Lee v. WHISPERING OAKS HOME OWNERS'ASS'N

Citations: 797 F. Supp. 2d 740; 2011 U.S. Dist. LEXIS 67080; 2011 WL 2518927Docket: 2:11-mj-00064

Court: District Court, W.D. Texas; June 23, 2011; Federal District Court

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Plaintiffs Ted D. Lee and Jerelene W. Lee filed a lawsuit against multiple defendants, including the Whispering Oaks Homeowners' Association and various city officials, following the denial of their rezoning application for five lots they purchased in the Beverly Hills Subdivision. Initially, the plaintiffs intended to develop high-end homes but were forced to reassess their plans due to a housing market collapse. On May 30, 2008, they sought to rezone the properties from R-20 to R-6, aligning with adjacent lots. 

The complaint alleges that neighboring landowners, including Makowski, Saks, and Garcia, opposed the rezoning efforts after the plaintiffs asserted control over the disputed property and erected a fence. Garcia is accused of disseminating false information online, claiming the plaintiffs intended to build up to thirty homes, and of pressuring neighbors to oppose the rezoning. Furthermore, Ted Lee claims that Defendant Higbie stated he would influence the zoning outcome before any official vote, suggesting political manipulation through campaign contributions from Higbie's attorney, Kaufman, to former councilperson Cibrian. The allegations highlight a coordinated effort by the defendants to thwart the plaintiffs' rezoning application, citing potential conflicts of interest and improper influence in the zoning process.

Plaintiffs claim that a neighborhood meeting, requested by Defendant Cibrian, escalated into an aggressive effort to pressure them into abandoning their zoning request. Defendant Northside Neighborhood for Organized Development, represented by President Chuck Saxer, opposed any density increases and has actively contested the rezoning at both the Zoning Commission and City Council. The Vance Jackson Neighborhood Association also opposed the request. Plaintiffs allege that Cibrian influenced City staff, leading to their opposition based on the false assertion that the zoning request was "out of character" with the neighborhood, despite it matching the existing R-6 zoning. Cibrian is accused of controlling the Zoning Commission through her appointed Commissioner, Ramiro Valadez, III, who consistently voted according to her preferences. During the City Council meeting on February 19, 2009, the neighborhood, led by Defendant Garcia, strongly opposed the zoning request, which was ultimately rejected due to Cibrian's influence as the district councilperson. Plaintiffs assert that Cibrian's opposition was motivated by financial contributions from Defendant Kaufman, her electoral ambitions, and the potential for gaining votes by siding against the zoning request, rather than the merits of the proposal. Additionally, Defendant Whispering Oaks allegedly endorsed the actions of Defendants Garcia, Makowski, and Saks in representing their interests. After the council meeting, attorney William Chenault, a resident of Whispering Oaks, offered assistance for future zoning attempts, while Councilperson Reed Williams later informed Plaintiffs that he would oppose any rezoning requests based on the Whispering Oaks Neighborhood Association's desires. Plaintiffs allege that Chenault misused information from their discussions when they sought his representation, adversely affecting their position.

The Original Complaint included five counts: 1) denial of substantive due process due to a zoning request denial; 2) violation of constitutional rights related to the Due Process clauses of the 5th and 14th Amendments, claiming deprivation of property use and enjoyment without due process; 3) civil conspiracy to deny substantive due process, civil rights, and equal protection, restricting Plaintiffs' enjoyment and development of the Subject Property; 4) excessive tax evaluation for Lots 1-5, requesting reduction to levels similar to undeveloped ranch land or farms if other relief is denied; and 5) breach of fiduciary duty against Defendant Chenault. Multiple defendants filed various motions, including motions for a more definite statement and motions to dismiss. Plaintiffs responded and sought leave to amend their complaint to clarify allegations against state and private defendants, which was granted by the Court.

In the Amended Complaint, Count I, titled "denial of due process," is directed solely at Defendants Cibrian and the City of San Antonio, alleging that the denial of the zoning request constituted a violation of substantive due process rights and that the zoning regulations were arbitrary and capricious. Count II, labeled "violation of constitutional rights," does not specify defendants and claims that actions by defendants breach Plaintiffs' constitutional rights under the 5th and 14th Amendments, depriving them of property use without due process. It lacks further specificity and overlaps with Count I, while suggesting a takings claim under the Fifth Amendment due to the denial of rezoning affecting the Subject Property.

