Waterway Ranch, LLC v. City of Annetta

• Decision Date: 22 August 2013
• Docket Number: No. 02–12–00309–CV.,02–12–00309–CV.
• Citation: 411 S.W.3d 667
• Parties: WATERWAY RANCH, LLC, Appellant v. CITY OF ANNETTA, Texas, Appellee.
• Court: Texas Court of Appeals

411 S.W.3d 667

WATERWAY RANCH, LLC, Appellant

v.CITY OF ANNETTA, Texas, Appellee.

No. 02–12–00309–CV.

Court of Appeals of Texas, Fort Worth.

Aug. 22, 2013.

Steven D. Sanfelippo, Steven M. Smith and Christina Wade Perrone, Rose Walker, L.L.P., Dallas, TX, for Appellant.

George A. Staples and Frederick “Fritz” Quast, Taylor, Olson, Adkins, Sralla & Elam. L.L.P., Fort Worth, TX, for Appellee.

PANEL: LIVINGSTON, C.J.; WALKER and MEIER, JJ.

OPINION

TERRIE LIVINGSTON, Chief Justice.

Raising six issues, appellant Waterway Ranch, LLC appeals the trial court's order granting the motion for summary judgment and plea to the jurisdiction filed by appellee City of Annetta, Texas. After the submission of this appeal, appellee filed a motion to dismiss it, contending that it is moot, that appellant lacks standing to maintain the appeal, and that appellant lacks the capacity to maintain the appeal. We deny appellee's motion to dismiss, and we affirm the trial court's judgment.

Background Facts

Appellee is a Type A general law municipality located in Parker County. In March 2011, appellant sued appellee, claiming that through an ordinance passed a month before, appellee had illegally annexed a 40.881–acre vacant tract of land in Parker County that appellant owned at that time. Specifically, appellant pleaded for a declaratory judgment ¹ that appellee's annexation ordinance was void under section 43.028 of the local government code² because appellee “never obtained [appellant's] consent before annexing the [p]roperty” and because the property was a “geographically separate tract that [was] unoccupied.” Along with the declaratory judgment, appellant sought attorney's fees.³

To its original petition, appellant attached a petition requesting annexation that was signed by twelve individuals and that stated in part,

We, the undersigned qualified voters [and] residents residing within the tract of land identified as Exhibit “A” to this Petition, ... do hereby petition the Town of Annetta to annex the area of land identified in Exhibit “[A]” hereto. The signatures contained in this Petition represent the majority of the qualified voters living within the area identified in Exhibit “A”. The area identified within Exhibit “A” is contiguous with the corporate limits of the Town of Annetta and is within the extraterritorial jurisdiction of the Town of Annetta and not within the extra territorial jurisdiction of any other municipality. Attached as Exhibit “B” is an affidavit stating the total number of qualified voters in the area proposed for annexation.

The petition requesting annexation included a map and affidavits attesting that the petition had been signed by a majority of registered voters in the territory subject to Exhibit A.

In answering the suit, appellee contended that section 43.024 of the local government code⁴ authorized the annexation of appellant's property without appellant's consent, and appellee also requested attorney's fees. Appellant eventually amended its petition to assert two additional affirmative claims: another declaratory judgment claim for a declaration that appellant had established a nonconforming use of its property as a manufactured home community prior to annexation and was therefore entitled to continue that use; and an inverse condemnation claim, alleging that the annexation qualified as a regulatory taking by restricting the use of the property and by diminishing its value. In the amended petition, appellant alleged that it had intended to use the property for a manufactured home community, that it had spent several thousand dollars in preparing the property for that purpose, and that neighbors of the property had sought annexation by appellee “in an effort to prohibit the [p]roperty's use as a manufactured home community.” Also, appellant stated in the amended petition that it was in the course of pursuing administrative remedies with appellee to “seek nonconforming prior use designation or to seek compensation for [a] regulatory taking.”

