Ashby High Rise Law Suits | Interview with Big State Home Buyers and Daryl Bailey. In this interview, Brian discusses the Ashby High-Rise law suits and the copycat River Oaks law suit with real estate lawyer and specialist, Daryl Bailey from Gray Reed & McGraw, P.C. law firm.
Brian Spitz – Hi, I’m Brian Spitz, President of Big State Home Buyers; and today we’re visiting with Daryl Bailey who is with the firm Gray, Reed and McGraw. And you guys have a specialty with real estate litigation and law. Tell us a little bit about what you do.
Daryl Bailey – I’ve been practicing for 26 years, and I do real estate related litigation. Commercial litigation makes up about 60-70% of my practice being real estate and real estate related construction, development and financing.
Our firm is a full commercial firm. We area Texas based firm with 120 lawyers in Houston, Dallas and Tyler
Brian Spitz – So one of the interesting topics you wanted to talk about was this case with the Ashby High-rise, which a lot of Houstonians might know about. It was a big deal in the West U and South Hampton area. Picket signs all over years “Stop Ashby High-rise”. It’s a case that recently finally went to trial.
Do you want to tell us a little bit about what that was about?
Daryl Bailey – Yes, it was a suit by a number of homeowners in the area where the AHR was to be developed. The suit was basically a public and private nuisance lawsuit. It was a month long trial and the jury found in favor of 20 property owners surrounding the area where this High Rise was to be constructed; and essentially found that because it was abnormal and out of place in the neighborhood, it constituted nuisance. And they found damages that if this High Rise were constructed, it would cause all kinds of settlement issues, all kinds of actual physical issues to the properties.
Brian Spitz – It’s interesting because it you go through all the River Oaks, Upper Kirby and Mid-town area, everything seems to be developing into high rise and multi-use, multi-family properties. So I’m surprised that the homeowners won.
Does it surprise you that they won?
Daryl Bailey – It’s not a surprise to me in the sense that a jury of 12 people, of individuals who are homeowners somewhere, might find in favor of the homeowners. I do believe it would be a challenge if this case were appealed. Because the tension, as you pointed out, about the development of the city, is a problem with how you define what is abnormal and out of place.
Historically, cities that say ”no zoning” still have a sophisticated and regulatory system in place for developing. So the tension is, if its not restricted through deed restriction to prevent something, how is it that the neighbors can suddenly control what happens on the property if the developer is working in the confines of regulations, which, this developer in my understanding, was.
Brian Spitz – Do you think part of this really resulted because it was in such a wealthy neighborhood? Do you think a smaller neighborhood or a more average income area could have sustained the fight like this? Because, this went on for a long time
Daryl Bailey – It did go on for a long time. And the first fight the developer had was with the city itself. And that’s what recorded and went on for a long time. The actual lawsuit by the residents didn’t occur until 2013 and actually went into trial within 6 months.
So, the developer’s position on that was – we have now complied with the city to comply with the regulations that were put in place, so we don’t have something that is illegal here. And now we are being sued by the property owners.
Would it have occurred in some other property area? I think the point about the development of the city urban is really why it came about, but consequently, home property values within the urban area are escalating. Would this happen in another area of town? Maybe not. But it’s because of influence of all those issues.
Brian Spitz – I imagine the developer will appeal it?
Daryl Bailey – Well, I don’t have first hand knowledge with what is going on regarding any settlement issues, but it would not surprise me that they would appeal it if they can’t settle it, I believe that it would be appealed by the developer.
It’s my understanding that currently, that several days ago; the parties met and had a hearing. The plaintiff’s are seeking an injunction to prevent the developer from starting the project. That is still before the trial judge as to whether or not he is going to grant the injunction.
Brian Spitz – So the trial itself wasn’t about injunction, it was about damages.
Daryl Bailey – It was about both. The court is the one who decides whether or not to give the injunction order. So, it granted the damages and the court is deciding the injunctive order.
Brian Spitz – Are they granting damages on something that as never come to pass? What damages are they entitled to?
Daryl Bailey – You’re exactly right. It’s an odd situation. I do believe that my reading of what was proposed by the homeowners for the injunction was that basically the construction be modified. Allow the construction, but modified so they relocate, say, the parking garage. Relocate it, make it different in a way that would not affect their properties as much.
Brian Spitz – You also mentioned to me that there is a copycat case in river oaks right now?
Daryl Bailey – There is, and that case, again, is homeowners who are trying to prevent a well-known developer in the city, in the country, from developing a high-rise multi-use building in their neighborhood. So I’m sure they took some solace form the fact that the verdict has been rendered to months before they filed this suit.
Brian Spitz – Where is this development supposed to go? Do you know?
You know, I don’t know specifically. It’s off of Kirby I believe, but honestly, I don’t remember
Brian Spitz – Interesting. So what would be your take away from all of this regarding the law and how it protects homeowners, protects developers?
Daryl Bailey – Well, its going to be an interesting challenge for any developer to decide…well, what they really have to decide again is : can you regulate some one else’s property rights through this definition of “abnormal and out of place” because “abnormal and out of place” is very subjective. And it deals with issues of, again, timing… What is abnormal and out of place? At one time, the Ashby High-Rise was probably very likely abnormal and out of place. But, as you pointed out with the development of the urban setting, is it going to be abnormal and out of place. I mean, as that whole area of town developed in to these types of properties.
Brian Spitz – Right, it’s right there by the Museum District, which is all redeveloped as well. All the development, which is kind of astounding to watch, is all urban development
Well, thank you so much for visiting with us on this. This is a really interesting topic!