The document outlines various legal claims made by the Plaintiffs regarding their property rights and the actions of the Defendants. The Plaintiffs seek a declaration asserting that the Defendants have intentionally taken or damaged their property rights without adequate compensation. They clarify that Counts I and II target the City of San Antonio and Cibrian directly, while claims against other individual defendants are based on conspiracy allegations. Count II appears to assert a takings claim against the City and Cibrian but fails to specify any additional claims.

Count III, titled "civil conspiracy," alleges that the Defendants conspired to deny the Plaintiffs their civil rights and substantive due process, involving actions under color of law by Cibrian and the City. This count includes conspiracy claims under both 42 U.S.C. § 1983 and § 1985(3), targeting private actors. Count IV addresses a breach of fiduciary duty solely against Defendant Chenault, with no claims related to property tax appraisals.

Count I includes a substantive due process claim against the City and Cibrian, arguing that zoning regulations have deprived Plaintiffs of their property rights and the ability to use and develop their property. Defendants WOHA, Higbie, and Kaufman contest this by asserting that Plaintiffs have not demonstrated a legitimate entitlement to rezoning, thus failing to establish a protected property or liberty interest. Plaintiffs counter by citing Supreme Court precedents that recognize a right to be free from arbitrary zoning actions, arguing that substantive due process claims can arise from irrational or unreasonable regulations, not just total deprivation of property use. It is noted that substantive due process violations occur when the government unjustly deprives an individual of a protected interest.

Property interests are defined not by the Constitution but by state law and existing rules that establish entitlements to certain benefits. In Brennan v. Stewart, the court noted that zoning denials could implicate due process rights. Citing City of Cuyahoga Falls v. Buckeye Community Hope Foundation, the plaintiffs argued that a landowner had a legitimate entitlement to building permits based on compliance with zoning regulations and city council approval. However, the Supreme Court did not determine if a property interest existed, concluding the city engineer's actions were not egregious or arbitrary. Therefore, this case does not substantiate the existence of a protected property interest.

The plaintiffs also referenced Village of Arlington Heights v. Metropolitan Housing Development Corp., where the Supreme Court recognized a developer's right to be free from arbitrary zoning decisions. The Court affirmed the developer’s standing without addressing the need for a protected property interest. Some circuit courts interpreted this as affirming a substantive due process right against arbitrary zoning actions, while others, like Andreano v. City of Westlake, suggested applying an entitlement test. The Third Circuit also acknowledged that land-use decisions can affect property enjoyment, allowing for substantive due process claims when such decisions are alleged to be arbitrary or capricious.

Circuit court decisions have applied a strict entitlement approach in land-use cases. In *Yale Auto Parts, Inc. v. Johnson*, the Second Circuit evaluated whether a landowner had a "legitimate claim of entitlement" to a permit for an automobile junkyard, establishing that the application would likely be granted absent due process violations. A later Second Circuit decision questioned the application of the Roth entitlement test in land regulation cases, suggesting a shift towards recognizing the inherent property interests of landowners under substantive due process. Justice Stevens asserted that the right to apply for zoning amendments is a property ownership aspect protected by the Fourteenth Amendment.

In the Fifth Circuit case *Shelton v. City of College Station*, a city ordinance required a specific off-street parking provision for businesses. After a denied variance request for a pool hall, the plaintiffs argued that similar businesses received variances, infringing on their substantive due process rights. Although Texas law allowed for judicial review of zoning board denials, the plaintiffs did not pursue state court relief and directly filed a lawsuit. The Fifth Circuit noted that Texas law supports an aggrieved property owner's right to seek judicial remedy against arbitrary zoning actions. Initially, the court recognized this right as a legitimate property interest, implicating due process violations. However, after rehearing en banc, the Fifth Circuit ultimately upheld the district court's summary judgment against the plaintiffs' substantive due process claim.

