Filed: 1/5/2017 3:11:30 PM

Lynne Finley
District Clerk
Collin County, Texas
By LeAnne Brazeal Deputy
Envelope ID: 14583697

NO. 401-03649-2015
THE CITY OF MCKINNEY,
TEXAS,
Plaintiff and CounterDefendant,
v.
CUSTER STORAGE CENTER,
LLC,
Defendant and CounterPlaintiff,
and COLLIN COUNTY, TEXAS,
Defendant.

IN THE DISTRICT COURT

OF COLLIN COUNTY, TEXAS

401ST JUDICIAL DISTRICT

.
DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT
COMES NOW Custer Storage Center, LLC ("Custer") and files this Motion for
Summary Judgment as follows:
I.
INTRODUCTION
The City of McKinney illegally wants to control development in its extraterritorial
jurisdiction ("ETJ") by prohibiting Custer's development project. Relying on permits
received from Collin County and representations by the City that it would not require
development permits, Custer purchased land and built self-storage buildings and an
associated office. The City erroneously claims to have exclusive authority to issue
building permits within the ETJ, that Custer was required to obtain permits from the City,

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 1

and that the permits issued to Custer by Collin County are void, and the City seeks
injunctive relief enjoining Collin County from issuing building permits for development
within the ETJ and mandating that Custer correct unspecified violations of the City's
ordinance for buildings that have been fully completed and is now in operation. For the
reasons set forth below, there are no issues of material fact and Custer is entitled to
summary judgment with respect to (i) the City of McKinney's causes of action as to
Custer and (ii) Custer's declaratory judgment counterclaims discussed below.
II.
FACTS
Custer is the owner and developer of an approximate 4.113 acre tract of land
located at Custer Road 800 feet north of U.S. 380 in Collin County, Texas (the
"Property") (Ex. 1, p. 1; Pet. 13). The Property is located within the extraterritorial
jurisdiction of McKinney (the "ETJ") (Pet. 13). The Property was purchased by Custer
for the purpose of development as a multiple unit mini-warehouse facility (the "Project")
(Ex. 1, p. 1; Pet. 18).
Custer representatives met with Collin County (the "County") representatives
several times to discuss development in the ETJ and/or the Project (Ex. 1, p. 1). They
were told that only County development approval was needed for the Project and that a
subdivision plat was not required under the Local Government Code because the Property
was not being subdivided (Ex. 1, p. 2). Custer's representatives also communicated with
City employees to discuss development in McKinney's ETJ.

They were told that

development in the ETJ would be permitted by the County and not the City (Ex. 1, p. 2).

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 2

Custer then proceeded to purchase the Property and obtain numerous permit approvals
from the County without any objection by the City (Ex. 1, p. 2).
The Custer Storage Center site plan attached as Exhibit 1-A was provided to the
County representatives as part of the development application process. Custer filed its
building permit application with the County on or about September 5, 2014, which is
attached as Exhibit 1-B. A building permit application fee in the amount of $13,295.00
was paid to the County (Exhibit 1-C). The County approved a grading permit for the
Project on or about November 20, 2014 (Exhibit 1-D; Pet. 31).

Custer obtained a

TPDES stormwater permit from the Texas Commission on Environmental Quality in

November 2014 (Exhibit 1-E). The Texas Department of Transportation issued a curb
cut permit on or about November 7, 2014 (Exhibit 1-F). Excavation work started on the
Project on or about December 8, 2014 and was substantially complete by February 2015
(Ex. 1, p. 3).
The County issued the building construction permit for the Property on or about
March 6, 2015 (Exhibit 1-G, H). Custer started building structures on the Property on or
about March 25, 2015, after it received all necessary County permit approvals (Ex. 1,
p. 3). The buildings were constructed in accordance with the 2009 Uniform Building
Code (Ex. 1, p. 3). The building and site development has been inspected over 8 times by
County inspectors, including at least two inspections by the County Fire Marshall (Ex. 1,
p. 3).

The County issued the OSSF permit for the Project on March 30, 2016

(Exhibit 1-H). On or about September 14, 2015, Collin County issued the certificate of
occupancy for the Project. A true and correct copy of the certificate of occupancy is

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 3

attached as Exhibit 1-I. The Project opened for business on or about October 29, 2015
(Ex. 1, p. 3).
The City admits that it did not require any new developments in the ETJ to obtain
building permits prior to March 17, 2015 (Ex. 3, pp. 52, 57). The City enacted Ordinance
No. 2015-03-015 on March 17, 2015 ("March 2015 Ordinance") (Exhibit 2-C). Prior to
that date, the City did not have an ordinance which required developers to obtain building
permits for land in the ETJ (Ex. 3, pp. 56, 65).
After Custer had obtained all necessary development permits from the County and
spent approximately $450,000.00 on the Project, the City posted a stop work order on
June 26, 2014 (Ex. 1, p. 4; Pet. 22 & 31). Subsequently, on July 23, 2015, the City sent
the correspondence attached as Exhibit 1-L to Custer withdrawing the stop work order.
The City has not requested a hearing or pursued either a temporary restraining
order or temporary injunction in this case (Ex. 1, p. 4). The City has not issued any
citations or notices of violations of City ordinances, and no municipal court hearings have
been held with respect to the Project and/or the Property (Ex. 1, p. 4).
The City is the retail water provider to the Property (Ex. 1, p. 4), as evidenced by
the City's approved Backflow Prevention Assembly Test and Maintenance Report
(Exhibit 1-L) and the City's approved Irrigation System Build Permit (Exhibit 1-M).
The construction of the Project has been completed. Custer has spent in excess of
$4,000,000.00 to construct the Project. Custer Road in front of the Property is scheduled
for widening. Custer designed the Project to ensure that no project improvements will
need to be taken for the Custer Road widening (Ex. 1, p. 4).

