Note: Included cases are from December 11, 2021 through January 10, 2022.
Tort Claims Act: City of Jersey Vill. v. Killough, No. 01-20-00823-CV, 2021 WL 5903988 (Tex. App.—Houston [1st Dist.] Dec. 14, 2021) (mem. op.). This is an interlocutory appeal in which the City of Jersey Village challenged the trial court’s order denying its plea to the jurisdiction and summary-judgment motion in a premises liability suit.
Killough alleged that he was injured when he collided with a concrete median barrier that had no paint or reflectors, while on his motorcycle, on U.S. Highway 290. Killough argued that the concrete median barrier constituted a special defect because it was an obstruction on the frontage road of U.S. 290 and posed an unexpected and unusual danger to ordinary users of the roadway in such a way that a vehicle’s ability to travel on the roadway would be unexpectedly and physically impaired. Killough further argued that the city had control over the concrete median barrier because the city was a home rule city with exclusive control over and under the public highways, streets, and alleys of the city. The city filed a plea and summary judgement motion, contending that the concrete median barrier was an ordinary premises defect rather than a special defect under the Texas Tort Claims Act (TTCA) because it was a longstanding permanent condition and also asserting that the roadway and the concrete median barrier were not constructed, owned, or controlled by the city, but rather by the Texas Department of Transportation. The trial court denied the city’s plea to the jurisdiction and summary judgment motion.
The appellate court found that the city’s status as a home rule city, standing alone, without a showing of ownership, dominion, or control of the concrete median barrier or roadway at the relevant location, did not create any duty on the part of the city. Therefore, the court held that the uncontroverted evidence established that the city did not owe Killough a legal duty, and did not waive the city’s governmental immunity. The appellate court reversed and rendered a decision.
Takings/Zoning: City of Grapevine v. Muns, No. 02-19-00257-CV, 2021 WL 6068952 (Tex. App.—Fort Worth Dec. 23, 2021). This matter was first reported last August in the TCAA Monthly Member News, Volume 16, Issue 12 (2021). In this opinion, the appellate court, on a motion for rehearing, reversed, in part, and affirmed, in part, the trial court’s order regarding the validity of the city’s short-term rental (STRs) ordinance.
The city’s initial zoning ordinance was written in a way that prevented STRs, but allowed some “bed and breakfasts.” Due to sporadic enforcement, and after an increase in complaints about negative effects from STRs, the city conducted a study. As a result of the study, the city passed an ordinance banning STRs in the entire city, but provided a 45-day grace period before enforcement would begin. Several property owners and commercial real estate services sued to invalidate the ordinance. The city filed a plea to the jurisdiction and motion for summary judgment, which were denied. The city appealed.
The city first contended that the plaintiffs failed to appeal any decisions to the board of adjustment and therefore failed to exhaust their administrative remedies. Generally, administrative bodies do not have the authority to rule on the constitutionality of statutes and ordinances. Although constitutional challenges are not “globally exempted” from the exhaustion requirement, if the administrative body lacked the ability to “render a relief that would moot the claim” then no exhaustion is required. As a result, the board of adjustment lacked the authority to grant the plaintiffs’ the right to conduct an STR, so no exhaustion is required.
Next, the city argued that STRs do not fit within the definition of a “single-family detached dwelling” under its zoning code because STRs are not occupied by a single-family but are occupied by groups of people. However, because the city’s code defines the word “family” in such a way that it does not require that the people living as a “single housekeeping unit” be related by blood or marriage and also has no duration of occupancy limit, the code does not prohibit STRs as long as the occupancy falls within the common and ordinary meaning of “family.”
