Note: Included cases are from June 11, 2020 through July 10, 2020.
Texas Tort Claims Act: VIA Metropolitan Transit v. Curtis Meck, No. 18-0458, 2020 WL 3479509 (Tex. June 26, 2020). This is a Texas Tort Claims Act (TTCA) case involving a VIA bus accident where the Texas Supreme Court affirmed a jury award against VIA.
VIA Metropolitan Transit is a governmental entity that operates public transportation services in San Antonio and Bexar County. Curtis Meck boarded a VIA bus operated by Frank Robertson, who was new to the job and still in training. Robertson began to pull away from the stop when another passenger shouted, “Back door!” apparently to notify Robertson that a passenger was still trying to exit. Traveling just under five miles per hour, Robertson made an abrupt stop, causing Meck to fall forward into the partition behind Robertson’s seat. Meck asserts this caused a herniated disc in his neck. Meck sued VIA asserting negligence and that VIA was a “common carrier” with a high degree of care imposed for the benefit of the passengers. After a trial on the merits, the jury found for Meck. VIA appealed. VIA did not object to the designation as a common carrier and did not object during jury selection when Meck’s attorneys told the jury of the higher duty imposed on VIA. VIA moved for a directed verdict asserting it was not a common carrier and the jury instruction was incorrect. The motion was denied.
Under the Texas Transportation Code, the duties and liabilities of a common carrier are the same as provided for under common law. Tex. Transp. Code §5.001(a)(1). A common carrier owes a duty to its passengers to act as “a very cautious and prudent person” would act under the same or similar circumstances. To qualify as a common carrier (in contrast to a private carrier), the entity must provide transportation services to the general public, as opposed to providing such services only for particular individuals or groups and as its primary function. VIA argued it is not a common carrier because: (1) it is not “in the business” of providing such services, (2) providing such services is not its “primary function,” and, (3) in any event, it cannot be a common carrier because it is a governmental body that performs only governmental functions. While the Court agreed that VIA is statutorily prohibited from generating revenue greater than an amount “sufficient to meet [its] obligations,” it disagreed that profit is necessary to qualify for the “in business” designation. The Court held VIA was indisputably in “the business of transporting people” and therefore met the first prong. And while VIA argued it performs numerous governmental functions that include constructing roads, issuing bonds, collecting taxes, and promoting economic development, for the purpose of “implementing the State’s transportation policy,” the Court held it must only do so to fulfill its obligation to operate as a “rapid transit authority.” As a result, transporting people is its primary function. The Court agreed that VIA is a governmental entity and that it was performing governmental functions that provided, by default, governmental immunity. However, that status does not prevent it from being a common carrier with a higher degree of care to its passengers. The Court further declined to change the law by requiring a lower, ordinary standard of care. The Court then held the TTCA does not define what type of negligence is subject to the waiver of immunity. However, the common law has long used the term “negligence” to refer to “three degrees or grades of negligence,” including gross negligence, ordinary negligence, and slight negligence (which applies to common carriers). As a result, all three types are subject to the waiver in the TTCA. Finally, the Court held the evidence was legally sufficient to uphold the jury award.
Chief Justice Hecht wrote a concurring opinion noting the “slight negligence” or “high degree of care” standards are misleading, unnecessary and should be abandoned. They suggest that common carriers are to “exercise all the care, skill, and diligence of which the human mind can conceive,” which invites the jury “to scrutinize the carrier’s conduct in an endeavor to find it defective.” However, he notes that given the evidence, an instruction on a “reasonable care” standard would not have changed the outcome.*
Contractual Immunity: Nettles v. GTECH Corp., No. 17-1010, 2020 WL 3116609 (Tex. June 12, 2020). In this case, the Texas Supreme Court held a contractor providing certain functions of the Texas Lottery Commission was not entitled to derivative sovereign immunity.
