Recent Texas Cases of Interest to Cities

Note: Included cases are from January 1, 2024, through January 31, 2024.

Civil Rights: Harris Cnty. v. Deary, No. 01-23-00516-CV, 2024 WL 234755 (Tex. App.—Houston [1st Dist.] Jan. 23, 2024).  Deary sued Harris County under the Texas Tort Claims Act (TTCA) and 42 U.S.C. § 1983 after a county sheriff allegedly slammed her to the ground and arrested her without probable cause. The county filed a plea to the jurisdiction, claiming governmental immunity, and additionally filed a Rule 91a motion to dismiss, claiming Deary’s suit had no basis in law and fact. The trial court denied both the plea and the motion, and the county appealed.

The appellate court affirmed in part and reversed in part, holding that: (1) because Deary had alleged only intentional torts in her pleading, the Texas Tort Claims Act did not waive the county’s immunity with regard to those claims; (2) a county has no immunity to Section 1983 claims because Section 1983 creates a cause of action against government actors who deprive a plaintiff of their constitutional rights; and (3) even if the trial court erred by denying the Rule 91a motion to dismiss, the appellate court lacked jurisdiction to review that interlocutory order because it did not implicate the court’s subject matter jurisdiction.

Tort Claims Act: City of Houston v. Branch, No. 01-21-00255-CV, 2024 WL 332993 (Tex. App.—Houston [1st Dist.] Jan. 30, 2024) (reh’g en banc). Branch sued the City of Houston for negligence under the Texas Tort Claims Act (TTCA), claiming negligent operation of a motor vehicle when a golf cart occupied by a city council member rolled forward over Branch’s foot, allegedly when the councilmember accidentally hit the gas. The city filed a motion for summary judgment claiming governmental immunity, which the trial court denied. The city appealed.

The appellate court affirmed, holding that Branch had raised a fact issue regarding the application of the TTCA’s waiver of immunity for negligent operation of a motor vehicle because if the councilmember hit the gas pedal on the golf cart, even inadvertently, it might constitute operation of a motor-driven vehicle within the meaning of the waiver.

Takings: Selinger v. City of McKinney, No. 05-23-00180-CV, 2024 WL 260500 (Tex. App.—Dallas Jan. 24, 2024) (mem. op.). Developer Stephen Richard Selinger sued the City of McKinney after his plat application to subdivide his 82-acre property into 331 lots was denied. His plans included construction of necessary sewer infrastructure including a package treatment plant, and because the tract of land was not served by the city’s water and sewer services, Seliger would contract with a special utility district to supply water to the subdivision. However, the city’s subdivision ordinance required developments in the extraterritorial jurisdiction to connect to the city’s water and sewer systems and to pay water and sewer impact fees, approximately $482,000 in his case. After declining to alternatively enter into a facilities agreement with the city which would include waivers to some of the city’s subdivision ordinance requirements and require him to pay the impact fees if and when the city’s water and sewer transmission lines were extended to the development, the city denied Selinger’s plat application. Seliger then sued the city arguing, among other things, that the city’s actions constituted an illegal taking of his property. However, the trial court ruled in favor of the city, issuing 118 findings of fact and 30 conclusions in law supporting its judgment. Selinger subsequently appealed the court’s decision.

The court of appeals held that based on the factual findings at trial, the city’s exaction of impact fees did not constitute a compensable taking. In so holding, the court concluded that the city’s impact fees bore an essential nexus to the substantial advancement of a legitimate government interest because (1) the city had developed a capital improvements plan based on extensive engineering and land use studies, and (2) had established a formula which determined Selinger’s projected impact to the city’s water and sewer systems. In addition, the impact fees were roughly proportional to the projected impact of Selinger’s proposed development. To Selinger’s claim that that the city’s exaction lacked the required essential nexus and rough proportionality because he never intended to use the city’s water and sewer systems in his development, the court stated that his unilateral decision did not impact the city’s exclusive right to provide water service to properties (like Selinger’s) located within its certificate of convenience and necessity (CCN). The city also offered evidence at trial that Selinger’s property would likely become more marketable with reliable city utilities. For those reasons, the court of appeals affirmed the lower court’s decision.

