Recent Texas Cases of Interest to Cities

Note: Included cases are from March 10, 2015 through April 10, 2015.

Utility Relocation: Southwestern Bell Tel., L.P. v. Emmett, No. 13-0584, 2015 WL 1285326 (Tex. Mar. 20, 2015). Southwestern Bell (d/b/a AT&T) sued the city when it, under contractual obligation to a flood control district, required AT&T to move its facilities from a city bridge that was going to be demolished and rebuilt. AT&T alleged that the county flood control district who directed the city to require relocation, not AT&T, was responsible for the cost of relocating the utility’s facilities. The trial court held that the company was responsible for the relocation. The court of appeals affirmed pursuant to the language of Section 49.223 of the Water Code which requires a district to pay relocation costs if the district makes such location necessary. The appellate court held that the district did not make the relocation necessary because of the city’s involvement in the project and because the bridge in question had not been demolished yet. AT&T appealed to the Supreme Court of Texas. The Court held that Section 49.223 required that the district pay for the relocation after reviewing what the words “made necessary” means in context of the statute. The district had contractual authority to require the city to require the relocation, and this was sufficient under Section 49.223 according to the Court. The district made necessary the relocation of the lines.

Governmental Immunity—Tort: University of Tex. at Arlington v. Williams, No. 13-0338, 2015 WL 1285317 (Tex. Mar. 20, 2015) (plurality opinion). The recreational use statute does not limit governmental immunity related to competitive sports or their spectators. Williams was injured while attending her daughter’s high school soccer game on a state facility. She sued the state for a premises defect based on her injury under the Tort Claims Act. The state filed a plea to the jurisdiction, arguing that it was protected by the recreational use statute which narrows the effect of the Tort Claims Act in regard to recreational use because it decreases the government’s duty of care. The Supreme Court of Texas took this as an opportunity to review whether the recreational use statute, Section 75.001 of the Civil Practices and Remedies Code, Subsection (L) specifically, lowers a governmental entity’s duty of care in cases of injuries inflicted during the spectating of competitive sports. The Court held that it did not. It looked at Subsection (L) which protects a governmental entity’s immunity for “any other activity associated with enjoying nature or the outdoors.” The Court held that this Subsection should be viewed narrowly to only include those activities that are similar to the other listed activities in Section 75.001, examples of which include fishing, hiking, and camping, among others. The Court held that spectating a competitive sport was not similar to the other activities and therefore did not invoke the protections of the recreational use statute. The Supreme Court affirmed the court of appeals’ judgment and the trial court’s order denying the state’s plea to the jurisdiction. This plurality opinion was only joined by three other justices. Justice Guzman filed a concurring opinion, which Justice Willett joined, that stated that the specific activity, waiting for her daughter, was not “recreational” activity, but did not address the issue of spectating. Justice Boyd issued a concurring opinion, referring to the recreational use statute as the Gordian Knot, and stated that spectating does not fit the description in Subsection (L) with the further analysis that statutes that relieve a person of a common law right of action must be construed narrowly.

Public Information Act: Kallinen v. City of Houston, No. 14-0015, 2015 WL 1275385 (Tex. Mar. 20, 2015) (per curiam). This per curiam opinion answers the question of whether a court has to wait to rule on a suit by a public information requestor until the Office of Attorney General (OAG) issues a ruling on a city’s public information opinion request. According to the Supreme Court of Texas, a court does not have to wait. The City of Houston received an open records request from Kallinen and chose to pursue an opinion from the OAG’s Open Records Division regarding some of the information. Before the OAG could issue a response, Kallinen filed suit against the city pursuant to Texas Government Code Section 552.321(a). The city argued successfully in the court of appeals that the trial court was deprived of jurisdiction in a Public Information Act suit until the OAG ruled on the opinion request. Kallinen, the requestor, appealed the ruling. The city argued that the OAG’s ruling had to come first as a jurisdictional requirement under exhaustion of remedies principles. The Supreme Court disagreed, holding that “[t]he requirement that a governmental body seek a ruling from the Attorney General when withholding requested information is a check on the governmental body, not a remedy for the requestor to exhaust.” The Court also held that a trial court has the discretion to stay proceedings while waiting for an OAG ruling or not. The case was sent back to the court of appeals for further review.