GTECH Corporation (GTECH) provided instant ticket manufacturing and services to the Texas Lottery Commission (TLC). GTECH was sued by multiple plaintiffs (in multiple suits after consolidated on appeal) alleging that the instructions on a scratch-off lottery ticket were misleading, causing them to believe they had winning tickets when they did not. GTECH created draft tickets, which the TLC commented on and made changes to, but ultimately approved after the back-and-forth concluded. After several complaints, the TLC shut down the game within 60 days of its release. The plaintiffs asserted claims for fraud, fraud by nondisclosure, aiding and abetting fraud, and conspiracy. GTECH filed pleas to the jurisdiction, asserting it was entitled to the same immunity held by the TLC. Due to the multitude of suits, some pleas were granted, some denied, but all ended up on appeal.
The Court first noted it had not yet had the opportunity to address whether a Texas government agency’s immunity from suit might extend to its private contractors and, if so, under what circumstances. In the instances of derivative immunity, it only applies to a private company operating “solely upon the direction” of a government, and exercising “no discretion in its activities.” It applies when the private company was “not distinguishable” from the governmental entity such that “a lawsuit against one [was] a lawsuit against the other.”
Here, the contract required GTECH to provide suggested game designs. After receiving approval from the TLC, GTECH provided drafts and received comments. GTECH’s role also included crafting, designing, and choosing wording. TLC’s instant product coordinator testified he would expect GTECH to notify them if it saw concerns with a game, including misleading instructions. Based on the contract and other evidence in the record, the Court held GTECH had some discretion with regard to the conduct at issue. The Court held that close supervision and final approval of work over which a contractor has discretion are not the same as the government specifying the manner in which a task is to be performed.
Importantly, the Court stated “[t]hus, even if we recognized derivative sovereign immunity for contractors, GTECH would not be entitled to immunity from suit on the fraud claims under the control standard.” This seems to indicate the issue of derivative immunity for contracts with state agencies remains an open question. The Court also stated “[a] challenge to an element of a plaintiff’s claim by a defendant who lacks immunity from suit does not implicate the jurisdiction of the court; it should be raised in a motion for summary judgment rather than a plea to the jurisdiction.” Finally, the majority held that extending immunity to contractors for fraud could not further the purpose of immunity.
However, the Court did say that GTECH was entitled to derivative immunity from the allegation of conspiracy and aiding and abetting because such claims require a finding of the underlying fraud claim being viable against the TLC. Since the TLC has immunity from fraud claims, the conspiracy claims, and aiding and abetting claims cannot be sustained against GTECH.
Chief Justice Hecht’s opinion, concurring in part and dissenting in part, notes that he believes since the ultimate decision and approval of the final ticket form rested with the TLC that GTECH should have been provided immunity as to the fraud claims. He stated “Today’s lesson is that if the government acts only through its own employees, it is immune from suit, but if it consults experts before it acts, it is still immune from suit but the experts are not, except that the experts are immune from suit for helping the government defraud but not for giving the government advice that it uses to defraud. And there you have it.” He agreed GTECH was immune from the conspiracy and aiding and abetting claims.
Justice Boyd’s opinion essentially stated his opinion is that “the simple and logical conclusion” is that sovereign immunity only protects the sovereign, no one else. He clarified that this does not affect his opinion on official or qualified immunity, which applies to individuals.*
Public Information: Genuine Parts Co., Inc. v. Paxton, No. 03-19-00441-CV, 2020 WL 3887973 (Tex. App.—Austin July 10, 2020) (mem. op.). This a Texas Public Information Act (PIA) case in which the court of appeals affirms the trial court’s finding that a settlement agreement was not excepted from disclosure.
Genuine Parts Company, Inc. (Genuine Parts) and the City of Houston entered into a settlement agreement that resolved litigation between the parties related to Genuine Part’s provision of automotive parts and services to the city’s fleet vehicles. A request was made for a copy of the settlement agreement. The city informed Genuine Parts of the request, and Genuine Parts requested a ruling from the attorney general asserting that settlement agreement was excepted from disclosure under Sections 551.104 and 551.110. Genuine Parts argued that the settlement agreement contained information that if disclosed would give advantage to a competitor or bidder, and that it contained commercial or financial information that if disclosed would cause substantial competitive harm to Genuine Parts. The attorney general issued a ruling finding that the settlement agreement was not excepted from disclosure. Genuine Parts filed suit against the attorney general. The attorney general filed a motion for summary judgement arguing that, as a matter of law, the settlement agreement did not fall within an exception to disclosure under the PIA. The trial court granted the summary judgement motion declaring that the settlement agreement was public information. Genuine Parts appealed.
