¶V 5HVSRQVH WKH &LW\ SURYLGHG 3ODLQWLII ZLWK VSHFLDO XVH SHUPLWV IRU WKH XVH KH

requested.

12.     These facts do not support a takings claim and Plaintiff has failed to invoke the Takings

&ODXVH¶VZDLYer of immunity. 3ODLQWLIIOLVWVIDFWRUVUHODWHGWRD³YLDEOHDOOHJDWLRQ´IURPWKHCity

of Dallas case. The facts in the present case do not rise to the level contemplated in these factors.

There can be no credible allegation of ouster, unreasonable restrictions, or overly burdensome

                                                      4
689
                                                                                                EXHIBIT B
standards when Plaintiff is simply subject to the zoning that existed on the Property when he

bought the Property and has by his own admission been given special use permits for the uses he

requested, including a barber shop use. ,I3ODLQWLII¶VFODLPVFRQVWLWXWHDWDNLQJWKHQODQGRZQHUV

all over the land could claim a taking simply because they are subject to zoning classifications set

by cities. There is no legal precedent for any such claim to rise to a valid takings case. Plaintiff

points the Court to language in his pleading which appears to track the factors. However, he does

not demonstrate factual elements to support these legal conclusions.

13.    3ODLQWLII¶VFDVHVKRXOGEHGLVPLVVHGDVDPDWWHURIODZ

Standing

14.    Plaintiffs incorrectly assert that a verified plea is required for the defense of standing and

FRQIXVHV³VWDQGLQJ´ZLWK³FDSDFLW\´6WDQGLQJLVQRWDQDIILUPDWLYHGHIHQVHEXWLVDOHJDOTXHVWLRQ

regarding subject-matter jurisdiction. Standing cannot be conceded or waived but is a legal

question regarding subject-matter jurisdiction; therefore, it is not an affirmative defense. See Texas

Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 1993 Tex. LEXIS 22, 36 Tex. Sup.

J. 607 (Tex. 1993). Because it is not an affirmative defense, a verified answer was unnecessary.

In addition, Plaintiff has no standing because he was not personally aggrieved because the non-

FRQIRUPLQJXVHH[SLUHGSULRUWR3ODLQWLII¶VSXUFKDVHRIWKH3URSHUW\7KHULJKWWRVXHIRUWKHLQMXU\

is a personal right belonging to the person owning the property at the time of the injury. Denman

v. Citgo Pipeline Co., 123 S.W.3d 728, 2003 Tex. App. LEXIS 10242, 159 Oil & Gas Rep. 509

(Tex. App. Texarkana 2003) relying on Abbott v. City of Princeton, 721 S.W.2d 872, 875 (Tex.

App.--Dallas 1986, writ ref'd n.r.e.); Lay v. Aetna Ins. Co., 599 S.W.2d 684, 686 (Tex. Civ. App.-

-Austin 1980, writ ref'd n.r.e.). Therefore, without express provision, the right does not pass to a

subsequent purchaser of the property. Denman, supra; Abbott, 721 S.W.2d at 875; Lay, 599

                                                  5
690
                                                                                         EXHIBIT B
6:GDW³$PHUHVXEVHTXHQWSXUFKDVHUFDQQRWUHFRYHUIRUDQLQMXU\FRPPLWWHGEHIRUHKLV

RUKHUSXUFKDVH´Denman, supra; Lay, 599 S.W.2d at 686. Here, it is undisputed that Plaintiff

bought the Property from the Eng Defendants after the non-conforming use expired. Therefore,

3ODLQWLII¶V XQVXSSRUWHG DVVHUWLRQ WKDW VWDQGLQJ ZDV VRPHKRZ DFTXLUHG ZKHQ KH DFTXLUHG WKH

Property fails to raise a genuine issue of material fact. As such the City is entitled to summary

judgment.

Ripeness and/or Exhaustion of Remedies

15.    ,QKLVUHVSRQVHWRWKH&LW\¶VDVVHUWLRQWKDW3ODLQWLII¶VFODLPVDUHQRWULSHDQGWKDW3ODLQWLII

has not exhausted administrative remedies, Plaintiff asserts that his takings claim LVEDVHG³WKH

reversion from commercial to semi-commercial [which] is a wholly separate issue than [his]

VXEVHTXHQWUHTXHVWIRUDVSHFLDOXVHSHUPLW´DQGWKDWWKH&LW\¶VILQDOGHFLVLRQDVWRWKHFHVVDWLRQ

of the non-conforming use occurred when the City first implemented the zoning of the Property as

commercial with a semi-commercial non-conforming clause. See Response at page 13. Such

DVVHUWLRQVIDLOWRRYHUFRPHWKH&LW\¶VULSHQHVVFKDOOHQJH)LUVWWKHIDFWVDUHXQGLVSXWHGWKDWWKH

&LW\¶VGHFLVLRQWRzone this Property as semi-commercial with a non-conforming commercial use

occurred in 1962. Second, Plaintiff is not challenging that the Property was zoned with a

nonconforming use; Plaintiff is challenging the City staff decision when the cessation of the non-

conforming use occurred. See Plaintiff’s Response at page 13. Plaintiff alleges his claims arise

from the cessation of the non-conforming use, or as he states in his response, his takings claim is

EDVHG RQ ZKHQ ³WKH UHYHUVLRQ IURP FRPPHUFLDO WR Vemi-FRPPHUFLDO´ RU ³ZKHQ WKH ORVV RI WKH

FRPPHUFLDOVWDWXV´RFFXUUHG3ODLQWLIIGRHVQRWEULQJIRUWKDQ\HYLGHQFHWKDWKHREWDLQHGDILQDO

decision in compliance with the Texas Local Government Code and the Zoning Code with regard

                                                   6
691
                                                                                          EXHIBIT B
to the cessation of the nonconforming use for the middle suite of the Property or the decision that

the barber shop was not an allowed semi-commercial use in the middle suite.

16.     ,QDGGLWLRQ3ODLQWLII¶VDVVHUWLRQWKDWKHREWDLQHGDILQDOGHFLVLRQGHQ\LQJWKHUHTXHVWWR

upzone the Property to commercial fails to satisfy a ripeness inquiry on his takings claim. The

IDFWVDUHXQGLVSXWHGWKDWWKH&LW\JUDQWHG3ODLQWLII¶VDSSOLFDWLRQVIRUD6SHFLDO8VH3HUPLWDOORZLQJ

additional permitted uses for the Property, including a barber shop/hair salon. There is no final

decision and the City has not closed the door to continued future uses for the middle suite of the

Property. See Hamilton Bank Williamson County Reg’l Planning Comm’n v. Hamilton Bank, 473
U.S. 172, 186 (1985). As such, WKH &LW\ LV HQWLWOHG WR GLVPLVVDO RI 3ODLQWLII¶V FODLPV EDVHG RQ

ULSHQHVVDQG3ODLQWLII¶VIDLOXUHWRH[KDXVWDGPLQLVWUDWLYHUHPHGLHVUHODWHGWRWKRVHGHFLVLRQV

&LW\¶V $FWLRQV GR Substantially Advance Legitimate State Interest and Does not
Unreasonably Interfere with Rights to Use and Enjoy

17.     3ODLQWLII¶VUHVSRQVHPLVFKDUDFWHUL]HVKLVUHTXHVWIRUXS]RQLQJDVDUHTXHVWWRXS]RQH only

WKHPLGGOHVXLWHZKHQLQIDFW([KLELWDWWDFKHGWR'HIHQGDQW¶V0RWLRQIRU6XPPDU\-XGJPHQW

clearly reflects that Plaintiff requested that the entire Property strip be permanently zoned

FRPPHUFLDO,QDGGLWLRQ3ODLQWLII¶VUHOLDQFHRQDOLVWRIEXViness he claims are allowed to operate

ZLWKLQRQHPLOHRIKLVVWULSPDOOIDLOVWRGHPRQVWUDWHWKDWWKH&LW\¶V]RQLQJGHFLVLRQUHJDUGLQJWKH

Property does not substantially advance a legitimate City interest. A bare list of business names

without providing their specific location, the location relative to residential homes, the availability

of parking spaces, the impact on traffic, the signage, the zoning for each, and the impact on the

&LW\¶VGHYHORSPHQWIDLOVWRFDUU\3ODLQWLII¶VEXUGHQWRSURYHWKDWWKH0 year old zoning ordinance

LQWKLVFDVHLVVRPHKRZDUELWUDU\RUXQUHDVRQDEOH$WDPLQLPXP3ODLQWLII¶VDIILGDYLWGRHVQRW

even substantiate the list of business names contained in the Response. Plaintiff does not, at a

                                                    7
692
                                                                                            EXHIBIT B
minimum, produce evidence that the businesses he relies on are even located within the City of

7HUUHOO+LOOV,QDGGLWLRQ3ODLQWLII¶VSHUVRQDORSLQLRQWKDWLWLVDUELWUDU\RULUUDWLRQDOIRUWKH&LW\¶V

zoning to allow for the middle suite not to be zoned commercial when the end suites are zoned

commercial is insufficient for the Court to overturn a presumptively valid zoning ordinance. See

City of Fort Worth, 388 S.W.2d 400, 402 (Tex. 1964). 1RUGRHV3ODLQWLII¶VSHUVRQDORSLQLRQWKDW

having the middle suite zoned commercial demonstrate that the suite would somehow be more

economically viable. The former owner Billy Eng testified that the laundromat operated in the

middle suite under the nonconforming commercial use and his business failed. See Exhibit 8

attached hereto, excerpt of Bill\(QJ¶V'HSRVLWLRQSDJH+LVWRULFDOXVHVRIWKHSURSHUW\DUH

critically important when determining the reasonable investment-backed expectations of the

landowner." Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 937, 41 Tex. Sup. Ct. J. 517 (Tex.

1998).

18.      /DVWO\3ODLQWLII¶VDVVHUWLRQWKDWWKHVHPL-commercial status makes it impossible to lease is

a completely unsupported personal opinion, especially when Plaintiff has testified that he had

several potential barbershop and hair salon tenants for the middle suite for which the City provided

3ODLQWLIIVSHFLDOXVHSHUPLWV3ODLQWLII¶VDVVHUWLRQRILPSRVVLELOLW\LVDOVRQRWVKDUHGE\WKHIRUPHU

owner Billy Eng who testified that he was planning on letting the non-conforming use permit lapse.

See Exhibit 2 ± H[FHUSWVRI%LOO\(QJ¶VGHSRVLWLRQDWWDFKHGWR WKH&LW\¶V 0RWLRQIRU6XPPDU\

Judgment. Furthermore,

Attorney Fees

19.      3ODLQWLII LQFRUUHFWO\ DVVHUWV WKDW KH LV HQWLWOHG WR DWWRUQH\¶V IHHV LQ WKLV WDNLQJV VXLW

$WWRUQH\¶V IHHV DUH QRW UHFRYHUDEOH XQOHVs authorized by statute or by contract. See New

                                                       8
693
                                                                                                  EXHIBIT B
Amsterdam Casualty Co. v. Texas Indus. Inc., 414 S.W.2d 914, 915, 10 Tex. Sup. Ct. J. 357 (Tex.

1967).     Texas law provides no statutory authority for awarding attorney's fees in inverse

condemnation claims arising under Article I, section 17 of the Texas Constitution. See State v.

