City of San Antonio v. Summerglen Property, 04-05-00589-CV.

• Decision Date: 23 November 2005
• Docket Number: No. 04-05-00589-CV.,04-05-00589-CV.
• Citation: 185 S.W.3d 74
• Parties: CITY OF SAN ANTONIO, Appellant, v. SUMMERGLEN PROPERTY OWNERS ASSOCIATION, INC., Kenneth Carey, Joe Cochran, William McCrae, Karen Pe&#241;a, George Baum and Dan Vana, Appellees.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

185 S.W.3d 74

CITY OF SAN ANTONIO, Appellant, v. SUMMERGLEN PROPERTY OWNERS ASSOCIATION, INC., Kenneth Carey, Joe Cochran, William McCrae, Karen Peña, George Baum and Dan Vana, Appellees.¹

No. 04-05-00589-CV.

Court of Appeals of Texas, San Antonio.

November 23, 2005.

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Patrick C. Bernal, Ryan Henry, Denton, Navarro, Rocha & Bernal, P.C., San Antonio, for appellant.

David L. Earl, Steven W. Arronge, Earl & Associates, P.C., Ryan G. Anderson, McClenahan & Anderson, P.L.L.C., H.L. Buddy Socks, Glast, Phillips & Murray, P.C., Dawn M. Laubach, San Antonio, David R. Weiner, Glast, Phillips & Murray, P.C., Dallas, for appellees.

Sitting: ALMA L. LÓPEZ, Chief Justice, SARAH B. DUNCAN, Justice, PHYLIS J. SPEEDLIN, Justice.

OPINION

PER CURIAM.

In this interlocutory appeal we consider the issue of whether appellees, a homeowners association and individual property owners in the Summerglen/Canyon Springs and Evans/Bulverde Road areas, have standing to challenge the City of San Antonio's proposed annexation of their property. We hold the property owners do not have standing to assert any of their claims for declaratory relief under Chapter 43 of the Local Government Code or under House Bill 585; accordingly, we reverse the trial court's order denying the City's plea to the jurisdiction, vacate the order granting a temporary injunction against the City, and dismiss the property owners' claims.

FACTUAL & PROCEDURAL BACKGROUND

On September 19, 2002, the City Council of San Antonio² adopted a new three year annexation plan pursuant to § 43.052 of the Local Government Code.³ TEX. LOC. GOV'T CODE ANN. § 43.052 (Vernon Supp. 2004-05). The City amended the plan on December 12, 2002 to add several new proposed annexation areas within its extraterritorial jurisdiction ("ETJ"), including the Summerglen/Canyon Springs and Evans/Bulverde Road areas.⁴ Under § 43.052(g), the annexation of those areas must be completed before the 31st day after the third anniversary of the date the areas were added to the plan, i.e., before January 12, 2006. TEX. LOC. GOV'T CODE ANN. § 43.052(g). If the annexation is not completed by that deadline, the City may not annex the areas for five years. Id.

Following the addition of the subject areas to its three-year annexation plan, the City provided notice of the proposed annexation to the property owners within 90 days, and posted the amended annexation plan and proposed annexation schedule for the areas on its website, as required by § 43.052(f) and (j), respectively. TEX. LOC. GOV'T CODE ANN. § 43.052(f), (j). The City posted the required inventory of services on its website on August 27, 2003. See TEX. LOC. GOV'T CODE ANN. § 43.053(g) (Vernon Supp.2004-05). The City presented a draft plan for the provision of services to the areas at the first public hearing on October 30, 2003. A second public hearing was held on November 13, 2003, with an additional third hearing on November 25, 2003 at the request of Summerglen's residents. See TEX. LOC. GOV'T CODE ANN. § 43.0561(a) (Vernon Supp.2004-05) (requiring two public hearings within 90 days of the date the inventory was made available).

Representatives were appointed by the Bexar County Commissioner's Court for each of the proposed annexation areas from February through April 2004. Thereafter, a series of negotiations were held between the City and the area representatives regarding the terms of the service plan. See TEX. LOC. GOV'T CODE ANN. § 43.0562 (Vernon Supp.2004-05) (requiring negotiations for the provision of services upon annexation). On June 1, 2004, prior to the first negotiation session, the Summerglen representatives submitted a written request for arbitration. The City, through outside counsel, responded that the arbitration request was premature because negotiations must be completed before arbitration is proper under § 43.0564. See TEX. LOC. GOV'T CODE ANN. § 43.0564 (Vernon Supp.2004-05) (providing that if an agreement is not reached through negotiations, either party may request arbitration to resolve the service plan issues). From October 2004 to July 13, 2005, a total of ten negotiation sessions were held on the service plan. Ultimately, no agreement on services was reached.