The city next argued the plaintiffs did not directly challenge the validity of the STR ordinance (only an interpretation of whether it applied to them) so no declaratory relief could be granted. However, the court found the plaintiffs’ retroactivity, due-course-of-law, and takings claims turn on whether the existing code allowed STRs. To that extent, the court found they had a valid justiciable controversy. Under the takings analysis, the court held that although a property owner generally has no vested right to use his property in a certain way without restriction, they have a vested right in the real property, which includes the ability to lease. From a constitutional standpoint, that is sufficient to trigger a protected property right interest for jurisdictional purposes. This, along with the fact the court found that STRs were not expressly prohibited by the wording of the ordinance, creates a fact issue as to whether the plaintiffs suffered a taking. The court also noted that, contrary to the city’s arguments, lost profits are a relevant factor to consider in assessing the property’s value and the severity of the economic impact on a property owner. The plaintiffs pled and submitted evidence to support that STRs “generate higher average rent than long-term leases, even after expenses” and that the STR Ordinance prevents them from “participating in an active, lucrative market for [STRs].”
The court agreed with the city that the regulation of STRs is not preempted by the Tax Code, as alleged by the plaintiffs. Plaintiffs did not point to any provision in either the Tax Code or the Property Code that implies that the legislature meant to limit or forbid local regulations banning STRs. The court then addressed the retroactive law arguments, holding that a “settled” right is different than a vested right and the plaintiffs asserted the STR ordinance impaired their settled property rights under the common law and under the city’s code to lease their properties on a short-term basis. The issue is not about the “property owners’ right to use their property in a certain way,” but about the owners’ “retaining their well-settled right to lease their property.”
Next, in the substantive-due-process context, a constitutionally protected right must be a vested right that has some definitive, rather than merely potential existence. Property owners do not acquire a constitutionally protected vested right in property uses once commenced or in zoning classifications once made. Thus, although the plaintiffs have a vested right in their properties, they do not have a vested right under the city’s zoning ordinance to use them as STRs. However, the court found they do have a fundamental leasingright, which is sufficient to plead, jurisdictionally, a due-course-of-law claim. The court clarified in this rehearing opinion, that its holding on this point is limited to the fact a property owner has a fundamental right to lease, but the durational limits may be valid or may be invalid depending on the extent of the regulatory intrusion into that right. The intrusion goes to the merits of the case, which the court declined to address as part of the interlocutory appeal. In short, the plaintiffs properly pled all claims for jurisdictional purposes, except a claim under a preemption theory.*
Condemnation: Town of Westlake v. City of Southlake, No. 02-21-00241-CV, 2021 WL 6069104 (Tex. App.—Fort Worth Dec. 23, 2021). This is an interlocutory appeal from the denial of the Town of Westlake’s plea to the jurisdiction in a case where the City of Southlake filed condemnation proceedings against the Town of Westlake in order to condemn approximately 1400 feet of land owned by the Town of Westlake.
Westlake claimed that condemnation action brought by Southlake was an attempt by Southlake to use its powers of condemnation to gain access to FM 1938 that a residential development located principally within Southlake, but abutting the boundary with Westlake, had not been able to negotiate. Southlake followed the condemnation procedures outlined in chapter 21 of the Texas Property Code and the commissioners awarded Westlake $22,000 for the condemnation. Westlake filed a motion to dismiss which was denied by the trial court. Then, just before the award was filed with the district court, Westlake filed a plea to the jurisdiction in the district court. The court noted the plea was not a plea, but rather should have been a motion opposing the taking, and denied the plea. Westlake filed this interlocutory appeal in response. Southlake then filed a motion to dismiss.
