Texas Supreme Court justices will decide whether it would be a “manifest injustice” for the city of Dallas to require a North Texas developer to rebuild a too-tall duplex townhome after city officials mistakenly approved the building permit.
McKinney-based property developer Phillip Thompson and his companies Phillip Thompson Custom Homes and PDT Holdings asked the high court Wednesday to prevent Dallas from requiring the builder to knock 10 feet off a duplex in Knox-Henderson because of the residential proximity slope — or RPS, a height ordinance.
The city says it should be allowed to enforce the height limit for the best interest of the neighborhood.
The nearly $1.6 million property is fully built but unoccupied. Thompson’s attorney Christopher Kratovil told justices builders would have to do a complete demolition in order to meet the RPS. The home can't be sold or get a certificate of occupancy until this dispute is over, Kratovil said.
“This is a builder, a small businessman, working in absolute good faith and dealing with this — with all due respect to my friends on the other side — Kafkaesque nonsense,” he said.
Dallas approved the request from PDT Holdings to build a three-story duplex townhome that would reach a maximum height of 36 feet, according to court records. Two buyers signed to purchase the home later that year.
Construction ran into its first issue in November when a city code enforcement field inspector told PDT Holdings the home wasn’t in compliance with the general 36-foot height limit for that area because of a parapet wall on the roof. Construction continued through January 2018, the parapet wall was fixed and PDT continued with construction.
The city then issued a stop work order on the townhome in April 2018 when the home was near 90% completion after a resident complained about a different height requirement — the residential proximity slope.
The general height requirement for that multifamily district is 36 feet. Thompson’s property is located in a more specific area that triggers the RPS. According to the ordinance, if a building is taller than 26 feet, it cannot be taller than a specific slanted height measured from the ground upward and outward.
The city’s Board of Adjustment shot down Thompson’s requests for an exception to the zoning rule three times, and it was after the second request that Thompson sued Dallas and the board.
A Dallas district court judge sided with Thompson in 2022, ruling the city was “estopped” from enforcing the ordinance — that is, prevented from enforcing the 26-foot height limit because it contradicted the city's initial approval of the building permit.
Dallas conceded in court documents that staff overlooked the RPS when it approved PDT’s permit. The city is asking the Texas Supreme Court to side with the Fifth Court of Appeals in Dallas, which ruled the city’s mistake wasn’t intentional, and Thompson could have gotten up to speed on the ordinance and avoided ever violating it.
The appeals court ruled only in exceptional circumstances can a government entity like the city be stopped from enforcing the law, even if city officials made the mistake, to prevent "manifest injustice,” or a clear and obviously unjust outcome.
This case is one of those exceptional circumstances, Kratovil argued, as the city issued multiple permits, approved and reapproved building plans and did not order a stop to construction until the home was almost fully built.
He also said the City of Dallas should have requested the facts and findings of the case — a document explaining the district court judge’s ruling — in order to get clarity on whether the city’s mistake was intentional or not. The plaintiffs didn’t request it because it would put them at a disadvantage legally, he said.
This isn’t the only time Dallas has mistakenly approved residential project permits. The city manager’s office told the Dallas City Council in August several permit applications for projects in the Elm Thicket-Northpark neighborhood were approved using outdated zoning information between 2022 and 2023, and permits were incorrectly granted.
Nineteen out of 29 sites reviewed were out of compliance. Elm Thicket-Northpark residents recently sued over some variances the Board of Adjustment granted in the aftermath.
“This comes up over and over and over again,” Kratovil told justices. “And I think one of the reasons the court should uphold what the trial court did and overrule the Dallas Court of Appeals is if the city is ever going to get this right, it has to be held to account.”
Nicholas Palmer with the Dallas City Attorney’s Office said he doesn’t personally know why Dallas didn’t ask for the facts and findings document during trial court proceedings, but he says it was not needed.
Palmer said the city stands to gain nothing from its mistake — and the plaintiffs need to prove it does in order to stop the city from enforcing the RPS ordinance.
“There has to be some type of benefit — be it monetary, be it reputational — something that the petitioners can articulate that the city receives some type of benefit in this way,” Palmer said. “And petitioners have essentially conceded that's not the case here.”
Justices countered that according to previous cases that have come before the Texas Supreme Court, all PDT has to prove is that the city misrepresented home height requirements to Thompson and his companies. They questioned whether it would be manifest injustice if PDT was not entitled to reasonably rely on the city’s direction to know what it could and couldn’t build.
Palmer reiterated his point.
“I would concede that this is strong medicine, but the first element of the manifest injustice, it has to result from a deliberate inducement to act that results in a benefit to the city,” he said.
Palmer also invoked the best interests of residents, who he said came out in droves to oppose Thompson’s request for a variance during Board of Adjustment meetings.
But justices questioned whether a 36-foot tall home would actually stick out like a sore thumb and, even if it did, whether the city of Dallas is effectively thinking about benefits to its own reputation by advocating for residents in this neighborhood.
Palmer said trying to address residents’ concerns is separate from an actual benefit to the city.
“The city merely wants the ability to do what it always does and require that PDT go through the necessary steps to be able to build this project,” he said.
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