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 4

Custer owns the Property and all of the buildings constructed on the Property in
fee simple. The self-storage units located on the Property are leased on a monthly basis
(Ex. 1, p. 4).
In 2016, Custer received notice that the City was considering including the
Property in the City's Municipal Annexation Plan (Ex. 1, p. 5). This would have allowed
the City to annex the Property. A September 9, 2016 letter from the City states that it is
withdrawing its proposed amendment to the Municipal Annexation Plan (Exhibit 1-P).
III.
SUMMARY JUDGMENT EVIDENCE
A.

The admissions by the City in the First Amended Petition.

B.

Affidavit of Travis Sims attached hereto as Exhibit 1.

C.

Affidavit of Arthur J. Anderson is attached hereto as Exhibit 2.

D.

Portions of the Reporters Record Transcript of the Temporary

Injunction hearing in Arch Resorts v. City of McKinney attached hereto
as Exhibit 3.
IV.
SUMMARY JUDGMENT STANDARD

In a motion for summary judgment case, the issue is whether the movant met his
summary judgment burden by establishing that no genuine issue of material fact exists
and that the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c);
Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002); City of
Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 5

The burden of proof is on the movant, and all doubts about the existence of a
genuine issue of material fact are resolved against the movant. Southwestern Elec. Power
Co., 73 S.W.3d at 215; Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co.,
391 S.W.2d 41, 47 (Tex. 1965).
A party may move for summary judgment on traditional grounds, i.e, that there is
no genuine issue of material fact and that the movant is entitled to judgment as a matter
of law. TEX. R. CIV. P. 166a(c). Summary judgment will be granted for the defendant
movant if the defendant disproves as a matter of law that plaintiff has no cause of action.
Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991). The defendant movant
only has to disprove one element of the plaintiff's cause of action.

Id.; Henkel v.

Norman, 441 S.W.3d 249, 251 (Tex. 2014). Alternatively, a defendant movant is entitled
to summary judgment if the defendant establishes all of the elements of an affirmative
defense.

Randall Food Mkt., Inc. v. Johnson, 801 S.W.2d 640, 641 (Tex. 1995).

Summary judgment will be granted for a plaintiff or counter-plaintiff movant if the

movant establishes as a matter of law each element of its cause of action unless the
defendant presents summary judgment evidence sufficient to raise a genuine issue of
material fact on any element of such cause of action or establishes each element of an
affirmative defense to avoid summary judgment. See Brownlee v. Brownlee, 665 S.W.2d
11, 112 (Tex. 1984); Nichols v. Smith, 507 S.W.2d 518, 520 (Tex. 1974).

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 6

V.
SUMMARY OF THE ARGUMENT
The live affirmative pleadings are the City of McKinney's First Amended Original
Petition for Declaratory Judgment and Permanent Injunctive Relief ("First Amended
Original Petition") and Custer's Second Amended Counterclaim and Request for
Injunctive Relief ("Counterclaim").

The First Amended Original Petition contains

23 separate requests for declaratory relief under Chapter 37 of the Texas Civil Practices
and Remedies Code, a request for attorneys' fees and an application for permanent
injunction. The City's injunction claim is moot, and the court lacks standing to rule on
the City's causes of action in its First Amended Original Petition. In the alternative, all of
the City's requests for declaratory relief should be denied. Accordingly, the City's request
for attorneys' fees and injunctive relief should also be denied.
Defendant's First Amended Counterclaim and Request for Injunctive Relief
("Counterclaim") includes six counts including declaratory judgment claims, a claim for
attorney fees and a claim for a regulatory taking. In the event the court dismisses the
City's lawsuit against Custer, then Custer plans to nonsuit its counterclaims for attorney
fees and regulatory taking.
Custer's declaratory judgment causes of action are summarized as follows:
1.

The City's March 2015 Ordinance extending its building code to the ETJ is

null and void. As a result the City lacked authority to regulate the construction of
buildings on the Property.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 7

2.

Because Custer is not subdividing the Property, Custer is not required to

obtain plat approval from the City.

3.

In the alternative, Custer developed the Property in accordance with legally

valid County permits.

VI.
ARGUMENT AND AUTHORITIES
A.

At least four of the City's 23 causes of action are not appropriate for
disposition under the UDJA.