The appellate court found, with regard to Southlake’s motion to dismiss, that the trial court’s jurisdiction was triggered once the commissioners’ findings were filed, even if Westlake “jumped the gun” as was asserted and filed the plea before the commissioners’ filing. As a result, the matter was properly before the appellate court. Regarding Westlake’s plea, Westlake first argued no waiver of immunity existed under section 251.001 of the Local Government Code. However, the appellate court noted that the language allows condemnation regardless of whether the property is already public or private, whether it is inside the city or outside, and possesses safeguards to prevent abuses. Because the statute allows condemnation of public property, it must, therefore include a waiver of immunity for the owning entity. Comparing the language in section 251.001 to similar provisions of the Utility Code, the court held immunity is waived for Westlake. While case law states that when one governmental entity is condemning property owned by another governmental entity, the condemning entity must establish the “paramount importance” standards (i.e., it has a public need greater and will not destroy the public nature). However, the paramount importance doctrine is not jurisdictional. With regards to Westlake’s argument that section 311.002 of the Transportation Code, giving cities exclusive control over streets and highways, the record had not been established enough to make the determination of whether the condemnation would interfere with such streets since Westlake owns only the adjoining right of way. The record was also not sufficiently developed to establish whether Southlake could establish a valid public purpose. As a result, the appellate court affirmed the trial court’s ruling.*
Tort Claims Act: City of Killeen Police Dep’t v. Fonseca, No. 03-19-00898-CV, 2021 WL 6105569 (Tex. App.—Austin Dec. 23, 2021). This appeal arises from a collision between a police cruiser driven by Officer Boehmker of the Killeen Police Department (Department) and a vehicle driven by Gloria Fonseca. Fonseca, on behalf of herself and as next friend to Julia Fonseca, along with Alberto Fonseca, acting only as next friend of Julia Fonseca (collectively, the “Fonsecas”), subsequently sued the Department for the officer’s alleged negligence and per se negligence. The Department responded with a plea to the jurisdiction, arguing that the suit was barred by governmental immunity and that no exception applied. The Fonsecas amended their suit to include a claim of gross negligence, and the Department amended its plea accordingly. The district court denied the Department’s plea, and the Department appealed.
The Department contends the district court erred by overruling the plea to the jurisdiction predicated on governmental immunity from suit. The Fonsecas claim that the Texas Tort Claims Act (“TTCA”) provides an exception to sovereign and governmental immunity where injury arises from use of motor vehicle. The appellate court affirmed the trial court’s denial concluding that the Fonsecas produced evidence sufficient to create a fact issue as to whether Officer Boehmker’s conduct was reckless thereby negating the application of the emergency-response exception to TTCA and, consequently, whether the claim fell within the scope of the TTCA’s waiver of immunity.
Tort Claims Act: City of Austin v. Furtado, No. 03-21-00083-CV, 2021 WL 6194365 (Tex. App.—Austin Dec. 31, 2021) (mem. op.). This is an appeal arising from an order denying the City of Austin’s plea to the jurisdiction in Furtado’s trip-and-fall, premises-liability suit. The city argued that governmental immunity barred the claims against the city and that Furtado failed to demonstrate a waiver of that immunity under the Texas Tort Claims Act. The city contends that the trial court erred by denying the plea because: (1) the part of the sidewalk where Furtado fell was an ordinary defect and not a special defect; (2) the city conclusively proved its lack of actual knowledge of the alleged defect; and (3) there was no fact issue about whether the city had constructive knowledge of the alleged defect.
The appellate court concluded that the alleged defect was a special defect and that the undisputed evidence conclusively established that the city did not have actual knowledge of the defect. In addition, the court concluded that Furtado failed to plead facts affirmatively demonstrating constructive knowledge of the alleged defect but that the pleadings did not conclusively negate constructive knowledge. Because there was an issue of pleading sufficiency, the court reversed and remanded to afford Furtado the chance to replead.
ERCOT: Elec. Reliability Council of Tex., Inc. v. CPS Energy, No. 04-21-00242-CV, 2021 WL 5879183 (Tex. App.—San Antonio Dec. 13, 2021). This dispute arises from an order of the Public Utility Commission (PUC) to the Electric Reliability Council of Texas (ERCOT) to set the per-megawatt hour price of electricity at its highest permissible rate—$9,000 per mwh—to account for a scarcity in electric supply during Winter Storm Uri. CPS Energy (CPS), a municipally owned utility servicing the San Antonio area that buys and sells electricity, alleges ERCOT improperly kept prices at this rate after any alleged need for scarcity pricing had ended, resulting in billions of dollars in overcharges to market participants, including CPS, and ERCOT owing CPS money.