Biggar, 848 S.W.2d 291, 298 (Tex. App.--Austin 1993), aff'd, 873 S.W.2d 11 (Tex. 1994).

         WHEREFORE, PREMISES CONSIDERED, Defendant City of Terrell Hills prays this

Court grant its Motion for Summary Judgment and dismiss all claims against it, that Plaintiffs,

Salim Merchant and Electro Sales and Services, Inc. take nothing by their suit against the City,

and that the City have and recover such other relief, both general and specific, at law or in equity,

to which the City may be justly entitled.

                                                      Respectfully submitted,

                                                      MCKAMIE KRUEGER, LLP
                                                      941 Proton Road
                                                      San Antonio, Texas 78258
                                                      (210) 546-2122
                                                      (210) 546-2130 Fax

                                                      /s/: Barbara L. Quirk
                                                      WILLIAM M. McKAMIE
                                                      State Bar No. 13686800
                                                      mick@mckamiekrueger.com

                                                      BARBARA L. QUIRK
                                                      State Bar No. 16436750
                                                      barbara@mckamiekrueger.com

                                                      ADOLFO RUIZ
                                                      State Bar No. 17385600
                                                      adolfo@mckamiekrueger.com

                                                      SUE ANN GREGORY
                                                      State Bar No. 00795392
                                                      sue@mckamiekrueger.com

                                                      ATTORNEYS FOR DEFENDANT CITY
                                                      OF TERRELL HILLS

                                                 9
694
                                                                                        EXHIBIT B
                                 CERTIFICATE OF SERVICE

        I certify that a true and correct copy of City of Terrell Hills’ Reply to Plaintiff’s Response
to Motion for Summary Judgment was served according to the Texas Rules of Civil Procedure
on all counsel of record in the manner specified below on September 28, 2016 as follows:

Carlo Garcia                                          Via E-Serve and e-mail
OLIVA, SAKS, GARCIA AND CURIEL, LLP
14255 Blanco Road
San Antonio, Texas 78216
Fax: 210.308.6939
cglaw@osglaw.com

Jay Moritz                                            Via E-Serve and e-mail
THE LAW OFFICES OF JAY MORITZ
2600 SW Military Drive, Suite 118
San Antonio, Texas 78224
Fax: 210.928.9118
JayLaw5@aol.com

                                                      /s/: Barbara L. Quirk
                                                      Barbara L. Quirk

                                                 10
695
                                                                                         EXHIBIT B
                                                                           3DJH                                                               3DJH
                   WKHH[SLUDWLRQRQWKHZULWWHQFRQWUDFWRUZULWWHQOHDVHWKDW\RX        DOORZHGKLPWRWHUPLQDWHWKHOHDVH,VWKHUHDZULWWHQGRFXPHQW
                   KDG"                                                                    WKDWUHIOHFWVWKDW\RXDOORZHGKLPWRWHUPLQDWHWKDWOHDVHRUZDV
                   $,DOORZHGKLPWREUHDNWKHOHDVH                             LWDYHUEDODJUHHPHQW"
                   42ND\6ROHWPHDVNWKHTXHVWLRQDJDLQ2ND\,V           $,WZDVDYHUEDODJUHHPHQWDWWKHWLPH
                   LWDQG,EHOLHYH,XQGHUVWDQGWKHDQVZHUEDVHGRQ\RXU\RX       42ND\$QGZKDWZDVWKHUHDVRQWKDW\RXDOORZHGKLPWR
                   NQRZ\RXUUHFHQWDQVZHU,I\RXFDQOLVWHQWRWKLVSDUWLFXODU         WHUPLQDWHWKHOHDVHRWKHUWKDQWKHUHDVRQWKDW\RXJDYHZKLFK
                   TXHVWLRQ,VLWVDIHWRDVVXPHWKDWKHOHIWKLVOHDVHHDUO\WKDW       ZDVKLVEXVLQHVVZDVIDLOLQJ"
                   ZDVVHWIRUWKLQWKHOHDVHDJUHHPHQW"                                   $7KDW
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                   $
      duties with his shift.

      PUBLIC HEARING ON THE REQUEST FROM MR. SALIM MERCHANT FOR THE
      REZONING OF TllE PROPERTY LOCATED AT 211 5 llARRY WURZBACH ROAD
      FROM SEMI-COMMERCIAL TO COMMERCIAL ZONrNG

              Mayor Camp opened the public hearing al 5:05 pm on Mr. Merchant's requesl. The City
      Manager explained that this request had been submitted lo the Planning and Zoning Cnmmission
      and rhe recommendation of the commission was against the request for re-zotU.ng. The property
      in question is localed between the Fort Sam Grocery W1d Ebbt1de Lounge.
              Mr Merchant addressed Council explaining that when he purchased the properly he
      though1 the entire su·ip was commercial and U1at without the re-2oning he cannot lease 1.he
      property as he had intended and in addiuon this will decrease the property value. Mr. Merchant
      said that he has a similar property on Eisenhauer which is all commercial. There is a spnns har,
      convi:aience store as well as his office localed there and he ht1s encountered ao problems with
      the neighbors during U1e past ten years.
              Mr. Flagg spoke to Council saying that Lherc was a reason the pr•operties had heen re-
      zorn:d. I he Laundroma1 that was located there previously hlls been closed for more than six
      momhs and 1herefore is zoned semi-commercial and it should be kepi 1111s way. l le said he
      agreed with the recommeudatiou of the P&Z Commjss100.
              Mrs. Ryan said that her concern is tha1 once the property is zoned commercial there wtll
      be no way of controlling what type of business opens there. She said she believed Mr.
      Merchant's intentions were good but tltal does not mean iI he sells the property the new owner,s
      would be. She explained 1ha1 their property backs directly up 10 that one and they have had
      problems over the years with disturbances from the " drunks and derelicts" tha1 hang out in 1he
      parking lot. Mr. Ryan agreed slating that at one time it was such a problem lhcy requested and
      received a variance to put in a higher fence.
              Couucilmembe1 Ocl1se verified with I.he City Manager that all of those p1-operties rue
      zoned semi-commercial; the store and bar are grandfathered in because they were in existence
      prior to the re-zoning The City Manager confirmed this saying they are not z.oned commercial
      Councilmember Ochse asked what types of businesses WL"f'C alloweducts, or as otherwise permmed and approved by the City Council,

                  d. No parking shall be pennittcd bclund the building located on the Propc11y:

                  e. No operation of any bus1.I1ess at lhe Property may occur between midnight and 6
                       a.m.;

638
                                                                                            EXHIBIT 3

                                                                                                      EXHIBIT D
                 f.   The Special Use Pennit zoning classification will expire six (6) months afl\!r the
                      Property is no longer used for at least one (I) of the Permitted Uses~ and

                 g. Tbe City Council must consider an140 S.W.3d 660
   Client/Matter: -None-
   Search Terms: Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660
   Search Type: Natural Language
   Narrowed by:
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                                                    BARBARA QUIRK
                                                                                                         EXHIBIT E
     Caution
As of: September 25, 2017 9:01 PM Z

                           Sheffield Dev. Co. v. City of Glenn Heights
                                                Supreme Court of Texas
                                 October 30, 2002, Argued ; March 5, 2004, Delivered
                                                      NO. 02-0033

Reporter
140 S.W.3d 660 *; 2004 Tex. LEXIS 195 **; 47 Tex. Sup. J. 327

SHEFFIELD DEVELOPMENT COMPANY, INC., PETITIONER, v. CITY OF GLENN HEIGHTS, TEXAS,
RESPONDENT

Subsequent History: Rehearing denied by Sheffield Dev. Co. v. City of Glenn Heights, 2004 Tex. LEXIS 765
(Tex., Sept. 3, 2004)

Prior History: ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE TENTH DISTRICT OF
TEXAS

City of Glenn Heights v. Sheffield Dev. Co., 61 S.W.3d 634, 2001 Tex. App. LEXIS 7212, 45 Tex. Sup. Ct. J. 984
(Tex. App. Waco, 2001)

Disposition: Court reversed in part and affirmed in part the court of appeals' judgment, rendered judgment in part,
and remanded the case in part to the trial court.

Core Terms
rezoning, City's, moratorium, zoning, regulation, court of appeals, damages, argues, city council, trial court, plat,
expectations, acre, landowner, economic impact, vested, compensable taking, recommended, deprived,
substantially advance, investment-backed, advancement, plans, ripe, declaratory, downzoning, interfered,
purposes, factors, issues

Case Summary

Procedural Posture
Appellant developer sued appellee city in the district court for two inverse condemnation claims and a declaratory
judgment. The district court found for the developer on one of the inverse condemnation claims. The Court of
Appeals for the Tenth District of Texas found that the developer was entitled to recover on both takings claims,
affirmed the damages award, found the declaratory relief claim was ripe, and remanded. The parties appealed.

Overview

After a moratorium on development, the city rezoned undeveloped property owned by the developer, reducing the
number of residences that could be built on the property. The developer contended that the moratorium and the
rezoning each constituted a taking of its property without adequate compensation in violation of Tex. Const. art. I, §
17. The developer separately requested a declaration that its development rights became vested when it submitted
an application during an earlier hiatus in the moratorium. The Supreme Court of Texas found that, on balance, the
city's rezoning substantially advanced legitimate government interests, and was not a taking. Further, the court
could not say that the moratorium did not substantially advance a legitimate governmental purpose. Nor could the

                                                   BARBARA QUIRK
                                                                                                      EXHIBIT E
                                                                                                    Page 2 of 25
                                140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

court say that the moratorium went too far towards a taking. Therefore, there was not a compensable taking of the
developer's property by the moratorium. However, the developer's vested rights claim was ripe for determination, as
there was nothing to prevent the trial court from ruling on the merits of the claim.

Outcome
The judgment of the appellate court was reversed on the takings claims and judgment was rendered that the
developer take nothing against the city. The judgment of appellate court remanding the developer's claim for a
declaration that its development rights were vested was affirmed, and the case was remanded to the trial court to
determine whether the developer fixed its rights by submitting a plat during a hiatus in the moratorium.

LexisNexis® Headnotes

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

HN1[   ] Fundamental Rights, Eminent Domain & Takings

See Tex. Const. art. I, § 17.

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

    Environmental Law > Land Use & Zoning > Eminent Domain Proceedings

    Constitutional Law > Bill of Rights > State Application

HN2[   ] Fundamental Rights, Eminent Domain & Takings

The Takings Clause of the Fifth Amendment to the United States Constitution is made applicable to the states
through the Fourteenth Amendment.

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

HN3[   ] Fundamental Rights, Eminent Domain & Takings

The Texas Constitution provides that no person's property shall be taken, damaged, or destroyed for or applied to
public use without adequate compensation being made. Tex. Const. art. I, § 17.

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

HN4[   ] Fundamental Rights, Eminent Domain & Takings

The Takings Clause of the Fifth Amendment states that nor shall private property be taken for public use without
just compensation. U.S. Const. amend. V.