Four of the City's 23 declaratory judgment requests are not appropriate for
disposition under Chapter 37, Tex. Civ. Prac. & Rem. Code, the Uniform Declaratory
Judgment Act ("UDJA"). According to the UDJA, the City can only request declaratory
relief regarding the construction or validity of a written instrument, statute, ordinance or
contract. Only tangible, concrete disputes should be resolved under the UDJA. Bonham
State Bank v. Beadle, 907 S.W.2d 465 (Tex. 1995).
The following causes of action in the First Amended Petition are not in dispute
and should be dismissed for lack of standing because they do not request the Court to
construe a statute or ordinance:
"f.

Custer Storage's Property was located within the City's

ETJ at the time Custer Storage made development
applications with Collin County.

p.

Custer Storage failed, or refused, to apply to

McKinney for development permits;

q.

Custer Storage has commenced grading, site work,

pre-construction work and/or construction work on the
Property;

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 8

*
u.

Custer Storage received notice of the ordinance and

code violations and failed, or refused, to take
corrective action to remedy violations."

These causes of action are more appropriately included in the factual background
portion of the City's petition. Custer therefore requests that these four causes of action be
dismissed as a matter of law.
B.

The City's lawsuit is moot as to Custer's development project because

the construction project has been completed.

In its First Amended Original Petition, the City pleads causes of action against
Custer and/or the County. The City's causes of action as to Custer's compliance with the
City's building code are moot because Custer's construction project has been completed.
As a result, the City lacks standing and its lawsuit as to Custer must be dismissed.
Standing is a constitutional prerequisite to suit. See Sw. Bel Tel. Co. v. Mktg. on
Hold Inc., 308 S.W.3d 909, 915 (Tex. 2010). A court has no jurisdiction over a claim
made by a plaintiff who lacks standing to assert it. DaimlerChrysler Corp. v. Inman, 252
S.W.3d 299, 304 (Tex. 2008). Thus, if a plaintiff lacks standing to assert one of his
claims, the court lacks jurisdiction over that claim and must dismiss it. See Andrade v.
NAACP of Austin, 345 S.W.3d 1, 14 (Tex. 2011) ("[A] plaintiff must demonstrate
standing for each claim he seeks to press and for each form of relief that is sought."
(quoting Davis v. Fed. Election Comm'n, 554 U.S. 724, 734, 128 S. Ct. 2759, 171
L.Ed.2d 737 (2008))).

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 9

Just as the Texas Constitution bars courts from deciding a case when the plaintiff
lacks standing, Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443-45 (Tex.
193), similarly, a court cannot not decide a case that has become moot during the
pendency of the litigation. Nat'l Collegiate Athletic Ass'n v. Jones, 1 S.W.3d 83, 85 (Tex.
1999). Put simply, a case is moot when the court's action on the merits cannot affect the
parties' rights or interests. VE Corp. v. Ernst & Young, 860 S.W.2d 83, 84 (Tex. 1993)
(per curiam).
A similar situation was addressed in Bayou Liberty Association v. U.S. Army
Corps of Engineers, 217 F.3d 393 (5th Cir. 2000). After the Corps issued a permit to
Walmart and Home Depot, the Bayou Liberty Association ("BLA") filed suit alleging
that the permit was not legally issued. BLA's motion for TRO and preliminary injunction
were denied. Id. at 395. After the retail development was completed, Walmart and
Home Depot filed motions to dismiss as moot.
The Fifth Circuit held that "when a party seeks an injunction to halt a construction
project, the case may become moot when a substantial portion of that project is
completed." Id. at 396. Even if the court were to find in BLA's favor on its declaratory
and injunctive causes of action, the rulings would not have any effect because the
construction project had been completed.
Custer's Project has been completed (Ex. 1, p. 4).

The County has issued a

certificate of occupancy for the Project (Ex. 1, p. 3). There are no further permits needed
for the Project (Ex. 1, p. 4). As a result, Custer cannot be required to obtain a building
permit from the City to construct a building on the Property.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 10

McKinney's First Amended Original Petition contains two requests for injunctive
relief as it relates to Custer.

First, the City requests that "all construction and

development activities at the Property which are inconsistent with the City's regulations
be immediately discontinued." This request for injunctive relief is moot because there
are no on-going construction and development activities on the Property (Ex. 1, p. 4).
Therefore, the City's request for injunctive relief and its associated requests for
declaratory judgment as to on-going construction activities must be dismissed as a matter
of law.
C.

Subdivision ordinance is inapplicable to Project and Property and

cannot support requested injunctive relief.

The City's second request for declaratory relief is for "a permanent injunction
requiring Custer Storage, within a reasonable amount of time, to correct all of the
violations at the Property to the City's full and complete satisfaction."

In its First

Amended Original Petition, the two ordinances that the City alleges are being violated are
the subdivision regulations and the building code. The City claims it has the authority to
enjoin

violations

of

its

subdivision

ordinance

pursuant

to

212.018,

Tex. Loc. Gov't Code. This ordinance does not apply to the Project, however, because
Custer has not subdivided the Property (Ex. 1, p. 4). Custer owns the Property and the
already constructed self-storage buildings in fee simple (Ex. 1, p. 4). Therefore, the
City's request for injunctive relief concerning violations of the statute and ordinances on
platting and the associated requests for declaratory relief must be dismissed as a matter of
law.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 11

D.