Eminent Domain: State v. Chana, No. 01-13-00953-CV, 2015 WL 1544719 (Tex. App.—Houston [1st Dist.] Apr. 2, 2015).   In this eminent domain case, the question was how to value the Chanas’ property that was condemned by the state. The trial court held that the Chanas’ property was worth almost one million dollars, based on evidence of the Chanas’ expert witness. The state disputed the testimony of the expert witness and argued that his testimony should be excluded because it was based on a violation of the project-enhancement rule. The project-enhancement rule states that property cannot be given an increased value in an eminent domain proceeding where the increase in the value only exists because of the project itself. The state argued that the parcel that was evaluated by the Chanas’ expert witness was only evaluated like it was because of the amount of land the state took. The court of appeals held that there was sufficient evidence that the expert witness correctly based his testimony on the highest and best use of the property, and did so without regard to any value added by the project itself. The court of appeals also held that the trial court was permitted to exclude property tax protest records from the analysis which would have shown a lower value, because the records included inadmissible evidence in an eminent domain proceeding, namely property listings. The court of appeals affirmed the trial court’s judgment.

Takings: Village of Tiki Island v. Ronquille, No. 01-14-00823-CV, 2015 WL 1120915 (Tex. App.—Houston [1st Dist.] Mar. 12, 2015). This case arose when the Village of Tiki Island (village) enacted an ordinance that prohibited short-term rentals for most homes in the village, but grandfathered other homes. Multiple homeowners sued the village, arguing that the ordinance constituted a taking because their home values were diminished by the enactment and enforcement of the ordinance. The trial court granted the homeowners a temporary injunction against the city’s enforcement of its ordinance. The village filed a plea to the jurisdiction, but the plea was never heard or submitted before the trial court. The village brought this interlocutory appeal based on the temporary injunctions, but also continued to argue that the trial court did not have subject matter jurisdiction because the plaintiffs did not allege sufficient facts of a taking. The court of appeals first held that the village’s interlocutory appeal was timely as to only one plaintiff. Then the court of appeals allowed the review of subject matter jurisdiction in the one case pursuant to Rusk State Hospital v. Black, 392 S.W.3d 88 (Tex. 2012), even though the issue of jurisdiction was technically raised for the first time on the interlocutory appeal. The court of appeals held that the trial court did have subject matter jurisdiction because the plaintiff had shown sufficient evidence of an economic impact on her property to constitute a viable takings claim. However, the court of appeals dismissed the plaintiff’s declaratory judgment claim because the claim merely restated the plaintiff’s takings claim. The court of appeals held that the trial court’s temporary injunction order was also correct as the plaintiff had identified a vested right related to the rental of her property sufficient for a temporary injunction.

Governmental Immunity—Contract: Western Oilfields Supply Co. v. City of Anahuac, No. 01-14-00468-CV, 2015 WL 1061130 (Tex. App.—Houston [1st Dist.] Mar. 10, 2015) (mem. op.). This breach of contract case involves the question of when an agreement becomes a “written contract” for purposes of Chapter 271 of the Local Government Code. The company offered the city an agreement regarding the rental and maintenance of water equipment. The city council approved the portion of the agreement laying out the terms, but not the pricing, at a city council meeting. Later, the city administrator signed the contract containing the pricing terms. The city later defaulted on its payments to the company. The company sued and the trial court granted a plea to the jurisdiction on the issue of governmental immunity. The lack of city council approval of the price quote during its meeting was an undisputed fact according to the court. Because a properly executed and authorized contract is essential to trigger the waiver of immunity, the court of appeals held that the trial court properly granted the plea. The court of appeals also noted that the city administrator did not have the authority to enter into this particular contract for the city and thus, his actions could not subject the city to a breach of contract claim. Finally, the court rejected the argument that acceptance of equipment and partial payment created the contract, as such a holding would equate to waiver-by-conduct which is not permitted in Chapter 271 cases.

Inverse Condemnation: City of Justin v. Rimrock Enters., Inc., No. 02-13-00461-CV, 2015 WL 1579579 (Tex. App.—Fort Worth Apr. 2, 2015). This case involved two questions: (1) whether the city took part of Rimrock’s property when it paved a preexisting gravel road; and (2) if it took the property, what was the taken property’s value. The city argued that it did not take any property from Rimrock because either: (1) the entire piece of property was already impliedly dedicated to the public; or (2) because the city did not intend to take the property because it thought the street had already been impliedly dedicated to the public. The court dismissed both arguments. The court addressed evidence in the record that showed that the history of the “trail” could lead a jury to infer only a portion of the roadway was impliedly dedicated to the public. The court held that the city’s argument – that a dedication to the public means (as a matter of law) a dedication of the entire right-of-way – is misplaced since this case is about an implied dedication. The case law supporting a ruling as a matter of law comes from express dedications. In regard to the city’s second argument, the court looked at the city’s very clear intent to improve the roadway and the fact that the city had even asked Rimrock for a release of any areas which may intrude (which was refused by Rimrock). As a result, evidence existed for a jury to determine the city had the intent to take property specifically for public use. The trial court did not abuse its discretion in its instruction to the jury regarding how to calculate damages based on the value of the severed portion taken as opposed to the decreased value of the entire property. In the end, the court affirmed the jury award of Rimrock’s claims for a taking but did not allow reimbursement for attorney’s fees.

