The City of Dallas v. Millwee-Jackson Joint Venture

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THE CITY OF DALLAS, Appellant v. MILLWEE-JACKSON JOINT VENTURE AND STEPHEN M. MILLWEE, Appellees

No. 05-20-00611-CV

Court of Appeals of Texas, Fifth District, Dallas

February 8, 2023

On Appeal from the 95th District Court Dallas County, Texas Trial Court Cause No. DC-04-07287-D

Before Justices Pedersen, III, Goldstein, and Smith

MEMORANDUM OPINION

BILL PEDERSEN, III JUSTICE

This is the third appeal in a long-running dispute between the City of Dallas and landowners Millwee-Jackson Joint Venture and Stephen M. Millwee (together, Millwee) concerning whether the City-through its own development-has foreclosed development of Millwee's land (the Property). The trial court concluded that the City had done so and signed a judgment that allowed the City to choose between reopening and maintaining a street it had abandoned and compensating Millwee for the taking of his property rights caused by the street closure. In this Court, the City challenges (1) the trial court's subject matter jurisdiction to enter such an injunction, (2) the legal basis for the injunction and (3) a declaratory judgment concluding that the boundaries drawn in a 2001 FEMA 100-year floodplain apply to the Property. In his cross-appeal, Millwee argues the trial court erroneously denied his claim for inverse condemnation based on a regulatory taking of his Property by the City. We affirm the trial court's judgment.

Background

In 1981, Millwee purchased the Property from Chicago Rock Island and Pacific Railroad Company when the railroad was in bankruptcy. The tract contained approximately 2.5 acres, and was bordered in part by Interstate 35, the City-owned Stemmons Park, and railroad property; Turtle Creek lies between the Property and the park to the west. An easement from the railroad allowed Millwee access to the Property running under the nearby railroad bridge to the east and connecting with Alamo Street. A portion of the Property lies in the 100-year floodplain, including that original easement. The only structures on the Property since its purchase have been billboards.

When Millwee purchased the Property, Alamo Street ran south from Oak Lawn Avenue down through Stemmons Park, continued under the railroad tracks, and then came back toward the south extending all the way to downtown at the Woodall Rogers Freeway. Alamo Street was an open public street for at least thirty years. It carried a significant amount of traffic and, up until 2002, evidence suggested that it was well maintained by the City. Surveys performed by the City before and after Millwee's purchase establish that his Property abutted Alamo Street.

Millwee always planned to develop the Property commercially beyond its use for billboards; he planned to build a hotel or an office building on the site. City regulations required such a development to have two access points for safety considerations. Millwee's efforts to create that second access underlie many of his dealings with the City over the years and most of the issues in this litigation.

Relatively early in the process, the parties appear to have agreed that the only plausible solution for a second access was to build a bridge from Millwee's Property over Turtle Creek to Alamo Street, which in turn connected to Oak Lawn Avenue. Millwee sought approval from the City to build such a bridge. In 1983, Millwee submitted his Final Plat of the Property to the City. The plat showed the location of his Property, the 100-year floodplain line, detailed water and sewer plans, and the proposed bridge. The plat also included a note that stated:

EXISTING ACCESS IS PROVDED BY DEED FROM THE RAIL ROAD COMPANY UNDER THE EXISTING BRIDGE. THE CITY OF DALLAS PUBLIC WORKS DEPARTMENT WILL REVIEW ANY PLANS FOR ADDITION[AL] ACCESS UPON FURTHER DEVELOPMENT.

There is no question that planning for the bridge continued between the parties. In February 1985, the City sent Millwee a letter that stated the City had held an interdepartmental meeting and identified the actions required for development of the Property. The letter set forth the responsibilities of each party to achieve that goal:

City Responsibilities:

1. Dedicate a 56 foot right-of-way for Alamo Street from the north addition line of the Millwee/Jackson Addition to Oak Lawn Avenue;

2. Abandon those portions of the existing Alamo Street right-of-way no longer necessary for street purposes;

3. Establish a new alignment for Alamo Street;

4. Prepare field notes for the abandonment of Alamo Street;

5. Prepare field notes for the new right-of-way of Alamo Street.

Millwee/Jackson's Responsibilities:

1. Prepare engineering plans, and submit to Private Development for review and approval. Construct Alamo Street as per the approved alignment;

2. Prepare engineering plans, and submit to Private Development for review and approval. Construct the bridge over Turtle Creek. The bridge must extend through the Floodway Management Area;

3. Relocate any landscaping and irrigation system, etc., in the approved Alamo Street alignment to the satisfaction of the Park and Recreation Department; and

4. Provide an area below the new bridge for a hike/bike path. The design and location to be determined by the Park and Recreation Department.