The Court reiterated that a claim for denial of due process necessitates a deprivation by the state of a protected interest in life, liberty, or property. The case centers on Shelton and Jones, who asserted a property interest under state law to seek a variance from a valid use restriction pertaining to their real estate on University Drive. The Court noted uncertainty over whether the state had deprived Shelton and Jones of this property right, particularly since they did not contest the underlying ordinance or the restriction itself. The state provided a mechanism for seeking a variance, including judicial review, which Shelton and Jones bypassed, potentially undermining their claim of deprivation.

Shelton and Jones contended that the refusal of their variance requests arbitrarily deprived them not only of the right to seek a variance but also of their property's use. The Court determined that the Zoning Board had a rational basis for its zoning decision and chose not to define the property right in question or assess whether a deprivation occurred. The Fifth Circuit previously identified similar issues in Hill v. City of Seven Points, noting that a property interest may not exist if a landowner does not utilize available state remedies. The Court observed that while defendants claimed Hill lacked a property interest due to the Board's discretionary power, the issue of forfeiture was not raised.

The Fifth Circuit has suggested that a substantive due process claim could be barred if plaintiffs fail to utilize available state remedies, although it has not definitively decided this. Shelton and Jones did not assert that they sought state court remedies. The question of a broader right to property use and enjoyment remains unresolved in the Circuit. For the purposes of this Order, the Court will assume that the plaintiffs have stated a protected interest. A substantive due process claim requires both a deprivation of this interest and a demonstration that the deprivation was arbitrary. Defendants argued that the plaintiffs failed to provide factual allegations suggesting the denial of rezoning lacked a rational basis. Zoning decisions are treated as legislative acts and are reviewed under the same constitutional standards as state statutes.

Zoning decisions are subjected to the same constitutional standards as state statutes, as established in Jackson Court Condominiums v. City of New Orleans. The Fifth Circuit's ruling in South Gwinnett Venture v. Pruitt emphasized that local zoning is a quasi-legislative function, not subject to federal judicial review unless arbitrary action is demonstrated. The court stated that zoning commissions do not need to provide findings of fact or reasons for their decisions and are presumed valid unless proven arbitrary or capricious. Challenges to zoning decisions face a stringent rational basis review, requiring plaintiffs to show that the governmental classification could not reasonably be believed by decision-makers. The court's inquiry is limited to whether there is a conceivable factual basis for the decision. The legislative model applied to zoning decisions means that evidence of improper motives does not invalidate those actions if a rational basis can be hypothesized. The court can entertain a rational basis analysis at the motion-to-dismiss stage, depending on the facts presented by the plaintiff and other relevant factors. It noted that exploring the true motives behind official actions through discovery may be inefficient and unnecessary when the truth is not in question.

A motion to dismiss may be appropriate for assessing the validity of a plaintiff's claim, particularly when the legitimacy of a state action is evident upon brief reflection. The Seventh Circuit indicates that in cases subject to rational basis review, a plaintiff must present facts that counter the presumption of rationality of the government's actions to survive a motion to dismiss. Allegations of animus do not negate this presumption unless the plaintiff first demonstrates an absence of any rational basis for the government's decision. The court can still identify a rational basis even when improper motives are alleged, such as those attributed to Councilperson Cibrian regarding a rezoning denial. The plaintiffs must provide evidence showing that the denial lacked any conceivable rational basis, which they have failed to do. Previous rulings affirm that considering neighborhood opposition in zoning decisions typically aligns with maintaining a rational basis, as demonstrated in cases where council members' responsiveness to constituents does not undermine the merits of zoning plans. The Constitution allows government actions to reflect public sentiment and does not prohibit yielding to community opposition in zoning matters.

Town officials' motivations based on local interests that oppose the plaintiffs' rezoning plan do not constitute a claim for denial of substantive due process. Allegations of local opposition fail to show that the denial of rezoning lacked a rational basis and are viewed as typical zoning disputes, where courts can easily identify legitimate purposes for such decisions. Common justifications in zoning cases, including traffic, safety, and quality of life concerns, support the denial of the rezoning request. An email from Defendant Garcia outlines several justifiable reasons for opposing the rezoning, such as potential negative impacts on property values, flooding risks from increased impervious cover, and traffic dangers at a busy intersection. The plaintiffs did not provide sufficient facts to demonstrate a lack of rational basis for the denial, and further examination of the city's decision would improperly expand the court's role beyond that of a zoning board.