The March 15, 2015 Ordinance does not authorize City to pursue
injunctive relief for completed buildings, nor is such relief authorized
by Local Government Code 212.008.

The only remaining City request for curative injunctive relief would concern
alleged building code violations within the already completed buildings. It is undisputed
that the Project was built in conformance with the 2009 Uniform Building Code (Ex. 1,
p. 3). The March 2015 Ordinance does not authorize the City to pursue injunctive relief
to correct alleged building code violations (Ex. 2-C). Under its express terms ordinance
enforcement authority is limited to requiring that new buildings in the ETJ obtain
building permits. Therefore, the City does not have authority under the March 2015
Ordinance to pursue injunctive relief for completed buildings.
It should be noted that the City had ample opportunity to enforce the March 2015
Ordinance. For example it posted a stop work order on the Property on June 26, 2015
(Ex. 1-K). But it lifted and withdrew the stop work order a month later (Ex. 1-L). It
could have pursued a temporary restraining order or temporary injunction to force
compliance and refused to do so (Ex. 1, p. 4). By sitting on its hands, the City has
waived its rights (if any) to pursue enforcement of the March 2015 Ordinance.
Further, injunctive relief as to building code violations is not available pursuant to
212.008, Tex. Loc. Gov't Code.

The Texas Supreme Court so held in Town of

Lakewood Village v. Bizios, 493 S.W.3d 527 (Tex. 2016). According to the Supreme
Court, plats and subdivision regulations apply to horizontal infrastructure construction
while building codes apply to vertical construction of buildings.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 12

Id. at 531-3.

Chapter 212 of the Local Government Code does not provide authority to the City to
pursue injunctive relief as to building code violations. Id.
The only reported appellate opinions holding that a city may pursue injunctive
relief in the ETJ are those involving express statutory authority. An example can be
found in Primary Media, Ltd. v. City of Rockwall, 2011 Tex. App. LEXIS 1993 (Tex.
App.Dallas, March 17, 2011, no pet.). Rockwall sued for an injunction to remove a
billboard installed in its ETJ in violation of city ordinance.

The court of appeals

acknowledged that "Rockwall, as a home rule municipality, is authorized pursuant to

Section 212.902 (of the Local Government Code) to extend its sign ordinances to its
ETJ." Id. at 5. Further, the Court of Appeals noted that the Legislature gave express
authority to "enforce the ordinance within its area of extraterritorial jurisdiction . . .." Id.
In this case, there are no Texas statutes authorizing any Texas city to extend its building
code to the ETJ or to require modifications to completed buildings in the ETJ.
Because the City's claims for injunctive relief are moot, these claims should be
dismissed as a matter of law. The City's declaratory judgment causes of action which
relate to the Project and the Property are moot and should be dismissed. In addition,
because the City cannot show a likelihood of prevailing on the merits at trial, its request
for permanent injunctive relief should be denied. Count 1 of Custer's Counterclaim
contains an Application for Permanent Injunctive Relief to enjoin the City from delaying
or preventing Custer's development of the Project.

Because the Project has been

completed, Custer agrees to nonsuit this cause of action in the event that the City's
lawsuit is dismissed as moot.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 13

The remaining arguments in this Motion are premised on the assumption that the
Court does not dismiss the City's causes of action against Custer. In the alternative,
Custer requests that the Court rule for Custer and against the City on the remaining
causes of action for the reasons set forth below.
E.

Custer has not violated Chapter 212 or the City's subdivision

regulations.

Paragraphs 51(a)-(e), (g), (j), (l), (o) and (r) of the First Amended Original Petition
asks that the Court declare that Custer violated the City's subdivision ordinance. As
discussed hereinabove, these causes of action should be dismissed because Custer has not
subdivided the Property and therefore has not violated the ordinance.
According to Chapter 142 of the City's Code of Ordinances, the subdivision
ordinance was adopted pursuant to Chapter 212, Tex. Loc. Gov't Code. (Ex. 2-G).
Section 142-4 of the Code states that the ordinance applies only to persons who divide a
tract "into two or more parts for the purpose of laying out of any subdivision of any tract
of land or any addition to said city, or for laying out suburban lots or building lots . . ."
There is no such subdivision in this case (Ex. 1, p. 4).

Further, the City has

acknowledged that Custer was not required to obtain plat approval by allowing Custer to
connect to the City's water supply (Ex. 1, p. 4). Because the City's subdivision ordinance
does not apply to Custer and/or the Property, the City's causes of action on platting
should be dismissed. Custer's request in its Counterclaim that the Court declare that
Custer is not required to plat should be granted.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 14

F.

The City lacks authority to require building permits in its ETJ.

Most of the City's remaining causes of action concern the extension of its building
code to the ETJ. Those causes of action include Paragraph 51(b), (c), (d), (e), (g), (p), (r),
(t), (u) and (w). Because the City lacks authority to require building permits in the ETJ,
those causes of action should be dismissed.

