Tuesday, December 18, 2007

Appellate panel splits on whether trial court should have heard declaratory judgment suit against City of Houston

Controversy here involved booze permit [okay: wine & beer]. The issue whether a declaratory judgment claim may be litigated under various contingencies, however, arises with some frequency in Texas courts, with inconsistent rulings on appeal.

Justice Edelman dissented in Supermercado Teloloapan, Inc. v. City of Houston (Tex. App.- Houston [14th Dist.] Dec. 18, 2007)(Dissenting Opinion by Justice Edelman) (exhaustion of administrative remedies, exclusive jurisdiction doctrine, lack of jurisdiction)


In 2005, Supermercado, a grocery store operator, applied to the Texas Alcoholic Beverage Commission (the "Commission") for an off-premise beer and wine permit. To satisfy a condition for obtaining the permit, Supermercado requested the City to certify that the location of its store was in a "wet area" and that the sale of beverages there was not prohibited by ordinance. See Tex. Alco. Bev. Code Ann. ' 61.37 (Vernon 2007). However, the City refused to certify the latter because it concluded that a charter school was located less than the required 300 feet from the store.

Because the certification sought from the City by Supermercado was one step in this permit application process, related directly to that process, and arises only in connection with such an application, this declaratory judgment action involves the same subject matter as that over which the Commission has exclusive jurisdiction. See Duenez, 201 S.W.3d at 676; Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.- Austin 1989, no writ). Therefore, because Supermercado had not exhausted its administrative remedies, the district court lacked subject matter jurisdiction over the declaratory judgment action, and we should reverse the judgment
of the trial court and order the case dismissed for lack of subject matter jurisdiction.

Supermercado Teloloapan, Inc. v. City of Houston (Tex.App.- Houston [14th Dist.] Dec. 18, 2007)(Hedges)(government entity law, regulation, declaratory judgment, UDJA)


In this declaratory judgment action, appellant, Supermercado Teloloapan, Inc. d/b/a Teloloapan Meat Market ("Supermercado"), appeals a take-nothing judgment in favor of appellee, the City of Houston ("the City"). In Supermercado's sole issue, it argues that the trial court erred in finding that the City's definition of the term "property line" is reasonable and consistent with the plain meaning of section 3-2(a) of Houston's Code of Ordinances. We affirm.

* * *
The dissent believes this Court does not have jurisdiction to address the merits of the declaratory judgment because the Commission has exclusive jurisdiction. The dissent finds that the issuance of the certification by the City in this case is but "one step" in the process of seeking a permit from the Commission. Relying on Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.CAustin 1989, no writ), the dissent concludes that Supermercado's remedy lies with the administrative agency. In Sells, Roose and other business owners applied for a beer retailer's permit with the Commission. The county clerk refused to certify that Roose's premises were in a "wet" area. The business owners filed a petition for writ of mandamus seeking to compel Sells to perform her statutory duty and issue the certificate. The court of appeals found that Sells's duty to issue a certificate as to the "wet" or "dry" status of a location arises only in connection with an application for a permit authorized by the Code. Id. at 643. In that regard, the court recognized exclusive jurisdiction in the administrative agency, with the result that the district court lacked subject-matter jurisdiction. Id.

In this case, however, Supermercado filed a declaratory judgment action seeking clarification of a Houston City ordinance. Unlike the business owners in Sells, Supermercado did not seek to compel the City to issue a certification of "wet" status. Supermercado sought a declaratory judgment to interpret the Ordinance, which is specifically permitted by the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann.' 37.004(a) (Vernon 1997).

Supermercado is not required to exhaust administrative remedies with the Commission to obtain an interpretation of the Ordinance. See Burgess, 101 S.W.3d at 554. Therefore, Supermercado's cause of action and remedy for enforcement is not derived from the Code.

Before Chief Justice Hedges, Justices Fowler and Edelman; Justice Edelman dissented
Appellate Cause No. 14-06-00472-CV
Full case style: Supermercado Teloloapan, Inc. d/b/a Teloloapan Meat Market v. City of Houston
Appeal from 80th District Court of Harris County (Hon. Kent Sullivan, [since succeeded on that bench by Judge Lynn M. Bradshaw-Hull])

Find terms: municipal, local government law, suits, litigation involving City of Houston, government entities, governmental immunity, city ordinance

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