Regarding the civil conspiracy claims, it remains unclear if the plaintiffs are asserting them under both 42 U.S.C. § 1983 and § 1985(3) or solely under § 1985(3). The plaintiffs indicated in their response that they are pursuing only § 1985(3) claims against non-state actors for conspiring to deny their substantive due process and equal protection rights. However, the Amended Complaint implies conspiracy under both statutes. Defendants Makowski and Cibrian moved to dismiss the § 1985(3) claims due to the plaintiffs' failure to allege any class-based discriminatory animus. Plaintiffs counter that intentional and arbitrary discrimination against a "class of one" suffices. Nevertheless, under § 1985(3), the plaintiffs must demonstrate a conspiratorial intent to deprive them of equal protection, which they assert in their Amended Complaint.

Two or more individuals conspiring to deprive others of equal protection under the law or to hinder state authorities in providing such protection are subject to legal action. This includes preventing citizens from voting through intimidation or injury. If any conspirator's actions result in injury or deprivation of rights, the affected party can seek damages from the conspirators. The Supreme Court, in Griffin v. Breckenridge, established that proving a violation of section 1985(3) requires demonstrating that the conspiracy involved some form of racial or class-based discriminatory intent. Subsequent cases reaffirm that conspiracies must interfere with rights protected from both private and official encroachments. Plaintiffs must show discriminatory animus to sustain a claim under section 1985(3); failure to allege such discrimination results in claims being dismissed. Additionally, to pursue a conspiracy claim under section 1983, plaintiffs must allege a violation of constitutional rights committed by individuals acting under state law.

To establish liability for private defendants under a Section 1983 claim, there must be evidence of a conspiracy with state actors to violate constitutional rights. This requires an agreement to commit an illegal act and a violation of the plaintiff's rights. Plaintiffs must allege specific facts demonstrating this agreement. The substantive due process conspiracy claim fails if there is no constitutional violation, as conspiracy claims cannot stand alone without an actual violation of Section 1983. In this case, the plaintiffs did not demonstrate an agreement between private and public actors to commit an illegal act. Opposition to rezoning, even if motivated by self-interest, is not illegal. The only potentially illegal act mentioned was Higbie's suggestion of controlling the outcome and hiring Kaufman for political pressure, but the plaintiffs did not claim that Cibrian agreed to this. Consequently, the court dismisses the Section 1983 conspiracy claim for lack of sufficient allegations.

Additionally, regarding ripeness concerns, any takings claim against the City (and possibly Cibrian) is deemed unripe because the plaintiffs did not seek "just compensation" through state-court procedures. Although Williamson County's ripeness requirements are no longer strictly jurisdictional, they may still be prudential. The court notes the need for a careful analysis of whether a substantive due process claim overlaps with takings claims and clarifies that a substantive due process claim framed solely as a takings claim is not ripe for adjudication.

City officials denied a land development permit to Sandy Creek, which contended that the denial violated state law and city ordinances, claiming the permit met all requirements. Sandy Creek argued that the officials acted arbitrarily and capriciously, violating its Fourteenth Amendment rights by denying its property use and development. The Fifth Circuit concluded that Sandy Creek's complaint was framed solely as a takings claim, with no viable due process claims for the district court to consider. The court determined that substantive due process claims related to the interference with property rights might survive a takings analysis if the interference was arbitrary. However, since the county did not attempt to constitutionally "take" the property or condemn it, the claim was not one of takings but rather a substantive due process claim. The court found ambiguity in the plaintiffs' allegations regarding their claims, leading to the dismissal of substantive due process takings claims as unripe and interference claims for failure to state a claim.

Additionally, various motions for more definite statements by defendants Higbie and Kaufman, along with V.J. Neighborhood, were deemed moot due to the plaintiffs' complaints not requiring further specification. WOHA's motion to dismiss based on insufficient service of process was also found moot, as plaintiffs provided the necessary documentation. WOHA further argued that the plaintiffs did not state a substantive due process claim, as they failed to demonstrate a deprivation of a constitutionally protected right or that the rezoning denial lacked a rational basis.