PURA: In re Disney DTC, LLC N/K/A Disney Platform Distribution, Inc., Hulu, LLC and Netflix, Inc., No. 05-23-00485-CV, 2024 WL 358117 (Tex. App.—Dallas Jan. 31, 2024). This case stems from a lawsuit in which 31 cities sued streaming providers Disney, Hulu, and Netflix for, among other things, failing to obtain state-issued certificates of franchise and refusing to pay the associated city franchise fees for use of city rights-of-way in providing their services pursuant to Chapter 66 of the Texas Public Utility Regulatory Act (PURA). In response to the lawsuit, the streaming providers filed a motion to dismiss arguing that: (1) cities lack the authority to enforce PURA’s franchise requirements against non-franchise holders like Disney, Hulu, and Netflix, and (2) because they do not build or operate facilities in city rights of way, they are not required to obtain state-issued certificates of franchise. After the trial court denied the streaming providers’ motion, they filed a writ of mandamus.

In ruling in favor of the streaming providers, the court concluded that although PURA provides cities with a limited cause of action against franchise holders, it does not allow for a cause of action against non-franchise holders. The Public Utilities Commission, through the attorney general, is the only entity authorized to determine who must be a franchise holder and how to enforce compliance for failure to obtain a franchise certificate. Because the streaming providers are not franchise certificate holders, the court held that the denial of the motion to dismiss was an abuse of discretion and ordered the trial court to vacate the denial order and to grant the streaming providers’ motion.

Government Immunity; Prompt Payment Act: San Antonio Water Sys. v. Guarantee Co. of N. Am. USA, No. 08-23-00123-CV, 2024 WL 42357 (Tex. App.—El Paso Jan. 3, 2024) (mem. op.). The San Antonio Water System (SAWS) entered into two separate contracts with Thyssen for the construction of the Mel Waiters Project and the Westpointe Project. GCNA served as the surety for Thyssen on both projects. A dispute arose over the Mel Waiters Project, leading SAWS to sue Thyssen for breach of performance and GCNA for breach of its performance bond obligations. In response, GCNA filed counterclaims related to the Westpointe Project, alleging several breaches of contract by SAWS and additional claims under the Texas Prompt Payment Act. SAWS then filed a plea to the jurisdiction and motion to dismiss GCNA’s counterclaims based on governmental immunity. The trial court denied the plea, and SAWS appealed.

Generally, cities have immunity from liability and lawsuits unless that immunity has been waived. Chapter 271 of the Texas Local Government Code contains a limited waiver of governmental immunity for breach of contract claims arising under certain contracts. Even though GCNA was not a signatory to the contract at issue, as an insurer of signatory (Thyssen), GCNA was subrogated to the rights of the insured, and could bring the claims under the contract. Unfortunately for GCNA, the court ultimately held that the terms of the contract were not violated by SAWS as GCNA argued. With regard to Prompt Payment Act counterclaim, it failed as well, due to SAWS not being an “owner” as defined by the Texas Property Code for purposes of GCNA’s claims. The court ultimately reversed the trial court’s judgment and dismissed GCNA’s claims with prejudice.

Tort Claims Act: City of Fredericksburg v. Boyer, No. 08-23-00236-CV, 2024 WL 101878 (Tex. App.—El Paso Jan. 9, 2024). Susanna Boyer was injured by a falling branch from a Bradford pear tree maintained by the City of Fredericksburg while walking on a sidewalk. She accused the city of negligence in maintaining the sidewalk and the tree, failing to warn the public about the tree’s danger, and not removing or mitigating the hazard. The city filed a plea to the jurisdiction claiming immunity under the Texas Tort Claims Act (TTCA), arguing it lacked actual knowledge of the tree’s dangerous condition. The trial court denied the city’s plea, so the city appealed.

