Recent Texas Cases of Interest to Cities

Note: Included cases are from May 11, 2017 through June 10, 2017.

Nuisance/Statute of Limitations: Town of Dish v. Atmos Energy Corp., No. 15-0613, 2017 WL 2200342 (Tex. May 19, 2017). The Town of Dish and various residents (Dish) sued Atmos Energy Corporation, Enbridge Gathering L.P., Energy Transfer Fuel, L.P., Enterprise Texas Pipeline, L.L.C., and Texas Midstream Gas Services, L.L.C. (energy defendants) for nuisance, trespass, and decrease in property value because of the noise and odor emanating from a facility that had four natural-gas compressor stations and a metering station (Ponder station) just outside of the town of Dish.  Dish began complaining as early as 2006 about the noise and odor, but did not actually sue until 2011 when the Ponder station was completed.  The trial court granted various motions that ultimately dismissed the claims. DISH appealed. The Amarillo Court of Appeals reversed the trial court on limitations, holding that the energy companies failed to prove as a matter of law that Dish’s claims accrued before February 28, 2009.

The Texas Supreme Court reversed the court of appeals and reinstated the trial court’s take-nothing judgment because the statute of limitations had lapsed. The court first addressed Enterprise’s argument that its metering facility did not contribute to the Ponder station’s alleged noise and odor.  The court stated that Enterprise presented evidence showing its facilities are fundamentally different from the other energy defendants, and that a metering station cannot be a source of the Dish’s complaints.  Since Dish did not present any evidence to rebut Enterprise’s contentions it was not one of the alleged offenders, the trial court properly granted Enterprise’s summary judgment motion.

Then the Court addressed the statute of limitations argument.  The statute of limitations in a nuisance claim is two years.  Dish sued on February 28, 2011.  Therefore, Dish’s alleged claims must have accrued no earlier than February 28, 2009.  A cause of action accrues “when a wrongful act causes a legal injury, regardless of when the plaintiff learns of that injury or if all resulting damages have yet to occur.”  Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003).  The court reviewed the history of Dish concerning and bringing the issue of the noise and odor to the energy defendants including a town meeting in 2006, an investigation by the Texas Commission on Environmental Quality in April 2008, and the Wolf Eagle Report (report) that informed Dish of the presence of a high concentration of carcinogenic and neurotoxin compounds in the ambient air near and/or on residential properties.  Though Dish stated that until the issuance of the report, they did not feel the noise and odor had reached the level of nuisance and trespass, Dish felt that the nature of these substances was inherently undiscoverable until after years of vociferous complaints.  The court did not agree stating that “an accrual date must be based on objective evidence, not bare, subjective attestations[,]” and the report showed Dish what they were already on notice of their claims well before they received the report.  Therefore, the energy defendants proved that any legal injury suffered by Dish had commenced at the latest, in May 2008, and since there was no objective evidence showing that the complained-of condition worsened in the summer of 2009, the statute of limitations had accrued more than two years before Dish sued.

Employment Law: Green v. Dallas Cty. Schs., No. 16-0214, 2017 WL 1968829 (Tex. May 12, 2017). The Texas Supreme Court reversed the court of appeals opinion and sustained the trial court judgment holding a school employee established he was terminated because of his disability.

Paul Green worked as a bus monitor for Dallas County Schools (DCS), transporting children with special needs. When hired he listed he had a congestive heart failure but was on medication. This apparently did not pose a problem for the school. However, a few years later he began taking another set of drugs. While on a route, he asked the driver to stop so he could use the bathroom. The driver did not stop but told him to wait until a better time during the route. However, Green involuntarily urinated in his pants. The driver reported the incident to his supervisor. Green was terminated for engaging in unprofessional conduct while on the bus. Green sued for disability discrimination. After a six-day trial, a jury returned a verdict in favor of Green. At the intermediary court of appeals, the court held no evidence existed he was terminated because of his congestive heart failure. Green appealed asserting the disability was urinary incontinence.