Land Use: Board of Adjustment for the City of San Antonio v. East Cent. Indep. Sch. Dist., No. 04-14-00341-CV, 2015 WL 1244665 (Tex. App.―San Antonio Mar. 18, 2015) (mem. op.). Sarosh Management (Sarosh) contracted to purchase property and intended to operate a convenience store that sold alcohol on that property. In Sarosh’s application to the Texas Alcoholic Beverage Commission (TABC), Sarosh disclosed that the property was located within 300 feet of a school. Sarosh sent a letter to the principal of the East Central Independent School District school located near the property informing the school of its intentions. Sarosh obtained the proper permits from TABC and began construction on the store. During construction, Sarosh applied for a certificate of occupancy with the City of San Antonio listing the business as a convenience store with alcoholic beverages, and the City of San Antonio issued the certificate. The city’s chief building inspector reinspected the property a few months later and revoked the certificate of occupancy. The inspector stated that the certificate was issued in error because the store was located within 300 feet of a school, which is prohibited by city ordinance.

Sarosh appealed the inspector’s decision to the city’s board of adjustment (board), which voted to overturn the inspector’s decision. The East Central Independent School District challenged the board’s decision by filing a petition for writ of certiorari. The trial court entered a judgment setting aside the board’s action, and Sarosh and the city appealed.

The board contends it did not abuse its discretion by overturning the inspector’s decision because the inspection failed to follow the procedures for revoking permits provided for in the city’s ordinance. The San Antonio Court of Appeals disagreed concluding that the inspector complied with the proper revocation procedure. The court also stated that because the certificate of occupancy was issued in violation of the ordinance, the certificate was void. Thus, Sarosh did not acquire any rights under the certificate and had no due process claim. The Court of Appeals affirmed the trial court’s decision.

Vested Rights: CPM Trust v. City of Plano, No. 05-14-00104-CV, 2015 WL 1568746 (Tex. App.―Dallas Apr. 7, 2015). This case involves a billboard installed in 1961. At the time of purchase, the property was not in the jurisdiction of the City of Plano. However, the property was later annexed by the city. Based on the city’s sign ordinance, the city ordered that the property owner, CPM Trust (The Trust) to remove the remainder of the billboard that was damaged following a storm. The Trust filed an application to the city’s board of adjustment (board) to appeal the decision of the administrative official requiring removal of the billboard. The building official’s decision was upheld by the board. The Trust filed a petition in the trial court. The trial court affirmed the board’s decision.

The Trust appealed the trial court’s judgment. The Dallas Court of Appeals concluded that the board abused its discretion by not allowing appellants the option to make repairs as provided in the city ordinance, and the trial court erred by affirming the board’s decision. The Trust also asserted a takings claim stating that they were entitled to recover temporary damages including rentals or lost profits for the period of time the damaged billboard was unusable. The Dallas Court of Appeals concluded that The Trust did not allege a taking, and the trial court properly granted the city’s plea to the jurisdiction on the takings claim. The court rendered judgment reversing the board’s decision and remanded the case to the trial court.

Sale of Real Property: City of McAllen v. Brand, No. 13–14–00167–CV, 2015 WL 1544733 (Tex. App.—Corpus Christi Apr. 2, 2015) (mem. op.). Othal Brand, general manager of the Hidalgo County Water Improvement District #3, sued the City of McAllen and its city manager in connection with a 2012 real property exchange between the city and Mark Freeland. The city and Freeland exchanged small parcels of land so that Freeland owned land within a water district and was eligible to run for a director position on the district’s board. After Freeland was elected to the board, Brand filed his lawsuit claiming, among other things, that the city failed to comply with Chapters 253 and 272 of the Local Government Code when exchanging property with Freeland. The city filed a plea to the jurisdiction, which was denied by the trial court, and the city appealed.

On appeal, the city argued that Brand lacked standing to complain about the land deal. The court held that Brand had no greater interest in the land deal between Freeland and the city than the general public. Because Brand alleged no particularized injury distinct from the general public, he had no standing to challenge the city’s actions. While Brand stated that he “would have considered placing a bid” on the city property in question if the city made public its interest in transferring the property, the court held that this speculative interest was not sufficient to confer standing. Further, because Brand sued as a private citizen, his employment with the water district did not create any particularized interest in the land deal that he would not otherwise have as a private citizen.

The court reversed the order of the trial court denying the city’s plea to the jurisdiction, and rendered judgment granting the city’s plea and dismissing Brand’s claims with prejudice.