WOHA's motion to dismiss the conspiracy claim is granted due to Plaintiffs' failure to demonstrate a constitutional right deprivation and a lack of factual allegations regarding an agreement. An alternative motion for a more definite statement is deemed moot. Makowski’s motion to dismiss the conspiracy claim is granted, as it argues that Plaintiffs did not establish state action or provide sufficient facts to support an agreement, and the 1985(3) claim is dismissed for lack of racial or class-based discrimination. Makowski's request for attorney's fees is denied. NNOD's motion to dismiss the conspiracy claims is granted, and its request for a more definite statement is moot. Higbie and Kaufman's motion to dismiss, citing lack of subject matter jurisdiction and failure to state a due process claim, is partly granted regarding the substantive due process and conspiracy claims but denied concerning subject matter jurisdiction and abstention. Cibrian's motion to dismiss based on absolute legislative immunity is granted; the Court finds her actions were legislative in nature, aligning with Fifth Circuit precedents, despite Plaintiffs' contention that her actions were not general policy-making.

The degree of immunity granted to officials is determined by the nature of their official functions rather than their status as legislators. Legislative immunity applies to officials performing legislative duties, even if they are not formally recognized as legislators. Absolute immunity is limited to actions that are functionally legislative rather than all actions undertaken by a legislator. The court in Hughes v. Tarrant County Texas established tests to distinguish between legislative and administrative actions, focusing on the nature of the facts involved and the specific impact of the state action. A decision based on "legislative facts" or that establishes a general policy is considered legislative, while decisions affecting specific individuals are deemed administrative. In Bryan, the court concluded that a mayor's veto of site and development plans was an enforcement action based on particular facts, thus not qualifying for absolute legislative immunity. Although Bryan was not a zoning case, it distinguished itself from prior cases like Hernandez v. City of Lafayette, where a mayor's veto of a general zoning ordinance was protected by legislative immunity due to its broad community impact. The court also referenced Calhoun v. St. Bernard Parish, noting that spot zoning remains a prospective amendment to a larger plan and is therefore legislative, unlike the specific vetoes in Bryan.

The excerpt addresses the legal principles surrounding zoning decisions and legislative immunity, highlighting relevant case law, including South Gwinnett Venture v. Pruitt and Weingarten Realty Investors v. Silvia. It asserts that the denial of rezoning requests constitutes a legislative act, thereby granting the decision-makers legislative immunity. In Weingarten's case, after a public hearing where opposition was expressed, the City Council initially denied the rezoning application but later approved it with restrictive conditions. Weingarten contended that the Council's actions were administrative, not legislative, by specifically targeting its application rather than establishing general zoning policy. However, the court concluded that zoning decisions are inherently legislative and protected by immunity. Consequently, the court granted Defendant Cibrian's motion to dismiss the Section 1983 claims on the basis of absolute legislative immunity, and the conspiracy claims under Section 1985(3) were also dismissed. The court dismissed Count II, the takings claim, as unripe, and Count I, the substantive due process claim, was dismissed without prejudice for failing to state a claim and because of legislative immunity concerning Defendant Cibrian. The dismissal allows Plaintiffs to seek any available state remedies.

Count III, the conspiracy claim, has been dismissed for failing to state a valid claim. Count IV, a state-law claim against Defendant Chenault, is dismissed without prejudice, allowing for discretion in dismissing state-law claims after federal claims are resolved. Chenault's motion to dismiss is rendered moot, as is the motion to disqualify Counsel Ted Lee due to potential witness conflicts. All other pending motions have been addressed as previously discussed. The order concludes all claims and parties involved, prompting the issuance of a final judgment under Rule 58, and the Clerk's office is instructed to close the case.

Key notes include that Plaintiffs clarified Count I pertains only to the City and Defendant Cibrian, yet other Defendants may still contest it based on alleged conspiracy. The Plaintiffs’ assertion regarding the impact of rezoning denial on property value is ambiguous, and the Seventh Circuit's precedent requires showing either a separate constitutional violation or inadequate state law remedies for substantive due process claims related to property interests. Additionally, the Fifth Circuit's discussion on legislative immunity concerning rezoning denials is relevant. The case references the need for a rational basis for zoning decisions and notes a lack of stated reasons for the City's denial of rezoning. If a conspiracy claim regarding unconstitutional taking is implied, it is determined not to be ripe. Lastly, any potential claims under the Texas Constitution do not meet the Williamson County requirements when pursued in federal court.