                                                  BARBARA QUIRK
                                                                                                 EXHIBIT E
                                                                                                           Page 3 of 25
                                  140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

    Real Property Law > Inverse Condemnation > Constitutional Issues

    Civil Procedure > Special Proceedings > Eminent Domain Proceedings > General Overview

    Environmental Law > Land Use & Zoning > Eminent Domain Proceedings

    Real Property Law > Inverse Condemnation > General Overview

    Real Property Law > Inverse Condemnation > Regulatory Takings

HN5[   ] Fundamental Rights, Eminent Domain & Takings

By their plain terms, the takings provisions of the state and federal constitutions do not limit the government's power
to take private property for public use but instead require that a taking be compensated. Physical possession is,
categorically, a taking for which compensation is constitutionally mandated, but a restriction in the permissible uses
of property or a diminution in its value, resulting from regulatory action within the government's police power, may or
may not be a compensable taking. All property is held subject to the valid exercise of the police power and thus not
every regulation is a compensable taking, although some are. There is no one test and no single sentence rule. The
need to adjust the conflicts between private ownership of property and the public's interests is a very old one which
has produced no single solution.

    Real Property Law > Inverse Condemnation > Constitutional Issues

    Real Property Law > Eminent Domain Proceedings > General Overview

HN6[   ] Inverse Condemnation, Constitutional Issues

The general rule, at least, is that while property may be regulated to a certain extent, if regulation goes too far it will
be recognized as a taking, this is a question of degree -- and therefore cannot be disposed of by general
propositions. The question at bottom is upon whom the loss of the changes desired should fall.

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

HN7[   ] Fundamental Rights, Eminent Domain & Takings

The United States Supreme Court acknowledges that determining how far is too far in a takings claim has proved to
be a problem of considerable difficulty. While the Supreme Court recognizes that the Fifth Amendment's guarantee
is designed to bar government from forcing some people alone to bear public burdens which, in all fairness and
justice, should be borne by the public as a whole, the Supreme Court, quite simply, has been unable to develop any
set formula for determining when justice and fairness require that economic injuries caused by public action be
compensated by the government, rather than remain disproportionately concentrated on a few persons. Indeed,
whether a particular restriction will be rendered invalid by the government's failure to pay for any losses proximately
caused by it depends largely upon the particular circumstances in that case.

                                                   BARBARA QUIRK
                                                                                                        EXHIBIT E
                                                                                                      Page 4 of 25
                                140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

    Real Property Law > Inverse Condemnation > Constitutional Issues

    Real Property Law > Eminent Domain Proceedings > General Overview

    Real Property Law > Inverse Condemnation > General Overview

    Real Property Law > Inverse Condemnation > Regulatory Takings

HN8[    ] Fundamental Rights, Eminent Domain & Takings

The United States Supreme Court has identified at least two discrete categories of regulatory action as
compensable without case-specific inquiry in a takings claim. One is where regulation compels a property owner to
suffer a physical invasion of his property. The direct, physical effect on property, though short of government
possession, makes the regulation categorically a taking. Another is where regulation denies all economically
beneficial or productive use of land. To deprive an owner of all economically beneficial use of land is tantamount to
depriving him of the land itself. But this is limited to the extraordinary circumstance when no productive or
economically beneficial use of land is permitted and the landowner is left with a token interest. In addition to these
two situations, the Supreme Court has stated that regulation effects a taking if it does not substantially advance
legitimate state interests. Otherwise, however, whether regulation has gone too far and become too much like a
physical taking for which the constitution requires compensation requires a careful analysis of how the regulation
affects the balance between the public's interest and that of private landowners.

    Real Property Law > Eminent Domain Proceedings > General Overview

    Real Property Law > Inverse Condemnation > Regulatory Takings

HN9[    ] Real Property Law, Eminent Domain Proceedings

In engaging in the essentially ad hoc, factual inquiries in takings by regulation cases, the United States Supreme
Court's decisions have identified several factors that have particular significance. The economic impact of the
regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct
investment-backed expectations are, of course, relevant considerations. So, too, is the character of the
governmental action. A taking may more readily be found when the interference with property can be characterized
as a physical invasion by government, than when interference arises from some public program adjusting the
benefits and burdens of economic life to promote the common good.

    Real Property Law > Eminent Domain Proceedings > General Overview

HN10[    ] Real Property Law, Eminent Domain Proceedings

The factors to consider in a taking by regulation case are as follows: (1) the economic impact of the regulation on
the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and
(3) the character of the governmental action. Nevertheless, the United States Supreme Court has cautioned that

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                                140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

these factors do not comprise a formulaic test. Case law does not supply mathematically precise variables, but
instead provides important guideposts that lead to the ultimate determination whether just compensation is
required. The temptation to adopt what amount to per se rules in either direction must be resisted. Thus, for
example, the economic impact of a regulation may indicate a taking even if the landowner has not been deprived of
all economically beneficial use of his property. Nor are the three factors the only ones relevant in determining
whether the burden of regulation ought in all fairness and justice to be borne by the public.

    Real Property Law > Eminent Domain Proceedings > General Overview

HN11[   ] Real Property Law, Eminent Domain Proceedings

Whether a regulatory taking has occurred, depends on a complex of factors. The analysis necessarily requires a
weighing of private and public interests and a careful examination and weighing of all the relevant circumstances in
this context. Courts consider all of the surrounding circumstances in applying a fact-sensitive test of
reasonableness.

    Business & Corporate Compliance > ... > Real Property Law > Zoning > Constitutional Limits

    Environmental Law > Land Use & Zoning > Constitutional Limits

    Real Property Law > Inverse Condemnation > Constitutional Issues

    Constitutional Law > ... > Fundamental Rights > Procedural Due Process > General Overview

    Constitutional Law > Substantive Due Process > Scope

    Real Property Law > Eminent Domain Proceedings > General Overview

HN12[   ] Zoning, Constitutional Limits

While determining whether a property regulation is unconstitutional requires the consideration of a number of
factual issues, the ultimate question of whether a zoning ordinance constitutes a compensable taking or violates
due process or equal protection is a question of law, not a question of fact. In resolving this legal issue, courts
consider all of the surrounding circumstances.

    Civil Procedure > Special Proceedings > Eminent Domain Proceedings > General Overview

    Civil Procedure > Trials > Jury Trials > Province of Court & Jury

HN13[   ] Special Proceedings, Eminent Domain Proceedings

While appellate courts depend on the district court to resolve disputed facts regarding the extent of the
governmental intrusion on the property, the ultimate determination of whether the facts are sufficient to constitute a
taking is a question of law.

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                                 140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

    Business & Corporate Compliance > ... > Real Property Law > Zoning > Constitutional Limits

    Real Property Law > Eminent Domain Proceedings > General Overview

    Environmental Law > Land Use & Zoning > Eminent Domain Proceedings

    Real Property Law > Inverse Condemnation > General Overview

    Real Property Law > Inverse Condemnation > Regulatory Takings

HN14[    ] Zoning, Constitutional Limits

The application of a general zoning law to particular property effects a taking if the ordinance does not substantially
advance legitimate state interests.

    Governments > Courts > Judicial Precedent

HN15[    ] Courts, Judicial Precedent

Prior decisions need not be reaffirmed periodically to retain authority.

    Governments > Courts > Judicial Precedent

HN16[    ] Courts, Judicial Precedent

If a precedent of the United States Supreme Court has direct application in a case, yet appears to rest on reasons
rejected in some other line of decisions, a lower court should follow the case which directly controls, leaving to the
Supreme Court the prerogative of overruling its own decisions.

    Governments > Courts > Judicial Precedent

HN17[    ] Courts, Judicial Precedent

The Supreme Court of Texas looks to federal takings cases for guidance in applying the Texas Constitution.

    Real Property Law > Inverse Condemnation > Constitutional Issues

    Real Property Law > Eminent Domain Proceedings > General Overview

HN18[    ] Inverse Condemnation, Constitutional Issues

Whether regulation substantially advances legitimate State of Texas interests is an appropriate test for a
constitutionally compensable taking, at least in some situations.

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                                140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

    Real Property Law > Eminent Domain Proceedings > General Overview

HN19[   ] Real Property Law, Eminent Domain Proceedings

Government action may be for a public -- as opposed to a private -- purpose, even if that purpose is not a legitimate
one for the government to engage in. For instance, the government may not require a person to give up a
constitutional right in exchange for a discretionary benefit conferred by the government where the benefit sought
has little or no relationship to the property.

    Constitutional Law > Equal Protection > Judicial Review > Standards of Review

HN20[   ] Judicial Review, Standards of Review

For equal protection purposes, government action has a rational basis if one can be conceived, regardless of
whether the government had it in mind when it took the action complained of.

    Business & Corporate Compliance > ... > Real Property Law > Zoning > Constitutional Limits

    Real Property Law > Eminent Domain Proceedings > General Overview

    Real Property Law > Ownership & Transfer > Public Entities

HN21[   ] Zoning, Constitutional Limits

United States Supreme Court cases describe the condition for abridgement of property rights through the police
power as a substantial advancing of a legitimate state interest. The Supreme Court is inclined to be particularly
careful about the adjective where the actual conveyance of property is made a condition to the lifting of a land-use
restriction, since in that context there is heightened risk that the purpose is avoidance of the compensation
requirement, rather than the stated police-power objective.

    Constitutional Law > Equal Protection > Judicial Review > Standards of Review

HN22[   ] Judicial Review, Standards of Review

An elevated standard of review must not be applied, but it ordinarily is, and should be, harder for the government to
show that its interests have been substantially advanced by regulation directed at one lone landowner.

    Real Property Law > Eminent Domain Proceedings > General Overview

HN23[   ] Real Property Law, Eminent Domain Proceedings

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                                 140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

The substantial advancement requirement for a legitimate regulation must be more than a pleading requirement,
and compliance with it more than an exercise in cleverness and imagination. But it must not be proved to a
certainty.

    Real Property Law > Eminent Domain Proceedings > General Overview

HN24[    ] Real Property Law, Eminent Domain Proceedings

Lost profits are clearly one relevant factor to consider in assessing the value of property and the severity of the
economic impact of rezoning on a landowner.

    Constitutional Law > Bill of Rights > Fundamental Rights > Eminent Domain & Takings

    Real Property Law > Financing > Construction Loans

HN25[    ] Fundamental Rights, Eminent Domain & Takings

The takings clause does not charge the government with guaranteeing the profitability of every piece of land subject
to its authority. Purchasing and developing real estate carries with it certain financial risks, and it is not the
government's duty to underwrite this risk as an extension of obligations under the takings clause.

    Civil Procedure > Special Proceedings > Eminent Domain Proceedings > Jury Trials

    Real Property Law > Inverse Condemnation > Regulatory Takings

    Real Property Law > Eminent Domain Proceedings > General Overview

    Real Property Law > Inverse Condemnation > Remedies

HN26[    ] Eminent Domain Proceedings, Jury Trials

Diminution in value is not the only element to be considered in a regulatory takings claim.

    Governments > Local Governments > Claims By & Against

HN27[    ] Local Governments, Claims By & Against

The actions and motives of individual officials and employees of a city are not those of the city itself.

    Governments > Local Governments > Claims By & Against

    Governments > Local Governments > Employees & Officials

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                                        140 S.W.3d 660, *660; 2004 Tex. LEXIS 195, **195

HN28[        ] Local Governments, Claims By & Against

Evidence of one city official's motives cannot be attributed to the city itself.

Judges: JUSTICE HECHT delivered the opinion of the Court.

Opinion by: Nathan L. Hecht

Opinion

    [*663] JUSTICE HECHT delivered the opinion of the Court.