Custer's Counterclaim for declaratory

judgment includes Paragraphs 30, 31, 32 and 33 and asks the court to declare that the
City lacks authority to require building permits in the ETJ. Custer's causes of action
should be granted.
1.

Cities may only regulate development in the ETJ pursuant to

legislative authority.

When construing a statute, courts begin with the language. State v. Shumake, 199
S.W.3d 279 (Tex. 2006). If the statute is clear, the court must construe the language
according to its common meanings. Crosstex Energy Servs. LP v. Pro Plus, Inc., 430
S.W.3d 384 (Tex. 2014). The court initially limits its statutory review to the plain
meaning of the text as the sole expression of legislative intent, see State ex rel. State
Dep't of Highways & Pub. Transp. v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002), unless
the Legislature has supplied a different meaning from the context or applying the plain
meaning would lead to absurd results.

Tex. Lottery Comm'n v. First State Bank of

DeQueen, 325 S.W.3d 628, 635 (Tex. 2010).

The statutory authority to extend ordinances to the ETJ was addressed by current
Governor Greg Abbott when he was on the Supreme Court: "(A) city's authority to
regulate land development in its ETJ is wholly derived from a legislative grant of

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 15

authority." FM Props Operating Co. v. City of Austin, 22 S.W.3d 868, 902 (Tex. 2000).
Justice Abbott was joined in his dissenting opinion by current Texas Supreme Court
Chief Justice Nathan Hecht and current justice of the U.S. Court of Appeals for the Fifth
Circuit Priscilla Owen.
A city must have express (or implied when such power is reasonably incident to
those expressly granted) statutory authority to exercise its extraterritorial power. City of
Sweetwater v. Hamner, 259 S.W. 191 (Tex. Civ. App. 1924, error dism'd). Other case
law supports such an interpretation. See City of Austin v. Jamail, 662 S.W.2d 779, 782
(Tex. App.Austin 1983, writ dism'd w.o.j.); City of West Lake Hills v. Westwood Legal
Def. Fund, 598 S.W.2d 681, 686 (Tex. Civ. App.Waco 1989, no writ) (both stating that
generally a city can exercise its police powers only within that city's corporate limits
unless a statute or the Texas Constitution expressly extends its authority).
While zoning and land use designations are generally considered legislative in
character, see City of Pharr v. Tippitt, 616 S.W.2d 173, 175 (Tex. 1981), the City has no
right to legislate land use in its extraterritorial jurisdiction.

212.003(a)(1)

Tex. Loc. Gov't Code (providing that municipality shall not regulate "the use of any
building or property for business, industrial, residential, or other purposes" in its
extraterritorial jurisdiction unless otherwise authorized by state law). Chapter 212 of the
Texas Local Government Code which is the municipal platting statute does not expressly
authorize cities to require building permits for vertical construction in their ETJ.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 16

2.

The City had no authority to issue building permits prior to the

enactment of the March 2015 Ordinance.

Custer obtained permits from the County, TCEQ and TxDOT and had started
construction of the Project prior to the March 17, 2015 enactment of the City's ordinance
extending its building code to the ETJ (Ex. 1, pp. 1-4). The City's policy was to not
require building permits in the ETJ prior to that date (Ex. 3, pp. 52, 57).

City

representatives informed Custer's representatives that City permits would not be required
for Custer to construct its Project (Ex. 1, p. 2). Such statements by the City were made to
other developers in the ETJ as well (Ex. 3, pp. 52, 57).
Because a city can only act through its ordinances, it must pass an ordinance to
exercise authority. This issue was addressed by the Fort Worth Court of Appeals in the
Runaway Bay case: "Thus, even assuming the City's argument that it possesses authority
under Section 212.002 to extend building code ordinances to its ETJ, the City must do
so by ordinance as set forth in Section 212.003." Rhino Real Estate Invs., Inc. v. City of
Runaway Bay, 2009 Tex. App. LEXIS 5706 *4 (Tex. App. Fort Worth, July 23, 2009,
no pet.). Michael Quint of the City admits that the City did not actually extend the
building code to the ETJ prior to March 17, 2015 (Ex. 3, p. 65). Custer is entitled to
summary judgment on this issue.
3.

The March 2015 Ordinance is void because the City is not

authorized to require building permits in its ETJ.

According to the recitals in the March 2015 Ordinance, the City is authorized to
extend its building code pursuant to Section 51.072 and Chapters 42, 43, 212 and 230 of
the Local Government Code. As discussed above, the Texas Supreme Court held in