Millwee identifies the 1985 letter as the City's "last official action" with respect to the bridge. On its face, the letter gave at least conditional permission for Millwee to construct a bridge from his property at his own expense.

Millwee began working on engineering and site preparation pursuant to his responsibilities under this 1985 plan. Unfortunately, soon after the proposal was accepted, the economy entered a significant downturn, and development plans were placed on hold.

As development once again became a possibility in Dallas, the City agreed to amend its Thoroughfare Plan, making changes to some seventeen streets in the area of the Property, in order to advance the "Arena Project," i.e., the development of the American Airlines Center and the Victory development close by. As part of the plan, Alamo Street was to be "deleted" from the Dallas North Tollway to Oak Lawn Avenue. During this time period, the City also made an agreement with Dallas Area Rapid Transit (DART) to abandon Alamo Street next to the Property and to convey the City's right of way to DART. The agreement allowed DART to build two sets of railroad tracks and the City to construct a portion of its new roadway, Houston Street.

Beginning in 2002, Alamo Street was demolished to the east of the railroad bridge. It was barricaded and closed from that bridge west to Oak Lawn Avenue. Millwee's easement was removed.^[1] Subsequent construction activities involving the railroad project-which continued through 2007-blocked access to Millwee's Property and physically occupied portions of his Property.^[2] Millwee filed suit against the City and DART in 2004. This Court has heard two appeals in the case, initially reversing a number of summary judgments and the grant of the City's plea to the jurisdiction in Millwee-Jackson Joint Venture v. Dallas Area Rapid Transit, 350 S.W.3d 772, 786 (Tex. App.-Dallas 2011, no pet.) [hereinafter Millwee I], and three years later, affirming the trial court's denial of the City's amended plea in City of Dallas v. Millwee-Jackson Joint Venture, 2014 WL 1413559, No. 05-13-00278-CV (Tex. App.-Dallas, April 4, 2014, pet. denied) (mem. op.) [hereinafter Millwee II]. Millwee non-suited his claims against DART in June 2017.

The case was tried in April 2019. The parties agreed to a bench trial on liability, and the Honorable David Evans conducted the trial. Millwee's live petition included claims for inverse condemnation, for a section 65.015 injunction, and for a declaratory judgment, which had earlier been granted by a partial summary judgment during the pendency of the litigation. Judge Evans issued findings of fact and conclusions of law. His judgment ordered that (1) Millwee take nothing on his inverse condemnation claim, (2) the summary judgment on Millwee's declaratory judgment claim be merged into the final judgment, and (3) Millwee was entitled to relief under his section 65.015 claim. The judgment provided the relief for that third claim as follows:

The Court, therefore, ORDERS, ADJUDGES, DECREES, and PERMANENTLY ENJOINS the City of Dallas to open Alamo Street from Oak Lawn to Houston Street and maintain it as a public street, including at a minimum to asphalt pave Alamo Street in compliance with the City of Dallas's Public Works Construction Standards. The City of Dallas must comply with this injunction within a reasonable time.

SAFE HARBOR PROVISION. Notwithstanding the Court's permanent injunction ordered herein and pursuant to section 65.015 of the practice and remedies code, the Court further ORDERS the City of Dallas will not be in contempt of this Final Judgment, if within a reasonable time instead of opening and paving Alamo Street the City of Dallas commences a condemnation suit to ascertain the Plaintiffs' damages for the abandonment of Alamo Street as prescribed in the Texas Civil Practices and Remedies Code section 65.015.

This appeal and cross-appeal followed.

The City's Appeal

The City raises three issues, challenging the trial court's subject matter jurisdiction to enter a permanent injunction, the trial court's granting of the permanent injunction, and the trial court's granting of a partial summary judgment on Millwee's declaratory judgment claim. We address these issues in turn.

The Permanent Injunction: Subject Matter Jurisdiction

In its first issue, the City argues that Millwee did not have standing to request-and the trial court did not have subject matter jurisdiction to grant-the permanent injunction. The City casts this...