Rancho De Los Arboles LLC and Ellen Eakin v. Town of Cross Roads, TX

Summary

The Texas Court of Appeals considered an appeal from the dismissal with prejudice of claims challenging the Town of Cross Roads’s zoning restrictions on short-term rentals in single-family residential districts. The court held that the town failed to establish that the appellants had not exhausted administrative remedies and that some claims were inadequately pleaded but potentially curable. It affirmed in part, reversed in part, and remanded to allow the appellants an opportunity to replead.

Holdings

1. The Town did not establish that Rancho failed to exhaust administrative remedies because the 2022 enforcement letter did not identify or constitute an appealable enforcement decision by a municipal official.
2. Rancho did not sufficiently plead a vested property right to operate the property as a short-term rental, but the defect was not shown to be incurable; therefore, dismissal with prejudice was improper and Rancho must be allowed to replead.
3. Rancho's substantive ultra vires claim against the Town was incurably deficient because an ultra vires claim must be brought against the responsible government official in the official capacity, not against the governmental entity itself.
4. Rancho failed to meet its pleading burden under the three-factor retroactivity framework, but the defect was not shown to be incurable; dismissal with prejudice was therefore improper and Rancho must be allowed to replead.
5. Rancho waived its disparate-treatment appellate complaint by failing to provide record citations, substantive analysis, or an allegation of trial-court error.
6. The trial court properly dismissed Rancho's claim seeking a declaration that short-term rentals were permitted under the ordinance because the claim sought interpretation rather than invalidation of the ordinance, and the Uniform Declaratory Judgments Act did not waive governmental immunity for that claim.
7. The trial court properly dismissed Rancho's request to enjoin enforcement of the ordinance because Rancho did not plead irreparable injury to vested property rights and could not estop the Town from exercising its governmental zoning function based merely on prior nonenforcement.

Questions Presented

1. Whether Rancho failed to exhaust administrative remedies by not appealing an enforcement action to the Town's board of adjustment.
2. Whether governmental immunity barred Rancho's declaratory and injunctive claims.
3. Whether Rancho sufficiently pleaded a due-process claim based on deprivation of a vested property right and, if not, whether it should have been allowed to replead.
4. Whether Rancho pleaded a viable ultra vires claim against the Town itself.
5. Whether Rancho sufficiently pleaded an unconstitutional-retroactivity claim and whether it should have been allowed to replead.
6. Whether Rancho waived its disparate-treatment claim through inadequate briefing.
7. Whether the Uniform Declaratory Judgments Act waived immunity for a claim seeking interpretation of the zoning ordinance rather than a declaration of invalidity.
8. Whether Rancho pleaded a sufficient basis for equitable relief enjoining criminal enforcement of the zoning ordinance.

Disposition

reversed_and_remanded