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 17

Bizios that the platting statute in Chapter 212 does not grant cities the authority to extend
their building codes to the ETJ via platting. Bizios, 493 S.W.3d at 532. Similarly,
Chapter 42 of the Local Government Code which addresses ETJ does not provide this
authority. Id. at 535. Chapter 43 is the Municipal Annexation Act which is inapplicable
because the City decided not to annex the Property (Ex. 1, p. 5). There is no Chapter 230
of the Local Government Code as referenced in the March 2015 Ordinance. Section
51.072 merely states that home rule cities have the power of self-government.
There are other statutes that touch on the issue that are not referenced in the March
2015 Ordinance. For example, Section 214.904(a) of the Texas Local Government Code
refers to the issuance of building permits "in the municipality or its extraterritorial
jurisdiction." But this statutory provision provides neither express nor implied authority
for a city to extend its building codes to its ETJ similar to Sections 216.003 and 216.902
of the Texas Local Government Code. There is no statutory language or legislative
history indicating legislative intent for Section 214.904(a) to expand a city's authority to
allow it to extend its building code to its ETJ.
House Bill 265 was passed in 2005 to create 214.904. The bill was intended to
prevent cities from arbitrarily delaying taking action on permit applications. These types
of applications could include non-vertical construction such as septic system, wastewater
capacity, asbestos abatement, 911 address assignment, water hookup, environmental
cleanup, fire alarm, floodplain development, sign permits, curb cut and pool construction.
There is no legislative history indicating that 214.904 was intended to grant cities the
authority to extend their building codes to the ETJ.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 18

There are various scenarios which the Legislature could have considered in
enacting the statute that did not involve cities unilaterally enforcing their building codes
in the ETJ. While the statute can be implied to mean that some municipalities within the
State may be requiring a permit to improve a building or "other structure," there are fact
situations that might be applicable other than a city extending its building code to the ETJ
for all purposes:
Land in the ETJ subject to a development agreement under 212.172,
Tex. Loc. Gov't Code, which allows a city to require building permits.
Land in the ETJ subject to an industrial district agreement under 42.044,
Tex. Loc. Gov't Code which can require permitting.
Land in the ETJ subject to a planned unit district agreement under 42.046,
Tex. Loc. Gov't Code which can require permitting.
Land in the ETJ with a special district agreement under 42.042,
Tex. Loc. Gov't Code which can require permitting.
Land subject to limited purpose annexations under 43.121,
Tex. Loc. Gov't Code which can require permitting. Section 43.131 states that
a city's extraterritorial jurisdiction is not extended by a limited purpose
annexation. The Legislature could have considered land subject to limited
purpose annexation as being equivalent to land in the ETJ.
"Other structures" could refer to billboards. General law towns and home rule
cities are given express authority to require building permits for signs in the
ETJ. 216.902, Tex. Loc. Gov't Code.
The Texas Supreme Court recently addressed these issues in Bizios. While the
case focused on the limitations on general law towns to extend their building codes to the
ETJ, there are several holdings that apply in this case.
For example, the Court ruled that the platting statute contained in Chapter 212
does not provide legislative authority for cities to extend building codes to the ETJ.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 19

Specifically, the Court held that building codes and permits are not "rules governing plats
and subdivisions" as described in 212.002, Tex. Loc. Gov't Code.

Plats and

subdivisions refer to horizontal construction, while building codes refer to structures and
vertical construction. Id. at 531-3.
Furthermore, 214.904 and 233.153, Tex. Loc. Gov't Code, do not grant
authority for cities to extend their building codes to the ETJ. Id. at 534. According to the
Supreme Court, this indicates that "the authority to enforce building codes in its ETJ is
not 'reasonably necessary' or "indispensable" to its ability to regulate platting and
subdivision." Id. at 535.
As stated by Governor Abbott, a city's authority to regulate land in the ETJ must
be "wholly derived from a legislative grant of authority." FM Props. Operating Co., 22
S.W.3d at 902. This holding applies to both general law and home cities. Because the
Legislature has not granted this authority to McKinney, its ordinances which attempt to
extend the City's building code to the ETJ should be deemed null and void. Therefore,
for the City's causes of action asking the Court to declare that the City has the necessary
authority to approve building permits in the ETJ, the Court should grant a summary
judgment decreeing that the City does not have such authority.
G.

If the City lacks authority to require building permits in the ETJ, the
validity of the County's permits are not relevant.

It is undisputed that Custer obtained development permits from the County and the
State prior to the City's enactment of the March 2015 ordinance. The City asks the Court
to generally declare that Collin County did not have authority to issue development

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 20

permits in Paragraph 51(h)-(n) of the First Amended Original Petition. The City's claims
are without merit and should be dismissed because the County has statutory authority to
regulate development in the County. The City admits that, at a minimum, the County has
the authority to enforce fire code regulations. It is anticipated that Collin County will
also address the merits of this issue.

Custer's Counterclaim includes requests for

declaratory judgment on this issue which should be granted.

In addition, the validity of the County's building permits is not relevant with
respect to the City's cause of action asking that the Court declare that it has the sole
authority to require building permits of Custer. If the City lacks this authority, then
whether or not Custer properly obtained a building permit from the County is irrelevant.
Therefore, the City's causes of action regarding County permit validity inasmuch as they
apply to Custer should be dismissed.
H.

Custer complied with the permit language of the County permits.

Similarly, the City lacks standing to challenge Custer's compliance with the
County permits as set forth in Paragraph 51(m) and (n) of the First Amended Original
Petition. The County requirement for Custer to check with McKinney to find out if there
were any additional requirements by the City pertaining to the self-storage project does
not give the City any rights. In addition, the summary judgment evidence proves that
Custer communicated with City employees who confirmed that no development permits
need be obtained from the City for the Project (Ex. 1, p. 3).