CPS sued ERCOT for breach of contract, negligence, gross negligence, negligence per se, breach of fiduciary duty, and violations of the Texas Constitution, seeking declaratory and injunctive relief and, alternatively, money damages. It also asserted ultra vires claims against ERCOT’s former executives and board, including Magness. ERCOT—but not Magness—filed a plea to the jurisdiction arguing the trial court lacked jurisdiction over CPS’s claims for various reasons. ERCOT also filed a motion to transfer venue to Travis County. CPS nonsuited its claims against all the individual defendants except Magness. The trial court denied ERCOT’s plea to the jurisdiction and its motion to transfer venue to Travis County. ERCOT and Magness filed a notice of interlocutory appeal from the trial court’s order denying ERCOT’s plea to the jurisdiction. CPS then filed a motion to dismiss this appeal for lack of appellate jurisdiction.
The appellate court: (1) dismissed CPS’s motion to dismiss ERCOT’s appeal because it found that ERCOT is a governmental unit as it “operates as part of a larger governmental system” and is therefore an “institution, agency, or organ of government;” (2) granted CPS’s motion to dismiss Magness’s appeal for want of jurisdiction as Magness lacks standing to appeal the trial court’s order granting ERCOT’s plea to the jurisdiction; and (3) held that PUC has exclusive jurisdiction over CPS’s common-law claims against ERCOT, and CPS must exhaust its administrative remedies in the PUC before seeking judicial review of those claims.
Tort Claims Act: Pena v. City of Garland, No. 05-21-00611-CV, 2021 WL 6143710 (Tex. App.—Dallas Dec. 30, 2021) (mem. op.). While Pena was at a city landfill, he was injured when a truck hit him after a city employee signaled to the truck driver to back up. Pena sued on the theories of premises defect, negligence, and the use of a motor vehicle. The trial court granted the city’s plea to the jurisdiction and Pena appealed.
The appellate court found: (1) there was no direct evidence to show the city had knowledge of a premises defect due to a high volume of traffic at the landfill; (2) Pena’s negligence claim failed to identify any tangible personal property; and (3) a governmental employee directing the truck was not sufficient to meet the use or operation of a motor-vehicle requirement of the Texas Tort Claims Act. The appellate court affirmed the denial of the plea to the jurisdiction but gave Pena the opportunity to replead.
Purchasing: City of Waco v. CTWP, No. 07-21-00280-CV, 2021 WL 6145427 (Tex. App.—Amarillo Dec. 30, 2021) (mem. op.). In this case, a vendor who had an expiring contract with the city sued the city for failing to comply with the procurement statutes when the city: (1) looked at vendors on the BuyBoard purchasing cooperative; (2) contacted some directly; (3) negotiated a different price from the BuyBoard price; and (4) did not provide a copy of the purchase order to BuyBoard. The vendor sued for declaratory judgment and an injunction.
The city filed a plea to the jurisdiction, which the trial court denied it. The city appealed. The appellate court determined that the plea should have been granted as to the declaratory judgment claims because the vendor was not challenging an ordinance. However, the appellate court determined that the evidence presented a conflict regarding the city’s governmental immunity from suit on the grounds that it used a purchasing cooperative based on its conduct in selecting a vendor. The appellate court also rejected the city’s arguments that the vendor lacked standing and that the vendor’s claims were moot because its contract with the city had expired.
Tort Claims Act: City of Houston v. Gantt, No. 14-20-00229-CV, 2021 WL 5934955 (Tex. App.—Houston [14th Dist.] Dec. 16, 2021) (subst. mem. op.). Gantt sued the city alleging injuries after being struck by a patrol car driven by a Houston police officer. The city filed a plea to the jurisdiction claiming it was immune from suit due to Gantt’s failure to properly notify the city of the claim, which the trial court denied. The city appealed.
The city can be subject to tort liability under the Texas Tort Claims Act (“TTCA”), but the TTCA contains notice requirements which must be followed. Alternatively, if the city had actual notice that (1) an injury had occurred (2) to a particular individual (3) that was at least partially the city’s fault, the TTCA’s notice requirements would have been satisfied. Additionally, cities may by ordinance or charter put additional notice requirements in place, which the city had done. In this case, police reports and fire department transport records related to the crash were not sufficient to put the city on actual notice of a claim, and Gantt was unable to show that he had otherwise complied with city or TTCA notice requirements. The appellate court reversed the trial court and dismissed the case for want of jurisdiction.
*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.