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Collin County v. City of McKinney

Court of Appeals of Texas, Fifth District, Dallas

May 10, 2018

COLLIN COUNTY, TEXAS, Appellant/Cross-Appellee
v.
THE CITY OF MCKINNEY, TEXAS, Appellee/Cross-Appellant
v.
CUSTER STORAGE CENTER, LLC, Appellee

          On Appeal from the 401st Judicial District Court Collin County, Texas Trial Court Cause No. 401-03649-2015

          Before Chief Justice Wright, Justice Lang, and Justice Stoddart Opinion by Justice Stoddart

          OPINION

          CRAIG STODDART JUSTICE

         The primary issue in this appeal is whether the City of McKinney, Texas, a home-rule municipality, has authority to enforce its building codes and platting requirements within its extraterritorial jurisdiction. Based on the facts in this appeal, Collin County, Texas, and Custer Storage Center, LLC argue that it does not. We conclude the City of McKinney lacks authority to enforce its building codes and related building inspection requirements within its extraterritorial jurisdiction, but it has authority to require a landowner to plat its property. We affirm the trial court's judgment in part, reverse the judgment in part, modify the judgment in part, render the judgment the trial court should have rendered, and remand the issue of attorney's fees for further proceedings.

         Background

         A. Factual Background

         The City of McKinney ("City") is a home-rule municipality. In 2002, the City and Collin County ("County") entered into an agreement titled City-County Approval Agreement, which was made pursuant to House Bill 1445 ("1445 Agreement").[1] The agreement states H.B. 1445 required the City and County to identify which governmental entity was authorized "to regulate subdivision plats and approve related permits" in the City's extraterritorial jurisdiction ("ETJ"). [2] Through the 1445 Agreement, the parties granted the City exclusive jurisdiction to regulate subdivision plats and approve related permits for property in the City's ETJ and authorized the City Secretary to accept plat applications, collect plat application fees, and respond to applicants with the approval or denial of the plat application for tracts of land located in the City's ETJ.

         Custer Storage Center, LLC ("Custer") owns land located in the County and within the City's ETJ. Custer developed the land and now operates a self-storage facility. As part of the development, the property was not subdivided or platted. Custer acquired building permits from the County[3] but did not seek or acquire such permits from the City. When the City became aware of Custer's construction project, it instructed Custer to obtain City building permits. After Custer failed to do so, the City filed this lawsuit seeking declaratory relief and a permanent injunction. The City requested the court declare, among other things, that Custer was required to obtain plat approval and building permits from the City but refused to do so. The City asked for a permanent injunction requiring Custer to correct violations at its property within a reasonable amount of time and enjoining the County from issuing building permits for development occurring in the City's ETJ. In response, Custer sought a declaratory judgment that, among other things, the City lacked authority to require development permits for property in its ETJ and Custer was not required to obtain plat approval from the City. Custer also sought a permanent injunction enjoining the City from taking any action to require Custer to obtain plat and building permit approval. The County did not assert any causes of action.

         B. Summary Judgment Proceedings

         Each party filed a motion for summary judgment. The County argued the City lacks authority to impose its regulatory power over building construction in the City's ETJ and the permits issued by the County to Custer were lawful. The City filed a motion for partial summary judgment seeking a declaration that the City has lawful authority-to the exclusion of the County-to require landowners developing property in its ETJ to obtain building permits, inspections and approvals, and pay related fees[4] to the City and Custer was required, but failed, to obtain City building permits in order to lawfully develop its self-storage facility on a property in the City's ETJ. Custer argued, among other things, the City lacked authority to require building permits for property being developed in its ETJ and Custer was not required to obtain plat approval from the City. All parties sought to recover their attorney's fees.

         Following a hearing, the trial court granted and denied each party's motion in part. In its judgment, the trial court concluded that the City's and County's respective authority to enforce platting and building permit requirements for property in the City's ETJ is determined based on whether a property is subdivided. The trial court's final judgment states in part:

The Court finds that the City has the lawful authority to require landowners developing property located in the City's ETJ to obtain building permits, inspections and approvals, and pay related fees in those instances, but only in those instances, where the property at issue is subdivided and lawfully required to obtain plat approval from the City. In those instances where the property at issue is not subdivided and [not] lawfully required to obtain plat approval from the City, the City lacks the lawful authority to require landowners developing property located in the City's ETJ to obtain building permits, inspections and approvals, and pay related fees.

         The trial court found the 1445 Agreement is valid and enforceable and the County ceded all platting, inspection, and building code authority in the ETJ to the City as to properties that are subdivided, but did not do so as to properties that are not subdivided.

         The court concluded Custer was not required to obtain plat approval or building permits from the City because its property was not subdivided. The trial court declared Custer legally developed its property pursuant to the permits issued by the County and those permits were lawful, valid, and within the statutory authority granted to the County.

         The trial court awarded attorney's fees to Custer but ordered the City and County bear their own attorney's fees and costs. This appeal followed.

         Issues on Appeal

         The County argues two issues in this appeal: the trial court erred by concluding the City has the lawful authority to require landowners developing property located in the City's ETJ to obtain building permits in those instances where the property at issue is subdivided and the trial court abused its discretion by failing to award attorney's fees to the County. Custer, which asserts no separate issues on appeal, agrees the City lacks authority to require building permits for property in the City's ETJ. In its cross-appeal, the City argues it has authority to require City building permits for all property developed in its ETJ; Custer was required, but failed to, obtain City building permits and obtain plat approval from the City to lawfully develop its self-storage facility; and the trial court abused its discretion by awarding attorney's fees to Custer.

         Law & Analysis

         A. ...


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