Generally, cities have immunity from liability and lawsuits unless that immunity has been waived. The TTCA contains a limited waiver of governmental immunity. For premises defects, a city owes the same duty to a claimant that a private person owes to a licensee on private property; therefore, in premises defect cases like this one, the TTCA would waive immunity if the city would be liable under a licensee theory of premises liability. To be successful in her claim, absent willful, wanton, or grossly negligent conduct by the city, Boyer had to prove, among other elements, that the city had actual knowledge of the dangerous condition. Mere hypothetical or constructive knowledge is not sufficient to satisfy this element. Boyer presented expert testimony related to the Bradford pear’s species-specific failure profile; however, the court found that the testimony did not rise to the level of actual knowledge on the part of the city. Consequently, the trial court’s order was reversed, and the case was dismissed for want of jurisdiction.

Tax Abatement Agreements: Corsicana Indus. Found., Inc. v. City of Corsicana, No. 10-17-00316-CV, 2024 WL 118969 (Tex. App.—Waco Jan. 11, 2024). The City of Corsicana and Navarro County entered into a sales tax abatement agreement with the developer of a retail center and a retail store that operated a location in the retail center under which the city and county granted the use of portions of the sales taxes generated by the store location to pay for the development of a facility in the retail center to house the store location. The city and county brought a declaratory action against the developer and the retail store, seeking to invalidate sales tax abatement agreements, due to closing of the store location at the retail center.  The developer and the store brought counterclaims seeking declaratory relief regarding the city’s and county’s obligations.  The lender for the loan on the facility for the store location, who was named as third-party beneficiary in the agreements, intervened. The trial court granted summary judgment for the city and county. Following the store’s Chapter 11 bankruptcy barring it from participating in the appeal and developer’s assignment of all of its rights in action and appeal to the lender, the lender appealed, both individually and as assignee of the developer.

The court of appeals affirmed, finding that: (1) that the public purpose, under the Texas constitutional provisions limiting use of governmental resources for public purposes, which authorized grant of sales tax revenue was the opening and continued operation of store location in the center; (2) the closure of the store location extinguished the public purpose of the agreements so after closure, the agreements’ predominant purpose was no longer to accomplish a public purpose, and thus, rendered agreements unconstitutional; (3) the city and county did not retain control over sales taxes, and thus, agreements were unconstitutional; and (4) the agreements were unconstitutional at the time they were entered into, and thus, presumption of validity did not apply to the city and county resolutions authorizing them to enter into the agreements.

Takings: Capps v. City of Bryan, No. 10-21-00130-CV, 2024 WL 118470 (Tex. App.—Waco Jan. 11, 2024). Landowner brought action against the city for inverse condemnation, alleging that (1) the city committed a new taking when it constructed a new electric transmission line outside of the areas of a right-of-way easement previously granted to city and across the landowner’s property in which he owned full interest at the time and (2) the city abandoned original easement when the old transmission line was removed. The trial court granted the city’s plea to the jurisdiction in part finding that the landowner did not have standing to bring an inverse condemnation action against the city. The landowner filed an interlocutory appeal.

The court of appeals reversed and remanding finding that the landowner had standing to bring an inverse condemnation proceeding based on allegations of a taking and damages to property he owned.

Recall Elections: In re Gerdes, No. 11-23-00283-CV, 2024 WL 187234 (Tex. App.—Eastland Jan. 18, 2024) (mem. op.). This case stems from a petition to recall two commissioners from the City of Ranger. One of the commissioners, Samantha McGinnis, was seated on the commission after she ran unopposed, and the city cancelled her election. The other commissioner, Kevan Moize, was appointed to a vacant seat on the commission. In accordance with the city’s charter provision which requires the city to call an election no later than 30 days from the time a petition is presented to the commission, Steve Gerdes submitted two petitions to recall McGinnis and Moize. After five months elapsed, Gerdes filed a petition for mandamus requesting the court to order the city to call the election.