After a twelve-month moratorium on development, the City of Glenn Heights rezoned undeveloped property owned
by Sheffield Development Co., reducing the number of residences that could be built on the property. Sheffield
contends that the moratorium and the "downzoning" each constituted a taking of its property without adequate
compensation in violation of article I, section 17 of the Texas Constitution. 1 Sheffield separately requests a
declaration that its development rights became vested when it submitted an application during an earlier hiatus in
the moratorium. Following a bench trial on liability issues and a jury trial on damages, the district court rendered
judgment for Sheffield for $ 485,000, plus pre- and post-judgment interest, on the downzoning takings claim only.
The court concluded that Sheffield's claim for declaratory relief was not ripe for adjudication. A divided court of [**2]
appeals concluded that Sheffield was [*664] entitled to recover on both takings claims, affirmed the damages
award for the downzoning claim, and remanded the moratorium claim for trial on damages. 2 The court also
concluded that Sheffield's claim for declaratory relief was ripe and remanded it. 3 We hold that Sheffield cannot
recover on either takings claim and reverse and render judgment accordingly. We agree with the court of appeals
that the case must be remanded to the trial court to determine whether Sheffield fixed its rights by submitting a plat
during a hiatus in the moratorium.

I

A

The City of Glenn Heights is a growing suburban community (1990 pop. 4,564; 2000 pop. 8,050) south of Dallas
astraddle the Dallas/Ellis County border. [**3] In 1986, the City zoned a 236-acre tract as Planned Development
District 10 (PD 10), allowing most of it to be developed for single-family residences on lots no smaller than 6,500
square feet, with a maximum density of 5.5 dwelling units per acre. 4 The owner at the time platted and developed
the first phase of the Stone Creek subdivision on just over 43 acres of the tract. Some of the lots in the first phase
met only the minimum required sizeminimum-size, but others were larger. The rest of the property was not
developed and remained vacant.

In 1995, the City adopted a comprehensive "Future Land Use Plan" which found that the City had an oversupply of
high-density residential areas. The plan designated the neighborhood including Stone Creek primarily as a lower
density residential area to contain four to five dwelling units per acre. Though PD 10 zoning allowed a

1 TEX. CONST. art. I, § 17 HN1[ ] ("No person's property shall be taken, damaged or destroyed for or applied to public use
without adequate compensation being made . . . .").

2 61    S.W.3d 634, 45 Tex. Sup. Ct. J. 984 (Tex. App.--Waco 2001).

3 Id.   at 660.
4 Relatively      small portions around the perimeter were earmarked for lots of 7500 square feet, 9,000 square feet, and 10,000
square feet.

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maximum [**4] of 5.5 dwelling units per acre in the relevant area, the first phase of the development had been built
with only 3.9 dwelling units per acre, the trial court found, and thus would comply with the new plan. The plan left
PD 10 zoning in place. Except for PD 10 and the thirteen other planned development districts (PDs), all property
within the City was rezoned according to the plan, increasing most residential lot sizes to 20,000 square feet
minimum. The City did not rezone any of the PDs at that time.

In the summer of 1996, Sheffield Development Co. contracted to purchase the undeveloped part of Stone Creek
including certain unbuilt lots in the first phase area, in all about 194 acres, for $ 600 an acre. The price was below
market because the owner, a firm headquartered in England, was anxious to liquidate its real estate portfolio in the
United States. Sheffield's principal, Gary Sheffield, was an experienced, successful developer of single-family
subdivisions. Before closing on the contract, he made a due-diligence investigation of all City regulations and
restrictions affecting the property. He met several times with the City Secretary, the City Manager, the Mayor, and
various Council [**5] members to advise them of Sheffield's plans to continue the Stone Creek development as
permitted by the PD 10 zoning and to ascertain that no zoning changes for the property were planned. He
specifically requested that Sheffield be notified of any possible zoning changes. No City officer or employee
expressed any objection or reservation to Sheffield's plans or stated that the PD 10 zoning might change, but
neither did anyone offer any assurance that the zoning would not change.

 [*665] At the time, the Vested Rights Statute allowed a landowner to vest zoning rights by filing a plat. 5 Through
the fall of 1996, representatives of the City met to discuss downzoning PD 10 and imposing a moratorium on
development, but they did not tell Sheffield of these meetings for fear that it would quickly close on the purchase of
the property, file a plat, and vest its zoning rights. When Sheffield finally did close on the purchase of the property in
December, the City Council met three days later in executive session to discuss downzoning PD 10.

 [**6] On January 6, 1997, without prior notice to Sheffield (the law that now requires four days' notice in such
circumstances 6 was not yet in effect), the City Council adopted Resolution No. 287-97 prohibiting the filing and
acceptance of plats in PDs until February 6 to allow time to determine whether existing PD zoning was consistent
with the comprehensive land use plan. The resolution recited:
     the temporary suspension is solely for the purpose of allowing the City Council to study, in conjunction with the
     City's planning and administrative officials, the zoning, growth and development related issues and concerns
     presented by the nonconformity of the City's planned developments with the City's Code and Future Land Use
     Plan.

Before the end of this moratorium, the City's consultant recommended that PD 10 be rezoned to require lots no
smaller than [**7] 12,000 square feet, thereby permitting construction of about half the number of houses permitted
by PD 10. The consultant also recommended that eleven other PDs be rezoned, leaving two that would not be
rezoned. The recommendation was referred to the City's Planning and Zoning Commission, and the City Council
extended the moratorium to March 6.

On March 11, after the moratorium had expired on its face, Sheffield submitted a plat for the development of its
property under PD 10 zoning requirements. The City Secretary rejected the plat on the asserted ground that the
City Manager had continued the moratorium in effect without Council action. On March 17, the City Council
extended the moratorium to May 6.

5 Actof May 24, 1995, 74th Leg., R.S., ch. 794, § 1, 1995 Tex. Gen. Laws 4147 (codified as TEX. GOV'T CODE §§ 481.141-
.143), "inadvertently" repealed by Act of June 1, 1997, 75th Leg., R.S., ch. 1041, § 51(b), 1997 Tex. Gen. Laws 3943, 3966, and
reenacted by Act of April 29, 1999, 76th Leg., R.S., ch. 73, §§ 1, 2 1999 Tex. Gen. Laws 431, 432 (at § 1, finding that statute
was "inadvertently repealed"), and now recodified as TEX. LOCAL GOV'T CODE §§ 245.001-.006.

6 TEX.   LOC. GOV'T CODE §§ 212.134(b) (adopted by Act of May 15, 2001, 77th Leg., R.S., ch. 441, § 1 2001 Tex. Gen. Laws
863).

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On March 24, the Planning and Zoning Commission accepted some of the consultant's recommendations for
rezoning twelve PDs but rejected the proposed rezoning of PD 10 and four other PDs. Anticipating that the City
Council would be unwilling to accept the Commission's decision yet unable to override it -- a three-fourths vote, or
six of the seven members, was required by the City charter -- the City Manager recommended that final action be
delayed. Accordingly, on April 21, the City Council [**8] rezoned three of the twelve PDs as recommended by the
consultant and approved by the Commission, and adopted Resolution No. 292-97, essentially identical to
Resolution 287-97, extending the moratorium to July 21. The City Council later extended the moratorium under the
same resolution to December 31 and finally to May 15, 1998. From July through December 1997, the City rezoned
another seven of the twelve PDs as recommended by the consultant, leaving [*666] PD 10 and one other on
which the City Council had not acted. At the same time, the City and Sheffield made some efforts to negotiate their
differences, but the City had no further studies done or reports made on whether PD 10 should be rezoned.

On April 27, 1998, the Planning and Zoning Commission voted to accept the consultant's January 1997
recommendation to rezone PD 10 and the remaining PD. The same day, the City Council approved the rezoning.

B

Sheffield sued the City for inverse condemnation, arguing that both the moratorium and the rezoning of the property
violated the takings provision of the Texas Constitution, article I, section 17. Sheffield also sought a declaratory
judgment that the plat it filed in March 1997, during [**9] the gap in the moratorium periods authorized by the City
Council, had been deemed approved by the City's failure to take action on it 7 and vested Sheffield's rights by
statute. Sheffield's pleadings did not assert the claim for declaratory judgment as an alternative to the claims for
damages. 8 Sheffield asserted a number of other claims against the City, which the trial court denied. Sheffield has
not appealed the trial court's rulings on those claims, and thus they do not concern us here.

The parties agreed to try liability issues to the court and damages, if necessary, to a jury. After the bench trial, the
court issued findings and conclusions that:

    . Sheffield purchased the property expecting that it could be developed under PD 10 zoning, in good faith
    reliance on the City's representations and the already substantial development of the Stone [**10] Creek
    subdivision;
    . the moratorium:
    . "substantially advanced a legitimate governmental interest",
    . "did not unreasonably interfere with Sheffield's rights to use and enjoy its property", and thus
    . "did not constitute a taking without payment of just compensation";
    . the rezoning:
    . "substantially advanced a legitimate government interest", but
    . "had a severe economic impact on Sheffield",
    . "deprived Sheffield of its investment-backed expectations",
    . "unreasonably interfered with Sheffield's rights to use and enjoy its property", and thus

    . "constituted a taking without payment of just compensation under Article I, Sec. 17 of the Texas Constitution."
Although the trial court found that no moratorium was in effect from March 6 to 17, 1997, it concluded, without
explanation, that Sheffield's claim that its rights were vested by the plat it filed during that period was not ripe.

In both the bench trial and the subsequent jury trial, the parties offered evidence of the value of Sheffield's property
before and after the rezoning. Witnesses for Sheffield testified that the property was worth $ 12,000-$ 14,000/acre
($ 2,328,000 - $ 2,716,000) before the rezoning and [**11] $ 600/acre ($ 116,400) afterward, a reduction of 95% or
more. The City's appraiser testified that the property was worth only $ 4,000/acre ($ 776,000) before the rezoning

7 See   TEX. LOC. GOV'T CODE § 212.009.

8 See   61 S.W.3d at 661 (Vance, J., concurring and dissenting).

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and $ 2,500/acre ($ 485,000) afterward, a reduction of 37.5%. Although the trial court found after the bench trial that
the rezoning [*667] had had "a severe economic impact on Sheffield", it did not quantify that impact. The jury
found that the property was worth $ 970,000 ($ 5,000/acre) before rezoning and $ 485,000 ($ 2,500/acre) afterward,
a reduction of 50%. In accordance with its findings and the jury's verdict, the trial court rendered judgment awarding
Sheffield $ 485,000.

Both the City and Sheffield appealed. Sheffield argued that the moratorium also constituted a taking of its property,
and that its claim for declaratory judgment should not have been dismissed. The City argued that neither the
moratorium nor the rezoning was a taking of Sheffield's property.

Drawing from this Court's opinion in Mayhew v. Town of Sunnyvale, 9 [**13] the court of appeals stated that
Sheffield could establish a compensable regulatory taking if the rezoning or moratorium either (1) did not
substantially advance the City's legitimate [**12] interests, 10 (2) deprived Sheffield of all economically viable use
of its property, 11 or (3) unreasonably interfered with Sheffield's use of the property 12 as measured by the severity
of the economic impact on Sheffield and the extent to which its investment-backed expectations had been defeated.
13 The court held that the rezoning was not a taking under either of the first two tests. The court determined that

rezoning Sheffield's property substantially advanced the City's legitimate interest in "protecting the community from
the ill effects of urbanization" and "preserving the rate and character of community growth". 14 The court pointed to
the City's evidence that rezoning had reduced the estimated potential population of Stone Creek from 3,090 to
1,563, and that a less densely developed subdivision would mean "more open space and less traffic[,] . . . greater
setbacks, fewer school children, 'less folks, and less noise . . . .'" 15 The court also held that rezoning did not
deprive Sheffield of "all economically viable use" of its property, 16 based on Sheffield's admission that the property
was still worth $ 600 acre.