Genuine Parts bears the burden of establishing that this exception to public disclosure applies to the settlement agreement. The proper test is whether disclosure of the information would provide a competitor or bidder with an advantage, albeit not necessarily a decisive one. Genuine Parts provided examples of how competitors, in the past, had used the PIA to gain advantages in bids to which Genuine Parts was also applying. While that could potentially be true, the key issue is whether the settlement agreement actually contains such harmful information. The settlement agreement identifies the parties and generally describes their dispute, the details of which are contained in publicly available federal court filings. The settlement agreement sets forth the total amount of a payment to be made by one party to the other along with the manner and timing of the payment. The settlement agreement references a lump sum amount relating to inventory, but provides no description of the nature of the inventory or its pricing, and there is nothing that could be construed to constitute “performance figures.” Genuine also failed to explain how the contents of the settlement agreement might give a competitive advantage. As a result, the evidence in the record fails to demonstrate that the settlement agreement contains information that “if released would give advantage to a competitor or bidder.” As such, the court concluded that summary judgment was properly granted.*
Exactions: Selinger v. City of McKinney, No. 05-19-00545-CV, 2020 WL 3566722 (Tex. App.—Dallas July 1, 2020) (mem. op.). This is an exactions case in which the court of appeals reverses the trial court’s order granting the City of McKinney’s plea to the jurisdiction.
Nancy Dail owns a tract of land in the City of McKinney’s extraterritorial jurisdiction (ETJ). Selinger, a developer, was under contract to purchase the land, and submitted his plans to the city to subdivide the land into approximately 331 lots. The plans included construction of necessary sewer infrastructure because the tract of land was not served by the city’s water and sewer services, and the city had no plans to extend those services to it. Selinger reached an agreement with the North Collin Special Utility District to supply water to the subdivision. The city denied Selinger’s plat application when Selinger refused to agree to pay the city approximately $482,000 if and when the city’s water and sewer transmission lines were extended to the development. Ten days later, Dail and Selinger sued the city alleging, among other things, a takings claim. The city filed a plea to the jurisdiction, asserting lack of ripeness and lack of standing as to Selinger. The trial court granted the city’s plea and dismissed the lawsuit with prejudice for lack of subject matter jurisdiction. Dail and Selinger appealed. Subsequently, a new subdivision plat was filed by Norhill Energy, LLC that was substantially the same as the initial plat except that it did not request any variances.
The court first addressed whether the case was ripe. The court found that the takings claim was ripe because the city’s demand for Selinger’s commitment to pay $482,000 as a condition of plat approval constituted an exaction and sufficient injury for ripeness purposes even though the demanded payment was contingent rather than definite. The court then addressed standing. It concluded that, even though Selinger was only under an option contract to purchase the land and had no property rights in the land itself, he had standing because the city had injured his rights in his plat application and the money he spent to prepare and submit the application. The court then looked at the applicability of the Private Real Property Rights Preservation Act (Chapter 2007 of the Government Code), which waives sovereign immunity to suit and liability in instances where a city enacts or enforces an ordinance, rule, regulation, or plan that does not impose identical requirements or restrictions in the entire ETJ of the city. The court determined that Chapter 2007 was applicable because there was evidence that there was other property in the city’s ETJ that did not have the same requirements imposed on it. The court then turned to whether the court had jurisdiction over Selinger’s claims under Section 212.904 of the Local Government Code, which establishes rules and procedures regarding apportionment of municipal infrastructure improvement costs. The court determined that Selinger had sufficiently pled a declaratory judgement claim challenging the city’s subdivision ordinance, and as a result the trial court had jurisdiction over Selinger’s claims for attorney’s fees. Additionally, the court found that Section 212.904 does not specify a particular procedure for an appeal to the city’s governing body, and that Selinger had exhausted his administrative remedies once city council denied his plat application. The court also found that the trial court had jurisdiction over the Selinger’s state due process claims. Finally, the court ruled that, even though the city had received a new plat application, the case was not moot because the city’s treatment of the new plat application will not affect the present controversy.