Under the Texas Labor Code, a disability includes any “physical impairment that substantially limits at least one major life activity.” Tex. Labor Code § 21.002(6). A “major life activity” includes “the operation of a major bodily function, including . . . functions of the . . . bladder.”  Green had a disability.  The trial court left it to the jury to decide what that disability was. Specifically, the charge explained that Green claimed that DCS “terminated his employment because of his disabilities, the side effects of his disabilities, and/or the side effects of the medications he takes to treat his disabilities.” And while DCS disputed his disability was a motive for the termination, it expressly agreed he was terminated for urinating on the bus. DCS did not seek an instruction that the only disability was the congestive heart failure and, as already noted, such an instruction would have been incorrect. As worded, the jury charge did not forbid the jury from finding that Green’s urinary incontinence was itself a disability. At least three bus drivers testified they knew Green had urinary incontinence but believed it was due to the medication he was taking. Since no one disputes that DCS fired Green because of his urinary incontinence, the jury verdict must be upheld.*

Unemployment Compensation: Harris Cty. Appraisal Dist. v. Texas Workforce Comm’n, No. 16-0346, 2017 WL 2023616 (Tex. May 12, 2017). The Texas Supreme Court held appraisal review board members can be “employees” for purposes of the Texas Unemployment Compensation Act.

The Harris County Appraisal District (HCAD) is statutorily tasked with appraising property for ad valorem property taxes. Appeals of an HCAD appraisal go to the Appraisal Review Board (board), which is an administrative entity with statutory authority to modify property appraisal valuations. Members of the board are appointed to two-year terms by the local administrative law judge. The board members are paid by the hour for the time they work, which is determined by how many people contest their appraisals. Several members of the board served the maximum terms then filed for unemployment benefits with the Texas Workforce Commission (TWC). HCAD challenged the filing. TWC determined the members were employees entitled to benefits, the trial court disagreed and set the TWC order aside, but the court of appeals reversed. It held the employment analysis is a factual one entailing a twenty-factor test derived from the common law and adopted by the TWC centering on control and direction. HCAD appealed.

A trial court reviews the TWC’s decision regarding unemployment benefits by trial de novo to determine whether substantial evidence supports the TWC’s ruling. Under the Texas Unemployment Compensation Act (TUCA), a presumption of employment arises upon a showing that an individual is paid for performing services.  This presumption is rebutted only if the alleged employer carries its burden of showing that the individual’s service is “free from control or direction under the contract and in fact.”  Notably, control of the content of a worker’s decision is not a necessary element in establishing employment status. Thus, board members are not precluded from meeting the definition of “employment” simply because they exercise independent judgment and HCAD cannot change their decision. HCAD further argues that the Tax Code prevails over the Labor Code because it is the more specific statute and directly addresses appraisal review board members rather than employees in general. It also prohibits board members from communicating or being normal employees of HCAD. The court drew an analogy from the Colorado County v. Staff decision (Chapter 614 does not require a victim to be the one writing a complaint against a police officer before disciplinary action is allowed). It held that while similar words may be used in different statutes, they are not identical and the statutes have different purposes. It is the purpose which controls.  The Tax Code simply governs who can serve on an appraisal review board, not what “employment” means for purposes of TUCA. The relevant question under TUCA is whether there is an employment relationship. Because the Tax Code lacks a definition of “employment” or “employee” and serves a different purpose than TUCA, the Tax Code’s references to the term “employee” do not control TUCA’s determination of employment status.  The court then went through the twenty factors.  It ultimately determined substantial evidence existed to support a finding HCAD maintained enough control for the members to be considered employees under the TUCA. Additionally, the court rejected HCAD’s argument the members qualified as members of the judiciary to warrant the TUCA exception for judges.*

Sex Offender Residency Restriction Ordinance: City of Westworth Village v. Texas Voices for Reason & Justice, Inc., No. 02-16-00106-CV, 2017 WL 2178870 (Tex. App.—Fort Worth May 18, 2017). This is an appeal from the denial of a plea to the jurisdiction. The underlying case involves an association attempting to hold a city ordinance invalid.

The city adopted an ordinance prohibiting any person required to register as a sex offender from establishing a residence within 1,000 feet of any location where children commonly gather. A violation of the ordinance constitutes a misdemeanor. The plaintiff, a Texas nonprofit corporation known as the Texas Voices for Reason and Justice, Inc. (TVRJ), sued the city on behalf of its members, claiming the ordinance violates the state constitution. The city filed a plea to the jurisdiction which was denied. The city appealed.