The commissioners argued they lacked the authority to call the election because the petitions were defective. Based on the city’s charter language, at least one-fifth of the voters who sign the petition must indicate that they voted for the officer at an election. Because neither McGinnis nor Moize was voted for at an election, the commission determined they could not be subject to recall. However, the court disagreed holding that the commissioners, absent an express charter provision, had no authority to refuse to call an election based on their findings that the petitions were defective. Instead, the commissioners were required to call the election, but could have simultaneously sought declaratory relief in district court to determine if the petitions were defective under the terms of the charter.

The commission also argued that the uniform election requirements in Election Code Section 41.001 preempt the city’s charter provision regarding the timing of holding a recall election. The next general election date at which the recall election could be held would fall on May 2024. However, McGinnis’s and Moize’s terms will conclude by then, and the seats will already be on the ballot. Therefore, the city did not need to hold a recall election. The court noted if the commission had ordered the election when it had received the recall petitions, it could have held the recall election in November 2023. For these reasons, the court granted Gerdes’s petition, and under its authority in Election Code Section 41.001(b)(3), ordered the city to schedule a special election on the recall of the commissioners not less than 15 days and not more than 30 days from the date its ruling.

Tort Claims Act: City of Corpus Christi v. Nickerson, No. 13-22-00040-CV, 2024 WL 48181 (Tex. App.—Corpus Christi–Edinburg Jan. 4, 2024) (mem. op.). Nickerson sued the City of Corpus Christi under the Texas Tort Claims Act (TTCA) after she was struck by a John Deere tractor operated by a coworker. The city filed a plea to the jurisdiction arguing that the TTCA did not waive the city’s immunity with respect to Nickerson’s claim because she received worker’s compensation benefits under the Texas Workers Compensation Act (TWCA). The trial court denied the plea and the city appealed.

The appellate court reversed, holding that when the TWCA applies, it acts as a bar to the waiver of immunity contained in the TTCA.

Texas Commission on Human Rights Act: City of Brownsville v. Gamez, No. 13-23-00159-CV, 2024 WL 48185 (Tex. App.—Corpus Christi–Edinburg Jan. 4, 2024) (mem. op.). Gamez sued the City of Brownsville under the Texas Commission on Human Rights Act for age and disability discrimination and retaliation based on his transfer and subsequent termination after his position was eliminated for budgetary reasons. The city filed a plea to the jurisdiction, arguing that its governmental immunity was not waived because the city had a nondiscriminatory reason to terminate Gamez, Gamez’s cancer did not constitute a disability, and Gamez had not alleged that he had opposed a discriminatory practice as required for a claim of retaliation. The trial court denied the city’s plea and the city appealed.

The appellate court affirmed the portion of the trial court’s judgment granting the city’s plea to the jurisdiction as to Gamez’s age and disability discrimination claims, holding that: (1) cancer is not a disability unless it impaired him in some way, which his did not; and (2) another employee with no authority over Gamez asking him when he would retire does not alone constitute evidence of age discrimination. However, the appellate court reversed the portion of the trial court judgment granting the city’s plea as to Gamez’s retaliation claim and remanded the case to allow Gamez an opportunity to replead, holding that he had not clearly pleaded a retaliation claim but that his petition did not demonstrate incurable defects in his claim.

Tort Claims Act: City of Hidalgo–Tex. Mun. Facilities Corp. v. Rodriguez, No. 13-23-00163-CV, 2024 WL 119245 (Tex. App.—Corpus Christi–Edinburg Jan. 11, 2024) (mem. op.). Rodriguez sued the City of Hidalgo–Texas Municipal Facilities Corporation (the city) under the Texas Tort Claims Act (TTCA), alleging a premises defect at a city-owned arena that was leased to the school district for which Rodriguez worked after she stepped into a sewage connection point (which she identified as a pothole or protruding steel cover) and fell, injuring her knee. The city filed a plea to the jurisdiction, claiming that: (1) Rodriguez could not identify a dangerous condition as required for a premises defect claim under the TTCA because she was unsure what she tripped over, had not seen it before she tripped, and it was not unreasonably dangerous; and (2) Rodriguez was a licensee and not an invitee, and therefore the city owed her a lower duty of care. The trial court denied the city’s plea and the city appealed.