Government Immunity: City of Dallas v. Kennedy, No. 05-19-01299, 2020 WL 3286515 (Tex. App.—Dallas June 18, 2020) (mem. op.). This is a personal injury case in which the court of appeals reversed the trial court’s order denying the City of Dallas’ plea to the jurisdiction.
Kennedy purchased a train ticket in Longview and travelled from Kilgore via train to Dallas, arriving at Union Station, a train station that is owned and operated by the City of Dallas. She did not pay the city any fee to enter and exit Union Station. As she was leaving the train station, she fell through a broken area of tile and sustained injuries that required medical care. Kennedy sued the city for negligence, asserting that the city had failed to repair the floor and failed to warn her of the dangerous condition. The city filed a plea to the jurisdiction. Kennedy amended her petition, dropping another defendant but continuing to assert the same claims against the city. The city filed a supplemental plea to the jurisdiction with evidence attached. Kennedy filed her own evidence, which the city objected to. The trial court denied the city’s supplemental plea and overruled the city’s evidentiary objections. The city appealed.
The court held that the city owed to Kennedy the duty it owes to a licensee, finding that Kennedy’s purchase of a train ticket in Longview did not constitute paying for the use of Union Station that would trigger invitee status. The court then looked at whether the city had actual knowledge of defects in the flooring area that Kennedy fell through. The court determined that the city’s evidence, which showed that no reports of defects in the flooring had been made in the two years prior to Kennedy’s accident, conclusively showed that the city lacked actual knowledge of the alleged dangerous condition. Additionally, the court refused to infer actual knowledge based on the apparent age of the defect.
Whistleblower: City of Fort Worth v. Pridgen, No. 05-19-00652-CV, 2020 WL 3286753 (Tex. App.—Dallas June 18, 2020) (mem. op.). This is a whistleblower case in which the court of appeals affirms the trial court’s order denying the City of Fort Worth’s motion for summary judgement.
Before they were demoted, Pridgen and Keyes were serving as assistant police chief and deputy chief, respectively, in the Fort Worth Police Department (department), where they both supervised the Internal Affairs (IA) and Special Investigations Unit (SIU) divisions. Pridgen and Keyes participated in the internal department investigation of an arrest conducted by Officer Martin. Officer Martin had been dispatched on a disturbance call to Jacqueline Craig’s residence following a 9-1-1 call by Craig to report that her seven-year old son had been choked by an adult neighbor. Officer Martin arrived at the scene to investigate, but soon thereafter engaged in an argument with Craig, which subsequently resulted in his pushing Craig to the ground; removing his Taser from his gun belt and placing it on Craig’s back; pointing the Taser at Craig’s 15-year old daughter and ordering her to the ground; and then placing Craig under arrest. In addition to being recorded on Officer Martin’s body worn camera, the incident was shown on Facebook livestream and gained national attention and media coverage leading to allegations of racism against Officer Martin by many members of the public. Following the department’s investigation, both Pridgen and Keyes recommended that Officer Martin be fired. Instead, the police chief suspended him for ten days. Ninety days later, both Pridgen and Keyes were demoted based on the department’s contention that they had disseminated confidential documents regarding the investigation without the department’s authorization.
Pridgen and Keyes sued the city alleging violations of the Texas Whistleblower Act. The city filed a motion for summary judgement arguing that Pridgen and Keyes were not whistleblowers because they did not make a good faith report of a violation of law to the police chief and there was no causation between the report and the adverse employment action. The trial court denied the city’s motion, and the city appealed.