But the court concluded that the rezoning unreasonably interfered with Sheffield's use of its property. The court
believed that in determining the economic impact on Sheffield it could not consider the jury's finding in the trial on
damages but could look only to the evidence offered in the bench trial on liability issues, even though that evidence
was substantially the same as the evidence before the jury. The court reasoned that the minimum economic impact
on Sheffield was a 38% reduction in the value of its property, based on testimony the City itself had offered, and
concluded that such a reduction was "a sufficient adverse economic impact to satisfy the first factor of the
unreasonable interference test." 17 [**15] The court then evaluated Sheffield's investment-backed expectations.
The court noted that the PD 10 zoning was in place when [**14] Sheffield bought the property, that 43 acres of the
original tract had already been developed under that zoning, that continued development was consistent with the
City's 1995 comprehensive land use plan, and that before closing on the property Sheffield had attempted [*668]

9 964    S.W.2d 922, 41 Tex. Sup. Ct. J. 517 (Tex. 1998).

10 61    S.W.3d at 644, 645.

11 Id.   at 644, 647.

12 Id.   at 647.

13 Id.   at 647-48.

14 Id.   at 646.

15 Id.

16 Id.   at 647.

17 Id.   at 648.

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                                  140 S.W.3d 660, *668; 2004 Tex. LEXIS 195, **14

to confirm its development plans in several meetings with City officials. 18 The court also cited evidence that there
was no existing market in Glenn Heights for larger homes and lots, that the highest and best use of the property
was to hold it until such a market developed, and that Sheffield had lost anticipated profits of over $ 8 million. 19 The
court noted that development under PD 10 zoning would not burden city services because the infrastructure for the
development had long been in place. 20 The court recognized that no one fact could determine its inquiry, but
concluded, based on all of the circumstances, that the rezoning "unreasonably interfered with Sheffield's
investment-backed expectations." 21 Accordingly, the court held that the rezoning "unreasonably interfered with
Sheffield's right to use and enjoy the property." 22

Turning to the moratorium, the court disagreed with the trial court that the moratorium substantially advanced the
City's legitimate interests for the entire period it was in effect. 23 The court noted that the City's stated purpose for
the moratorium -- to study whether PD 10 and other planned development areas should be rezoned -- was
completed when the City's consultant tendered his report and recommendations less than a month after the
moratorium was first put in place. 24 Yet the moratorium was extended and re-extended a total of fifteen months
(excluding the twelve-day gap found by the trial court). The court of appeals cited testimony by the Mayor and one
Councilman that the moratorium was extended because of a stalemate on the Council and in order to pressure
Sheffield into accepting the City's development conditions. 25 The Mayor testified that one Councilman "had
expressed his concern that the City did not have [**16] enough leverage, as he likes to put it, over the developer".
26 From the evidence, the court concluded that "the motivation for the moratorium was never simply to study the

zoning issue." 27 "Once the city had all the information it needed to make a decision," the court concluded, "the
stalemate on the council [over whether to reject the Planning and Zoning Commission's decision not to rezone PD
10 and four other PDs] was not a legitimate reason to continue the moratorium which prevented development of the
property". 28 Thus, the court held that the moratorium was a compensable taking of Sheffield's property beginning
with the Council's stalemate on April 21, 1997. 29

Finally, the court also disagreed with the trial court's dismissal of Sheffield's claim for a declaratory judgment [**17]
as not ripe. Rather, the court of appeals concluded, "nothing else . . . can occur that will affect Sheffield's
entitlement to a determination of" whether it had filed a plat vesting its development rights during a gap in the

18 Id.   at 650.

19 Id.   at 650-51.

20 Id.   at 651.

21 Id.   at 652.

22 Id.

23 Id.   at 657.

24 Id.   at 655.

25 Id.   at 655-56.

26 Id.   at 656.

27 Id.   at 657.

28 Id.

29 Id.

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moratorium. 30 Accordingly, the court affirmed the judgment for damages for the rezoning and remanded the case
 [*669] for a determination of damages for the moratorium and of Sheffield's claim for declaratory relief. 31 As the
dissent noted, however, the court gave no guidance on whether Sheffield could "prevail on approval of the plat
(thereby gaining the right to develop the property under the former zoning) and recover damages for the moratorium
and re-zoning". 32

We granted both parties' petitions for review. 33

[**18] II

We first consider Sheffield's claims that the rezoning and moratorium each effected a taking of its property without
adequate compensation in violation of article I, section 17 of the Texas Constitution. Sheffield makes no claim
under HN2[ ] the Takings Clause of the Fifth Amendment to the United States Constitution, which is made
applicable to the states through the Fourteenth Amendment. 34 The two guarantees, though comparable, are
worded differently. [**19] HN3[ ] The Texas Constitution provides that "no person's property shall be taken,
damaged or destroyed for or applied to public use without adequate compensation being made . . . ." 35 HN4[ ]
The Takings Clause of the Fifth Amendment states: "nor shall private property be taken for public use without just
compensation." 36 As the court of appeals noted, it could be argued that the differences in the wording of the two
provisions are significant, but neither Sheffield nor the City makes this argument. 37 Both agree that in applying the
Texas constitutional provision in this case, we should look to federal jurisprudence for guidance, as we have in the
past, 38 and so we do.

[**20] A

30 Id.   at 658.

31 Id.   at 660.

32 Id.   at 661 (Vance, J., concurring and dissenting).

33   61 S.W.3d 634, 45 Tex. Sup. Ct. J. 984 (July 3, 2002).

34 Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 306 n.1, 152 L. Ed. 2d 517, 122 S. Ct. 1465
(2002) (citing Chicago, B.& Q. R.R. Co. v. Chicago, 166 U.S. 226, 239, 241, 41 L. Ed. 979, 17 S. Ct. 581 (1897)); Mayhew v.
Town of Sunnyvale, 964 S.W.2d 922, 933, 41 Tex. Sup. Ct. J. 517 (Tex. 1998) (also citing Chicago, B.& Q. R.R. Co.).

35 TEX.    CONST. art. I, § 17.
36 U.S.    CONST. amend. V.

37 61 S.W.3d at 642-44. See DuPuy v. City of Waco, 396 S.W.2d 103, 108, 9 Tex. Sup. Ct. J. 42 (Tex. 1965) ("It was the injustice
of requiring an actual [physical] taking which explains the inclusion for the first time in the Constitution of 1876 of the requirement
that compensation be paid for the damaging of property for public use."); Trinity & S. Ry. Co. v. Meadows, 73 Tex. 32, 11 S.W.
145, 146 (Tex. 1889) ("The insertion of the words 'damaged or destroyed' in [article I, section 17] was doubtless intended to
obviate this question [of whether a compensable taking required a physical appropriation], and to afford protection to the owner
of property, by allowing him compensation, when by the construction of a public work his property was directly damaged or
destroyed, although no part of it was actually appropriated.").

38 E.g.,
      City of Austin v. Travis County Landfill Co., 73 S.W.3d 234, 238-39, 45 Tex. Sup. Ct. J. 511 (Tex. 2002); Mayhew v.
Town of Sunnyvale, 964 S.W.2d 922, 932, 41 Tex. Sup. Ct. J. 517 (Tex. 1982).

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HN5[ ] By their plain terms, the takings provisions of the state and federal constitutions do not limit the
government's power to take private property for public use but instead require that a taking be compensated. 39
Physical possession is, categorically, a taking for which compensation is [*670] constitutionally mandated,
40 [**22] but a restriction in the permissible uses of property or a diminution in its value, resulting from regulatory

action within the government's police power, may or may not be a compensable taking. 41 As we have said, "all
property is held subject to the valid exercise of the police power" and thus not every regulation is a compensable
taking, although some are. 42
     There is . . . no one test and no single sentence rule . . . . The need to adjust the conflicts between private
     ownership of property and the public's interests is a very old one which has produced no single solution. 43

"Government hardly could go on", wrote Justice Holmes in the first regulatory takings case in the United States
Supreme Court, "if to some extent values incident to property could not be diminished [by government regulation]
without paying for every such change in the general [**21] law." 44 Yet, he continued, "a strong public desire to
improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional
way of paying for the change." 45 HN6[ ] "The general rule at least", he concluded, is "that while property may be
regulated to a certain extent, if regulation goes too far it will be recognized as a taking", 46 adding, "this is a
question of degree -- and therefore cannot be disposed of by general propositions." 47 "The question at bottom is
upon whom the loss of the changes desired should fall." 48

While the United States Supreme Court has never questioned this rule since Justice Holmes stated it,                  49   [**24]
HN7[ ] the Court has acknowledged that determining how far is "too far"

39 See First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 314, 96 L. Ed. 2d 250,
107 S. Ct. 2378 (1987) ("As its language indicates, and as the Court has frequently noted, this provision does not prohibit the
taking of private property, but instead places a condition on the exercise of that power.") (citations omitted).

40 Tahoe-Sierra  Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 322, 152 L. Ed. 2d 517, 122 S. Ct. 1465
(2002) ("When the government physically takes possession of an interest in property for some public purpose, it has a
categorical duty to compensate the former owner . . . .").

41 Taub   v. City of Deer Park, 882 S.W.2d 824, 826, 37 Tex. Sup. Ct. J. 1079 (Tex. 1994) ("An act short of actual physical
invasion, appropriation, or occupation can amount to a compensable taking when a governmental agency has imposed
restrictions that constitute an unreasonable interference with the landowner's right to use and enjoy the property.")(citation
omitted).

42 City   of College Station v. Turtle Rock Corp., 680 S.W.2d 802, 804, 28 Tex. Sup. Ct. J. 104 (Tex. 1984).

43 Id.   (quoting City of Austin v. Teague, 570 S.W.2d 389, 392, 21 Tex. Sup. Ct. J. 534 (Tex. 1978)).

44 Pennsylvania    Coal Co. v. Mahon, 260 U.S. 393, 413, 67 L. Ed. 322, 43 S. Ct. 158 (1922).

45 Id.   at 416.

46 Id.   at 415.

47 Id.   at 416.

48 Id.   (emphasis added).

49 See, e.g., First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 328, 96 L. Ed. 2d
250, 107 S. Ct. 2378 (1987) ("There is no dispute about the proposition that a regulation which goes 'too far' must be deemed a
taking.").