Both sides sought summary judgment, and appellee also filed a plea to the jurisdiction on appellant's nonconforming use and inverse condemnation claims, contending that those claims were not ripe for adjudication. To its motion for summary judgment, appellee attached a petition requesting annexation (which expressed that it contained signatures representing the majority of the qualified voters in the area to be annexed), affidavits from landowners attesting that the signatures on the petition were for the purpose of requesting annexation and that the territory that was annexed was “contiguous and adjacent to the Town of Annetta,” and annexation ordinances 119 and 119–A, which, according to Town Secretary Daina Lawler's affidavit, annexed appellant's property. Both ordinances recited that an affidavit had been filed with appellee “stating the fact that a majority of the qualified voters of an area less than 1/2 mile wide and contiguous to the Town ... [had] voted in favor of becoming a part of the Town pursuant to [section 43.024],” and the ordinances therefore annexed a ninety-seven-acre area (as set forth in exhibits to the ordinances through metes and bounds descriptions of six tracts) into the town.

Sid Whitener, appellant's manager in April 2012, signed an affidavit that appellant attached to its motion for summary judgment. In the affidavit, Whitener swore that appellant's 40.881–acre tract was bordered by Duncan Road on its east side, a creek on its west side, a fifty-acre ranch on its north side, and appellee's city limits on its south side. Whitener stated that there were “no common boundaries between [appellant's property] and the remainder of the other allegedly annexed tracts” and that appellant's property was “a separate and distinct tract of land, different in character than the remainder of the annexed property.” He also swore that appellant's property was vacant and had no residents; that in September 2010, appellant began preparations to use the property as a manufactured home community, including building a septic system; and that it was “well known around Annetta that the [p]roperty was being utilized as a manufactured home community.”

Contrary to the facts contained in Whitener's affidavit, however, Cynthia Waters swore in an affidavit, which appellee attached to a response to appellant's summary judgment motion, that she is familiar with appellant's property's boundaries, that appellant's property bordered the north property line of her property, that appellee's city limits bordered the south property line of her property, and that her property was therefore outside of appellee's city limits before the annexation but was annexed along with appellant's property. Waters's affidavit also stated, “At the time of the annexation three qualified voters, including me and members of my immediate family resided in the area of the Waters property.... All three of us voted to become a part of the City of Annetta.”

In May 2012, the trial court struck some of the summary judgment evidence that appellant had submitted, granted appellee's motion for summary judgment and plea to the jurisdiction, denied appellant's motion for summary judgment, decreed that appellant would “take nothing by its suit,” and awarded attorney's fees for appellee. Appellant filed a motion for reconsideration and a motion for new trial, and after appellee responded to those motions, the trial court denied them. Appellant brought this appeal.

Appellee's Motion to Dismiss This Appeal

After the parties presented their contentions on the merits of this appeal through their briefs and oral arguments, and after this appeal was submitted in January 2013, in March 2013, appellee notified this court that appellant no longer owns the property at issue because it has been foreclosed upon. Appellee provided a foreclosure sale deed establishing that Texas Bank Financial purchased the property.

On March 19, 2013, we sent a letter to appellant to express our concern about the possibility of the appeal becoming moot in light of the foreclosure. On April 1, 2013, appellant responded to our letter, contending that the appeal was not moot because there was a live controversy concerning attorney's fees sought by both parties; ⁵ because appellant could still appeal the dismissal of its inverse condemnation claim since its standing to do so was vested at the time of the taking, when appellant owned the property; and because there was “a pending lawsuit against [appellant] for a deficiency judgment as a result of the foreclosure,” which, according to appellant, could be impacted by our ruling on the annexation issue. On April 15, 2013, appellee filed a motion to dismiss this appeal, arguing, in part, that the issues in the appeal were moot and that appellant could no longer maintain the appeal because it had forfeited its “corporate existence.” Appellant did not respond to appellee's motion to dismiss.

Although appellee has proved that appellant no longer owns the property subject to this appeal because it has been foreclosed upon and that appellant's charter has been forfeited by the secretary of state, for several reasons, precedential and persuasive authority constrains us to deny appellee's motion to dismiss. First, although appellant's lack of ownership of the property subject to the annexation could ordinarily render a similar appeal moot and subject to dismissal,⁶ the supreme court has held that a declaratory judgment appeal does not become moot, despite the elimination of an otherwise justiciable controversy because of events occurring during the appeal, when a party sought attorney's fees in the trial court and continues to seek them on appeal. Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642–43 (Tex.2005) (citing Camarena v. Tex. Emp't Comm'n, 754 S.W.2d 149, 151 (Tex.1988)); see also Hansen v. JP Morgan Chase Bank, N.A., 346 S.W.3d 769, 774–75 (Tex.App.-Dallas 2011, no pet.) (cit...