The court first looked at whether the reports made to the police chief by Pridgen and Keyes regarding Officer Martin’s conduct were reports of a violation of law protected by the Whistleblower Act or opinions about the discipline and consequences of Officer Martin’s conduct. The court found that Pridgen and Keyes presented evidence that they had reported conduct that constituted violations of law to the police chief, including assault, official oppression, and perjury based on their viewing of Officer Martin’s body camera video and arrest affidavits and on what Officer Martin did and said. The court then looked at whether Pridgen and Keyes’ reports of Martin’s violations of law were objectively made in good faith. The court concluded that Pridgen and Keyes had raised a fact issue as to their objective good faith in reporting Martin’s violations of law. Finally, the court looked at whether Pridgen and Keyes raised a fact issue on causation. The court determined that they had offered evidence from which a jury could conclude that their engaging in protected activity at least partially motivated the police chief to demote them, and that the police chief would have reached a different decision in the absence of their protected activity. Accordingly, the court upheld the trial court’s decision to deny the city’s motion for summary judgement.
Breach of Contract: Hernandez v. County of Zapata, No. 04-19-00507-CV, 2020 WL 3815932 (Tex. App.—San Antonio July 8, 2020) (mem. op.). [Comment: this opinion is helpful mainly to litigators who deal with standards for admission of evidence]. This is a breach of contract/garbage collection case where the court of appeals upheld an order granting the County of Zapata’s summary judgment against Hernandez.
Hernandez and the County of Zapata entered into a one-year written contract, granting Hernandez an exclusive franchise to provide garbage collection services to county residents. Hernandez agreed to pay the county a percentage of the sums he collected from the residents for his garbage collection services. When a dispute arose, the county sued Hernandez for breach of contract. The county filed a traditional motion for summary judgment, which was granted. Hernandez appealed.
A party opposing a motion for summary judgment may file a response “not later than seven days prior to the day of” the summary judgment hearing. Hernandez failed to timely file a response and failed to establish the trial court abused its discretion in denying his motion to file a late response. Hernandez’s motion was unsupported by any probative evidence establishing good cause for the failure. The lack of factual support and explanation regarding counsel’s alleged mistakes, “leav[es] the trial court without any means of determining whether an excusable accident or mistake had in fact occurred.”
In comparison, the county’s affidavits in support of its summary judgment were properly supported and included the underlying facts to justify the conclusions asserted in the affidavits. For example, the affidavit of the county auditor provided support by stating: (1) his primary duties are to oversee financial record-keeping for the county and to assure that all expenditures comply with the county budget; (2) he has continuous access to all county books and financial records and conducts a detailed review of all county financial operations; (3) he has general oversight of all books and records of all county officials and is charged with strictly enforcing laws governing county finance; and (4) after reviewing bank statements from Hernandez’s business and comparing them with county records and cross-checking corresponding franchise fee percentage owed by Hernandez pursuant to the contract, that the amount Hernandez owed the County was $361,439.07. As such, the trial court did not abuse its discretion in denying Hernandez’s objections to the county’s affidavits.
The court also found that the trial court did not abuse its discretion in overruling the objection to bank statements based on hearsay. Under the Texas Rules of Evidence, a statement by an opposing party is not hearsay if the statement is offered against the opposing party and “is one the party manifested that it adopted or believed to be true.” Hernandez admitted that he produced the bank statements in discovery. By producing the bank statements and by adopting the bank statements as his own, Hernandez manifested an adoption or belief in their truth. The evidence is sufficient to conclusively establish the existence of a valid contract, that the county performed under the contract, and that Hernandez breached the agreement. Aside from the first-year payment, it is undisputed Hernandez did not pay the county the contracted percentages of the total gross receipts for the years 2011 to 2016. As a result, the trial court was within its discretion to grant the summary judgment. Finally, the court concluded that the record supports an award of attorney’s fees.*
Contractual Immunity: City of Port Isabel v. Meza, No. 13-19-0070-CV, 2020 WL 3786249 (Tex. App.—Corpus Christi July 2, 2020) (mem. op.). On May 15, 2015, the City of Port Isabel terminated the city manager, Edward Meza. Additionally, the city council rescinded the severance policy adopted by the city council in 2010, in spite of the fact that a document titled “City Manager Severance Agreement” was signed by the mayor and Meza on July 6, 2010. Meza filed suit for breach of contract, and the city filed a plea to the jurisdiction, arguing that it was immune from suit under Chapter 271 of the Local Government Code. The trial court denied the city’s plea, and the city appealed.
