El Dorado Land Co., LP v. City of McKinney

El Dorado Land Company sold property to the City of McKinney for use as a park. El Dorado's special warranty deed provided that the conveyance was subject to the restriction that the community only be used for that purpose. If the City decided not to use the property as a community park, the deed granted El Dorado the right to purchase the property. Ten years after acquiring the property, the City built a public library on part of the land. El Dorado notified the City it intended to exercise its option to purchase, but after the City failed to acknowledge El Dorado's rights under the deed, El Dorado sued for inverse condemnation. The trial court sustained the City's plea to the jurisdiction, finding that El Dorado's claim did not involve a compensable taking of property but, rather, a breach of contract for which the City's governmental immunity had not been waived. The court of appeals affirmed. The Supreme Court reversed, holding that, in its deed to the City, El Dorado retained a reversionary interest in the property that was a property interest capable of being taken by condemnation. Remanded. View "El Dorado Land Co., LP v. City of McKinney" on Justia Law