The appellate court affirmed, holding that there were genuine issues of material fact as to: (1) whether the sewage connection point was an unreasonably dangerous condition; and (2) whether Rodriguez was an invitee or a licensee because although she had not paid to be on the premises, the school district for which she worked had paid.

Tort Claims Act: City of Houston v. Salazar, No. 14-23-00061-CV, 2024 WL 117384 (Tex. App.—Houston [14th Dist.] Jan. 11, 2024). Sammy Salazar, among others, was in a vehicle which was hit by a patrol car driven by Officer Seidel of the Houston Police Department while he was pursuing another individual. The appellees sued the City of Houston and Officer Seidel for negligence. The city moved for summary judgment, claiming governmental immunity, which the trial court denied, leading to this interlocutory appeal.

Generally, cities have immunity from liability and lawsuits unless that immunity has been waived. The Texas Tort Claims Act provides a limited waiver of governmental immunity for torts committed by city employees “acting within the scope of their employment” arising from the operation or use of motor-driven vehicles if the employee would be personally liable to the claimant under Texas law. Officer Seidel would have official immunity from this suit if he could prove the lawsuit arose from (1) the performance of discretionary duties, (2) undertaken in good faith, (3) provided he was acting in the course and scope of his authority. In this case, the “good faith” element was in question, and to prevail on this element, Officer Seidel needed to show that a reasonably prudent police officer, under the same or similar circumstances, could have believed his actions were justified based on the information he possessed at the time. The city presented evidence related to Seidel’s use of sirens and lights throughout his pursuit and other evidence demonstrating his considerations of the needs of the pursuit versus its risks. The appellate court determined that Officer Seidel did establish the affirmative defense of official immunity and therefore reversed the trial court’s ruling and dismissed the claims against Houston for lack of subject matter jurisdiction.

Tort Claims Act: City of Houston v. Gonzales, No. 14-21-00482-CV, 2024 WL 187418 (Tex. App.—Houston [14th Dist.] Jan. 18, 2024) (on reh’g). In January 2016, while driving with his training officer, Houston Police Department probationary peace officer Daniel Iwai collided with the rear bumper of another vehicle while responding to a priority-two call for assistance. Jonathan Gonzalez, who was in the other vehicle, sued the city for injuries he sustained in the collision and was awarded $250,000 at the conclusion of trial. Houston raised several issues on appeal, but the only one reached by the court was regarding an abuse of discretion by the trial court for not dismissing the case for lack of jurisdiction.

Generally, cities have immunity from liability and lawsuits unless that immunity has been waived. The Texas Tort Claims Act provides a limited waiver of governmental immunity for torts committed by city employees “acting within the scope of their employment” arising from the operation or use of motor-driven vehicles under certain circumstances. However, an exception to this waiver exists when a city employee is responding to an emergency. To prevail in this case, Gonzales needed to present evidence establishing at least one of the following: (1) the officer was not responding to an emergency, (2) the officer’s actions were not in compliance with laws or ordinances applicable to emergency action, or (3) the officer’s actions reflected a conscious indifference or disregard for the safety of others. At trial, both sides presented evidence regarding whether or not Iwai was responding to an emergency situation, and although the appellate court found the evidence to be inconclusive on this point, because the trial court rendered judgment for Gonzales, the appellate court held that the lower court’s findings were “not factually insufficient” to support the judgment against the city. Ultimately, the appellate court affirmed the trial court’s ruling; however, due to a procedural rule, the award to the plaintiff was lowered from $250,000 to $100,000.