Texas law provides that in certain circumstances, an association may have standing to sue on behalf of its members. However, no Texas court has addressed the precise question of what analysis applies to determine whether an organization has members for purposes of associational standing.  Borrowing from federal case law, the court held the question turns on whether the organization is a traditional voluntary membership organization. If it is then no further inquiry into the issue of membership is necessary. If not, the association must establish it is the functional equivalent of a traditional voluntary membership organization. TVRJ’s certificate of formation affirmatively reflects that it was formed as a Texas nonprofit corporation that would have no members. Therefore, the certificate of formation conclusively proves that no person had membership rights at the time it filed this suit. The burden rests with TVRJ to establish it is the functional equivalent of a traditional membership organization. An organization is a functional equivalent if: (1) it serves a specialized segment of the community; (2) its constituents possess all of the “indicia of membership” in an organization; and (3) its fortunes are closely tied to those of its constituency.  The evidence TVRJ provided are its amended bylaws and an affidavit of its purpose. TVRJ’s general members do not have any direct influence or control over who serves as a TVRJ director. TVRJ’s general members are not required to contribute financially to the organization; rather, any financial contributions they make are purely voluntary. The court analyzed the evidence and the involvement of the general members and determined they possessed none of the indicia of membership. As a result, the association has no standing to challenge the city’s ordinance. Given that conclusion, no amendments to the pleadings can cure this defect. The court reversed the denial, granted the plea, and rendered judgment for the city.*

Takings: City of Rollingwood v. Brainard, No. 03-17-00077-CV, 2017 WL 2417388 (Tex. App—Austin May 31, 2017) (mem. op.). In this flooding/takings case, the Third Court of Appeals affirmed the denial of the City of Rollingwood’s plea to the jurisdiction.

As part of a condition for approval of a plat application, the city required John Andrews to dedicate a drainage easement on his property and install a “flume” to convey storm water down an adjoining street, Pickwick Lane. Before the city approved the application, Andrews sold part of his property to the Brainards. The Brainards’ property is situated downhill from what remained of the Andrews property and from Pickwick Lane. The city approved Andrews’ application with respect to the remaining Andrews’ property. The Preheims then purchased the Andrews lot uphill from the Brainards. The Preheims’ plans to build a large house would increase the impervious cover. The Preheims’ engineers called for the construction of a detention pond to hold the excess runoff, which the city approved. The Brainards allege that after the construction of the Preheims’ system their yard frequently flooded and became unfit for their desired purposes. The Brainards sued the city for a takings (inverse condemnation) and nuisance. The city filed a plea to the jurisdiction, which the trial court denied.

While the city asserted it took no affirmative action other than approving a permit (which cannot attribute liability by itself), the Brainards alleged the city and Preheims colluded in a conspiracy to intentionally divert water onto the Brainards’ property. According to the city, the record demonstrated it relied on engineers’ reports when it granted the Preheims’ permit applications. The city contends the reports show the detention pond would prevent flooding, not cause it. However, the Brainards submitted an affidavit from an engineer stating the report actually indicated the runoff would impact the Brainards. He then discussed another engineering report the Preheims submitted to the city in October 2012 indicating the broken/altered curbs would cause a drainage impact. In other words, the Brainards created a fact question as to the city’s intent and knowledge as to causing the flooding. Further, there is evidence that the city actually altered the curb to allow more water to flow out of Pickwick Lane to the Brainards’ property. They concluded alleviating street flooding is a “benefit” qualifying as a public use under a takings analysis. As a result, the plea was properly denied.*

Governmental Immunity: Becky, Ltd. v. City of Cedar Park, No. 03-15-00259-CV, 2017 WL 2224527 (Tex. App.—Austin May 19, 2017) (mem. op.). Becky, Ltd. (Becky) owns a landlocked tract of land in the City of Cedar Park; Milestone sought to develop an adjacent lot. The city entered into a unified development agreement with Milestone which included a dedicated and partial construction of a right-of-way roadway extension. Becky brought suit in May 2014 against Milestone, the city, and the city council members challenging the validity of the agreement. The city defendants filed pleas to the jurisdiction which the trial court granted. Becky appealed.

