Ruling upholds judgment previously entered by a state district court
DALLAS – A state appellate court has denied efforts by the city of Dallas to dismiss a lawsuit that challenges the city’s efforts to evict the owner of a southwest Dallas office building and terminate the company’s long-term lease of city property.
The Court of Appeals for the Fifth District issued the ruling, finding that the city’s request for sovereign immunity protection from litigation did not conform with state law. The ruling affirms a previous judgment from a state district court judge issued in March 2021, which found the city’s lease of the property was a revenue-generating proprietary action, rather than a governmental function that would be protected from litigation.
The lawsuit, originally filed in October 2019 by Oxley Leasing, alleges that the city is trying to unlawfully take the 60,000-square-foot, five-story building at 5801 Marvin D. Love Freeway and use it for its own purposes. Oxley purchased the building, which is located across the street and outside the Dallas Executive Airport fence, and entered into a long-term land lease with the city in 2014.
“Notwithstanding the city’s use of the income generated by the lease as a source of revenue for the airport, at its core the nature of the contract itself is the lease of real property, not the operation of an airport,” the court notes in a 17-page opinion.
Oxley claims the city breached the lease agreement by attempting to evict Oxley even though the city has accepted Oxley’s lease payments and possession of the property for years.
“The city readily accepted those payments, cashed those checks, raised no concerns and yet tried to evict without warning,” says Trey Cox, of Gibson, Dunn & Crutcher LLP, an attorney for Oxley in the lawsuit. “We continue to believe that the city’s hostile takeover efforts were prompted by a desire to use the building for its own purposes, despite the valid lease and all the investment and improvements Oxley has made. City officials must have thought we could not or would not pursue a successful legal action, and they were wrong.”
The lawsuit is Oxley Leasing North Loop LLC v City of Dallas, Case No. DC-20-15606, originally filed in the 134th District Court in Dallas.