On appeal, the city argues that Meza’s severance agreement was not properly executed because it was not brought before the city council for final approval, or in the alternative, it was rescinded during the May 2015 meeting and Meza did not have standing to bring the lawsuit. As a result, the city contended that immunity was not waived under Local Government Code Section 271.152. The minutes from July 2010 showed that the city council discussed a severance package for Meza, and the severance agreement introduced as evidence contained the mayor and Meza’s signatures. According to the court, there was more than a scintilla of evidence to show that Meza’s severance agreement was properly executed. Accordingly, the court concluded that the trial court correctly denied the city’s plea to the jurisdiction.
Breach of Contract: City of Corpus Christi v. Graham Constr. Servs., Inc., No. 13-19-00367-CV, 2020 WL 3478661 (Tex. App.—Corpus Christi June 25, 2020) (mem. op.). This is a breach of contract claim under Chapter 271 of the Local Government Code involving a wastewater plant replacement project where the Court of Appeals affirmed the trial court’s denial of the city’s plea to the jurisdiction.
The City of Corpus Christi entered into a contract with Graham Construction Services (Graham) for the replacement of a wastewater plant. In the agreement, the city hired Carollo to provide engineering and contract administration services and Carollo was considered the owner’s representative. The agreement had strict deadlines for the completion of the project in two different phases. The agreement also had strict notice of claim requirements (i.e. less than 90 days after claim event). Graham submitted over a dozen delay claims, arguing that it faced delays due to “unclear or conflicting specifications in the contract, unnecessarily burdensome testing requirements, and an uncooperative and obstructionist attitude on the part of Carollo”, but not within the time frames required by the agreement. At some point, the city replaced Carollo with Freese & Nichols (Freese), but Carollo was still involved in the project. Graham also submitted reports requesting an increase in price and extensions of the schedule. The city reviewed the reports and met with Graham regarding these reports. The city refused to issue a certificate of substantial completion, and Graham left the job site. Graham sued the city for breach of contract. The city filed a counterclaim which included a third-party petition against Carollo. Three years after the suit filing, the city filed a plea to the jurisdiction. The trial court denied the plea as to the breach of contract and attorney fee claims and the city appealed.
Under Chapter 271 of the Texas Local Government Code’s waiver of immunity for goods/services contracts, contract damages are limited to: (a) balance due including increased costs from owner caused delays; (b) change orders; (c) attorney’s fees; and (d) interest. Tex. Loc. Gov’t Code § 271.153. The chapter does not waive a contractor’s defense, but does require a contractor to comply with the adjudication methods found in the contract. Id. §§ 271.154-.155. The city argued that it was not responsible for owner-caused delays because the delays were allegedly caused by Carollo, an independent contractor. The court held a fact issue exists because Carollo was listed as an “Owner Representative” in the agreement. The court also held (1) the city’s thirty and sixty-day notice of claim requirements are prohibited by Section 16.071 of the Texas Civil Practice and Remedies Code; and (2) the city did not tell Graham it missed the notice of claim deadline but instead worked through the claim dispute. These are permissible under Section 271.155. The court compared this case to a recent contract case where the city did notify a contractor of the lateness of their claims. See Mission Consol. Indep. Sch. Dist. v. ERO Int’l, LLP, 579 S.W.3d 123, 129 (Tex. App.—Corpus Christi 2019, no pet.). Finally, the court held that the contractor’s request for attorney’s fees was allowed because Section 271.153 states that fair and equitable attorney’s fees are recoverable. The plea was properly denied.*
*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.