On January 27, 2012, the Texas Supreme Court withdrew its prior opinion and issued a new opinion in City of Dallas v. Stewart, 2012 WL 247966, ––– S.W.3d –––– (Tex. 2012). In its prior decision on July 1, 2011, the Texas Supreme Court upheld the jury’s award of $ 75,000 in a case where Stewart argued that the city improperly took and demolished her house. Stewart had previously fought and lost the demolition order in the municipal board meetings, and she then timely appealed the decision to state district court, where she prevailed and was awarded damages.
The city appealed the trial court’s decision, and this case eventually made it to the Texas Supreme Court. In July 2011, the Texas Supreme Court issued its opinion affirming the underlying court’s decision.
However, the city was concerned that the Texas Supreme Court’s July 1, 2011 decision would potentially open the door for many persons to bring similar takings cases against cities all over Texas, and therefore filed a motion for new hearing. Chief Justice Jefferson wrote: “[The cities] argue that failing to accord administrative nuisance determinations preclusive effect will open the floodgates for takings claims. Because takings claims have a ten-year statute of limitations, they contend, parties will now sue to challenge demolitions that occurred any time in the past ten years.”
The Texas Supreme Court denied the motions for new hearings, but issued a new opinion. In its new opinion, the Texas Supreme Court expressly stated that property owners must exhaust all administrative remedies and timely appeal any adverse decision to the proper court within the 30-day window set by the municipality and be subject to paying the municipality’s legal fees and court costs if they lose. The Texas Supreme Court further held that cities do not have to institute court proceedings to abate every nuisance—rather, “they only must defend the appeals of nuisance determinations and takings claims asserted in court by property owners who lost before the agency.”
Therefore, under this recent ruling, the cities would not be subject to liability for alleged takings claims by property owners who failed to exhaust their administrative remedies and failed to file an appeal to state district court. This decision should provide additional clarification and protection for cities and municipalities who follow the proper procedures in condemnation matters and not expose them to liability for those matters whose appellate time tables have long since expired.