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    has proved to be a problem of considerable difficulty. While this Court has recognized that the "Fifth
    Amendment's [**23] guarantee . . . [is] designed to bar Government from forcing some people alone to bear
    public burdens which, in all fairness and justice, should be borne by the public as a whole," this Court, quite
    simply, has been unable to develop any "set formula" for determining when "justice and fairness" require that
    economic injuries caused by public action be compensated by the government, rather than remain
    disproportionately concentrated on a few persons. Indeed, we have frequently observed that whether a
    particular restriction will be rendered invalid by the government's failure to [*671] pay for any losses
    proximately caused by it depends largely "upon the particular circumstances [in that] case." 50
As a result, the Supreme Court has admitted, "cases attempting to decide when a regulation becomes a taking are
among the most litigated and perplexing in current law." 51 For our part, we have called these legal battlefields "a
'sophistic Miltonian Serbonian Bog'". 52

There are small islands in the bog. HN8[ ] The Supreme Court has identified, in its words, "at least two discrete
categories of regulatory action as compensable without case-specific inquiry". 53 One is where regulation "compels
the property owner to suffer a physical 'invasion' of his property." 54 The direct, physical effect on property, though
short of government possession, makes the regulation [**25] categorically a taking. Another is "where regulation
denies all economically beneficial or productive use of land." 55 To deprive an owner of all economically beneficial
use of land is tantamount to depriving him of the land itself. [**26] But this is "limited to 'the extraordinary
circumstance when no productive or economically beneficial use of land is permitted'" 56 and "the landowner is left
with a token interest." 57 In addition to these two situations, the Supreme Court has stated that regulation "effects a
taking if [it] does not substantially advance legitimate state interests". 58

50 Penn  Cent. Transp. Co. v. City of New York, 438 U.S. 104, 123-24, 57 L. Ed. 2d 631, 98 S. Ct. 2646 (1978) (alteration in
original) (citations omitted).

51 Eastern   Enters. v. Apfel, 524 U.S. 498, 541, 141 L. Ed. 2d 451, 118 S. Ct. 2131 (1998).

52 Cityof Austin v. Teague, 570 S.W.2d 389, 391, 21 Tex. Sup. Ct. J. 534 (Tex. 1978) (quoting Brazos River Auth. v. City of
Graham, 163 Tex. 167, 354 S.W.2d 99, 105, 5 Tex. Sup. Ct. J. 12 (Tex. 1962)); see also JOHN MILTON, PARADISE LOST
49, bk. II, ll. 592-94 (Scott Elledge ed., Norton & Co. 1993)(1674)(describing the land beyond Lethe as "A gulf profound as that
Serbonian bog / Betwixt Damiata and Mount Casius old, / Where armies whole have sunk").

53 Lucas   v. S.C. Coastal Council, 505 U.S. 1003, 1016, 120 L. Ed. 2d 798, 112 S. Ct. 2886 (1992).

54 Id.(citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435-40, 73 L. Ed. 2d 868, 102 S. Ct. 3164 (1982))
(holding that "law requiring landlords to allow television cable companies to emplace cable facilities in their apartment buildings
constituted a taking").

55 Id.
     at 1015-16 (citing Agins v. City of Tiburon, 447 U.S. 255, 260, 65 L. Ed. 2d 106, 100 S. Ct. 2138 (1980)); see also Mayhew
v. Town of Sunnyvale, 964 S.W.2d 922, 933, 41 Tex. Sup. Ct. J. 517 (Tex. 1998).

56 Tahoe-Sierra  Pres. Council, Inc., v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 330, 152 L. Ed. 2d 517, 122 S. Ct. 1465
(2002) (quoting Lucas, 505 U.S. at 1017-19); see also Mayhew, 964 S.W.2d at 935. But see Lucas, 505 U.S. at 1016 n.7
("Regrettably, the rhetorical force of our 'deprivation of all economically feasible use' rule is greater than its precision, since the
rule does not make clear the 'property interest' against which the loss of value is to be measured. When, for example, a
regulation requires a developer to leave 90% of a rural tract in its natural state, it is unclear whether we would analyze the
situation as one in which the owner has been deprived of all economically beneficial use of the burdened portion of the tract, or
as one in which the owner has suffered a mere diminution in value of the tract as a whole.").

57 Palazzolov. Rhode Island, 533 U.S. 606, 631, 150 L. Ed. 2d 592, 121 S. Ct. 2448 (2001); cf. Tahoe-Sierra, 535 U.S. at 350
(Rehnquist, C.J., dissenting) (arguing that economically beneficial use in Lucas is not synonymous with value).

58   Agins, 447 U.S. at 260 (1980) citation omitted); see also Mayhew, 964 S.W.2d at 933-34.

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 [**27] Otherwise, however, whether regulation has gone "too far" and become [*672] too much like a physical
taking for which the constitution requires compensation requires a careful analysis of how the regulation affects the
balance between the public's interest and that of private landowners. While each case must therefore turn on its
facts, guiding considerations can be identified, as the Supreme Court first explained in Penn Central Transportation
Co. v. City of New York:

     HN9[ ] In engaging in these essentially ad hoc, factual inquiries, the Court's decisions have identified several
     factors that have particular significance. The economic impact of the regulation on the claimant and,
     particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are,
     of course, relevant considerations. So, too, is the character of the governmental action. A "taking" may more
     readily be found when the interference with property can be characterized as a physical invasion by
     government, than when interference arises from some public program adjusting the benefits and burdens of
     economic life to promote the common good. 59

[**28] The Supreme Court has restated these factors simply as:

     HN10[ ] (1) "the economic impact of the regulation on the claimant"; (2) "the extent to which the regulation
     has interfered with distinct investment-backed expectations"; and (3) "the character of the governmental
     action." 60

Nevertheless, the Supreme Court has cautioned that these factors do not comprise a formulaic test.

     "Penn Central does not supply mathematically precise variables, but instead provides important guideposts
     that lead to the ultimate determination whether just compensation is required." "The temptation to adopt what
     amount to per se rules in either direction must be resisted." 61

Thus, for example, the economic impact of a regulation may indicate a taking even if the landowner has not been
deprived of all economically [**29] beneficial use of his property. Nor are the three Penn Central factors the only
ones relevant in determining whether the burden of regulation ought "in all fairness and justice" to be borne by the
public. 62 HN11[ ] Whether a regulatory taking has occurred, the Supreme Court has said, "depends on a complex
of factors including" the three set out in Penn Central. 63 The analysis "necessarily requires a weighing of private
and public interests" 64 and a "careful examination and weighing of all the relevant circumstances in this context." 65
As we have ourselves said of regulatory takings issues, "we consider all of the surrounding circumstances" 66 in
applying [*673] "a fact-sensitive test of reasonableness". 67 [**31]

59 438   U.S. 104, 124, 57 L. Ed. 2d 631, 98 S. Ct. 2646 (1978) (citations omitted).

60 Connollyv. Pension Benefits Guar. Corp., 475 U.S. 211, 225, 89 L. Ed. 2d 166, 106 S. Ct. 1018 (1986) (quoting Penn Cent.
Transp. Co. v. City of New York, 438 U.S. at 124).

61 Tahoe-Sierra,   535 U.S. at 326-27 n.23 (citations omitted) (quoting Palazzolo, 533 U.S. at 634, 636 (O'Connor, J., concurring)).

62 See,e.g., City of Austin v. Teague, 570 S.W.2d 389, 393, 21 Tex. Sup. Ct. J. 534 (Tex. 1978) ("There is still another test
which is sometimes helpful. It allows recovery of damages when the government's action against an economic interest of an
owner is for its own advantage.").

63 Palazzolo,   533 U.S. at 617 (emphasis added).

64 Agins   v. City of Tiburon, 447 U.S. 255, 261, 65 L. Ed. 2d 106, 100 S. Ct. 2138 (1980).

65 Tahoe-Sierra,   535 U.S. at 326 n.23 (quoting Palazzolo, 533 U.S. at 636 (O'Connor, J., concurring)).

66 Mayhew     v. Town of Sunnyvale, 964 S.W.2d 922, 933, 41 Tex. Sup. Ct. J. 517 (Tex. 1998).

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     We have said that HN12[            ] while

     determining whether a property regulation is unconstitutional requires the consideration of a number of factual
     issues, the ultimate question of whether a zoning ordinance constitutes a compensable taking or violates due
     process or equal protection is a question of law, not a question of fact. In resolving this legal issue, we consider
     all of the surrounding circumstances. HN13[ ] While we depend on the district court to resolve disputed facts
     regarding [**30] the extent of the governmental intrusion on the property, the ultimate determination of whether
     the facts are sufficient to constitute a taking is a question of law. 68
     We apply this standard to the record before us.

B

We come, then, to whether the rezoning of Sheffield's property was a taking. There was no physical invasion of the
property, and Sheffield does not argue that it was deprived of all economically beneficial use of the property.
Sheffield argues that the rezoning was a taking because it did not substantially advance the City's legitimate
governmental interests, and because it went too far in restricting Sheffield's use and enjoyment of its property. We
consider each argument in turn.

1

a

As a threshold matter, the City argues that a regulation should not be considered a taking merely because it does
not substantially advance legitimate state interests. The United States Supreme Court flatly stated in Agins v. City
of Tiburon that HN14[ ] "the application of a general zoning law to particular property effects a taking if the
ordinance does not substantially advance legitimate state interests". 69 We agreed with that statement in Mayhew v.
City of Sunnyvale and used it in applying the takings provision in the Texas Constitution. [**32] 70 But the City
argues that the Supreme Court has receded from its statement in Agins, and so should we in applying the Texas
Constitution. Whether a regulation furthers a legitimate purpose, the City argues, is really a due process concern
and not a test for determining whether the government must compensate a taking of property. Furthermore, the City
argues, requiring compensation for a regulation merely because it does not advance state interests and therefore
does not benefit the public, unfairly burdens taxpayers by requiring them to pay for something from which they did
not benefit.

It is true, as the City says, that the Supreme Court appears to have equivocated somewhat on its statement in
Agins outside the context of cases involving required dedications or exactions. In City of Monterey v. Del Monte
Dunes at Monterey, Ltd., the trial court had instructed the jury that [**33] a city's refusal to allow development of
property would constitute a taking if "there was no reasonable relationship between the city's denial of the . . .
proposal and legitimate public purpose". 71 [*674] The Court said that although it had never provided

67 City   of College Station v. Turtle Rock Corp., 680 S.W.2d 802, 804, 28 Tex. Sup. Ct. J. 104 (Tex. 1984).

68 Mayhew,     964 S.W.2d at 932-33.

69 447    U.S. at 260 (citation omitted).

70 964    S.W.2d at 933-34 (quoting Appendix at 304).

71 526    U.S. 687, 701, 143 L. Ed. 2d 882, 119 S. Ct. 1624 (1999).

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         a thorough explanation of the nature or applicability of the requirement that a regulation substantially advance
         legitimate public interests outside the context of required dedications or exactions, we note that the trial court's
         instructions are consistent with our previous general discussions of regulatory takings liability. 72

"Consistent" does not, of course, equal correct, a fact made all the more noticeable by five Justices' expressly
withholding opinion on whether Agins' substantial advancement requirement is a proper takings test. 73 [**34] But
since Del Monte Dunes, the Supreme Court has cited the substantial advancement test without criticism, 74 as it
had done several times earlier. 75

Whatever may be made of all of this, one thing is clear: the Supreme Court has never modified or retracted its
statement in Agins. HN15[ ] Prior decisions need not be reaffirmed periodically to retain authority. As the Supreme
Court has admonished:

         HN16[ ] "if a precedent [**35] of [the Supreme] Court has direct application in a case, yet appears to rest on
         reasons rejected in some other line of decisions, [a lower court] should follow the case which directly controls,
         leaving to [the Supreme] Court the prerogative of overruling its own decisions." 76

We are not, of course, bound to follow Agins in this case since Sheffield makes no claim under the United State
Constitution, but as we have already said, HN17[ ] we do look to federal takings cases for guidance in applying
our own constitution. To that end, we conclude that Agins remains authoritative.

