Note: Included cases are from December 11, 2019 through January 10, 2020.
Employment: Town of Shady Shores v. Swanson, No. 18-0413, 2019 WL 6794327 (Tex. Dec. 13, 2019). This is an employment case, but the focus on the opinion is a procedural one. Importantly, the Texas Supreme Court held: (1) a no-evidence motion for summary judgment was proper to raise a jurisdictional challenge, and (2) the Texas Open Meetings Act (TOMA) did not waive immunity for declaratory relief, only mandamus and injunctive relief.
Swanson was the former Town Secretary for Shady Shores. She brought claims asserting she was wrongfully discharged. The town filed a plea to the jurisdiction, which was granted as to the Sabine Pilot and Whistleblower claims. The town later filed traditional and no-evidence summary judgment motions (on immunity grounds) as to the TOMA declaratory judgment claims, which the trial court denied. The town took an interlocutory appeal, but Swanson kept filing motions. The trial court granted Swanson leave to file a motion for a permissive interlocutory appeal as Swanson asserted she filed her notice of appeal (for the plea to the jurisdiction) within 14 days of the town’s notice of appeal for the summary judgments. When Swanson attempted to hold further proceedings and obtain an order on the permissive appeal, the town filed a separate mandamus action (which was consolidated for purposes of appeal). The court of appeals declined to issue the mandamus noting the trial court did not actually sign any orders, noting Swanson did not timely file an appeal, and was not granted a permissive appeal.
The court of appeals held allowing a jurisdictional challenge on immunity grounds via a no-evidence motion would improperly shift a plaintiff’s initial burden by requiring a plaintiff to “marshal evidence showing jurisdiction” before the governmental entity has produced evidence negating it. It also held the entity must negate the existence of jurisdictional facts. After recognizing a split in the appellate courts, the Texas Supreme Court rejected the reasoning noting in both traditional and no-evidence motions, the court views the evidence in the light most favorable to the nonmovant. Because the plaintiff must establish jurisdiction, the court could “see no reason to allow jurisdictional challenges via traditional motions for summary judgment but to foreclose such challenges via no-evidence motions.” Thus, when a challenge to jurisdiction that implicates the merits is properly made and supported—whether by a plea to the jurisdiction or by a traditional or no-evidence motion for summary judgment—the plaintiff will be required to present sufficient evidence on the merits of her claims to create a genuine issue of material fact. Such a challenge is proper using a no-evidence summary judgment motion.
Next, the Court held the Uniform Declaratory Judgment Act (UDJA) does not contain a general waiver of immunity, providing only a limited waiver for challenges to the validity of an ordinance or statute. UDJA claims requesting other types of declaratory relief are barred absent a legislative waiver of immunity with respect to the underlying action. Under TOMA, immunity is waived only “to the express relief provided” therein—injunctive and mandamus relief—and the scope does not extend to the declaratory relief sought. Thus, TOMA’s clear and unambiguous waiver of immunity does not extend to suits for declaratory relief against the entity. However, Swanson did seek mandamus and injunctive relief as well, which were not addressed by the court of appeals, even though argued by the town. As a result, the Supreme Court remanded these claims to the court of appeals to address.*
Declaratory Judgment: City of Houston v. Hope for Families, Inc., No. 01-18-00795-CV, 2020 WL 97176 (Tex. App.—Houston [1st Dist.] Jan. 9, 2020) (mem. op.). This is a declaratory judgment case where Hope for Families (HFF) sought to declare a deed from HFF to the city void.
The city selected HFF to receive funding to purchase, demolish, and rehabilitate a foreclosed, dilapidated apartment complex as part of its community development program. HFF learned that the property was encumbered with delinquent property taxes. Before it could reach a resolution of the tax delinquency, Wade, a city employee, negotiated an agreement with one of HFF’s board members to convey title to the city. HFF sued to have the conveyance of title declared void. The trial court denied the city’s and Wade’s plea to the jurisdiction.
First, the court of appeals determined that the Uniform Declaratory Judgment Act does not have a general waiver of governmental immunity. These types of lawsuits against a governmental entity are suits against the state for which the plaintiff needs a waiver of governmental immunity to proceed. There is no such waiver.
HFF also sued under the theory that the Texas Business Organizations Code provides a remedy to declare the conveyance invalid. However, the court of appeals determined that there is no authority for HFF to bring the lawsuit; only the attorney general has standing to undo the deed between HFF and the city. HFF could sue only its board member under the Texas Business Organizations Code.