Contractual Immunity: City of Galveston v. CDM Smith, Inc., No. 14-14-00294-CV, 2015 WL 1544938 (Tex. App.—Houston [14th Dist.] Apr. 2, 2015). The City of Galveston entered into a contract with CDM Smith, Inc. to administer federal funds received to assist with the recovery from damages caused by Hurricane Ike. CDM sued the city, the city attorney, and the housing director after the city stopped submitting CDM invoices to the responsible state agency for payment, asserting (among other things) breach of contract and a writ of mandamus for violation of the Public Information Act (PIA) regarding open records requests relevant to CDM’s claims. The city filed a plea to the jurisdiction on the grounds of contractual immunity from suit, which was denied by the trial court, and the city appealed.

On appeal, the city argued that the waiver of contractual immunity provision in Local Government Code Chapter 271 did not apply because the contract did not state the “essential terms” regarding payment or provision of services to the city since the city’s payment obligation was contingent on the receipt of funds from the state. The court held that the contract identifies the maximum compensation to be paid to CDM, the scope of work to be compensated, and the procedure for payment, and therefore sets the essential terms of the agreement. The city further argued that the contract was not for services to the city, but to identify and direct funds to citizens whose homes were in need of repair after Hurricane Ike. The court held that the city did enjoy benefits under the contract through CDM’s providing management and operational services, assisting the city’s Grants and Housing Department with the program, and developing a master plan and housing study that the city would own. Because the city’s agreement with CDM included the essential term regarding payment and required CDM to provide services, the court concluded that the city’s immunity from CDM’s breach of contract claim was waived under Local Government Code Chapter 271, and affirmed the trial court’s denial of the city’s plea to the jurisdiction on that claim.

In addition to the contractual immunity issue, the city also asserted on appeal that its immunity had not been waived as to CDM’s claims under the PIA. CDM claimed that the city failed to produce documents requested under the PIA, and sought a writ of mandamus to compel them to promptly produce the requested documents. However, the city submitted evidence establishing that it complied with CDM’s requests, but that CDM did not follow through on the requests after receiving the city’s cost estimate. As a result, CDM could not establish that the city was “unwilling” to supply public information, as is required in a suit for mandamus. The court held that the trial court lacked jurisdiction over all of CDM’s claims under the PIA, and reversed the trial court’s denial of the city’s plea to the jurisdiction.

Vested Rights: Village of Tiki Island v. Premier Tierra Holdings, Inc., No. 14-14-00629-CV, 2015 WL 1393278 (Tex. App.—Houston [14th Dist.] Mar. 24, 2015). The plaintiff sought a declaratory judgment action to determine vested development rights under Chapter 245 of the Texas Local Government Code. This is an interlocutory appeal from the denial of a plea to the jurisdiction where the 14th Court of Appeals determined no justiciable controversy exists and reversed the denial.

Premier Tierra Holdings, Inc., (Premier) owns a tract of property in the Village of Tiki Island (village), located in Galveston County. Premier desires to develop or sell the property for a mixed-use marina development (project). Premier asserted that Chapter 245 of the Local Government Code required the village to consider the approval of an application for a permit solely on the basis of the regulatory scheme existing at the time the first plat application for a project is filed, and therefore certain provisions of the village’s zoning ordinance (adopted later) could not be applied to its project. The application was denied. Premier sued seeking a declaration it has a vested right as of its original plat application for the project. The village filed a plea to the jurisdiction asserting the relief sought was for a ruling on a “hypothetical future application of land-use regulations.” The trial court denied the village’s plea and it appealed.

The court held that while Chapter 245 allows a declaratory judgment action to determine certain vested rights, at the time Premier filed its plat application, the village was governed by Chapter 212 of the Local Government Code, which establishes the standards for approval of a proposed subdivision plat. The village contended Premier never exercised its statutory right to request that the village provide the reasons for the denial, never appealed the denial, and never advanced the denial was improper. The court held that “Premier’s request for declaratory relief fails to present a justiciable controversy because the record does not disclose the reasons why the [village] denied the 2010 plat application; no plat or permit applications have since been denied for any specified reasons; and Premier has not challenged the [village’s] denial of its plat application in this or any other proceeding.”

The village was not required to approve the application simply because it was filed, but was entitled to approve, disapprove, or conditionally approve based on regulations in effect at the time. Essentially, since Premier did not ascertain the reason for the denial or attempt to cure any defects and the village has the right to deny for some reasons but not others, no controversy yet exists. The court disagreed that the claims failed because of mootness and ripeness and expressly stated that its opinion should not be read or implied to hold “the plat application itself or any statutory rights Premier acquired for the project as a result of filing the plat application are necessarily mooted.” Since the court could not do anything at this juncture, no jurisdiction yet exists.*

*Case summaries taken largely from the work of the Law Offices of Ryan Henry, PLLC, and reprinted with permission from Ryan Henry.  To sign up for the firm’s blog, go to