According to County

representatives, the language in the permits requiring communication with the City

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 21

applies only to billboards and platting (Ex. 3, p. 102-4). Since neither applies in this
case, these causes of action should be dismissed.
I.

Custer is vested in the prior County permit approvals under

Chapter 245, Tex. Loc. Gov't Code.

Paragraph 51(v) concerns the vested rights statute found in Chapter 245 of the
Local Government Code and creates a system by which property developers can rely on
the land-use regulations in effect at the time "the original application for [a] permit is
filed" involving a project. Tex. Loc. Gov't Code ANN., 245.002(a) (West 2005); Save
Our Springs Alliance v. City of Austin, 149 S.W.3d 674, 681 (Tex. App.Austin 2004,
no pet.). Custer's Counterclaim contains a similar request for declaratory judgment in
Paragraph 29.

Because the "laws, rules, regulations, or ordinances of a regulatory

agency" may change and those changes may "enhance or protect the project," it allows a
permit holder to take advantage of those changes without forfeiting any of its
Chapter 245 rights. Tex. Loc. Gov't Code ANN., 245.002(d).
Chapter 245 defines a "project" as "an endeavor over which a regulatory agency
exerts its jurisdiction and for which one or more permits are required to initiate, continue,
or complete the endeavor." Id. 245.001(3). Chapter 245 does not define "endeavor";
however, an attorney general's opinion discussing Chapter 245 stated "endeavor" is
commonly defined as "the action of endeavoring; effort, or pains, directed to attain an
object." Tex. Att'y Gen. Op. No. JC-0425 (2001); see also Black's Law Dictionary 547
(7th ed. 1999) (defining "endeavor" as "a systematic or continuous effort to attain some
goal" or "to exert physical or intellectual strength toward the attainment of an object or

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 22

goal"). The site plan for Custer's project for the entirety of the Property was provided to
the County in 2014 (Ex. 1-A). It is undisputed that the City's March 17 Ordinance
occurred after Custer had received numerous permits for its land in the ETJ (Ex. 1,
pp. 1-4).
An opinion with similar facts can be found in Hartsell v. Town of Talty,
130 S.W.3d 325 (Tex. App.Dallas 2004, pet. den.). At the time the initial permit for
Hartsell's residential subdivision project (a preliminary plat) was approved, there were no
building code requirements in the ETJ. Id. at 328. After the Town subsequently enacted
its ordinance extending its building codes to the ETJ, it filed suit to force Hartsell to
submit building permit applications. According to the Dallas Court of Appeals, the
homebuilders were protected from the Town's enforcement of its building codes under
Chapter 245. Id. at 328. Similarly, Custer is protected from the Town's attempts to
prohibit or adversely impact its Project under Chapter 245 Tex.
McKinney claims that the County permit approvals do not vest any rights to
Custer as to the City's subsequent regulations in accordance with Shumaker Enterprises,
Inc. v. City of Austin, 325 S.W.3d 812 (Tex. App.Austin 2010, no pet.). In addition to
being a "no petition" case, Shumaker is distinguishable on its facts from the present case.
Shumaker submitted an application with Travis County to mine a tract that was
located outside of Austin's ETJ. Id. at 813. Before the county acted on the application,
Austin's ETJ extended to overlap the tract. Id. Shumaker requested a determination from
the city that a permit was not required from the city. After the city rejected Shumaker,
the trial court and court of appeals upheld the city's decision. Id.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 23

In Shumaker, the city did not have the option of making a decision on a permit
application because the tract was located outside of its ETJ. The Property, on the other
hand, is located within McKinney's ETJ. Further, McKinney intentionally refused to
require permits for new development on its ETJ land (Ex. 3, p. 52).
McKinney made a conscious decision prior to adoption of the March 17, 2015
ordinance to allow the County to make all permit decisions on unplatted land in the ETJ
(Ex. 3, pp. 52, 94). Mr. Quint has acknowledged that the City's policy was to not require
or accept permit submittals in the ETJ (Ex. 3, p. 52). Prior to purchasing the Property,
Custer was told by the City that no permits would be required in their ETJ (Ex. 1, p. 2).
Because the March 2015 Ordinance was enacted after the commencement of
Custer's Project, the court should declare that the Ordinance cannot be applied to Custer's
Project pursuant to Chapter 245, Tex. Loc. Gov't Code.
J.

The City/County Plat Approval Agreement did not mandate City

permit approval.

According to Paragraph 51(h),(w), the City has authority to require building

permits under the 1145 agreement. In 2002, McKinney and the County entered into a
City/County

Plat

Approval

Agreement

in

accordance

with

242.001,

Tex. Loc. Gov't Code (Ex. 2-D). On June 15, 2015, several mayors of municipalities in
Collin County asked Collin County Judge Self to recognize that the City/County
agreement language of "related permits" necessarily means building permits (Ex. 2-A).
The County Commissioners responded to the McKinney Mayor on June 22, 2015
(Ex. 2-B). According to the June 22, 2015, letter, the Collin County Commissioners

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 24

refused to honor the City's request because of "legal concerns about the City's authority to
enforce its building code and construction-related ordinances on vertical construction in
the ETJ" (Ex. -B). The City can cite to no legal precedent for the proposition that
"related permits" refers to vertical rather than horizontal construction.