Even when attempting to treat HFF’s claim as a trespass to title, the city still retained its immunity because there is no waiver of governmental immunity for that claim. However, Wade as an individual could be sued for acting ultra vires. In order to fall under the ultra vires exception, “a suit must not complain of a government officer’s exercise of discretion, but rather must allege, and ultimately prove, that the officer acted without legal authority or failed to perform a purely ministerial duty.” The court concluded that HFF’s petition had alleged sufficient facts that Wade acted improperly in filing the deed. Thus, those claims against him in his official capacity could proceed.
The court reversed the trial court when it came to the city and granted the plea to the jurisdiction. The court dismissed the claims against the city for lack of subject-matter jurisdiction. The court reversed the portion of the trial court’s order denying Wade’s plea to the jurisdiction regarding the title dispute claim and remanded the issue for further proceedings. It affirmed the remainder of the order.
Texas Tort Claims Act: City of Houston v. Miller, No. 01-19-00450-CV, 2019 WL 7341666 (Tex. App.—Houston [1st Dist.] Dec. 31, 2019) (mem. op.). This is a Texas Tort Claims Act case that focuses on the notice provisions of the statute. The trial court denied the city’s plea to the jurisdiction on the grounds that it did not have timely notice of Miller’s claims.
The city’s charter requires notice within 90 days of the date of the incident. Miller was thrown from his motorcycle after riding over a pothole. He sent a letter to the city outside of the city’s 90-day notice period. Miller argued the city had actual notice despite the fact he did not provide formal notice within the deadline. He claimed the city had to be aware of the defective condition because it should have known about it. The First Court of Appeals rejected that argument because Miller failed to present evidence that the city had “subjective awareness” of its “alleged fault producing or contributing to the injury.” The court reversed the trial court’s denial of the city’s plea to the jurisdiction and rendered judgment dismissing Miller’s claim with prejudice.
Texas Tort Claims Act: Deleon v. Villareal, No. 02-19-00133-CV, 2020 WL 98142 (Tex. App.—Fort Worth Jan. 9, 2020) (mem. op.). This is a Texas Tort Claims Act case that focuses on whether police officers were in the scope of their employment when arresting Deleon and testifying against him. The Second Court of Appeals affirmed the trial court’s grant of the officers’ motion to dismiss.
The officers arrested Deleon and then testified against him. After a jury acquitted him, Deleon sued the officers for negligence per se and intentional infliction of emotional distress. The officers filed a 91a motion to dismiss on the grounds that the lawsuit could have been brought against the City of Saginaw under Texas Civil Practice and Remedies Code Section 101.106(f). Deleon refused to amend his petition to dismiss the officers and sue the city.
Section 101.106(f) requires mandatory dismissal of the individuals if the suit could have been brought against the city. Section 101.106(f) “provides the appropriate avenue for dismissal of an employee [of a governmental unit] who is considered to have been sued in his official capacity,” that is, when suit “is brought against a government employee for conduct within the general scope of his employment and, when suit could have been brought under the [Texas Tort Claims Act] against the government.”
The court concluded the dismissal was proper. Because Deleon’s suit against the officers was based on conduct within the general scope of their employment and could have been brought under the TTCA against the city, Deleon’s suit was against the officers in their official capacities only. Thus, the officers were entitled to dismissal.
Zoning: Oak Point Bd. of Adjustment v. Houle, No. 02-19-00068-CV, 2019 WL 6767801 (Tex. App.—Fort Worth Dec. 12, 2019) (mem. op.).This is a board of adjustment appeal where the Fort Worth Court of Appeals reversed the denial of the board’s plea to the jurisdiction and dismissed the case.
The City of Oak Point has a zoning ordinance establishing a 50-foot front-yard setback in residential neighborhoods. Houle, a resident, complained about the variance to the set-back granted to his neighbor, Bobby Pope. Pope received a permit and built a shed, but due to a miscalculation, it was built in the setback. The board of adjustment (BOA) granted the variance. Houle attempted to challenge it by suit in the county court at law. The BOA filed a plea to the jurisdiction which was denied. It appealed.