Furthermore, apart from what the Supreme Court has said, we continue to believe for purposes of state
constitutional law, as we held in Mayhew, that the statement in Agins is correct: that HN18[ ] whether regulation
substantially advances legitimate state interests is an appropriate test for a constitutionally compensable taking, at
least [**36] in some situations. In this case, for example, Sheffield argues that the City did not rezone Stone Creek
for any legitimate purpose, such as to avoid the ill effects of urbanization and provide for orderly development, but
simply to muscle Sheffield into modifying its development proposals or going away altogether. If Sheffield were
correct, we think the lack of a legitimate purpose alone would make the rezoning a taking, just as it would have in
Mayhew. The City equates a lack of legitimate purpose with a lack of public purpose, [*675] the latter being a
prerequisite to any taking. 77 Without a public purpose, the City reasons, there is no public benefit, and the public
should not be required by the substantial advancement test to pay for government action from which it has received
no benefit. But the flaw is in the equation. HN19[ ] Government action may be for a public -- as opposed to a
private -- purpose, even if that purpose is not a legitimate one for the government to engage in. For instance, as the

72 Id.   at 704 (citation omitted).

73 Id.
     at 732 n.2 (Scalia, J., concurring in part and concurring in the judgment); id. at 753 n.12 (Souter, J., joined by O'Connor,
Ginsburg, and Breyer, JJ., concurring in part and dissenting in part).

74 Tahoe-Sierra  Pres. Council, Inc., v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 323-24, 152 L. Ed. 2d 517, 122 S. Ct. 1465
(2002) ("For the same reason that we do not ask whether a physical appropriation advances a substantial government interest or
whether it deprives the owner of all economically valuable use, we do not apply our precedent from the physical takings context
to regulatory takings claims.").

75 Lucas   v. S.C. Coastal Council, 505 U.S. 1003, 1016, 120 L. Ed. 2d 798, 112 S. Ct. 2886 (1992) ("As we have said on
numerous occasions, the Fifth Amendment is violated when land-use regulation 'does not substantially advance legitimate
state interests or denies an owner economically viable use of his land.' ") (quoting Agins, 447 U.S. at 260) (alteration in the
original) (citations omitted)).

76 Agostini   v. Felton, 521 U.S. 203, 237, 138 L. Ed. 2d 391, 117 S. Ct. 1997 (1997).

77 Marrs v. R.R. Comm'n, 142 Tex. 293, 177 S.W.2d 941, 949 (Tex. 1944) ("'one person's property may not be taken for the
benefit of another private person without a justifying public purpose, even though compensation be paid'") (quoting Thompson v.
Consol. Gas Co., 300 U.S. 55, 80, 81 L. Ed. 510, 57 S. Ct. 364 (1936)).

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Supreme Court has held, "the government may not require a person to give up a constitutional right . . . in
exchange for a discretionary benefit conferred by the government where [**37] the benefit sought has little or no
relationship to the property." 78 Sheffield argues, not that the City's purposes were not public, but that they were not
legitimate. If Sheffield is correct and the rezoning was therefore a taking, the benefit to the taxpayers would be that
of the City's having achieved its goal.

Accordingly, we decline the City's invitation to reject the substantial advancement test for compensable takings
stated in Agins and Mayhew.

b

The trial court concluded that the rezoning of PD 10 substantially advanced a legitimate governmental purpose,
 [**38] and the court of appeals agreed. Sheffield argues that the assessment of the relationship between the City's
actions and legitimate governmental purposes must be confined to the record of events, documents, and meetings
leading up to the rezoning -- the "legislative record" -- and cannot consider, as the court of appeals did, post hoc
arguments made by the City in the course of this litigation. Sheffield also argues that the court of appeals was too
deferential to the City in assessing its purposes because the rezoning was not generally applicable but was aimed
directly at Sheffield. Finally, Sheffield argues that by any standard, the rezoning was a taking under the substantial
advancement test.

Sheffield cites no authority for its argument that the test must be limited to a "legislative record" of statements,
positions, or findings by the City prior to the rezoning, and we have found none. While Sheffield correctly points out
that the city commission in Mayhew gave reasons for its actions at the time they were taken, 79 we considered not
only those reasons but evidence later offered in litigation. 80 HN20[ ] For equal protection purposes, government
action has a rational basis [**39] if one can be conceived, regardless of whether the government had it in mind
when it took the action complained of. 81 Sheffield does not explain why the basis for takings analysis should be
more constricted, and we know of no reason. The court of appeals did not err in looking to the City's evidence and
arguments to assess its purposes.

Sheffield does not argue that the government must always be held to a heightened standard of judicial review when
its purposes are assessed in a takings context, but only that a heightened [*676] standard is appropriate when the
government has targeted a particular landowner or piece of property. As authority, Sheffield cites the Supreme
Court's decision in Nollan v. California Coastal Commission, which held that conditioning a home rebuilding permit
on the owners' conveyance of a public easement [**40] across their beachfront property was a compensable
taking. 82 The Supreme Court explained:

         HN21[ ] our cases describe the condition for abridgement of property rights through the police power as a
         "substantial advancing" of a legitimate state interest. We are inclined to be particularly careful about the
         adjective where the actual conveyance of property is made a condition to the lifting of a land-use restriction,
         since in that context there is heightened risk that the purpose is avoidance of the compensation requirement,
         rather than the stated police-power objective. 83

78 Dolan    v. City of Tigard, 512 U.S. 374, 385, 129 L. Ed. 2d 304, 114 S. Ct. 2309 (1994).

79 Mayhew      v. Town of Sunnyvale, 964 S.W.2d 922, 935, 41 Tex. Sup. Ct. J. 517 (Tex. 1998).

80 Id.

81 Owens      Corning v. Carter, 997 S.W.2d 560, 581, 42 Tex. Sup. Ct. J. 883 (Tex. 1999).

82 483    U.S. 825, 839, 97 L. Ed. 2d 677, 107 S. Ct. 3141 (1987).

83 Id.   at 841 (alteration in the original).

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We agree, but we read "particularly careful" to mean, not that HN22[ ] an elevated standard of review must be
applied, but that it ordinarily is, and should be, harder for the government to show that its interests have been
substantially advanced by regulation directed at one lone landowner. Moreover, the record does not support
Sheffield's argument that it was singled out. Eventually, the City's downzoning of residential property was virtually
city-wide, affecting non-PD property and most of the PDs. It was certainly not restricted to PD 10. In determining
whether the rezoning substantially advanced the City's [**41] legitimate purposes, the court of appeals was not, we
think, unduly deferential.

The court of appeals concluded that the City's rezoning substantially advanced its interests in avoiding the ill effects
of urbanization and preserving the rate and character of community growth. 84 The court pointed to evidence that
the downzoning would reduce the potential population and eventually result in more open space, less traffic, greater
setbacks, and fewer school children, although the court also noted that roads, schools, and utilities had all been
designed to accommodate original population estimates. 85 Sheffield argues that the most the evidence shows is
that rezoning could theoretically advance the City's legitimate purposes, and that is not enough. We agree that
HN23[ ] the substantial advancement requirement must be, in the Supreme Court's words, "more than a pleading
requirement, and compliance with it . . . more than an exercise in cleverness and imagination." 86 But we do not
think it must be proved to a certainty. Indeed, the actual effects of the City's rezoning are for the future and can only
be projected and estimated. The City offered evidence that rezoning the PDs would lower [**42] its potential
population by about 6,000, from about 31,000 to 25,000, and that rezoning PD 10 accounted for about one-fourth of
this reduction. The City could reasonably conclude that this would substantially advance its legitimate interest in
preserving a smaller community environment. Also, the City's concern with its growth first arose in 1995 and thus
was not prompted by Sheffield's acquisition of Stone Creek, even though Sheffield's imminent development plans
clearly stirred the City's anxiety. Thus, while the evidence establishes that from the fall of 1996 on, the City had its
eye on Sheffield all during the rezoning efforts, the Stone Creek subdivision was not the City's only [*677] focus,
and its efforts were not so narrowly directed at Sheffield alone as to indicate that the City's legitimate interests in
controlled growth had taken a back seat.

 [**43] On balance, we agree with the lower courts that the City's rezoning substantially advanced legitimate
government interests.

2

Even so, we must consider whether the City went so far in restricting Sheffield's use of its property that the rezoning
was more like a taking and "in all fairness and justice", the burden of that restriction should be borne by the public.
We begin with the three Penn Central factors, mindful as we do that our analysis cannot be merely mathematical.

First, as the lower courts concluded, the rezoning clearly had a severe economic impact on Sheffield. By the City's
own evidence, the rezoning reduced the value of Sheffield's property by 37.5%, below what it was when Sheffield
purchased it, although not below the bargain price Sheffield paid. The jury found that the value of the property had
been reduced by half, but that it was still worth more than four times what Sheffield paid for it. From Sheffield's
perspective as a developer, the economic impact of the rezoning included more than $ 8 million in lost profits from
the planned development. There was no existing market for the larger lots required by the rezoning, and the
evidence was disputed whether [**44] one would ever develop. The City argues that evidence of lost profits should
be ignored, but we agree with the court of appeals that HN24[ ] lost profits are clearly one relevant factor to
consider in assessing the value of property and the severity of the economic impact of rezoning on a landowner. It
must be kept in mind, however, that

84 61    S.W.3d at 646.

85 Id.

86 Nollan,   483 U.S. at 841.

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HN25[ ] the takings clause . . . does not charge the government with guaranteeing the profitability of every piece
of land subject to its authority. Purchasing and developing real estate carries with it certain financial risks, and it is
not the government's duty to underwrite this risk as an extension of obligations under the takings clause. 87

But while the impact of rezoning on Sheffield was unquestionably severe, it did not approach a taking. The court of
appeals focused on the diminution in the value of Sheffield's property, nearly 38% by the testimony of the City's
expert. We think the relevant number [**45] is 50%, as found by the jury. But HN26[ ] diminution in value is not
the only, or in this case even the principal, element to be considered. It is more important that, according to the jury
verdict, the property was still worth four times what it cost, despite the rezoning, because this makes the impact of
the rezoning very unlike a taking. Sheffield argues that its business acumen or good fortune in acquiring the
property cannot be considered in assessing the economic impact of rezoning, but we think that investment profits,
like lost development profits, must be included in the analysis.

Second, again as the lower courts concluded, the rezoning significantly interfered with Sheffield's reasonable,
investment-backed expectations. Sheffield's expectations were certainly reasonable. The PD 10 zoning had been in
place for ten years before Sheffield acquired the property, and part of the subdivision had already been developed
under that zoning scheme consistent with the City's comprehensive land use plan. 88 [**47] Moreover, [*678]
Sheffield's expectations were not merely those of any landowner, or even those of any developer; rather, Sheffield's
expectations were based in large part, and legitimately so, [**46] on its efforts to deal with the City. Sheffield met
with city officials to present his plans for development and inquire about any contemplated zoning changes, and as
the trial court found, its reliance on representations made in those meetings was in good faith. Although no City
employee ever promised Sheffield that there would be no change in zoning (nor would any such promise have
bound the City 89), it is fair to say that the moratorium and rezoning blindsided Sheffield, just as the City intended.
Evidence of Sheffield's dealings with the City is not, as the City argues, an improper basis to estop the City, but
proof of the reasonableness of Sheffield's expectations. However, it must also be said that the investment backing
Sheffield's expectations at the time of rezoning -- the $ 600/acre purchase price and the expenses of exploring
development with the City -- was minimal, a small fraction of the investment that would be required for full
development. And as with most development property, Sheffield's investment was also speculative, 90 as evidenced
by the fact that the property Sheffield acquired had not been developed in the ten years since it was first zoned PD
10.