On February 28, 2005, during the period of negotiations, the Summerglen Property Owners Association, Inc. and several individual property owners and appointed representatives in the area filed suit seeking a declaratory judgment that the City's attempted annexation was unlawful based on procedural violations of the annexation process set forth in Chapter 43 of the Local Government Code, such as failure to give proper notice of the November 25, 2003 hearing, and failure to provide more than a draft service plan; the suit also alleged the City's failure to arbitrate upon request was unlawful. On March 9, 2005, a group of individual property owners and representatives in the Evans/Bulverde Road area intervened, requesting the same declaratory relief that the City had failed to comply with the statutory procedure for annexation and could not proceed with the proposed annexation. On June 23, 2005, the City filed a plea to the jurisdiction contending the individual property owners do not have standing to sue because claims based on procedural irregularities in the annexation process may only be brought in a quo warranto proceeding. The City further asserted that the issue of arbitration was not ripe because the negotiation process had not yet run its course.

On June 16, 2005, House Bill 585 was signed by the Governor and became effective immediately. Section 2 of the bill prohibits a municipality with a population of one million or more, that has operated for at least 10 years under a three-year annexation plan similar to the plan described in § 43.052, from annexing an area in its ETJ that is north and east of I.H. 10 and that is either adjacent to the municipality's boundaries or within 1 1/2 miles of a deferred annexation area. The parties agree that H.B. 585 applies to the City of San Antonio, and specifically, prohibits annexation of the Summerglen/Canyon Springs and Evans/Bulverde Road areas because they lie north and east of I.H. 10 and are within 1 1/2 miles of the PGA Tour deferred annexation area.⁵

On June 28 and 30, 2005, the property owners filed applications for a temporary injunction restraining the City from taking any further steps toward annexation, based on their assertions that annexation of their areas would be a direct violation of new H.B. 585. In its response opposing the temporary injunction, the City contended that H.B. 585 is unconstitutional as a special or local law because it only applies to the northeast area of San Antonio. In addition, the Summerglen/Canyon Springs plaintiffs amended their petition, and the Evans/Bulverde Road intervenors amended their plea in intervention, to add a third claim for declaratory relief stating that annexation would violate H.B. 585. The City's second amended answer included a counter-claim for declaratory relief that H.B. 585 is unconstitutional as a local or special law.

On July 27, 2005, the trial court held an evidentiary hearing on the temporary injunction applications and the City's plea to the jurisdiction.⁶ Testimony was presented by two City employees, the Comprehensive Planning Manager, Jesus Garza, and the City Planning Director, Emil Moncivais. Garza testified to the City's compliance with all of the statutory deadlines in the annexation procedure set forth in Chapter 43, including giving 10 days notice of the November 25, 2003 public hearing, and the timely submission of a "complete" service plan at the first public hearing on October 30, 2003. Garza testified the service plan presented at the October 30, 2003 hearing was a "complete" plan as required by the statute, even though it was in draft form because a service plan is not "final" until adopted by the City Council at the time the annexation ordinance is adopted. See TEX. LOC. GOV'T CODE ANN. § 43.056(a) (Vernon Supp.2004-05) (requiring the municipality to "complete a service plan" for the area to be annexed before the first day of the 10th month after the month in which the inventory of services is prepared).

With respect to Summerglen's arbitration request on June 1, 2004, Garza stated the City has not "refused" to arbitrate. He and Moncivais testified that the City responded to the arbitration request by letter stating that arbitration was proper only after the mandated negotiations had been completed, and the request was premature. In addition, Garza testified to the City's interpretation of § 43.0564 as only requiring arbitration on the terms of the service plan, not on whether to proceed with annexation. After the last negotiation on July 13, 2005, Garza testified the City stated its position in a letter dated July 15, 2005, that it is "agreeable and intends to proceed with arbitration" on the service plan, and is awaiting any additional arbitration requests from the other areas' representatives within the 60-day period following the last negotiation. Summerglen's counsel stated he received notice from the City withdrawing its July 15 letter the evening before the hearing. Garza responded that he was unaware of such a letter. He reiterated that the City is still willing to proceed to arbitration on the service plan.

Finally, Garza testified that the City staff intends to recommend proceeding with annexation of the Summerglen/Canyon Springs and Evans/Bulverde Road areas as scheduled in December 2005, unless enjoined by the court. He stated if the court enjoined the City staff from taking further steps toward annexation, it would not be possible to conduct the vote on annexation in December 2005. If annexation is approved in December 2005, the annexed areas will be placed on the tax rolls at midnight on December 31, 2005, and will...