The Texas Supreme Court is weighing in on a lawsuit against the city of Corpus Christi that seeks to nullify a tax incentive agreement for a downtown hotel.
Litigation filed by hotelier Ajit David — who seeks to undo an agreement that would award $2 million in sales tax incentives to Homewood Suites developers — is effectively on hold, following an emergency stay issued by the state’s highest judicial branch.
The July 6 order was released by the court and posted to its online case history, one day before the compelled deposition of Homewood Suites developer Philip Ramirez had initially been scheduled. His deposition, as well as the scheduled deposition of Guajardo, are being put on pause as part of the stay.
The stay will remain in effect until an order by the court.
Lawyers representing three parties in the lawsuit — Mayor Paulette Guajardo, the city of Corpus Christi and Ramirez — had filed a petition last week imploring justices to put an emergency halt on further proceedings in the litigation and also direct a trial court judge to make a decision on whether she can hear the case, records show.
The move is partially based on a Texas Supreme Court ruling related to the city of Austin, issued in May. The attorneys have cited the ruling in a hearing and in the petition, believing it supports their argument that Judge Sandra Watts must rule on pleas to the jurisdiction made by Guajardo and the city prior to additional depositions being taken.
Pleas to the jurisdiction generally challenge whether a judge has the authority to oversee litigation in certain circumstances.
They can be invoked by municipalities in asserting that a judge may be restricted in their powers to preside over matters in which legislative immunity may apply.
Pleas to the jurisdiction, if granted, can essentially terminate a lawsuit.
Defendants’ attorneys have maintained that Watts must rule on jurisdiction before additional depositions of Guajardo and Ramirez.
Watts, in her December order, wrote that “limited, targeted discovery” after pleas to the jurisdiction have been filed is allowed under state law as part of establishing jurisdictional facts.
She had relayed to attorneys in a June 17 hearing that she intended to rule on the pleas to the jurisdiction, but only after continued depositions of Guajardo and Ramirez — as sought by David — had been taken.
In filings responding to the emergency stay request last week, Doug Allison, David’s attorney, wrote that the “real goal is delay.”
Where it started
The genesis of the lawsuit is debate over how Homewood Suites developers had represented the purpose of the incentives.
Critics have accused developers of altering a screenshot and using it in a 2024 presentation — an attempt, they have said, to intentionally mislead city officials.
Developers have denied allegations, stating that it had come down to a formatting issue and that there had not been an effort to deceive.
In his September 2024 suit, David had asked that a court declare the funding agreement, signed in April 2024, as “void, invalid, and not enforceable,” in part, by asserting in court documents that it had offended “public policy to have allowed solicitation of City’s tax-payer dollars by use of an Altered Federal Document.”
The city was the initial defendant, while Guajardo was named an individual defendant about a year later.
The developers, Elevate QOF LLC, filed as intervenors shortly afterward.
Ramirez is not a party in the lawsuit, but instead a third-party witness, according to the petition filed with the Supreme Court.
The city, Guajardo and Ramirez have denied allegations made as part of David’s lawsuit.
A law enforcement investigation and an administrative law review did not find criminal wrongdoing.
Depositions ordered
Several city staff members and economic development administrators, as well as Guajardo and Ramirez, had given depositions before filings pleading the jurisdiction were filed in November 2025, records show.
Watts ultimately did not rule on the pleadings and ordered in December 2025 limited discovery — among those items continuing depositions of Guajardo and Ramirez.
Attorneys representing the city and Guajardo had responded by petitioning the 13th Court of Appeals, asking the justices to direct Watts to rule on the pleas. They contended in court records that she had abused her discretion “by ordering ‘irrelevant and non-jurisdictional discovery’ to take place prior to ruling on jurisdictional pleas.”
The appeals court denied the request in May, ending the stay.
Last month, Watts reinstated her prior order — scheduling depositions for Ramirez on July 7 and Guajardo on July 21 — with a scope of “limited discovery to develop disputed jurisdictional facts,” court records show.
The subjects listed in the order would not accomplish establishing new information needed to determine the pleas to the jurisdiction, defendants’ attorneys have asserted.
The Austin case ruling was issued, according to the attorneys, three days after the appeals court’s opinion.
In the June 17 hearing, Watts told attorneys that she had become familiar with the new Texas Supreme Court’s ruling in the Austin case but that she didn’t “find the facts similar to our facts,” reiterating that she would consider the pleas after the depositions.
In a statement released through his attorney, David wrote that he understood “it is routine for appellate courts to grant a stay so they have an opportunity to receive briefs.”
“The 13th Court of Appeals did the same, and then the City and Mayor lost,” he wrote. “The same thing will happen here.”
The Texas Supreme Court
In the June 29 petitions to the Texas Supreme Court, defendants’ attorneys said that depositions of Guajardo, Ramirez and a former city employee would cover subjects to include “alleged communications, influence, public-record changes, Type B funding, and the project’s history.”
“Those topics may bear on Plaintiff’s merits narrative,” the document states.
The petition asks the Texas Supreme Court to essentially force Watts to rule on jurisdiction before additional discovery.
The attorneys also requested a rehearing from the appeals court. Documents shown in the appeals court case history show the motion was denied July 6.
Among reasons the Texas Supreme Court may grant review of petitions are constitutional and statute questions, as well as whether an appeals court “appears to have committed an error of law of such importance to the state’s jurisprudence that it should be corrected,” online procedure documents show.
The case history lists Aug. 5 as the deadline for David to file a response to the petition.
The filing with the Texas Supreme Court brings the number of courts now involved with cases stemming from the tax incentives to four: the Supreme Court, a state court, an appeals court and a separate lawsuit filed by Guajardo in federal court.
Proceedings for a removal hearing of the mayor, to be held by the City Council, are also pending. The hearing also stems from accusations made surrounding the tax incentives.
(This story was updated to add new information.)
Kirsten Crow covers city government and water news. Have a story idea? Contact her at kirsten.crow@caller.com.
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This article originally appeared on Corpus Christi Caller Times: Texas Supreme Court weighs in on lawsuit over Corpus Christi hotel
Reporting by Kirsten Crow, Corpus Christi Caller Times / Corpus Christi Caller Times
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By Kirsten Crow, Corpus Christi Caller Times | USA TODAY Network