Because

Chapter 212 does not expressly authorize the issuance of City permits in the ETJ and the
City/County agreement specifically refers to "plat approval", the City had no authority to
issue permits in unincorporated areas on unplatted land.
The primary objective of House Bill 1445 in 2001 when 242.001 was originally
enacted to eliminate the "unnecessary expenses and delays for property owners because
municipalities and counties have different standards, requirements, and levels of authority
over subdivisions." (Bill analysis, H.B. 1445, 2001). In order to avoid the confusion and
expense created by overlapping platting jurisdictions, this legislation requires cities and
counties to agree about the manner with which subdivision plats will be approved within
the extraterritorial jurisdictions of municipalities.

The statute authorizes cities and

counties to agree to a system that would simplify the administration of subdivision plats
in the extraterritorial jurisdiction in one of four ways:
Option 1:

Agreeing to allow the municipality exclusive jurisdiction as

authorized by Chapter 212 of the Texas Local Gov't Code ("Chapter
212");

Option 2:

Agreeing to grant the county exclusive jurisdiction over subdivision

plats as authorized by Chapter 232 of the Texas Local Gov't Code;

Option 3:

Agreeing to physical apportionment of the extraterritorial area with

some portions to be governed by the city and others to be governed
by the county; or

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 25

Option 4:

Agreeing to establish an office responsible for submittal and

approval of plat applications using a "consolidated and consistent set
of regulations" as authorized by Chapter 212 and Chapter 232.

The intent of the statute with respect to permits not specifically related to
subdivision land development was addressed in Texas Attorney General Opinion
No. GA-0366. At issue was whether a county could assess a municipal drainage charge
under the 242 interlocal agreement. Comal County argued that the drainage charge
would be "a subdivision related permitting activity." The Attorney General's office
disagreed.

According to the opinion, the statute is intended to clarify which local

regulations are "related to plats, subdivision construction plans, and subdivisions of

land." This phrase was interpreted as relating specifically to land subdivisions. Chapter
402 was held to not relate "specifically to plat-related regulations nor specifically to
subdivisions."
There is no case law or legislative history supporting the City's position. The
better argument is that "related permits" are those related to the subdivision process such
as infrastructure construction (streets, water lines, etc.). In fact, the title of 242.001 is
"Regulation of Subdivisions in Extraterritorial Jurisdiction Generally." This indicates
that the "related permits" do not refer to vertical improvements such as structures, but
only to construction related to subdivision development. Therefore, the City's causes of
action with respect to the 1445 Agreement should be denied and dismissed.
K.

The City's Request for Attorneys' Fees should be denied.

In Section 52 of the First Amended Original Petition, the City requests that its
attorneys' fees and costs be awarded under 37.009, TEX. CIV. PRAC. & REM. CODE.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 26

Because Custer should be the prevailing party pursuant to this Motion, an award of any
fees and costs to the City would not be equitable and just, and the City's request for
attorneys' fees should be denied.
CONCLUSION
The City's request for injunctive relief should also be denied based on mootness.
Alternatively, because there are no disputed facts, all 23 of the City's declaratory
judgment causes of action should be dismissed as a matter of law. Because the City's
requests for attorneys' fees and injunctive relief are predicated on its declaratory
judgment claims, these causes of action should be denied as a matter of law.
Correspondingly, Custer's motion for summary judgment on its Counterclaim should be
granted.
PRAYER
WHEREFORE, Custer prays that its Motion for Summary Judgment be granted
and that the City's First Amended Original Petition as to Custer be dismissed.
WHEREFORE, PREMISES CONSIDERED, Custer respectfully requests that this
Court grant to Custer such other and further relief at law and equity to which it may show
itself justly entitled.

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 27

Respectfully submitted,
WINSTEAD PC
500 Winstead Building
2728 N. Harwood Street
Dallas, TX 75201
(214) 745-5745 Phone
(214) 745-5390 Fax
aanderson@winstead.com

By: /s/ Arthur J. Anderson

Arthur J. Anderson

SBN 01165957

ATTORNEYS FOR DEFENDANT CUSTER

STORAGE CENTER, LLC
CERTIFICATE OF SERVICE
I hereby certify that on January 5, 2017, a true and correct copy of the foregoing
document has been forwarded to the following counsel of record via the Court's e-filing
system:
Robert F. Brown
Brown & Hofmesiter, LLP
740 East Campbell Road, #800
Richardson, TX 75081

J. Greg Hudson
Hudson & O'Leary LLP
1010 MoPac Circle, Suite 201
Austin, TX 78746
Robert J. Davis
Matthews, Shiels, Knott, Eden,
Davis & Beanland, L.L.P.
8131 LBJ Freeway, Suite 700
Dallas, TX 75251
/s/ Arthur J. Anderson
Arthur J. Anderson

DEFENDANT CUSTER STORAGE'S MOTION FOR SUMMARY JUDGMENT Page 28

4812-3829-3822v.4
58382-1 1/5/2017