Becky asserts that pursuant to local ordinance, the city and its council members “waived” Milestone’s obligation to comply with the city’s subdivision ordinance and circumvented the planning and zoning commission (P&Z) and its ability to grant variances for plat approval. Becky seeks a declaration that this alleged ultra vires act renders the agreement void.  However, the agreement concerns the public right-of-way extension and does not directly address the platting process for Milestone’s planned development. The terms state that the approval of the construction plans for Phase 1 of the right-of-way was not a condition precedent to Milestone proceeding with its construction of the subdivision development. The ordinances have an express exception for acquisition of public right-of-way. After utilizing statutory construction principles to define “acquisition” the court held the agreement falls squarely within the exceptions listed in the ordinances. The ordinances also do not restrict public improvement decisions to the P&Z only and the commission acts only as an advisory board to the city council.  Additionally, none of Becky’s “declarations” for relief involve the validity of an ordinance, so immunity is not waived under the Uniform Declaratory Judgment Act.*

Vested Rights: Draper v. Guernsey, No. 03-16-00745-CV, 2017 WL 2224540 (Tex. App—Austin May 18, 2017) (mem. op.). In 1985, Travis County approved a site-development permit for a three-story office development on real property currently owned by Draper.  In 2011, Draper filed what he termed a Chapter 245 determination seeking to develop the property with an exemption from the City of Austin’s current development regulations based on a plat recorded in 1872 and the 1985 Travis County permit. The city denied the application. Draper filed suit seeking a declaration he possessed a vested right under chapter 245 of the Local Government Code to develop the property under regulations in effect in 1985. His petition also sought damages for allegations of fraudulent misrepresentation, perjury, breach of contract, and a host of other claims. The trial court granted the city’s summary judgment motion and Draper appealed.

Under Chapter 245 of the Local Government Code, once an application for the first permit required to complete a property-development project is filed with a regulatory agency, the agency’s regulations applicable to the project are effectively “frozen” as they would relate to that project. However, an application filed with one agency does not provide “fair notice” to a different agency and is thus not sufficient to establish vested rights from the second agency’s regulations. Filing an application for a permit with Travis County prior to annexation did not entitle him to Chapter 245 rights with respect to city’s requirements after the property was annexed.  As a result, his vested rights claims fail. To avoid this, Draper argued Texas Local Government Code Section 43.002 states a city may not, after annexing an area, prohibit a person from continuing to use land in a manner previously authorized prior to annexation. According to Draper, this requires his vested rights to be recognized. However, Section 43.002 was not enacted until 1999, well after Draper’s property was annexed by the city in 1985. Statutes are presumed to be prospective in their operation unless expressly made retrospective. Tex. Gov’t Code § 311.022. As a result, the argument fails and the court did not need to address whether the term “use” in Section 43.002 applies to an undeveloped use. Further, the court held Draper may not assert ultra-vires claims against Guernsey, the planning director, under the circumstances alleged because an official’s exercise of discretion does not constitute an ultra vires act. The city retains immunity from any remaining claims. The remaining non-claim issues raised by Draper, including breaching a Rule 11 agreement and perjury, are not properly before the court. The case was dismissed.*

Subject-Matter Jurisdiction: City of New Braunfels v. Stop the Ordinances Please, No. 03-14-00198-CV, 2017 WL 2224526 (Tex. App—Austin May 18, 2017). The Austin Court of Appeals dismissed a challenge to a city ordinance which prohibited the use of coolers and containers while utilizing the Guadalupe and Comal Rivers.

This is the third appellate opinion generated around the underlying dispute. In essence, the city, whose municipal limits encompass long stretches of both rivers, passed a series of ordinances limiting the use of drink coolers and containers while citizens floated down either river on tubes or other flotation devices. The plaintiffs, Stop the Ordinances Please (STOP), are an unincorporated association primarily made up of business owners who sell coolers and containers or cater to river tourists.  The court went through, briefly, the holdings in the first two opinions, which principally focused on the pleadings. After remand, the parties conducted discovery and filed opposing motions for summary judgment. The trial court granted STOP’s motion and denied the city’s motion.  The district court also permanently enjoined the city from enforcing, spending public funds, or collecting fines or any other penalties. The city appealed.