The BOA advised Pope had since moved the shed out of the setback. By variance, the BOA effectively excepted Pope’s shed from the front-yard setback requirement. Houle’s petition seeks to undo that exception. However, the variance expressly stated that should the shed ever be moved, the variance would be nullified, which is exactly the relief requested by Houle. The shed’s relocation means that Houle has obtained the relief he sought by his claims, and a judicial determination cannot have any practical legal effect on an existing controversy, rendering his lawsuit moot. None of Houle’s arguments asserting why the suit remains live applied. As a result, the plea should have been granted.*
Governmental Immunity: City of Helotes v. Page, No. 04-19-00437-CV, 2019 WL 6887719 (Tex. App.—San Antonio Dec. 18, 2019) (mem. op.). This is an interlocutory appeal from the denial of the City of Helotes’ plea to the jurisdiction in which the court of appeals held that the plaintiff’s injuries occurred during the performance of a proprietary function.
A city employee dropped a table while removing it from a parked golf cart. The table allegedly struck the cart’s accelerator causing the cart to propel forward and strike the plaintiff, Jean Marie Page. This accident occurred while the employee was setting up for an event referred to as the “MarketPlace at Old Town Helotes,” which is a vendor fair sponsored, supervised, regulated, operated, and managed by the city. The MarketPlace is held on public streets which are closed to traffic, and the city rents booths to vendors who sell crafts, merchandise, and food, and advertise and display the services they offer. The city also has a booth from which it sells beer. Page sued the city for negligence. The city filed a plea to the jurisdiction alleging the MarketPlace is a governmental function because it was an economic development tool to bring people into Old Town Helotes so as to improve the existing businesses’ finances and generate community involvement. The trial court denied the plea.
The court applied the following four prong test delineated in Wasson Interests, Ltd. v. City of Jacksonville to determine whether the MarketPlace was a proprietary or governmental activity: (1) whether the city’s act was mandatory or discretionary; (2) whether the activity was intended to benefit the general public or the city’s residents; (3) whether the city was acting on the state’s behalf or on its own behalf in performing the activity; and (4) whether the city’s act was sufficiently related to a governmental function to render the act governmental even if it would otherwise have been proprietary.
The city conceded that its decision to own, support, and operate the MarketPlace was discretionary indicating that the MarketPlace was likely proprietary. The court also determined that although non-residents participated in and benefited from the MarketPlace, its primary objective was to assist local businesses by generating community involvement in the Old Town Helotes area which raised funds for the city’s general budget. Additionally, the court found that the city administrator’s testimony regarding the collection of sales taxes, the recording of revenues in the MarketPlace’s budget, and the use of the profits for the MarketPlace or other city departments provided some evidence that the city was acting on its own behalf. Finally, the court concluded that there was no evidence that the operation of the MarketPlace is “essential” to the city’s governmental actions. Accordingly, the court affirmed the trial court’s order.
Tort Claims Act: City of El Paso v. Lopez, No. 08-19-00056-CV, 2019 WL 6838005, (Tex. App.—El Paso Dec. 16, 2019). This is a Texas Tort Claims Act (TTCA) case where the El Paso Court of Appeals affirmed the denial of the city’s plea to the jurisdiction.
Lopez was traveling on his motorcycle at night when the roadway ended with a concrete barrier and canal. There were neither road signs nor any other type of warnings or lighting. Lopez struck the barrier and was killed. The police investigation report noted “the driver . . . failed to stop for the end of the street or roadway and crashed his bike into the canal.” A nearby resident also gave a statement that “there are a lot of cars that crash into the canal” because “[t]here are no warning signs to let you know that the street ends so when people come out of the bars they wind up crashing at the canal.” The investigation listed “lack of signs and illumination” as factors in causing the accident. Lopez’s family brought a wrongful death claim against the city. The city filed a plea to the jurisdiction, which was denied.
The plaintiffs failed to provide statutory notice of the accident but asserted the city had actual notice of its fault. Citing to the recent Texas Supreme Court case in Worsdale v. City of Killeen, 578 S.W.3d 57 (Tex. 2019), the court held the “critical inquiry is the governmental unit’s actual anticipation of an alleged claim rather than subjective confirmation of its actual liability.” After reviewing the record, the court held the city had actual notice of the claim under the TTCA. Next, the court analyzed whether the concrete barrier was a special defect. Both the canal and the concrete barrier were located on the roadway’s path, neither of which was visible in the dark to ordinary motorists. As a result, the court determined it was a special defect and the plea was properly denied.*
Breach of Contract: Wasson Interests, Ltd. v. City of Jacksonville, No. 12-13-00262-CV, 2019 WL 7373851 (Tex. App.—Tyler Dec. 31, 2019) (mem. op.). [Note: Wasson filed a motion for rehearing after the court’s August 30, 2019 opinion. The court overruled the motion for rehearing, withdrew its opinion and judgment from August 30, 2019, and substitutes this new opinion and corresponding judgment in its place. In the new opinion, the court rejected Wasson’s arguments on rehearing as untimely and not proper grounds upon which to reverse the trial court’s summary judgment.]