Third, the rezoning, as we have already explained, was general in character and not exclusively directed at
Sheffield. This case is not like [**48] Nollan, for example, where an easement was exacted from a single
landowner for a rebuilding permit. Zoning changes are to be expected, especially in growing communities like Glenn
Heights. The rezoning here was typical of such changes.

Beyond the three Penn Central factors, we are concerned, as we have already indicated, about the City's conduct.
The evidence is quite strong that the City attempted to take unfair advantage of Sheffield, and quite lacking in any

87 Taub   v. City of Deer Park, 882 S.W.2d 824, 826, 37 Tex. Sup. Ct. J. 1079 (Tex. 1994).

88 See  Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 936, 41 Tex. Sup. Ct. J. 517 (Tex. 1998) ("Knowledge of existing zoning
is to be considered in determining whether the regulation interferes with investment-backed expectations.").

89 See, e.g., City of Pharr v. Pena, 853 S.W.2d 56, 62 (Tex. App.--Corpus Christi 1993, writ denied) ("statements or assurances
regarding zoning made by individual members of the city council, board or commission are not binding and do not give private
property owners a vested right to the use or disposal of their property so as to deny the city the exercise of its police power");
Alamo Carriage Serv., Inc. v. City of San Antonio, 768 S.W.2d 937, 941-42 (Tex. App.----San Antonio 1989, no writ)
("Statements of individual council members are not binding on the City."); City of Farmers Branch v. Hawnco, Inc., 435 S.W.2d
288, 292 (Tex. Civ. App.--Dallas 1968, writ ref'd n.r.e.) ("[assurances regarding continued zoning] by individual members of a
council or board are not binding on a governmental body which may act only in its official capacity").

90 See   Taub, 882 S.W.2d at 826.

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                                      140 S.W.3d 660, *678; 2004 Tex. LEXIS 195, **48

indication of unfair action on Sheffield's part. The City, fearful that we might consider the improvident statements of
individual officials and employees, argues that HN27[ ] the actions and motives of those individuals are not those
of the City itself. Of course, we agree. 91 But it is exactly the City's conduct, not that of its officials [*679] and
employees, that is so troubling. The City did not rezone or impose a moratorium on development, or indicate that it
had the remotest intention of doing so, until Sheffield closed on the purchase of the property. The moratorium it
imposed was for the purpose of "study", which was unquestionably completed within a month. Yet for a year the
City Council delayed action on the Planning and [**49] Zoning Commission's decision that PD 10 not be rezoned.
According to the City's own records, a reason for the delay was to muster the votes to reject the Commission's
decision. On the other hand, the City Council continued to consider the zoning of many other PDs during the same
time period, suggesting that the delay was lethargic rather than ill-motivated. And while the City's conduct is
troubling, it must also be said that the benefits the City legitimately sought to achieve from rezoning were not
thereby diminished.

 [**50] Taking all of these factors into account, the trial court concluded that the rezoning was not unreasonable,
and a divided court of appeals disagreed. We agree with the court of appeals that the downzoning in this case is
much different from the refusal to upzone in Mayhew, thereby maintaining the status quo and preventing the
landowner from proceeding with an enormous development on land that had long been used solely for agricultural
purposes in a small, uniquely rural environment. Nevertheless, we do not agree that the rezoning in this case went
too far, approaching a taking. Rather, we think that the City's zoning decisions, apart from the faulty way they were
reached, were not materially different from zoning decisions made by cities every day. 92 On balance, we conclude
that the rezoning was not a taking.

[**51] C

We now turn to whether the fifteen-month moratorium preceding the rezoning was a taking.

1

We first consider whether the moratorium substantially advanced legitimate government interests. Sheffield does
not argue that the moratorium should never have been imposed. Rather, Sheffield would hold the City to its own
words. The moratorium, according to the City, was

solely for the purpose of allowing the City Council to study, in conjunction with the City's planning and administrative
officials, the zoning, growth and development related issues and concerns presented by the nonconformity of the
City's planned developments with the City's Code and Future Land Use Plan.

After April 21, 1997, Sheffield argues, there was nothing left "to study". The consultant's report was complete, the
Planning and Zoning Commission had reviewed it, the issues were drawn, and it was time for decision. At its
meeting on that date, Sheffield argues, the City Council could have taken up the Commission's decision to reject
the consultant's recommendation that PD 10 not be rezoned, and could have accepted or rejected it, but did neither
because of a stalemate among councilmembers. Furthermore, [**52] there is evidence that at least one

91 See,  e.g., City of Corpus Christi v. Bayfront Assocs., Ltd., 814 S.W.2d 98, 105 (Tex. App.--Corpus Christi 1991, writ denied)
("an individual city council member's mental process, subjective knowledge, or motive is irrelevant to a legislative act of the city,
such as the passage of an ordinance"); Mayhew v. Town of Sunnyvale, 774 S.W.2d 284, 298 (Tex. App.--Dallas 1989, writ
denied) ("the subjective knowledge, motive, or mental process of an individual legislator is irrelevant to a determination of the
validity of a legislative act because the legislative act expresses the collective will of the legislative body") (quoting Sosa v. City
of Corpus Christi, 739 S.W.2d 397, 405 (Tex. App.-- Corpus Christi 1987, no writ)), aff'd after remand, 964 S.W.2d 922, 41 Tex.
Sup. Ct. J. 517 (Tex. 1998).

92 SeeLucas v. S.C. Coastal Council, 505 U.S. 1003, 1027, 120 L. Ed. 2d 798, 112 S. Ct. 2886 (1992) ("It seems to us that the
property owner necessarily expects the uses of his property to be restricted, from time to time, by various measures newly
enacted by the State in the legitimate exercise of its police powers . . . .").

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                                   140 S.W.3d 660, *679; 2004 Tex. LEXIS 195, **52

councilmember wanted to use delay to give the City more leverage in pressuring Sheffield to agree to a less dense
development plan.

 [*680] Again, we agree with the City that HN28[ ] evidence of one official's motives cannot be attributed to the
City itself. We look entirely to the objective evidence regarding the City's actions. The City argues, candidly but
remarkably, that using delay to extract concessions from landowners is a legitimate government function. We
disagree, 93 and were we convinced that this was the sole reason for the City's delay, we would be required to
consider whether the moratorium constituted a compensable taking. Delay may be necessary or appropriate to
allow everyone affected by a zoning decision an opportunity to fully consider all options and negotiate solutions, but
the use of delay for extortion is hardly a legitimate government function. The City also contends that we cannot
second-guess its motives and must presume that the extended moratorium was due to nothing other than an
honest disagreement over the appropriate zoning for the planned development areas. But the takings provision of
the Texas Constitution would suffer a huge [**53] loophole if we were required to presume that a city's endless
refusal to permit a landowner the reasonable use of his property was justified by an honest disagreement of
councilmembers.

The fact is that during eight months of the moratorium, the City rezoned seven PDs. It took time. There is no
evidence that the City meant to unfairly pressure all of the affected landowners. On the contrary, the evidence
reflects an orderly, albeit slow, process toward resolving the differences between the City Council, the Planning and
Zoning Commission, and the City's consultant. One can wish that the process had hurried along, but we cannot say
that the moratorium did not substantially [**54] advance a legitimate governmental purpose.

2

Nor can we say that the moratorium went too far towards a taking. Sheffield did not show during the liability trial, as
it was required to do, what economic impact it suffered from the moratorium as distinct from the rezoning. Nor does
the record show how Sheffield's reasonable, investment-backed expectations excluded the possibility of a fifteen-
month delay in a decision on its development plans. No other aspects of the moratorium make it more like a
temporary taking -- that is, an unreasonable prohibition in the use of property for a defined period 94 -- than a mere
delay in decision. We can easily imagine circumstances in which delay was aimed more at one person, or was
more protracted with less justification, and more indicative of a taking. But the evidence in this case does not
approach that situation.

III

Having failed [**55] to find that the City's rezoning was a compensable taking of Sheffield's property, we are left
with one issue: whether Sheffield's vested rights claim was ripe. Sheffield claims that the plat it filed on March 11,
1997, vested its development rights because the moratorium was not then in effect and the City did not act on the
filing. We agree with the court of appeals that this claim was ripe. The City argues that the parties did not argue
ripeness to the trial court, but that does not lessen the fact that ripeness [*681] was the basis for the trial court's
ruling. As the court of appeals concluded, there was nothing to prevent the trial court from ruling on the merits of
Sheffield's claim.

The concern expressed in the dissent in the court of appeals that Sheffield might both recover damages for
restrictions on the development of its property and nevertheless be permitted to develop its property unimpaired by

93 Cf.Westgate, Ltd. v. State, 843 S.W.2d 448, 454, 36 Tex. Sup. Ct. J. 282 (Tex. 1992) ("The policy reasons that support our
decision today [that delaying condemnation of property after announcement of an intent to do so is not a taking] might not be
applicable where the condemning authority is accused of intentionally injuring a landowner.").

94 See Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 152 L. Ed. 2d 517, 122 S. Ct. 1465
(2002).

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                                       140 S.W.3d 660, *681; 2004 Tex. LEXIS 195, **55

those restrictions 95 is no longer real, since we have held that Sheffield cannot recover damages. However, another
issue remains: has Sheffield's pursuit of damages foreclosed its claim that it is entitled to develop its property under
PD 10 zoning because of a properly submitted [**56] plat during a hiatus in the moratorium, as found by the trial
court. While this action has been pending, Sheffield sued the City, asserting that its development rights were
statutorily fixed by the original Stone Creek plat in 1986. The court of appeals held in that case that the action for
damages now before us was an election of remedies, foreclosing Sheffield's claim, because Sheffield did not assert
that claim in this action before judgment. 96 But Sheffield's claim for declaratory relief in the present action is on a
different footing. Sheffield did assert in this action, before judgment, that its development rights were fixed, not by
the originally filed plat, but by a plat submitted to the City during what the trial court found was a hiatus in the
moratorium due to the City Council's failure to extend it. The election issue is therefore different. It has not been
briefed or argued, and we express no opinion on it.

 [**57] Since the sole question before us is whether the vested rights issue is ripe for decision, and we agree with
the court of appeals that it is, we remand the issue to the trial court for further proceedings.

*****

Accordingly, we reverse the judgment of the court of appeals on Sheffield's takings claims and render judgment that
Sheffield take nothing against the City, and we affirm the judgment of the court of appeals remanding Sheffield's
claim for a declaration that its development rights have been vested by its plat submitted March 11, 1997.

Nathan L. Hecht Justice

  End of Document

95 61   S.W.3d at 661 (Vance, J., concurring and dissenting).

96 City   of Glenn Heights v. Sheffield Dev. Co., 55 S.W.3d 158 (Tex. App.--Dallas 2001, pet. denied).

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