Historically, Texas courts are only to consider constitutional challenges to penal enactments within the context of a criminal proceeding. There is no dispute the ordinances under challenge are considered to be “penal” in nature.  An exception to this principal is a civil challenge that the ordinance is: (1) unconstitutional; and (2) said to threaten “irreparable injury to vested property rights.” “A right is ‘vested’ when it ‘has some definitive, rather than merely potential existence.’” And while citizens may have a property right in the physical coolers, this right does not automatically translate to a “vested property right” to use said property a particular way or in a particular location.  A vendor who owns such property as inventory retains the property right, but not the vested right to sell such property in any particular manner he sees fit. Texas courts have found, in the past, that an adverse economic impact on a business constitutes harm to a vested property right, at least in circumstances where the business lacks an adequate remedy through criminal proceedings due to the deterrent effect on customers. However, interpreting subsequent Texas Supreme Court precedent, the court held “irreparable injury to vested property rights” must flow from the actual or imminent enforcement of the penal statute against the claimant. It is questionable whether the owners’ businesses could ever meet the requirement, considering that the ordinances do not directly criminalize their trade in coolers or disposable containers. The summary-judgment evidence conclusively established that the district court did not have subject-matter jurisdiction over the claims. There is a lot more to the opinion and many nuances, but cramming all of that into a case summary defeats the purpose of it being a summary.*

Tort Claims Act: City of Austin v. Vykoukal, No. 03-16-00261-CV, 2017 WL 2062259 (Tex. App—Austin May 10, 2017) (mem. op.). Nicole Vykoukal and Eliezer Perez brought suit against the City of Austin and Austin Energy for personal injury damages from a motor vehicle accident. In this interlocutory appeal, the city challenged the trial court’s denial of its plea to the jurisdiction and motion for summary judgment based on governmental immunity.

Vykoukal and Perez were riding their bicycles and came to a portion of the bike lane that was partially encroached by overgrown vegetation. The two stopped in the bike lane in the shade provided by the vegetation to have a drink of water. While they were stopped, a driver approached, crossed over into the bike lane, and struck Vykoukal and Perez. Both were seriously injured. Vykoukal and Perez sued the city alleging that the overgrown vegetation constituted a special defect and the city breached its duty to maintain the right of way and keep it free from obstruction. The city argued that it retained its immunity because overgrown vegetation was not a special defect and that Vykoukal and Perez could not amend their pleadings to establish a premises defect.

The court recognized that the Texas Tort Claims Act provides a limited waiver of immunity for premises and special defects. Under Texas law, whether the defect is a premises or special defect depends on the duty of care owed to the entrant by the governmental unit. For a special defect, the governmental unit owes the claimant the same duty of care that a private landowner owes an invitee. Under this standard, the governmental unit must use ordinary care to reduce or eliminate an unreasonable risk of harm, which the governmental unit knew about or should have known. The court considers the following factors when determining whether a condition is a special defect: (1) the size of the condition; (2) whether the condition unexpectedly and physically impairs a vehicle’s ability to travel on the road; (3) whether the condition presents some unusual quality apart from the ordinary course of events; and (4) whether the condition presents an unexpected and unusual danger. The court concluded that the driver did not take the ordinary course of travel, and thus, was not an ordinary user. Because the driver was not an ordinary user, the overgrown vegetation was not a special defect. Additionally, the court concluded that the vegetation posed neither an unexpected or unusual danger to nor impeded the travel of Vykoukal and Perez.

The court reversed the trial court’s order denying the city’s plea to the jurisdiction and dismissed Vykoukal’s and Perez’s claims against the city for lack of subject matter jurisdiction.

Employment Law: Carter v. City of Garland, No. 05-16-00903-CV, 2017 WL 2118785 (Tex. App.―Dallas May 16, 2017) (mem. op.). This is a race discrimination and retaliation case where the Dallas Court of Appeals affirmed the dismissal of the plaintiff’s claims on summary judgment.

Carter was a police officer with the city who applied for three different positions and was not selected. Carter filed a complaint with the Equal Employment Opportunity Commission, and then filed a suit alleging race discrimination and retaliation. The city filed traditional and no-evidence summary judgment motions which the trial court granted. Carter appealed.