After the Texas Supreme Court held in 2016 that the proprietary-governmental dichotomy applied to breach of contract cases, it remanded this case back to the Tyler Court of Appeals to address the merits of the city’s initial no-evidence motion for summary judgment.
The basic fact pattern is as follows. Wasson Interests, Ltd. (Wasson) was the successor in interest of a 99-year lease of city property specified for residential use for two separate lots – lot 43 and lot 46. Wasson began leasing the property for one week at a time. The city sent an eviction notice holding the short-term rentals constituted a commercial use of the property in violation of the lease. The city agreed to excuse past violations and cancel the eviction in exchange for Wasson entering into a reinstatement agreement under which the city imposed more specific conditions concerning the property’s acceptable uses and occupancy limitations. Later, the city discovered an advertisement to rent the home on lot 43. The city sent notice to Wasson that the advertisement and rental terms violated the reinstatement agreement and that the city would terminate the leases if Wasson failed to cease all commercial activity within ten days. The city ultimately sent an eviction notice and Wasson sued the city for breach of contract. The city filed a traditional and no-evidence summary judgment which the trial court granted and Wasson appealed.
After remand from the Texas Supreme Court, the court of appeals considered Wasson’s argument that the trial court erred when it granted summary judgment in favor of the city due to a fact issue on Wasson’s breach of contract and wrongful eviction claims. The city alleged that Wasson breached the reinstatement agreement in three ways: (1) Wasson advertised the properties online for use as a vacation rental; (2) Wasson’s rental scheme obligated a renter to stay a minimum of only one week (instead of 30 days); and (3) Wasson allowed its employees to stay at the properties in consideration for their labor. The court addresses whether Wasson carried its burden to create a fact issue by producing more than a scintilla of evidence that it did not materially breach the reinstatement agreement.
The reinstatement agreement expressly prohibited the advertisement. Nevertheless, Wasson advertised the house on lot 43 on VRBO.com. The court held that the advertisement constituted not only a breach of the agreement, but also authorized the city to terminate the leases and evict Wasson on lot 43. (Note: although Wasson didn’t carry its burden to show a fact issue regarding the advertisement for the lot 43 property, no advertisement for lot 46 was in the record, so Wasson presented more than a scintilla of evidence that complied with the reinstatement agreement’s advertisement provision as to the lot 46 property.)
The court also sided with the city’s contention that the rental scheme’s obligation that a renter stay a minimum of only one week violated the reinstatement agreement. In doing so, the court again referenced the online advertisement for the property on lot 43. The agreement required any rentals to have a term that exceeded 30 consecutive days. Wasson did not offer sufficient evidence showing that it did not breach the 30 consecutive day requirement in the agreement in relation to the property on lot 43. Again, without any advertisement pertaining to the property on lot 46 in the record, Wasson raised a fact issue as to whether the city’s termination of the lease for lot 46 and eviction was improper.
The reinstatement agreement also prohibited Wasson from renting the property as a vacation home “whether rent is paid in money, goods, labor, or otherwise.” The city claimed that Wasson violated the agreement for both lots when it allowed employees to stay at both properties in consideration for their labor. But the court found no evidence in the record that Wasson allowed employees to stay at the property in consideration for their labor. The only evidence in the record showed that Wasson allowed employees to stay at the property gratuitously at times. The city therefore was without cause to terminate either lease and evict on this ground.
For the reasons stated above, the court held the city was authorized to terminate the lease and evict Wasson on lot 43, but Wasson raised a fact issue concerning the city’s termination of the lease and eviction on lot 46. The court affirmed the trial court’s order in relation to lot 43, but reversed the trial court’s order and remanded as to lot 46.
Finally, Wasson argued that it should retain the equity for the improvements made to the city’s land even if it violated the reinstatement agreement. Although Wasson was lawfully evicted from the property on lot 43, the court held that it would be inequitable for the city to retain the full value of the improvements made by Wasson to lot 43. According to the court this case represents an “unusual scenario” in which the city provided only the land and the leases authorized the tenant to construct permanent homes and other improvements. The city would be unjustly enriched to retain the full value of the extensive improvements without providing any compensation to Wasson. The court remanded the issue to the trial court to determine the amount of equitable reimbursement due to Wasson for the improvements to lot 43.
*Indicates 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 www.rshlawfirm.com.