Section 21.254 of the Texas Labor Code provides: “Within 60 days after the date a notice of the right to file a civil action is received, the complainant may bring a civil action against the respondent.” The court has interpreted this sixty-day provision to require not just the filing of a lawsuit but service of process as well. Summary judgment evidence established that sixty-three days elapsed between the time Carter received notice of his right to sue and when he filed suit. The city was served still later.  While Carter attempts to argue on appeal he did file the petition timely, he did not attach evidence or make that argument at the trial court.  On appeal, Carter points to evidence already contained within the court’s record, specifically an affidavit attached to another filing, as grounds for his appellate arguments. However, again, he did not incorporate such evidence into his summary judgment arguments and the trial court is not required to consider evidence which is not identified. As a result, the city established its limitations defense and the trial court order is affirmed.*

Recreational Use Statute: City of Canadian v. Klein, No. 07-15-00452-CV, 2017 WL 2334233 (Tex. App.—Amarillo May 22, 2017) (mem. op.). This is an interlocutory appeal by the city from an order denying its plea to the jurisdiction where the Amarillo Court of Appeals reverses and renders judgment dismissing the suit.

In this case, a minor (E.K.) was injured at the city swimming pool. The pool manager (Burns) witnessed a lifeguard (C.D.) “double bouncing” other lifeguards and swimmers on the diving board. The pool rules allowed only one person on the diving board. E.K. was injured during his turn on the diving board with C.D.. Klein asserts that the negligence of two employees (Burns and C.D.) caused E.K.’s injury.

When premises are open to the public for recreational activities, the recreational use statute elevates the burden of proof required to invoke the Tort Claims Act’s immunity waiver by requiring proof of gross negligence, malicious intent, or bad faith. The court concludes that the evidence shows only a failure to supervise by Burns but no negligent conduct. Likewise, the court finds that the evidence raises no issue that C.D. was aware of the extreme risk to E.K. but did not care (i.e., C.D. was not grossly negligent).

Because the city’s tort liability under the recreational use statute depends on proof of gross negligence committed in a use of tangible personal property, the court finds that the Tort Claims Act does not waive the city’s immunity from Klein’s suit. The trial court’s order denying the city’s plea to the jurisdiction is reversed and Klein’s suit is dismissed.

Recreational Use Statute: City of Texas City v. Woodkins, No. 14-15-01053-CV, 2017 WL 2367515 (Tex. App.—Houston [14th Dist.] May 31, 2017) (mem. op.). Joyce Woodkins sued the City of Texas City after she was injured when she crashed her bike into an uncovered and unmarked trench on a sidewalk in the city-owned sports complex. Woodkins alleged negligence and gross negligence, and claimed that the city waived its immunity under the Texas Tort Claims Act and the recreational use statute because the case involved premise and special defects, among other things. The city filed a plea to the jurisdiction, arguing that it did not owe Woodkins a greater degree of care than that owed to a trespasser, and therefore the city could be liable only if it was grossly negligent or acted with malicious intent or bad faith. The trial court denied the city’s plea to the jurisdiction, and the city appealed.

On appeal, the court held that the city failed to meet its burden to show there was no genuine issue of material fact as to its actual knowledge of the alleged defect. Woodkins claimed that the city was grossly negligent in removing the metal plate from the trench or allowing the dangerous condition to exist, and that the city had actual awareness of the condition. Having met her pleading burden, the burden shifted to the city to prove its entitlement to traditional summary judgment by disproving one of the essential jurisdictional facts alleged by Woodkins. The city offered affidavits from two city employees—the parks superintendent and recreation and tourism director. Both individuals concluded that they were unaware of any defective condition prior to Woodkins’ injury. Looking at the language in both affidavits, the court found that the facts offered in the affidavits fell short of negating the actual-knowledge component of gross-negligence as a matter of law.

The city also argued that because it had an ordinance prohibiting a person older than twelve years of age from riding a bicycle on any sidewalk in the city, that it was not foreseeable that a person would ride a bicycle on the sidewalk across the uncovered drain. However, the court found that the city’s ordinance did not relieve it of the duty to refrain from gross negligence. According to the court, even assuming that Woodkins rode her bicycle in violation of the ordinance, she would be owed no less than the duty owed a trespasser under the common law.

The court affirmed the trial court’s order denying the city’s plea to the jurisdiction.

*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.

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